Economic Crisis - Leaders Have Earned Distrust, Says Study

If you have a 401K, you've seen what happens when confidence abandons the stock market. If people didn't trust financial leaders and institutions before, they certainly do not now. Paola Sapienza (Kellogg School of Management at Northwestern University) and Luigi Zingales (Un iversity of Chicago Booth School of Business) have created the Chicago Booth/Kellogg School Financial Trust Index and they have published the first set of results today. They say their research shows just how deep America's declining trust runs and how strongly it contributes to the country's financial problems.

The results do not speak well for confidence that more government programs are the solution. Even among investors who are ideologically favorable to government intervention in financial markets, three out of four have been made less confident by the way the government has intervened.

I call BS on this so-called study. IF the study were true, the Obamessiah wouldn't be president today, the first stimulus wouldn't have been passed by the Senate and the House and the Obamessiah Stimulus wouldn't even be on the table.

The problem is that too many dumbed down people look waaaaayyyyy too much to the government to straighten out their lives for them since they are totally clueless. The FACT of what has occurred in America in the past 3 months completely and totally belie the "results" of this alleged "study".

I think this is a post-mortem. Prior to zerO being elected, folks thought “It can't get any worse” and “Bush's (and GOP) fault.” Also, it was presented during the campaign that the stimulus would go to the *little people* in the form of tax cuts, checks and subsidies. Instead, it went to the perps in the form of unmonitored gifts of tax monies.

Anecdotes: We had dinner with 3 other couples on Sunday. One crunchy granola w/BDS and the rest of varying degrees of conservatism. One couple is closer to RINOs than to conservatives. Everyone very bitter and anxious. The crunchy granola was the only one not a professional or self-employed. She still has *hope*, even after being financially hit quite hard (30% to 50% in various accounts).

The consensus, though, was “Everything is a lie.”

Yesterday, at the grocery store, I ran into a woman who lives on a pension, rent from a farm in another state and the invested proceeds of an insurance settlement for a real, devastating physical injury. I always thought she was a conservative, as I know she supported W and the WOT. She got very upset when I said things were only going to get worse and said:”No, they aren't”, quite forcefully. I really doubt she voted for zerO, but I have learned not to assume about this.

I think we are seeing mass psychogenic illness, which includes denial and extreme cognitive dissonance. People seem to hold diametrically opposed views at the same time.

zerO won on smoke and mirrors and the stimulus passed for the same reason. The PTB ranted on about imminent meltdown, no one was able to contradict them, the BS passed and nothing has improved. The study is likely accurate and you are, as well.

The geniuses that brought us this mess are frantically day trading and shorting whatever they can so they can recoup some of their losses. These are the people telling everyone to hold their investments, keep the faith and everything will come back, since it always has in the past. I am not guessing about this. We have relatives who worked for Citadel and now work for Magnastar. They are very close lipped, usually, but their losses were 75%(hedge fund)--100% (Lehman). The wife of one of them has a California State Employee pension, which she always thought would be guaranteed. Two weeks ago, they were plotting how to rent out their paid for, high-valued home in the city, move to an inner suburb and then recoup by selling the suburban property when "real estate comes back". The plot involved a mortgage on the suburban property. Lots of denial in everything they are planning/doing. Of course, they voted for zerO and backed the stimulus bill.

Then there is the self-employed Paulite, who works part-time as a contractor for a non-profit that consistently lobbies against her publicly-stated views. When discrepancies are pointed out, she hems and haws and equivocates, probably because the ostensible mission of the non-profit is to promote organics, which appears to take precedence over her financial concerns.

Don't look for logic, enlightened self-interest or rationality in America, these days. It has gone MIA. Everything we thought we knew is false and, while trust has evaporated, many people are clinging to those lies because the alternative will send them screaming into the streets in search of Thorazine.

Good, good info and I really appreciate you sending it along to me. It sounds as though things are trending about the way that I thought they would, but my timetable had it out to summer-fall timeframe.

I still agree that, from a psychological perspective (economy aside), things are going to turn VERY bad when people realize that obi wa nobama set expectations so high that there is no way he can even begin to meet those expectations.

Since the Obamessiah got elected, I was certain that he would have his traditional first hundred days honeymoon but not much else before the backlash began. After reading your info plus my own observations and discussions I am having with other conservatives, I’m begining to wonder now if he really will have his whole honeymoon or will he have to “hunker down” a lot sooner than any of us (especially me!) expected.

I’m beginning to become concerned about the national psyche. As a boomer, I always suspected that I would never see a dime from SS, and now that speculation is turning into reality. The woman you mentioned that you encountered in the grocery store really concerns me. Emotionally, she sounds like she is at the end of her rope and can’t handle anymore. The people who killed themselves and their entire family after both husband and wife lost their jobs may only be the tip of the iceberg. We could well be at the precipice of a new, (not-so)Great Depression that could be more devastating than the original.

Some Democrats are already grumbling that the Obamessiah has betrayed them by breaking his campaign promises. We knew that was coming and (I think) were prepared, but the Democrats did not. I pray that we are all adding 2 + 2 and coming up with 7. But, I don’t really think so.

Thanks for sharing your info. I look forward to corresponding more with you.

FRegards,
Dusty

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