Hmm... where to hide the 401k...still looking for a safe haven

The amount of money destroyed by chasing yield is going to be epic.

And the clock continues to tick...

(Wow, is it any coincidence this place uses the words tick and Ticker...???)

As regards senor Bucky, the lights are flashing, the horn is blaring, and yet folks are milling around the train tracks as if nothing is happening. Forum members who haven't put a bit of money in foreign banks or currency aren't paying attention. I saw a bit the other day that showed that each American's share of the national debt is $45,000 - a thousand more than each Greek owes.

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I saw a bit the other day that showed that each American's share of the national debt is $45,000 - a thousand more than each Greek owes.

Rerun the calculation using the number of people who actually work. Leave out kids, elderly, truly disabled, etc.

Riceday - I have had the same problem since 2007...what is the least terrible option in my 401k. For me it's 75% in the Money Market fund and 25% in the US Treasury fund. I'm extremely lucky because the Money Market fund I'm in has only US exposure (everyone needs to do their due diligence here!). The Treasury fund (Vanguard Short-Term Federal) unfortunately has a ton of Federal Home Loan Bank (FHLB) exposure which is not backed by the full faith and credit of our Treasury, like Fannie and Freddie weren't 2-3 years ago, until we bailed them out too. Every other option in my 401k puts me into corporate bonds or stocks...no thank you.

My 401k is basically forced participation in these markets, no option to sit in cash, no options for precious metals, have to quit my job to pull the money out, etc. I realize I'm the exception to the rule here as I'm ultra-conservative with my money (the above allocation kind of proves that). :)

Since when does Paypal give a rat's ass about raping its customers?

"Since when does Paypal give a rat's ass about raping its customers?"

Seconded. That brought me a smile. And a single tear.

Steelhead,

This here link is worth staring at for a minute or two:

http://www.usdebtclock.org/

Meanwhile, here in WA I heard a proposal yesterday that the state wants to "invest" the pension money it's holding into businesses which can't otherwise get a loan. Sounds like an awesome strategy.

@Riceday: exactly - there's no flexibility in my 401K. I hate how the IRS has structured these plans. They should be just like my IRA - give me full control of my investment options

Burke, When the Reserve Fund broke the buck I had money in a sweep account (barely knew what that was then) at my broker, but I had selected the Treasury only fund, and had been accepting a lower yield for a year or so on account of that. Well, Reserve Fund froze its assets so money went in overnight and didn't come out. And they did that not just to the fund in question, but to the TREASURY ONLY fund. keeping the sweep from my account. They let the funds loose after a week or so and who knows how many trillions of lubrication The Bernank slathered all over the system.

So they had to be co-mingling funds or some illegality, but no one goes to jail.


Anyway that is a warning for everyone from my experience.

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I saw a bit the other day that showed that each Americans share of the national debt is $45,000 - a thousand more than each Greek owes.

Let's quit bull****ing around here. Americans owe at several levels. Janet chimes in for Chicago.

"Our total debt for the municipality, education, county, sanitary, park, fire, township, library and special services is now $108 billion. That means the debt per person in Chicago exceeds $23,700 (corrected assuming 2.67 average per household) or more than $63,500 per household, and that is just local debt."

Now I don't know what Greeks owe at local levels, but chances are, our numbers are probably worse in total.

Edit: It does not look like Janet included state debt in that either.

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We actually did, from a regulatory perspective......... nothing.

While that is impossible to accept or digest, it is easy to see how it has come to be. You have people who understand very little about finance or economics trying to fight the bankers and moneyspinners, and on the other side you have pretty much everyone with any financial expertise or credibility in the public eye standing squarely on the side of not regulating the institutions and processes that caused the failures leading up to 2008.

It is so easy for CNBS to bring Senator after Senator, Congressman after Congressman, Governors, Former WH/Hill Staffers, Professors, Experts with financial and economic creds who use hyperbolic rhetoric to dismiss any attempts at regulation and warn us of Hellfires if we do anything to restrict the madness on Wall Street and the Financial industry at large. Surprisingly they also want to keep the madness in govt going on - with emphasis on burning more borrowed money to buy and drop more weapons on stone age peasants and middle ages morons.

