American Investors Shun Stocks? / Elite Retreat? McCain Drops Diet Bill
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American Investors Shun Stocks?
Friday, March 12, 2010 - by Staff Report
Investors often flee the stock market and then jump back in, but too late for their own good. The evidence of the past year fits the pattern: New money coming to stock mutual funds has been negligible even as returns have been among the best on record. An influx into stocks in the coming months would suggest investors once again waited too long. They have reasons to be cautious, of course, While the market is up almost 70% in the past 12 months, many mutual funds are still below their pre-crisis peak. "There's still some sensitivity to how much was lost [in the bear market] – investors are still opening their 401(k) statements and seeing losses," said Todd Rosenbluth, mutual-fund analyst at Standard & Poor's. The question is whether the losses were so big that they scared investors away from stocks not just for the next few months, but also for years. "I don't know if we're seeing the demise of actively managed mutual funds – if we are seeing a big change – but a lot of people seem to have decided to stay away from stock funds," said Tom Roseen, senior analyst at research firm Lipper Inc. From March 1, 2009, through Jan. 31, stock mutual funds saw net inflows of $21.22 billion – trivial for a sector that has about $4 trillion in assets. In the same period, bond funds saw net inflows of $328 billion. – Wall Street Journal
Dominant Social Theme: They're missing the boat?
Free-Market Analysis: After the Great Depression, the American stock market was decimated. In the latter 1940s, the New York Stock Exchange, in desperation, came up with the idea of road shows to explain to American investors the benefits of investing in stocks. The publicity campaign worked over a period of time. Eventually, the US stock market took off and really hit its stride in the 1960s, culminating in a perception that a list of nifty fifty corporations offered a "can't miss" opportunity to guarantee (hopefully) the eternal solvency of one's family.
Elite Retreat? McCain Drops Diet Bill
Friday, March 12, 2010 - by Staff Report
McCain Abandons Dietary Supplement Regulation Bill ... Arizona Sen. John McCain (left) has abandoned his own bill that would have increased federal regulations on dietary supplements. Sen. Orin Hatch, R-Utah, who has long been a champion of supplements, urged his fellow senator to withdraw his support from bill S. 3002 that would have required all manufacturers of dietary supplements to register with the Food and Drug Administration and provide a list of their products and ingredients. In addition, the bill would have made it much easier for the FDA to recall dietary supplements. Experts believed it would also drastically limit their availability to consumers. – Newsmax
Dominant Social Theme: A concerned senator rethinks.
Free-Market Analysis: Is there any elite dominant social theme that John McCain doesn't want to support? During the waning regime of George W. Bush, he came out in favor of flooding the United States with workers from Mexico – and its corollary which was building a transnational highway to connect Mexico and Canada, thus cutting the US in half. He always supports the US military-industrial promotion of endless war for endless peace around the world. He is for endlessly higher taxes to support an endlessly higher deficit. He backs the current central banking regime, is yet a proponent of global warming, and most recently he came out in favor of further regulating America's dietary supplement industry.
