Over a bowl of cereal just a few minutes ago, this Associated Press story reprinted in the local newspaper was happened upon and I couldn’t help but think of the sorry state the stock market has come to, what with retail investors shunning equities like the plague and trading now dominated by super fast computers in the little understood world of high frequency trading along with shell-shocked hedge funds and pensions funds that, according to a Wall Street Journal report over the weekend, are still assuming that they can get an eight percent annual return and retirees depending on that happening.
Is that what it’s come to? After freakishly low interest rates and a trillion and a half dollars of money printing by the central bank and after the Federal government intervened in ways never thought possible before to prop up the banking sector, the auto sector, and nearly the entire housing market, it’s now up to the Federal Reserve to deliver more money printing so that the economy and, by extension, the stock market can be similarly propped up?
You have to wonder what someone waking up today from a 15-year coma would think about our current condition, one that, increasingly seems to be accepted as the status quo, the casual reference in the AP story above being the latest example.
A LAWSUIT accuses Citibank of costing a 104-year-old heiress’ trust fund up to $US80 million ($87 million) by failing to invest its money properly, the New York Post reported overnight.
What’s amazing about this data is the 35-49 age group where decades of conditioning that your best bet is “stocks for the long run” appears to have produced a nearly unshakable belief system. Even after ten years of dismal returns for equities (with the notable exception of gold stocks), Wall Street and the financial media should give themselves a pat on the back for being so successful in their efforts to convince the public that stocks are still a good bet despite the overwhelming evidence to the contrary.
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