PrechterEarlier this week Bob Prechter posted on his website a contributor's view that the time for apologies is market-correlated and about to come to an end:

Prechter [1995]: "In bear markets, anger, fear and the urge to destroy overcome the social conscience. Remorse, on the other hand, is a bull market trait born of the larger trend toward inclusionist impulses… The peaking social mood has brought apologies for a host of transgressions that are decades, generations, and even centuries old. After years of bickering, the Japanese government reached a "compromise" apology for its part in World War II. At a recent press conference, President Clinton resisted considerable public pressure to ask forgiveness for bombs dropped on Japan eight administrations ago. A group of ethicists and historians has decided that financial compensation and a formal government apology is due victims of secret human radiation experiments conducted in the U.S. during the Cold War…"

Galasiewski continues: "Apologies in 1998, 1999 and 2000 made the greatest three-year total within the topping years, and there was a record one-year spike in 2002, when other measures of sentiment, such as the number of S&P 500 futures contracts held by small traders, also made their all-time peaks. Since then, however, annual apologies have not kept pace with price, suggesting that the wave of reconciliation that took off in the early 1990s is almost exhausted. Once the bear market resumes, expect the public's willingness to acknowledge past wrongs to become itself a thing of the past. In its place will be an impetus to act in ways that will require apologies later.

Last spring, several U.S. states approved resolutions formally expressing remorse over and apologizing for their role in slavery. In July the U.S. House of Representatives approved a resolution demanding an apology from Japan for its military's sexual enslavement of women in Asia during World War II. As the next chart [not included here, ed.] shows, historical apologies have increased dramatically in the past 15 years, along with the stock market. The coincidence is not random; both are driven by the wave of positive social mood that took off in 1982.

Other aggrieved parties seeking apology or compensation would be wise to push their causes swiftly, while historical wrongs still garner the public's sympathy. With the stock market on the verge of a major collapse, the window of opportunity for the redress of grievances is rapidly closing."

My question is, if the time for apologies to and among city-states is rapidly drawing to a close, what does that portend for the civil discourse more generally and intra-company dialogue in particular –that is, between spouses and family members in family-run companies, between partners in the workplace, among "teams" in corporate America, etc. and might that suggest a benefit to small-caps that, all other things being equal, have fewer intra-organizational relationships at risk?





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