Professor Elam

I have written about socionomics, the idea taht popular mood influences what happens in our lives. This manic depressive cycle is most prominentlty displayed in the stock market. People buy when they are happy and sell when they are unhappy.

I have been unable to post responses to your comments for some reason, a glitch in tht typepad server apaprently. Andrea M. wonders if Wall Street will ever be the same and just how do people feel that work there.

Big picture, the economy moves in cycles. Oil were

36 in 1981

12 in 1986

low 20s in the 1990s

12 in 1998-6

145 in 2008

60 bucks or so at the moment

Side comment, can you see why I do not live in the oilfield economy of Odessa, TX any more, but i digress. Hoqw edo you suppose someone feels that lives and tries to maintain a life or business when the economy is a derivative of the oil price?

Stocks were

800 in  1982, 14,000 in 2008, now 9000

Gee, same thing.  Part of my message is that one needs to examine where you are in the cycle to maintain some semblance of sanity and reason to handle the events about you. The idea of socionomics is that the mood swings of people determines what hapens, not the other way round. Stocks are donw because the mood turned negative. I have posted numerous observations that support this thesis from the kind of movies we watch to television to political candidates, ie, we want change.

As for going after the bad guys, there is too much culpability in both political parties to really do that. Republicans sponsored the Commodity Modernization Act thanks Phil Gramm that led to Credit Default Swaps. Democrats refused tighter controls over FNM and FRE after the Community Development Act that urged banks to make loans to sub prime borrowers, thanks Bill Clinton and Barney Frank.  The SEC that is supposed to ride herd on brokers and public firms as far as I can tell just shuffles paper and asked for more paper after SARBOX but never really DID anything to stop any of this. And the accountants, well they have just been along for the ride collecting fees.

As Bernie Goldberg remarked on tv the other night, indeed we are doing better in Iraq, but people are tired of the war and the problems of those folks. Like in the 1930s, focus will now turn inward, same thing by 1974 after years of the war in VIet Nam, enough people say. Is this a good think, I don't know but that is what is happening.

Interestingly, the Dow Utilities are performing the beast of the three DOW indices, I guess we will still have the lights and tv one no matter what.