MSNBC reports that "A record number of workers made hardship withdrawals from their retirement accounts in the second quarter. "

Article here: http://www.msnbc.msn.c...

"Fidelity administers 17,000 plans, which represents 11 million participants. In the second quarter, some 62,000 workers initiated a hardship withdrawal. That's compared with 45,000 in the same period a year ago."

In other words, although psychology may have improved (thanks to the peppy MSM), things on the ground have actually gotten WORSE yoy.

The article continues, "What's also eye-opening is that 45 percent of participants who took a hardship withdrawal a year ago took another one this year, McHugh said."

These are the people who aren't finding work, and drop off the official unemployment stats.

In desperation, MSNBC tries to see the silver lining, by making a rather stupid point:

"The good news in the report was that the average 401(k) account balance as of the end of the second quarter was $61,800; up 15 percent from the same time last year, but down from the end of the first quarter of 2010."

This obviously just reflects the direction of the market itself. And if you ignore that obvious point, it's actually a piece of bad news: That the average 401(k) balance is 61,800.

People are supposed to retire on their 401(k)'s. Well, that's not going to happen. Especially if the employment situation keeps people making hardship withdrawals.

I get the nagging feeling that this market is just a juggling act at this point. Retailers aren't investing any more, they are withdrawing, as the outflows show. Eventually we will probably have another "flash crash". Will they blame it on a trader's stubbed toe?

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