The Crow's Nest

Waiting for Shoes to Drop

Mon, 21 Dec 2009 23:42:36 GMT

When I see a configuration that signals an extreme change, such as the sudden shift in perception regarding inflation and view of the U.S. government mentioned in the previous post, I watch and wait to find out what actual event(s) might possibly correspond with this. The climax for such a shift, according to this month's MoodCompass should be early this week. While there has been a slight elevation in the frequency of discussions of inflation and the wide credit spreads, there has been little that could possibly interest the average American or world citizen. At such a moment as this, I must pause and wonder if something noteworthy will occur at all. However, part of the hazard of doing this forecasting work, especially with a tool as reliable as the MoodCompass has shown itself to be, is that when a high risk event configuration does appear to be near, I must resign myself to waiting for some kind of "shoe" to drop. The good news, I suppose, is that if a few more days go by with not much happening, I can let it all go, and completely focus on sipping eggnog with friends. May your holidays be bright, and of few "shoes" dropping.

Who's Afraid of Inflation?

Sun, 13 Dec 2009 22:24:17 GMT

The theme for the coming week is "unintended consequences." The developed world has been in the midst of a manic binge of overconsumption for quite some time. Just like with an individual person, prolonged extreme mania is often followed by a severe depression (after the extreme mania of the 1920's, the depression of the 1930's naturally resulted). World governments have done their best to forestall an economic depression by continuing to pump "stimulus money," the economic equivalent of adrenaline, into the global system. To not have done so would have been catastrophic. Yet, is it possible that they just traded in one set of problems for another? How long can one keep going on stimulants without some sort of breakdown? Should we expect anything less drastic from something as complex as the current world order?

The indications for the coming week are for an extreme surge in inflation concerns. While this could be a final surge before deflation sets in for a time, the strength of it could still be quite alarming, especially to those who pay attention to such things on a daily or weekly basis. The likely manifestations to go along with this are a sharp spike back up in gold, silver, and other commodities; a decline in the U.S. Dollar; a dramatic sell-off in U.S. Treasuries; and diminished confidence in the U.S. government, and the global system as a whole.

Dec. 14 - 20: Sharp sell-off in U.S. Dollars and/or U.S. Treasuries. Inflation concerns skyrocket. Global system appears to be breaking down. Diminishing confidence in the U.S government. (MoodCompass, Dec. issue, pg. 2).

Will Increased Violence hurt Copenhagen?

Sun, 06 Dec 2009 17:46:13 GMT

Dec. 7 - 16: Directed Volatility, Outrage Violence is on the increase, and possible displays of discontent or civil unrest. (MoodCompass, Dec. issue, page 10).

There has already been a lot of skeptical press about the futility of Copenhagen. As desperate as the situation is, as serious as the threats are to the planet, there is little liklihood that any government will be willing to bear the political costs of actually insuring that the kinds of cuts required will actually be made. Climate activists and others who are aware of how serious the situation is, are feeling increasingly desperate.

The Copenhagen climate talks begin on Monday December 7. Social mood projections are for increased violence, protests, and civil unrest beginning on the same day. While outbursts of outrage could show up anywhere on the planet, I have to wonder whether these two factors will intersect in Copenhagen. If they do, will it help draw attention to the climate change problem, or will it only distract from the business at hand? Is there anything that anyone can do that will actually cause needed changes to take place? Important questions that need to be answered.

On the positive side, at least for Copenhagen, our social maps for the month show that increased violence or civil unrest is most likely in Mexico, the U.S., Pakistan and India. The risk is also somewhat elevated in Russia (we have already seen some of that this month). Best wishes for a fruitful and peaceful event to both delegates and protesters in Copenhagen.

December 2009 - Spending Sprees and Hangovers

Fri, 04 Dec 2009 21:02:19 GMT

Below is an except from this month's MoodCompass:
- - -
Since September, the global mood has been in a process of peaking optimism within a larger downturn (that is still only just beginning). It has been difficult for many to truly believe in an economic recovery, but more and more have decided to embrace it whole heartedly. While efforts to keep the global consumption machine moving have been no less than heroic, they cannot much longer forestall the inevitable. Trying to spend one’s way out of a situation that resulted from over consumption and over spending in the first place is like trying to pick oneself up by one’s own boot straps. Eventually, the result is falling on one’s face. The topping process in the markets and the recovery is nearly complete. This month is a glimpse at some of the unintended consequences that have been purchased in an attempt to continue to keep the global wheels turning at an unsustainable pace.

