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Comment by refurb | Hacker News Reader

The market is still down ~10% from it's pre-COVID high.

I think the point is that a worldwide pandemic, 40 million people unemployed, China annexing Hong Kong, and mass civil unrest should logically lead to far more of a downturn than merely 10% off all-time highs (which were already several standard deviations above long term price to earnings ratios).

Does it really though? Money doesn’t care about people. Why should that annexation be harmful for the market? Why do 40 million unemployed a dent? They’re not the ones spending money because this crisis hit bottom first.

This is what I am starting to suspect. From the Stock Market's perspective, the economic bottom 30% don't matter. They don't contribute much to the economy and whatever happens to them does not really matter to the Stock Market.

Pre-COVID, I would never have believed that.

Go back to the market activity during the Arab Spring. The market definitely does care about uncertainty RE trading partners and Hong Kong is a huge trading partner.

40 million unemployed domestically means lower demand for many businesses. Who will buy new cars (with debt), houses (with debt), consumer electronics, etc etc?

My most aggressive investment accounts reached new highs this week. There was money to be made going down (puts) and money to be made when things started bouncing back.

And that peak was probably also aspirational at best. The SP500 has basically become the stock price manipulation hall of fame.

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