Smart money: Heavyweights join 'wall' protest grou

The "wall" on Wall St was named after a barricade the Dutch built in the 17th century to guard themselves against pirates and Indians.

It was four metres tall and designed to keep out interfering strangers and, indeed, most common members of the public at the time.

Funny really, because the view of the general population in the US today is that they are the ones needing protection from Wall St, rather than the other way round. "In God We Trust" it says on US currency, but this stout resolve on which that nation was built sometimes gets a bit of a shake-up.

As one in six Americans now live in poverty and more than 45 million citizens were handed food stamps last month, it's no wonder groups such as Occupy Wall Street (#OWS) are gathering momentum.

Without going into the more vigilante aspects of the movement, #OWS is protesting against financial inequality and their Government's propping up of overpaid bankers while foreclosures, cuts to state aid programmes and unemployment rage away in the provinces.

Our traditional view of protesters in New Zealand might lead you to think that this collection of individuals are a bunch of scruffy hippies with nothing better to do.

Incorrect. Some heavyweights are getting in on this argument, and both of the prominent Buffets, senior and junior, (Warren and Howard respectively), are just two of them.

Before everyone starts leaping up and down and baying about yet more rich fat cats supporting populist causes to gain column inches, let's make an important distinction: there is a big difference between the conservative, ethical and client-focused investing of the majority and the activities of a tiny minority who generate all the notoriety, who often transact large amounts of corporate dosh in sometimes complicated and unfathomable ways.

One of the centrally recognised problems in these hothouses of molten money is the eye-watering bonuses paid to the men who undertake these transactions. Even more contentious, and highlighted frequently by #OWS, is the lack of accountability when every horse runs last and the money goes down the tubes.

Ordinary Americans are left to pick up the pieces and pay for the damage. No wonder they're mad about it.

The occupationalists have whipped up a frenzy of exposure as they highlight one of our oldest social issues, the gap between rich and poor. Most reasonable people would agree with their causes.

The only snag is that, like so many who like to complain, they have no idea how to fix the problem.

Rest assured, guys, if the big boys could have mopped up this global mess by now, they absolutely would have.Caroline Ritchie is an authorised financial adviser with Forsyth Barr in Napier. She can be contacted on 0800 367 227 or by sending an email to: caroline.ritchie@forsythbarr. co.nz

This column is general in nature and should not be regarded as personalised investment advice. Disclosure Statements are available on request and free of charge.