Occupy Wall Street

[Brett_Cameron]

Unless the Occupy Wall Street effort develops into full scale chaos and revolution (which I doubt) they will have little or no affect on retirement. Localized rioting could affect the functioning of the exchange on a temporary basis which could have minor effects on the investment activities of retirees.

Notice the correct usage of "affect" and "effect"? 8>)

 

[GregLee]

What's wrong with you people? Protests are fun! I used to go to protests when I was young, dumb, and full of something.

I was watching bemused, not participating, in the Harvard 1961 diploma riots, protesting Harvard's decision to change the language of its diplomas from Latin to English. That was fun, and pretty much just an expression of undergrad high spirits and mischief. Later, I was teaching as a grad assistant at Ohio State in 1970 when the OSU campus was occupied by armed and scared national guardsmen after sit-ins protesting the Kent State killings. That was not nearly as much fun.

 

[FUEGO]

I put this in the category of the WTO protests, except much less violent so far. Anticipated effect: minimal. Could snowball into a well funded union backed political movement, if the 99-percenters are open to being pawns. I suppose they would be as long as the unions buy em pizza and beer!

 

[ziggy29]

Unless the Occupy Wall Street effort develops into full scale chaos and revolution (which I doubt) they will have little or no affect on retirement. Localized rioting could affect the functioning of the exchange on a temporary basis which could have minor effects on the investment activities of retirees.

But see, that's not really where I think the *potential* impact is. I think there's a growing sense of economic desperation, one this movement may be tapping into to an extent, a feeling that in the future there *will* be no retirement for most of us in the future if things don't change. Pensions have been gutted in the private sector and the private sector has lost enough ground that they can't keep up with the cost of public sector benefits. Health care is a mess and rising at double digit rates. We're getting pay cuts in *real* dollars, making it harder and harder to invest for ourselves and our own retirements. And when we do, our 401Ks remain in the toilet.

That's the feeling out there, I think -- yes, it's mostly "I can't find a decent job" but I think the entire undercurrent is "...and no way in hell can I retire healthy and at a decent age unless forced out before I can afford it."

I'm not sure this is the answer, and truth be told I cringe at the thought of it being hijacked by polarizing groups who will dilute the original message which I think was less partisan and ideological. It started in populism, I think, and I'd hate to see it morph into partisanism. I don't think the original thought was to dismantle capitalism, just to restrain it a bit in the hopes that a rising tide can lift all boats again. And I don't know how the middle class gets "retirement relief" (again I stress, that among mostly middle class folks we collectively are extreme outliers in terms of readiness for retirement) through the political process when it feels like the stars are aligning for making harder than ever, at least in the post-WW2 era.

 

[Nords]

That's the feeling out there, I think -- yes, it's mostly "I can't find a decent job" but I think the entire undercurrent is "...and no way in hell can I retire healthy and at a decent age unless forced out before I can afford it."

"... and if we don't fix this country now then I might have to start living within my means and saving my own money for retirement!!"

 

[Trex]

affect and effect. The verb affect means "to influence something", and the noun effect means "the result of". Effect can also be a verb that means "to cause [something] to be", while affect as a noun has technical meanings in psychology, music, and aesthetic theory: an emotion or subjectively experienced feeling. A device to remember when trying to decide which is the right choice: If something affects you it usually has an effect on you.

• Standard. This poem affected me so much that I cried.
• Standard. Temperature has an effect on reaction spontaneity.
• Standard. The dynamite effected the wall's collapse.
• Standard. He seemed completely devoid of affect.
• Non-standard. The rain effected our plans for the day.
• Non-standard. We tried appeasing the rain gods, but to no affect

 

[ziggy29]

"... and if we don't fix this country now then I might have to start living within my means and saving my own money for retirement!!"

