Man, it would be something to see the Tea Party rallies after the Obama administration nationalized our 401(k)s ...So, over $29bn of Argentine civic savings are to be used as a funding kitty for the populist antics of President Cristina Kirchner. This has been dressed up as an anti-corruption and efficiency move. Aren’t they always?
Argentine sovereign debt was trading at 29 cents on the dollar today, pushing the yield to 25pc. Tempted?
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My fear is that governments in the US, Britain, and Europe will display similar reflexes. Indeed, they have already done so. The forced-feeding of banks with fresh capital – whether they want it or not – and the seizure of the Fannie/Freddie mortgage giants before they were in fact in trouble (in order to prevent a Chinese buying strike of US bonds and prevent a spike in US mortgage rates), shows that private property can be co-opted – or eliminated – with little due process if that is required to serve the collective welfare. This is a slippery slope. I hope Paulson, Darling, and Lagarde tread with great care. I do not expect Steinbruck to tread with any care.
Wednesday, April 21, 2010
Argentina nationalizes pension funds
The Argentine government is in terrible fiscal shape, and has just seized a quarter of the private pension funds in the country - $29B of them:
Man, it would be something to see the Tea Party rallies after the Obama administration nationalized our 401(k)s
ReplyDeleteOh wow. You think it's exciting now? If that happened you'd see real excitement. Of course, the MSM would just say "But now the interest rates are lower" etc etc etc, and look on with puzzled faces.
I've posted about this happening here on my blog a couple of times. I will take bets that the fed.gov tries to do it. There is so much debt that has to be sold that there is no place in the world that could buy it all. If the .gov takes over the 401k accounts, they can force the bonds into them and create a market.
ReplyDeleteWhen this is telegraphed by this media-sensitive administration, I think I'll just take the hit on taxes and liquidate my 401k. I'd rather pay off all my debts now and start putting money under the mattress than have it "promised" to me when I turn 75, or whatever age they say I "deserve" to get my money at.
ReplyDeleteYeah, you talk about a run on banks? Sheesh. There won't be a mutual fund left standing here if they start moving in that direction.
ReplyDeleteThere was talk of a .gov take over of 401 (k)s about three months ago. For a very, very, short time. One blogger commented that if the government tried to do that, there would be politicians hanging from lamp posts. A bit extreme, but I think that the reaction would be almost as severe.
ReplyDelete