2014: The Market Is Not The Economy And The Winner-Takes-All Society

You hear that old saw that “the market is not the economy,” a lot these days, and for good reason. As ConvergEx’s Nick Colas notes, the S&P 500 breaks to record highs – but U.S. labor markets remain sluggish; investor portfolios do well – but over 47 million Americans (more than 15% of the population) are still in U.S. food stamp program – the same as August 2012. The important question now is: “Is the market TOO different from the economy?” Record corporate profits – the reason for all-time highs in U.S. equities – come with little hiring or wage gains.  The hottest growth stories are business models with lots of customers but very few employees. The recently purchased WhatsApp – for $19 billion – has 55 employees. Investment payoffs – and increasingly social outcomes as well – are technology-enabled, asymmetric and sporadic. How soon before we reach a […] Read More