When we have 26 million people laid off, with more adding to that number every week, when we have a pandemic with lock downs and no end in sight, when they are pouring out milk, crushing eggs, killing hogs and burying potatoes when you can't buy frozen french fries in the store, not to mention a lot of other things and did I mention that oil was so low that they were paying people to carry it off recently and I am not kidding, why is the stock market so high? If you lived through the tech boom bust or the mortgage great crash of 2008 where only a fraction of the people were directly involved in the crash, you would think with just about everyone out of work, stores either empty or shut down and even Neiman Marcus declaring bankruptcy there would be blood in the streets and even maybe a 50% drop with no upturn until things started turning up. So why not?
The answer is, wait for it, the market is rigged!
Unless you are willing to believe that Amazon shipping toilet paper has offset all of the downward forces in the market except for 16%, then you should be able to see it as clear as day, the whole thing is rigged.
People still look at the stock market as being kind of like Walmart, that people go into the market and buy things based on the worth of those things to them. Just like items in a store, the man or woman on the street thinks companies with stock for sale in the market were priced on value, so like a television or cell phone has more value that say, a carrot, carrots are cheap and televisions are more expensive and a company that has real value, sells real products people want and has a real business model should be worth more. I have news for you, it doesn't work that way and it hasn't for a long time.
Companies that have never, ever made a profit can double in price over a year's quarter.
Companies that don't even have a product on the market can do about the same. Let me ask you a question, how would you fill in the rest of this sentence? "What goes up, must ________?" If you said "come down" you are a winner. These stocks that shoot up, often free fall down. They have no real value to hold them up, like I don't know, some sales of their products.
The government is pumping out money so fast it would make drunken sailors blush and the Federal Reserve has actually said they would inject up to an infinite amount of money into the system, (system means the big banks and their business buddies) to support the system, (stop just a minute to think about a central bank that actually says it will print an infinite amount of money to keep things afloat when printing more money makes it more worthless) so no wonder the market isn't down more. The fed has put a put on it or in other words, promised to bail out Wall Street one way or another, if it takes flooding the planet with money and I guess Mars and Venus too.
The market has been rigged for a long time, if you have watched it, you know that, but now it is so plain that anyone should be able to see it and the usual denials won't hold water.
Prices on the stock market have nothing to do with profitability, nothing to do with making an actual product, nothing to do with sales and revenue, it is all a Ponzi scheme. I have people ask me why I say stay out of the market unless you want to gamble since it is a big Ponzi scheme and they think they can ride the coat tails of the big guys. I tell them, remember, there are losers in these schemes that fund the winners and if you don't know the rules you will be the loser and they change the rules every day.
Here is an example, the Federal Reserve can't buy stocks by law. So what do they do? They give someone else the money and let them buy the stocks for them. So you have the law and you have the new rule. "Today we can get around the law by hiring someone to do it for us."
Did you wonder why gold and silver were down during a financial crash when commonsense would have told you they should have been up? Well, there were people betting on the market going down more and when their margin calls for these bets or market plays came in, there was a round of gold and silver selling to cover these calls. So why did they need the margin money? Because the market starting going up, even on more and more bad news and their positions weren't worth the money they had put up for collateral. So why did the market go up and not down on bad news? Because the Federal Reserve opened the doors to free money for the bankers of Wall Street.
I hoped that 2008 would have finally taught people that the stock market is no place for your retirement money, but sadly not. We wiped out another generation of seniors. You see, just because the market goes down and then back up doesn't mean you won't lose and that is a bit more complicated than I can cover here, but I may do that soon. There are a lot of situations where you don't make as much going back up as you lost going down and from the 2008 crash it took a lot of people a decade to recover the losses and you can never get back the lost time.
With so many safe investments and so many guaranteed income vehicles, why do we still blindly "play the markets?" Hundreds of millions of dollars of advertising, advertising that simply buys the opinions of the television financial advisors on the networks that receive this money and then there are the brokers that make their living off of the game and your money whether you win or lose.
Medicare already looked like a third world program, this crash is speeding up the bankruptcy of Social Security and Medicare, pension funds that were already under water are hitting the bottom of the deep blue sea, states are begging the federal government to bail them out since the states can't print money and that means their pension funds are broke and they can't fix them, a lot of stock market based retirement funds are down so much the owners can't get enough out to retire or to live in retirement...I keep warning people, but my megaphone is not as big as Wall Street and their partners in crime in the big casino and remember, the house always wins in time.
If you want out of this rigged casino, then give me a call and we can discuss what is right for you. You know it isn't over on Wall Street, there will be more rounds of losses just like all the times before.
Best and Be Blest,
Scott Hogue CCFC, CCA