--- title: Why You're Not in the Mood description: In emotional economics, how we feel can predict how we deal with the markets canonical: https://time.com/archive/6641451/why-youre-not-in-the-mood/ author: Rana Foroohar article:opinion: false article:content_tier: free article:published_time: 2012-03-26T04:00:00.000Z article:modified_time: 2026-02-26T16:19:36.257Z article:section: Science og:title: Why You're Not in the Mood og:description: In emotional economics, how we feel can predict how we deal with the markets og:url: https://time.com/archive/6641451/why-youre-not-in-the-mood/ og:site_name: TIME og:image: https://static.time.com/v3/assets/bltea6093859af6183b/blt3718d0de27747af4/698a44d3b21a9c209d508100/360_crana_0326.jpg?branch=production&width=750&quality=75&auto=webp&crop=16:9 og:image:width: 1200 og:image:height: 675 og:image:alt: 360_crana_0326.jpg og:type: article twitter:card: summary_large_image twitter:title: Why You're Not in the Mood twitter:description: In emotional economics, how we feel can predict how we deal with the markets twitter:image: https://static.time.com/v3/assets/bltea6093859af6183b/blt3718d0de27747af4/698a44d3b21a9c209d508100/360_crana_0326.jpg?branch=production&width=750&quality=75&auto=webp&crop=16:9 ---  * [Science](/section/science/) # Why You're Not in the Mood by [Rana Foroohar](https://time.com/author/rana-foroohar/) Mar 26, 2012 4:00 AM UTC  Why you're not in the mood. In emotional economics, how we feel can predict how we deal with the markets Why you're not in the mood. In emotional economics, how we feel can predict how we deal with the marketsIllustration by Harry Campbell for TIME by [Rana Foroohar](https://time.com/author/rana-foroohar/) Mar 26, 2012 4:00 AM UTC Winter has been a season of surprises, and spring is ripe for more. The richest, most electable candidate in the Republican primary race is losing ground to a man who doesn’t believe in evolution. Millions of homeowners remain underwater, yet rents are rising. The unemployment rate is falling, but the temperature of protectionist rhetoric is heating up. Even culture is bucking the conventional wisdom: highbrow nostalgia show Downton Abbey is a hit, while high-tech sci-fi flick John Carter bombs. This all seems confusing and contradictory, but it makes perfect sense to people in the burgeoning field of emotional economics. Investment expert Peter Atwater, head of consulting firm Financial Insyghts, which studies the effects of consumer mood on markets, says that since the financial crisis in 2008, our mood has been closed in, negative, fearful and isolationist. He calls it the me, here, now era, in which we crave things safe, familiar, nostalgic and local. And it’s not something that a few months of better economic data can fix, given that it’s rooted in a deep sense that the world is still a highly volatile and uncertain place, even if the economy seems temporarily better. This is an era characterized by a preference for stocks that pay predictable dividends, the locavore movement and renting rather than owning (think houses but also Netflix, Zipcar and all the websites through which you can lease everything from clothing and baby gear to kitchenware and accessories). It’s also marked by more-extreme politics, which tends to cater, like foraging, to a me, here, now ethos: witness not only the unexpected rise of Rick Santorum but also the serious surge of isolationism in Europe, where border-control measures and scary right-wing parties are expanding. Even mainstream politicians like French President Nicolas Sarkozy, who is running for re-election, are calling for tighter markets, which favor local companies, and restrictions on immigration. It’s a far cry from the late ’90s, when Europe’s single currency, the euro, was formed. Then we were having an us, everywhere, forever kind of moment. The dotcom bubble hadn’t yet burst, everyone was getting rich (or seemed to be), and consumer confidence was at record highs. No wonder the S&P 500 was soaring and dotcom “concept” stocks that stretched beyond national boundaries and rational valuations seemed logical. When confidence is high, anything seems possible. Which is perhaps why it’s impossible today to imagine why anyone thought that countries as disparate