I put forward some evidence to suggest that spam activity might be inversely correlated with the stock market. Is there any evidence to suggest a similar pattern for computer viruses? It appears so…

The Threatcon rating from Symantec reflects the overall global threat exposure from viruses. Viruses are very closely related to spam since the viruses are often used to send spam in the first place.

The rating goes from level 1 (low) to level 4 (extreme).

• The highest Threatcon level ever has been Level 3 which occurred multiple times in 2003 and 2004, but has not occurred since. The Dow Jones stock index bottomed in 2003 after a downward trend that lasted 3 years, so this is exactly when we would expect higher Threatcon ratings.
• The stock market peak in October was accompanied by the lowest Threatcon rating of 1, which is again what we’d expect.

PandaLabs described the most dangerous viruses of the last 20 years.

• Since 1988 the years 2003 and 2004 had 5 of the 14 most dangerous viruses as identified by PandaLabs. So those 2 years accounted for over 1/3 of the most dangerous viruses in a 20 year period.
• Some of the other viruses occurred during or shortly after stock market declines. For example, the Chernobyl virus came from Taiwan in 1998, 1 year after the Asian financial crisis.
• Since 2004 there were no serious viruses as stocks were going up to a historic high, then after stocks had turned down for the largest crash in decades, the Conficker virus hit in November 2008.

[Image Source]

So the inverse correlation between spam and viruses against the stock market does appear to have some validity, but more robust statistical testing would be needed to help confirm this idea.

If you find any other evidence for or against this idea be sure to comment and link to sources. 

Why would this happen?

Well when stocks turn down it signifies economic problems are on the way, and this is linked with a change in the behavior, mood and outlook of society as a whole. When the economy tanks people tend to be more negative and act more negatively.

All of the following tends to happen together:

• Stock markets fall
• The economy suffers
• Unemployment rises
• Crime rises

That is not necessarily in order of cause and effect, but it signifies that they are all somehow related. Spam is generally considered a crime, so therefore it is reasonable to say that when stocks fall, spam increases.

It would also be reasonable to expect a potential lagging effect. The effects of stresses in the economy may take a while to create an event in an individual’s life, such as job loss, foreclosure, pay cuts and unmanageable debt, which may act as a trigger to turn the person to crime.

It will also take some time to set up a sophisticated spam system and/or create viruses.

But is there any evidence of this spam-virus-stock relationship?

Booms in Spam Accompanied Stock Market Bottom in March 2009

In March, 2009 the Dow Jones Industrial Average (along with many other stock indexes across the globe) bottomed after a 50% drop. Stocks fell over a period of a year and a half starting after the Dow hit an all time high in October, 2007.

As of December, 2009 stocks are still about 25% lower than the 2007 peak.

• Typepad users report a recent increase in spam in March 2009.
• The Akismet spam trend appears to peak around March 2009 (see graph below). The earlier consistent increase is most likely simply a reflection of Akismet’s early growth in users.



[Image Source]

• For about 4 months after March it has been reported that spam volumes have increased by 141 percent continuing ‘the longest streak of increasing spam volumes ever’.
• In April, May, June and July 2009 viruses sent by email increased 300 percent.
• Phishing and spam seemed to peak in September with reports of a slight reduction since then. This would fit in with the lagging effect expected.

Continue Reading…
Computer viruses linked with weak economy…

This series of articles should have clued you in to how the stock market, the economy and social and cultural trends are entwined.

Historically the ‘Us & Me’ mentality appears to kick in as stock markets decline and economies under perform. This mentality, depending on the extent of decline, will stick around for a few months to a few years after. Eventually it gradually dissipates to the ‘You & We’ mentality as stocks go back up and the economy improves.

Hopefully from the various examples you have begun to see a link between fluctuations in the stock market and the mood of the people. The larger the corresponding fluctuations in the stock market and economy are, the bigger the change in mentality of the social crowd.

The direction of the stock market and the health of the economy should now help clue you into how people’s behavior, mood and outlook are changing.

What’s the Dow Jones Industrial Average telling you?

Flash Player 9 or higher is required to view the chart Click here to download Flash Player now

Continue Reading…

1. The Time of “Us & Me”, Not “You & We”?
2. The Roaring Twenties, 1929 Stock Market Crash & Great Depression
3. The Rise & Fall of the Klu Klux Klan
4. The 60s Peace Movement & the Slump
5. “You’re Either With Us or Against Us”
6. EU Break Up & Racist Political Parties
7. Predict Social & Cultrual Trends Using Stocks & the Economy

When stocks hit a major bottom in March 2009, after the biggest stock crash in decades, it was accompanied with this front page article in The Economist: ‘The bill that could break up Europe‘.

As the recession deepened protectionism became an increasing threat throughout Europe as individual countries began to become more exclusionary.

