Additional References
EWFF, October 2005
Whatever Happened to Speak Softly?
One of the few things politicians can do to offset domestic anger is to redirect it at outside threats. This is a political skill that some U.S. politicians have already deftly mastered. Back in Bill Clinton’s Presidency, The Elliott Wave Theorist noted that the U.S. government was continually issuing ultimatums to foreign powers. During his two terms, we counted at least a dozen. Bush has expanded on that tradition, issuing almost three times as many warnings as Clinton in about half the time. He’s also backed them up with full-scale invasions and occupations of two countries, Afghanistan and Iraq, which are ongoing. His famous “if you’re not with us, you’re against us” rallying cry of 2001 remains his most dramatic foreign policy legacy. Joint Chinese/Russian military exercises in August are an unwelcome, yet completely logical response. “This is a message to the United States,” says a U.S. official. In the western hemisphere, the fallout from U.S. global posturing is highlighted by the tension between the U.S. and Venezuelan President Hugo Chavez. Given the numerous U.S. ultimatums and the attack on Iraq, Chavez’ off-the-wall accusations of U.S. efforts to topple his government and possible backing plots to assassinate him obviously strikes many outsiders as credible. The rising tension was highlighted last month when Reverend Pat Robertson publicly called for Chavez’s assassination. Robertson later apologized. The transition to a bear market attitude in which tough talk emerges is dangerous because it creates enemies. The result in virtually every area of U.S. foreign policy has been, and will continue to be, a rising array of confrontations that will be a source of extreme tension in the years ahead.
EWFF, March 2005
A Grand Supercycle at Twilight
As the Dow Industrials, the single-best meter of social mood, pushes to a new high for its bear market rally, the social scene is experiencing a quick burst of the global goodwill and harmony that ruled back in the 1990s. Once again, the aura of a positive mood peak is in the air as formerly combative country leaders have exchanged handshakes (Bush and various European leaders), enacted a major global treaty (Kyoto) and engineered a democratic election in a former totalitarian stronghold (Iraq). Remember the remarkable cessation of hostilities that took place between Israel and the PLO in the 1990s? The peace ended, on que, with the bull market in 2000 and intensified throughout the bear market decline. But the four-year high in social mood, as measured by the Dow Industrials, has now produced a “formal end to more than four years of fighting.” Back in 2003, a English writer Christopher Wilson said the royal family was waiting for the “right moment” to announce a wedding between Prince Charles and his former mistress. “They’re waiting to spring it on the public,” he said in a BBC documentary. “When the wind is in the right direction, everybody’s feeling good. That’s the moment [it] will come out.” Word of the marriage came February 10.
It’s clearly only a countertrend peak, as all of these events floated above a witches brew of global disparagement and hostility. In Britain, for instance, the locals just aren’t taking to the royal wedding the way they did to Prince Charles’ first wedding at the start of the bull market in 1981. As one reviewer noted, “Camilla is no Diana-alike and Charles is a dork. The magic is gone.” Even the queen, Charles’ mother, will not attend the ceremony. Despite the truce in Israel and Iraq’s elections, bombings in both places continue. Unlike the unified global trade pacts and summits of the 1990s, the Kyoto global warming treaty actually creates tension instead of alleviating it: “This is Australia and the United States against the rest of the world.” Bush and European leaders were all smiles as the president completed a fence-mending trip through Europe, but once he departed, big-time friction surfaced. For the first time, signs of a potential split in the 50-year alliance between the U.S. and all of Europe appeared when George Bush refused to negotiate with Iran regarding its nuclear capabilities and the U.S. house voted 411-2 to warn the EU that it must not lift its arms embargo with China. As one political observer noted, “Imagine a world where Russia and the European Union, and Russia and China, and the EU and China, all find more in common with each other than with the United States. The seeds of such an anti-U.S. entente were planted in Europe last week.” In the downtrend in social mood, these seeds will surely sprout into serious conflict.