Beginning with the second week of December, geopolitical concerns are on the rise. Key global players such as China and the United States may be less than cooperative with each other; Russia may be at odds with Eastern Europe; and we must not forget the wild cards—Iran and N. Korea which may add renewed trouble to the global balancing act at a moment’s notice. Displays of discontent or unrest are more likely on a global scale, and incidents of violence may be seen to be up as well. In the middle of the month, there are indications that inflation concerns will rise dramatically. This should be accompanied by either a sharp sell-off in U.S. Dollars, U.S. Treasuries, or both. Concurrently, confidence in the U.S. government will diminish, and there may be worries that the global system is breaking down. Immediately surrounding the Christmas holiday there may be some relief. However, as the New Year begins, geopolitical worries and systemic risks again come to the foreground as noteworthy threats to the fragile house of cards that have been so carefully stacked in place.

- - -
http://anewstory.org/moodcompass.htm (current issue viewable by research sponsors only; reprinted with permission of A New Story Foundation)

Spending Sprees and Hangovers - December 09 Videocast

Wed, 02 Dec 2009 03:49:25 GMT

The Global Mood "Weather Forecast" for December 2009. Increased global tension, U.S. Dollar or U.S. Treasuries sell-off, increased discontent or unrest, and west coast earthquake are the highlights.

This week: A Geopolitical Spike

Sun, 22 Nov 2009 16:02:18 GMT

Between November 19 – 23, the geopolitical situation changes dramatically, and crude oil may experience a sharp spike. The geopolitical picture stabilizes somewhat as December begins. (MoodCompass, Nov 2009, pg 14).

There is a high correlation between changes in society's view of the outside world and the price of crude oil. This allows us to produce the chart below which holds a lot of key information about global economic and geopolitical shifts in November. The orange line correlates with concerns about inflation. As it bottoms out near November 22, one would expect inflation concerns to be replaced with deflation worries. That's exactly what happened in the market place: U.S. Treasury prices climbed as rates went lower, the U.S. Dollar climbed and commodity prices sold off.

Then near Nov. 19, the purple line or "perceived geopolitical threats," becomes the primary issue, and is elevated through the end of November. It is interesting how this has played out so far: Iran declined the world offer to enrich its uranium on Nov. 19, and has initiated a series of war games on Nov. 22, right in the center of the geopolitical spike on this chart. This is a great example of what makes the MoodCompass so fascinating to work with.

Next Week: Market Meltdown

Fri, 06 Nov 2009 20:02:44 GMT

The social mood configuration for next week infers a collective search for safety or an avoidance of risk taking. This has particular economic significance, as this configuration has not been seen since last February, before the big market rally that has been occurring since March.
- - -
Excerpt from the November MoodCompass:

November 9 - 15: Market Meltdown. Safety seeking. Inflation concerns are replaced with concerns of deflation. Likely commodity sell-off and Dollar rise. U.S. centered economic crisis. Markets may decline sharply.
- - -
From the Week by Week Highlights of Global Mood, Perception, and Behavior on Page 2 of the November MoodCompass: http://anewstory.org/markets/Nov09_MoodCompass.pdf (current issue viewable by research sponsors only; reprinted with permission of A New Story Foundation).

November 2009 - Desperate Measures

Sat, 31 Oct 2009 03:27:51 GMT

Below is an except from this month's MoodCompass:
- - -
There is a sense of desperation to the month of November which is likely to challenge world leaders to find new and creative solutions to long standing problems. There are economic concerns that “stimulus” has not yet been able to make go away, and chronic geopolitical issues that continue to go unresolved. In the first half of the month, the primary focus is economic and currency issues. There may be one last big panic over the fate of the U.S. Dollar, after which it should continue to show new strength. As the seriousness of the economic situation begins to become clear, inflation worries will be replaced with concerns about deflation, and global markets could see a sharp, but likely brief, sell-off. The yet unresolved unemployment situation may require new and innovative responses from federal and state governments.

