I’m not convinced the recession is over, but for arguments sake lets assume it is. Why didn’t the stock market bottom lower than it did? Given the S&P 500 at 666 and assuming, generously, $60 earnings equals a PE of 10. That’s a much higher bottom than it’s bottomed before.
I believe there just isn’t enough pain out there. Or maybe more appropriately the pain isn’t being distributed properly. The bottom 17% of the US that is un or underemployed is receiving the majority of the pain. Of that 17% many of them are collecting generous unemployment benefits. Another good portion of them may have sizable savings to fall back on. This whole situation needs to be given more time before some serious pain is felt.
What are we fighting for?
How much of this stimulus money is being spent on something worth sustaining? Sustaining the finance industry in its current state is a complete waste of resources (time, oil). It’s becoming more and more obvious that the finance industry is a giant leach on the rest of the economy by sucking money out of it while increasing, not decreasing, the costs of capital. Sustaining the majority of the auto industry is a disappointment. I could understand sustaining and auto industry where everyone could afford to drive an Acura TL, but most of the cars produced are garbage that merely get you from point A to point B. Is that really what a driving experience is about? What’s the point of sustaining a farming industry that pays farmers to not produce? What’s the point of sustaining an airline industry that, after the first 3 hours that includes driving to the airport and going through security, after delays, takes 6 hours for a 3 hour plane ride? What's the point of sustaining state and local governments where politicians and high ranking or tenured emergency workers make 5 times as much as an average government worker but don’t add anywhere near 5 times the value, if any value. I hate for this whole rant to be viewed as a healthcare rant, but I’ll end by saying with all those problems the worst problem of all is that the US can’t even take care of its own people, medically. I hate to imagine how many children or young adults will never become Doctors and Engineers because either they themselves became ill or because someone in their family became ill and the financial problems associated with it prevented them from moving forward.
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