Looking at America through the lens of the stock market not only is useless in forecasting major moves in the market itself it also blinds us to the conditions most citizens experience in their daily work and home lives. In any case as even most CNBC anchors remind us the stock market is not the economy. Some like to joke that
Source: Opinion | Dear NPR: The Stock Market Is Not the Economy | John Buell
With rates so low, investors don’t have much choice for good returns outside of stocks. Margie Patel, senior portfolio manager at Wells Fargo Asset Management, said the Fed has pretty much signalled to Wall Street that it won’t allow for a big market downturn. “As long as interest rates are this low,” she said, “it’s really hard for me to see how you could have much of a correction in stocks.”
‘This is where we are’: Bubble fears are rising on Wall Street
On top of failing to mention that broader and more instructive economic context, Trump—who repeatedly claimed prior to the November election that the stock market would crash if Joe Biden won—also omitted the fact that the market soared in part because of news that the General Services Administration allowed the transition to the Biden administration to begin after weeks of delay. “Investors are cheering signs that a protracted fight over control of the White House is potentially drawing to a close, reducing political risks over the winter months,” the Wall Street Journal reported. Following his attempt to take credit for the stock market surge, Trump left the briefing room without taking any questions from reporters:
‘Well That Was Weird as Sh*t’: As More States Certify His Defeat, Trump Holds 60-Second Briefing to Brag About Stock Market | Common Dreams News
If Trump and the Republicans hold on and retain control of the Senate the future is less clear – there is no published Republican platform for a second term – but it seems reasonable to assume more of the same.
Disruptive outlier: the election outcome that could shake markets
When Trump says he did not what to “panic” the “country,” what he really means is that he did not want to drive down the stock market. In all the commentary I heard about the phrase in the media yesterday, I heard no one make this point. People were disgusted with Trump’s two-facedness, which certainly cost tens of thousands of American lives. But they still took his statement at face value as an expression of concern for the people.
Aztec Politics: Trump sacrificed 200K by Downplaying Covid-19 to save the Stock Market from Panic
American Economy is in Intensive Care (ODT)
But with rates now at zero, money printing — or quantitative easing as it is called in polite circles — is all they have left.
It’s cash that’s being created out of thin air.
And a huge portion of it is being poured straight into stock markets regardless of what is happening out there in the real world.
The graph above tells the story. In the past few months, America’s central bank has bought more than $US3 trillion ($4.37 trillion) worth of “assets”.
These include US government debt, mortgage debt and other debt securities, using cash it has generated out of thin air, simultaneously driving interest rates down and flooding the economy with cash.
It has spent more than double the amount outlaid at the height of the global financial crisis. And, it appears, we’ve only just begun.
The biggest side effect, however, is that wealth becomes more concentrated among the already wealthy.
If you own a house or stocks or bonds, you’ve become rich without even trying.
via The secret behind the booming stock market in the face of the coronavirus crisis – ABC News
With the Dow down 250 yesterday, it may be over for the Tax Cut addicts on Wall Street, and Donald Trump.
Source: Wall Street Journal Rips Into Trump – Is The Honeymoon Over? | Crooks and Liars
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