A few days ago we predicted that the Bernie Madoff scheme would have a serious impact that extended far beyond the investors whose money he lost. The already fragile investor confidence is being shaken to its core, we wrote. Now a new, albeit unscientific, survey from the Street.com reveals that three-quarters of its readers are now nervous or say they don’t trust Wall Street.
The Street.com asked its readers “How does an alleged multibillion-dollar ‘Ponzi scheme’ by market maker and money manager Bernie Madoff affect your confidence in the stock market.” Here’s how they describe the results:
Of the 3,540 people who answered the survey, 40.9% said the scandal “makes me more nervous than I ever was.” Another 35.1% said that they “never trusted Wall Street” and never will.
Some 20.8% said the scandal would have no effect. Finally, 3.2% said it wasn’t as bad as past scandals.
Of course, these kind of reader surveys are notoriously unscientific. And asking the question in that way clearly tips the scales a bit in the direction of negative sentiment. Still, these results jive with our own observations and conversations with investors. It may be a long time before investors regain their confidence in Wall Street institutions.