Anger in the Air
Courtesy of Elliott Wave International
Increasingly negative social mood is overtaking politics — and the U.S. stock market.
A recent CBS News poll put President Obama’s job approval rating at a new low of 46 percent. This is not surprising from a Socionomics point of view:
Correlation with the stock market, consumer confidence, economic performance and other measures suggests that social mood is by far the main determinant of presidential popularity… There are two reasons for this fact. First, his actions, despite their endless analysis in the press, do little to affect his popularity. Second, his popularity is dependent upon a social mood and economy over which he can exercise no countertrend influence."
The Wave Principle of Human Social Behavior
"Anger in the Air" was the sub-headline on television, when the January 19th election results announced Republican Scott Brown the winner. The meaning was clear: Anger among Massachusetts voters in the U.S. Senate special election led to what would have normally been unpredictable: A Republican beat a Democrat in what is arguably the bluest of blue states. Not since 1972 had a Republican had been elected to the U.S. Senate from the Bay State.
What a turn of events." That’s what Diane Sawyer said during the January 22 broadcast of World News Tonight after a report on Ben Bernanke going from Time magazine’s Person of the Year to the possibility that he might not be re-appointed. Even some Democratic Senators voiced disfavor of the Fed Chairman. He was ultimately re-appointed, as the January Elliott Wave Financial Forecast predicted:
Social mood is still too elevated to deny Bernanke reappointment as head of the Fed in upcoming congressional confirmation hearings. But rising political tension confirms that his next term will be far more stressful than his first
Just one day before that broadcast, President Obama announced the "Volcker Rule," which proposes to restrict speculative investments made by banks. Former Federal Reserve Chairman Paul Volcker stood towering next to the President during the announcement. The diminutive figure of Treasury Secretary Geithner stood several feet away from the President. The setting suggested Obama was leaning more heavily on Volcker’s advice than that of his Treasury Secretary. Following the announcement of the Volcker Rule, media discussions revolved around whether Geithner would last much longer. On January 27, Geithner appeared before the House Oversight Committee concerning another AIG bailout controversy. One member even asked Geithner whether he should step down as Treasury Secretary. Like Bernanke, Geithner is also sailing through the choppy waters of an increasingly negative social mood. Only time will tell if he’s able to keep his boat from capsizing as waters become more agitated.
On January 27, President Obama’s lengthy State of the Union address included a direct rebuke of a recent Supreme Court decision (allowing direct corporate contributions to political campaigns). The cameras saw Justice Alito shaking his head and apparently saying, "definitely not true." Supreme Court Justices are rarely spoken to directly in a State of the Union speech, never mind openly criticized. Chalk it up to Washington’s growing political resentments.
The political strife mirrors recent stock market action, which saw its worst three day decline (January 20-22) in months, breaking the uptrend line from the March 2009 low. The NASDAQ lost 5.4% in January; the Dow Industrials fell from 10,729 on January 19 to 10,067 on January 29. It was the worst month for the blue chips since February 2009.
The Wave Principle suggests the downward trend in social mood has further to travel. Our research indicates that what’s ahead may be worse than a severe bear market. The January issue of The Socionomist reveals what can ultimately result from an increasingly negative social mood. The research is uniquely thought provoking — and seriously sobering. The Socionomist doesn’t set out to be unduly alarming, yet it does spell out the candid facts and evidence about what may affect your personal safety in the years ahead.
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