It's a difficult transition. One that's necessary, I agree, but hard. But be a little fair here -- you have your pension and health care lined up in retirement (you earned it by upholding the deal you signed up for, don't get me wrong) -- so maybe you don't see it's harder and harder for most people to save for their own retirement when their wages are going down relative to inflation, they are losing benefits rapidly (especially in the private sector, though the public may be catching up soon) and more and more are seeing unemployment or underemployment eat into their ability to fund their own retirements.

This sounds a little "let them eat cakey" to me, I have to confess.

 

[samclem]

But see, that's not really where I think the *potential* impact is. I think there's a growing sense of economic desperation, one this movement may be tapping into to an extent, a feeling that in the future there *will* be no retirement for most of us in the future if things don't change.

Seems a stretch to me, based on looking at the disparate signs they are carrying, what they are saying to reporters, etc. I don't think these folks are motivated by the threat to their retirement plans. They just want to rage at the system. Okay, whatever. Zzzzzz.

 

[ziggy29]

Seems a stretch to me, based on looking at the disparate signs they are carrying, what they are saying to reporters, etc. I don't think these folks are motivated by the threat to their retirement plans. They just want to rage at the system. Okay, whatever. Zzzzzz.

Most of them are obviously too young to be thinking of retirement issues and I'm sure very few of them have that *specifically* on their minds. But the ability to find decent jobs is a big first step toward being able to fund retirement. Whether it's 401K contributions, IRA contributions or years of service in a pension plan, you can't get closer to retirement without a job that enables you to work toward it.

(I was thinking about it in my early 20s and contributed to my 401K until I bled -- but again, I'm an outlier. It will take some time and painful adjustment for the masses to see it, too. And I was able to get a career-oriented programming job even *before* graduating from college, back in 1987. Good luck with that today.)

 

[samclem]

Most of them are obviously too young to be thinking of retirement issues and I'm sure very few of them have that *specifically* on their minds. But the ability to find decent jobs is a big first step toward being able to fund retirement. Whether it's 401K contributions, IRA contributions or years of service in a pension plan, you can't get closer to retirement without a job that enables you to work toward it.

So they've gone to Wall Street to find a good job? Good for them, my faith in America's youth is restored. I'd thought they'd gone there to have a protest against big corporations, which sounded like just the opposite of looking for work.

 

[GregLee]

• Standard. This poem affected me so much that I cried.
• Standard. Temperature has an effect on reaction spontaneity.
• Standard. The dynamite effected the wall's collapse.
• Standard. He seemed completely devoid of affect.

But in the first three of these, except in spelling pronunciations, "affect" and "effect" are pronounced the same way. So it makes sense for people to spell them the same.

 

[CCdaCE]

I hope this doesn't go political and derail before we can hear some thoughts from the members of this forum. I haven't paid much attention to this recently but it seems to be growing and has caught my interest. I'm beginning to think its gaining traction and may impact our country. What do you think about the Occupy Wall Street phenomenon?

My question, as originally heard, by me, from Kai Ryssdal? (Nat'l Public Radio) is "what took 'em so long?"

The Tea Party has their points, what's taken so long for the "other side" to come up with a gripe?

-CC

 

[samclem]

The Tea Party has their points, what's taken so long for the "other side" to come up with a gripe?

-CC

What is the "other side"of the Tea Party? Folks who want bigger government? And what, government has been shrinking lately? I don't think these guys are the opposite of the Tea Party--something else entirely.

 

[Helen]

When 400 of the richest people in America have more money & wealth than 150 million of the poorest in America...the poor and the middle class, in our country will protest! Thank...., we have that right as America's!

+1

 

[GregLee]

The Tea Party has their points, ...

Name two.

 

[ERD50]

When 400 of the richest people in America have more money & wealth than 150 million of the poorest in America...the poor and the middle class, in our country will protest! Thank...., we have that right as America's!

+1

Well, one of those 400 passed away today. I'm certain he spent more time working towards accomplishing things than he did complaining about 'the man' holding him back.

Heck, he didn't even have a college degree. He had plenty of excuses for not succeeding. I guess he didn't get the memo.


