"Everything That Is Wrong With America, In One Image"
At the end of January, just as China was admitting the full extent of the Wu Flu pandemic it had kept under wraps for weeks in hopes it could get away with not shutting its economy even if it meant tens of thousands dead (in the end, it failed) we reported that since 1990 the top 1% has bought $1.2 trillion of equities and mutual funds while the rest, or 99% of the population, had sold $1 trillion. And, confirming what we discussed in "The Rich Have Assets, The Poor Have Debt", based on the Federal Reserve's Distributional Financial Accounts (DFAs), the concentration of household equity ownership among the wealthiest households is at an all-time high.
But then an unexpected thing happened: stocks crashed, with the S&P briefly losing as much as 35% as traders freaked out that the global coronavirus pandemic would result in a world that is shut down for months, if not quarters, resulting in profit devastation. That's when the Fed stepped in, and after first unleashing a bazooka, then a "nuclear bomb" meant to crush bond shorts, and finally a super nuke where the Fed would go so far as bailout all those companies that had purchased trillions in stocks while issuing BBB-rated grade which are now being downgraded in record amounts, i.e., the Fed would buy "fallen angel" junk bonds, Jerome Powell ensured that the 1% is well on its way to being made whole - in other words the superrrich are now benefiting from the biggest bailout in history, a topic which sparked an unprecedented debate on CNBC when sparks flew between VC investor Chamath Palihapitiya (himself a billionaire) and anchor Scott Wapner, with the former saying billionaires and companies should be allowed to fail (he is absolutely right - after all that's what the Chapter 11 process is for as we have been saying for months), while the latter sparking outrage for inexplicably claiming that billionaires are just as desperately in need of rescuing by the money printer (watch the full clash here).
In short, it was a momentuous week, one in which we learned that the Fed will do anything - even if it means destroy the dollar completely (just watch the price of gold for Powell's progress in this regard) - to rescue the super rich, while everyone else was getting destroyed. And nothing capture the zeitgeist better than the following screen grab courtesy of Justin Horwitz who aptly titled the following tweet "Everything that is wrong with America, in one image."
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To this all we can add is: American Middle Class 0 - Federal Reserve 6,083,131,000,000.