Holy shit - Paul Ryan sneaks Wall Street attempt to hurt your retirement into GOP anti-poverty plan

[realmirage]

Edit: 2 source links added

Can you believe this? Lost in all the hubbub over Trump's racist attack on the judge was Paul Ryan's unveiling of the the GOP's "anti-poverty plan." Guess what he snuck into it? An attempt to block the Department of Labor's "fiduciary rule" which will go into effect in 2018. What does this rule do? It would require retirement advisers to only give you advice that is to your benefit. Right now, advisers can trick you into choosing other options that earn them more commission, but give you less money in your retirement years. This practice is set to end in 2018 and the GOP wants to stop you from having this protection.

Obama just vetoed a GOP resolution to block the fiduciary rule this month. So what does the GOP do? They sneak it into their "anti-poverty" plan. Who are they trying to make less poor? They are trying to make people poorer who have worked their asses off! It's just like the GOP to wrap something disgusting into a package labeled with pretty words like "anti-poverty" to get you to swallow it and then die.

No difference between the GOP and DNC? If you believe that you are a victim waiting to happen.

This proves that the GOP, the QUIET GOP, behind the scenes of the Trump debacle is still the enemy. They will back any GOP candidate that allows them to continue to help the rich fleece you and me.

https://www.dol.gov/ebsa/newsroom/fsconflictsofinterest.html
http://www.msnbc.com/rachel-maddow-show/paul-ryans-anti-poverty-plan-isnt-the-better-way

[applegrove]

1. The GOP wants to cleave the country into two groups: rich assholes

and the poor that will include formerly well of professionals like teachers and doctors and factory workers who will see their jobs replaced by robots, and then join the rest of the working poor. They want all predatory or morally laxadaisical people to be rich because they will then vote and support Republicans. No middle class anymore. Thus the GOP would be able to win all elections by hoarding money, power and knowledge.

[realmirage]

2. Their practice of taking something horrible and putting it in a pretty package

will never end. You're right, it's as if they really want to actually destroy the middle class. It sounds hard to believe, but what other conclusion can I draw when I see them sneak this pro-Wall Street item into an anti-poverty bill? You just know that the only purpose of this bill is to kill the fiduciary rule and gut social programs.

[applegrove]

3. I first thought of it when our conservative prime minister cancelled the long

form census which was used to create scientific statistics used by social groups, educators and business people to predict markets and the future. What could a government hate about that? Why would a pro business conservative government hurt business like that? And I thought that big business would be able to afford to hire other businesses to do market research but small businesses would not. And I thought they are cleaving small business people from big. Deregulation normally does away with medium sized businesses but I always saw that of one of the many negative effects of Deregulation. But until the long form census was cancelled I never saw the strategy dividing business into huge vs. small business was a goal of the right. How could you get rid of free stats for small businesses if you cared about all business. Thankfully the Liberals are in power and brought back the long form census.

[realmirage]

5. That's exactly why Democrats have been

telling people who know little about government, and actually think there's no difference between the DNC and the GOP, that they are crazy and will only be hurting themselves, not the wealthy corporations, if they don't get their ass out and vote for the Democratic nominee. The Supreme Court is within our grasp as well. What could be bigger than that? If only people were more educated.

[applegrove]

6. Here, here.

[Yupster]

4. It will be interesting to see how this rule works itself out over the next few years

It has certainly had the industry in a tizzy the last two years as its different versions have come in and out of comment period. The final rule, though over 2,500 pages long looks much less stark than the ones which were published as proposals.

So let's say I'm a financial adviser and you come by my office one day. You say you have some money to invest but haven't ever done it before.

I start asking you some questions.

Turns out you are 27 years old, married with no kids. Your parents just retired and sold their family home to move to a smaller place. They got lots more than they expected and surprised you with $ 10,000 check for your birthday with a note explaining that this is a one time gift since they were surprised by their house profits. You have a pretty good job paying $ 60,000 and your husband has a pretty good job paying $ 40,000. No kids yet but you'd like to in the future. You're lucky that you just paid off your student loans a year or two ago and have no credit card debt. You both have 401 (k's) at work, so here you are.

