That distinction that some economist make between industrial capitalism and financial capitalism, we only need to look at the 2008 financial crisis, which to overly simplify it, based on bad mortgage loans that were turned into derivatives which all the big firms held, which created the systemic risk and almost brought the whole system.The origins and the triggers for the crisis, was unrelated to the general economy or business cycle.
Hmm ... now when I think of this, it seems kind of rich in irony that Western people complain that the Chinese stock market is like a stand alone entity not connect to the Chinese economy, which they insinuate is not good. Hell, Wall Street usually never connected to Main Street for a long time too.
This stuff is all relative new, in that the world never really seen it before. Read that a lot of macro economic theory, is not working anymore, and that seems to be true.
One good example is negative interest rates in Europe. That makes no sense. Also, they try to pump money into the system, which still makes it deflationary, which is puzzle too. Anyways, too board a topic.
