As concerns about the global economic recovery continue to strike fear in financial markets, U.S. stocks were predicted to fall again today, following yesterday's sharp drop. The losses from yesterday showed the Dow losing 3.6%, the S&P 500 dropping 3.9% and the Nasdaq 4.1%
It’s a good thing the American financial system doesn’t have to run for election.
A new report finds that just 26 percent of Americans trust the country’s financial system.
That’s actually relatively good news for banks, big corporations and the like. It’s up from 20 percent in January of 2009, when the country was still deep in recession and grappling with the financial crisis.
The Chicago Booth/Kellogg School Financial Trust Index, which is compiled quarterly by researchers at the University of Chicago and Northwestern University, is based on a representative survey of about 1,000 Americans.
The survey aims to capture “the amount of trust Americans have in the institutions in which they can invest their money.” The latest survey covered October to December 2010, when the economy was beginning to pick up a little speed and grew at a 3.2 percent pace, according to government data.
Big corporations fared the worst in the survey, with just 13 percent of Americans saying they trust these major businesses. That’s the same level as the first quarter of last year and down from the middle of 2010.
The stock market also isn’t high on Americans’ list of trusted organizations, with just 16 percent of Americans saying they trust that institution. Again, that’s the same percentage as last March.
Banks and mutual funds fared better, at 43 percent and 31 percent, respectively. Among all the components of the index, the banking system has seen the biggest percentage gain in trust this year.
Besides their lack of trust for the stock market, 44 percent of respondents said they thought the stock market was overvalued. The Dow Jones industrial average closed above 12,000 Tuesday for the first time since June of 2008.