The Obama - Clinton Disaster Message Board

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Politics : The Obama - Clinton Disaster

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To: Wayners who wrote (27852)	4/2/2010 5:44:22 PM
From: tntpal	Read Replies (2) of 103300

Re: Mandatory "R Bonds" Jesse's Café Américain 08 January 2010 As a rule of thumb, the worst possible time to convert lump sum savings into a fixed income annuity would be when interest rates are historically low. Although products may vary, this is roughly equivalent to buying long term bonds at a time when interest rates are likely to increase, substantially reducing your principal in real terms, and eroding your fixed returns through inflation. For some reason the Obama Administration is promoting the idea now that there should be some encouragement for Americans to start converting their 401K's and IRA's into annuities, to provide themselves with lifetime income. The effort is being spear-headed by Mark Iwry of the Treasury and Phyllis Borzi of the Department of Labor. Here is a paper written on the subject by Mark Iwry when he was at the Brookings Institution. The essence of this paper is that distributions from IRA's and 401K's would automatically be rolled into an annuity providing a monthly income by default. This concept is known on the Street as the handling fees for meager returns pork barrel pigfest. The Fed likes it because they will undoubtedly get a two year rolling chunk of the people's retirement cash to play with. Perhaps just rolling those 401K's and IRA's into Social Security or the Long Bond would be what they have in mind. Somehow the panacea of TIPS with inflation defined by the government sounds probable. The drawback perhaps is that this would not generate the highest recurring fees for Wall Street and the FIRE sector, which have to be eyeing that 'cash on the sidelines' hungrily. How about Patriot Bonds that are fully invested in Mortgage Debt formerly owned by the Fed, with some tranches of Commercial Real Estate to add some zest to the recipe? The Treasury can give this option a small tax break, which can be largely consumed by Wall Street fees and mispricing of risk returns... jessescrossroadscafe.blogspot.com *Wayne -- Is this 'Obamacrap' still alive - have not heard much on it the past few months? Anyway out of all these Obama ClustersFKs - they keep popping up all over the place !!!** Some interesting comments by TobagoJack on this related post: Message 26233014

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