This is not only my nomination for video of the year (from Seeing Sounds), it gets the nod for sentiment indicator of the year!

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N.E.R.D. – Sooner or Later


Sooner or Later via Cameron Newland

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Here’s an interesting question: Are videos like this one more likely to occur nearer to tops or bottoms?

I am not suggesting traders use this as markers for buying and selling, rather, its something more subtle. Ask yourself this question: By the time the zeitgeist of society has reached the point where economic turmoil and a market crash are fodder for music videos, is it early or later in the market cycle? Do the odds favor that there is more upside or downside at this point?

Category: Markets, Music, Psychology

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

42 Responses to “It All Comes Crashing Down”

  1. mlomker says:

    I’ll believe we’ve hit bottom when I stop seeing articles about asset allocation, dollar-cost averaging, and anything that even resembles buy & hold. You only have to go back to the 70′s to find an era when *everyone* was a trader. We are nowhere near having the average guy on the street figure that out.

    I consider anything short of apathy toward the stock market to be a sign that we’ve only made a first leg down.

  2. rww says:

    Is it early or late in the market cycle? Depends, doesn’t it, on the typicality of the cycle. It is mindboggling that anyone believes we are in a typical, cyclical, recession. The enormity of the damage has, I think, overwhelmed everyone’s sense of scale.

  3. Steve Barry says:

    We’ve hit bootom when total credit hits 170% of GDP…only 18,900 bps to go.

  4. KJ Foehr says:

    I believe such a sentiment indicator would have signaled the bottom in 1982, and probably in 1974. But what about the GD? When did the zeitgeist of society then first begin to focus on economic turmoil and the market crash? 1930, ’31, ’32, ’33, ’34… ’39? And did it signal the bottom then?

    Song of the year? I would hope some better music than that has come out this year.

  5. Let’s make your question more interesting… How about if you ask your readers if stocks, as measured by the S&P 500, will outperform the 10-year Treasury, or some other acceptable benchmark for a “safe investment,” from 01/01/2009 to 12/31/2009 and see who “wins.”

    You can post the results in January 2010.

    To make things even more interesting, ask readers to explain their “rationale” for their wager. My wager is with stocks, which is not a “prediction,” but a prudent risk management position.

    It’s quite easy to make a comment on a blog about how the world is coming to an end, but it’s quite another to hold your self accountable, to some degree, for your decisions…

    “If you do not change direction, you may end up where you are heading.” ~ Lau Tzu

  6. Jojo99 says:

    It’s hard to put any history to this as an indicator.

    Up until only a few years ago, it was near impossible for most artists to make their video’s and music easy to obtain by the masses as distribution and outlet was tightly controlled by the music industry. The industry had a vested interest in NOT letting a “negative” message get too much distribution (if any at all).

    But now we have Facebook, MySpace, YouTube, etc., available to all at almost no cost. The subject of the economy is very topical, a lot of people are being affected, from poor to rich, so I think we’ll see much more of this “social commentary/protest” work in the form of music and video’s..

  7. osmif says:

    I built a railroad…

    Brother can you spare a dime?

  8. I think movies might be a better reflection. Check out some of the movies and themes from the ’70′s. Low budget and high on common man themes. The ’30′s were much the same. Both those eras tried not to offend the viewer with extravagance. Especially visually. Maybe the one difference was the escapist movies from the ’30′s where people went to the movies to forget their troubles. Escapism may be the next blockbusters. That reminds me too that the whole Star Wars type space genre really took off during that time. What could be next this time around? I suppose this time will create the next Spielberg

    I always thought the ’70′s were a hangover decade from the ’60′s when I looked back on them but it may just have been that everyone was broke. I grew up in the ’70′s and, even as a kid, they were a boring decade. You could feel it everywhere. It was a huge recoil. That’s probably what we are about to experience. How the movies and music reflect that is a great question. I think we will see a lot more escapist movies I’m not sure about how budgets will be affected considering hollywood is worldwide now and not confined to the movie house any more. The same probably goes for music. The difference in music may be who rises up in these times. The ones on the top probably won’t be as affected by this whereas the new voices that gain popularity by voicing what is on the mind of the common man may have a completely new beat. I suppose a new ‘sound’ might come out of all this. Another problem is that music is now so multi-generational that not everyone will be suffering to the same degree. The ’60′s and ’70′s were the boomers rebellion and consequence and they controlled the musical space. That is not so much the case any more

  9. Steve Barry says:

    Spending vcame crashing down for the holidays…possibly the worst season in modern times.

    http://news.yahoo.com/s/nm/20081225/bs_nm/us_usa_holidaysales_spendingpulse_1

  10. Steve Barry says:

    On a brighter note, Japan industrial production “falling off a cliff”

    http://news.yahoo.com/s/nm/20081226/bs_nm/us_financial_japan_2

  11. pj says:

    If they are still making muzac about all that, then I guess they ain’t seen the real pain yet. This time, “It Is Different”, if I may be allowed to use that phrase.

