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jesusfreakinco (29.61)

Fitch warns on US AAA rating and wants your 401k plan!

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January 13, 2010 – Comments (19) | RELATED TICKERS: FED , CRO.DL , OKS

http://www.telegraph.co.uk/finance/economics/6969163/US-must-cut-spending-to-save-AAA-rating-warns-Fitch.html

"the picture is deteriorating fast enough to ring alarm bells."

"Fitch expects the combined state and federal debt to reach 94pc of GDP next year, up from 57pc at the end of 2007. Federal interest costs will reach 13pc of revenues, meaning that an eighth of all taxes will go to service debt. Most fiscal experts view this level as dangerously close to the point of no return for debt dynamics. "

JFC -  scary stuff.  hopefully politicians wake up soon.  Send a wake up call to Washington.

Americans Oppose Initiatives Limiting 401(k) Choices, ICI Says

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

JFC - And politicians want your 401k plan to make up for their social security fiaso.

"U.S. investors oppose federal initiatives that would force them to give up control over their 401(k) accounts, the Investment Company Institute said."

Got gold?  Gol silver?  Got guns?   Got butter?

JFC

 

 

 

19 Comments – Post Your Own

#1) On January 13, 2010 at 4:36 PM, lemoneater (87.47) wrote:

Somehow I would prefer having control of my own 401k. Imagine that!

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#2) On January 13, 2010 at 4:59 PM, BMFPitt (77.21) wrote:

Americans also oppose kitten juggling and black market organ thieves that leave you in a bathtub full of ice.  So what?

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#3) On January 13, 2010 at 5:09 PM, jesusfreakinco (29.61) wrote:

Lemon - ditto

BMF - what kinda bizarre comment is that?  Would you trade in your 401K plan for a promise from the govt?  If you really wanted an annuity, there are plenty of private options.

JFC

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#4) On January 13, 2010 at 5:10 PM, JaysRage (93.90) wrote:

A government powerful enough to solve all your problems is powerful enough to take everything you have.  

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#5) On January 13, 2010 at 5:16 PM, AvianFlu (47.82) wrote:

Trust me.
The feds would not like what I have in my 401K. I don't think they'd let me keep one thing in spite of the fact I've had very good returns. I don't want some faceless bureaucrat controlling my investments...unless they have a higher CAPS score than me.

See you in the re-orientation camp...

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#6) On January 13, 2010 at 5:20 PM, jesusfreakinco (29.61) wrote:

Jays - we have that type of govt now.  We need to take it back, but I am not sure how other than educating friends and family and throwing out all the politicians - ALL of them (ok maybe except Ron Paul)

Avian - over my dead body.  hehe.  

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#7) On January 13, 2010 at 5:26 PM, TMFCrocoStimpy (93.64) wrote:

#2  I like juggling kittens - does that make me a bad person, or just a bad American?

One fundamental flaw in talking about how having 401Ks being converted into annuities is the assumption that the provider of the annuity wouldn't be subject to the same risk that having the 401K invested directly in the market would take on.  For an individual, having an annuity provides some protection against and individual failure of the 401K market selections.  However, if the entire market melts down as it did last year, then there is little protection to be had since the companies providing the annuities would likely fail (ala AIG and the like), thus defaulting to a government bailout to preserve the annuity.

Doesn't seem like a whole lot of real protection from a systemic standpoint.....

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#8) On January 13, 2010 at 5:53 PM, floridabuilder2 (99.65) wrote:

It is pretty obvious that the govt wants to solve our problems by causing asset inflation.  I'm not a history major of economics, but it will be interesting on what hard assets perform the best in this type of inflationary environment.  It really doesn't matter to me what the gov't does because the next 10 years are going to suck for people who aren't protecting themselves.

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#9) On January 13, 2010 at 6:03 PM, 100ozRound (30.42) wrote:

Lock n Load

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#10) On January 13, 2010 at 6:14 PM, jesusfreakinco (29.61) wrote:

Croco - good points.   And 401ks offer little diversification for a market crash.  They usually only off long funds and not alternative funds like commodities / gold / silver.  Rolling over to self-directed IRAs are the way to go IMO.

FB - you are right about things going to suck.  They already do for the 22% un- and under-employed workforce.  Add illegals out of work to that and you've go a whole lot of unhappy folks.  I am still a firm believer that gold/silver will dramatically outperform (especially in USD terms) other assets (yes, including and perhaps especially land).

100oz - gold, silver, guns, and butter.  It'll be interesting to see how the country responds.  I fear it will be too late before most folks wake up, if it isn't too late already.  

All - educate family and friends.  I regularly email news articles to a large number of f/f.  They probably think I am some doomsday conspiracy nut.  However, if I get some to open their eyes, then that is less f/f I have to feed when they come to my house when all hell breaks loose.

Fool on!

JFC

 

 

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#11) On January 13, 2010 at 6:51 PM, leohaas (91.57) wrote:

If this is true, here is how to deal with it: 

Quit (or get yourself laid off--should not be difficult in today's environment), and roll over your 401(k) into an IRA.

In the next job, do not contribute to the 401(k) if the employer has one. Instead, use IRAs (Roth, if you are eligible).

