Jump to content
[[Template core/front/custom/_customHeader is throwing an error. This theme may be out of date. Run the support tool in the AdminCP to restore the default theme.]]

AIG repays bailout loans


muck
 Share

Recommended Posts

If it is being bought by the jerkoff managing my 401(k) I'm not sure how eagerly I am looking forward to it being sold off. That jacka$$ doesn't have a very good track record.

 

:unsure:

 

Aren't YOU managing your 401(K)?

 

If not, then you have no one to blame but yourself for letting someone else manage it and then sticking with them if they have a poor track record.

Link to comment
Share on other sites

That I agree 10000000000000% with....if it does indeed workout you can bet your bottom dollar that it will be a tactic used again in the future

 

The mechanisms needed to bail out everyone, and especially AIG, were a pretty unique situation? No? It seems pretty apparent that we were on the precipice of a major economic disaster and we just maybe, just maybe, might have mitigated it (yes, I realize this involves me eating some crow by making fun of everyone predicting a collapse) with imperfect but necessary govt intervention? I'm currently less worried what precedent this sets relative to what would have happened.

 

It is however, completely dumbfounding to see the lack of regulation that is applied to the free gift these guys have received. The tongue bath that the JP Morgan guy received the other day, on behalf of Congress, was beyond realism.

 

 

Link to comment
Share on other sites

 

 

:unsure:

 

Aren't YOU managing your 401(K)?

 

If not, then you have no one to blame but yourself for letting someone else manage it and then sticking with them if they have a poor track record.

 

 

Clearly you dont know how my plan works. I can choose option a, b, c or d or allocate percentages. once I choose my plan/plans then I am out of the decision making process. over the 3 months called the summer of 2008, even the most conservative pf the plans lost 1/2 its value. If my 401k were a keeper team someone else drafts, chooses keepers, does add/drops and sets the line up. All I get to do is pay the league dues. You might be confused about who fu*cked up my 401k but I am not.

 

Eta: My point being the guys or gals managing each plan will decide if I am buying back AIG not me. I would feel better about the AIG stock price but the Facebook offering showed us all how rigged that can be

Edited by Clubfoothead
Link to comment
Share on other sites

What will be the stock price if the Gubment drops all 61% at once? They're propping up the value of the stock artificially because private stockholders know they wouldn't take the money and run when it makes the most sense for their own bottom line -- like a normal investor would.

Link to comment
Share on other sites

TimC ... my guess ... if the UST showed up at their local Morgan Stanley office on Monday morning and gave a sell ticket for 61% of AIG at the market at the open, the stock would probably gap down at least 50% and would bottom tick at at least 90% lower; by the end of the week, the stock would be back to about half of where it is now (maybe higher than that). This would be the dumbest way possible for them to sell their stock; lots of heads would roll if this were done.

Link to comment
Share on other sites

Clearly you dont know how my plan works. I can choose option a, b, c or d or allocate percentages. once I choose my plan/plans then I am out of the decision making process. over the 3 months called the summer of 2008, even the most conservative pf the plans lost 1/2 its value. If my 401k were a keeper team someone else drafts, chooses keepers, does add/drops and sets the line up. All I get to do is pay the league dues. You might be confused about who fu*cked up my 401k but I am not.

 

Eta: My point being the guys or gals managing each plan will decide if I am buying back AIG not me. I would feel better about the AIG stock price but the Facebook offering showed us all how rigged that can be

 

 

Club -- what you don't know is that someone in your company is the companies' fidiciary for the 401(k). If you really have zero ability to manage your 401(k) ... like changing your investment parameters and going from "b" to "d" and back again ... then the fiduciary your company established is a total nincompoop. You should demand better from him/her.

Edited by muck
Link to comment
Share on other sites

Clearly you dont know how my plan works. I can choose option a, b, c or d or allocate percentages. once I choose my plan/plans then I am out of the decision making process. over the 3 months called the summer of 2008, even the most conservative pf the plans lost 1/2 its value. If my 401k were a keeper team someone else drafts, chooses keepers, does add/drops and sets the line up. All I get to do is pay the league dues. You might be confused about who fu*cked up my 401k but I am not.

 

Eta: My point being the guys or gals managing each plan will decide if I am buying back AIG not me. I would feel better about the AIG stock price but the Facebook offering showed us all how rigged that can be

 

 

Pretty CHIPS AHOY!ty plan, I've never seen one that gave the employee near no control. Every plan I have been a part of or even seen has had a choice of funds for the employee to choose amongst and allocate their contributions too as they see fit. Many times this includes a variety of target date funds, bond funds, index funds and actively managed funds. Some plans do provide "brokerage accounts" where employess that want even more control could manage their 401K just as if it were a regular brokerage account, buying individual securities if they wanted and funds not available inside the 401K plan.