  12. gloppie says:

    Dow 3000

  13. easymoney says:

    Kent drank the kool aid

    I second that gloppie

  14. Steve Barry says:

    @Kent:

    I made this prediction last year that looks like it will be awfully close…it took the greatest market interventions in the history of mankind to barely avoid it…

    Hey Papa Bear Kudlow…I am on record on this board saying that 2008 will likely be the worst year in S&P history, beating the -43% in 1931. If I’m right, I want to be a guest on your show for the best call ever. All I need is for the S&P to have a historically high P/S of 1 on 900/share in revenue. Seems like a piece of cake.

    Posted by: Steve Barry | Jan 4, 2008 9:44:49 AM

  15. I couldn’t past too much of that song–for me, their style is a complete mismatch to the video..

    to each his own~no prob.

    Jojo99 Says:

    December 25th, 2008 at 7:36 pm
    makes, to me, a compelling point..IOW, (which/whose) timeline (are you/is one) referring to?

    as an exemplary facet: Hip-Hop. the MainStReam equates it w/ ‘Gangsta Rap’– 50 Cent/Eminem

    one need not travel 8 miles to understand that that equivalancy isn’t worth 4 bits..

    see: http://www.guerrillafunk.com/
    Guerrilla Funk Recordings was born out of necessity. It’s a musical organization that was founded by Paris – the politically conscious artist best known for the incendiary song “Bush Killa” – that counters the corporate stranglehold of censorship currently plaguing the entertainment industry. It provides balance in this intolerant climate of suppression of free speech and artistic expression, and serves as a vehicle for those who are unable – not because of lack of talent or relevance – to be heard. There now exists a harmful double-standard at most record labels of endorsing artists who only espouse misogyny, mindless violence, and drug culture references in their music — while at the same time ignoring artists who strive to enlighten and inspire.
    ~
    as counter-point to the popular mein..
    ~
    as far as, “We were are in re: PopCulture v. Top/Bottom?”

    Steve Barry’s, ongoing, thematic description to ‘smoldering crater’, is a valid reference point.

    IOW: What’s Up? DOWn ..to Kent’s comment, above..

    LSS: the Chords of The Mightly Wurlitzer Score no *Real Scene..

    until the parallels between James A. Garfield and Ronald W. Reagan can be, widely and intelligently, broached, We’ll continue to have serious Problems.

    Realistically, pj, above, is correct, “It Is Different”–we are walking, in a daze, through different days–too distracted, too divided, too deceived–to see, clearly, we’re under attack by forces we fuel.

    non-linearity is about, its Pikes can/will skewer the skewed
    http://www.thefreedictionary.com/skew
    ~

    on a lighter note~
    since it’s, still, the gift-giving Season, Oil is fixin for serious 2 handles..

    and, with that ‘still’, above, it’s one Reason I’ve always appreciated Hanukah–in it’s multiple nights lies, within, the story of perserverance, of the meta-physical: empowering the physical, and over-powering physical limits..

    much more in keeping with tale of Christ in re: loaves and fishes- Mark 6:41
    http://bibledecoded.blogspot.com/2008/01/loaves-and-fishes.html
    ~
    as an aside, both groups were fighting Wars, one physical, the other in the the meta- context..
    ~
    than with his birth, though, I guess we all need an excuse to blow out the old stock, and take stock, to prepare for upcoming Blow of Winter..

    The days are getting longer, hello! Solstice, so we’ve that going for us : )

  16. DL says:

    “Do the odds favor that there is more upside or downside at this point?”

    As is usually the case, it’s a question of time frame.

    Over the next 10 months, the market may be stuck in a trading range; profits mainly to the nimble.

    Longer term, it’ll pay to bet on the 4-year cycle in the market.

  17. correction: w/ this: as far as, “We were are in re: PopCulture v. Top/Bottom?”

    We were are = Where are we

    btw, why does WP kill the double-space after . /periods/ ?

  18. hourglass says:

    Consider the source of this music video. Pharrell Williams, rapper, songwriter, producer, clothing designer and successful businessman. Forbes 2008 lists his net worth around $20 million. In this video N.E.R.D (No one Ever Really Dies) is saying to Wall Street you messed up and now you’re paying the price. Don’t come at me with bags of money trying to sell me a scam. Williams sets very high standards, he sees a problem with the way people are trying to make money. I think when a musician makes a video like this it means we’re later in the “market cycle” and in the critical stage.

  19. vaughn says:

    “Do the odds favor that there is more upside or downside at this point?”

    i will not be scaling in…..

    The NERD tune is ok…..but not deep enough to cut.

