Markets Don't Fail - Part I

The Fallacy of Macroeconomic Research

On July 26, 2025, Forbes published a book review written by John Tamny of my book, The Moneyball Method. That review was also published on July 18, 2025, at RealClearMarkets.com. This brief essay will focus on a quote from the fifteenth paragraph of the Forbes review:

It’s not just that markets yet again gain their vitality from periods of weakness as money relentlessly puts out to pasture what is no longer meeting and leading the needs of the people. It’s not just the mindless contradiction that “easy money” has never lifted stocks in Europe or Japan in the way the confused claim it’s lifted them stateside (again, “you didn’t build that”). It’s that all of what’s been used to explain market conditions completely misunderstands what money is.

Markets gain their vitality from periods of weakness? Yes, capital will flow to businesses that create value more efficiently. “Easy money” did not lift asset prices in first world economies like Europe and Japan? No, capital will flow to regions that attract talent. Confused economists and portfolio managers misunderstand money? Yes, capital that flows is money in circulation.

But how does this affect individual investors? An important theme of my book is for readers to adopt the mindset of a creator, of a successful entrepreneur. Very briefly, you must first create a vision for what you would like to build. But you must also be willing to take calculated risks with your time, energy and capital. Obviously, not everything will work out as hoped or planned – you must learn from experience and be flexible with strategy. Lastly, you must measure success objectively.

And because this book operates in the world of secondary market securities that are broadly defined as stocks of American companies, international stocks, Treasury and corporate bonds and money market funds, we must begin with a healthy understanding and respect for the capital markets.

Frequently, that means we must disregard the traditional tools of macroeconomic research, market forecasts, earnings projections and Fed policy. Why? Chapter Three gives us a hint:

Market economies are dynamic, open, complex systems that defy all pretension for improvement by centralized control. However, investment banks publish reams of research that rationalize the force of regulation. If you can find an economic outlook report from any time in the last fifty years – see for yourself. Every one has the same general analysis – cautiously optimistic, continued volatility, near-term uncertainty, headwinds and tailwinds, secular trend intact and potential policy errors.

To learn more, please click the link below:

https://www.amazon.com/Moneyball-Method-Middle-Class-Manifesto-Objective/dp/1696009111/