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To: carranza2 who wrote (4954)4/1/2009 12:59:55 PM
From: Jim Mullens  Read Replies (2) | Respond to of 9129
 
C2, re: "Nonetheless, the 1000% figure is eye-opening."

Agreed.

I’m concerned about the markets going forward because of the reduced level of participation by the individual investor due to his massive losses--- speculative nature of the stock market due to the traders v investors being in control. Seems to me— the individual investor and the institutions that support the individual investor (mutual funds, pension funds, annuities, etc) in order to be prudent will have to lower their equity allocation mix significantly in order to guard against future melt-downs. This has a double impact on the markets—1) less invest capital and 2) more instability with greater proportion of trades driven by the speculators.

However, pending legislation may mitigate some of these problems in the future.

+ Hedge funds tax changes - remove current beneficial taxing at long term cap gains rates—use ordinary income rates. If I understand this correctly, the beneficial 15% rates encouraged short term trading / destabilizing the markets. Being taxed at higher rates might lower their returns and capital going into these speculative ventures.

+ Modifying Mark to Market accounting.

Your thoughts?