  20. emmanuel117 says:

    Too much hope at the end of the video; needs more nihilism to show true despair (though if that was a deadcat bounce at the end…).

  21. Mike C says:

    There are a few commenters I would direct to the following posts (no need to name as you can probably figure out who you are):

    http://oldprof.typepad.com/a_dash_of_insight/2008/12/blowouts-of-the-week-an-example-for-investors-and-traders.html

    http://oldprof.typepad.com/a_dash_of_insight/2008/12/starting-with-the-result-the-blowout-of-the-week.html

    Some questions for the 2008 bears who are still bearish even after a 50% drop:

    1. Are you the proverbial “stopped clock” that is right at least twice a day? Do you have an analytical framework for repeated success, or did you just happen to luckily call the “blowout of the week” and future market calls will be wrong?

    2. When will you have overstayed the bear party, and know it is time to be bullish? When the economic news is rosy? Surely, the stock market will rally long before many economic conditions and indicators show positive improvement. When does cheap valuations override everything else?

  22. Itiswhatitis says:

    70′s a hangover? I always sorta compared the 60′s to the 90′s and the 70-73 expansion to the last one(2001-07). The only difference was the first one grew much faster but lasted only half the time. But the end results were the same.

    I would say the hangover lasted to the mid-90′s all together. The effects from the 73-83 period were felt for years afterword. High poverty and crime affected the country in the 80′s and early 90′s it wasn’t really washed away to the tech boom took off in 96. Sorta alike the Depression era hangover wasn’t fully gotten rid of to 1963 usually a decade later the bust commences.

    The Taxi Driver was always IMO the classic 73 bust movie. It wasn’t the 1960′s economic miracle anymore.

  23. Vermont Trader says:

    I like to call it “The Great panic of 2008″ when i am inevitably asked my opinion at the table.

    i think we are in for a volatile 2009 that will offer something for bulls and bears.

    I am long at the moment but in very carefully selected set of companies. Right now I just plan on playing the old “pigs at a trough” game in 2009.

    BR – Thanks so much for all your work this year.

  24. Steve Barry says:

    @MikeC:

    I presume you are referring to me…good questions. I worry that I may stay bearish too long. But we have had a massive paradigm shift. Investors who have been effective for the last 25 years buyin on the dips are now fish out of water. They will be crushed. I always give multiple reasons for my calls. Right now they are so compelling, I have to remain bearish…these are:

    1) 21 day put/call at multi-year lows
    2) Short interest at ridiculous lows
    3) Blogger poll at very high bullishness
    4) Steepest rise in NYSE Bulls in over 5 years
    5) Economy still in freefall
    6) Madoff ramifications for hedge funds has not even begun
    7) Real estate still 40% overvalued per Shiller’s long-term charts
    8) Total credit per GDP 200% above a healthy level
    9) Dow would still be in its long -term inflation adjusted uptrend to trade below 4000.

  25. Steve Barry says:

    How did that happy face get there? an omen?

  26. DaveM says:

    I agree with DL above about time horizons. The toughest part of digesting the financial blogosphere is seeing into the time horizon of whatever is being discussed, and then trying to build a working construct around the flood of ideas to make sense of them.

    As for the song, I’d say the intermediate bottom coming up soon is worthy of something more likely to be in the class of a Thriller like in 1982. Predicting something that big, however, is just too speculative.

  27. SINGER says:

    When videos like this pop up, it is an indicator of how prominent the financial condition of the society has be come in the group consciousness… Whether a particular video is an indication an overdone condition one way or another depends on how prescient the artist is…

    Put it this way… I didn’t hear boo from 99.5% of the world back in Summer 2007, which was when the market was ripe to begin a downturn…

    Plus, how many people called the Crude Oil in the $30′s move… I don’t know of anyone who called that…

    Considering how far we have come on the major indices, I would bet on their being more upside here rather than downside. However, if you look at a rather long term chart (like 30 years or so) we could still move much lower…On a long term basis we are still in a corrective part of an uptrend…

    What’s the deal with Crude Oil??? Are we gonna get a major countertrend wave higher here??? If anything feels morbidly overdone here, it’s the decline in Crude prices…

    PS Pharrell and crew much better as producers and beatmakers. Still can’t hate him for doing his thing…

  28. much more in keeping with tale of Christ in re: loaves and fishes- Mark 6:41

    Wait a minute. Jesus wasn’t a hedge fund guy was he? He takes a small amount of ‘bread’ and leverages them up 200, 300 and 400 times and has some left over. Does the SEC know about him? Or is this another one of those instances of them looking the other way…or maybe turning the other cheek.

    @Steve Barry Says: December 26th, 2008 at 8:21 am

    How did that happy face get there? an omen?

    The number 8 with the close bracket ) makes the ‘cool’ symbol

    Or maybe the blog just thinks your post is cool

    @Itiswhatitis Says: December 26th, 2008 at 5:58 am

    There are many economic overlaps for sure. Creative destruction on such a grand scale dictates that there will be.