This was in contrast to the ‘You & We‘ mentality that strengthened the EU during the stock boom of the 1980s and 1990s, and the boom from 2003 to 2007 where the EU even extended into ex-soviet countries.

Now in December 2009, as stocks appear to be at or close to a top, the ‘You & We’ mentality has made a comeback with the recent introduction of the Lisbon Treaty.

The treaty had previously faced difficulty with stronger opposition during the preceding downturn in stocks. However, after several months of an aggressive recovery in stock markets across the EU, the treaty passed.

European People & Right Wing Extremism

Throughout countries in Europe the ‘Us & Me’ mentality strengthened shortly after the stock market bottomed in March 2009. Various right wing and exclusionary political parties managed to gain a large number of ’surprise’ seats in the June European elections.

For example, in the U.K the British National Party, which is ‘wholly opposed to any form of racial integration and committed to… restoring the overwhelmingly white makeup of the British population that existed prior to 1948‘, won 2 seats.

While many were shocked that so many extreme political parties gained seats across Europe, history tells us it is exactly what you would expect after a significant stock market decline. The rise and fall of the Klu Klux Klan in the early 20th century is just one historic example that fits this pattern.

Continue Reading…

1. The Time of “Us & Me”, Not “You & We”?
2. The Roaring Twenties, 1929 Stock Market Crash & Great Depression
3. The Rise & Fall of the Klu Klux Klan
4. The 60s Peace Movement & the Slump
5. “You’re Either With Us or Against Us”
6. EU Break Up & Racist Political Parties
7. Predict Social & Cultrual Trends Using Stocks & the Economy

The U.S was busy signing treaties with all its neighbors and old enemies as the economy boomed through the 1990s. In 1998, as the stock market approached an historic top, Al Gore even signed the Kyoto treaty.

Things began to drastically change after the stock market topped in 1999 and the dot-com bubble soon burst with $5 trillion in market value disappearing. Shortly after the new President Bush denounced the support of the Kyoto treaty and the U.S. became more exclusionary.

9/11 hit after the Dow Jones began falling relatively rapidly having lost 15% in less than 4 months. Overall the stock market was still in a larger downward trend from the 1999 top. The trend continued down after 9/11 and the ‘Us & Me‘ mentality ensued.

Both Hilary Clinton and George Bush announced ‘You’re either with us or against us’. Bush approval ratings exceeded 90%, the highest approval of a president since the end of World War II.

[Image Source]

As much as Bush went out of office with low approval ratings, back then he was incredibly popular, a reflection that the general U.S. population agreed with the ‘Us vs. Them’ mentality and were also concerned for their own safety.

Was it simply coincidence that all of this happened following and during a downward trend in stocks that started in 1999 and didn’t bottom until 2003?

Continue Reading…

1. The Time of “Us & Me”, Not “You & We”?
2. The Roaring Twenties, 1929 Stock Market Crash & Great Depression
3. The Rise & Fall of the Klu Klux Klan
4. The 60s Peace Movement & the Slump
5. “You’re Either With Us or Against Us”
6. EU Break Up & Racist Political Parties
7. Predict Social & Cultrual Trends Using Stocks & the Economy

The 1960s saw the growth of the peace movement which was anti-war and about people getting along, very much a ‘You & Me‘ mentality. Woodstock is seen by many as the icon of the peace movement, is it a coincidence it took place in 1969 after an overall multi-decade up-trend in stocks which was topping?

Similarly the African-American Civil Rights Movement took place during the boom which resulted in the Civil Rights Act of 1968, a culmination of progress for equality throughout the boom period.

In the 1970s, a period of economic uncertainty, the peace movement faded away along with the African American Civil Rights Movement.

Tensions Resulting From ‘The Slump’

During the 50s and 60s the overall trend was up for the U.S. stock market, but when dips in the stock market occurred it was a time when capitalist vs. communist tensions would increase.

The most significant stock slump came in 1962 which was described as the worst crash since 1929. It would make sense that that Cuban Missile Crisis happened in 1962 just one month after the stock market bottom.

Following on from this was Kennedy’s Assassination and the Gulf of Tonkin Incident. The latter of which resulted in President Johnson being given authority to send more troops, which reached 400,000 by 1967.

By 1967 rising stocks and a growing peace movement saw the U.S. begin to reduce the number of troops in Vietnam. In December 1972 the Dow peaked above 1000 points for the first time ever, just one month after this top a peace agreement was reached.

Continue Reading…

1. The Time of “Us & Me”, Not “You & We”?
2. The Roaring Twenties, 1929 Stock Market Crash & Great Depression
3. The Rise & Fall of the Klu Klux Klan
4. The 60s Peace Movement & the Slump
5. “You’re Either With Us or Against Us”
6. EU Break Up & Racist Political Parties
7. Predict Social & Cultrual Trends Using Stocks & the Economy

After such a long series of economic pain it is not surprising that an ‘Us & Me‘ mentality appeared in full force as the U.S.A declared war on Germany. But the war was just one sign of the  ‘Us & Me’ mentality.

