>Doug Henwood wrote:
>>
>>
>> Forget the Dow - try the Nasdaq .... one of
>> the great bubbles in financial history, now burst. This is much more
>> representative of first, the mass psychology, and second, the average
>> individual investor's portfolio.
>
>What are we talking about when we speak of "the average individual
>investor"? Also, how "mass" is that mass"?
Well, 50% of U.S. households have some money in the stock market, either directly or through mutual funds. For almost all those people the sums are pretty insignificant in macro terms - some 95% of stockholdings are held by the richest 5% of investors - but they're pretty big in their personal lives. That 50% more than doubles the figure that prevailed through the 1970s and into the 1980s.
As for the mass psychology, I'm talking about all those investors, plus quite a few onlookers, and the major outposts of the consciousness industry, which ceaselessly propagandized about the democratization of wealth and the world-historical importance of the bubble. There's no doubt that irrational exuberance affected people's buying, borrowing, and savings patterns in pretty large numbers.
> I guess my questions focus on
>the relationship between the stock market and the general economy, and
>either I forget your explanations in _Wall Street_ or they were not by
>themselves sufficient on this general topic.
There's a special circle of hell reserved for this sin.
Doug