The flip side of the Wall Street bailouts...

[Badfish]

My 401K has rebounded nicely.

The GOP can spin all they want , but these improving 401 statements keep showing up in the mailboxes of voters , and they like what they see , and they know who got us there.

Now before I get 40 unrecs and posts telling me that not everyone has a 401 , let me say I agree with you , but there are alot of people who do have a 401K.

401K's at a 10 year high ? ... http://www.bloomberg.com/news/2011-02-23/fidelity-says-average-401-k-account-hit-10-year-high-last-year.html

[RUMMYisFROSTED]

1. 401K

:loveya:

/s

[truedelphi]

2. Uh, that is very true. But the reason the economy sucks has nothing at all to do with your

401 K being bailed out.

The big problem here is that the Big Noise media (Or Sack of Lying Crooks, as we call them in this house) have you and almost everyone else believing that we bailed out Wall Street to the tune of some 700 billion bucks.

Well, the real story is (And this became totally apparent the first week in Dec 2010 when the results of very superficial audit of the Federal Reserve was announced) is that some nine trillion bucks have been "loaned" or given out the back door of the Federal Reserve in the period from October 1st 2008 till whenever.

Nine Trillion bucks. (And some people, cynics are they, think it might be as much as thirty trillion bucks.) We don't know who it went to, but we do know that it wasn't used by the Big Financial Firms to help the small time dairy farmers, many of whom went belly up in the summer of 2009. We know it didn't help people running small businesses get loans, or help the middle class watch their society successfully survive. Most of us in the middle class are not seeing much of anything survive.

This really matters - why the hell this money was "lent" out to god knows who when the states are suffering I don't know.

It didn't help the states - over 35 states now have serious budget deficits. When Gov Schwarzenegger asked Tim Geithner for a 20 billion buck loan to help the people of California out, that request was denied, because Geithner doesn't want to impact our deficit.



But hey, it did help Goldman Sachs buy an entire nature preserve in Patagonia (South America) and of course, it is a tough commute for most Americans if they want a job as a docent down there.

As pre-emptive rebuttal to those who don't know what I am talking about, here is Octafish describing the results of the Dec 2nd announcement about problems at the Federal Reserve:

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=439x45488

[Badfish]

3. Gotta .link ? ...thanks.

Nine Trillion bucks. (And some people, cynics are they, think it might be as much as thirty trillion bucks.

[truedelphi]

5. If you read my post, to the very bottom, you will duly note

the link at the Bottom.

Lazy person that I am, I let Ocatafish do the hard work on this one, way back in Dec 2010.

[jtuck004]

15. Here ya go

http://www.banksterusa.org/content/feds-backdoor-bailout
http://www.youtube.com/watch?v=uwhMVB0XzPU&feature=player_embedded

And there is more detail in

It Takes a Pillage - Nomi Prins
Econned - Yves Smith
Too Big To Fail - Sorkin
Bailout Nation - Barry ritholtz

This is detailed in many other pages and books, a surpising amount of information given that the Fed has not yet had a public accounting, and the major firms continue to operate behind an opaque shield handed them in the Commodities Futures Modernization Act that President Clinton signed, (to his credit he later said he got bad advice from Larry Summers, who is currently advising Obama, and Robert Rubin).

It is disingenuous to say we just loaned them money and they paid it back. That ignores the hundreds of billions, and possibly trillions of dollars they kept by taking those loans at zero or .07%, buying Treasuries which were paying 3%, collecting the interest, then later paying back the loans.

It ignores the fact that they created trillions in face value of worthless paper, then had the fed, working with the Treasury, purchase them at 100 cents on the dollar, leaving the taxpayer holding a bag of what is essentially old newspaper.

And it happened, and continues, by creating the legislation in the Clinton administration, fueling the problem in the Bush administration, and funneling them trillions of taxpayer dollars in the Bush and Obama administrations.

All of these "people" bear a special responsiblilty for the 5 million people whose homes are underwater, for the children that are among the record 40 million people who now need food stamps, for the lack of a program that directly addreses the need for jobs by 27 million Americans, for the communities that are finding themselves crumbling, while they make excuses.

It's really too bad that the pain and suffering that will be the lot of many people won't be visited on the people that caused these actions and those who defend them.

[Badfish]

17. sure , Im understand that.

Thats why I titled the thread .."the flipside of the bailout"

The bad side is what you just posted , it's what we have all been debating and upset with for a few years now.

