The Mother of All Stock Market Bubbles
The comments below are an edited and abridged synopsis of an article by Stephen Lendman
Never before in US equity market history has there been as great a disconnect between economic reality and equity prices as now. At a time of economic collapse and likely protracted US depression, market valuations are at/near all-time highs.
Amazon is 43% of the S&P 500 consumer discretionary index; nearly 2/3rds of the market is underperforming this year; year-to-date, only one in three stocks is in the green; one in five stocks is down 50% or more from its all-time high; the five largest stocks in the S&P 500 have a combined market cap that equals that of the smallest 389 stocks; Apple, Amazon, Microsoft and Google have a combined market cap (over $6 trillion) that is greater than the GDP of every country in the world, minus the US and China; Tesla, having surpassed Walmart (with 1/20th of the revenue!), has become the 9th-largest stock in the US.
Under these conditions, it’s impossible to invest wisely because markets are dominated by speculative excess.
No matter which party wins control of the White House and/or Congress, nothing will change; things are more likely to worsen until an inevitable day of reckoning arrives.
Market valuations are at levels that suggest double-digit earnings growth ahead, despite evidence indicating protracted economic depression and mass unemployment along with reduced business and consumer spending.
In today’s world gone mad, what was once unimaginable is happening in real time.