Markets Don’t reflect Reality, they Deviate from Reality:

There is money to be made. Go make as much as possible for as long as you can. Keep it coming in while you sleep. Make even more when you wake up. Life is gaining income and spending it. With no money, you will die. It’s a big part of human reality.

A reality which changes often. When a tornado steamrolls a town, it distorts their reality. That distortion has a cascading effect. Those alterations range from emotional to geologic and everything in between. Distortions like these keep reality forever changing.

Within our dynamic reality, there are systems. Seasonal change is a system. A system that would very much alter if a space object collided with Earth and changed our orbit. Ecosystems are systems, so is the electrical grid. All these examples are very tangible. There are also systems that do not exist but are real, like economic ones. And just like everything else in reality, these systems are always changing too.

The thing is with something not tangible, like an idea, it can only affect reality indirectly. A frustrated person squeezes a pillow for ten seconds. Her frustrating thoughts don’t. Therefore, is the idea real?

What is real can distort or change reality, like the tornado, but can not make a new one. Intangible systems in our world can’t make an alternate reality, either. But like tangible things, intangible systems can change, so what causes those distortions? Human emotion is a system that is affected by real and imaginative things. Therefore, everything directly affects intangible systems. Unlike tangible systems, who are only directly affected by existing objects. So it seems systems that do not physically exist are more real than those that do. Which makes sense because there is only a reality because people developed the concept.

Economics is one of those intangible systems. So it exists nowhere, only in our minds, and is therefore affected by every type of experience directly. If a new economic idea is the cause, a direct change in the respective economic system is the effect. If a train full of economic intellectuals gets struck by lightning, then the system will become stagnant.

Our collective thinking and imaginations, in this age of man, is the most powerful cause. A nuclear meltdown can destroy a city, but can not eliminate ideas that came from it. As the saying goes, the pen is mightier than the sword. The sword being the physical world; the pen being the mind.

With the economy, causes eventually boil down to affecting the individual. We all exist in the same reality, but each of our experiences in it is different. If you are weak, you have certain limitations. Those with the gift of strength do not have them. Being rich is a very different life than living in poverty. Beauty is not treated the same way as being otherwise. Our individual experiences are unique in this reality we all share. Let’s call these solitary differences our respective situations. This situation is a location of where we are in our journeys through reality. That location is not just a tangible place, it results from what you think, how you feel, and where you are; financially, geographically, and spiritually, amongst other almost endless factors. A lot of things outside of your control have decided a good amount of your situation, like the past.

Dow Jones Industrial Average

University of Michigan Consumer Sentiment

The Dow Jones Industrial Average’s (DJIA) present situation in its journey is it’s at an all-time high (10/28/2021). The value of that system should reflect our reality. Humanity created this all-time high. Businesses just provide the reasoning for buying and selling, which is sometimes ignored, and other times used. Since people put the market in a powerful position, it should create a positive feeling, since the market reflects them. But, like I said before, even though we share a reality, our situations within it vary. At the same time the market is at an all-time high, the University of Michigan: Consumer Sentiment (UMCSENT) is near a decade low. Aggregately feelings are down, but the market is up. The market must reflect a situation, not reality.

We coexist with the market, and humanity is the sole reason behind its existence. But the market does not reflect reality, because it doesn’t reflect how people feel and why they feel that way. Since the market has to be reflecting something, its status must be a product of a special situation, because the aggregate sentiment is down. Even though humans make the market, it represents businesses.

Businesses comprise collections of people that work at and own the company. The business entity is doing great while its people’s feelings differ. The business and its people are not codependent. If your wife just gave birth to Siamese twins, you are going to be stressed, regardless of work. There is a disconnect. There are a lot more people than businesses, and business can’t operate or exist without people. Yet the market that represents them is not a reflection of the people. There is no business success without consumers, and business gets perpetually rewarded for the latter’s existence, while business does not always return the favor.

The goal should be to have people feeling good, like how the market is doing. If the Dow Jones at its best does not achieve that, we need to find out what it does. Since the stock market booming does not make humanity happy, it would be incorrect to use the market as a validation that things are good, as we often do, because the market does not reflect that. The market price reflects something else. Those in the situation of steering and controlling the market have a sentiment that reflects it, unlike the normal consumer who is down at the moment. It is like those on and affiliated with Wall Street are directors of a movie. Movies exist in the real world yet do not portray reality. The market is not much different in presenting something that deviates from reality. On top of Consumer Sentiment being in the gutter, so is the President’s approval rating, which is another negative indicator. Making it seem even more that the peaking market is a mirage. A mirage the normal consumer, as evidenced by the indicators given, does not get to enjoy while in the present desert of normal reality

Imagine you give someone a trillion dollars. Their bank account has to change because after the deposit, their balance has changed. Or likewise, a balance sheet has to change after adding cash to it. You know one thing that does not have to change? A stock price. You can give a great company with a long history of excellent product development and great project management a billion dollars of cold hard cash, and the stock price won’t budge if there are enough people selling. If many people are selling, there is more supply of shares than there is demand and bargaining power transfers to the buyer, which drives prices down. There are institutions and people that can sell massive quantities of financial assets and buy it back later without batting an eye.

Wonder if the DJIA going up more would actually hurt the market, leading to more oversight? Who now has the incentive to steer the market in a neutral or lower direction? People with sentiment tied to the market do. Those people in that situation want to stay happy, like everyone else does. But pursuing their happiness means actions that serve their portrayal of a false reality, and not the one in which the rest of us exist.

Given that, it is hard to know when, or if, the market has ever reflected reality, rather than a window into a specific group’s situation. My conclusion after so much thought is two steps.

The first being we should automate buying and selling on the market. With those actions defined, there would be no illusions or actions benefiting self-serving innuendoes. Which leaves the stock market only reacting to happenings in reality. The market in some places has started this, but it should evolve into all active traders and market makers being automated using algorithms that are as transparent as financial statements. Therefore, when the market goes up and down, it is a truthful representation of reality we all share.

The second is giving money to people. That way they become more valued, and feel valuable. Those now valued workers who work at occupations that are necessary for a functioning society, but devalue them, will have to change for the better. Once that occurs, humanity’s situation will have improved. Their improvement, together with an objectified market, would translate into a reality where each more closely reflects each other. Please be generous with any donations you would like to give.