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The Cultural Trends section in the October issue of The Elliott Wave Financial Forecast covers a relatively high level of political turmoil around the world. Another small example is the fistfight that took place on the floor of the Macedonia Parliament last week. Nine people were arrested and nine more were injured in the skirmish that finally ended when a special police unit intervened. Far more important, than this little skirmish is all the turnover that’s taking place or will do so shortly in most major global democracies. This month’s issue charts a very clear political shift to more bear market leaders and movements.  

Even more bearish is the rapidity with which more authoritarian leaders seem to be gaining strength. Two of the best examples are Venezuela’s Hugo Chavez and Bolivia’s Evo Morales, who recently introduced a new constitution that will give him many of the same dictatorial powers now exercised by Chavez. On a recent trip to the United States, Iranian President Mahmoud Ahmadinejad was seen in many quarters as rising to the level of a cult hero, primarily because he was introduced as a “petty and cruel dictator” at Columbia University last month.

Then there is the item at right from the one of the history most important settings for bear market political movements. A review of the history books shows that for at least the last 80 years, the stars always seem to be perfectly aligned for a Russian power grab at the most important peaks in social mood. Back in 1929, for example, Stalin completed an effective seizure of the Russian government with the expulsion of opposition figures Nikolai Bukharin and Aleksy Rykov from the Politburo and the exile of Leon Trotsky. At the next major peak in social mood, the Cycle degree peak of 1937, the Great Purge, which eventually produced the execution of Bukharin and Rykov was initiated. Thousands of other former communists were also killed. Trotsky was assassinated in 1940.

The next important Cycle-degree peak came in February 1966. It was in the final months of that advance that another Soviet leader, Leonid Brezhnev, came to power and soon established a more repressive, authoritarian tone. According to Wikipedia, for instance, it was in a May 1965 speech commemorating the 20th anniversary of defeat of Germany that Brezhnev mentioned Stalin positively for the first time. In April 1966, two months after the peak, “he took the title General Secretary, which had been Stalin's title. The trial of the writers Yuri Daniel and Andrei Sinyavsky in 1966—the first such trials since Stalin's day—marked the reversion to a repressive cultural policy. Under Yuri Andropov the political police (the KGB) regained much of the power it had enjoyed under Stalin.” Like the topping process that would run through January 1973, Brezhnev’s consolidation of power lasted through the early 1970s (according to Brezhnev Reconsidered through April 1973 when three Brezhnev cronies were elected to the Politburo).

Putin appears to making a similar transition. As the article notes he rose to power on the back of the war, (he was in charge of Russian forces before becoming president) and his first major act as president was to take control of the Chechen capital of Grozny in 2000. That happened on February 6, 2000, between a peak in the Dow Industrials (January 14, 2000) and the S&P (March 23, 2000).

Putin’s latest power grab is probably right up there with Brezhnev in the mid-1960s. “To become the head of government is quite a realistic proposal,” Putin says without mentioning that it means abandoning the intent if not the letter of the Russian Constintution of 1993. According to Blooomberg: “The plan allows Putin, 54, to continue exercising control over the nation while adhering to the form, if not the substance, of a democratic transition. ‘We'll have a new president, but he won't chart his own course,’ Sergei Markov, a political analyst. ‘It will be Putin's course,’ said Markov, director of the Moscow- based Institute of Political Studies.” “Putin’s course” clearly expresses the authoritarian values EWT associated with a bear market back in 2004.