The focus shifts in the second half to the world arena. A polarization develops between “good guys” and “bad guys” (the identification of the good guys and bad guys would be in the eye of the beholder). There is a societal sense of righteousness and unity against an enemy or cause. While it would make sense that a specific event would cause such a response, there is no direct indication as to whether such an event is likely to occur or what it might be. Because there appears to be some relationship to this polarization with the energy markets, there is a good possibility that it involves Iran and possibly Russia.
- - -
http://anewstory.org/markets/Nov09_MoodCompass.pdf (current issue viewable by research sponsors only; reprinted with permission of A New Story Foundation)

Caution, Violent Week Ahead!

Mon, 26 Oct 2009 05:18:38 GMT

The global mood configuration for this next week indicates that it has the potential to be the most violent period this month. It might be of interest to watch the news this week to see how and where this manifests.

- - -
Excerpt from the MoodCompass:

October 26 – Nov 1: Volatility. Resolution of global tension received as “bad news” (i.e. a negative event). Geopolitical concerns rise sharply. People are angry. Violence is increasing.
- - -
From the Week by Week Highlights of Global Mood, Perception, and Behavior on Page 2 of the October 2009 MoodCompass: http://anewstory.org/markets/Oct09_MoodCompass.pdf (current issue viewable by research sponsors only; reprinted with permission of A New Story Foundation).

On The Brink - November 09 Videocast

Sat, 24 Oct 2009 00:33:06 GMT

The Global Mood "Weather Forecast" for November 2009. US centered economic chaos, Military display(s) of force, Hawaii event, and more swine flu are the highlights.

Is the Dollar Really Dead? Don't Fall For It!

Sun, 18 Oct 2009 23:42:17 GMT

Many have been discussing the Dollar's demise. There have been panic sell-offs of Dollars in the forex market, and U.S. Treasuries are being abandoned wholesale. Yet, this is the kind of extreme in sentiment that most often occurs at a market top or bottom. It's true that the U.S. government is borrowing unprecendented amounts of money. It's true that some countries including China, the U.S.'s primary creditor, is exploring alternatives in reserve currencies. However, as much as China, Russia, Iran, and other nations might wish there were another place to turn, the global system is intricately complex, and rests on a foundation based in debt and U.S. Dollars. Things can not safely change that fast. Also, as global anxiety climbs, and people are once again forced to liquidate assets that are primarily priced in Dollars, the U.S. currency will rise in value against the "commodity" currencies.

Even if there is still one more brief, but possibly extreme panic, holders of the U.S. Dollar will once again find their currency gaining in favor. Inflation worries will be a spector of the past, and deflation will once again be the primary concern. We've been here before. This is what it looks like at a social mood top, as markets in general begin to break down once again, and as Treasuries and the U.S. Dollar are sought as "safety." The Dollar may indeed collapse at some point, and inflation may very well soar to unbelievable heights as resources become more scarce. However, for now, and perhaps for some time to come, the Dollar may find support as the Great Recession continues to play out, and the spectre of Depression once again begins to lurk in the shadows.

---

Excerpt from the October 2009 MoodCompass:

October 19 – 25: A Solution? U.S. government crisis resolved one way or another. U.S. Dollar declines sharply. Inflation concerns up sharply.

From the Week by Week Highlights of Global Mood, Perception, and Behavior on Page 2 of the October MoodCompass: http://anewstory.org/markets/Oct09_MoodCompass.pdf (current issue viewable by research sponsors only; reprinted with permission of A New Story Foundation).

The Next Two Weeks - Chaos

Sun, 04 Oct 2009 15:55:13 GMT

October 5 – 18: Chaos. Civil unrest in the U.S. and elsewhere. World leaders try to maintain stability. Possible E. Asia event (Japan earthquake?). Stock market lower. U.S. Dollar stable, and likely up.
- - -
From the Week by Week Highlights of Global Mood, Perception, and Behavior on Page 2 of the October MoodCompass: http://anewstory.org/markets/Oct09_MoodCompass.pdf (current issue viewable by research sponsors only; reprinted with permission of A New Story Foundation).

