07.11.03
So long Mr. Fisher.
The architect behind the scenes of many of the major decisions coming from the Treasury Department, Peter R. Fisher Under Secretary for Domestic Finance - Designate U.S. Department of the Treasury has decided to call it quits. Mr. Fisher who worked under Paul O'Neill and now under Treasury Secretary John Snow is responsible for many of the behind the scenes policies that have roiled some markets while helping the government borrow more heavily with improved efficiency. Traditionally the Under Secretary runs the Treasury while his boss promotes policies and agendas.

Mr. Fisher was a primary mover behind the elimination of the 30 year long bond. This former benchmark was removed in October 2001 replaced by the ten year bond. The buyback of debt using the surplus and the issuance of the ten year to support the new (and growing) deficit, Mr. Fisher believed that the 30 year was not an good way for the government to finance its debt. The department is apparently working on a defense for this stance arguing the the ten year bond is less expensive. But the change has caused some serious rebalancing issues at companies whose pensions also used the 30 year bond.

It is no secret that the way pensions had been calculated have come under pressure under the last three years pushing some plans towards insolvency and others to beg for some sort of assistance, mainly in the form of recalculating how they were to be funded. The elimination of the the 30 year distorted the value of many plans creating the underfunding mess many companies and plans are currently facing. His belief in the shorter term security will apparently continue after his departure. Susan Schwab of Goldman Sachs has been nominated to replace him.

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