Real Economy vs. Market/Financial Economy

[Shaun @ Tru6]

I've been very busy lately but catching snippets. One thing I caught was that there is a "real economy" and there is a "market or financial economy." just caught an auditory glimpse.

Anyone else hear this? What is the difference? or is this just a dumb post that I heard wrong?

[jyl]

Discussed here

Why Should Main Street Care What Happens On Wall Street?

Generically, people talk of financial markets aka Wall Street vs real economy aka Main Street.

Real economy is the economy as experienced by people who aren't investors, traders, bankers, etc. Is described in most of the economic stats we hear - unemployment rate, CPI, GDP, PMI, etc.

Financial markets is stock prices, bond yields, interest rates, credit spreads, etc.

Volatility in financial markets, alone, is not a big deal. Some investor/trader made $, another lost $, all in a day's work.

When financial market damage drives excess (positive or negative) in real economy, that's a problem. IMO.

Your anecdote of not getting funding to expand your business because credit market locked down is example of financial markets hurting real economy. Your biz has nothing to do w/ financial markets, yet you are being hurt by those markets.