We Must Understand Collective Trauma
The public creates new facts and gives rise to illusions in the process of simplifying complex reality.
Anyone caught up in a situation is bound to have a partially distorted view of the world. In particular, the social and cultural national trauma of the group that person belongs to has an influence. Trauma experienced in the past causes illusions in the form of unconscious Pattern Finding. In this way, the public creates new facts, and Mr. Media in turn exaggerates this social atmosphere and further escalates the situation. At this point, stock prices move in a direction detached from corporate fundamentals.
When an imbalance occurs in the real economy at this point, it tends not to be corrected but to expand day by day. Moreover, once a change occurs in the financial market, that movement becomes established as a trend. Then, when this bias is pushed to the extreme and can no longer be sustained, stock prices once again follow corporate earnings.
For example, South Korea has been very sensitive to exchange rates since the IMF crisis, and the United States has been very sensitive to housing price crashes since the The Subprime Mortgage Crisis.
- Emphasizing the fear of U.S. real estate prices
- JP Morgan Stock Rally to End Soon
- Decline warning due to commercial real estate by Morgan Stanley
- South Korea's fear of exchange rates
- Germany's fear of inflation
Topics: Reflexivity Theory
Category: Evergreen
Status: Ever/Tree
Related: Pattern Finding,Pain is information