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EWFF, October 2002
The bear market has guided Martha Stewart’s image with the same precision as the bull. In September, the now “tarnished queen of perfection” beat the NASDAQ to a new low when she refused to testify before Congress about insider trading charges and had her case forwarded to the Justice Department. “Everything negative that could happen has happened,” said the author of a Stewart biography. “A curtain has been drawn back in a way that is causing her excruciating and irreparable damage.”

But the curtain to “everything negative” has nothing to do with Martha Stewart. This is clear from the alleged offense, which would not even have been prosecuted in the bull market, and the fact that corporate executives everywhere face similar attacks. The more fully that they leveraged the benevolent effects of a rising social mood, the more likely it is that they now face the slings and arrows of angry shareholders, politicians and community activists.

EWFF, July 2002
From Bad to Worse
This week’s Time magazine cover focuses on the end of the world while Newsweek digs into the Martha Stewart insider trading debacle with a front-page story on “Martha’s Mess.” According to yesterday’s Washington Post, “The exploding scope and volume of these still-unfolding corporate and accounting scandals have begun to weigh heavily on the stock market.” Subscribers know the truth, a declining social mood, as reflected by the stock market, has produced attacks on the leaders, companies and social units that were the focus of the advance. These are the results of the trend change that were forecast in past issues. Their scope is indicative of the degree of the decline.

“Focus on My Salad”
Newsweek says Martha Stewart is not going to jail, and it offers no evidence of impropriety. Still, there she is on the front-page as the tarnished “queen of perfection” because Martha Stewart embodies the descending mood. She reflects the public’s vulnerability and anger with such perfection that television stations across America had to show the image of her chopping salad, laughing nervously and declaring that she “will be exonerated of any ridiculousness.” In March, EWFF anticipated the intensifying glare of the bear market mood with this comment: “The next, more personal phase of this process will focus on the individuals that benefited the most from the rising mood.” As the stock market approached its final highs, no one was a more direct beneficiary than Martha Stewart. Her persona was so entwined in the rising mood that she took it public. In October 1999, when her market capitalization rose to $1.7 billion on sales of just $14 million, EWFF said overvaluation had risen to the “level of a social virtue.” Over the next five months, Martha Stewart shares fell almost 74% and hinted at a whole new social order. But no one noticed until recent weeks because that is when the new more destructive order was in place. Now CNBC and the scandal sheets track her decline tick for tick.

EWFF, November 1999
In another late-breaking milestone, Martha Stewart “struck stock market gold” October 19 with the sale of 14% of her firm to the public. Stewart’s first book, Entertaining, came out in 1982 as the bull market was taking off. Since then, she has become “the queen of gracious living,” a self-made billionaire “credited with creating a lifestyle industry.” She is not the first bull-market hero to equitize her persona (the World Wrestling Federation even went public on the same day), but she may be the most fully valued. The Martha Stewart company has a capitalization of $1.7 billion and earnings of $14 million, which makes her an excellent “role model” according to one consultant, who added, “we need them because it gives women hope and desire to strive.” Overvaluation is now a social virtue.