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DarthMaul09 (29.07)

Why are retail investors leaving the equity markets?



April 25, 2012 – Comments (6) | RELATED TICKERS: JPM , GS , BAC

Because the recession never ended and they are no longer needed.

Zerohedge has a post showing that retail investors have been selling out of equities independent of the direction of the market.  They suggest that individual investors have finally learned that the market is rigged and no longer wish to play the sheeple that are both fleeced and slaughtered for the benefit of the big financial institutions.

Another plausible explaination is that the recession never ended for the middle class.  Equity sales reflect the need to raise cash for living expenses.  Home equity has declined and is no longer an easy source of cash.  So I suspect that the trend that they have uncovered was due less to enlightenment and more likely the result of ongoing austerity in the US.

Retail Investors Ignore "Generational" Opportunity To Buy Stocks One More Week

Submitted by Tyler Durden on 04/18/2012 18:11 -0400


Additional supporting data are provided by the US government and commented on by Charles Hugh Smith: (A similar graft was also commented upon by Casey Research).

Why Is Gasoline Consumption Tanking?   (February 10, 2012)

It is unlikely that the 47% decline in gasoline utilization was due to anything other than the recession which continues to suppress the middle class.

With retail investors net sellers of equities, the rise in the equity markets appear to be due to larger investors, such as banks, which are using the funds that they receive from the Fed to capture performing assets, which can pay a dividend that is greater than zero.

We have already seen what happens to the market in the absence of Fed support.  If this is the new reality, then without Fed support the markets will implode and take the big banks with it.  Since the Feds real mandate is to support its member banks, currency debasement is inevitable and will proceed until all remnants of the middle class have been completely destroyed.  What becomes of the real economy and governance is uncertain, but it is unlikely to be free or market driven (The Road to Serfdom).

The markets will eventually become completely owned by the large banks, which will redefine the purpose of the markets.  No longer will this be a place to purchase ownership of a company.  Its new purpose will be as a depository for all the wealth stollen by the banking cartel.

This is not a new idea:

"I see in the near future a crisis approaching that unnerves me and cause me to tremble for safety of my country; corporations have been enthroned, an era of corruption in High Places will follow, and the Money Power of the country will endeavor to prolong its reign by working upon the prejudices of the People, until the wealth is aggregated in a few hands, and the Republic destroyed."

ABRAHAM LINCOLN, letter to Col. William F. Elkins, Nov. 21, 1864




6 Comments – Post Your Own

#1) On April 25, 2012 at 4:16 AM, daveandrae (< 20) wrote:


Why do you put energy into something which you have absolutely no control over?  That has never made any sense to me. For a variety of reasons, people buy and sell stock mutual funds everyday.

So what. Who cares! 

Truth be told, the people that say that the market is a "rigged game" only say that, because they've made it one by jumping in and out of it.  

Warren Buffet once said...."Wall Street makes its money on activity. You make your money on inactivity. "  


My portfolio's April 25th, 2012, year over year investment performance.  

Asset Allocation- 100% equity

Turnover ratio - Negligible.


Harley Davidson - 35.96%

McDonalds- 26.19%

Pfizer -  17.05%

General Electric - 1.79%

Dow Chemical - (minus) 8.99%

Total Aggregate Return - 14.4%

S&P 500 -  4.59% 




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#2) On April 25, 2012 at 11:23 PM, DarthMaul09 (29.07) wrote:

April 24, 2012 10:53 pm

‘Real’ investors eclipsed by fast trading

By Telis Demos in New York

Trading by “real” investors is taking up the smallest share of US stock market volumes in over a decade, according to a recent study.

...The proportion of US trading activity represented by buy and sell orders from mutual funds, hedge funds, pensions and brokerages, referred to as “real money” or institutional investors, accounted for just 16 per cent of total market volume in the form of buying, and 13 per cent via selling in the final quarter of last year, according to analysis by Morgan Stanley’s Quantitative and Derivative Strategies group.

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#3) On April 28, 2012 at 1:06 AM, DarthMaul09 (29.07) wrote:

John Williams - The “Recovery” Faked By Phony Gov. Numbers


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#4) On May 25, 2012 at 12:41 AM, DarthMaul09 (29.07) wrote:

Retail Pulls Money Out Of Stocks For 13th Consecutive Week


Submitted by Tyler Durden on 05/24/2012 17:39 -0400

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#5) On June 01, 2012 at 1:50 AM, DarthMaul09 (29.07) wrote:

"The End Game: 2012 And 2013 Will Usher In The End" - The Scariest Presentation Ever?


Submitted by Tyler Durden on 05/31/2012 20:02 -0400

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#6) On June 18, 2012 at 3:02 PM, DarthMaul09 (29.07) wrote:

Updated June 17, 2012, 8:45 p.m. ET
Calm Market, Rough Trading

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