Has The Big Correction - or Worse - In The Stock Market Begun?

It's not beyond imagining that the big correction - or worse - in the stock market has begun. The media seems to think the impetus of falling stock prices is related to the U.S. government bombing Iran. But that may not be entirely accurate.

Of course, this war with Iran could be an impetus, but it could also be the thing that triggered what we should have expected all along.

Thoughts turn back to the long 3-year Bear Market in Stocks after the great Tech Bubble's air began to hiss around this time of year in 2000. Remember that one? Not many do. A 3-year Bear Market? Unheard of! And indeed that was the reaction at the time, as the initial downdraft began. So different than 2007-2008 when stocks cratered in a short period of time. But devastating to portfolios nonetheless.

The point here: When things turn, there's usually some trigger. And Lord knows we don't mean to reduce this war with Iran to the status of a trigger. War is terrible. And we pray that it ends soon. But that doesn't preclude the actions of these governments serving to trigger a Big Correction, or, as we said, worse.

Now, there's not way to know whether this is the case or not. Perhaps markets will spring back to life. We'll have to wait and see. Just don't be surprised if things ultimately turn south for stocks in the coming months.

For now, though, we'll pick up on something more certain that we posted last week: the widening gap between the Haves and Have-Nots. While this can be seen as a manifestation of similar gaps throughout recorded history, we don't want to just dismiss its impact. It's real and it may only now be reaching a more critical stage. Not that many folks are unaware of its existence, but perhaps there's a shift in sentiment to an uglier twist. As with the possible Big Correction in Stocks, we'll have to wait and see. But for now, a thought about this gap.

There's a certain element in all this that is captured in a Psalm. And let's recall that the Psalms were compiled over a period of a thousand years - according to some. It's said the earliest Psalms date back to the time of Moses, around 1500 B.C. That's about 3,500 years ago! This one, captures a segment of the Haves of that time, that one suspects mirror a segment of the Haves of our own.

Yes, while not all Haves sit upon ill-gotten gains, some do. And here's one way these ill-gotten gains Haves were seen way back when as captured in Psalm 72 (Douay Rheims transaltion of the Bible):

I had a zeal on occasion of the wicked, seeing the prosperity of sinners. 4 For there is no regard to their death, nor is there strength in their stripes. 5 They are not in the labour of men: neither shall they be scourged like other men.

6 Therefore pride hath held them fast: they are covered with their iniquity and their wickedness. 7 Their iniquity hath come forth, as it were from fatness: they have passed into the affection of the heart. 8 They have thought and spoken wickedness: they have spoken iniquity on high. 9 They have set their mouth against heaven: and their tongue hath passed through the earth. 10 Therefore will my people return here and full days shall be found in them.

And they said: How doth God know? and is there knowledge in the most High? 12 Behold these are sinners; and yet abounding in the world they have obtained riches. 13 And I said: Then have I in vain justified my heart, and washed my hands among the innocent. 14 And I have been scourged all the day; and my chastisement hath been in the mornings. 15 If I said: I will speak thus; behold I should condemn the generation of thy children.

I studied that I might know this thing, it is a labour in my sight: 17 Until I go into the sanctuary of God, and understand concerning their last ends. 18 But indeed for deceits thou hast put it to them: when they were lifted up thou hast cast them down. 19 How are they brought to desolation? they have suddenly ceased to be: they have perished by reason of their iniquity. 20 As the dream of them that awake, O Lord; so in thy city thou shalt bring their image to nothing.

Notice the reckoning that befell those Have-Nots? If the current stock market wobble turns into something much worse, perhaps it will serve as a reckoning for some.

Unfortunately, it may also gut the investment portfolios of perfectly innocent folks who put their trust in stock for the long run.

Again, let's wait and see.