Tuesday, September 20, 2011

People On Ludes Should Not Drive

One of the tenets of socionomics (as I read it) is that during periods of net positive mood bias, especially the massively optimistic phase that metastisized in the 1990s, a People will turn to caffeine, sugar, uppers and other stimulants to accentuate the buzz and excitement of a Bull era.

As we transition to a deeply net negative mood era, one can expect the "uppers" industry (both legal and illegal) to suffer, while "downers" get a new lease on life. 

One example of this can be found in a recent National Survey on Drug Use and Health (NSDUH).  This survey is a great example of using a headline to simplify complex behavior: 

National survey shows a rise in illicit drug use from 2008 to 2010
SAMHSA News Release, 8 September 2011
The use of illicit drugs among Americans increased between 2008 and 2010 according to a national survey conducted by the Substance Abuse and Mental Health Services Administration (SAMHSA). The National Survey on Drug Use and Health (NSDUH) shows that 22.6 million Americans 12 or older (8.9-percent of the population) were current illicit drug users. The rate of use in 2010 was similar to the rate in 2009 (8.7-percent), but remained above the 2008 rate (8-percent).

So, there you have it.  People continue to do drugs even when the Powers That Be say they shouldn't and the number of people is increasing according to this survey.

However, digging deeper, you can detect socionomics at work:

...An increased rate in the current use of marijuana seems to be one of the prime factors in the overall rise in illicit drug use. In 2010, 17.4 million Americans were current users of marijuana - compared to 14.4 million in 2007. This represents an increase in the rate of current marijuana use in the population 12 and older from 5.8-percent in 2007 to 6.9-percent in 2010...

...The number of current methamphetamine users decreased by roughly half from 2006 to 2010 -- from 731,000 people age 12 and older (0.3-percent) to 353,000 (0.1-percent). Cocaine use has also declined, from 2.4 million current users in 2006 to 1.5 million in 2010...

Now, from what my friends and the cops who taught my DARE class many years ago tell me, the effects of marijuana are generally to slow things down a bit, while meth and coke tend to pep one up.

The Socionomist has had a number of outstanding research papers on the Drug War and Marijuana Prohibition over the last year or so and I suggest you review them.  The social trends driving the passions behind the drug war and drug use in general seem to be shifting and we may not recognize the legal landscape when it comes to drugs, booze and other mood-altering techniques.

In a recent issue of either the Elliott Wave Theorist or the Elliott Wave Financial Forecast, it was suggested that one way to play this move towards downers would be to open a micro-distillery.  Not a bad idea at all in my opinion.  Might be time to check the laws in your state regarding micro-distilleries and then try and hunt down Grandpa's recipe for White Lightning.

And as more and more folks turn to downers, always recall the words of wisdom from Jeff Spicoli in Fast Times at Ridgemont High, a movie made during another net-negative mood period (1982):  People on Ludes should not drive.

Tuesday, September 13, 2011

Defense on the Field

I've been thinking a lot lately about what comes next.  Events in Europe continue to weave a pattern and build a story expressing extreme negative mood.  Here in the U.S., the popularity of El Senor Presidente and the ladies and gentlemen making up the Senate and House continue to plumb new lows.  Items like that continue to show, in my opinion, that we are going to see the elites in politics and finance discredited to a degree most can't envision right now. 

I viewed Robert Prechter's video presentation of his August Theorist recently. Watching him step through not just the bear case, but his projections for the near future makes for one amazing presentation.  This only adds to the conviction that we best hang on tight.  The overlay between current equity market patterns and the patterns formed back in the 1930's are striking.  If his projections are correct, we have several more years until the "ideal" date for the bottom is reached and there will be massive unrest and uncertainty in society and politics between here and there.

Down in the trenches, we can see how the stress of this uncertain environment is making itself felt.  Here is a Google Trends result for the search terms "apply food stamps"

And here is a Trends result for the search terms "buy seeds"

I view these as important as they relate to food.  I may be pushing it here, but if we are all subject to mass herding and subconscious survival impulses as posited by socionomics, I'd expect food and food security to be a primal urge that would need expression in uncertain times.  Even though most people are not going to grow more than a trace fraction of food in their own garden, this series of "higher highs and lower lows" year-over-year from 2007, give a glimpse into the collective mind. 

