[vision-master]

$this->bbcode_second_pass_quote('VMarcHart', '')$this->bbcode_second_pass_quote('vision-master', '')$this->bbcode_second_pass_quote('Atlantean_Relic', 'W')ell I guess we should warmly greet the boomers to generations that don't get retirement. I just hope they can learn to shut up and accept it like the rest of us have.

[cube]

$this->bbcode_second_pass_quote('CrudeAwakening', 'H')as $1 trillion been truly lost, or was it never really there in the first place?

[cube]

IMHO there was no "money" lost.
What was lost is Unrealized Gain

which can be emotionally painful however regardless of emotions, actual "money" and "unrealized gain" are two completely different things.

[Revi]

I always thought it was a con game. I am afraid that I lost quite a bit from my measly pension.

It's a roulette wheel economy. Unfortunately we all lost this time. The house is packing up shop.

I envision Bush and Cheney in their Escalades, packed with ill gotten loot, riding off in the sunset.

Their parting words are "So long suckers!"

[BigTex]

As some of you know, I am a retirement plan attorney. I work with 401(k) plans and traditional defined benefit pension plans for companies and governmental entities.

This market crash is going to be a much larger disaster for retirement plans that anyone can imagine.

Everyone knows the 401(k) plan story of simply having a smaller account balance than you thought you were going to have.

For retirement plans, however, the liability for poor investment returns in the pension trust that is used to fund benefits falls squarely on the shoulders of the sponsoring company or governemntal entity (e.g., school districts, municipalities, counties, states, etc.). That means that in the midst of contracting earnings or contracting tax revenues, pension plan sponsors are going to find themselves with enormous additional retirement plan contributions that will be needed to make up the unanticipated losses becaue their investment strategy was more aggressive and risky than they may have appreciated). This will be a huge drag on earnings and will require governmental entities to locate sources for additional tax revenue.

For those employers who go into bankruptcy, we the taxpayers will get to bail out underfunded pension plans of these employers through the Pension Benefit Guaranty Corporation (PBGC).

Picture a small dog (the company) with a tail the size of a telephone pole (the underfunded pension plan) beating the crap out of the dog, and that is what the pension plan/sponsoring employer issue is going to look like once the dust settles on this stock market meltdown.

The fact that so many baby boomer employees are nearing retirement age will make the matter much worse because there will be no time to recoup the investment losses we are seeing now.

It's a problem that will percolate to the surface months from now, but it's going to be ugly.

[Eli]

Thanks Tex, nice post.

The most retirees in history, and all their accounts blow up. The money most definitely was lost and we are all going to share in this pain.

[Tyler_JC]

On the plus side, some stocks are currently very cheap.

Investors have been throwing out the baby with the bathwater and smart investors are going to get rich off of this.

I'm going to wait a few months more before jumping in (Dow 8,000) but when things settle down a bit and we hit a bottom, there are going to be a lot of great deals out there.

Does anyone expect Anadarko Petroleum, ExxonMobil, Corning, XTO, or Altria Group to go bankrupt in the near future?

These companies are all trading at major discounts compared to their historical trends.

Take XTO, for example. Their current P/E ratio is 9. You don't get much cheaper than that, especially for a company that has beat its earnings targets every year since '99.

They have a 5 year average net operating margin of over 30%. That beats Google and Microsoft for Pete's sake.

There's no reason this company should be trading so low.

We could be looking at a once in a lifetime opportunity to get back into the markets in the next year.

[ColossalContrarian]

$this->bbcode_second_pass_quote('Tyler_JC', 'O')n the plus side, some stocks are currently very cheap.

Investors have been throwing out the baby with the bathwater and smart investors are going to get rich off of this.

I'm going to wait a few months more before jumping in (Dow 8,000) but when things settle down a bit and we hit a bottom, there are going to be a lot of great deals out there.

Does anyone expect Anadarko Petroleum, ExxonMobil, Corning, XTO, or Altria Group to go bankrupt in the near future?

These companies are all trading at major discounts compared to their historical trends.

Take XTO, for example. Their current P/E ratio is 9. You don't get much cheaper than that, especially for a company that has beat its earnings targets every year since '99.

They have a 5 year average net operating margin of over 30%. That beats Google and Microsoft for Pete's sake.

There's no reason this company should be trading so low.

We could be looking at a once in a lifetime opportunity to get back into the markets in the next year.

[BigTex]

People have been saying RIG is undervalued for the last 40 points down.

The P/E was 8 when the stock was 120 last month.

Today the P/E was 5 and the stock was 80.

It was a great buy at 120, but it doesn't look too smart right now to have bought it at 120.

Be careful.

[Homesteader]

$this->bbcode_second_pass_quote('Eli', '')$this->bbcode_second_pass_quote('Olaf', 'I')'m becoming quite concerned that my wife and I are about to lose everything we have invested. To top it off, we don't really know what to do anyway. So we hold our breath.

I'm tempted to take as much as possible and buy things of value while we still can, but then that just sounds like panic talking.

