El texto tiene comentarios que son brutales, se ve como el dinero que se ha invertido en la basura son los de los fondos de pensiones, en breve llegara la ostia de las perdidas de los fondos como pronosticaron los del GEAB

Articulo muy recomendable e ilustrativo

Market Skeptics

*****401(k)s Hit by Withdrawal Freezes*****
by Eric deCarbonnel


The Wall Street Journal reports that 401(k)s Hit by Withdrawal Freezes.

(emphasis mine) [my comment]

MAY 5, 2009
401(k)s Hit by Withdrawal Freezes
Investors Cry Foul as Some Funds Close Exits; Perils of Distressed Markets
By ELEANOR LAISE

Some investors in 401(k) retirement funds who are moving to grab their money are finding they can't.

Even with recent gains in stocks such as Monday's, the months of market turmoil have delivered a blow to some 401(k) participants: freezing their investments in certain plans. In some cases, individual investors can't withdraw money from certain retirement-plan options. In other cases, employers are having trouble getting rid of risky investments in 401(k) plans.

When Ed Dursky was laid off from his job at a manufacturing company in March, he couldn't withdraw $40,000 from his 401(k) retirement account invested in the Principal U.S. Property Separate Account.

That fund, which invests directly in office buildings and other properties, had stopped allowing most investors to make withdrawals last fall as many of its holdings became hard to sell.

Now Mr. Dursky, of Ottumwa, Iowa, is looking for work and losing patience. All he wants, he said, is his money.

"I hate to be whiny, but it is my money," Mr. Dursky said.

The withdrawal restrictions are limiting investment options for plan participants and employers at a key time in the markets. The timing is inconvenient for the number of workers like Mr. Dursky who are laid off and find their savings inaccessible. [More than “inconvenient”, considering the imminent collapse of the dollar. By the time workers can access their savings again, they will have lost all value.]

Though 401(k) plans revolutionized the retirement-savings landscape [financial sector] by putting investment decisions in the hands of individuals [profit hungry financial institutions], the restrictions show that plan participants aren't always in the driver's seat.

Individual investors mightn't even be aware of some behind-the-scenes maneuvers causing liquidity problems in their retirement plans. Many funds offered in 401(k) plans lend their portfolio holdings to other investors, receiving in exchange collateral that they invest in normally safe, liquid holdings. [Key point]

The aim is often to generate a small but relatively reliable [insanely risky] return that can help offset fund expenses [ie: big bonuses for those gabling away America’s retirement savings]. But in recent months, many of the collateral investments have gone haywire [AAA subprime CDOs squared aren’t worth anything? Who knew (heavy sarcasm)], prompting money managers to restrict retirement plans' withdrawals from the lending funds. [Overleveraged hedge funds which borrowed stocks have gone bankrupt and the AAA/toxic collateral they provided is worthless. There is no money, so “money managers” are restricting withdrawals and hoping subprime borrowers start making their mortgage payments again.]

Some stable-value funds also are blocking the exits. These funds, available only in tax-deferred savings plans such as 401(k)s, typically invest in bonds and use bank or insurance-company contracts to help smooth returns. But in cases of employer bankruptcy and other events that can cause withdrawals, these funds can lock up investor money for months at a time.

Investors in the Principal U.S. Property Separate Account said they understood the risk of losses, but didn't think their money could be locked up for months or years. Most participants in the 15,000 plans holding the fund haven't been able to make any withdrawals or transfers since late September.

"To sell property at inappropriately low prices in order to generate cash for a few would hurt the majority of investors and violate our fiduciary obligations," said Terri Hale, spokeswoman for Principal Financial Group Inc., the parent of the fund's manager. The fund, which had $4.3 billion in net assets at the end of April, still is making distributions for death, disability, hardship and retirement at normal retirement age.

As of April 28, redemption requests that had yet to be honored totaled nearly $1.1 billion, or roughly 26% of the fund's net assets [That is a lot of money]. Principal doesn't anticipate that it will make any distributions to investors who have requested redemptions until late 2009 or beyond [Dollar won’t be worth anything by then…], Ms. Hale said. Meanwhile, the fund continues to fall, declining 25% in the 12 months ending April 30.

Some investors have lost hope of recovering their money [because it is gone, thanks to “money managers” (ie: those who “manage” to make your “money” disappear)]. Judith Sterner, a 69-year-old part-time nurse, had more than $12,000 in the fund when she tried to transfer that balance to a money market last fall. But her transfer was denied, and her stake has since declined to less than $10,000.

"This $12,000 represents a year of my retirement money that I don't have," said Ms. Sterner, of Morton Grove, Ill.

Principal still allows new investors into the fund [they need this money to continue paying those “money managers”]. It categorizes the U.S. Property account as a fixed-income investment, alongside much stodgier funds holding high-quality bonds. New investors are warned of potential withdrawal delays, Ms. Hale said. As for the fixed-income categorization, she said, "a substantial portion of the account return is based on income streams from rents, and its returns have been comparable to fixed-income funds."

While the problems selling real-estate investments are relatively straightforward, withdrawal restrictions related to securities lending stem from far more obscure practices [ie: the wonders of securities lending].

Funds often lend out portfolio holdings, through a lending agent, to other investors. These borrowers give the lender collateral, often amounting to about 102% of the value of the securities borrowed. Some of the collateral pools in which funds invest this collateral held Lehman Brothers Holdings Inc. debt and other investments that plummeted in value or became hard [impossible] to trade in the credit crunch.

