The Next Shoe to Drop: IRA Grab Being Set Up NOW–Heads Up! (UPDATE 1X)

~~By InsightAnalytical-GRL

Over the last couple of days I’ve received a couple of regular newsletters from pretty reputable places mentioning an article in Business Week about the growing buzz about plans to get people to shift their IRAs and 401Ks into “income streams/annuities” under the auspices of the crowd in Washington, D.C.  Following the link from both emails resulted in a link that went to a weird Business Week page that looks like a sitemap , but NOT the article in question…a very unique way of scrubbing? (*see rediscovered link with title change, Update below)

Here’s part of what one of the newsletters quoted from the missing article:

Jan 8th:

http://www.businessweek.com/news/2010-01-08/americans-oppose-initiatives-limiting-401-k-choices-ici-says.html

4th paragraph down reads:

“The U.S. Treasury and Labor Departments will ask for public comment as soon as next week on ways to promote the conversion of 401(k) savings and Individual Retirement Accounts into annuities or other steady payment streams, according to Assistant Labor Secretary Phyllis C. Borzi and Deputy Assistant Treasury Secretary Mark Iwry, who are spearheading the effort.”

I don’t have time to poke around as much as I would want now, but I wanted to direct you to a blog which is on top of this and has provided links to various other articles that have appeared in recent months, including those from Bloomberg, as well as analysis from Karl Denninger.

Please check out this post dated January 13, 2010 from the Finance Blog:

Converting 401k and IRA Funds Into “Steady Payment Streams”

Part of the post quotes the January 8 story from Bloomberg.com, which is still available. It seems the Business Week article picked up the story from Bloomberg, since the snippet from the newsletter reads the same.

Retiree Annuities May Be Promoted by Obama Aides (Update2)

By Theo Francis

Jan. 8 (Bloomberg) — The Obama administration is weighing how the government can encourage workers to turn their savings into guaranteed income streams following a collapse in retiree accounts when the stock market plunged.

The U.S. Treasury and Labor Departments will ask for public comment as soon as next week on ways to promote the conversion of 401(k) savings and Individual Retirement Accounts into annuities or other steady payment streams, according to Assistant Labor Secretary Phyllis C. Borzi and Deputy Assistant Treasury Secretary Mark Iwry, who are spearheading the effort.

Guess who’s involved looking out for all of us??   Starts with an A…

Annuities generally guarantee income until the retiree’s death, and often that of a surviving spouse as well. They are designed to protect against the risk that retirees outlive their savings, a danger made clear by market losses suffered by older Americans over the last year, David Certner, legislative counsel for AARP, said in an interview.

“There’s a real desire on a lot of people’s parts to try to encourage something other than just rolling over a lump sum, to make sure this money will actually last a lifetime,” said Certner, legislative counsel for Washington-based AARP, the biggest U.S. advocacy group for retirees.

Oh, yeah and guess who else is taking their piece?

Promoting annuities may benefit companies that provide them through employers, including ING Groep NV and Prudential Financial Inc., or sell them directly to individuals, such as American International Group Inc., the insurer that has received $182.3 billion in government aid.

MAY BENEFIT????   You have to be kidding…And, AIG, AGAIN???

The article continues discussing how people just aren’t putting much money into annuities so they have to be “encouraged.”

There’s a bit of concern being raise, however:

Asset managers are concerned the government may go too far in encouraging annuities, said Mike McNamee, a spokesman for the Investment Company Institute. Seven in 10 U.S. households would object to a requirement that retirees convert part of their savings into annuities, according to a survey the group released today.

“Households’ views on policy changes revealed a preference to preserve retirement account features and flexibility,” the institute said in a report.

But there’s puzzlement, too:

The institute also said annuities have received support from academic research and “it is unclear why individuals usually forego the annuity option” even when it is available. The survey didn’t ask about potential efforts by the government to encourage voluntary use of annuities.