-ERD50

 

[ziggy29]

Final warning, folks -- this is getting into pure ideology and not sticking to this particular event and how it relates to retirement issues.

 

[Trex]

Well, one of those 400 passed away today. I'm certain he spent more time working towards accomplishing things than he did complaining about 'the man' holding him back.

Heck, he didn't even have a college degree. He had plenty of excuses for not succeeding. I guess he didn't get the memo.


-ERD50

Mr Jobs will be missed!

 

[Helen]

Here are some factors which impact ER that, IMO, are behind the Occupy Wall Street protests.

1. Wage disparity:

"The heads of the nation’s top companies got the biggest raises in recent memory last year after taking a hiatus during the recession.
At a time most employees can barely remember their last substantial raise, median CEO pay jumped 27% in 2010..."

CEO pay soars while workers' pay stalls


2. Most private sector pension plans are a thing of the past and 401k plan matching contributions are shrinking:

"Consulting firm Watson Wyatt Worldwide recently surveyed human-resources executives at 245 large companies and found that 12% had already cut their defined-contribution-plan matching contributions, up from just 3% in a similar survey two months ago. Another 12% expect to make the change in the next 12 months, up from 7% in December."

The Incredible Shrinking 401(k) Employer Match - The Wallet - WSJ


3. The expense ratios in many 401k plans are prohibitively high:

"Indeed, the average 401(k) participant in a big plan forks over 1.07% of the account balance each year, while small plan participants pay 1.4%, on average. With the most expensive plans running as high as 3%..."

BW Online | June 7, 2004 | Does Your 401(k) Cost Too Much?

Retirement is becoming a thing of the past for a large percent of the US population. I think these factors are some of the reasons behind the current protests.

 

[clifp]

I was watching bemused, not participating, in the Harvard 1961 diploma riots, protesting Harvard's decision to change the language of its diplomas from Latin to English. That was fun, and pretty much just an expression of undergrad high spirits and mischief. Later, I was teaching as a grad assistant at Ohio State in 1970 when the OSU campus was occupied by armed and scared national guardsmen after sit-ins protesting the Kent State killings. That was not nearly as much fun.

I knew a few older grad students who said the same thing about the Berkeley protest of the late 70s vs the tear gas filled ones of the late 60s.
Let's hope the occupy Wall St protest stay on the more fun side.

 

[Nords]

It's a difficult transition. One that's necessary, I agree, but hard. But be a little fair here -- you have your pension and health care lined up in retirement (you earned it by upholding the deal you signed up for, don't get me wrong) -- so maybe you don't see it's harder and harder for most people to save for their own retirement when their wages are going down relative to inflation, they are losing benefits rapidly (especially in the private sector, though the public may be catching up soon) and more and more are seeing unemployment or underemployment eat into their ability to fund their own retirements.
This sounds a little "let them eat cakey" to me, I have to confess.

Final warning, folks -- this is getting into pure ideology and not sticking to this particular event and how it relates to retirement issues.

Your comments are fair and impartial, and no offense taken!

However let me offer a practical example.

A couple weeks ago I dropped by Rice University, where I observed my daughter and ~800 other sophomores busting their assets and hustling for grades & $$. The school has its share of stinkin' rich kids, true, but it's also 25% international and has lots of scholarships. The breadth of the economic gap is staggering.

Along with the fun planned for their weekend, these guys were all chasing research projects, service projects, internships, $12 campus tour-guide gigs, and other side jobs. Nobody seemed very upset about the state of the economy or the job market or their prospects in America's 4th largest city with all those Fortune 500 companies and a hospital complex across the street. In fact their tacit assumption was that in a couple years they were going to go out there in the big bad world and fix most of it, and more than one of them asked me about saving & investing.

It was easy to get swept up in their optimism and enthusiasm. Even for the voice & classical-instrument students, who I fear had better learn to live a very frugal lifestyle.

I think winners keep on winning, even if they're starting out in the 99%.

