Hey all,

I’ve been studying big economic stories for years and I keep returning to one simple idea: our economy moves in patterns and cycles, and when patterns drift apart, something important is happening.

I’ve been reading news articles from Bravos Research and I recently heard about this gap between what people feel about the stock market and what they feel about their own money. That gap matters for you, me, and anyone saving for a home, school, retirement, or a rainy day. It’s a good read so I recommend you check them out. I’ll share with you what I learned here in this week’s read.

There are 2 ways people feel right:

This is odd. It’s like cheering for a sports team you don’t have tickets to; the team is winning, but your wallet is empty. That split is a clue that the financial system is separating from the real-life money people earn.

Since 2010:

That difference is huge. It means many people have seen asset prices (stocks, houses, gold, crypto) go higher, while their paychecks didn’t keep up. That leads to stress, less saving, and fewer new buyers for big things like houses.

And I care because this gap because when wages, house prices, corporate profits, and financial markets stop moving together, one of two things usually happens: either asset prices fall to match weaker incomes, or incomes and real things improve to match the assets. And let’s be real here, it’s always the former.

Corporate profits vs. household savings

Two big trends feed this gap:

When companies make more profits, that money often flows into financial assets. But average people are saving less due cost of living increasing and their wages not catching up. So money concentrates in assets, pushing asset prices higher while most families struggle to buy the same things.

Housing affordability

For many decades, the average home price was about 3 times yearly household income. Since the early 2020s this moved toward 5 times income. In plain terms: houses became about almost twice as expensive for the average family compared to incomes. Because housing is the biggest part of most budgets, this squeezes everything else — less saving, less investing by normal families.

Wealth inequality

Wealth has become more concentrated at the top. The top 0.1% owns a bigger share than at any time since the 1920s or 1930s. That makes it harder for the middle class to build wealth by owning assets (houses, stocks, small businesses), and it changes how the economy grows.