HEADLINES such as “World stocks fall to two-year low” that appeared in the Wall Street Journal recently have many wondering if the tepid recovery from the 2007-8 crash is finished.

Since midsummer, the Shenzhen Composite, FTSE 100, Stoxx Europe 600 and other benchmark exchanges have steadily declined, with the US Standard and Poor’s joining them over the last few weeks.

As author Akane Otani notes, “After a punishing October, major indices in Europe, Japan, Shanghai, Hong Kong, Argentina and Canada are languishing in correction territory — a drop of at least 10 per cent from a recent high. The US is teetering on the edge of joining its peers …”

Like gross domestic product (GDP) and the unemployment rate, composite equity performance is a limited measuring stick of the economy’s health, though it is favoured by popular mainstream pundits and celebrity economists. As such, all three become the grist for the bourgeois political mill. Invariably, they soon obscure more than they enlighten.

So what do the markets tell us?