For example, the housing market is basically back to where it was before COVID.
Pending home sales spiked a stunning 44.3% in May compared with April, according to the National Association of Realtors.Combine that with US home prices rising by 5.5% year-over-year, and it’s positively Bubble-icious!
That is the largest one-month jump in the history of the survey, which dates to 2001. It beat expectations of a 15% gain. Sales were still 5.1% lower compared with May 2019, however.
Pending sales measure signed contracts on existing homes, so it shows that buyers were out shopping during the month of May. Sales had fallen 22% for the month in April, as the economy shut down to slow the spread of the coronavirus.
Same goes for stocks. Even with the declines of last week, the 2nd quarter ended up having monster returns on Wall Street.
S&P 500 surges to notch best quarter since *1998.*— Steven Dennis (@StevenTDennis) June 30, 2020
DOW has best quarter since *1987.*https://t.co/xaUv6shUSW
And guess who can play in the market and buy real estate at low interest rates without fear of being able to make the payments?
Surely there is no connection between these two things https://t.co/dG6ParR5gp— Ken Klippenstein (@kenklippenstein) June 28, 2020
Almost by design, indeed.
As June ends in America, tens of millions of unemployed individuals are in danger of having their expanded benefits taken away in the next month, and people in the service industry are staring at yet another round of layoffs as more bars, hotels and restaurants close up. At the same time, corporations and rich Americans can borrow to their heart’s content, gamble on more financial games, and use their already-received gains from the GOP Tax Scam.
(Side note, a whole lot of us in the middle and upper middle-class are going to be writing checks to the IRS in the next 2 weeks. Not exactly conducive to stimulating consumer spending that is already depressed among higher-income people).
The job losses in the country reflect this uneven distribution of outcomes. While the service industries are bleeding out, finance and real estate positions have barely been nicked.
So we're in the middle of a stock and asset bubble that’s not based on any kind of real growth in the economy. And when that bursts (again), I bet it won’t be the people who recklessly fueled the Bubble that will be facing the largest economic damage.
It’s really hard to find a lot positive about our economic system these days, either currently, or for the future. And the field needs to leveled fast, with an aid package agreed to in DC and sent out in the next month, or else things will turn ugly. Not just for the economy, but our society.