Barry Ritholz of Big Picture, asks: Do Capital Markets Create Their Own Fuel?
Economic forecasters sometimes describe capital markets as a leading economic indicator.....
But can capital markets actually create or destroy the very economic conditions that their participants are anticipating? ....
Are the participants in capital markets (investors) buying or selling in anticipation of future economic conditions AND thus contributing to the anticipated economic condition? Do capital markets have an inherent self-fulfilling prophecy effect? Do capital markets create their own fuel?
....
These are not rhetorical questions. I would like some education. I’m a CFP with an MBA but certifications and degrees don’t help me (or anyone) as much as the study of philosophy, which makes me fully aware of my own ignorance.
Please join me after the jump: where I explore the answer and its implications.
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