Of course, in the next sentence, the question is answered:

Annuity sales to individuals have come under regulatory scrutiny in recent years over the size of sales commissions and whether some varieties are suitable for older investors.

So, who’s pushing this idea?

One proposal raised by Iwry as co-author of a paper while at the Retirement Security Project, before joining the administration, has reached Congress. A bill requiring employers to report 401(k) savings both as an account balance and as a stream of income based on an annuity was introduced on Dec. 3 by Senators Jeff Bingaman, a New Mexico Democrat, Johnny Isakson, a Georgia Republican, and Herb Kohl, a Wisconsin Democrat.

WOW, bipartisanship!!

And, this crap may not be a product of the Obama crowd alone…Chuck Butler, President of EverBank, and the author of the Daily Pfenning newsletter (one of the two newsletters I received that are discussing this) writes:

Well… A reader sent me a report from May of 2008, where a Washington Think Tank came up with this idea of taking a piece of our pie…

I can’t vouch for this information so I will try to track it down.  But if it’s true, then the idea was around during Bushco…and, if so, then it means this is another example of the continuity into Obama World.

In the meantime, also check out the analysis of Karl Denninger at Market Ticker in a post entitled “401k/IRA Screw Job Coming?” He mentions CNBC’s Rick Santelli’s belief that this is all about forcing money into the Treasury market and then he concludes:

Let me tell you what this is – it is an attempt to prevent the collapse of the Treasury market!

And he goes on to discuss the risks all this portends for the future.

Read it and weep…

****

UPDATE

*One of the newsletters just popped into my mailbox and they’ve discovered the missing Business Week link, complete with a title change, by the way…from

“Americans Oppose initiatives limiting 401 k choices ICI says”

to:

“Retiree Annuities May Be Promoted by Obama Aides”

Notice the change of emphasis??????

Here’s the story:

Retiree Annuities May Be Promoted by Obama Aides

http://www.businessweek.com/investor/content/jan2010/pi2010018_130737.htm

China Solar Panel Maker (Who Already Has Installed a Solar Farm On a U.S. Military Base), Now Sets Up 1st U.S. Plant

~~By InsightAnalytical-GRL

I just watched a BBC America show about the reticent Neil Armstrong, the first man to walk on the moon, and over the last couple of days on NPR radio, the Stardate segments have been devoted to the anniversary of  the Apollo 12 mission when Pete Conrad (the third man to make that walk) and Alan Bean made a pinpoint landing of the lunar module to test  “precise landing techniques” that would be used in future missions.

"The Surveyor 3 spacecraft sits silently in a small lunar crater, with the Apollo 12 lunar module on the crater's rim in the background. Astronauts Pete Conrad and Alan Bean landed just a few hundred feet from Surveyor 3 in November 1969 to test the precise landing techniques that would be needed for future missions."--Stardate.org

We can’t do solar panels here?

***

Early last week I posted this comment by Zachary Karabell, who appeared on CNBC (See: Larry Kudlow Has a Fit as Obama the “Declinist” Opens His Mouth in Japan; Says Obama is “Not His President”):

And he said that if we want China to continue to “hitch” themselves to us more, we’re not supposed to freak out if China wants to buy businesses HERE and not have a “knee-jerk xenophobic response.”

Well, here’s a story that will not make people happy, even though it may help us ultimately less dependent on foreign oil. Of course, we may become dependent on NEW environmental technology from foreign sources, but…

From Business Week (my bolding):

China Solar Panel Maker Sets First U.S. Plant

Suntech Power aims to boost its share of the U.S. market with a solar-panel manufacturing plant to be built in Arizona

China’s Suntech Power Holdings (STP) is no newcomer to the U.S. Last May, President Barack Obama toured the U.S.’s largest solar panel installation at Nellis Air Force Base in Nevada. There, row upon row of shiny black Suntech panels account for about a third of the 14-megawatt solar farm.