In any case, convert your IRA to a Roth this year (especially if the market makes a nosedive).

JFC: FWIW you ARE a conspiracy nut. But keep on writing: I like a good laugh with my diner!

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#12) On January 13, 2010 at 6:51 PM, devoish (98.71) wrote:

jesus freakin co.

I don't get it. The article does not mention 401k's at all. It just says the USA needs to take steps to reduce its deficit. Strengthening the dollar will increase the purchasing power of my 401k.

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#13) On January 13, 2010 at 6:54 PM, floridabuilder2 (99.65) wrote:

To me you are not talking doomsday conspiracy since I too detect massive financial fraud just by the definition of what I do for a living.  My number one belief is that no one can predict what the eventual outcome is going to be, but instead we should use our knowledge by explaining how to protect ones assets.

You pump gold/silver and those are good choices....  I choose to differentiate because when people state that all homebuilders suck and they are worthless, foolish sheep take that advice as a guarantee and then short the for sure thing.  The economy IMHO is going to produce massive winners and massive losers in banking, housing, and REITs.  I like to put my money in games where I know who is a fraud and who isn't

 

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#14) On January 13, 2010 at 6:56 PM, devoish (98.71) wrote:

Sorry, I missed the third link.

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#15) On January 13, 2010 at 7:24 PM, devoish (98.71) wrote:

The ICI points out that a lot of people's 401k's dropped and then recovered. If the USA is talking about reminding people that more fixed income might be a better idea as they approach age 65 that is ok with me. They don't seem to be making anyone do anything.

It also includes these two little gems;

Senator Herb Kohl, chairman of the Senate Special Committee on Aging, proposed legislation on Dec. 16 to require fund companies to do more to ensure 401(k) options are appropriate for workers. The Wisconsin Democrat cited reports that target- date funds designed for people retiring in 2010 invested in high-yield, high-risk corporate bonds.

Senator Kohl seems to be talking about increasing your choices of where to park your money, by making apropriate options available for workers.

Representative George Miller, a California Democrat, is advocating legislation to require more disclosure about 401(k) fees paid by investors. The Education and Labor Committee, which Miller leads, approved a bill requiring more disclosure about fees in June.

Representative Miller is hot on the trail of another investment bank scam, skimming 401k's for fees that destroy any gains most people get.

 

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#16) On January 13, 2010 at 7:46 PM, AvianFlu (47.82) wrote:

re: post #10

True, most 401K programs only offer very basic "safe" mutual funds. However, I've got mine loaded with individual stocks, foreign ETFs, and the CEF gold/silver product. I'm an employer and I set up the plan. For my employees I offer the normal American Funds, but for myself anything goes. If you talk to your boss or the 401K administrator you might be able to convince them to allow more diverse investments. You might have to sign a hold harmless in case you completely bungle it and lose all your money.

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#17) On January 13, 2010 at 8:09 PM, jesusfreakinco (29.61) wrote:

Leo - nut.  I guess I'll take that as a comment.  Those that were calling for a financial crisis ala Lehman and worse (Shiff, Rogers, Roubini, etc) were thought to be nuts as well.  Good advice on 401Ks.  If they target them, they may also target IRAs as well.  Time will tell.

FB - good points.  Those on the inside (i.e. GS, JPM, etc) will be winners and those on the outside (mutual fund investors, average mom/pop) may be losers.  Like reverse robin hood.  I appreciate you have to differentiate between the two.  Personally, I find it hard to bet with the insiders just out of principal even if I know I may miss out on a sure winner.  It is the equivalent of insider trading.  This 'principal' thing is called integrity and was is missing in our culture IMO.  More importantly, it is dramatically missing in our politicians.  Having avidly followed the gold/silver miner market, I see there was dramatic winners and losers there.  Here's hoping I picking the winners and to CAPS for providing experts like yourself for HB and Sinchy for PMs.

Devo - thanks for sharing the vids.  I'll have to watch those.  Knowing that 90% of mutual funds can't outperform the S&P - already a racket IMO. Maybe these fees are the reason.

 

Avian - think about today's market -overvalued stock market, overvalued bond market, breaking the buck a potential for money market funds, and guaranteed income funds being provided by insurance companies that are zombie insurance companies bloated FASB-crap balance sheets.  With that in mind, where is the average investor supposed to put their money if they expect a crash similar to what we had last year?

JFC

 

 

 

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#18) On January 13, 2010 at 8:14 PM, soycapital (< 20) wrote:

"A government powerful enough to solve all your problems is powerful enough to take everything you have."

GOOD POINT, AND SO TRUE, WISH MORE PEOPLE REALIZED THIS FACT!

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#19) On January 13, 2010 at 9:03 PM, BMFPitt (77.21) wrote:

what kinda bizarre comment is that?

One that seems to have gone way over your head.  Go find someone with two brain cells to rub together and at least a basic knowledge of Steve Martin movies and internet hoaxes, and have them explain it to you.

Would you trade in your 401K plan for a promise from the govt?

No.  I wouldn't trade it straight up for a moped, either.  So what?

If you really wanted an annuity, there are plenty of private options.

If you really wanted to find something horrible the government has done or is going to do to rant about, there are plenty of things that aren't complete fantasy that you could go with.

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