14/03/2011 – How Punk Rock and Pop Music Relate to Social Mood and the Markets

The king called up his jet fighters
He said you better earn your pay
Drop your bombs between the minarets
Down the Casbah way

Punk rock played by bands like The Clash, X, The Ramones, and
the Sex Pistols had that in-your-face, defy-authority attitude
that crashed onto the scene in Great Britain and the United
States in the ’70s and ’80s. It’s interesting that the lyrics
can still ring true 30 years later, but even more trenchant
is how the prevailing mood is reflected by the music of the
times, as seen in this chart that Robert Prechter included
in a talk he gave last year.

Popular culture reflects social mood, and the stock market
reflects that same social mood. That’s why we get loud, angry
music when people are unhappy with their situation; they want
to sell stocks. We get light, poppy, bubblegum music when they
feel happy and content; they want to buy stocks. In a USA
Today article about music and social moods in November
2009, reporter Matt Frantz made clear the connection that Elliott
Wave International has been writing about for years:

The idea linking culture to stock prices is surprisingly simple:
The population essentially goes through mass mood swings that
determine not only the types of music we listen to and movies
we watch, but also if we want to buy or sell stocks. These
emotional booms and busts are followed by corresponding swings
on Wall Street.

“The same social elements driving the stock market are
driving the gyrations on the dance floor,” says Matt
Lampert, research fellow at the Socionomics Institute, a think
tank associated with well-known market researcher Robert Prechter,
who first advanced the idea in the 1980s. [USA Today,
11/17/09]

In the talk he gave to a gathering of futurists in Boston,
Prechter explained how the music people listen to relates to
social mood and the stock market:

When the trend is up, they tend to listen to happier stuff
(see chart). Back in the 1950s and ‘60s, you had doo-wop
music, rockabilly, dance music, surf music, British invasion — mostly
upbeat, happy material. As the value of stocks fell from the
1960s into the early 1980s, you had psychedelic music, hard
rock, heavy metal, very slow ballads in the mid-1970s, and
finally punk rock in the late ’70s. There was more negative-themed
music. [excerpt from Robert Prechter’s speech to the
World Future Society’s annual conference, 7/10/10]

Which brings us right back to punk rock. Although there’s
lots of upbeat music in the air now, we can assume that after
this current bear market rally, we will hear angrier music
on the airwaves as the market turns down. It might be a good
time, then, to pay attention to what the markets were doing
the last time punk rock blasted the airwaves. Here’s an excerpt
from “Popular
Culture and the Stock Market,” which is the first
chapter of Prechter’s Pioneering Studies in Socionomics.

The most extreme musical development of the mid-1970s was
the emergence of punk rock. The lyrics of these bands’ compositions,
as pointed out by Tom Landess, associate editor of The Southern
Partisan, resemble T.S. Eliot’s classic poem “The
Waste Land,” which was written during the ‘teens, when
the last Cycle wave IV correction was in force (a time when
the worldwide negative mood allowed the communists to take
power in Russia). The attendant music was as anti-.musical.
(i.e., non-melodic, relying on one or two chords and two
or three melody notes, screaming vocals, no vocal harmony,
dissonance and noise), as were Bartok’s compositions from
the 1930s.

It wasn’t just that the performers of punk rock would suffer
a heart attack if called upon to change chords or sing more
than two notes on the musical scale, it was that they made
it a point to be non-musical minimalists and to create
ugliness, as artists. The early punk rockers from England
and Canada conveyed an even more threatening image than did
the heavy metal bands because they abandoned all the trappings
of theatre and presented their message as reality, preaching
violence and anarchy while brandishing swastikas.

Their names (Johnny Rotten, Sid Vicious, Nazi Dog, The Damned,
The Viletones, etc.) and their song titles and lyrics (“Anarchy
in the U.K.,” “Auschwitz Jerk,” “The
Blitzkrieg Bop,” “You say you’ve solved all our problems?
You’re the problem! You’re the problem!” and “There’s
no future! no future! no future!”) were reactionary
lashings out at the stultifying welfare statism of England
and their doom to life on the dole, similar to the Nazis
backlash answer to a situation of unrest in 1920s and 1930s
Germany.

Actually, of course, it didn’t matter what conditions were
attacked. The most negative mood since the 1930s (as implied
by stock market action) required release, period. These bands
took bad-natured sentiment to the same extreme that the pop
groups of the mid-1960s had taken good-natured sentiment. The
public at that time felt joy, benevolence, fearlessness and
love, and they demanded it on the airwaves. The public in the
late 1970s felt misery, anger, fear and hate, and they got
exactly what they wanted to hear. (Luckily, the hate that punk
rockers. reflected was not institutionalized, but then, this
was only a Cycle wave low, not a Supercycle wave low as in
1932.)

In summary, an “I feel good and I love you” sentiment
in music paralleled a bull market in stocks, while an amorphous,
euphoric “Oh, wow, I feel great and I love everybody” sentiment
(such as in the late ’60s) was a major sell signal for mood
and therefore for stocks. Conversely, an “I’m depressed
and I hate you” sentiment in music reflected a bear market,
while an amorphous tortured “Aargh! I’m in agony and I
hate everybody” sentiment (such as in the late ’70s)
was a major buy signal.

Popular
Culture and the Stock Market. Read
more about musical relationships to social mood and the
markets in this 40-page-plus free report from Elliott
Wave International, called Popular Culture and the
Stock Market. All you have to do to read it is sign
up to become a member of Club EWI, no strings attached. Find
out more about this free report here.