The death of the 'cult of equities' was a popular topic this year among both fringe blogs and the best-known institutional asset managers and sell-side strategists. As AP discusses in this excellent article, ordinary Americans - defying decades of investment history - are selling stocks for a fifth year in a row. It's the first time ordinary folks have sold during a sustained bull market since relevant records were first kept during World War II. The answer is both complex and simple but summed up best by a former stock analyst's comment that in order to buy stocks "You have to trust your government. You have to trust other governments. You have to trust Wall Street, and I don't trust any of these."Zero Hedge
The Real Crisis: "People Have Lost Trust In The Government And The Market"
Tyler Durden
Could also be that interest rates are zero for four years.... Rsp
ReplyDeleteA lot of those equities have been cashed in to pay bills and reduce debt. Still doesn't mean you can trust current government. Although I saw this morning that the IRS is going to hold off on collecting the tax increase revenue until Congress finishes making their fiscal mud pies. . IRS is government, right?
ReplyDelete
ReplyDelete"Fed policy is trying to suck people into risky assets when they shouldn't be there," says Michael Harrington, 58, a former investment fund manager who says he is largely out of stocks. "When this policy fails, as it will, baby boomers will pay the cost in their 401(k)s."
Wrong. More conspiracy theory here from ZH as usual...
Fed policy is ZIRP which they think is stimulative (but is not as govt interest income is also zeroed). And Fed is doing QE (also removes interest income from the non-govt and creates fiscal drag) which they think increases "confidence" (magic thinking) or increases "loanable funds" (moron thinking) ...
The Fed nowhere is on the record as claiming their policy is intended to "suck" people into equities...
And if you look at the latest Z.1 report, I question the veracity of the entire premise here that "people hve been selling" as the total household holdings of equities and mutual funds is at all time highs...
http://federalreserve.gov/releases/z1/Current/z1r-4.pdf
This article could be a contrarian indicator...
rsp,