Wall Street's Fungal Creep

Heidi Moore's tirade against the push to advertise hedge funds may be a bit over the top, but she does have a way with words:

For most people in the US, Wall Street is not an everyday concept. It's more like a haunted Victorian mansion on the edge of town where your 401(k) retirement plan lives: it takes a long time to understand how to get there and you're pretty sure something's not right about it, but you're too scared to get close enough to check. ***

As you might expect, that's an illusion. Wall Street is in your backyard … in your schools and roads … in your bank account, charging you fees on your checking account ;…[and] in your driveway, where your car sleeps as you pay off your auto loan – a debt that has already been sliced and diced and sold to a trader at a bank somewhere. ***As a result, Wall Street is not so much like a haunted Victorian mansion as a quiet, creeping fungus right where you live: it grows fast and takes root everywhere, silently.

Moore may be right about the targeting of seven-figure 401(k) balances. Still, Wall Street already markets 10,000 mutual funds and a thousand or more exchange-traded funds. The 8,000 or so hedge funds, most of which underperform the S&P, will have plenty of competition.

One quibble: Contrary to Moore's assumption, the U.S. has nowhere near nine million millionaires. We have about nine million millionaire households. The number of individuals with investable assets of $1 million or more is closer to three million.