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Social Mood, Stocks and Epidemics
As prices fall, susceptibility rises
The lead article in the first issue of
The Socionomist is beyond timely.
A Socionomic View of Epidemic Disease: A Looming Season of Susceptibility is Part One of an exploration of the mechanisms by which social mood affects our psychology, physiology and susceptibility to epidemic disease. It has been in the works for months. Part Two will publish in June.
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Social Mood, Stocks and Epidemics
by Alan Hall
Social mood governs a plethora of human social activities, from stock markets to the economy to societal health. For example: as measured by the stock market, we recently completed a large wave in a powerfully-negative social-mood trend. It bottomed amid extremely pessimistic sentiment. Social stress reached higher levels than it has in decades. Soon after, H1N1 swine flu erupted and came right to the edge of being a pandemic. If this was the only such instance of disease breaking out after a social-mood decline, it might be coincidence, but there are numerous examples in the historical record.
As you can see in the chart of the MSCI World Stock Index below, there are similarities between the 2003 SARS epidemic and today’s flu outbreak.
This chart is not in Part One of
A Socionomic View of Epidemic Disease in the brand-new inaugural issue of
The Socionomist. We didn’t need it. We have five other charts that show the strong connection between negative social mood and increased human susceptibility to epidemics.
SARS and swine flu occur at similar positions in the pattern of the MSCI World Stock Index: soon after a strong negative mood trend lowers stock prices and elevates social stress. But there are interesting differences in the social reactions to the two epidemics. People made SARS jokes in 2003, but nothing like the derisive humor now being aimed at swine flu and those who warn against underestimating it.
With reports now indicating that H1N1 flu is waning -- much like the 1918 Spanish flu did after its mild first wave passed -- a historically-high level of complacency is returning to the social environment, mirroring the return of optimism in the stock market. There are abundant signs of this in the rapid outbreak of swine flu jokes, fashion jewelry, tee shirts, songs, dances and the widespread accusations that the media and World Health Organization overreacted.
The rampant disregard for the threat of disease is a strong indication that the complacency that is characteristic of major peaks in social mood is still strong. This is not a sign of a bottom.
You may want to learn more about the connection between social mood and disease. In 2006, the Public Library of Science published a peer-reviewed systematic review of all the studies done on the 2003 SARS epidemic. It found no evidence that antivirals, steroids or other therapies helped patients. A few studies suggested that these therapies caused harm. In other words, we didn’t conquer the disease; it seemed to subside on its own.
Swine flu may do likewise, or as WHO warns, could mutate and resurge in a more virulent form. As many people recently learned with their finances, you shouldn’t count on the government to protect you. Government is the ultimate herd; doomed to react.
Instead of being "swept along" by social trends, you can anticipate them. You can indeed be prepared take advantage of the changes no one else sees coming -- and the trend changes range from politics to religion, mergers to marketing, fashion to medicine to security and beyond.
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A Socionomic View of Epidemic Disease:
A Looming Season of Susceptibility
- Disease during bear markets: the 600-year history that even historians will find fascinating
- A "Sentimental" Picture of Health: How the optimism and complacency of a bull market dissipate, leaving the population vulnerable to disease
- The two most important pandemics of the past 1,000 years: The untold story of how these killer outbreaks happened during (or at the end of) bear markets
- The analysis showing why the end of bear markets are more dangerous than their beginning -- including the recent history of the infectious disease that has killed 25 million people worldwide
- The "false alarm" in the United States that nobody learned from: Government is bound to repeat the mistakes of this earlier "chaotic drama" (it was an episode you may remember yourself)
- The Socionomist also contains three other timely articles, on Skyscrapers, Radical Islam, and our section on Signs of Shifting Mood. The issue is filled with insights you won’t find anywhere else.