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News Link • Propaganda

Throwing Caution to the Wind

• Chris Martenson
The number of articles out there in the mainstream press that are designed to create the impression that all is well practically constitute a deluge at this point. One thing I like to do, especially when an article comes out in a reputable paper like the NYT, is to check their facts to see if they square up with the tenor and tone of their "it's safe to get back in the pool" articles. Here's a perfectly fine example from today: Cautiously, Small Investors Edge Back Into Stocks Like millions of ordinary investors, Cindy and Eric Canup are still recovering from Wall Street’s big downturn. Their portfolio is off by 25 percent. They are mindful of their spending. And their dreams of buying land in Northern California or Oregon have been delayed five to 10 years, until they can rebuild their retirement accounts. Yet with no guarantee they will ever be made whole again, individual investors like the Canups, who live in Oakland, Calif., are sticking with the stock market. Recently, with help from their financial adviser, they nudged some of their cash into mutual funds and took on riskier investments. They have even stopped tossing unopened 401(k) statements into a filing cabinet. Comments: So the framing being established here is that there are people out there doing well because they have stuck to their guns and even piled more heavily into equities. Never mind the inconvenient fact that equities have returned pretty much zero for more than a decade, making them the worst investment of the decade. That's not worth mentioning here, where dreams of an effortless future are being peddled. What's important here is not how individual investors are faring, but whether or not money is flowing into or out of the market. One measure of that adds up the inflows and redemptions to mutual funds and the NYT, then cites the ICI (a reputable tracker of such things) to bolster the case that money is flowing in! Now, some of the money that fled stocks for safe harbors like money-market funds and government bonds last year is beginning to return. Even with trillions still sheltered on the sidelines, some $56 billion has poured into equity funds since April, according to the Investment Company Institute. This all sounds very comforting, but the purpose here is to check the facts, so I went to ICI and found this:

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