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The US economy is imprisoned, most of the population is under house arrest, and the inmates in Washington are running the asylum. And yet while the nation appears to be walking the green mile, investors residing in the Wall Street cell block have been extended pardons from the market gods. Prisoners in the Main Street general population wing of the jail are stuck consuming gruel, manufacturing license plates, and marrying old maids with a dozen cats. The bats not only triggered a severe respiratory illness pandemic, but also sparked a serious case of insanity.

America in One Image?

Justin Horwitz, a Democratic strategist, tweeted a screenshot that was meant to showcase “everything that is wrong with America.” It featured CNBC’s Jim Cramer celebrating the Dow Jones Industrial Average’s best week since 1938 and a network chyron that read “More than 16M Americans have lost jobs in 3 weeks.” The consensus on Twitter was unanimous: what the heck is happening?

On the surface, it does not make much sense. Today, millions of Americans are out of work, businesses are closed, and the gross domestic product is forecast to contract double digits in the first and second quarters. At the same time, the leading stock indexes have rebounded about 20 percent from their March 23 lows. Champagne is flowing on Wall Street, while blood is being shed on Main Street. Trying to grasp this market is like attempting to comprehend former vice-president Joe Biden speaking to the press.

Once you scratch that surface, you realize what is going on. It may not seem like a satisfying explanation, but at least you can understand the office water cooler talk between the bulls and the bears.

Pay It Forward

Do you remember the annihilation that took place last month? The consecutive Black Mondays, the thousand-point swings, the margin calls, and the liquidation of trillions of dollars in assets? It was devastating to watch in real time for the faint of heart, especially if you are nearing retirement and desiring to spend the rest of your days sleeping in and eating cheesecake.

The March madness was pricing in the next quarter or two. Stock exchanges anticipated the rising confirmed cases and death tolls, the soaring jobless claims, the skyrocketing unemployment rate, the depressing earnings season, and every other piece of bad news relating to the coronavirus. This is why it seems befuddling when 6 million Americans file for unemployment benefits and the United States confirms 723 new deaths, but the S&P 500 jumps 2 percent.

Financial markets are always forward looking. Right now, the New York Stock Exchange is focusing on life after COVID-19, when society, it is hoped, returns to normal. There may be some detours along the way, but traders are assessing the future of the postcoronavirus world and searching for new opportunities to make a lot of money.

The Powell Putsch

And then there is the Federal Reserve System.

After sitting on the sidelines and twiddling its thumbs, the US central bank decided to spring into action. In just two weeks, the Fed slashed interest rates to 0 percent, unleashed unlimited quantitative easing, and diversified its bond-buying repertoire. Chair Jerome Powell adopted the European Central Bank’s (ECB) motto: do whatever it takes to shore up markets and stitch up the hemorrhaging. Indeed, when you have a Fed pumping trillions of dollars into the system and promising to buy anything and everything without a ceiling, investors will be confident in shopping at 11 Wall Street.

Wouldn’t you feel assured knowing that your stock picking is fully insured by the Eccles Building?

The Powell Putsch will not relent until “the economy really is on a solid footing.” It’s anyone’s guess when this will happen and what it will look like. In the meantime, the printing press is running all day long, and the freshly created dollars will be funneled to the two primary beneficiaries: Congress and the 10 percent of investors who possess 80 percent of stocks.

A Vaccine for Washington

The pharmaceutical industry is coming up with a vaccine to remedy the coronavirus. Big Pharma may also need to manufacture a separate vaccine to make us immune to the trillions of dollars that Washington spends, prints, and borrows during the booms and busts of the business cycle. Or have our bodies already developed immunity to these astronomical figures that defy the space-time continuum? Perhaps in the next century we will begin talking about quadrillions of dollars, presupposing our generational successors and the greenback survive the bats’ new coronaviruses and Representative Alexandria Ocasio Cortez’s (D-NY) Green New Deal. All we can do is shrug our shoulders and say “Malarkey!”