The Real Crisis: “People Have Lost Trust In The Government And The Market”
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.” With Fed policy trying to force investors back into stocks (at any cost), a former fund manager notes, presciently that, “When this policy fails, as it will, baby boomers will pay the cost in their 401(k)s.” Are we the new ‘Depression Babies’? We suspect so.
Investors, as you well know, are leaving the equity markets in droves…
“Based on AP’s calculations, individuals accounted for 40 percent to 50 percent of money going to U.S. stock ETFs in recent years.
If you assume 50 percent, individual investors have put $194 billion into U.S. stock ETFs since April 2007. But they’ve also pulled out much more from mutual funds – $580 billion. The difference is $386 billion, the amount individuals have pulled out of stock funds in all.
If you include the sale of stocks by individuals from brokerage accounts, which is not included in the fund data, the outflow could be much higher.”
But why are investors not buying the propaganda this time and jumping in with both hands and feet…
“You have to trust your government. You have to trust other governments. You have to trust Wall Street,” says Neitlich, 47. “And I don’t trust any of these.”
Defying decades of investment history, ordinary Americans are selling stocks for a fifth year in a row. The selling has not let up despite unprecedented measures by the Federal Reserve to persuade people to buy and the come-hither allure of a levitating market. Stock prices have doubled from March 2009, their low point during the Great Recession.
It’s the first time ordinary folks have sold during a sustained bull market since relevant records were first kept during World War II, an examination by The Associated Press has found.
The Fed Targets Unemployment With More Money for BANKS!!
Robert Pollin: The Fed breaks ground with unemployment target but pushing more money into banks without requiring more lending won’t solve the problem
Savings Deposits Soar By Most Since Lehman And First Debt Ceiling Crisis Despite ZERO Interest Rates
A month ago, we showed something disturbing: the weekly increase in savings deposits held at Commercial banks soared by a record $132 billion, more than the comparable surge during the Lehman Failure, the First Debt Ceiling Fiasco (not to be confused with the upcoming second one), and the First Greek Insolvency. And while there were certainly macro factors behind the move which usually indicates a spike in risk-aversion (and at least in the old days was accompanied by a plunge in stocks), a large reason for the surge was the unexpected rotation of some $70 billion in savings deposits at Thrift institutions leading to a combined increase in Savings accounts of some $60 billion. Moments ago the Fed released its weekly H.6 update where we find that while the relentless increase in savings accounts at commercial banks has continued, rising by another $70 billion in the past week, this time there was no offsetting drop in Savings deposits at Thrift Institutions, which also increased by $10.0 billion. The end result: an increase of $79.3 billion in total saving deposits at both commercial banks and thrifts, or an amount that is only the third largest weekly jump ever following the $102 billion surge following Lehman and the $92.4 billion rotation into savings following the first US debt ceiling debacle and US downgrade in August 2011.
In total, there has been an increase of $112 billion in deposits in savings accounts in the past month alone, roughly the same as the total non-M1 M2 momey stock in circulation.
Peter Schiff: We Can’t Solve Our Problems Without Going Over A Cliff
from CNBC, via Eduardo89rp:
With the Obama administration blatantly attacking the 2nd amendment and going after Americans’ Constitutional right to protect themselves from a tyrannical government, Max Keiser talks to trends forecaster, Gerald Celente of TrendsResearch.com in the latest Keiser Report about the next American Revolution.
In a follow up presentation to the AmeriCatalyst Group, Hayman Capital fund manager Kyle Bass shares thoughts on a number of key issues facing the world over the next few years. Among those that stood out, was the inevitability of a major war, escalation of food riots, and why the government’s job is to maintain confidence over truth.
Excerpts are show here below:
5:00 – “This Ends In War”
“We sit today at the world’s largest peacetime accumulation of debt in world history…you know how this ends right? This ends through war…
I don’t know who’s going to fight who, but I’m fairly certain in the next few years you will see wars erupt, and not just small ones…”
19:00 – “More Social Unrest”
“You’re going to see more social unrest. You saw HUGE riots in Greece, and you’re seeing HUGE riots in other parts of the world over food (and lack of food) and those are actually derivatives of the financial problems that we’re seeing. We’re exporting inflation to some other nations. Going forward it’s going to be a problem.”