Thursday :: Aug 31, 2006

Tracking The Hemline


by pessimist

One of the urban legends concerning predicting the stock market's future involves hemlines, first proposed by Wharton economist George Taylor in the 1920s. If there is anything to this theory, then the markets are headed down - another failure of the Bu$h Administration.

The clothing retailers in SoCal ARE showing long dresses and boots in their television ads, and on the street, many women are already sporting such fashions - even though the temperatures remain hovering around the 100 degree mark at the Ol' Pessimist's Homestead. I will be watching further developments with great interest.

Women's fashions aren't the only indicator which has minor value in predicting economic futures.

Another indicator which has some validity is commuter traffic density. As the author of this article points out:

My personal favorite gauge of the economy is my daily commute, whereby I assume the longer I'm stuck in traffic, the better the local job market must be. Remembering that the last recession brought with it comparatively empty roadways, it makes a growing economy's gridlock more bearable.

And of course, the obverse is also equally valid. It's been my experience in some of the nation's worst traffic conditions that things have eased somewhat. There are fewer traffic tie-ups which affect the Ol' Pessimist's ride home from his real-world employment than there usually are.

Another easily observed method of determining the health of the economy is my variation of the 'boxcar' theory. I take note of the number of days with heavy truck traffic during the early morning hours I'm headed in to work. Even though we are about to enter the holiday marketing period, the number of trucks is down significantly from earlier this year.

A better indicator might well be Starbucks' sales figures:

The chain had said sales at shops open at least 13 months rose 4 percent in July, missing Wall Street estimates and stoking concerns that the pressure of higher gas prices and interest rates was moving up the income ladder.

So much for higher gas prices not having much of an effect on the economy. Any way you want to look at the future of the economy, there are lots of indicators which point to a downturn. The question is: will the economy have an effect on the fall election?

Stay tuned.

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pessimist :: 4:55 PM :: Comments (1) :: Digg It!