Markets ≠ The Economy: Confusing Them Can Cost You Money

Do not confuse markets with the economy they are not the same thing

Our human brains are wired to reduce complexities into simpler parts, from which we then draw linear conclusions. While this may have served us well from an evolutionary standpoint, it often misleads us when it comes to navigating financial markets.

The financial landscape is littered with many examples of this, the most enduring of which might be the “market as economy” paradigm, which always seeks to explain market moves with economic rationale.

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Breaking Down Breakeven Rates Part 1

Breakeven rates in the US have rebounded strongly from their COVID lows and markets are expecting boom times again

Breakeven rates are all the rage these days. The chart below has been posted (and printed) all over the place showing the huge rally in breakeven rates since the lows of March 2020. People are looking at this rally and using it as evidence that the US economy (and by extension the world’s) is on the verge of “boom times!”

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Markets ≠ The Economy: Oil

Oil production on land with derricks and wells in the desert

Crude oil is another commodity that market participants like to look at in order to gauge the overall health of the global economy. The logic here is the same as with copper, since oil is what the modern industrialized economy runs on, a higher price per barrel must mean strong global growth… right?

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Is Dr Copper Making A Fool Out Of Us?

It is said that Copper has a PhD in economics because of how widely used it is across the economy, but is it's price always a reliable indicator?

A favorite trick of global macro commentators, and some traders, is to look at short term price action in a particular market and from there extrapolate broader economic conditions, which they then use to make other forecasts.

Copper is a perfect example of this.

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Why It Isn’t Important If Markets Are Right Or Wrong

Cartoon by KAL (

Are market prices right or wrong?

Market watchers and participants can be forgiven for asking this question as over the past year, the West has lurched from Covid Wave 1 to Covid Wave 2, lockdown to reopening and then new lockdowns followed by renewed lockdowns.

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