It’s one of the first rules in the book of mainstream economic wisdom: a country’s economy is the thermometer which “reads” its stock market’s temperature. If financial conditions are heating up, stocks rise; if they are cooling down, stocks fall. Were it so simple — millionaires wouldn’t make up a measly .15% of the global population.

Obviously, there’s a major flaw with this logic; namely, it isn’t true. Time and again, stock prices smolder to near boiling even as economic growth chills to the bone. (The opposite also holds: Stock prices cool down even as the economy is on fire.)

Take, for instance, Germany’s main stock index, the DAX 30. On August 13, Europe’s number one economy reported a .3% rise in gross domestic product (GDP) — Germany’s first quarter of growth since January 2008. Soon after, the …

German exports and investment spending plunged in the first quarter, dragging Europe’s largest economy into its deepest economic slump on record. Exports were down 9.7 percent from the fourth quarter and company investment declined 7.9 percent, according to the Federal Statistics Office. The Office reported that gross domestic product fell a seasonally adjusted 3.8 percent from the previous three months, confirming an initial estimate from May 15. That’s the largest drop since quarterly data were first compiled in 1970. From October to December 2008, the German economy had already contracted by 2.2%, and by 0.5% in each of the the second and third quarters. According to the statistics office, the ...

German consumer confidence rose for a third consecutive month in November, a strange result when you consider the fact that Germany is in recession. GfK AG’s forward looking index for December, based on a survey of about 2,000 people, increased to 2.2 from 1.9 in November,according to a report from the Nuremberg-based market-research company published today. Basically we need to bear two things in mind here to understand this result, the substantial drop in oil (and with it in inflation) and the resilience being shown by Germany's labour market.br /br /br /a href="http://3.bp.blogspot.com/_ngczZkrw340/SSv8W2SuY0I/AAAAAAAALjE/0jMpiasrigY/s1600-h/german+cc.png"img id="BLOGGER_PHOTO_ID_5272585258228671298" style="DISPLAY: block; MARGIN: 0px auto 10px; WIDTH: 320px; CURSOR: hand; HEIGHT: 160px; TEXT-ALIGN: center" alt="" src="http://3.bp.blogspot.com/_ngczZkrw340/SSv8W2SuY0I/AAAAAAAALjE/0jMpiasrigY/s320/german+cc.png" border="0" //abr /br /German inflation fell in October and the price of oil dropped to just over $50 a barrel from the July peak of $147, boosting households’ disposable income. On the other hand, Germany's worst recession in 12 years ...