The Cantillon effect causes stock market record highs to coexist with middle-class financial deterioration because new Fed money reaches wealthy asset holders first before trickling down with diminished value
Too little corroboration in the last 3 days to call a trend (3 articles). Watching for it to gain traction.
"Dimon cautioned that leverage across financial markets remains high, including in hedge funds, prime brokerage, exchange-traded products and Treasury market arbitrage. When you have that, you do have a higher chance that some people will disrupt the market in a quick way."
"The ratio of margin debt to GDP is moving toward 4.5%, the highest level ever recorded. Historically, sharp peaks in the ratio have been followed by sharp pullbacks in the market, as was the case leading up to the dot-com crash, the Great Financial Crisis, and the bear market in 2022."
"The new money created by the Fed does not reach everyone at the same time. It flows first to those closest to the printing press – the big banks, the hedge funds, the elite. By the time it trickles down to you, its purchasing power has been sucked dry. That is the Cantillon effect. It explains why the stock market can hit record highs while most Americans struggle to afford rent."