The risk potential rests on the shoulders of India and Pakistan’s stock markets
The India-Pakistan crisis continues at warp-speed. Retaliation after brutal retaliation. May 7 “Operation Sindoor” to avenge the April 22 murder of 26 unarmed civilians in Pahalgam, a town in the Indian-administered region of Jammu and Kashmir.
And now, promises to inflict more pain.
It prompts the unimaginable question: Are India and Pakistan on the brink of nuclear war?
In the May 2012 Socionomist, researcher Alan Hall identified a key factor for what determines the quality and lethality of military conflict: the trend in social mood, as reflected in a country’s primary stock index. Basing his analysis on the last 300 years of price action in nominal U.S. stock prices, Hall explains: “First retrenchments… tend not to produce major wars.” Instead, Hall reveals, initial dips in positive social mood manifest as:
Belligerence-on-the-cheap. Verbal threats, espionage, trade wars, financial conflicts, internal terrorism, cyberattacks, authoritarian clashes, border conflicts, drone attacks and anti-satellite attacks should all increase.
Five years later, we turned our attention to India and Pakistan, as verbal tensions between the nuclear-made nations began to escalate. However, their mutual stock market rallies provided a sealed cap on the proverbial powder keg. Here, our July 2017 Socionomist Special Report “Social Mood Drives and Tempers – Nuclear Fear and Proliferation” emphasized as much:
The governments of India and Pakistan have been rivals since they won their independence from Britain in 1947. Pakistan has deployed tactical nuclear arms at military bases along its entire frontier with India. According to a June 2016 report from the Stockholm International Peace Institute, Pakistan’s nuclear arsenal contains 110 to 130 nuclear warheads. The same report shows that India has 100 to 120 nuclear warheads.
There is a silver lining, though…. nominal stock indexes are near all-time highs in several militarily relevant nations, and that other nations around the world are likely in large-degree first declines, which may coincide with rising animosity and smaller conflicts, “but not global war.”
That was then. The current India-Pakistan conflict continues to employ these “cheap” albeit deadly instruments of war: drone attacks, air strikes, espionage, dirty bombs and so on. India maintains its “No First Use (NFU)” policy – vowing not to launch nuclear weapons first in any conflict. This is a moral stance, not a legal obligation. Pakistan has made no such commitment.
Tired of reading the same tired, and often biased take on major global events? It’s time for a new resource! The Socionomist newsletter will keep you ahead of the news and give you a perspective that frequently – and correctly – flips traditional thinking on its head. Tariffs, trade wars, the folk-hero worship of Luigi Mangione, data breaches, trad wives and more – they’re all connected by social mood – including whether the India-Pakistan conflict will cross the red line into unthinkable territory.
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