The flipside is main streets 401K's have recovered , the topic of the thread.

[jtuck004]

18. The annual reports show the 401K recovery is

mostly due to sales outside of our borders.

Thus, people with stocks, which are held disproportionately by the very wealthy, are participating in a recovery that most of the country is not. The rest of the 98% of the people have their wealth mostly in their homes, which are falling off a cliff.

In one example Coke showed a 20% drop in domestic sales, but record profits overseas. China is putting 1500 NEW vehicles on the road every day (ones that did not exist before), for the first time selling more than we did, here...

If oil continues it's price increase, however, even those 401k's may see a real hit. Japan has put a crimp in that, but I have faith in the volatility of the major oil producers, as well as the lack of vision among those who could bring our assets to bear on finding new ways to reduce our reliance on oil. I think they will still find ways to screw things up. ;)

[Badfish]

20. I disagree.

Thus, people with stocks, which are held disproportionately by the very wealthy, are participating in a recovery that most of the country is not. The rest of the 98% of the people have their wealth mostly in their homes, which are falling off a cliff.

Americans with stocks, mutual funds, 401K's ect... number just around 50% ....nothing like the 2% you posted.

You better take another look.

[jtuck004]

23. It has a whole different meaning when you make up your own words.

If that's what you want to do, I will find a better use of my time.

I said stocks which are held disproportionatly by the very wealthy, not what you wrote, "Americans with stocks".

Fact is, with an average income of in the U.S. of about $50,000 yr, most people can't afford to buy stocks to any great extent (except within a pitifully small retirement program if they even have that), and a home is the single most prevalent asset of any size among 98% of the population.

If one is in the group with 1.5, or 3, or 5 million in yearly income, the majority of their wealth is in financial instruments.

There are lots of sites with that information, do your own homework. But this one was interesting

http://www.mybudget360.com/how-much-does-the-average-american-make-breaking-down-the-us-household-income-numbers/

[truedelphi]

28. Thank you for trying to reason with that

Guy.

And thanks for the interesting information,link provided.

Will check it out.

[Badfish]

8. Here is some info on those loans... says they were paid back

The loans were made through a special loan program set up by the Fed in the wake of the Bear Stearns collapse in March 2008 to keep the nation's bond markets trading normally....The amount of cash being pumped out to the financial giants was not previously disclosed. All the loans were backed by collateral and all were paid back with a very low interest rate to the Fed -- an annual rate of between 0.5% to 3.5%.
http://money.cnn.com/2010/12/01/news/economy/fed_reserve_data_release/index.htm

[truedelphi]

14. Key sentence and you need to understand what it means

"All the loans were backed by collateral and all were paid back with a very low interest rate to the Fed..."

The collateral those Financiers used was about as valuable as the used toilet paper in any of our houses.

Oh and slightly different subject, but my outrage continues to let me digress -

TARP monies were paid back too, and in some cases by tax write-offs especially created for the TARP loan holders.

[Badfish]

24. LOL , Thats "the key sentence" ?

The loaned took place , collateral was put up ,...the loan was then paid back.

And you are here complaining about the collateral ? ...on a loan that was paid back years ago ?

Holy fucking shit. This board has gone to a dark dark place.

401K's are at a 10 year high , very good news for Main Street , ..and you have to piss all over it cause you are upset about some collateral that was put up for a loan that was paid back years ago ?

Thats some fucked up shit.

[Badfish]

9. A few things...

You said the 9 trillion was 'loaned' and 'lent' ..implying it wasn't paid back. It WAS paid back.

Then you claimed "We don't know who it went to" ...and we do. Here ya go...

[truedelphi]

22. Okay, i admit to being partially wrong.

It may be that some of these nine trillions dollars was paid back.

but it was paid back with collateral, which if you understand what the Financial upswing of 1995 to 2008 was about, you understand that collateral was about.

Basically worthless pieces of paper..the bad bets that the Financial Players placed on things like CDO's and CDS's.

[xchrom]

4. Lots of people didn't suffer particularly in the down turn.

Doesn't mean a thing.

[Badfish]

6. I suffered.

and am glad to see my 401 rebound.

thanks for your concern.

[walldude]

13. OMFG.. Yeah like all the concern you show for people

who are really suffering.

Yeah I'm sure someone who had to decide between food and medication this week is very happy for you and your 401K and this great economy we are living in.

