Remember the "Bond Vigilantes?"

They were the international traders who forced discipline on any nation that over-borrowed or acted foolishly. While world leaders mumbled under their breath and shuffled their feet, the bond vigilantes took action. They sold the offenders' bonds, gutting prices.   They forced the errant nation to heal. If necessary, they sold the offenders' currency short.

Well, friends, the stock vigilantes are gathering.

They're rounding up a posse. We're invited. It's time to ride. Just present your mutual fund or 401k-plan ownership card. You can be deputized immediately. It would be nice if the law would do it, but the abuse has gone too far. It's time we act to protect our families.

What do we do as stock vigilantes?

We sell some of our equities. If we've got equity mutual funds, we sell some. If we've got company stock in our 401(k) plan we sell as many shares as we are allowed to sell. This won't be fun but it's got to be done.

Why?

Let us count the ways the system has failed us:

Elected representatives have done nothing but accept campaign contributions.

Regulatory agencies haven't protected us.

Fees compromise our accounting firms.

Corporate boards are too busy playing golf to mind the business.

Executive leadership---a phase soon to be synonymous with light fingered and crook--- feels they can reap fortunes in options, loans, and what have you, at shareholder and worker expense. We get to hold the bag.

If that isn't cause enough, then consider this. Early last week it was revealed that the Justice Department was negotiating immunity with Andrew Fastow, the former chief financial officer of Enron.

The Justice Department quickly rejected the offer, according to a lawyer in the Justice Department.

Still, the idea gives new meaning to the idea of "executive privilege"--- hold me harmless and I will talk to you.

Well, it's time the stock vigilantes sent a message: Enough.

Sell shares. Wreck their stock option plans. Destroy executive compensation. Let all of them know that nothing goes nowhere unless John and Jane Investor-worker are treated right.

Sound a little extreme?

Then you haven't been reading my reader e-mail or checking the daily decline of stock prices. There's a rebellion brewing out there. It's just getting started.

Some readers, accustomed to feeling powerless, will wonder if the stock vigilantes can do anything. The answer is simple:   stock vigilantes can do plenty.

You can understand by considering how important the flow of humble monthly contributions has become to sustaining the stock market. Here are the basics:

•           The largest shareholders in America--- company founders and                corporate executives--- are net sellers of common stock year                after year. They've been net sellers in virtually every year that                I can remember. Their selling has regularly been offset by mutual                fund purchases. Much of the money for those purchases comes from                regular contributions to 401(k) plans.

•           In 2000, mutual fund investors put $309.4 billion in net new cash                into equity mutual funds while withdrawing $35.6 billion from                taxable bond funds and $30.7 billion from balanced funds,                according to Investment Company Institute data. In spite of this,                stocks fell 9 percent.

•           Last year, mutual fund investors started a major shift. Net new                cash to equity funds dropped to only $32.2 billion while $75.8                billion of net new cash flowed into taxable bond funds. With                little support, stock prices fell another 12 percent.

•           Total assets in 401(k) plans at year-end 2000 were just more than                $1.7 trillion. Hewitt Associates, a benefits consulting firm,                estimates that falling stock prices have taken a toll on our                collective allocation to equities. Equity commitment declined from                73 percent at the beginning of the year to 67 percent by year-end.                Today, single percentage point shift represents $17 billion. If                401(k) plan participants simply returned to a 60/40 allocation,                $130 billion would flow out of equities--- 4 times the amount that                flowed in last year.

•           The assets in 401(k) accounts aren't the whole ball game. Assets                in IRA accounts are similar in size and the assets of the entire                mutual fund industry are about 4 times as large. A mere one                percent shift out of equity mutual funds would represent the                movement of nearly $70 billion.

This is the power to make markets quake.