Key insights
- The author posits that increasing wealth inequality fuels a self-sustaining bull market, disconnecting stock performance from economic reality. Faster recovery times after downturns and persistent all-time highs despite global events are cited as evidence. The post questions the sustainability of this trend and the potential for a return to 'normal' market behavior. However, the impact on US equities is limited due to the speculative nature of the argument.
Sorry for the stupid title but looking at the performance of the markets and their (non-)reaction to global events, I am thinking that the stock market, as a mirror of (global) economics, no longer works.
Yes, there are downturns (as seen lately) but the recovery time gets faster each time and given the economic situation the current all time highs just don't add up. And arguing against my post - of course markets always go up in the long term but I hope you get my point.
So back to my theory: I think the gap between the poor and the rich has widened since Corona even more and there is simply so much money floating around that needs to be invested in order to make the rich richer.
So we might have created kind of a financial perpetuum mobile.
The question is: where will this lead to and is there a chance that we'll see "normal" markets again?