October 2009 – Chaos, Mayhem, and Armageddon

Tue, 29 Sep 2009 02:31:11 GMT

Below is an except from this month's MoodCompass:
- - -

October is seasonal for mischief, pranks, and random destructive acts. However, this year, the world may experience a much larger scale version of this phenomenon. Whether over fears of unknown change associated with health care reform, outrage at complacency with Iran, or economic problems yet to be solved, the United States could experience a level of civil unrest that it has not seen for many years. An even more extreme form of civil chaos could appear in Iran this month. There may be other outbreaks of this type of behavior throughout the world. Most especially pay attention to Afghanistan, Pakistan, India, Thailand, Western China, and Russia.

Strains on the global economy and infrastructure should continue in October. The budgets of states and local economies may be stretched to dangerous levels. The U.S. government will likely be working overtime keeping things together, and one of those all weekend crisis session is not out of the question.

And let’s not forget Iran. It would not be unlikely during the month for discussion and conjecture to arise regarding the direction of the Iran regime, the U.S. position on sanctions or military action, and potential Israeli actions. Such topics as Armageddon may even become part of ordinary conversation in the most intense periods of suspense.

The month ends with a very violent social mood configuration. It is not clear how this may manifest, but it does indicate that November could be even more interesting than October.

- - -
http://anewstory.org/markets/Oct09_MoodCompass.pdf (current issue viewable by research sponsors only; reprinted with permission of A New Story Foundation)

Chaos, Mayhem & Armageddon - Oct 09 Videocast

Sat, 26 Sep 2009 03:13:41 GMT

The Global Mood "Weather Forecast" for October 2009. Continued economic concerns, widespread civil unrest, and extreme Middle East tension are the highlights.

Extreme Volatility!

Sat, 19 Sep 2009 11:22:57 GMT

September 21-27: High inflation concerns. Final stock market top and U.S. Dollar bottom (if it hasn’t occurred already). Renewed geopolitical concerns. Global leaders try to maintain stability. Markets could be extremely volatile.

- - -
Excerpt from the September issue of MoodCompass.
http://anewstory.org/markets/Sep09_MoodCompass.pdf (current issue viewable by research sponsors only; reprinted with permission of A New Story Foundation)

Tension Building

Sat, 19 Sep 2009 11:21:54 GMT

September 7 - 20: Growing global economic concerns. Possible crude oil supply concerns. Increase in tropical storm activity. U.S. government in denial about the severity of the situation(s).

- - -
Excerpt from the September issue of MoodCompass.
http://anewstory.org/markets/Sep09_MoodCompass.pdf (current issue viewable by research sponsors only; reprinted with permission of A New Story Foundation)

New Video: Crisis at Hand

Mon, 14 Sep 2009 01:14:40 GMT

This supplement for September gives a technical insight into the mood cycles analyzed for the 2nd half of the month. Highlights: Destabilizing global events, and completion of both the U.S. Dollar decline and stock market rally from March.

High Alert - Now through Sept. 14

Wed, 09 Sep 2009 10:39:43 GMT

There is a high entropy configuration in society's mood over the next few days indicating the possibility of a disruptive event (source: September MoodCompass). This could be geopolitical in nature, primarily economic, or a combination of both. Further elaboration on concerns for September can be found in this month's post "September 09 - Please Remain Calm."

September 09 -- Please Remain Calm

Sat, 29 Aug 2009 16:34:00 GMT

Below is an except from this month's MoodCompass:
- - -
The last few months have seen global society move from the brink of despair to a hopeful optimism that things may actually be starting to get better (even while jobs and homes continue to be lost). Wall Street has given new meaning to irrational exuberance, as bullish sentiment indicators reach extremes that exceed the levels of the market peak of October 2007. There are rumors expressed by some commentators that there never even was a recession to begin with.