    Other movies of the era were ones by Charles Bronson(Death Wish) and Clint Eastwood(Dirty Harry). Most of them low budget and using city scene sets. Many of them in New York which was crawling with criminal behavior at the time and was seen as a natural backdrop to the ideas that were breaking out. Vigilantism, breaking the rules and fighting ‘the man’ were all common back then as art raged against what was left of the structure that was a changing American culture

  29. @SINGER Says: December 26th, 2008 at 11:49 am

    I’m wondering if crude is forecasting a new energy breakthrough on the horizon?

  30. gms777 says:

    “Who Let the Dogs Out?”

    First released in 1998; started being played at US sports events in fall 1999 and at major league ball games in 2000.

  31. ButtoMcFarty says:

    http://www.youtube.com/watch?v=Z9psDq44N34

    “Are you the proverbial “stopped clock” that is right at least twice a day?”

    Yeah Steve!!

    And just when did you stop beating your wife??
    :)

  32. Mike C Says: December 26th, 2008 at 4:30 am

    Mike,

    see:
    “Dec. 24 (Bloomberg) — Japan should write-off its holdings of Treasuries because the U.S. government will struggle to finance increasing debt levels needed to dig the economy out of recession, said Akio Mikuni, president of credit ratings agency Mikuni & Co.

    The dollar may lose as much as 40 percent of its value to 50 yen or 60 yen from the current spot rate of 90.40 today in Tokyo unless Japan takes “drastic measures” to help bail out the U.S. economy, Mikuni said. Treasury yields, which are near record lows, may fall further without debt relief, making it difficult for the U.S. to borrow elsewhere, Mikuni said.

    “It’s difficult for the U.S. to borrow its way out of this problem,” Mikuni, 69, said in an interview with Bloomberg Television broadcast today. “Japan can help by extending debt cancellations.”
    http://www.bloomberg.com/apps/news?pid=20601087&sid=aFgHlh.Dn4Lc&refer=home

    and:
    Top 25 Censored Stories for 2009
    #1. Over One Million Iraqi Deaths Caused by US Occupation
    # 2 Security and Prosperity Partnership: Militarized NAFTA
    # 3 InfraGard: The FBI Deputizes Business
    # 4 ILEA: Is the US Restarting Dirty Wars in Latin America?
    # 5 Seizing War Protesters’ Assets
    # 6 The Homegrown Terrorism Prevention Act
    # 7 Guest Workers Inc.: Fraud and Human Trafficking
    # 8 Executive Orders Can Be Changed Secretly
    #9 Iraq and Afghanistan Vets Testify
    # 10 APA Complicit in CIA Torture
    http://www.projectcensored.org/top-stories/category/y-2009 for starters..

    doesn’t strike me as a Bullish backdrop..

    past that, if you’d like some action on the Lions, I’ll take GB -20 @ 3-7 odds, all day..

    at the end of the day, it’s still: “Differin’ opines, make’m run the Equuines”.

  33. ButtoMcFarty says:

    ButtoMcFarty Says:
    December 15th, 2008 at 8:29 pm

    My one and only financial prediction for 2009. (New thread idea?)

    USD/JPY will close below 50 before the end of 2009.

    Cheers

  34. donna says:

    I have a 23 and 19 year old, and the music of the new groups is really, really good, much like 70s music. I think you’ll see a lot of great new music coming up. It has an interesting sound, much more layered than 70s music. Some really amazing guitar playing, too.

  35. ButtoMcFarty says:

    Speaking of the 70′s….

    http://www.youtube.com/watch?v=Of-GoDlJCo8

    :)

  36. Lynn says:

    During a market run up, if your paper boy (or any other unsophisticated investor) is getting in then it’s time to get out. So the corollary would be: During a recession, if musicians are singing about the market down turn, then we are near a bottom.
    Personally, I won’t be jumping back into the market for at least a few more months.

  37. and, just for my own sense:

    GB 31, Detroit 21 28 Dec 008

    Detroit +20 was the winning side..

  38. gms777 says:

    Seems like we see rococo, baroque stuff like Sgt. Peppers and Prince’s Raspberry Beret when times are good, and grunge-y stuff like Pearl Jam, Nirvana, Grand Funk, and early LedZep and this when times are hard.

  39. adamj says:

    How the Young Jeezy’s CD called “The Recession” It came out September 2nd but was named many months earlier so I would say he puts many talking heads on TV to shame. Although many people knew when the recession really started you had people denying it for a long time.

  40. eaglepilot says:

    My personal bottom indicator is the “Jay Leno” indicator-when talking about 401k s
    and the economy is no longer funny, Jay will not be not be making jokes about them. Just about then, the economy is near the bottom.