SOS Polarization

Polarization (politics), the process by which the public opinion divides and goes to the extremes
Polarization (psychology), the process whereby a social or political group is divided into opposing sub-groups

So what is polarization got to do with bull and bear. Exactly, polarization has everything to do with bull and bear. Over the history of the US stock market (also applies to other), bear market happens during the time when polarization happens.

When the economy turns bear, i.e. more unemployments, dissatisfaction arises. The dissatisfied will protest against the government and voice their unhappiness over the cause of the downturn of the economy. Such as the Main street alledged the Wall street that cause the current crisis. Groups are form, individual opinion are wide, conflicts rises, that is what we get.

One will realise that during a market boom or economy bull, everyone is content, people are more united.

So, in short, be aware of the current social mood. Tension will build up during such a mood. All we got to do is to be more observant to our environment.

MyView

For Malaysia, you will see the following:

• opposition rising, DAP, PKR, PAS


• more legal and libel cases


• more vocal against government weakness, MACC, plane engine stolen, murder at MACC complex


• protest of "cow head" against the mayor of Selangor


• conflict over the word "Allah" and burning of churches

This social mood started since March 2008, and it is building steam. In the near future, there will be more unwarranted incidents.

Of course, one may argue, well, since March 2008 till Jan 2010, the share market has increased from about 800 to 1300 points, is this a bear? Well, the underlying truth is the Malaysian economy had actually weaken since then. Just look at the political arena, almost fighting everyday since then, look at MCA, look at UMNO, look at the GERAKAN, etc. If everyone is busy fighting for their own interest, do you think they have time for the economy?

So, lets not kid ourselves, economy has weakened, look at the export figures, look at the credit growth rate and look at how much was raised in 2009, one of the highest for the past few years. If everything is great, do you think investor want to raise more money?