Suntech landed that project the same way it has raced to the top of the fast-growing global solar market: by focusing on price and scale. Now the world’s largest supplier of solar panels is boosting its stake in the U.S. market.

On Nov. 16 in Beijing, the company announced its first American manufacturing plant. The facility, to be located in the Phoenix area, will begin production by next October. “The U.S. market is on the cusp of greatness,” says Steven Chan, Americas president and chief strategy officer for Suntech. With the announcement, Suntech becomes the first major Chinese cleantech player to bring factory j obs to the U.S.

MMMM...wonder how many MORE major Chinese players will be arriving? And on U.S. military bases? (Of course, wasn’t there a flap over Bill Clinton selling military technology to China way back when?)

Now, there are some in Congress that are afraid our home-grown “green manufacturing jobs” won’t get a chance to get off the ground if this sort of thing happens on a regular basis. Sure, the Chinese are manufacturing here, but the factory jobs are THEIR creation, not jobs created by  a  home-grown company.

Obama’s visit to China focusing on collaboration in green technologies. Suntech’s move may soften criticism from U.S. lawmakers worried that low-cost factories in China will snare new green manufacturing jobs before they even have a chance to take root in the U.S. “[Suntech’s] decision to bring manufacturing here to the U.S. is a great sign of the increasingly important collaboration between Chinese and American leaders in the renewable-energy industry,” said Dan Kammen, a professor in the energy and resources group at the University of California at Berkeley, in a statement provided by Suntech.

Gee…that Berkley prof can’t write his own statement??

According to the article, most of the grants the U.S. issues for “cleantech” is winding up overseas:

Suntech’s investment comes as anxieties are rising in Washington over foreign domination of the U.S. cleantech space. In late October the announcement of a Chinese-U.S. consortium planning to build a wind park in Texas using imported Chinese turbines led to calls that federal subsidies should be pulled from the project.The same month, a report from the Investigative Reporting Workshop found that in the wind sector, where foreign manufacturers dominate the market, overseas companies have received 84% of more than $1 billion in federal clean-energy grants released since Sept. 1. The study did not focus on solar energy, but the majority of solar panels are also produced by European and Asian companies.

Texas?  Well, naturally…I’d bet that the George Bushes I & II are involved somehow, what with their long-time ties to China…Between them and their heir Barack Obama, things are proceeding very nicely…

In light of my previous post about growing U.S. unemployment, pardon me if I query: WHAT THE HELL IS GOING ON??

(Well, we’re going to build electric cars with the Chinese, for one thing…)

***

Editor’s Note: I loved the space program and now live where Pete Conrad lived…and remember when this irrepressible spirit, who shouted “Whoopee” as he hopped around the moon’s surface, died in a motorcycle crash in California 10 years ago this past July (pictures on this memoria page). (He also rode 2 Gemini missions and Skylab I.)

HULU — “An evil plot to destroy the world”: A Mainstream Media Creation (FOX, NBC et al) to Squeeze Out Independent Media Content

~~By InsightAnalytical-GRL

If you any doubts about how the mainstream media is playing us, then here’s the proof that they indeed are.  It’s easy to see when you take a look at Hulu. Most of the uniformed world think FOX (News Corp.) and NBC/GE are “enemies”  but we see that they’re working together to suck the air out of independent media content available on the web.

Hulu–“An evil plot to destroy the world.”  I didn’t originate this description; Hulu did. It’s in their ad which features the obnoxious Denis Leary jabbering away about TV content turning your mind to mush and snarking at a “brain dead” (those are the ad’s words) geek who’s getting a stream of green stuff passed into his ear.  Before he’s through, Leary says that the folks at Hulu are  “aliens” and then winds up with the tag line, “Hulu…an evil plot to destroy the world…Enjoy.”

