Events that seem random may indeed follow a pattern. Mark Galasiewski, editor of the Asian-Pacific Financial Forecast, studied the potential link between social mood, market trends and major terrorist attacks. Consider this excerpt from the July 2011 Socionomist, plus Galasiewski's chart and revealing conclusion.
"The event that came to mind first was 9/11 -- al-Qaeda's notorious attack on the United States on September 11, 2001. Could it be that al-Qaeda's most ambitious attack on a U.S. target also marked the end of this negative social mood period as expressed by this stock index? As the chart shows, it did. In fact, not only Pakistan but many stock markets in Asia were in bear markets while the U.S. and Europe boomed during the 1990s. As it turns out, those bear markets help explain the popularity of al-Qaeda leading up to 9/11.
"Figure 1 shows other selected al-Qaeda attacks on American targets or targets perceived to be American. (The data is from infoplease.com, a division of Pearson Publishing.) You can see that al-Qaeda executed its first attack on an American target after the bear market of the early 1990s had ended. This was the 1993 bombing of the World Trade Center.
"The group made its next major attack on a U.S. target during the 1996 decline, when it bombed a U.S. military barracks in Saudi Arabia, killing 19 people. Bin Laden then announced his fatwa against the United States near that 1996 low. But the most lethal attack of that bear market was right after the 1998 low, when al-Qaeda bombed the U.S. embassies in Kenya and Tanzania....
"The most important aspect of this chart may be indicated by the blue ovals. When stock prices have been rising for some time, terrorist organizations seem to find it difficult to attract and keep highly talented or highly skilled people, and there are no terrorist attacks. That's the power of positive social mood."
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