Social Mood Illustrated by the support the Fed Gets in The Media

Social Mood, as defined by the Socionomics Institute, is the engine of social action:

Social mood waxes and wanes positively and negatively. A positive social mood is associated with a host of social phenomena, such as bull markets, bright colors, short skirts, re-election of incumbents, peace, and deregulation. A negative social mood is also associated with a host of social phenomena, such as bear markets, dark colors, falling hemlines, rejection of incumbents, discord, and regulation. 

A subtle but important point: Although social mood governs social events, it fluctuates independently of such events. In other words, wherever mood goes, events will follow. But, the events themselves have no impact on the direction of social mood; there is no feedback loop. If social mood governs social events, what governs social mood? Answer: The Wave Principle.

With this in mind, look at the following chart: It shows the S&P 500 since early 2010. As you can see, in early October 2011, the S&P 500 was making a one-year low, while in Feb 2012, we are at near a multi-year high:

Now, look at the two following reports, one from early October 2011 and the other one from Feb 2012:

Fed Ridiculed Over Prices People Pay Begets Lip Service to Beef (Oct 14th)

Bernanke-Led Economy Proves Critics Clueless About Fed Policies (Feb 8th)

This yet again shows that at the bottoms of social mood (and hence equity markets) people are dismissive and unsupportive of the Government and their hordes of destructive central planners, and that at peaks of social mood (as measured by tops in equity markets) people are at the exact opposite of the scale. These gyrations can happen in a matter of just 4 months, as shown above.

Here are the quotes:

Oct. 14 (Bloomberg) — Federal Reserve policy makers are giving commodity prices their due. 

[...] Policy makers were “out of touch with the public and politicians,” Feroli said in an interview from his New York office. “Given that the Fed is an increasingly visible public institution, it had to adjust its communications accordingly.”

[...] The communications change comes after the Fed’s November decision to embark on a second round of asset purchases sparked the harshest political backlash in three decades. 

[...] There’s a “disconnect” between the Fed’s recent comments on oil and its historical view that core inflation, stripped of volatile energy and food costs, is the best measure of price stability, said John Silvia, chief economist at Wells Fargo Securities LLC in Charlotte, North Carolina.
“The Fed’s communications are trying to talk down people’s inflation expectations and reinforce that talk by pointing to the lower commodity prices,” Silvia said. “For a lot of professional people like me, it’s like ‘Okay, fine, you want to talk about that, but that’s not what you had to say two years ago when gas prices were rising.’”

Feb. 8 (Bloomberg) -- The numbers are proving Federal Reserve Chairman Ben S. Bernanke’s critics wrong. 

More than a year after Republicans from House Speaker John Boehner of Ohio to presidential candidate Ron Paul of Texas warned that the Fed’s second round of asset purchases risked a sharp acceleration in prices, the surge has failed to materialize. The personal-consumption-expenditures price index rose 2.4 percent for the 12 months ending in December, near the central bank’s 2 percent target. 

[...] Even though the economy is showing signs of strengthening and inflation appears in check, Republicans Mitt Romney and Newt Gingrich, who also are running for president, have said they wouldn’t keep Bernanke, 58, when his second four-year term as Fed chairman expires on Jan. 31, 2014. Gingrich said in September that Bernanke was “the most inflationary, dangerous and power-centered chairman” in the central bank’s history. 

“The criticism about the Fed being inflationary is not fact-based,” said Mark Gertler, an economics professor at New York University who has co-written research with Bernanke. “In terms of an inflation record, the facts are the Fed has been as close to impeccable as you can possibly get.”

The good news is that Bernanke's peak is past us now — he was the Person of the Year 2009 for Time magazine — and it seems that the mood is still negative enough to get him out of the office provided Obama is also ousted.