http://www.truthdig.com/eartotheground/item/reich_the_real_economy_is_catching_up_with_the_financial_economy_20110613/?lnAfter six straight weeks of a falling Dow and a period of stalled economic growth, the stagnation of national recovery is glaringly visible to everyone—except our representatives in Washington, says Robert Reich. —ARK
Robert Reich:
Over the past year, the Street lured small investors back into the market on the smokey promises that the worst is over and stock prices are bound to rise. The lure became a self-fulfilling prophesy. As investors re-entered the market, they bid up stock prices. Hence, the mirror.
Insiders on the Street are always the first to bail when they sense they’ve been overselling, as they started to do a few weeks ago. This gives them a second opportunity to make money off small investors — by selling short.
The nation’s second-largest financial redistribution in history (the largest, on a percentage basis, occurred in 1929) came in 2007 and 2008 – from small investors and their pension funds to the Street’s savvy traders who shorted them. Now it’s been repeated, although on a smaller scale.
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