as Germany and Greece could ever be part of a common economic and political bloc. Europeans themselves don’t believe it, and it’s that lack of belief, rather than any real lack of funds, that thwarts them in acting decisively to save the monetary union. All of this supports a core principle of emotional finance, which is that we are all basically id-driven children who love to be told stories, many of which we become wedded to even as we realize that they are on some level false–or at least not quite as true as we think. Eventually, our beliefs take on market lives of their own (housing prices will always rise, Internet stocks can only go up, the E.U. isn’t 27 separate economies and cultures but a cohesive bloc), creating groupthink that leads to bubbles. Hedge-fund titan George Soros, a great believer in emotional finance, calls this phenomenon “reflexivity”–not to be confused with reflexology, which a lot of people who’ve been trading over the past few years probably need. It’s no accident that Soros got rich trading on such emotions against the cold reality of numbers. You can layer the S&P 500 index on top of the Bloomberg Consumer Comfort index since 1993 and see a nearly perfect reflection. That said, the dips and heights overshoot fundamental stock valuations. The markets respond to our moods, but neither is necessarily logical. Hence tulip mania, housing mania and Newt-o-mania. So what does our mood today tell us about the future? That the me, here, now attitude is making the world a more fragmented place. National energy strategies are becoming more self-interested, countries are hoarding resources (India tried to ban cotton exports recently), and globalization is to a certain extent reversing as multinational firms weigh the risks of shipping goods to and from the world’s hot spots and move jobs and facilities closer to end markets. Finance, once the grease of the global economy’s engine, is retrenching as many large banks sell off assets and focus more on local markets. It’s a world in which getting rich and thinking big may be harder. But as winter blurs into spring, the memory lingers, which is why most of us prefer to stay snuggled under the duvet watching reruns of Downton Abbey. ```json [{"@context":"https://schema.org","@type":"NewsArticle","@id":"https://time.com/archive/6641451/why-youre-not-in-the-mood/","mainEntityOfPage":{"@type":"WebPage","@id":"https://time.com/archive/6641451/why-youre-not-in-the-mood/"},"headline":"Why You're Not in the Mood","datePublished":"2012-03-26T04:00:00.000Z","dateModified":"2026-02-26T16:19:36.257Z","description":"In emotional economics, how we feel can predict how we deal with the markets","url":"https://time.com/archive/6641451/why-youre-not-in-the-mood/","keywords":[],"thumbnailUrl":"https://static.time.com/v3/assets/bltea6093859af6183b/blt3718d0de27747af4/698a44d3b21a9c209d508100/360_crana_0326.jpg?branch=production&width=1200&quality=75&auto=webp&crop=1200:675&height=675","author":[{"@type":"Person","name":"Rana Foroohar","url":"https://time.com/author/rana-foroohar/"}],"articleSection":"Science","image":[{"@type":"ImageObject","url":"https://static.time.com/v3/assets/bltea6093859af6183b/blt3718d0de27747af4/698a44d3b21a9c209d508100/360_crana_0326.jpg?branch=production&width=1200&quality=75&auto=webp&crop=1200:675&height=675","width":1200,"height":675,"headline":"360_crana_0326.jpg","caption":"Why you're not in the mood. In emotional economics, how we feel can predict how we deal with the markets","creditText":"Illustration by Harry Campbell for TIME","representativeOfPage":true}],"publisher":{"@type":"Organization","name":"Time","url":"https://time.com/","logo":{"@type":"ImageObject","url":"https://time.com/images/logo.png","width":528,"height":156},"foundingDate":"March 3, 1923","sameAs":["https://www.facebook.com/time","https://www.instagram.com/time/?hl=en","https://twitter.com/time","https://www.pinterest.com/timemagazine"]}},{"@context":"https://schema.org","@type":"BreadcrumbList","itemListElement":[{"@type":"ListItem","position":1,"item":{"@id":"/section/science/","name":"Science"}},{"@type":"ListItem","position":2,"item":{"@id":"https://time.com/archive/6641451/why-youre-not-in-the-mood/","name":"Why You're Not in the Mood"}}]}] ```