• 14 hours The “Oil Of The Future” Is Set To Soar In 2021
  • 17 hours Wealthy Could End Up Footing The Bill For States’ Budget Shortfalls
  • 1 day Could This Be The Hottest Commodity Play Of 2021?
  • 2 days JP Morgan Says Fintech Will Steal The Disruptor Show
  • 4 days Facebook Plays Dirty Down Under
  • 4 days Could This Be The Most Exciting Lithium Play Of 2021?
  • 7 days China Sidelines US As EU’s New Top Trading Partner
  • 9 days 3 Smart Ways To Play the Global Chip Shortage
  • 10 days Flying Taxis Are The Number One Speculative Bull Arena
  • 11 days Ocean Power: The Missing Link
  • 16 days Luxembourg’s Ultra-Secrecy Still Attracts Hundreds Of Billionaires
  • 17 days Robinhood Is Under Fire And Trading ‘Democracy’ Is In Question
  • 18 days Bitcoin Could Be Worth $12 Trillion In The Long-Term
  • 19 days The Biggest Tech IPO Since Uber … For Farmers
  • 21 days The Biggest Boost Yet for the Cannabis Industry
  • 22 days Biden Administration Signs $231 Million Deal For At Home COVID Tests
  • 23 days China’s Tech Billionaire Ma Is Back And ‘Compliant’
  • 24 days Gamestop Crashes By 60% But The Story Is Far From Over
  • 26 days Crypto Crime Is Plummeting
  • 28 days Small Oil Firm Gets Massive Wall Street Bets Bump
Is The Bull Market On Its Last Legs?

Is The Bull Market On Its Last Legs?

This aging bull market may…

What's Behind The Global EV Sales Slowdown?

What's Behind The Global EV Sales Slowdown?

An economic slowdown in many…

John Rubino

John Rubino

John Rubino edits DollarCollapse.com and has authored or co-authored five books, including The Money Bubble: What To Do Before It Pops, Clean Money: Picking Winners…

Contact Author

  1. Home
  2. Markets
  3. Other

This Is Why You Don't Own A Lot Of Stocks

You'd think that by now every relevant measure of stock market overvaluation would have been converted into a chart and circulated throughout the blogosphere. But Zero Hedge has come up with a new one depicting how long the typical wage slave has to work to buy the typical stock. And – surprise – it shows historic, egregious overvaluation which, if history is any guide, implies a crash is close at hand.

Hous an American has to work to buy the S&P500

How did workers come to be priced out of their slice of the American capitalist pie?

First, an ever-rising share of the new wealth being created – in the form of corporate profits – is being siphoned off by said corporations, leaving less for the people depicted in the above chart.

Labor's Share of Corporate Income

Second, monetary policy has been so insanely loose in recent decades that the hot money thus created is pouring into equities, pushing up their market value.

5-Year Dow Chart

Combine these two trends and you get greater concentration of wealth at the top and increasing difficulty on the lower rungs of the economic ladder. Which in turn explains President Trump, Brexit, Marine Le Pen and all other manner of political upheaval around the world. Middle and formerly middle-class voters, who overwhelmingly outnumber the 1%, are done being harvested and will now vote for anyone, right or left, who promises to take back what's been stolen.

So yes, history remains a good guide to the future. But maybe a different slice of history. Instead of 1999 or 2007, where stock market crashes were followed by a return to more-or-less statistically normal times, the French Revolution or the 1929 crash, after which things changed radically, might be worth studying.

 

Back to homepage

Leave a comment

Leave a comment