7/7     Mother, age 70, is thinking about putting money into fixed
        annuity. I have absolutely 0 experience with annuity, and
        I'm guessing they should be better than CDs since compounded
        interest is tax deferred. Does anyone have old family members
        who have annuities? Are they good? Are there other products
        similar to annuities in terms of safety and slightly higher-than-CD
        interest rates?
        \- general/theoretical problem with annuities is it is a textbook
           case of asymmetric information/adverse selection. [FYI: The classic
           paper on adverse selection was by UCB Dept Econ professor GAKERLOF.
           In a bit of a coincidence, he co-won with JSTIGLITZ, the economist
           two threads up].
           \_ useless advice. why even bother to write it?
              \_ It's not advice.  It is an observation and some trivia.
                 I'm not going to give somebody I dont know financial advice
                 via the motd. BTW, if you know what "adverse selection" is,
                 it is pretty obvious there will be some suboptimal pricing.
                 (i.e. if somebody is selling you health/annuity-type
                 income insurance with limited medical info).
              \_ Have you not seen psb's posts before?
                 \_ I'm not the op, but psb's posts are usually in the
                    following format:
                    "There is an academic topic related to this"
                    "It is interesting, I've read a little bit of it"
                    <Stick some material and KEYWORDS in the thread>
                    "I am cool and smart and if you are like me, you'd
                     read it too."
                    (optional) ok thx
                    \- "Results 1 - 10 of about 97,600 for (annuity
                       "adverse selection"). BTW, yesterday [?] the FRESH AIR
                       program had a short discussion about annuities and
                       adverse selection (without using the term "adverse
                       selection" i believe), and sort of spells out why
                       individually negotiated annuities may be "a priori"
                       suspect due to overpricing.