We talk about the difference between qualified and non-qualified money and you decide to keep it non-qualified but don't know what to invest it in?

I start giving you options.

1. We can leave the money in a money market account which is making .02 % interest which means in 30 years you will have made 1 % interest.

We can buy a 2 year cd for 1.2 %

3. We can buy a bond, either taxable, but since you guys make $ 100 k with few deductions, a municipal bond is probably better. For a muni bond we can make 3.8 % tax free a year for 25 years or 2.4 % for 8 years.

4 We can buy a mutual fund, or group of mutual funds, medium risk growth and income funds, higher risk growth funds, or wildly risky aggressive funds like tech funds or oil funds or emerging markets funds, or more likely a mixture of all of them.

5. We can buy a couple of stocks. Let's buy , just pick two companies, $ 5,000 of any of 1000 companies.

So the old rule was that the investments I recommended must be suitable to your age, wealth, income, family situation, risk tolerance and debt level.

The new rule is the investment I recommend must be in your best interest. So which of the investments 1-5 is the one that's in your best interest?

The one that costs the least? That would be the cd or the money market. The one that made the most over the last 20 years? That would be some tech stocks or some others we never heard of. Is it the one which causes the least taxes? That would be the muni bond. The one that makes the broker the least commission? That would be the money market.

The companies are trying to figure out how they will comply with the rule. Most of them are moving people toward managed money accounts which charges you a set annual fee, say 1.5 % a year regardless of which investments you choose. The biggest thing that change will do will make the broker richer and increase your costs dramatically. In this case though, too bad but $ 10,000 is below the minimum for that type of account.

[realmirage]

7. I'm not a finance expert, but I looked at some of the details

and they look like an improvement

https://www.dol.gov/ebsa/newsroom/fsconflictsofinterest.html

And I also know that when a fox is trying to get into my henhouse, I may not be an expert on fox behavior, but I know what its goal is. The fact that Wall Street and the GOP are trying desperately get this rule and destroy it tells me I should probably be in favor of protecting this rule.

[Yupster]

10. You read through that fact sheet and thought it sounded good?

I'm interested to see which parts sounded good to you?

What I read was a bunch of glittering generalities like the average American deserves a sound retirement, and we need to be protected from low performing investments.

What the heck is a low performing investment? CD's are pretty low performing. Do I really have to be protected from buying cd's? If I buy 100 shares of Coca Cola and it loses money for the year can I now turn it back in or sue my broker?

Then there's the ridiculous math. This will save the average American with an IRA 1 % a year. I have what most people would consider a very large IRA. I have many, many investments within it. I can't think of more than 2-3 of them that charge me more than 1 % a year. They would be my weirder mutual funds like the India or Emerging Markets fund. I realize it's expensive to research Burmese companies so I don't mind paying more for those weird ones. Anyway they're a very small part of my portfolio. The majority of my investments are individual stocks and bonds and I rarely trade them and if I don't trade them in a year I pay absolutely nothing to just hold onto them. So the saving 1 % a year on average I just see as a very questionable statistic.

The funniest part of the whole thing is when it says that the rule was developed in close consultation with firms of the industry. Yeah for two years the DOL has been putting out versions and the industry has been pointing out how it couldn't work in practice and the DOL would pull it back and then rework it. Yeah it was developed with much industry input. The input was pointing out that they had no idea how they would even try to comply with these rules. What does the best interest of the client even mean?

There was such cooperation that the lawsuits are already lining up.

But in the end people will think things are better because who could be against acting in the best interests of the clients?

Costs to the clients will go up and small investors will have trouble getting and keeping an adviser. Most brokers will make much more money though so at least there's that.