How hard would it have been for Obama to come in, market drops to 666, BAC is selling for $2, C is even lower, and Obama says, okay this cannot go on forever, we need to split the customer banking from investment banking and get the former working smoothly while working separately to stabilize the latter. Things would have been so different - not only would we have had more job creation, we would also have had more honest markets and better prospects for the future. Instead any hint of govt interfering in banks, other than to give them billions of dollars carte blanche, was hyped up as nationalization and socialism and whatnot and Obama and his cohorts backed off and did exactly what needed to be done for the banks to the car companies. Funnily now everyone is touting how wonderful GM and Chrysler are now - which is also a gross exaggeration.

Ultimately we must be in such deep, unrecoverable **** that the experts in finance and economics believe that hanging on to falling rocks is the best strategy to soften the blow at the bottom of the cliff we sped off of. Or we have elevated the most incompetent and dishonest, clueless people to positions of power and influence on finance and economics.

If enough people wanted the financial institutions to be regulated properly, it would have happened. If enough people want the FIs to be NOT REGULATED and granted impunity it would have happened, and it did. That is where we need to start fixing, if we are looking for a fix. We need more people wanting to address the real problem of financial recklessnes at every level, instead of having enough and more people articulating loudly the imaginary threats of socialism, communism, communalism, Black Nationalism and so on. Just something to think about for a few minutes.

My 401K has options in equities, bonds, money market funds. What's a sane person to do? That's serious question for this board, obviously much heavier on money matters than I am.

It's getting to feel like the options are a) take it in the eye socket, b) in the *******, c) down the throat. The probability of these funds being of any value when I'm 65 (or 70, or 75) appears to be small and decreasing.

Looks like a very astute move by Pay Pal, I wonder where they will invest short term if not in money market funds.

Treasuries?


Money market funds were given the ability to close the gate and deny redemptions awhile back.............

Flaps - Thanks - I about coughed-up my Cheerios when I added the average personal debt to the individual's share of the national debt. Anyone here who hasn't read the Burning Platform's Part 5 - Unforgiven, needs to. Let us hope that we aren't on the brink of a fourth turning.
http://www.theburningplatform.com/?p=165....

Trust everyone with 401k has checked whether "self directed brokerage account" is an option. They don't go out of their way to let you know, but if you can do that then obviously your choices become "unlimited".

The money don't exist Karl. It is nothing but a mirror of commercial paper it holds and liquidity is through a line of credit with a bank, probably secured by compensating balances. It has to clear through M1 in some fashion.

I have been reading about the MM funds lending to French banks. Many of the banks there are having trouble borrowing dollar funds. Anyone think the dollar is going to zero, don't forget these banks have to have them to cover their liabilities. Banks are liable for their assets. Acting-man.com had an article last week about the big 5 US money market funds being in European paper really deep in search of yield. The mortgage bubble/CDO market was piled upon asset backed commercial paper. This was what the SIV's were and why Citi and others had to take them onto their books, namely they couldn't roll the asset backed paper, so they had to fund it themselves. Few people realize that everything collapsed in 2008. Just a row of dominoes. But, remember they have to find a yield somewhere because the bald idiot running the Fed has rates at zero. Why have a MM Fund or better yet, have your money in one if you get zero?

Yep. Of course when the yield is 0.1% what the **** are you doing chasing that **** in the first place?

0.1% ?

Really?

How about some EXTREME LEVERAGE with that, Karl...

( first chart: http://online.wsj.com/mdc/public/page/md.... )

Get out of money markets and into Legos sets and bobbleheads. When things collapse the children will need toys! GO LONG TOYS!

@riceday & maxplanck

thank you fellows for expressing concern. I'm right there , 65 next month with IRA 85% cash 10% GE 5% mining. And worried sick.

When next crash comes i'm loading up on electric utility stock - pays a dividend, has captive market, can't be imported.

What's an uneducated man to do? I'd try to imitate the smart money but don't understand their vocabulary.
Except for plain spoken Warren Buffet who bought the railroad that hauls coal thru my small town to Southern Co plants down Alabama way. But that train done left the station.


end whine. Thanks for your posts, they lightened my day even if it's just catharsis..

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When next crash comes i'm loading up on electric utility stock - pays a dividend, has captive market, can't be imported.

If the balance sheet is ok that's not a bad strategy. Just don't do it until the valuation and dividend payout makes sense.

I've never looked at municipal utility bonds. Do the utility bonds pay off general revenue or from business revenue? I seriously know almost nothing about bond investing or preferred shares. Any thoughts?