Though agents who coordinate funds' lending programs share in profits from securities lending [notice how every level of the financial system profited enormously by taking risk with the savings of others], the risk of such collateral-pool losses falls entirely on the funds that have lent the securities and, ultimately, retirement plans and other investors holding those funds.

The problems have limited retirement plans' ability to get out of securities-lending programs [if the entity which borrowed securities went under, these lent securities will never be returned], though participants' withdrawals generally haven't [yet] been affected.

Retirement plans offered to employees of energy company BP PLC last fall tried to withdraw entirely from four Northern Trust Corp. index funds engaged in securities lending. Certain holdings in Northern's collateral pools had defaulted, been marked down, or become so illiquid that they could only be sold at low values, according to a BP complaint filed in a lawsuit against Northern Trust.

The BP plans halted new participant investments in the funds and asked to withdraw their cash so it could be reinvested in funds that don't lend out securities [BTW. Securities lending is the counterpart to short selling. One can’t exist without the other].

But under restrictions imposed by Northern Trust in September, investors wishing to withdraw entirely from securities-lending activities would have to take their share of both liquid assets and illiquid collateral-pool holdings, according to a Northern Trust court filing. BP rejected that option, and the companies still are trying to resolve the matter in court.

Northern Trust's collateral pools are "conservatively managed" and focus on liquidity over yield [How can they say that with a straight face?], the company said.

State Street Corp. in March notified investors of new withdrawal restrictions in its securities-lending funds. Until at least the end of the year, plans can make monthly withdrawals of only 2% to 4% of their account balance, the notice said.

Plans wishing to withdraw entirely from lending funds will have to take a slice of beaten-down collateral-pool holdings.

"Given the current state of the fixed-income market, we felt it was prudent to put some well-defined withdrawal parameters in place," said State Street spokeswoman Arlene Roberts.

My reaction: 401k funds are blocking cash withdrawals.

1) Some investors can’t access the money in their 401k accounts because their investments in certain plans has been frozen.

2) Most funds offered in 401(k) plans lend their portfolio holdings to other investors, receiving in exchange collateral that they invest in toxic/worthless assets rated as AAA.

3) As expected, the toxic/worthless collateral pools have defaulted, been marked down, or become so illiquid that they could only be sold for pennies on the dollar.

Conclusion: It would be a VERY good idea to get out of your 401k. Securities lending has been a near universal practice, which means virtually no 401k retirement fund is safe from withdrawal freezes.

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Nief, lo traje hace un par de días. La verdad es que a muchos usanos se les van a abrir los ojos de golpe. Y no va a ser agradable.

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Crei verlo por algun sitio pero no lo encontraba, me gustaron mucho los comentarios que hizo el autor del blog al texto.


A medida que mas y mas gente necesite mas dinero porla crisis e intenten recuperarlo... se iran dando cuenta que no hay dinero para recuperar.

Ahi empezaran las despariciones de dinero.

Me flipa ver como dan como hecho que para final de año el dolar no valdra nada

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Al loro con los comentarios...


dashxdr said...

Speaking of 401K's, my story went like this:

A company I worked at until 2001 offered matching funds, so I participated in their 401K program. When I left that company, I rolled the 401K into an IRA and I managed the investments.

The value got as high as $28,000 or so. Then 2008 it crashed, along with most everything else. It got to around $6,000, and I thought what a great time to get out of the 401K. So I requested the 401K equities be moved into my regular brokerage account. This becomes taxable income ($6,000, whoopie, but a lot less than $28,000). And I'm liable for a 10% penalty, or around $600.

Great time to exit 401K's. I got paranoid when I heard about Argentina seizing control of the people's retirement accounts. It's only a matter of time before the US government tries that, now that Social Security is bankrupt and only holds a bunch of IOU's from the US government.

Yep, good idea to get out of these retirement accounts. The US government is not going to exist much longer anyway.

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Al caso de esto, adivina que empezó a hacer el gobierno español el año pasado con los fondos de la seguridad social?

Bingo, comprar bonos del tesoro españoles. Es decir, muchos de los fondos ya no están (desconozco cuanto queda) y solo queda bonos del tesoro, es decir, promesos del estado de pagarse a él mismo. Pa flipar.

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Flipar? vamos a Flipar todos. Es muy fuerte.

¿Hay links, noticias y más datos sobre esto?

Con los datos en la mano podríamos saber el "bujero" en el mercado de bonos, y establecer un timing aproximado de la implosión en España.

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He leído esto varias veces en el foro, pero aunque he buscado, tampoco consigo encontrar que cantidad de la SS ha sido destinada a bonos del Tesoro.

En las predicciones y demás se habla mucho de la fecha de la quiebra de la SS. Me parece FUNDAMENTAL que antes sepamos la cantidad exacta que ya está "trasvasada" y fundida en gastos cortoplacistas.

Es nuestro dinero joder. Ah no, que el dinero público no es de nadie!!

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Arrepentios, el zpfin está cerca

El dinero público es de los políticos. Dejate de creer las mindongas. Quien lo gestiona? Los políticos, pues es de los políticos. Además, el gobierno no somos todos. El gobierno es una empresa (especial) que da unos servicios. Las tonterías de que el gobierno somos todos y demás es para que los siervos nos pensemos que pintamos algo.

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