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Here again we see a social phenomenon that is turning back to a bearish trend after a multi-month bull market rally in social mood. To understand the bull-bear progression, let's first go back to the later part of the last bull market. Remember the press "globalization" was getting back in the late 1990s? When the word first emerged in the lexicon of management gurus and investment seminars, it was a strictly positive force that was transforming the business and investment worlds. Globalization described the break down in global barriers to free trade through technololgy and diplomacy; it was almost universally considered an unstoppable force, but EWI subscribers knew better. The Elliott Wave Theorist and Financial Forecast identified it as a catch-all phrase for the inclusionary social trend that accompanied the bull market, which was not moving inexorbly higher, but toward a reversal that would accompany the long-term trend in stock prices. 

The contours of that topping process are, in fact, discernable in the treatment the subject has received since 1998. This chart shows its movement from the highs of 1998 and 1999 through the reversal in 2000, the lows of 2002 and the countertrend rally of the mid-2000s.  The fervid and unfettered belief in the benefits of globalization were captured in The Commanding Heights . It's appearance garnered the following review from a May 1998 issue of Newsweek:
 The Romance of the Marketplace
The Commanding Heights is a big book. The book reveals the temper of our times. From India to Isreal, from Mexico to Moscow, it has become a truism that economic activities should be dominated by market forces.
May 4, 1998

According to another Newsweek profile from around the same time the global romance with the marketplace actually started in early 1980s when Margaret Thatcher and Ronald Reagan came to power. It is no coicidence that the bull market was also getting underway at that time. The Elliott Wave Theorist pointed to the connection between globalization and the Grand Supercycle peak in stock prices in July 1998 (see additional references below). One example capitalism triumph was evident in comments from the prime minister of an African nation in a May 1998 issue of The Financial Times. Said the former Marxist, “I’ve come to realize that private sector driven economies are the only viable sources of wealth creation.” 

Through the peak in 2000, The Commanding Heights was followed by a flood of globalization articles and books – virtually every one confirming its optimistic premise. One example is The Lexus and the Olive Tree, which still tops an Internet list of “leading globalization books. ”  In the book, Thomas Friedman, a liberal columnist for the NY Times, writes positively about “a new era in international relations” that will change the world economy. "

In late 1999, one month before the start of the bear market, the change turned out to completely  contradiction to the bright The change turned out to be completely The new world disorder was announced by Globalize This, another top globalization selection that presents an agitator’s eye view of the “Battle of Seattle,” the World Trade Organization conference of December 1999. The book describes the protest movement that disrupted a world trade meeting for the first time. It came out on January 15, 2000, one day after the all-time peak in the Dow Jones Industrial Average. Says the list of top globalization books, “If The Lexus and the Olive Tree explains globalization. Globalize This explains anti-globalization.” Here’s an except of from the book’s introduction:

November 30, 1999, marked a turning point in history. Tens of thousands of ordinary citizens took to the streets of Seattle to stop the World Trade Organization (WTO) from conducting 'business as usual' (ie making rules for the entire planet that merely serve the interests of large corporations)... Seattle marked the greatest failure of elite trade diplomacy since the end of World War Two. The talks ended in total collapse.
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As with stocks, on the whole, trade talks have struggled to approach the high ground of the late 1990s ever since. Through the first leg of the bear market, bearish globalization tomes crowded the shelves. Other titles that appeared through the early part of 2003 included The Best Democracy Money Can Buy: The Truth About Corporate Cons, Globalization, and High-Finanace Fraudsters, Globalization and Its Discontents and World On Fire: How Exporting Free Market Democracy Breeds Ethnic Hatred and Global Instability.

Most recently there’s been a backlash against the backlash: In Defense of Globalization came out in October 2004. The book “takes on globalization's critics, disarming them with logic and killing them with compassion.”  The End of Poverty: Economic Possibilities for Our Time (March 15, 2005) tells “Why globalization should be embraced rather than fought.” Naturally, the markets been rallying for many months, so the social mood is ripe for some reclamation of the globalization concept.

But the latest WTO gathering in Hong Kong is reminiscent of Seattle. Like Seattle, for instance, it begins as something of a party. The article above sites a “carnival atmosphere.” The authorities appear to be ready with more police than protestors. But the mood may sour fast. A more recent report from Bloomberg says protestors set fire to an imitation coffin and threw plastic bottles and eggs at police.  In clashes, demonstrators including a prominent legislator were sprayed with pepper spray. The stock market was still rising back when the Seattle gave birth to the anti-globalization effort in late 1999, but it proved to be an accurate foreshadowing of a fast approaching bear market. In Hong Kong, a similar signal may be flashing. If history is repeating, as we suspect, the Dow Jones Industrial Average will align itself with a renewed burst of anti-globalization fever.