 

If your plan truly is as you describe, I'd suggest you start lobbying management/etc. to make some changes to the plan.

Link to comment
Share on other sites

Pretty CHIPS AHOY!ty plan, I've never seen one that gave the employee near no control. Every plan I have been a part of or even seen has had a choice of funds for the employee to choose amongst and allocate their contributions too as they see fit. Many times this includes a variety of target date funds, bond funds, index funds and actively managed funds. Some plans do provide "brokerage accounts" where employess that want even more control could manage their 401K just as if it were a regular brokerage account, buying individual securities if they wanted and funds not available inside the 401K plan.

 

If your plan truly is as you describe, I'd suggest you start lobbying management/etc. to make some changes to the plan.

 

But then the ability to blame others would almost be nil.

Link to comment
Share on other sites

But it is the truth - in my opinion one of the biggest problems in our country - more and more people just want to blame others and take zero responsibility in their own actions.

 

 

I read somewhere that this is not true.

Link to comment
Share on other sites

But isn't that TIm's point... artificially inflated cuz they can't do that.

 

And isn't that Brent's point... that the stock may be "worth" that, but since the UST can't convert stock to cash, then the People have not been paid back.

 

It sounds like some kind of fiat stock that doesn't really have much real/liquid value.

 

I suppose the question is... when can the People sell it's shares of AIG, how much will We really get? Until then, it seems like another smoke an mirrors act?

 

 

No, I don't think that's Tims point.

 

Warren Buffet has the same problem with any of the stocks he owns, as do ALL other big shareholders.

 

Sure they could dump all of their stock in a single day, but there isn't the demand for that much trading activity ... supply and demand ...

 

Think of it this way ... could every homeowner on your street decide to sell all the houses on your street on the same day, regardless of price? Sure? What sort of prices would they get? Pretty low, right? Yes. So, are all the houses over-inflated? No -- assuming a normal market, they're not.

 

Same thing for the AIG stock.

 

Assuming a normal market for the stock it'll trade around $31-32 / share right now.

  • Like 2
Link to comment
Share on other sites

That's how most employee plans work, so what do you propose peolple in that situation do?

 

 

Then I must be very fortunate in that with all 4 employers I have been with that offered 401K plans, I had the ability to pick and choose what, of the available funds within the plan, I wanted to invest in and in what amount of my contributions. And I've apparently been pretty lucky that whether it was with the small 50 employee company or with my current employer with 25K+ employees, there were at least 10+ funds to choose from, ranging from index funds, growth funds, international funds, emerging market funds, specialty funds (ie energy, healthcare, tech, etc.), bond funds and if I was extremely conservative a simple money market fund.

 

In fact, of all the people I have spoken with regarding 401Ks/retirement planning, and since I am involved (more lurking to grow my own knowledge in the area) on another board that is dedicated to helping people make the best of their retirement/investment options/plans, it is a pretty large number covering a very large number of employerbased plans (ie 401K, 403b, etc.) I have never come across a plan where the employee had no control over what of the available funds within their plan they were able to invest in.

 

Now, while this is not a thread on retirement planning etc., if I were in club's position I would likely not be contributing to the plan at all (well, maybe to the match if there is one, but even then I would consider not contributing), and would instead be focusing on making contributions to a ROTH IRA up to the annual maximum before I would turn any money over to an account where I have no control.

Link to comment
Share on other sites

Club isn't talking about his 401k per se, he's talking about the rubbish in it. All the mutual funds that buy the stocks. He can choose between the funds but he can't choose the stocks they buy.

 

And don't get him or me started on the management fees, another f'n racket.

  • Like 1
Link to comment
Share on other sites

Club isn't talking about his 401k per se, he's talking about the rubbish in it. All the mutual funds that buy the stocks. He can choose between the funds but he can't choose the stocks they buy.

 

And don't get him or me started on the management fees, another f'n racket.

 

 

As muck alluded to, your company has a fiduciary that determines what is and isn't included within your 401K options. Talk to that person to get better options. Get them to offer low cost index funds, such as from Vanguard, etc., where the cost is often around 0.05% or even less.

 

And if you are not happy with the options in your 401K, don;t participate in itand just use an IRA where you have full control of it.

Link to comment
Share on other sites

Management fees in an actively managed fund are hardly a racket. Management fees in an index fund are hardly a racket.

 

The racket is in the 12b-1 fees and other 'expense reimbursement' items that more than cover the actual costs several times over.

 

Find fund families that offer classes of funds that you like that don't have 12b-1 (or similar fees) deducted and/or institutional classes that have greatly reduced management fees.

Link to comment
Share on other sites

And if you are not happy with the options in your 401K, don;t participate in itand just use an IRA where you have full control of it.

