Ask around for precise definitions and quite soon you will come to the conclusion that Bubbles are one of those things that are simultaneously amorphous enough to elude precise definition, yet distinct enough to be recognized instantly.

Given the fuzzy nature of what constitutes a Bubble, for our purposes let’s just call it a very large divergence in asset prices with underlying reality.

Enter US equity markets continuously making record highs.

Consider these price moves in relation to the underlying economic reality.

Lockdowns across the world’s largest economies occurring at pretty much the same time; entire industries like tourism, aviation, and hospitality shut down, and global manufacturing and transport chains severely disrupted.

All this being just a slice of the overall economic havoc wreaked by the world’s reaction to Covid-19 in the year 2020. 

The sum of all this being the massive shock of millions of people becoming unemployed and without income seemingly overnight. Even as lockdowns eased and economies reopened, the labor market did not recover. 

Now, if a capitalist system consists of two halves – Labor and Capital, how strong can it possibly be if one half is experiencing its worst conditions in living memory?

Which brings us to that most bubble-licious of questions: How is it that millions of workers do not have a source of income, yet the stock market keeps making all time highs?