It is always darkest just before the day dawneth
-- Thomas Fuller
I was getting ready to write a missive on housing and on new homes in particular since we got a new slew of data. Let me give you the soundbite: Housing doesn't matter anymore. Looking to housing as an indicator of economic recovery now is like everyone hoping that Pets.com and all of the other Internet retailers were going to get up off the mat after the dot-coms turned into dot-bombs. Or that if you wait long enough for Godot, he'll actually arrive.
But then I went with my son to see The Hunger Games
. I didn't know what to expect from the movie because I haven't read the books or kept up with anything about it. In short, I was clueless. But it didn't take me long to see this was a movie that has some substance to it. Based on the novel written by Suzanne Collins, the story focuses on two characters, Katniss Everdeen and Peeta Mellark.
The first thing that struck me was the visual style in which the story was told. If you look at the districts, you see a blend of elements from dark times in world history. The clothes worn by the district inhabitants look like they came from the Joad family wardrobe, while the processing of children for The Reaping looked like something straight out of a World War II concentration camp or a Russian gulag. At the same time, many of the people in The Capitol wore clothes that were reminiscent of robber barons from the turn of the 20th century. This isn't a coincidence, and it provides a very stark delineation between the haves and have-nots.
Source: Clean Cut Media
Then you have the story itself. There are two key themes that drive the story. The first is rebellion. Rebellion is a popular theme in times of positive and negative social mood, but there's a big difference in the way rebellion is presented here and by comparison in something like the Ocean's Eleven
franchise movies, which were made in a period of rising/positive social mood. In The Hunger Games
, rebellion bubbles beneath layers of repression and hopelessness. In the Ocean's
franchise, robbery -- which is a rebellious act -- is just “what they do,” and it's almost incidental to the fabulous vacations they take in Las Vegas and across Europe. One presents rebellion very much as an act with great risk. In the other, there is no risk in ripping someone off because they've got everything figured out.
Which leads to another Hunger Games
theme: sacrifice. Some things are worth fighting for. Katniss actually volunteered to go in the place of her younger sister, who was actually chosen out of their district. The theme of personal sacrifice -- depicted here as a desperate measure against a corrupt, oppressive regime -- goes deeper still, but I'll avoid spoiling the movie for you. As a point of comparison between the two movie franchises, here’s a weekly chart of the S&P 500
going back 10 years, where I added in the years each Ocean’s
movie was released and when The Hunger Games
was published and its subsequent movie release.
Click to enlarge
So how do cinematic themes translate into a bull market? Some work from one of our own Minyanville team might help here. Peter Atwater
has been talking about the idea of horizon preferences
for some time (Minyanville Buzz & Banter subscribers can read more here
). The basic premise behind horizon preferences is that when social mood is positive, people plan for the long term, take chances ad nauseum, and share openly because there's little to no fear of risk in the immediate term or in the foreseeable future. But when social mood darkens, risk aversion is heightened and people withdraw from others because they want what's familiar and intimate. In that sense, I'm looking at the introduction of the social media app Pair
as another interesting development in social mood and what our collective horizon preferences are. Such ideas aren’t developed when social mood rises or declines, but when it bottoms.
That's great, but how do we bridge these horizon preferences? How do we go from the close, immediate, and intimate to the expansive, long ranging, and experimental? The answer is the second theme from The Hunger Games
: sacrifice. We sacrifice when we feel like fighting for the future. We sacrifice when we sense we have nothing to lose. We sacrifice, in short, when it's worth the risk, whatever that risk is. And if that risk pays off, we'll keep risking things. We'll keep taking chances. And before everyone knows it, a new positive era in social mood takes shape.
Collins couldn't have gotten her book published in the dot-com era or in the halcyon days of the credit/real estate bubble. Social mood was too bright, and the herding instinct in media and entertainment affects what they produce just like it affects what prices/multiples stocks trade at in the equity market. The fact that this book was originally written in 2008 but didn't catch on as a popular phenomenon until the past two years or so should tell you something about where we are from a socionomic perspective.
If Fuller's quote is right, we should see people's moods collectively change for the better. That doesn’t mean everything is
better, just that people feel
better about everything including financial markets. And I don't know about you, but I'm relieved. Because I’m not waiting for Godot, and I’m not waiting for a housing rebound, either.
No positions in stocks mentioned.
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