In March, we cautioned to look for such an extreme in optimism in the months ahead, as it would be the signal that things would be about to get really bad. We are here now. September is a month of paradox, confusion, turbulence, and cross currents. It is a month where hope continues to push forward, as reality persistently slaps it down. There could be large stock market declines as well as huge market rallies as people struggle to find their bearings. There are indications of high economic concerns on a global scale, yet concurrent concerns about inflation are not out of the question. Another crisis regarding the fate of the U.S. Dollar may reappear, while the Dollar builds a solid foundation from which to rally from in the coming months.

In the geopolitical arena, there is increasing violence likely in Nigeria and more civil unrest likely in Iran. Either of these could cause supply concerns in the energy markets. There is a general deterioration in the desire for cooperation among nations, most notably from Russia and the Middle East arena. Global relationships could also deteriorate with Afghanistan, Pakistan and even India. The United States could begin to show an increasingly unfriendly tone this month as well.

In the natural world, it’s the peak of hurricane season, increasing the likelihood of tropical storms and cyclones. There is also a curious indication of concerns with disease outbreaks in Asia which merits watching. Overall, September should be an interesting, if not painful month, as we all try to orient ourselves to a shifting, changing reality. Global leaders should be working overtime to ensure us that all is well, and above all to “please remain calm.”

- - -
http://anewstory.org/markets/Sep09_MoodCompass.pdf (current issue viewable by research sponsors only; reprinted with permission of A New Story Foundation)

Major Storm Approaching – Take Cover Now!

Mon, 24 Aug 2009 16:04:41 GMT

Recall what was said in the March issue of MoodCompass, “This is not the end of the economic downturn, but it is near the end of increased disintegration for now. When the next long term peak in optimism arrives, that will be the time to look for things to really begin to get bad!”

We’re just about there now. Wall Street has been having a grand ole time. Bankers have raked in the dough. Yet, jobs continue to be lost, and foreclosures continue to rise. Jean Claude Trichet, European Central Bank Chief, at a recent meeting of central bank heads in Jackson Hole, WY, said that there were signs that the economy “was starting to get out of the period of freefall.” With that statement he did not claim that things were getting better, but less worse, or worse less fast.

Indices of traders’ sentiment show optimism at levels exceeding the October 2007 market peak. This is occurring only several short months from the largest DOW point decline ever! This phenomenon is known in trading circles as irrational exuberance. This term refers to the manic frenzy of buying that occurs at the end of a major trend. It is a surge of greed, and the fear of being left out of a seemingly endless one way move in a market.

If you are fortunate enough to have investments, you may wish to consider moving them to cash or at least something with a lower risk. If you are blessed with a bank account, you may wish to ensure that your bank is one of those on the recently published list of “The World’s Safest Banks.” While the FDIC currently covers deposits in individually failed banks, they will not be able to cover every deposit during a systemic failure. I can’t tell you when something like that might occur, only that the likelihood for such a scenario will increase steadily over the next few years.

The center of this particular "storm" should be here sometime in November. However, the initial squalls could begin to appear as early as this week, and even those could be pretty intense. Take whatever precautions you can; let go of what is beyond your control. Whatever actions you do need to take, they should be done immediately.

Pleae Remain Calm - September 09 Videocast

Mon, 17 Aug 2009 09:48:01 GMT

The Global Mood "Weather Forecast" for September 2009. Global Economic Crisis, Geopolitical Tension Increase, and Disease Concerns in Asia are the highlights.

August 2009 – While We Were Sleeping

Fri, 31 Jul 2009 15:52:04 GMT

Below is an except from this month's MoodCompass:
- - -
We spoke last month of a War Dance – some posturing and chest pounding among friends. This month, the sound of drums pounding in the distance can be heard. They’re getting closer. The situation in Iran has been simmering. N. Korea has not yet been “tamed.” There may be domestic distractions—health care, the economy, and other things to pay attention to. There are summer vacations that need to be taken, and parties to go to. However, like it or not, it will be difficult to ignore the sound of the drums, especially near the end of the month.

There is a recent expansion of our research into cycles of mood and perception to a personification of the Earth or Nature itself and its “moods” created from a collage of how human’s perceive non-human nature. In August, there is heightened concern about issues related to global warming or climate change. There is a heightened risk of a moderate earthquake in the area surrounding the Indian Ocean. For whatever reason, strong concerns with disease issues are indicated in Asia at the end of the month, going into September (see http://anewstory.org/earth.htm for more info).

