Why are the rich people making TONS of money while other people live on a extra $600 dropped to maybe $400 a week in jobless benefits….
You know…. the Republican thing….
The S&P 500, an index that tracks the country’s largest publicly traded companies, has all but erased its pandemic losses and closed within a fraction of a percentage point of its all-time high Thursday.
But far away from Wall Street, the economy on main streets in cities and towns across the country feel as if they are in tatters.
Unemployment stands at 10.2 percent as thousands of businesses remain closed. Many of the jobs shed when businesses closed their doors for extended lockdowns have not come back, and the jobless rate remains at its highest level since the Great Depression.
Gene Goldman, chief investment officer at Cetera, says that equity markets are enjoying a V-shaped recovery even as the real economy is experiencing a slower, U-shaped recovery.
“It does not make sense,” he said.
While some of the economic data that’s come out has been positive, Goldman noted that a lot of the real time indicators are showing worrisome signs.
Last month, for example, Yelp found that 26,000 restaurants had closed, almost 16,000 of them permanently.
“Think about the workers who lost their jobs, whose benefits have been cut and who are uncertain about paying their rent.” he said. “Those are the consumers, they’re the ones who are supposed to be buying things.”
Consumer confidence fell in 41 states over the course of July, according to Morning Consult, particularly in the South and West, and remains some 24 points below its pre-pandemic average.
So why are markets flying so high?
A central reason for the spike is the Federal Reserve.
The Fed dropped interest rates to near zero and opened a slew of new lending facilities to keep financial markets afloat. Its balance sheet exploded from roughly $4.3 trillion in mid-March to about $7 trillion today….