Wednesday's Headlines: Death derivatives emerge from pension risks of living too long

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Goldman Sachs, Deutsche Bank and JPMorgan Chase, now want to help investors bet on people's deaths through pension fund bonds, according to Bloomberg, which writes: "Pension funds sitting on more than $23 trillion of assets are buying insurance against the risk that their members will live longer than expected. Banks are looking to earn fees from packaging that risk into bonds and other securities to sell to investors. The hard part: Finding buyers willing to take the other side of bets that may take 20 years or more to play out."

Prudential, Credit Suisse, Munich Re and UBS are also looking to get into the game, which is being pioneered in the U.K., as a result of changes in accounting rules there in 2004.

Other news:

Morgan Stanley set up a private-equity joint venture in the affluent eastern Chinese city of Hangzhou, aiming to raise $231 million. [WSJ]

Barclays will pay 7 percent interest annually to senior employees on cash bonuses deferred for at least five years under the bank's plan to link compensation with long-term performance. [BusinessWeek]

Allstate is buying Esurance and Answer Financial for about $1 billion from White Mountains Insurance Group. [BusinessWeek]

Oaktree Capital Management, the $82 billion firm founded by Howard Marks and Bruce Karsh, is the latest private firm to decide to become publicly traded. [DealBook]

Is Nasdaq's dropped bid for NYSE a sign of a tougher line on mergers from the Obama administration? [WSJ]

ICAP, the biggest broker of trades between banks, said fiscal full-year earnings jumped 61 percent on turmoil in the Middle East. [Bloomberg]

Paulson & Co., the $36 billion hedge fund founded by John Paulson, took a stake in Hewlett-Packard and increased its holding of Transocean-adding companies undergoing transformations to its bets on gold. [Bloomberg]

As hot tech companies line up to test the IPO market, trading in restricted, private markets softened last quarter. [CNN Money]

Unemployment rates are the lowest for white, college-educated women over age 25, according to a breakdown of the labor force by age, race and education. [CNN Money]

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