Trading in stocks down

The U.S. stock market is in crisis.  Small investors continue to get out of stocks.  Read about the problem and one possible explanation in the stories below.  Tomorrow I’ll talk about an alternative for small investors.

New York Times
May 7, 2012
Stock Trading Is Still Falling After ’08 Crisis
By NATHANIEL POPPER

Even though American stocks have doubled in price in the last three years, investors and traders large and small keep giving the market the cold shoulder.

Trading in the United States stock market has not only failed to recover since the 2008 financial crisis, it has continued to fall. In April, the average daily trades in American stocks on all exchanges stood at nearly half of its peak in 2008: 6.5 billion compared with 12.1 billion, according to Credit Suisse Trading Strategy.   Read more.

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Myrtle Beach Sun News
May 6, 2012

Some rules to prevent another stock market collapse yet to be enforced

Regulations to prevent collapse have yet to take effect, could be watered down

By Kevin G. Hall - McClatchy Newspapers

WASHINGTON -- Almost four years after America’s financial near-collapse, regulators are now empowered to police financial markets as never before. Yet some of the most important rules to curb Wall Street’s bad behavior have yet to take effect – and could be watered down. Historians likely will view Barack Obama’s presidency through the prism of the worst financial crisis since the Great Depression. Like that period in the 1930s, the legislative and regulatory response to this crisis is sure to influence the U.S. economy for decades. . . .

“The regulatory framework has changed, but the attitude of financial services companies hasn’t. It’s been one constant pushback after another since Dodd-Frank was put on the books,” complained Travis Plunkett, director of regulatory affairs for the Consumer Federation of America. “In some cases the securities and financial services industries have won rollbacks that pushed back to well before the financial crisis.”  Read more.