I think most of the Occupy Wall Street protesters have yet to wrap their minds around the correlation and causation between the (1) rich who (2) manage to keep on getting richer. Maybe there's a lesson in there for the other 99%, and it doesn't involve silver spoons or elite prep schools or "secret stock-market trading codes"...

 

[Sandhog]

it's harder and harder for most people to save for their own retirement when their wages are going down relative to inflation, they are losing benefits rapidly (especially in the private sector, though the public may be catching up soon) and more and more are seeing unemployment or underemployment eat into their ability to fund their own retirements.

I agreed it's getting tougher to save for retirement with current environment. And those like me who's in latter stage in their career just getting started. However, it takes lots of sacrifices forgoing wants in order to have the needs in the retirement.

Even during the great depression with 25% unemployment, there were 75% employed. And what I've been told by my dear mother was that a neighbor sharing basic necessities with neighbors. I don't think it should be us against them. It should be to get rid of corruptions and fraudulent business practices where they cook up the books by both government and market trade companies.

 

[harley]

Name two.

Decrease Federal spending.
Decrease the size of the Federal gov't.

What more do you need?

 

[justplainbll]

Decrease Federal spending.
Decrease the size of the Federal gov't.

What more do you need?

+1

 

[ERD50]

Here are some factors which impact ER that, IMO, are behind the Occupy Wall Street protests.

1. Wage disparity:

"The heads of the nation’s top companies got the biggest raises in recent memory last year after taking a hiatus during the recession.
At a time most employees can barely remember their last substantial raise, median CEO pay jumped 27% in 2010..."

I agree that this is a source of some angst. As I've said before, and there have been threads on it before, it seems to be a justified complaint. The oft-noted BOD-CEO links are just too buddy-buddy. I'm not sure what the answer is. I'm pretty sure protests are not it.

The FIRE-side: To what degree do excess CEO, and other executive salaries actually affect the bottom line? I think the math says very little. There aren't enough of them. Ever see this discussed on a per-share basis, rather than a 'big number'? That doesn't justify it, but to 'keep it real' we need to put it in perspective.

2. Most private sector pension plans are a thing of the past and 401k plan matching contributions are shrinking:

I do feel this is global competition at work. Again, protesting isn't the answer, we need to keep America relatively competitive.

The FIRE-side: I think the reality is that people better plan for retirement on their own. I get this message to young people any chance I get.

3. The expense ratios in many 401k plans are prohibitively high:

This angers me, too.

The FIRE-side: We need some sort of transparency, [-]and some way for employees to take action on who the employer contracts with, to get better choices.[/-]

Wait - strike that last part. This ties into the idea we should just plan our own retirement. If I do that, I take my money to the best value provider. Why should I have someone else decide where my money is invested. I think we all just need to get involved, rather than hand the responsibility off and then cry when they don't do it the way we want. Take control of your life!

Retirement is becoming a thing of the past for a large percent of the US population. I think these factors are some of the reasons behind the current protests.

I doubt these young people are thinking much about retirement. They are angry, and they likely don't know why or what to do about it.

A young lady at a recent town hall ranted about FIFO accounting practices on Wall Street. I couldn't hear everything she said, but I caught up with her after and she was talking with a guy who owns an accounting firm. We explained that FIFO is just an accounting method, along with average, LIFO and selected shares. There wasn't anything intrinsically 'evil' about it, and it would not even make the list of things that should be scrutinized. But she was all worked up about, because she read somewhere it was costing us billion (or something). I think we actually shifted her to think more critically about these articles she reads.

The FIRE-side: If people get attention with protests, it can drive politicians to want to appease them. And they will likely do it with non-productive 'we did something' actions (like the recent restrictions on debit card transactions, which simply shifted the costs elsewhere - a totally foreseeable outcome - and a waste of everyone's time.) So emotional outbursts could do more harm than good to our portfolios, I fear.

Just a reminder that any political discussion needs to be related to FIRE.

Hopefully, my "FIRE-side" intros made my intent clear.

-ERD50