The ad is up at the company blog under the title “The Evil Plot Continues.”  Go see for yourself…(and be sure to “click” to see the full ad after the initial clip is over or click here for the video without the blog post.).  This week, Hulu has released a “Video Panel widget”:

To continue to deliver on our mission to connect audiences with their favorite content wherever they are — or, as Denis Leary would say, on their “bliggety blogs, facey spaces and tweety pages” — we are releasing a new embeddable product this week: the Video Panel widget.

The ad is supposed to be a cool joke aimed at the younger crowd, but in reality, it may not just a joke!  A couple of weeks ago I happened to be watching CNBC and caught an interview with the young CEO who was talking about how successful Hulu had become and how it would be even more successful as it closes in on YouTube, which is currently the top video site.

And who’s behind Hulu?  According to Hoovers (with my bolding):

Hulu Company Description

When the rich and famous name their offspring, anything is possible. NBC and FOX had a digital baby. And they called it Hulu. Initially formed as a joint venture between NBC Universal (a unit of GE) and News Corp. (the parent of FOX), Hulu.com is a video site that features video from more than 100 content providers. Offerings include TV shows from FOX and NBC, as well as from subsidiary cable channels such as Bravo and the SCI FI Channel. Hulu also shows films from studios including Sony and MGM. Content — all total, some 900 TV series and full-length movies– is streamed on demand, free of charge the day after its broadcast debut. After a nearly five-month long beta version, Hulu.com was launched in 2008.

And, there’s another player now: Disney/ABC.

Disney Buys Into Hulu. YouTube Should Be Worried.  (4/30)

As the initial exclusivity for NBC and Fox content expires, Hulu will be adding Disney/ABC videos and TV shows to its distribution mix as well. Hulu is becoming the preferred distribution channel for the big media companies. And it is succeeding in attracting the fickle Web audience. This should worry YouTube, which is still casting about for a business model that will pay for its enormous storage and bandwidth costs. The media companies cannot ignore YouTube just yet, but by strengthening Hulu they can give it their best content first.

A couple of days earlier, this article provided some extra background:

Hulu Now The Number Three U.S. Web Video Site. Soon To Be Number Two.  (4/28)

Just last month, we wrote that Hulu had gained some 10 million viewers to become the fourth largest video portal on the web. Now, it’s slain another rival to the list: Yahoo, to move into #3 — at least in terms of videos viewed.

To be clear, the new March U.S. numbers released by comScore show that Hulu is still slightly behind Yahoo’s video properties when it comes to unique viewers. But the NBC and Fox-backed Hulu should pass it any day now in that category as well. Meanwhile, the number two player, Fox Interactive Media (which runs MySpace), is slipping just as quickly as Hulu is rising in videos viewed. It could well be as soon as this month when Hulu moves into the number two web video position.

Needless to say,  I wondered about the name. Silly me for thinking it was a take-off on “hula” or something Hawaiian. NOOOOOOOOOO, it’s actually a Chinese name! From Wikipedia:

The name Hulu comes from two Mandarin Chinese words, hulu (simplified Chinese: 葫芦; traditional Chinese: 葫蘆; pinyin: húlú; Wade-Giles: hu-lu) “calabash, bottle gourd” and hulu (simplified Chinese: 互录; traditional Chinese: 互錄; pinyin: hùlù; Wade-Giles: hu-lu) “interactive recording.”

The company blog explains:

In Mandarin, Hulu has two interesting meanings, each highly relevant to our mission. The primary meaning interested us because it is used in an ancient Chinese proverb that describes the hulu as the holder of precious things. It literally translates to “gourd,” and in ancient times, the hulu was hollowed out and used to hold precious things. The secondary meaning is “interactive recording.” We saw both definitions as appropriate bookends and highly relevant to the mission of Hulu. ^[4][5]

(Here’s the link to the above-mentioned blog post at Hulu with a picture of the young group (mostly of Chinese background?) who worked on choosing the name: http://blog.hulu.com/2008/05/13/meaning-of-hulu/.) (Note: For all their care, it seems that “Hulu” has some unusual meanings in other languages anyway. For a sampling, see:  Hulu Translates To “Cease” and “Desist” in Swahili. Oops.)

