The Big Four’s Conspiracy to Create Ever-Rising Markets

We’re in the middle of the worst global health crisis in a century…

The worst economic crisis in twelve years, if not longer, because of that health crisis…

The worst geopolitical tensions since the end of the Cold War three decades ago…

The worst civil unrest in more than 50 years…

And still the Nasdaq is up almost 8% for the year, while the Dow and the S&P 500 are down only about 8% and 4%.

As I’m writing this Thursday morning, weekly unemployment claims modestly exceeded estimates again with 1.877 million new claims. A number that was unheard of just months ago.

But markets are still up for the day.

Like me, you’ve probably heard that stock prices are supposed to reflect the future earnings of companies. Clearly, that’s not the case anymore. On balance, companies are not going to make just a few percent less than they would have before all these crises hit.

The drop in earnings for the second quarter is going to be much, much bigger.

But if your listen to the financial news media, to investment banks, or to government officials, they’ll repeat this old story about “future earnings” anyway.

This is probably the biggest Reality Gap in the country right now.

Stock markets are no longer about buying a share of a company’s future earnings, where investors win by making the best long-term predictions and traders win by predicting what investors will do next.

The truth is that the Big Four – News Media, Madison Ave, Big Government, and the Wall Street Heavyweights have together turned stock markets into something else altogether.

Much like access to clean water and electricity, the Big Four have turned rising markets into a public good.

Here’s what I mean, how it hurts your retirement plans, and what you can do about it…

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