Why Are Stocks Up When Economy Is Down?

By: Tom Morgan

Why are stocks up when economy is down?

The Big Sequester smacked us this week. And stocks went up.

We have record numbers on food stamps. We have so much debt we will soon have to invent a word above “trillion.” And stocks went up.

The economy grows like snails dance. Thousands of Obamacare regulations and dozens of its taxes are about to slam it. And stocks went up.

Our last recession was the worst since Moses skipped rope. According to the President it was. Our recovery? Abysmal. And stocks went up.

The President and the Republicans cannot agree on the day of the week. The Senate cannot write a budget. For three years, no budget. And stocks went up.

The only new jobs we created the last several years were in the Federal Government. And stocks went up.

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How far up? Four years ago the Dow slumped to 6,547. If you invested across the board in stocks then, you should have more than doubled your money since. The Dow is now above 14,000. Yes. You could have doubled your money in four years.

What is the deal? When the economy is a sick puppy, why do stocks go up? I suggest you set aside the next 100 answers you read to this question. Trash them. And focus on a single word, a single concept: Profits.

Profits drive stocks upward. Through gloom and political farce. Through wars and peak oil and global warming. Or climate change, as it is now. Profits drive stocks upward. And American companies are making more and more profits.

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