Ali Vleshi - Repeat after me: "The stock market is NOT the economy."

[iluvtennis]

Ali Velshi@AliVelshi·Aug 18
Actually this is the great American imbalance, in which we are able to instantly protect investors yet fail to protect workers. Repeat after me: “The stock market is NOT the economy.”

Link to tweet

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I wish more people understood this. The mainstream media has ownership of much of this as they often gauge the economy as the stock market. That has been a big fail. I hope it doesn't bitew us in the butt on Nov 3rd because trump leads in the polls wrt "the economny".

[PETRUS]

1. Thank you.

So much economic reporting is bad (misleading). Using the state of the stock market as a proxy for "the economy" as a whole is one of the things I find irritating.

[iluvtennis]

2. well said. nt

[PETRUS]

3. I recently read a piece by Yanis Varoufakis...

I think it's relevant. Here's a snippet:

Before 2008, the money markets also behaved in a manner that defied humanism. News of mass firings of workers would be routinely followed by sharp rises in the share price of the companies “letting their workers go” – as if they were concerned with their liberation… But at least, there was a capitalist logic to that correlation between firings and share prices. That disagreeable causality was anchored in expectations regarding a company’s actual profits. More precisely, the prediction that a reduction in the company’s wage bill might, to the extent that the loss of personnel lead to lower proportional reductions in output, lead to a rise in profits and, thus, dividends. The mere belief that there were enough speculators out there thinking that there were enough speculators out there who might form that particular expectation was enough to occasion a boost in the share price of companies firing workers.

That was then, prior to 2008. Today, this link between profit forecasts and share prices has disappeared and, as a consequence, the share market’s misanthropy has entered a new, post-capitalist phase. This is not as controversial a claim as it may sound at first. In the midst of our current pandemic not one person in their right mind imagines that there are speculators out there who believe that there are enough speculators out there who may believe that company profits in the UK or in the US will rise any time soon. And yet they buy shares with enthusiasm. The pandemic’s effect on our post-2008 world is now creating forces hitherto unfathomable.

In today’s world, it would be a mistake to try to find any correlation between what is going on in the real world (of wages, profits, output and sales) and in the money markets...

Link to the whole piece: https://www.yanisvaroufakis.eu/2020/08/21/something-remarkable-just-happened-this-august-how-the-pandemic-has-sped-up-the-passage-to-postcapitalism-lannan-institute-virtual-talk/

[iluvtennis]

4. very interesting. agree there is no correlation between the money markets and what's going on

in the real world in this pandemic time.

thanks for the linked article.