The Dow Just Hit 30,000, But Meanwhile The Real Economy Is Having A Meltdown
Did you hear the good news? The Dow Jones Industrial Average hit 30,000 for the first time ever this week. In the midst of the worst economic downturn since the Great Depression of the 1930s, the stock market has been soaring to heights that we have never seen before. What we have been witnessing is completely insane, but I suppose that if the entire system is utterly doomed, we might as well go out with a bang.
I have often said that the stock market has become entirely detached from reality, and that statement has never been truer than it is right now.
For the companies listed on the S&P 500, profits are down about 48 percent compared to last year. But fundamentals do not seem to matter in the giant casino that Wall Street has become.
Instead, the key is to create as much buzz and speculation around your company as possible. In this type of environment, a mirage known as “Tesla” can be worth more than all of the other major automakers in the entire world combined…
The electric car maker’s shares continued to climb more than 4% on Tuesday, increasing its total market value above $500 billion for the first time. Tesla’s market cap rose to more than $520 billion Tuesday afternoon.
Tesla (TSLA) is now worth more than the combined market value of most of the world’s major automakers: Toyota (TM), Volkswagen (VLKAF), GM (GM), Ford (F), Fiat Chrysler (FCAU) and its merger partner PSA Group (PUGOY).
Anyone that believes that Tesla is actually worth 500 billion dollars is probably clinically insane.
But of course there are hundreds of other big corporations that are wildly overvalued at the moment as well.
Meanwhile, the real economy continues to implode. According to Fox Business, we are facing “a tidal wave of evictions at the end of the year”…