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OpEdNews Op Eds    H2'ed 8/22/10

Backlash with a Vengeance: Small Investors Pull $33 Billion From Wall Street Banksters

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It's a not so fond farewell to Wall Street's yellow brick road.

Today the New York Times reported that small investors pulled the plug on Wall Street. (In Striking Move, Small Investors Flee Stock Market)

Individual investors sold an amazing $33 billion dollars in equity invested U.S. mutual funds in just the past seven months.

Credit Suisse said small investors are losing their appetite for risk. Nice spin.

Dorothy Pulls the Curtain on the Wizard
Dorothy Pulls the Curtain on the Wizard
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But how can that be? Corporate profits are through the roof.

I said the market will have a serious fall once the Fed jerks the interest rates up.

Richard C. Cook, a writer for Global Research with 20 years of experience at U.S. Department of Treasury, took me to task for this statement. He reminded me that the Fed is committed to not raise interest rates for the foreseeable future. True enough.

So, the cheap money has and will continue to flow. The logic is infallible. If money costs little to nothing, why not invest it in equities of cash rich corporations with a fantastic up side when the economy recovers?

Is the small investor so dumb he and she doesn't get this?

No, it's not that individual investors are risk adverse. There's something else. What could it be?

The curtain that hid the Wall Street fraud has fallen with a $33 billion thud.

Those of us trying to save for college or retirement are afraid of theft. Past stealing, present stealing and future stealing.

Small investors have finally woken up and smelled the putrid coffee that's been simmering for decades. Long term investing fail to yield anything but loses. But we've been told over and over again that you cannot time the market.

What's been going on? Why does Wall Street have all the money? What do these people do that they deserve more than single digit revenues from the GDP? Who was looking out for us?

The answer came back. It was short and sweet. Nobody.

You're the mark in this con game and the fix was in big time. Not only did they take your investment money, they destroyed the economy, took your job, and whacked you once more with a taxpayer funded bail out.

Forget the fact that some of that money is being repaid with interest, your job, your life are in ruins. Let these crooks keep your hard earned money? We may be a little slow, but we're not crazy.

The Corporatoracy did nothing in the recent financial reform legislation to fix the problems: unchecked fees, computer trading, spread manipulation, corporate accounting transparency, exorbitant executive compensation, high speed trading, insider trading, et cetera. It's all the same thing, stealing and fraud.

Bernie Madoff's scam was peanuts in comparison, yet we have not seen one perp walk for the criminals responsible.

In November of 2009 I wrote Six Reasons to Screw Wall Street Now. I'll say it again. You've got no business in the stock market as an individual investor with out connections to the criminal network that runs the joint.

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Chaz Valenza is writer and small business owner in New Jersey. He earned his MBA from New York University's Stern School of Business. His current feature film project is "Single Point Failure" an insider's account of how the Reagan Administration (more...)
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