EWFF, December 2002
Socionomic Fallout from the Bear Market
The rising incidence of social conflict predicted by socionomics is escalating rapidly. In late November, Muslims in Nigeria went berserk over a newspaper article’s assertion that the prophet Muhammad would have been happy to marry a candidate from the upcoming Miss World pageant. Socionomics provides the backgrond to understand why there was also a riot in South Korea, in fact, on the same day. This one was over the acquittal of a two U.S. army soldiers, so the riots are completely unconnected by any external signs. The internal connection the emerging global depression, in the psychological sense of the word governs their synchronicity, at least generally if not specifically. Like so much of the violence of the past two years, these two events do have one external thing in common: Anger toward America. This is not a good sign for the social future of the U.S. It indicates that the global anti-americanism discussed in May and September is accelerating at a rapid rate. This is confirmed by intensifying anti-American protests and hunger strikes in South Korea. A Pew Research survey of 38,000 people in 44 countries found that U.S. favorability ratings have slipped significantly in virtually every country. The Grand Supercycle bear market has social implications, and we have only glimpsed their breadth and extent.
EWFF, September 2002
There’s nothing trivial or hidden about the cultural manifestations of a bear market. Like the passage from day to night, they bring all-encompassing changes that are diametrically opposed to the conditions of the preceding bull market. Due to the lag between a reversal in mood and its effects, however, long term trend changes have a way of sneaking up on people. In a reversal of its counterpart, a bear market is a process through which the negative consequences of the trend catch up to the trend itself. At the bottom, negative events will overshoot social mood, which, by then, will have reversed to the upside. One important subtlety in the relationship between a wave of high degree and the consensus of investors is that it is not always out of synch. The current juncture is another. Many of the negative cultural trends discussed over the last few months, such as rising anti-americanism have emerged and/or continued to intensify as equity prices have fallen from their early 2002 highs. As The New York Times reported on September 15, “The bad news just keeps on coming.”
EWFF, May 2002
In many areas, bear market psychology is picking up speed. A typical example are the harbingers of exclusionism and xenophobia discussed last month. “Le Pen is a symptom of a wider political malaise: fear of globalization, gloomy declinism, ugly xenophobia,” reports the Washington Post. The Post added, “When it comes to France, this resentment is most loudly expressed as hatred of America.” In an attack on U.S. marines in Puerto Rico, perpetrators blame U.S. culture rather than the Catholic church for the church’s sex scandal. Along with Latin American condemnation of the U.S. over a failed Venezuelan coup, the spread of anti-U.S. sentiment can be seen fanning out across the globe. Obviously, it is gaining a foothold in contingents that are thought to be far less radical than those that attacked the World Trade Center on September 11. This is the opposite of the global embrace that the U.S. and its democratic, free-market ideals enjoyed during the bull market.
The Elliott Wave Theorist, January 1999
The front page of The Wall Street Journal reported on America’s “Culture of Optimism” on December 22. Here, under the banner “Joy To the World,” the WSJ records that the S&P and NASDAQ attained all-time highs despite political chaos, dropping bombs and fraying economic fundamentals because of “the ebullient national personality of the U.S., an immeasurable quirk that without question adds to the gross domestic product and to social harmony.” America, the “most optimistic nation on earth,” has an irrepressible natural resource, or “good feelings premium,” which it places on the economy, political figures who project optimism and Internet stocks. From our perspective, it is an amazing article because it accurately identifies the driving force behind the bull market. The economy is a reflection of “a generic, almost metabolic, human optimism,” says the author of Optimism: The Biology of Hope. The dean of one of the nation’s top business schools adds, “When I’m optimistic, I’m more likely to make commitments of capital, to spend and to take risks.’” As The Elliott Wave Theorist has always stressed, this positive group emotion is in fact the root of all bull markets. What the article does not say, however, is that there is a natural countervailing pessimism (also known as a bear market) that enters the picture from time to time. In that light, we note that the article characterizes Americans with the same unwaveringly positive traits that Japanese writers attributed to their country’s people in 1989. In November 1989, a month before the Nikkei’s peak, for instance, the author of The Japan That Can Say No appeared in Time suggesting that Japan’s bull market was a racial trait. Japan’s leadership in technology would help it “build a new world history.” At Japan’s great peak, countless other articles and books on both sides of the Pacific extolled the virtues of Japanese management techniques and declared its business habits and educational system far superior to its slothful American counterparts. Now that the S&P is at an all-time high and the Nikkei is down more than 65%, the situation is reversed. We believe the outcome here will be the same as it was there.
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