If all this was not enough, while Wall Street has been busy ignoring the high unemployment rates and the growing financial issues that Main Street is increasingly faced with, while banks have been finding new ways to risk money, and everyone and his brother are declaring the recession over, the ingredients for new crises have been stewing. As September approaches, a large stock market decline becomes increasingly near.

But that’s almost a month away. Go back to sleep. It’s probably just a bad dream anyway.
- - -
http://anewstory.org/markets/Aug09_MoodCompass.pdf (current issue viewable by research sponsors only; reprinted with permission of A New Story Foundation)

Gaia is Agitated: August '09

Thu, 23 Jul 2009 19:00:29 GMT

Our newest release is the "Earth's Mood Cycles," and is Gaia agitated in August! I am so excited about this breakthrough research. Let's hope that we get the message this time! It's now available for public perusal at the link above.

July 2009 - A War Dance

Fri, 03 Jul 2009 23:29:42 GMT

Below is an except from this month's MoodCompass:
- - -
While most of our social mood data comes from the United States, the patterns showing up here also manifest in societies throughout the world, and often in a more extreme manner. Last November, exactly where the social configuration indicated “chaos breaks out,” the Mumbai terrorist attacks occurred. Last month, exactly where a “paradigm shift” was indicated, riots and protests in favor of a new leader were seen in Iran.

In the first half of July, is a social configuration known as the “War Dance.” Metaphorically, think of warriors putting on war paint, pounding their chests, and beating on drums. Expect to see a surge in nationalism and the mentality of “good guys” and “bad guys.” The configuration for the US government is indicative of both high activity and “posturing” with the outside world. However, this occurs after the societal “War Dance” indicating that this action is likely responsive. Also, while “forceful,” the U.S. action should be primarily diplomatic (SE over SW).

With all of this, there are no indications of any new major outbreaks of war at this time. However, watch for the “War Dance” posturing and beginnings of a response before the 14th of the month. While at this time, it is not yet possible to pinpoint where the focal point of this “War Dance” will manifest, the most likely candidates are N. Korea and Iran. This “War Dance” configuration reappears at month’s end. Should the government assure that “all is well” at that time, be wary, as this would be coincident with a “denial” configuration.

There are no indications of a likelihood of actual disruptions in the supply of crude oil. However, when people are worried, even needlessly, they can resort to hoarding. Please refer to our Public Panic Crisis Event presentation for more information on this phenomenon (it is available on our website at: http://anewstory.org/documents/public_panic_crisis.ppt). The most likely period for a manifestation of panic in the markets or otherwise is July 23 – 28. The likely public response to rising oil and gas prices near the 13th is unclear.

- - -
http://anewstory.org/markets/Jul09_MoodCompass.pdf (current issue viewable by research sponsors only; reprinted with permission of A New Story Foundation)

The Next Six Months -- A Volatile World

Sat, 27 Jun 2009 17:06:09 GMT

I’d like to give you a heads up on the big picture, as A New Story Foundation has just completed a six month global mood and market outlook. Here is a brief summary for July - December 2009.

Look for global tensions to flare this summer and reach a peak in the fall. If the usual players are involved, then look for: 1) The issue regarding the US Dollar and world reserve currency should continue to increase tensions with the US, China, and Russia. 2) Russia is likely to be doing the natural gas hostage play again, increasing tensions with Europe and former Soviet States. 3) Also, watch for a hot spot in the Middle East due to the instability in Iran, and possible nervousness on the part of Israel and/or Iraq. 4) North Korea should continue to be an uncertain annoyance in the background.

The global economic picture should continue to deteriorate, and markets should generally be down to sideways through October. Unemployment should climb well beyond current levels. Look for valiant government efforts to turn things around by the end of the year. Near year's end should be the beginnings of a turnaround in sentiment that should continue into early 2010. Expect a surge of hope (or denial) in November, and an attempt to see “silver linings” within a context of bad data or news in December.

Stay well,
Cari