THEME: RICH vs POOR & MY LAWN
The one year spread between Walmart (WMT) vs Nordstrom (JWN) basically says it all. In one year, the spread has made 90%. Why? Because the rich are getting richer and the poor are getting poorer. Inflation hits the poor harder because they have less ability to hedge. Rising energy and food prices hit the pocketbooks of the poor harder.

So what explains this behaviour other than simply saying that the Republicans are screwing the poor and giving away money to the rich? A look at my rain starved lawn explains it all. When there is no rain, the whole lawn turns yellow. Everyone suffers. The rich suffered during 2000-2002 in proportion to the poor because at least their stock based wealth hurt them disproportionately more. During the bubble, many insiders genuinely ate their own cooking and loaded up on stocks. So in 2003, when it became clear that the stock market was coming back, at least temporarily, it is like when rain returns to the yellow lawn. Every plant gets water, but the weeds are more hardy and absorb it faster.

Now, if the weeds had memory of the drought, they would not go crazy and carry a lot more stocks, but in fact would trim back their stocks quickly. With out predicting whether stocks are going to rise or fall in the future, they sell stocks in a hurry because it is found money.

It is the gullible public that once again believes the rain will last forever that gambles once more. That is why stocks cannot break their old highs until the generational bull/bear cycle is played out for good.

The weeds always win.