Skip to content

Stock Market

How The Federal Reserve Is Increasing Wealth Inequality

Ever since the COVID-19 pandemic struck, the Federal Reserve has gotten plenty of kudos for moves that have helped stabilize the economy, kept house prices from tanking and supported the stock market. But those successes have obscured another effect: the inadvertent impact the Fed’s ultra-low interest rates and bond-buying sprees are having on economic inequality. Longstanding inequality in the U.S. has been exacerbated by the Fed’s role in touching off a multi-trillion-dollar boom in stock markets — and stock ownership is heavily skewed toward the wealthiest Americans. In contrast, soaring stock prices don’t help people like Wina Tan. Tan, 59, is one of the millions of Americans nearing retirement age whose greatest source of wealth isn’t stocks or equity in a home.

The Case For The Financial Transaction Tax

For most Americans, what threatens health also threatens wealth. The COVID-19 pandemic triggered the worst economic crisis in nearly a century, with millions suddenly facing hunger, unemployment, or eviction. But Wall Street doesn’t represent most Americans. In the parallel universe of the financial industry, stock indices soared to historic peaks as Americans wished good riddance to the deadliest year in our history. Detached from the daily lives of most Americans, the stock market surge almost exclusively benefited the disproportionately wealthy, and the pandemic once again lived up to its distinction as “the great clarifier.” For years, Wall Street has been increasingly out of touch with the underlying economy of workers, jobs, and wages, and the fortunes reaped by hedge funds and billionaires have not helped the millions of Americans in dire need.

Vulture Funds To Use Pandemic To Pillage The Global Economy

There’s a new app with a tagline that promises that you, too, can ‘profit like a landlord from just £1 with no effort’. Proptee, set to launch this year (subject to approval from the UK’s Financial Conduct Authority) allows anyone with, say, five grand to buy shares in a buy-to-let flat in London worth half a million. In return, you receive a slice of its tenants’ monthly rent—here about one percent—with the promise you can cash-out your investment as the value rises. ‘We’re building a stock exchange for properties that lives on your smartphone and combines the high yields and low risk of property investing with the high liquidity of a stock exchange,’ explains 24-year-old cofounder Benedek Toth.

Gamestop—And the Game That Never Stops!

This past week a video game company in trouble, Gamestop, became the center of media attention.  Day traders had driven up the company’s stock price by thousands of percent in just one day. The mainstream media narrative was the ‘small guy’ investor challenged the big boys of finance who had bet Gamestop stock price would contract, not rise sharply.  The little investor, so the story goes, initially won big but Gamestop’s stock price escalation was stopped in its tracks by coordinated forces of Wall St., as trading was abruptly halted later in the day in the midst of the run-up. But that narrative, that media spin, has it wrong.  The real meaning of what has happened is quite different.

‘French Revolution In Finance’

The New York Stock Exchange suffered a poor day on Wednesday, with the Dow Jones Industrial Average sinking by more than 600 points. However, for a select few companies, stock values have gone through the roof. It was thanks, in large part, to a group of amateur stock traders with a vendetta against veteran corporate insider short-sellers betting on a company’s failure, with the video game store GameStop taking center stage. Before the drama was over, the company’s value had jumped by more than 1,700%, an investment firm had lost billions, and some small-time investors who gambled it all were able to afford some of life’s costlier necessities with their windfall.

The Reddit Revolution, GameStop And Melvin Capital

A remarkable series of events culminated in at least one major Wall Street hedge fund on the verge of insolvency and widespread anxiety and even panic from the titans of the financial system. It was all initiated on a sub-group of Reddit known for its heterodox interest in stock markets, video games, and vaguely populist politics.  Purposely targeting the stock of a company that had long been written off by Wall Street and which short sellers had decided to ravage — the video game retailer GameStop — these small investors, many apparently working class or debt-ridden, banded together to drive up the stock price of that company into the stratosphere, abruptly leaving the hedge fund short-sellers with billions of dollars in losses.

Government Spends Equivalent Of Entire US Student Debt To Rally Stock Market For 15 Minutes

The money spent was equal to the total amount of US student debt, more than twice as much as the Wall Street bailout of 2008 and nearly 30 times the net worth of former New York mayor Michael Bloomberg, the richest man to ever run for president. With financial markets in a state of near panic over an incoming COVID-19 pandemic...

U.S. Stocks Have Fallen For 5 Weeks In A Row – That Is The Worst Stock Market Streak In Almost 8 Years

We haven’t seen stock prices slide like this in a long time, and if this keeps up we could soon be looking at an avalanche.  Our rapidly escalating trade war with China and more bad U.S. economic numbers pushed stocks down once again this week, and at this point the Dow Industrial Average has now fallen for five weeks in a row.  We haven’t seen a losing streak this long since June 2011, and it is yet another indication that we have reached a major turning point.  Some positive comments about China from President Trump on Friday helped to lift stocks a little...

Stock Buybacks Will Hit $1 Trillion In 2018

US corporations will buy back their own stock at a record clip of $1 trillion this year, according to an analysis issued by Goldman Sachs on Monday. The Wall Street giant attributed the surge in share repurchases to booming corporate profits and Trump’s $1.5 trillion tax cut for corporations and the wealthy, which was passed by Congress and signed into law last December. In a note to investors, David Kostin, chief equity strategist at Goldman, gushed that investors were likely to see the impact of the buybacks in higher share prices and fatter stock portfolios very quickly. The scale of the buyback spree is massive. Second-quarter 2018 stock repurchases are up 57 percent from the same period a year earlier. In the tech sector, the year-over-year increase is 130 percent.

Not A Matter Of If, But When

In early January 2018, capitalists across the globe were celebrating the fact that the Dow Jones had rallied by 45% since the election of Donald Trump. Likewise, brokers were beaming in Sandton when the Johannesburg Stock Exchange hit a high of 61,475 points (up a staggering 300% compared to early 2009 when at one point it sat at 18,465 points). Yet beneath all the exuberance, danger signs abound—including signs that stock, bond and debt markets are experiencing bubbles, which will burst at some point.

Rumors Grow That U.S. Fed Is Propping Up Stock Market

It’s not every day that three well-credentialed men are willing to put their names and reputations behind the allegation that the U.S. Federal Reserve is rigging the stock market. But that’s exactly what happened yesterday. Paul Craig Roberts, a former Associate Editor of the Wall Street Journal and Assistant Secretary of the U.S. Treasury under President Ronald Reagan joined with Economist Michael Hudson and Wall Street veteran Dave Kranzler to write that “it appears that in May 2010, August 2015, January/February 2016, and currently in February 2018 the Fed is rigging the stock market by purchasing S&P equity index futures in order to arrest stock market declines.” This is not the first time the Fed has come under such suspicion.
Sign Up To Our Daily Digest

Independent media outlets are being suppressed and dropped by corporations like Google, Facebook and Twitter. Sign up for our daily email digest before it’s too late so you don’t miss the latest movement news.