Mr. Gross makes the common error of referring to "investors" buying and selling an interest in the S&P500, or any other index for that matter. This is rather a distortion of the meaning of the word. An investor provides funds to an entity to help finance it operation. What we have in the case of the indexes, which have nothing to do with investing, is betting, known in the particular case of betting on the price performance of one or more equities, as speculating. When I was young, which was a long time ago, you didn't call somebody a speculator because it was essentially calling him a criminal. It wasn't well tolerated.

Mr. Gross says, deep in the article, that " ... the Federal Reserve have been much more willing to bail out struggling large financial companies." Well, yeah - given that it is owned and operated by the large financial companies, that isn't too surprising. Wait till the government turns all powers of regulation over to that syndicate, and see what happens.

There is an argument about the correct nature of the tax tables that centers upon the idea that the rich should be coddled because they provide the funds for new enterprises. Well, considering that the opportunity to invest in a new company or in an expansion of an old company, is usually only offered to the rich, one can see that this would be a self-fulfilling travesty! Possibly a more egalitarian means of offering these new shares would result in a redistribution of the tendency to actually invest such that the rich could be highly taxed without bringing the economy to its knees.

Nothing demeans a posting like mispelling a word in the title, does it? Could I have gotten away with it if I hadn't confessed?

A few years ago, I was having one of my economics classes read a Wall Street Journal article about the rapidly increasing size of our annual budget deficits. On occasion, even high school students like to read aloud, so the (small) class was taking turns reading paragraphs aloud from the article. One of the paragraphs was quoting a budget analyst who was remarking on the 'whopping big budget deficit'. The girl who was reading the paragraph read it as 'whooping big budget deficit', and the class dissolved in laughter. I guess I egged them on a little bit by asking, "Did you say whooping?"

It was a general travestry.

financial companies. This must be news to Bernanke. Say, is the Fed traded on Nasdaq, or NYSE? How can I buy some, or is it a privately traded company that only the big hedge funds can buy?

Maybe Leroy can teach you something about alpha, beta and portfolio diversification.

The Fed is owned by a collection of large banks which are required to be investors in order to be eligible for those low interest loans. Obviously, they wouldn't have much reason to resist being investors.

Here is the Fed's description of the ownership arrangement:

"Member banks must subscribe to stock in their regional Federal Reserve Bank in an amount equal to 6 percent of their capital and surplus, half of which must be paid in while the other half is subject to call by the Board of Governors. The holding of this stock, however, does not carry with it the control and financial interest conveyed to holders of common stock in for-profit organizations. It is merely a legal obligation of Federal Reserve membership, and the stock may not be sold or pledged as collateral for loans. Member banks receive a 6 percent dividend annually on their stock, as specified by law, and vote for the Class A and Class B directors of the Reserve Bank. Stock in Federal Reserve Banks is not available for purchase by individuals or entities other than member banks."

This is quoted from a Fed publication entitled "The Federal Reserve System Purposes & Functions", which is downloadable from the Fed web site.