It’s hard to believe that the stock market keeps rising every day while we are still in the middle of a pandemic, deal with record unemployment and in the midst of a racial divide that could have serious implications ahead of a presidential election later this year.
For most Americans, especially those adversely impacted by the Coronavirus, the immediate gains from the market are likely minimal or limited to their retirement accounts. Large institutions, sophisticated investors/traders and the rich with their large cash reserves are likely the main groups making serious money from the rapid stock market gains. So it’s no surprise that most Americans feel at some level the stock market is rigged for the richest and seemingly disconnected from the real world.
This is compounded with rising poverty, homelessness and the inability of governments to make much needed unemployment and stimulus payments on time. Yet billions of dollars are being paid to bailout large companies and inject money to backstop capital markets. The rich get richer and inequality worsens.
Some argue the reason for the rapid rebound in the stock market is due to the massive amounts of liquidity from the federal reserve and government stimulus programs (the ballooning national debt seems to have been forgotten). Others say the stock market is only forward looking and so is factoring in a rapid (V-shaped) recovery and no second wave of the Coronavirus. Hence any of the bad news or current travails are already in the rear view mirror for the stock market.
But when you see the same “experts” and talking TV heads who were all doom and gloom a few months ago, suddenly announce that America is back then you start feeling the whole thing is one big Ponzi scheme. These “bubbles” just enable more volatility and insider trading as those in the know probably sold before the crash, bought back at the lows and are now talking the market up before the next crash when all the government funded stimulus and unemployment benefits run out. They will then lobby for a second round of bailouts and stimulus to repeat the same cycle where the rich get richer because the whole system is rigged.