How about social mood? Here is a chart reproduced from Google's Preview of Robert Prechter's 2002 treatise, Conquer the Crash.
Notice how the 1987 stock market crash does not stand out on this chart. Unlike the wise counsel of Warren Buffett and the CNBC cheerleaders, this is no 1987 whereby the sooner one bought back into the market, the better the ultimate profits gleaned from the fervent bull market of the 1990's.
From Conquer the Crash :
"Major stock market declines lead to lead directly to depressions. Figure 2-1 [above] displays the entire available history of aggregate English and American stock price records, which go back over 300 years. It shows that depression has accompanied every stock market decline that is deep enough to stand out on the long term graph. There are three such declines, which occurred from 1700 to 1784, 1835 to 1842 and 1929 to 1932."
THIS TIME IS DIFFERENT!
Back in the late 1970's I was a wet behind the ears attorney in Atlanta with a strong addiction to the stock market. It wasn't long before I discovered another young addict, Robert Prechter, just up the road in Gainesville, Ga. He was my first (of many) market gurus, introducing me to a novel form of technical analysis deemed, The Elliott Wave Principle. Using Prechter's book and his thrice a week telephone updates, I made my first small fortune in the stock market.
After the 1987 crash Prechter got out of the market and he handed his short term advisory service over to a succession of less competent advisers. Before the current guy, Steven Hochberg came on board, I was long gone as a subscriber and as a Wave student. It wasn't until Prechter's greatest accomplishment (in my opinion), his 1999 book, The Wave Principle of Human Social Behavior and the New Science of Socionomics
did I return to the fold, this time not so much as a way to trade stocks, but as a way to understand life, society and economics.
As I read over the Internet this Saturday in October, 2008, I can't help but be amused by the near total obsession with getting in the market at "the lows" "the bottom" "the turn of the screw". By order of no one else but the Emperor Warren himself, the market has been commanded to stop it's decline and soar to new heights. Everyone is pointing to previous lows in the great bull market of the 20th century as their example from which they are taking their current marching orders. In the likely face of an economic depression, I don't think so.
"Stocks are not registering a Supercycle top like that of 1929 but a Grand Supercycle top....That means that the ultimate---if not the immediate---consequences will be more severe and more confounding than the consequences of the 1929-32 crash. As Chapter 5 of At The Crest of the Tidal Wave explains, the entirety of the Grand Supercycle wave IV should last a century and comprise two or three major bear markets with one or two intervening bull markets."--Conquer the Crash, Robert R. Precther, Jr.
It is not Robert Prechter that is saying it's different this time, nor is it Allan Harris saying it's different this time. It is civilization itself, it's history, it's psychology, it's the tide of economic life-death-life that is saying, yes, it is different this time.....and, if course it's this guy:
The line it is drawn The curse it is cast The slow one now Will later be fast As the present now Will later be past The order is Rapidly fadin'. And the first one now Will later be last For the times they are a-changin'.