The Rise of the Klu Klux Klan

In 1915 the Klu Klux Klan was reformed shortly after the recession of 1913–1914. It began to grow rapidly as the Post-World War I recession hit, followed by the Depression of 1920–21.

However, the Roaring Twenties soon came in force with a huge boom in the stocks and a largely prosperous economy.

A mild recession took place between 1923 and 1924 and the Klu Klux Klan peaked at an estimated 4 million to 6 million members in 1924.

The Fall of the Klu Klux Klan

It was after that recession when the Roaring Twenties really kicked into gear and the Dow Jones tripled in value. With stocks and the economy booming the ‘Us & Me’ mentality was replaced by a friendlier ‘You & We’ vibe.

Such a vibe throughout society would not tolerate the extreme racism of the Klu Kulx Klan.

The Klu Klux Klan’s members declined rapidly during the boom in stocks. Eventually it dwindled down to somewhere between 30,000 to 100,000 members by 1930, just after the stock market peaked at a record high for the time.

During the same period the Harlem Renaissance flourished. This was a literary, artistic, and intellectual movement of black culture.

If you follow African American history you will see most progress was made during or shortly after boom periods, and the setbacks came during or shortly after declining stocks and economic uncertainty.

Continue Reading…

1. The Time of “Us & Me”, Not “You & We”?
2. The Roaring Twenties, 1929 Stock Market Crash & Great Depression
3. The Rise & Fall of the Klu Klux Klan
4. The 60s Peace Movement & the Slump
5. “You’re Either With Us or Against Us”
6. EU Break Up & Racist Political Parties
7. Predict Social & Cultrual Trends Using Stocks & the Economy

The 1920s, for the most part, was a period of economic prosperity referred to as ‘The Roaring Twenties’. Wedged between two world wars it was a time of peace. Women wore shorter skirts and more revealing clothes and consumerism was rife with the popularity of the automobile, the radio and going to the movies.

The stock market crashed in 1929 and the Great Depression shortly followed. In a matter of years women were back to wearing more conservative clothing, movies had become horror focused (Frankenstein, Dr Jekyll & Mr. Hyde, King Kong, Freaks, Dracula) and consumerism took a big setback as people lost their jobs and became worried for their future.

As the Great Depression came to an end a focus on a new enemy was born as World Was II hit.

The change to this negative outlook after the roaring 1920s happened in a matter of a few years eventually culminating in a great war after the stock crash and resulting depression. Times can change very quickly!

Continue Reading…

1. The Time of “Us & Me”, Not “You & We”?
2. The Roaring Twenties, 1929 Stock Market Crash & Great Depression
3. The Rise & Fall of the Klu Klux Klan
4. The 60s Peace Movement & the Slump
5. “You’re Either With Us or Against Us”
6. EU Break Up & Racist Political Parties
7. Predict Social & Cultrual Trends Using Stocks & the Economy

The above statement refers to a broad change in behavior that has begun to kick in with increasing force since the stock market top in 2007, and also from the previous top in 1999.

The implications of this are overwhelming! Just look at the events of the last two years.

Economists, businesses, the media and just about everybody appear surprised and shocked by the evolving change in society’s character. “CHANGE” – that’s been the big buzz word of 2009, but all this change need not be such a shock with a little perspective…

It is no coincidence that when the economy suffers people’s behavior, overall mood and outlook changes, sometimes very drastically.

The ‘You & Me’ & ‘Us & We’ Pendulum

‘You & We’

During a boom people have a happier inclusionary outlook. People care more for others (You) and want to include and work with other groups of people (We) = ‘You & We’.

‘Us & Me’

During and after the bust an exclusionary (Us) and self survival outlook (Me) becomes the prevalent mood = ‘Us & Me’. The combination of a fear of survival and an exclusionary outlook typically results in the emergence of perceived enemies and opposition.

A Look Through History…

The above greatly simplifies the overall change in mood and outlook of a population through boom and bust periods. However, it should give you a sense as to how society’s mood swings from positive to negative, and how the events of the time shake with it. In fact the swings in mood correlate very well, in a slightly lagging fashion, with stock market trends.

If you look at the booms and busts of recent history you will see this theme play out…

Continue Reading…

1. The Time of “Us & Me”, Not “You & We”?
2. The Roaring Twenties, 1929 Stock Market Crash & Great Depression
3. The Rise & Fall of the Klu Klux Klan
4. The 60s Peace Movement & the Slump
5. “You’re Either With Us or Against Us”
6. EU Break Up & Racist Political Parties
7. Predict Social & Cultrual Trends Using Stocks & the Economy