Lisa Simpson
Apr 14,2010
In: Finance

Hating Wall Street Might Harm the Average American

Hating Wall Street might harm the average american.

There are many reasons why the man in the street in America prefers to keep clear of the stock market. One strong reason is that there is a general feeling that the fellows handling the stock trading are all crooks. Many think the whole thing is a scam to fleece the humble citizens who have no hope against these Goliaths.

Perhaps the anger is turned in the wrong direction. Following the mayhem on the economic front the country has just experienced many see the stocks and the sellers of these lumped under the one name of Wall Street make up an unholy nexus. In general the people have become demoralized about the markets.

But upon second thinking it might be clear that when one purchases stocks the person is buying part of a business and not the financial system. The anger of the investors is understandable. The Evil Empire of this age comprises of the banks, the brokers, hedge funds, computerized trading methods etc.

The dangerous risk-taking almost brought down the empire to its knees in 2008. It was saved from biting the dust by the intervention of the government with aid running into trillions. The ultimate outcome was the loss of jobs running into millions across the globe. The savings of many were wiped out – those that had invested in stocks. The index (S&P) for the biggest firms of the country dropped by 57% – it being the worst since the 30’s.

A feeling of naked hatred for Wall Street has become stamped in the national character. And the best way to vent this anger seems to be to give up the idea of buying and selling stocks altogether. People have now put their trust in bonds. But bonds too pass through Walls Street.

In general bonds are a safer bet than stocks with the income being regular. Many investors think that the rulers of the Evil Empire cannot manipulate it as much as they can with stocks. No mention however is made again of the sub-prime mortgage bonds that triggered off the crisis.

The confidence of the public is still wavering and there are fears lurking of another recession lashing back. But a bit of careful thinking will show that public anger is not going to stop the mega investors from hunting around to make the kills. If the ordinary American fails to pitch in with the pack with his small bite then he will just lose out on whatever chance there is to pocket some gains.