Andrew Ross Sorkin writes: You’ve no doubt been reading a
lot about a “crisis of confidence” on Wall Street in recent days after software
problems at a big trading firm sent the stock market, briefly, into a tizzy. Everyone is hyperventilating at the errant
trades at the Knight Capital Group — suggesting, in the words of Arthur Levitt,
that these malfunctions “have scared the hell out of investors.” The problems
at the firm were immediately lumped together with Facebook’s glitch-filled
initial public offering, the flash crash of 2010 and the rescinded public
offering of BATS Global Markets, among others.
Apparently — if the experts are to be believed — these
computer errors are the reason “investors are fleeing the markets like never
before,” Dennis Kelleher, president of Better Markets, told The Los Angeles
Times. Dozens of articles about the trading blunder included some form of that
contention, using statistics showing that $130 billion or more had been
withdrawn from mutual funds over the last year or so.
Let me offer a more straightforward explanation of why
investors have left the stock market: it has been a losing proposition. An
entire generation of investors hasn’t made a buck……
Wait,wait...there's more at http://dealbook.nytimes.com/2012/08/06/why-are-investors-fleeing-equities-hint-its-not-the-computers/
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