a bull market...................

 Here’s the thing about the pandemic experiment: It worked too well.

Everyone had money. Everyone had options. There was a bull market in people forming their own LLCs and starting companies. A bull market in sitting on their asses and doing nothing too. A bull market in quitting their jobs. A bull market in whatever they felt like doing. Indulging their hobbies, accepting flexible hours, moving their residence, taking college classes while being employed, secretly having two full time employers, quitting without quitting, being paid for waking up in the morning, taking extended periods of time in between gigs, making a big career change. Whatever people wanted to do, they could do. Freedom on a previously unimaginable scale.

Young know-nothings from all walks of life were investing in digital art and SPACs, trading options on their phones, starting their own companies, selling their own weed and launching their own crypto projects. Older ordinary people found themselves accidentally wealthy overnight, their houses instantly worth 30 to 50% more almost regardless of condition or geography, the values of their 401(k)’s bursting at the seams, potential buyers for their small businesses and real estate holdings coming out of the woodwork with blank checks ready to be signed at the conclusion of a Zoom meeting. You could sell anything to anyone for any price at any time. We were minting millionaires by the minute.

Capitalism felt like it offered possibilities for everyone for the first time ever. Influencers fluent in the language of entrepreneurship and personal finance had a potential audience in the millions for their messaging. The world was ripe with possibility and people felt emboldened. They were liquid and ready to maximize their own opportunities. It was an exciting moment in time. No one was left out.

And that was the problem.

Widespread prosperity, it turns out, is incompatible with the American Dream. The only way our economy works is when there are winners and losers. If everyone’s a winner, the whole thing fails. That’s what we learned at the conclusion of our experiment. You weren’t supposed to see that. Now the genie is out of the bottle. For one brief shining moment, everyone had enough money to pay their bills and the financial freedom to choose their own way of life.

And it broke the fucking economy in half.

The authorities are panicking. Corporate chieftains are demanding that their employees return to the way things were, in-person, in-office, full time. The federal government is hiring 87,000 new IRS employees to see about all that money out there. The Federal Reserve is trying to put the toothpaste back into the tube – the fastest pace of interest rate hikes in four decades and the concurrent unwind of their massive balance sheet. Everyone is scrambling to undo the post-pandemic jubilee. It was too much wealth in too many hands. Too much flexibility for too many people. Too many options. Too much economic liberation. “Companies can’t find workers!” the media screams but what they really mean is that companies can’t find workers who will accept the pay they are currently offering. This is a problem, we are told. After decades of stagnating wages, the bottom half of American workers finally found themselves in a position of bargaining power – and the whole system is now imploding because of it. Only took a year or so.

-Josh Brown, from this Reformed Broker post