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  • The Seville Reporters

In Focus: Watch The Gap

Updated: Aug 16, 2020

What the hell were people rushing to get back to during the lockdowns between late February and May? While the 99% protested for their right to get back to "normal" the 1%, stayed quiet, quarantined, and widened the gap between the haves and have-nots.

Big Bank Earnings Set Records

Last week, earnings season kicked off with the major banking houses of the U.S. reporting their earnings, normal stuff for this time of year. But what stood out was the number of records set during the last quarter.

While the average American is still trying to figure out how to navigate the pandemic, the countries wealthy just kept raking in the dough. JP Morgan Chase (JPM) CEO Jamie Dimon reported that JP Morgan recorded its highest quarterly revenue ever. Morgan Stanley's (MS) revenue was 30% higher in Q2 2020 than it was in Q2 2019, and Goldman Sachs (GS) Q2 2020 revenue was 40% higher than Q2 2019, and the bank's investment banking unit reported a record for quarterly revenue.

Meanwhile many unemployed Americans were trying to figure out how to survive when the $600 unemployment enhancement expires at the end of July. According to the Wall Street Journal 12 million Americans missed their last rent payment and 23 million have serious doubts about making their next rent payment.

Big Moves in Stocks Amid The Pandemic

In the second quarter the stock market rose at a record pace without regard for the soon-to-be evicted or jobless Americans. The massive move up in the stock market from the late March lows had a big impact on bank earnings and in widening the wealth gap.

Between March 18 and April 10, 2020 billionaire wealth increased by $282 billion as per a Institute of Policy Studies report. In that same time span over 22 million people lost their jobs.

The Fed and Government Spending, What You Hear vs What it Means

More than $6 trillion has been dealt by the government to deal with the impact of the coronavirus. The average American's cut of the $6 trillion was $1,200. A measly one time payment of $1,200.

The other funds were spent propping up bad companies and keeping the stock markets up. If you're an active stock market participant you've received a stimulus check plus some, if you're not a stock market participant, you've received a $1,200 check, thoughts and prayers.

There has been a lot of shareholder value, corporate value, and CEO wealth created over the past four months. All off the back of the federal government propping up the economy with your money, and you all you got was $1,200, how cute.

The First Step in Closing the Wealth Gap

There is no magical fix to close the wealth gap between the 1% and the 99%, but what you can do right now to help yourself is invest.

Over the past few months, the actions of the federal government have made it clear that they're okay with people suffering, as long as the markets don't suffer. The stock market, not the economy has become the priority, and there is a difference between the two. A portion of Americans actively participate in the stock market, but all Americans participate in the economy. The elected officials constantly say "economy" but the money is flowing to the markets.

Stop being left out, start investing, no matter what, get invested. I know how hard it can be living check to check, robbing Peter to pay Paul, saving up a decent amount of money only to have to spend it all when the car breaks down unexpectedly or some other emergency pops up. It's hard, but you've got to find a way to do it.

The priority of the government during the pandemic have been the markets, not the people. Get invested and make yourself a priority.

No matter what politicians yell to you through your TV, there is no way from stopping the rich from getting richer, but by investing you can get in the car that's driving the wealth of the world's richest people.

Start investing, now!

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