In the 1940s, Edward R. Dewey hypothesized, that the tallest buildings are usually completed after significant market peaks. This infographic will show you six market crashes, that occurred throughout a period of more than a century, as well as eleven skyscrapers, corresponding to these crises. They all seem to be confirming Dewey’s hypothesis. Is it just a coincidence?
Today, the science of socionomics explains this “Skyscraper phenomenon”. This new science, founded by Robert Prechter Jr., postulates that social mood drives financial, macroeconomic, political and social behavior. In contrast, the conventional understanding is that such events drive social mood. The best tool to register social mood is the market through its price charts. Optimistic and happy people buy, while pessimistic, angry or afraid people sell. So each chart is nothing more, than an illustration of the psychological condition of the masses at any given moment.
In the market, extreme optimism results in price bubbles. One of the real-life manifestations of extremely positive social mood is the construction of enormous buildings. Market tops and skyscrapers often seem to emerge simultaneously, because both phenomena are the result of the illusion of infinite prosperity. But extreme psychological conditions do not last very long. That is the reason why record-breaking buildings, whose construction starts during a market bubble, are often completed after the bubble’s collapse.