My next stop was a visit to the Hulu site at http://www.hulu.com/.  The “News” channel has a few sub-sections, but I just looked at the Politics section closely. Of course, it varies day to day, but it certainly is NOT a comprehensive news site…an awful lot of clips featuring unchallenged spin from the Administration and cable talk shows on the day I looked.  Hulu is entirely commercial content, so you won’t see any original “ads” or political discourse from the peons here, like you see at YouTube.

Who’s running Hulu for NBC, FOX, and Disney?

The CEO is one Jason Kilar. From Business Week:

Jason Kilar serves as Chief Executive Officer of Hulu, LLC. Mr. Kilar has been Chief Executive of online video joint venture of NBC Universal, Inc. and News Corp., since July 9, 2007. He serves as Special Advisor of KBL Acquisition Corp. IV*. He served as Senior Vice President of Worldwide Application Software at Amazon.com Inc. since May 2003 and was responsible for Amazon’s Marketplace business. From February 2002 to May 2003, Mr. Kilar served as Vice President of Worldwide … Application Software of Amazon.com Inc., where he joined in May, 1997 as a Product Manager. From October 2001 to February 2002, Mr. Kilar served as Vice President of Marketplace of Amazon.com Inc. and served as its Vice President of Books, Music, and Video & DVD from February 2001 to October 2001 and serves as its Vice President. He began his career with The Walt Disney Company, where he worked for Disney Design & Development. He serves on the board of Management Leadership for Tomorrow. He has been Director of AdReady, Inc. since November 28, 2007. Mr. Kilar received his M.B.A. from Harvard Business School…

The company is providing  investment capital for Hulu is Providence Equity. Of course, there’s a “global presence”:

Working collaboratively from offices in Providence, New York, London, Hong Kong and New Delhi, our 74 investment professionals pursue opportunities as a unified team across North America, Europe and Asia Pacific. Our sector focus and international mandate enable us to dedicate our full resources to building global leaders in the media, entertainment, communications and information industries, regardless of location.

The large “team” running this firm has some interesting names on the roster.

Michael K. Powell, now a Sr. Advisor for PE, formerly FCC chairman during the Bush Administration

In addition to Kilar, there are a lot of people with Harvard ties, work history with some of the large investment banks (with a number of them with a history at Morgan Stanley), and other interesting backgrounds. Here’s a sampling of some of the names I peeked at…there are many others with similiar ties on the long list of “the team”:

• Senior Managing Directors  Glenn M. Creamer and Paul J. Salem both come out of Harvard and Brown with interesting director backgrounds over and above the Morgan Stanley, Merrill Lynch, J.P. Morgan, and Prudential experience.  Others I took a peek at include:
• COO  Gary S. Weinstein …Lehman Brothers
• Managing Director Julie A. Fisher … The World Bank  &  J.P. Morgan
• Managing Director Christopher P.  Halpin …Goldman Sachs

• Chief Compliance Officer Fred Franklin (who “served for ten years as Assistant Director of the U.S. Securities and Exchange Commission’s Division of Enforcement”)… from Bear Stearns

So, it looks like the total capture of the minds of the younger generation by the mass media will be complete if most of them gravitate to Hulu.  If YouTube can’t survive, will the creative video we see there dry up or become fragmented across many smaller sites?

Hulu is just another piece of the puzzle as the media “clamps down” to control what media content users see.  Scary, very scary indeed.

***

*KBL Acquisition Corp. IV is involved in “miscellaneous”  investment services but is a big player in the healthcare industry (also KBL I, II, III)

Hulu Company Profile.

GE media holdings (From Columbia Journalism Review site)

News Corp. media holdings (From Columbia Journalism Review site)

Disney media holdings (corporate site)