What unmitigated gall...

[Badfish]

16. I am unemployed and injured.

My wife just had her $10.00 an hour job cut to 4 hours a day.

I rent a 200 sq ft. efficiency and am wondering where rent will come from in a few weeks.

All I have is my 401K.

Don't act as if you are in this alone. You have no idea who you are talking to.

[xchrom]

26. If you're wondering where the rent is coming from

Then you need to cash out.

You need to make sure your landlord is taken care of.

[jtuck004]

21. Millions of people have less than $20,000 in a little 401K

which puts them in much the same boat as others. I have been doing tax return after tax return in which people have held onto those until they no longer could.

I did one for a woman who is homeless. She still has a 401K with about $8,000, near as I remember. Spent a month in her car last summer rather than cash it and move in somewhere, now in a shelter. Said she won't cash it until the very last thing because when she loses that she knows there is nothing else.

I know it seems like having a litte bit to fall back on puts people in a better place, but after taxes that money won't last most people a year. 10,000 people a day are turning 65, and over a third of them have nothing except social security, while another 15% or so appear to have these little 401K's. One good medical bill or a couple years of medications and it could be all gone.

If the economy is so bad that people who are not retired are having to cash those in, and with no real job creation on the horizon, that means we, as a whole, are probably all screwed.

[Cali_Democrat]

7. Equities are rising because of printed money from Ben Bernanke and the Fed

Once he pulls the plug on Quantitative Easing, the market will tank and we'll be back to square one.

Meanwhile, all the printed money he created will have driven up the prices of commodities so much that the average American consumer will spend a huge portion of their budget on food and energy.

Our economy is built like a house of cards and it will all come crashing down.

[Badfish]

10. well thats the trick , isn't it.

inject money into the economy to start a recovery , then suck it back out before inflation gets out of control.

I think the Administration knows what they are doing.

[Cali_Democrat]

12. Well...

Look at the values of various commodities futures indexes since Bubble Ben Bernanke announced his latest round of money printing a.k.a. QE2 in September 2010.



http://www.bloomberg.com/markets/commodities/futures/

It might be too late to pull the plug.

[Exilednight]

11. That's the best simplistic explination that I've heard. Many think they

understand macro-economics, but they don't.

In a nutshell, you've pretty well hit the problem. If the fed goes ahead with QE3, we're really fucked.

[truedelphi]

29. Well, what Bernanke would say to you, as he said to the folks on

"Sixty Minutes" is a version of "pish posh!"

It is NOT printed money. (According to Bernanke.) Instead, using the most modern computer technology, he creates a digitized account for the firm that the Federal Reserve is bailing out, and then places digitized dollars inside that account.

And according to Bernanke, neither you or any other taxpayer is liable for that money. it is digitized - that is the ticket. And after all, it is not to be noticed by Congress, because at the time in 2009 when Bernanke delivered this spiel of lunacy to "Sixty Minutes," the audit of the Federal Reserve was just a crazy glimmer in the eyes of people like Dennis Kucinich and Ron Paul.

So, according to Bernanke, digitized dollars don't count. They are not inflationary, they are not meaningful in any way.

Of course if it is the governor of your state wanting some loans from Treasury or the Fed, so that thousands of teachers, social workers, fire men and police don't get layoff notices, then all of a sudden those dollars have meaning, and the request will be denied.

But if it is Goldman Sachs, or AIG, or any of a handful of Big Banking Financiers, why, roll out the carpet and offer them those digits!

[bergie321]

19. Yeah....

...Until the next bubble pops.

[JoePhilly]

25. Not if you pay attention.

If you have a 401k, you need to manage it.

Most 401ks do not require one to be invested in risky investments. which means you can PICK how much risk you are willing to take.

Now, if you are risk averse, you select extremely conservative investments. You put your money in those, you collect a company match (where that is possible), you take a tax break on this money.

One can also decided that their investment horizon is long enough to ride out major fluctuations. Or, one can do this ... you dollar cost average your deductions, and then for any run up of say 5-10%, you shift gains into conservative investments. If the run up continues, you let your contributions continue as is ... if the market falls ... because you have already protected gains, you change your contributions to focus on the largest losers in the drop, so as they recover, you get an added gain.

To do this, you need to be focused. But if you don;t want to do this, just put your 401k in the most conservative investment that you have access to.

[kickysnana]

27. They will let you amass more and then take it all again unless we stop them n/t