September 26, 2012
Wealthy Catalonia—which generates a fifth of Spain’s economic output—is broke, thinks its taxes are too high and wants to secede from Spain, also broke. They both need a bailout from the EU, which demands austerity. Today, Madrid police shot anti-austerity protesters in Neptune Square with rubber bullets and beat them with batons. Similar violence and calls for a nationwide anti-austerity strike erupted in Greece today. You might wonder why Spanish and Greek social mood is so negative with Madrid’s IBEX Index and Greece’s ASE Index bouncing nicely in recent months. But the rallies remain dwarfed by—and barely recover from—Spain’s multi-year 63% decline and Greece’s 90% drop that preceded. Expressions of social mood, such as protests, strikes and secessionism, lag stock markets. Negative social mood will be raining on Spain and Greece for awhile.
Similarly, U.S. stocks rallied from January 1860 to March 4, 1861, when seven states seceded from the Union. That rally, too, was dwarfed by the previous seven-year, 56% decline. And as in Spain and Greece, that was the second decline in a larger bear-market pattern, the point when people get seriously angry. Click here to read more about secessionism in bear markets.
If you look closely, you can see patterns in social mood that help you predict social trends. Learn more with the Socionomics Premier Membership.