>Interestingly, the current bull has attempted to change this, though
>I'm not sure it's in a way that you'd like to see. The Official
>Sources (NYT/WSJ) love to run stories about Wal-Mart cashiers who
>have six digits in a retirement fund; the "ownership" aspect of this
>has got to have an impact. People who have worked their whole lives
>and used to look forward to the government 'taking care of them' are
>now watching mutual fund quotes to see how well they are taking care
>of themselves.
But they're not taking care of themselves, they're relying on valuations created from the expectations of millions of other "investors," mainly a relative handful of money managers, not to mention the Federal Reserve. That's self-reliance for you.
We've been through this before on Bad Subjects, but most of the cash flow into U.S. stocks has come from a shifting allocation of existing savings - from banks to securities through mutual funds - not a gusher of new savings. In fact, the U.S. savings rate in 1997 was the lowest since the Depression. As those assets have shifted, valuations have shifted upward with them. It's not hard imagining that process reversing, though god knows whether it will happen in 1998 or 2027.
Doug