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Don't go wobbly on us now, Ben Bernanke (left) ... Mervyn King, the Bank of England's Governor, seems strangely alone in ... seeing the absurdity of a recovery strategy where everybody tightens at once and surplus states keep on dumping excess capacity abroad. "I was struck by the mood at the G7, where several of the major economies around the world said quite openly that they were relying on external demand growth to generate growth. That can't be true of everybody," he said. The West risks a slow grind into debt-deflation unless central banks offset fiscal tightening with monetary stimulus – QE, of course – to keep demand alive. Yet the Fed and the European Central Bank are letting credit contract. ... Fed chairman Ben Bernanke told us in his 2002 speech "Deflation: Making Sure It Doesn't Happen Here" that: 1) Japan's slide into deflation was "entirely unexpected", and that it would be "imprudent" to rule out such a risk in America; 2) "Sustained deflation can be highly destructive to a modern economy and should be strongly resisted"; 3) that a "determined government" has the means to stop deflation, if necessary by use of the "printing press". Yet here we are, facing exactly that risk, unless you think one good quarter of inventory rebuilding has conjured away our debt bubble. The one-off inflation blip caused by a doubling of oil prices is already fading, revealing once again the deeper forces of deflation. Core prices fell 0.1% in January. They plummet from here. So why has Bernanke broken ranks with King and begun to flirt with disaster by tightening too soon? Has he lost control to regional hawks, as in mid-2008? Have critics in Congress and the media got to him? Has China vetoed QE, fearing a stealth default on Treasury debt? Don't go wobbly on us now, Ben. If the governments of America, Europe, and Japan are to retrench – as they must – their central banks must stay super-loose to cushion the blow. Otherwise we will all sink into deflationary quicksand. – UK Telegraph
CNN Poll: Majority says government a threat to citizens' rights ... A majority of Americans think the federal government poses a threat to rights of Americans, according to a new national poll. Fifty-six percent of people questioned in a CNN/Opinion Research Corporation survey released Friday say they think the federal government's become so large and powerful that it poses an immediate threat to the rights and freedoms of ordinary citizens. Forty-four percent of those polled disagree. The survey indicates a partisan divide on the question: only 37 percent of Democrats, 63 percent of Independents and nearly 7 in 10 Republicans say the federal government poses a threat to the rights of Americans. – CNN 
In the midst of the current orgy of capitalism-bashing, unleashed by those who earnestly believe that they should be directing the buying and selling activities of the public, there is once again a good deal of talk about how we must all serve the public interest and forget about our own selfish goals. Just a few days ago Al Gore went on a demagogical frenzy, denouncing "market triumphalism" and lamenting the perfectly sensible concern that "Laws and regulations interfering with the operations of the market carr[y] a faint odor of the discredited statist adversary we had just defeated" (i.e., Soviet socialism). He even asserted, without a scintilla of proof, that the Cold War victory of democratic capitalism – which means, the mixed economy over a dictatorially planned one – "led, in the United States, to a hubristic 'bubble' of market fundamentalism that encouraged opponents of regulatory constraints to mount an aggressive effort to shift the internal boundary between the democracy sphere and the market sphere." 
Billionaire financier Jim Rogers (left) has predicted that the British Pound could completely collapse within weeks, sending shockwaves throughout the global economy and heralding the beginning of a downturn that would make the recent economic crisis look tame in comparison. "Other currencies aren't strong and the Euro has real problems, with cracks much wider than Greece beginning to show," Rogers said. "But it's the Pound that's most vulnerable. In real terms, it's already devalued against virtually every currency barring the Zimbabwean dollar and it's especially exposed over the weeks running up to the UK election. In a basket of currencies, the Pound is potentially a basket case. And that will put Britain in an extremely bad position for the shakedown." "The last few months have seen a 'false bounce', shorn up by massive short-term injections of government underwriting," Rogers, the former business partner of George Soros, said. "But it can't last. We've been applying temporary sticking plasters, not long-term cures. Later this year we'll see the start of the real recession, with more Lehman-scale disasters and a fallout which won't stop until the underlying malaise is genuinely cured." he added. – InfoWars
Two weeks ago, European leaders tapped Germany to lead a bailout of Greece. Since then -- sturm und drang and chaos. Germans are infuriated over everything from Greece's hiring of Wall Street firms to hide its debt to the country's retirement age (in Germany, 67, in Greece, 61). In turn, Greeks have accused German papers of racism and western European leaders of paternalism. Yesterday, a 60,000-person strike shut down Athens and turned violent, Theodoros Pangalos, the deputy prime minister of Greece, brought history into it. In an interview with BBC radio, he invoked the 1941 Nazi invasion of Greece, which caused an estimated 300,000 deaths. – FP Passport
Even without much expenditure of electronic soap for their "brainwashing" by the Armed Forces' psy-ops contingents, the American people in their anonymous millions would likely accept these turns of events, and the "official" explanations for them, because by then: (i) Control of the country by the Armed Forces would appear to be the only way that a modicum of economic and social order could be restored. (ii) The Armed Forces would not yet have been compromised, but would still generally be seen as truly "American" in composition, attitudes, and goals. (iii) The Armed Forces would imagine themselves capable of embodying popular aspirations and serving popular needs – governing on behalf of the great mass of the people, rather than of special interests. And (iv) the Armed Forces' intervention would be excused as fundamentally "democratic", because most people would at least tacitly support it. (Only a few die-hard constitutionalists would point out –until they were suppressed – that just about everything the Armed Forces were doing was patently illegal to the point of criminality.)
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