Epidemics, Markets, and a Model Crisis

Alan Hall is Senior Research Analyst at the Socionomics Institute. He has authored socionomic studies on Russia, European housing, war, stocks, commodities, politics, environmentalism, education, social health, epidemics, eugenics, secessionism and authoritarianism. He wrote the lead articles for the inaugural issues of The Socionomist in May and June 2009, and contributed to Global Market Perspective, The European Financial Forecast and The Elliott Wave Theorist.

You can follow him on Twitter @Socionomics

For more on Alan Hall, click here.

It’s widely believed that epidemics make people fearful. I disagree. I think that fearful people are more susceptible to epidemics. And I have socionomic research to back me up.

Socionomics posits that the trends in social mood — that is, widely-shared feelings, including those of optimism and pessimism — unfold in a hierarchical patternrn of similarly-shaped waves that are visible in charts of stock prices, which are our most sensitive meter of social mood.

Major epidemics occur near lows in social mood — often near significant, fearful bottoms in stock prices — and can persist well into the subsequent uptrend.

This is particularly important now because our socionomic and Elliott Wave analysis suggests that social mood has completed an upward wave of monumental size and shifted to the negative at Grand Supercycle degree (that’s one degree larger than the change in mood that created the Great Depression)!

This shift is driving rapid changes — for the worse — in financial markets, economies, personal fortunes and the quality of life.

And the scale of this mood shift means that the bulk of the largest bear market since 1720 still lies ahead, increasing our risk of an encounter with one of the grim reapers of major social mood decline: epidemic disease.

The first step toward preparing for the increased risk of disease is to understand the engine that drives it.

For whatever reason, disease sometimes plays a prominent role in major corrective periods, with some Cycle and Supercycle degree corrections containing epidemics and larger ones pandemics. See for yourself…

See larger image

This is a chart of inflation-adjusted U.S. stock prices dating from 1888, the year Louis Pasteur opened his laboratory and the approximate advent of germ theory, which radically improved medicine.

Prior to this period, epidemic disease was far more prevalent across the timeline but still occurred a significant majority of the time during bear markets.

The shaded areas in the chart are the bear markets and the arrows show three periods of major U.S. epidemics, which in each case breached human defenses near the ends of social mood declines that lasted twenty years on average. Notice that the single exception was the Asian flu in 1957 and that the H1N1 flu pandemic of 2009 erupted right on schedule.

As you can see, we’re about 14 years into the current bear market. Social stress is rising as we approach another one of these dangerous junctures, far bigger than the previous three. It should bring one or more epidemics and, could culminate in a pandemic.

“But what about our quality of life today and our access to advanced health care? Surely that will prevent any epidemic or pandemic?” I hear you ask. And my answer is that, while we may seem “invincible” today, we’re anything but, and I’ll explain why at the Irrational Economic Summit this October 16–18 in Miami.

I’ll share details of the bacterium that has spread beyond hospitals to inhabit ocean water and beach sand, and which is now described as a major public health problem…

Of the Tamiflu-resistant influenza A viruses that are now spreading widely across the U.S…

And the disease that public health officials claimed in 2000 had been “eradicated from the U.S.,” but that has suddenly flared back into existence, showing a 68% increase in just one year…

I’ll also share with you the evidence that the ultimate driver of epidemics and pandemics is social-mood change, which in turnrn leads to changes in social behavior and perhaps in individuals’ constitution. And, perhaps the most important insights I will share are how and why stock markets give you advance warnrning of elevated risks to your health.

See you there.

Alan Hall


Note: Alan Hall is also contributor to the monthly newsletter The Socionomist, which is all about anticipating major social changes, making right-minded decisions, and gaining an edge in your marketplace. The information provided each month could literally mean the difference between surviving and prospering in the changing times ahead. You can learnrn more by visiting: www.elliottwave.com/wave/IES2014.