 

 

Are you saying the interest earned on an IRA will out perform my employer matching contribution to the 401(k) and the tax break I get on the 401(k) contribution? Becasue I lose both by bailing on the company offered 401(k).

 

If the answer is no, given I have no say in who manages our 401(k), maybe the people that I pay to manage my retirment could do their fu(king jobs. I know that wasn't one of the options you listed for me, but shouldn't it be?

Link to comment
Share on other sites

Are you saying the interest earned on an IRA will out perform my employer matching contribution to the 401(k) and the tax break I get on the 401(k) contribution? Becasue I lose both by bailing on the company offered 401(k).

 

If the answer is no, given I have no say in who manages our 401(k), maybe the people that I pay to manage my retirment could do their fu(king jobs. I know that wasn't one of the options you listed for me, but shouldn't it be?

 

 

Regarding the first part, if you feel they are mismanaging the funds and making poor choices, then it is a possibility that you could make choices that would outperform boththe employer matchand apparent mismanagement of the money within the 401K. Additionally, a traditional IRA offers the same tax benefit as 401K contributions (obviously you can put more into a 401K, but if you are unhappy with the fund offerings/management of the plan, why would you). If you are truly unsatisfied with the 401K options, perhaps there is a very safe money market you can put it into within the account up to the employer match (granted, you'd likely only be earning less than 1%), and then focus on IRA contributions where you would have more control over the fund offerings.

Link to comment
Share on other sites

Management fees in an actively managed fund are hardly a racket. Management fees in an index fund are hardly a racket.

 

 

 

I disagree. 75% of mutual funds underperform their index. Factor in management fees and the cost is astronomical over the years, especially as the fees extracted can't be compounded.

Link to comment
Share on other sites

TimC ... my guess ... if the UST showed up at their local Morgan Stanley office on Monday morning and gave a sell ticket for 61% of AIG at the market at the open, the stock would probably gap down at least 50% and would bottom tick at at least 90% lower; by the end of the week, the stock would be back to about half of where it is now (maybe higher than that). This would be the dumbest way possible for them to sell their stock; lots of heads would roll if this were done.

 

Amusingly enough, that is pretty much exactly what Romney says he would do with the government's holdings on GM stock if he becomes president.

 

As for AIG, the government pretty much had to bail it out (which really means that we bailed out AIG's counterparties). The bailouts could have also been structured differently to make them less of a giveaway to the financial sector. There are ways that we could limit the need for such bailouts in the future, but for reasons that still baffle me, the financial sector has been able to somehow convince (read: snowjob) enough of the public so as to make reasonable government regulations on the financial system politically unpopular.

Link to comment
Share on other sites

for reasons that still baffle me, the financial sector has been able to somehow buy enough Republican politicians to convince (read: snowjob) enough of the public so as to make reasonable government regulations on the financial system politically unpopular.

 

 

FYP

Link to comment
Share on other sites

I disagree. 75% of mutual funds underperform their index. Factor in management fees and the cost is astronomical over the years, especially as the fees extracted can't be compounded.

 

 

I promise, management fees aren't the racket. Running a mutual fund and/or separately managed account business can be quite expensive (systems, data storage, compliance, etc. ... plus all the people ...).

 

The racket is in the 12b-1 (and similar) fees.

 

If a mutual fund isn't doing what you want, sell it and move on to something else --- if enough do, then it will cease to exist.

 

That is a far different issue than "management fees are a racket".

Link to comment
Share on other sites

"The most dangerous man to any government is the man who is able to think things out for himself, without regard to the prevailing superstitions and taboos. Almost inevitably he comes to the conclusion that the government he lives under is dishonest, insane and intolerable, and so, if he is romantic, he tries to change it. And even if he is not romantic personally he is very apt to spread discontent among those who are."

Link to comment
Share on other sites

Amusingly enough, that is pretty much exactly what Romney says he would do with the government's holdings on GM stock if he becomes president.

 

As for AIG, the government pretty much had to bail it out (which really means that we bailed out AIG's counterparties). The bailouts could have also been structured differently to make them less of a giveaway to the financial sector. There are ways that we could limit the need for such bailouts in the future, but for reasons that still baffle me, the financial sector has been able to somehow convince (read: snowjob) enough of the public so as to make reasonable government regulations on the financial system politically unpopular.

 

 

While it pains to me say, I agree the government had to bail out AIG. How else could they give billions of tax payer dollars to overseas concerns and a 100 plus million in bonuses?

 

They could have structured it differently so the company had to share in some of the pain. Not sure I agree with the government regulation comment or even the word reasonable given the government was a primary contributing factor due to poor policy decisions dating back to the 70's but that is another story.

Edited by Ice1
Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

 Share

  • Recently Browsing   0 members

    • No registered users viewing this page.
×
×
  • Create New...

Important Information