The 30% was already lost, it was tied to the Russell index. Little people don't own GE, MSFT, KO except in their pensions and 401K funds, along with their company stock that has now collapsed 30-50% in the last month. The average guy works for a small company, a russell-index company. tens of thousands of jobs were lost when the Russell collapsed. BTW our pension fund (vanguard windsor) has a loss for the last 52 weeks! So just WHO has all this wealth? A few...
And who are these foreign investors that have poured 4 trillion dollars into our stock markets like pocket change?
What we have here is some kind of international financial crisis tied to the S&P index- maybe runaway derivatives and futures products, or some unspeakably large debt that can only be handled by lowering the interest rate on the debt, or some unspeakably large foreign hedge fund trying to collapse the dollar by shorting the index. Or the Japanese dumping their stocks and bonds so fast that the funds can't absorb them. Or massive inflows from foreign governments printing money as fast the printing presses allow. A runaway black box.
I just don't think it was mom and pop america making 35,000 a year who made this bubble. Their stock market, the Russell, has returned about about 10% a year plus dividends for the last five years. Most of them would like to see this thing collapse and get it over with.
There are well over 1000 stocks selling below book value now.
The fed doesn't legally have the charter to intervene in the stock market (after all it consists of multinationals), it only has charter over employment and price stability. Greenspan has repeatedly warned the public about the overpriced market.
Now whatever it is, it's up to the boomers to figure out that the Russell stocks are selling at prices not seen since 1973! |
