Mind the Gap

In 2009, in the depths of the GFC with the S&P 500 tagging 666, about 11.9% of Americans lived in poverty. In 2020, with the S&P 500 having recently reached 3393 after trillions in central bank intervention, the rate is estimated to be 12.4%, with projections of over 15% depending on how bad unemployment gets.Black and Hispanic Americans have it much worse.

Is it any wonder that as the gap grows between the haves and have-nots, we’re again seeing evidence of extreme anger and despair? With so many unable to pay their rent or buy groceries, and the lion’s share of the government’s pandemic response going to large corporations, should we be shocked that people are protesting in the streets? How about when they realize they’re the guinea pigs in the establishment’s undeclared herd immunity experiment.

To use the talking head parlance, the market keeps “shrugging off” such economic realities. But, there’s something about protests, looting and riots that seems to get investors’ attention. Don’t be surprised if the market finally reacts.

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