Papantonio: Don't Become a 401K Victim

[GoLeft TV]

I saw a cartoon a couple of days ago -- it pointed out that the best thing Edward Snowden could do to avoid being prosecuted by this government would be to hide on Wall Street, because as we've all learned, this administration never prosecutes anyone on Wall Street.

So when a Wall Streeter banker, broker, or trader robs your 401K, scams you into fraudulent foreclosure, or makes your pension disappear by way of a CDO, a Swap, or a Synthetic hustle, he or she is always pretty sure he can keep the scammed profits, never go to jail, and probably get a bonus for excelling at his criminal conduct.

So last week when 80 Wall Street business types showed up in the beltway to ask for even more protection for their criminal conduct, corporate media barely noticed or reported the story because, well, Wall Streeters being granted immunity from criminal prosecution has become such commonplace in Obama's America.

More at Ring of Fire.

[ctsnowman]

1. K & R

[BlueStreak]

2. It is an important story, but I don't think it applies to as many as Mike implies

Maybe I don't understand all the ramifications, but the behavior he is describing sounds like what can happen when a saver turns over his portfolio to a stock broker to invest in individual stocks.

A person would have to be practically insane to do that. It is one thing to invest in individual stocks, doing your own research, and also listening to advice from your broker. It is another thing entirely to give the broker carte blanche to make investment decisions on your behalf. That would be nuts, and will always lead to abuse, even with the fiduciary rule.

It seems to me that most of the people in this audience who have significant 401Ks should have all or nearly all of the money in mutual funds or cash. There is room for abuses in mutual funds too, but that is a different story. In general, mutual funds live or die based on the results their managers produce, so they actually have a strong incentive to give a good return to the individual. That's not to say there aren't crooks in that industry. There are, but I don't think it is so widespread. What *IS* widespread is insider trading, and that is the thing that really rips off the small investor.

[customerserviceguy]

4. Thanks

401K's themselves are not the problem, it's giving them over to the ripoff artists that most "investment experts" are. I keep all mine in a money market fund, and while I'm not making any interest, I can sleep at night knowing that I'm not losing any principal.

[BlueStreak]

8. Sadly, there are a lot of people that do give their money to ripoff artists

A friend of mine is an attorney who specializes in retirement plans. He doesn't manage any investments. He just sets up the legal structures (living trusts, etc.) Every year he will have 5 or 10 stories of elderly clients that got ripped off by unscrupulous people left in charge of these clients' accounts. Fortunately they can be sued successfully and it is fairly easy to prove unethical behavior in this area because it almost always involves churning lots of commissionable transactions and purchasing some assets that obviously are not appropriate for a retired person needing to preserve wealth.

[NoMoreWarNow]

7. Thanks-- I was wondering about mutual funds

Most of my retirement fund relating to stocks investment are in mutuals. Direct stock investment is highly risky, it has always seemed to me --and I hope no one has retirement funds in swaps and hedge funds and those super risky derivatives.

[A Simple Game]

3. The little guy no longer has a way for his money to make money.

The stock market is a game and all the little people are pawns to be sacrificed.

Real estate is no longer a safe investment.

I was in a bank a week ago and noticed their interest rates, the best one was on a, and I can't remember if it was 60 or 72 month, CD for 1.15%. 1.15% for 5 or 6 years! How much money would you lose? I think maybe 10% to 15% would be close considering the inflation rate.

[customerserviceguy]

5. Return on investment is not going to provide you with a retirement

Deferring current consumption to sock away for the future will. There's simply no other way around it, the magic money multipliers of the old days are gone forever.

[DhhD]

6. Thanks. When a company is closed in the future or reconstructed before your retirement,

your 401K loses the 50% that your employer put in it. You get the 50% that you put in and that is no longer worth what it was in the past. Your lose, lose, and lose again to fees,time and scammers.

The word, reconstruction, was a word used in Reaganomonics when the 401K was first started. It has been a plan of Wall Street to confiscate your money for many many years. It was the plan of the Greenspan Commission of 1983 to allow Wall Street to confiscate part of your Social Security fund also.