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Back in December 1999, when the Dow Jones Industrial Average was a few weeks from it’s final all-time peak, The Elliott Wave Financial Forecast explained the infatuation with millionaire-hood by exposing the link to similar major peaks like that of 1929 (see Additional References below for the original entry). In April 2004, we pointed out that the term itself can actually be traced back to 1720, the year of the first great financial manias, the South Sea Bubble in England and the Mississippi Scheme in France (also available in Additional References).

USA Today’s latest exploration of the phenomenon concludes, “Don't expect many to kiss off millionaire mania anytime soon.” But even within the confines of this story there are several very big hints that suggest the infatuation may, in fact, be ending. For one thing, there is psychologist Joan DiFuria who says that while “More rich folks are questioning the meaning of their lives in an era of terrorism, wars and corporate scandals, and they hope to put their money to more altruistic uses.” The emerging change of heart is addressed by entries on the charity wave and the “happiness makeover.”

In another telling quote, a source calls the arrival the attainment of a million in net worth "a cheap symbol of success that pegs everything to the bottom line, while not feeding one's inner life, moral values and spirituality.” These are all is early signs of a reorientation to a more inward, less materialistic and religious outlook, which are all traits of a bear market traits. Another sign of the weakening strength of the bull market, is that the current peak millionaire show, Deal or No Deal, is nowhere near as popular as Who Wants To Be A Millionaire was back at the all-time highs when it was a ratings powerhouse that appeared on prime time just about every night of the week. Another divergence is that while several contestants on Who Wants To Be A Millionaire won the $1 million, the closest anyone has come on Deal is $464,000. Finally, there is the fact that contestants don’t have to know anything to win on Deal; they just have to pick the right sequence of suitcases. So, just like the financial markets at the current juncture, Deal is more of a crapshoot.

April 2004, EWFF
The Waning of  ‘Mllionaire’ Magnetism
Another Supercycle-degree indicator that served us well back at the all-time highs was the social caché of the word “millionaire.” In December 1999, one month before the all-time peak in the Dow, EWFF detailed myriad ways in which “millionaire-hood has become the common goal of the nation.” By that point in time, book sellers, newspaper editors and even TV show producers discovered that the word had an almost magical ability to stir the public’s financial fantasies. It started back in 1997, when newspapers found out that the “millionaire population is growing 20 times faster than the general population.”

This obsession has clearly returned, as USA Today’s top selling business book is The Automatic Millionaire; advertisers are pitching a get-rich quick scheme by asking “Does the idea of becoming a weekend millionaire intrigue you?”; and, as we covered in the January issue, Regis Philbin has returned to prime time with a new version of Millionaire called Super Millionaire, which appeared three days after the Dow’s February peak. Over its five-day run, it had an average Nielsen rating of just under 10, about where it was in mid-2001 when the Dow was last in the same area, near 10,700. Super Millionaire’s lesser popularity confirms that the rally is a countertrend move that cannot recapture the fullness of the old peak. After falling with the market in 2001 and 2002, the number of prominent “millionaire” mentions rallied in 2003 but fell as stocks peaked in early 2004. This happened even as Super Millionaire debuted in February. The chart [not shown] depicts an important waning in the social fascination with millionaires, which is in perfect socionomic concert with the bear market.

The fall-off is significant because it shows that the public is losing its connection to a term “millionaire” that dates back to 1720 and John Law’s creation of modern finance near the last Grand Supercycle peak. According to the book Millionaire, it was first used to describe the wealthy beneficiaries of the Mississippi Company: “Law sparked the world’s first major stock-market boom, in which so many made such vast fortunes that the word “millionaire” was coined to describe them. The term “millionaire” exerted a seductive appeal. The idea that money could be made from speculation rather than drudgery was printed indelibly on the popular consciousness.” The counterbalancing principle, that money could go up in smoke even faster, was made just as indelible by the subsequent bursting of Law’s bubble. But the public is unable to keep both ideas in mind at the same time. So, it vacillates between the two, and every 300 years or so it repeats the transition in a fashion that is so uniform and grand that, for those few observers that are able to watch it happen in real time, it is a wonder to behold.

December 1999, EWFF
The longer-term fools-for-stock psychology has now dwarfed that at the highs of 1968 and 1929 by a margin that is hard to comprehend. Stock market capitalization as a percentage of GDP is now 144% vs. 81.4% in 1929. A more qualitative comparison is the 1990s parallel to the of Ladies Home Journal “Everybody Ought To Be Rich” article of 1929. The current mania matched the audacity of the Ladies Home Journal when Reader’s Digest printed, “You Can Make A Million [in the stock market]” back in July 1996. Since then, millionaire-hood has become the common goal of the nation. It advanced from a new notion to a popular form of veneration in late 1996 when “You Can Make a Million” became a book, The Millionaire Next Door, a best seller in 1997. Then came a rush of stories about “secret millionaires” who got in early, lived frugally, and died with millions squirreled away in stocks. At the end of 1997, newspapers discovered that the “millionaire population is growing 20 times faster the general population,” and a wave of stories celebrating this fact followed. “Millionaires: Just a Dime a Dozen” was a headline in the L.A. Times. As many stocks reached their all-time high in July of the next year, aspirations seemed to escalate by a factor of 1000. The New York Post headline of July 8, 1998 was “High-tech Billionaires: They’re a Dime a Dozen.” The game-show smash, Who Wants to Be a Millionaire, may be the culmination of this whole process. “It’s almost impossible to quit watching. It’s the programming equivalent of crack cocaine,” said the director of the Center for the Study of Television. During one key ratings week, the show accounted for half the viewership of the Top 10 shows.