Social Mood Conference  |  Socionomics Foundation
By Matt Lampert & Mark Galasiewski | Excerpted from the December 2012 Socionomist

Originally published under the title, “As Mood Goes, So Goes Arab Spring and the Middle East”



[Ed. In one of our most popular and relevant articles ever, socionomists Matt Lampert and Mark Galasiewski explain that recent major events of unrest and conflict in the Middle East and Asia are expressions of negative social mood.

[Socionomists can use the same template to understand and anticipate social breakdowns anywhere and throughout history.

[Here is an excerpt of Lampert and Galasiewski’s December 2012 article.] 

…Troubling Signs
In October 2008, many Asian markets had fallen by 50% and more in a year. Volatility was at an all-time high. In the US, Lehman Brothers had filed the largest bankruptcy in history, by multiples.

… Many emerging markets registered price lows in October 2008 and began to rally. But most developed markets continued to new lows in 2009. Some markets, especially in Arabia and southern Europe, continued lower even beyond 2009. The Asian-Pacific Financial Forecast (APFF) pointed out that the October 2008 juncture had implications not only for stocks but also for non-financial social events:

If this analogy and forecast are correct, investors should be even more alert to the possibility of what comes along with … major declines within bear markets—that is, outbreaks of violence.

Growing Hostilities
Social events soon began to fall in line with APFF’s forecast. Just weeks after the October 2008 issue was published, Islamic extremists killed 164 people during a series of attacks on downtown Mumbai. A six-month Egypt-brokered truce between Israeli and Palestinian forces came to a halt in December. Hamas leaders declared an end to the ceasefire, and in response to rocket fire into Israel from Palestinian militants, Israel launched air strikes in cities across Gaza. Both sides ratcheted up the violence, and Israel continued its military assault with a ground invasion in Gaza in early January. APFF put the conflict’s escalation in socionomic perspective in this commentary, issued six days after the ground invasion began:

Socionomics allows us to find some order in the chaos. The negative trend in social mood that is responsible for stock market declines also manifests itself in other social activities, such as politics. The severity of the Israeli behavior mirrors the severity of the decline in Israel’s stock market leading up to the recent conflict – a 60% correction, its largest in at least 17 years. A similar collapse in social mood appears to have motivated calls for extreme violence on the Palestinian side as well.

Figure 2 pinpoints the timing of key events on charts of Israeli and Jordanian stock prices.

Figure 2

Figure 2

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In the remainder of this five-page article, authors Matt Lampert and Mark Galasiewski examine the Arab Spring revolts in the Middle East and the 2009 post-presidential election uprisings in Iran through the socionomic lens. They explain that “as mood goes, social events will follow.” Current events in the Middle East provide a dramatic, ongoing example.

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Socionomics InstituteThe Socionomist is a monthly online magazine designed to help readers see and capitalize on the waves of social mood that contantly occur throughout the world. It is published by the Socionomics Institute, Robert R. Prechter, president; Matt Lampert, editor-in-chief; Alyssa Hayden, editor; Alan Hall and Chuck Thompson, staff writers; Dave Allman and Pete Kendall, editorial direction; Chuck Thompson, production; Ben Hall, proofreader.

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Most economists, historians and sociologists presume that events determine society’s mood. But socionomics hypothesizes the opposite: that social mood regulates the character of social events. The events of history—such as investment booms and busts, political events, macroeconomic trends and even peace and war—are the products of a naturally occurring pattern of social-mood fluctuation. Such events, therefore, are not randomly distributed, as is commonly believed, but are in fact probabilistically predictable. Socionomics also posits that the stock market is the best available meter of a society’s aggregate mood, that news is irrelevant to social mood, and that financial and economic decision-making are fundamentally different in that financial decisions are motivated by the herding impulse while economic choices are guided by supply and demand. For more information about socionomic theory, see (1) the text, The Wave Principle of Human Social Behavior © 1999, by Robert Prechter; (2) the introductory documentary History's Hidden Engine; (3) the video Toward a New Science of Social Prediction, Prechter’s 2004 speech before the London School of Economics in which he presents evidence to support his socionomic hypothesis; and (4) the Socionomics Institute’s website, www.socionomics.net. At no time will the Socionomics Institute make specific recommendations about a course of action for any specific person, and at no time may a reader, caller or viewer be justified in inferring that any such advice is intended.

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