Ever since the U.S. financial system came hat in hand to beg taxpayers for a bailout back in 2008, it was only a matter of time before either Wall Street, or the government, would seek to find a way to steal the $19 – 25 trillion Americans have in their myriad of retirement accounts. And not withstanding Nancy Pelosi and Barack Obama’s attempts to connive individuals into shifting their 401K’s and IRA’s into government backed debt, most retiree’s money has been relatively safe over the past eight years since the Fed was providing enough ‘stimulus’ to feed the hunger of the banks and hedge funds.
However six years after conducting their first Quantitative Easing program, the central bank has come to the realization they have lost control over inflation and interest rates, and have begun to pull back from supplying the tens of trillions of dollars necessary to create the artificial ‘recovery’ that has seen the Dow soar to over 21,000.
And needless to say, this shutting off of the tap is severely affecting a significant player in the markets. And when you couple in the fact that these institutions are facing a growing number of redemptions, one hedge fund is salivating at the thought of finding a way to take control over some or all of the people’s retirement funds.
Alas, with companies increasingly opting for defined-contribution retirement plans (401k's) in-lieu of defined benefit plans, combined with the trillions of dollars of losses that wall street has racked up for the nation's largest pensions, it's no wonder that 'millionaire, billionaire, private jet owners', like Stephen Schwarzman of Blackstone, are looking to get their 'fair share' of fees from America's $4.8 trillion in 401(k) assets.
As Schwarzman told Bloomberg, "you have to have a dream," and his dream is to apparently lay waste to a whole new pocket of American retirement wealth.
Today most mom-and-pop investors still don’t have that option. But a shift in how people are saving in their 401(k)s may give private equity a new way in -- keeping firms like Carlyle, Blackstone Group LP and KKR & Co. eyeing the $4.8 trillion that U.S. workers have saved in their 401(k)s.
“In life you have to have a dream,” Steve Schwarzman, Blackstone’s chief executive officer, said on a call with analysts in January. “And one of the dreams is our desire -- and the market’s need -- to have more access” between alternative-investment funds and ordinary savers. It was a bold and telling statement coming from the helm of the world’s largest private equity firm. - Zerohedge
It is bad enough that most Americans pay little attention to the retirement investments, and most rarely look to see what they actually own beyond the bottom line numbers on their quarterly statements. But could you imagine what would occur if trillions of dollars were suddenly open for hedge fund managers, many of whom have lost money for their clients since the end of 2015, to suddenly get a windfall to spend in a market where the P/E levels are at a point not seen since the 1929 stock market crash?
All one has to do is go back and study the events of MF Global and Jon Corzine to realize that those who seek to rise to the level of the 1% almost always put their love of money above everything else… including and especially above the needs and requirements of their clients . And it is why studies have shown over and over that the offices of banker, ceo, and government official are natural breeding grounds for those with a psychopathic mentality.
In a world where debt is called money, and paper is considered an asset, there is no trust or confidence in a financial system to ever do the right thing, and where the rule of law is never followed when it comes to your money. And like a ‘giant squid’ that constantly needs to consume whatever food (cash, credit, assets) it can to both survive and grow, the fact that the majority of America’s retirement is just outside the fingertips of the government and Wall Street means that at anytime they can find a way to bring that money down to the their level, and the losses incurred by retirees during the 2008 stock market will be something they might very soon be more than happy to accept.