Osler's Razor

There are several strange anomalies floating around out there, but one of the strangest is this: Even with a lot of volatility, the stock market has remained fairly strong even as everything else related to the economy has been trashed. We have record-high unemployment, terrible rates of business failure, are looking at entire segments of the retail industry being wiped out, the national debt has skyrocketed, we face political instability, US oil and gas producers are being decimated, consumer spending has crashed, and the world faces and epic food crisis... yet the stock market seems relatively unaffected.

Part of it may be that government interventions have largely been focused on maintaining cheap money on low interest rates, funneling tax money to corporations, and bailing out financial systems right and left, all of which benefits big companies. Or maybe it just seems like everything will be ok once this all blows over.

But it won't be ok. It won't be the same even when things get better-- and it will probably take a while to recover from this. And the stock market will correct to match the rest of the economy sooner or later (probably sooner).

When that happens, the wealthy will be protected-- they have been short-selling the market in a way that hasn't been seen for years. Meanwhile, people who have parked their retirement in an index fund or a few stocks will get hammered. Again.

Because that is the way this works, unfortunately.