While out at dinner last week, a friend turned to me and said, “I heard some positive news about the economy and a new bull market today. Yet it seems like nothing has changed for the better with the finances of most people I know. My sister in money nerdery… what, pray tell, the fuck?”
What the fuck indeed!
According to the U.S. Census Bureau, more Americans than ever are struggling to pay their household bills. Housing is currently unaffordable for half of American renters, a record high as reported by the Joint Center for Housing Studies at Harvard University. And analysis from the Federal Reserve Bank of St. Lewis shows that Americans’ financial stress due to credit card debt has reached levels not seen since the Great Recession of 2008-2009.
Yet despite all of these extremely fucking dire stats, there’s apparently reason to celebrate! For we have entered a new bull market! That’s way more important to the economy than [checks notes] rising eviction rates and a massive baby formula shortage, right? Right?
… right?
Hello, class inequality, my old friend. It’s time we got super bummed about you again.
What does a new bull market even mean?
I wrote a whole article for our Investing Deathmatch series on bull markets vs. bear markets. Go check it out! It’s really good, I worked hard on it, and it explains things in great detail.
If, however, you are a lazy good-for-nothing who does not appreciate how I SLAVE over a HOT WORD PROCESSOR for you, allow me to summarize:
- In a bear market, stock values mostly go down. ☹
- In a bull market, stock values mostly go up. ☺
The word “mostly” is doing a lot of work up there. She’s sweating her ass off trying to keep things as accurate as simplicity allows!
From January 3rd, 2022 through October 12th, 2022, we were officially in a bear market. If you have an investment portfolio, take a look at its performance for that time. It was probably pretty cringe-worthy—lots of jagged bumps and troughs trending downwards over ten months.
But now all that has changed! The line goes up and to the right! For as of this past week, it was determined that we’ve been in a new bull market since October 12, 2022! (Bull and bear markets are always determined retroactively, based on new all-time highs or lows.)
The stock market and financial health are two different things
Despite the breathless excitement over a new bull market… my friend’s skepticism about the economy in general was entirely justified. He was hearing celebratory news from the financial sector, but as he looked around, he saw some pretty troubling shit.
This is because the ups and downs of the stock market are not a good indicator of the overall financial health of a given population. It’s merely a metric of shareholder return on investment. And shareholder returns, it can be argued, have vanishingly little to do with the economics of household finance.
Sure, if a company’s stock value is doing well, it can afford to do things like hire more staff, give raises to existing staff, or make its products and services more affordable and accessible. I’d argue these are all good and useful to the public.
But none of these actions are foregone conclusions. They are merely choices a company’s leadership can make. That leadership can also decide to, for example, buy back shares of company stock and issue large bonuses to executives, neither of which are particularly helpful to the public.
It’s hard not to feel gaslit by financial analysts when they cream their pants over a new bull market. Because yes, the big angry cow on the trading floor does help some of us prosper. But not all of us. And it certainly doesn’t mean everything is fine with the overall economy.
Who benefits from the bull market?
Personally, I’m kinda psyched about the new bull market. I have the means to be invested in the stock market, which means that the value of my investments have been rising nicely for over a year. My personal wealth is growing without me having to lift a finger.
This is great for my eventual retirement and my ability to set money aside for a future when I won’t want to work so hard. Go me! I’m using the tool of the stock market to secure my financial future!
Yet what of the folks who don’t invest their money? What of people who can barely save an emergency fund, let alone save for retirement? And what about all the people I mentioned at the beginning who are struggling with debt, or rising housing costs, or the price of their monthly bills?
The bull market means vanishingly little to them.
They aren’t shareholders. They aren’t benefitting in any concrete way from the line of the S&P 500 index going up and to the right. And I wouldn’t blame them if they looked on the bull market celebration with confusion and dismay.
Or anger.
What we talk about when we talk about the economy
If I were to end this news on a call to action, it would go thusly: Be kind. Show some compassion. Look after your people.
When we talk about the economy, we talk of stock market moves and unemployment rates (historically low at 3.7%) and inflation (holding steady). Yet numbers like these hide the human element involved in economics. People struggle and stress over making ends meet regardless of what the stock market is doing. Steadying inflation doesn’t mean much to someone who has barely been able to afford their grocery bill for the last year.
Celebrations over bull markets and low unemployment rates sometimes rankle, or even invalidate, the tough times normal folks experience. The financial news seems to be saying “What do you mean the economy sucks? Everything’s going great—the stock market, the unemployment rate, inflation. You must be imagining your troubles. Or it’s all your own fault.”
If you’re struggling in this economy, I can assure you it’s neither your imagination nor your fault, new bull market be damned.
Steadying inflation actually does mean a LOT to someone having trouble with grocery bills. Particularly if their wages aren’t going up to match.
Employment rates ARE important to workers and potential workers. Wages are also important, both in the average and at the lower ends.
The stock market may not affect boots on the ground people, but the rest of the economy is made of people who are absolutely affected by economic policies.
Republican rhetoric right now is that the economy is doing terribly and therefore everyone should vote Trump. But the economy is actually doing pretty well (and even among their viewers people are doing better), and inflation is doing better here than it is in other countries. I just said no to a TV interview that wanted me to argue that the economy is doing badly when stocks are doing well… but it’s not doing badly.
Yes, we can do a lot better on basic needs– nobody should go hungry, everyone should have shelter etc. And yes, we need better government policy (and new supreme court justices who won’t kill any attempt at relief). But that doesn’t mean that employment/inflation/etc. numbers are meaningless. They affect real people.
I came here to say much of what you just did. Especially the political rhetoric, re: Republicans trying to say that Biden has done a crappy job and therefore we should reelect the orange tyrant.
More tax cuts for Trump’s billionaire buddies won’t create ONE DAMN JOB. It’s just another cannonball to the gut for the working class who are already exploited by the Bezos’ and Fake Tony Starks’ of the world.
Josh, you are so right about this. The concentration of wealth into the hands of a few is appalling. The Republican Party is certainly holds the lion’s share of accountability for this mess, given their long history of supporting supply-side economics, industry deregulation, and weakened organized labor. Thank you for adding your thoughts, now and always! I appreciate you!
As an aside, Sarah J. Maas’s A Court of Thorns and Roses is an exceptionally well written book. Talk about tight pacing!
Some of these statements are true/uncertain and some of them are straight up false.
Please elaborate… I get the true and the possibly uncertain…..on the edge of my seat for the false:)
…Wait! Could it be that you’re not a fan of ACOTAR?! Nooooo! I acknowledge that there are some pacing issues. And an overuse of em dashes for dramatic emphasis. And that the plot doesn’t make sense. And the love interest is both stale and problematic. And that the sex scenes are too tame for a book hailed as “SPICY” by BookTok. And that the main character seems to be an uncomfortable author insert into some strange combination of the Disney Beauty and the Beast and Labyrinth. There are some uncomfortable retcons regarding race. And frankly, if you think the whole riddle thing had inexcusably terrible poetic meter AND a laughably obvious answer, I agree!
But it’s just not realistic to think that those issues could be fixed! Copy editors and script doctors are VERY expensive. I’ve heard they cost millions of dollars. Sarah J. Maas comes from money, true… But who could afford that?!
My consulting rate is pretty cheap– only $250/hr.
Rhysand and Feyre are OTP. Keep crying, Tamlin stans.
Why the fuck are you here, troll? Clearly this blog is not for you, and you’re oblivious to the realities of that felonious assbag.
I smell bad.
And my kids don’t like me.
Now you’re talking sense.
Touche, Piggy 🙂 Points for funny