The upward trend of the "apply food stamps" search terms is another indicator of stress.  Expect that one to go exponential soon.
I hope and assume you have your defensive positions in place.  For the few readers with considerable wealthy out there, you are probably as well hedged as you are going to be.  For the rest of us, defensive positions will mean a lot of things in addition to money.  These are things I've harped on before - know your neighbors, try to build up a network of friends you can rely upon, be active in making your community, your neighborhood or at least yourself resilient, have a few gardening tools on hand, pick up a few handy skills - you never know what you are going to need to be able to barter or trade in the coming years as we prepare to accelerate the plunge to lows in markets and mood that most can't picture right now.

If your defense is not set up yet - do it.  Then, while others are scrambling, you can begin to plan to go on offense at the bottom.  We are going to be able to build the foundation for great fortunes and great success in a few short years.  But we have to be able to ride the storm out between now and then.

Batten down the hatches and best of luck.

Wednesday, September 7, 2011

Culturnomics

I blog a good bit on Socionomics, a very useful model for behavior and forecasting. Just ran across a journal article (h/t Next Big Future) describing something called "Culturnomics," which appears to be an attempt to aggregate media sources to predict trends.

Here is the abstract from their article at First Monday:

Culturnomics 2.0:  Forecasting Large-Scale Human Behavior Using Global News Media Tone in Time and Space
by Kalev H. Leetaru, First Monday, Vol. 16, No. 9, 5 September 2011
News is increasingly being produced and consumed online, supplanting print and broadcast to represent nearly half of the news monitored across the world today by Western intelligence agencies. Recent literature has suggested that computational analysis of large text archives can yield novel insights to the functioning of society, including predicting future economic events. Applying tone and geographic analysis to a 30–year worldwide news archive, global news tone is found to have forecasted the revolutions in Tunisia, Egypt, and Libya, including the removal of Egyptian President Mubarak, predicted the stability of Saudi Arabia (at least through May 2011), estimated Osama Bin Laden’s likely hiding place as a 200–kilometer radius in Northern Pakistan that includes Abbotabad, and offered a new look at the world’s cultural affiliations. Along the way, common assertions about the news, such as “news is becoming more negative” and “American news portrays a U.S.–centric view of the world” are found to have merit.

No mention that I saw of Prechter, et al, or even the more odd-ball work done over at HalfPastHuman (caution: extremely high woo-woo content).

I am very intrigued by the concept of a "media civilization" and how that might affect social mood "patterns" for various places around the world. Not sure how well the "Culturnomics" hypothesis will hold up without a solid framework (like the structure the Elliott Wave Theory gives to Socionomics), but it is great to see that academia is beginning to take "tone" and "mood" more seriously as drivers of social change.

The growth of interconnected communications networks look to finally make it possible to build tools to create benchmarks of social mood - just as mood is plunging and, if the socionomic model (as I interpret it) is correct, just as societies and governments are clamping down on those communications networks.  Sigh.

Tuesday, September 6, 2011

Broke Back Market

Looking at my Yahoo! Finance page this morning, I see the 10 year yielding 1.941%, the S&P 500 down 2.49% and growing talk of an insolvent Europe facing the collapse of the Euro currency regime.

Take a moment and think back to 1999. If someone had told you that in 2011 the 10 year would be below 2%, that the DJIA, S&P and NASDAQ would have not made any net gains over that time, that rumors would be swirling about the imminent destruction of the Euro, that the U.S. would be fighting multiple wars overseas and that the U.S. debt would be over $14.5 trillion - what would your impression have been about what life would be like for an everyday citizen of the U.S. in that far-away year?

Tough times are coming. Hell, tough times are here for the over 16% of the population un- or under-employed. Things will get rougher in politics, society, the media and religion. You think people are angry and polarized now? Well, just wait.

Knowing worse is to come, take some comfort from the fact that even with the foreknowledge of rough times to come, it does not mean that life will be unbearable, or "nasty, brutish and short." Keep your head about you as we ride this wave down. There will be plenty of opportunities to do good to a neighbor, to learn a skill, to invest in your community and to maybe even plant the seeds of future wealth.