Reply #10: Only accurate economic forecasts can calm markets

[Demeter]

Financial market participants spend much of their time responding to economic statistics. Better than expected data releases are regarded as good, and poorer ones bad. It would seem obvious in principle. For equity markets in general, stronger growth would imply stronger company earnings and vice versa.

Yet there is a body of literature that aims to refute this simple notion, by showing that historically there is no correlation between stock markets and countries’ real gross domestic product growth. In fact, some countries which typically have slower growth have had much more rewarding
stock markets.

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http://link.ft.com/r/NA70KK/LQI4JS/LSLXF/LQX5TB/ZBLOCZ/T3/t?a1=2011&a2=6&a3=6

ONLY EFFECTIVE ENFORCEMENT OF THE LAW CAN CALM THESE MARKETS!