Wall Street feasts on federal coronavirus aid while Main Street starves… Bezos Gains $24 Billion While World’s Rich Reap Bailout Rewards

Wall Street feasts on federal coronavirus aid while Main Street starves…

Judging by the performance of the stock market, the economic recovery from the pandemic lockdown should be swift and dramatic, a so-called V-shaped recovery.

If only it were true.

The stock market’s recent gains don’t tell the full story of the absolute mess the US economy finds itself in, even as the worst of the coronavirus is behind us. Rather, the gains in equity prices are more of an indication of the uneven stimulus methods employed by the feds. These measures will almost certainly benefit Wall Street and market speculation — even as their impact on Main Street will be slow to come.

Wall Street executives and analysts predict a tale of two economies: Wall Street traders will make money, while Main Street businesses face economic conditions not seen since the Great Depression.

I hope my Wall Street sources are wrong. I hope the money earmarked for small businesses and individuals as part of the $2 trillion rescue package will prevent the economy from falling off a cliff. I hope the money made on Wall Street trades will trickle down to small businesses when the economy opens up.

But there is good reason to believe the trickle-down will be pretty thin. Wall Street may recover fast as the economy founders.

The Federal Reserve is pumping an estimated $10 trillion in liquidity into the financial system. That’s essentially earmarked for Wall Street. These trillions flowed into just about every corner of high finance; the Fed’s new programs even allowed it to buy up mortgage-backed securities pegged to strip malls that were teetering before the pandemic hit.

Bezos Gains $24 Billion While World’s Rich Reap Bailout Rewards…

(Bloomberg) — The world’s richest person is getting richer, even in a pandemic, and perhaps because of it.

With consumers stuck at home, they’re relying on Jeff Bezos’s Amazon.com Inc. more than ever. The retailer’s stock climbed 5.3% to a record Tuesday, lifting the founder’s net worth to $138.5 billion.

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The pandemic has brought the global economy to a near standstill and pushed almost 17 million Americans onto the unemployment rolls in the span of three weeks. JPMorgan Chase & Co. and Wells Fargo & Co. signaled Tuesday that loan losses fueled by the unprecedented job cuts — many of them in the retail sector that Amazon so efficiently disrupted — could rival those incurred after the 2008 financial crisis.

Read more: Worst-Case Fears of 20%-30% U.S. Jobless Rate Now Realistic

Yet Bezos and many of his wealthy peers in technology, private equity and elsewhere are doing just fine, helped by unprecedented stimulus efforts by governments and central bankers. While the combined net worth of the world’s 500 richest people has dropped $553 billion this year, it has surged 20% from its low on March 23, according to the Bloomberg Billionaires Index

“The wealth gap, it’s only going to get wider with what’s going on now,” said Matt Maley, chief market strategist at Miller Tabak + Co. “The really wealthy people haven’t had to worry. Yes, they’re less wealthy, but you haven’t had to worry about putting food on the table or keeping a roof over your head.”