[realmirage]

11. If it's so bad, why is the GOP trying to kill it

And why did Obama veto a bill to block it while touting its importance? Is your next theory that Obama is in someone's pocket?

[Yupster]

13. It was pretty obvious why he vetoed the bill.

The bill was to stop the rule his administration put in so if he believed in his rule of course he vetoed it.

The real question is why he supports and in fact ordered the creation of the rule?

That's much more complicated and it's anyone's guess. Is it worth it to even try to figure out motivation?

One place I looked first was President Obama's own individual portfolio.

From that I learned two things.

1. He is very responsible financially. This is hardly surprising as if you had to think of one word to describe President Obama, "responsible" would likely be high on the list. He has large college funds set up for his daughters and his investment mix is just as conservative as can be. His largest holdings by far are US treasuries paying from 0.5 % to maybe 2.5 %. He has very, very little stock exposure and that little bit is in a S+P 500 index fund. No debt at all.

2. He's never been very interested in his own investments. Most president-elects put their investments in a blind trust run by some local Series 7 broker. They talk about what types of investments the president-elect likes and dislikes and then the guy wheels and deals for him until he leaves office. I don't think President Obama did this. He has huge amounts of money in a checking account and even more in money market accounts. It looks like he's pretty much ignored his investments on autopilot.
I just don't think investments have ever been an interest of his. There are more important things in life to him. That's hardly a bad thing. Kind of the type of person you'd like to be president.

So how does that get to a 2,800 page rule that throws the whole industry into confusion?

First I would guess the President had very little to do with it.

Second Secretary Perez has a horrible relationship with the industry. His job before this was Assistant Attorney General for Civil Rights. It's unusual that he's had no experience n the industry he's regulating. The early rule versions came back with biting criticisms, even from the firms which typically try to stay ahead of the regulators by doing more than required. Each time the rule would come back and more criticism followed. The final role did reflect many of the criticisms though.

Third - there really are problems. There are many people selling investment products who are only licensed to sell a very limited number of products. No surprise that everyone therefore needs those products. If your only tool is a hammer, don't be surprised if every problem looks like a nail.

Fourth - I think the government would be happier if retirement accounts were more like the federal government retirement program. Not very confusing. You can invest in the G fund (govt bonds) or the F Fund (bonds) or the C Fund (stocks) or the S Fund (small cap stocks) or the I Fund (foreign stocks). Nice and simple. Easy for the regulators. No weird questionable investments.

I see this rule as a move toward that end. Companies will be moving people to pre-packaged managed money programs. Easy for the regulators to watch over, no weird stuff. But the downside is for people who just have old fashioned simple investments like 100 shares of Walmart or a corporate bond, or even a mutual fund, their costs will generally go up, sometimes a lot. Small investors will find their accounts are below the minimums and may be assigned an 800 number to call. These two trends were happening anyway. These changes will just speed them up.

One other thing is that there is currently a real shortage of financial advisers. The average age is much older than most professions. Companies are aggressively hiring, but the hiring process for the major companies is very difficult and the test is just plain really, really hard to get someone through. These changes I believe will speed up retirements.

Just my own personal opinions of course.

[fleabiscuit]

8. Framing. Take a page from the gop.

The TRUMP-Ryan-GOP anti-poverty plan. Trump is framed on everything they do. Trump is framed with them by name. It's OK to lie about them. The Trump-McConnell-GOP budget plan. The Trump-Rubio-GOP immigration plan...

[Yo_Mama_Been_Loggin]

9. What a guy

[Cha]

12. And, President Obama just Vetoed!

Thanks Obama!

BTW...

Gallup Daily: Obama Job Approval Obama Approval 54% +2

http://www.gallup.com/poll/113980/Gallup-Daily-Obama-Job-Approval.aspx?utm_source=twitterbutton&utm_medium=twitter&utm_campaign=sharing

This is our Revolution! Our country is on track.. we don't need BS.. we need a Dem Congress