As we noted this morning, in the New Normal world, the only marginal buyer of Index futures are central banks [and] when it comes to individual stocks, the biggest buyer is the company itself.
The retail “dumb money” abandoned ship long ago after watching 40% of their 401ks go up in smoke on the heels of a meltdown catalyzed by the implosion of the American homeownership dream which, thanks to the Fed and Wall Street, had been supercharged and securitized. To the extent the turmoil in September and October of 2008 didn’t drive the individual investor permanently onto the sidelines, the subsequent realization that the entire “market” is nothing but a giant casino being manipulated at every turn by greedy cabals with names like “The Cartel” finished the job.
The world got wise to the central banker bid a long time ago and now, with Cheryl Davis Hillary Clinton’s push to bring an end to the “tyranny of the next earnings report” and thus to the practice of leveraging the balance sheet and employing financial engineering to inflate the bottom line, the buyback bid may soon be in jeopardy as well.
So unless the US wants to go the China route and simply make selling illegal, then it may be necessary to get creative when it comes to luring mom and pop back into the game. With that in mind, we bring you the following from WSJ who reports [11] that now, you’ll be able to buy stock in the checkout line at the grocery store. Here’s more:
Now selling at the checkout counter: breath mints, hand sanitizer and…$25 of Berkshire Hathaway stock?
In a new twist on the bustling gift-card business, retailers such as Kmart and Office Depot this week are starting to roll out cards that give the recipients small amounts of stock in some of the country’s best-known companies. The cards will be available ahead of the holiday shopping season at other retailers, including Safeway Inc., Toys “R” Us andLowe’s Cos.
The idea that shoppers might want to pick up some Apple Inc. along with their apples is the brainchild of Stockpile Inc., a Palo Alto, Calif.-based startup. Avi Lele, a former patent attorney and founder of the company, said he came up with the idea when he wanted to give a Christmas gift of stock to his nieces and nephews, and found the need to first gather personal information such as their Social Security numbers too burdensome.
“It is taking something complicated and expensive and making it accessible to everyone,” said Mr. Lele, who also is Stockpile’s chief executive officer.
The cards work like traditional gift cards but recipients receive stock instead of merchandise when they cash them in.
If they want, customers can swap the shares they have received for other stock.
Stockpile is licensed as a broker-dealer, and the Securities and Exchange Commission and other regulators have blessed the cards’ rollout. Americans could be harder to win over.
Only 13.8% of American families own stock directly, down from nearly 18% before the financial crisis, according to a study released by the Federal Reserve last year. Most Americans prefer to invest through mutual funds and retirement accounts.
So in other words, Stockpile wants to make stock an impulse buy, just like a Snickers bar or a cheesy tabloid. To us, that doesn’t sound like it’s conducive to due diligence, but what do we know?
And of course you’ll also be able to speculate on precious metals and index products, which is particularly amusing because what it means is that depending on where these cards eventually get sold, shoppers will be able to walk right past real gold only to buy paper gold backed by essentially nothing [12].
The first group of Stockpile cards to hit the racks will offer shares of 20 companies, including Coca-Cola Co., Facebook Inc., Apple Inc. and Berkshire Hathaway Inc., as well as products that follow the S&P 500 index and precious metals such as gold and silver.
On the bright side, maybe this means the US shale complex will get to stay alive for a little while longer: if all else fails, producers could just beg Stockpile to peddle HY ETFs next to the Milky Ways.
We'll close with the following from Shirley Motyka, a 37-year-old biology teacher who spoke to the Journal:
"I have always wanted to get into the stock market business, but I honestly don’t have the time to explore what’s going on in the market trends of the day."
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