My wife cautioned of 'running to the bank' and feeding a fall, but I countered with the argument that people who pulled out their funds actually HAVE their money.

Olafr

[Ache]

http://www.washingtonpost.com/wp-dyn/co ... id=topnews

$this->bbcode_second_pass_quote('', 'T')he stock market's prolonged tumble has wiped out about $2 trillion in Americans' retirement savings in the past 15 months, a blow that could force workers to stay on the job longer than planned, rein in spending and possibly further stall an economy reliant on consumer dollars, Congress's top budget analyst said yesterday.

"Unlike Wall Street executives, American families don't have a golden parachute to fall back on," said Rep. George Miller (D-Calif.), chairman of the House Committee on Education and Labor. "It's clear that Americans' retirement security may be one of the greatest casualties of this financial crisis."

[seldom_seen]

$this->bbcode_second_pass_quote('', 'T')he stock market's prolonged tumble has wiped out about $2 trillion in Americans' retirement savings in the past 15 months, a blow that could force workers to stay on the job longer than planned, rein in spending and possibly further stall an economy reliant on consumer dollars, Congress's top budget analyst said yesterday.

[VMarcHart]

$this->bbcode_second_pass_quote('cube', '')$this->bbcode_second_pass_quote('CrudeAwakening', 'H')as $1 trillion been truly lost, or was it never really there in the first place?

[vision-master]

Glad I worked for the Gov.
$this->bbcode_second_pass_quote('', 'T')he events on Wall Street the past few weeks have raised questions about the financial impact of the volatile markets on Minnesota's public pension systems. The pension systems and the State Board of Investment (SBI), which invests Minnesota's pension assets, are monitoring the situation closely, however, the retirees and active members of Minnesota's statewide pension systems should feel secure that their benefits and pensions are safe and will be paid. Retiree benefits are not adjusted downward because of investment losses.

[vision-master]

$this->bbcode_second_pass_quote('seldom_seen', '')$this->bbcode_second_pass_quote('', 'T')he stock market's prolonged tumble has wiped out about $2 trillion in Americans' retirement savings in the past 15 months, a blow that could force workers to stay on the job longer than planned, rein in spending and possibly further stall an economy reliant on consumer dollars, Congress's top budget analyst said yesterday.

[IgnoranceIsBliss]

Let's see - Our economy in the US is dependant upon consumer spending. Baby boomers liked to think they were financially secure enough to spend their money on things like vacations, golf equipment, new furniture, RVs, and assorted other toys. Now that their investments/ pensions/ accounts are taking a hit, they will probably have to cut spening, huring the economy even more.

Like seldom_seen said, where are all of these jobs going to come from? Is XYZ Grocery store going to hire grandma to bag groceries when they have 5 young dudes to choose from who have families to support? Maybe XYZ grocery will need to cut costs too, so they start making us bag our own stuff?

Interesting info about state gov't pensions (teachers/ police, etc)
Is there any way these programs can just be gutted? (like just paying retiring police officers 25% of what they are expecting?) Or will local gov'ts be forced to raise taxes just to pay these pensions? (Not that I am advocating the former! My husband and I are both teachers in our 30's)

On this subject, there was a recent report about how Atlanta couldn't afford raises for firemen, etc so insteand they made crazy promises about increasing pension payments. Then they made absolutely no additional payments into the system, so there is a huge bubble of unfunded liabilities waiting to blow up on future tax payers. Atlanta and some surrouding counties are already having major budget probems right now.

[Farknight]

Dear Ignoranceisbliss, I noted your comment below.

$this->bbcode_second_pass_quote('', 'I')s there any way these programs can just be gutted? (like just paying retiring police officers 25% of what they are expecting?) Or will local gov'ts be forced to raise taxes just to pay these pensions? (Not that I am advocating the former! My husband and I are both teachers in our 30's)

[VMarcHart]

$this->bbcode_second_pass_quote('Farknight', 'A')s a retired cop who earned his promised pension through being hurt in the line of duty to the point of near death, pulling through only because I am ornery and had 3 small kids to feed at the time. I would seriously, no ADAMANTLY AND EXTREMELY abject to taking away or lowering my already pathetic pension.

[Revi]

It is a really scary thing. I was ten years from "retirement". Now it's only a distant goal. One of the things we are working for is the security of knowing that we can retire. I was planning on retiring at 60 and living off of investments until my pension kicked in. Now that doesn't look as likely.

Things are really scary out there. I'm not just saying that.

The whole idea of storing up pieces of paper that can be redeemed upon retirement is a little silly anyway. We all know that with peak oil coming there won't be anything for us by the time we get to the end of the line.

The reality of it is a bit heavy though.

[vision-master]

$this->bbcode_second_pass_quote('', 'I')nteresting info about state gov't pensions (teachers/ police, etc)
Is there any way these programs can just be gutted? (like just paying retiring police officers 25% of what they are expecting?) Or will local gov'ts be forced to raise taxes just to pay these pensions? (Not that I am advocating the former! My husband and I are both teachers in our 30's)