Not because he’s preoccupied with the evolving fashions of nether garments – rather, he sees underwear sales as a key economic predictor.
The men’s underwear index (yes, it exists) backs up Greenspan’s theory: US sales of men’s underwear fell significantly from 2007 to 2009, during the Great Recession, but gained steam again in 2010 as the economy recovered.
Andrew Lawrence, a director and former real estate analyst with Barclays Capital, created the “Skyscraper Index” in 1999. His theory was that an increase in very tall buildings happens as we’re approaching a bust – and when a building that breaks the record for the world’s tallest is completed, a recession or economic crisis is imminent.
“We took the index as far back as the late 1800s and found that even going back that distance we could still find correlations between economic crises and completion of the world’s tallest building,” he said in an interview.
The Empire State Building was finished in 1930, just in time for the Great Depression, while the Sears Tower (now Willis Tower) and the World Trade Center’s Twin Towers opened in the early 1970s as the US sunk into stagflation. In October 2009, construction company Emaar completed the exterior of Dubai’s Burj Khalifa, and two months later, the Dubai government nearly defaulted.
Lawrence links these lofty ambitions to cheap credit, over-investment, and rampant speculation – typically signs of an economic top.
Today, most projects to build the highest tower are on hold. But in another way, Billionaires are still spending their money to soar into the sky: Jeff Bezos, Elon Musk, and Richard Branson are all competing in the space race.
But the theory doesn’t always hold up. Research group Kline & Company found that while lipstick sales increase during times of economic distress, they also gain during boom times.
Related hypotheses abound, however. In 2020, at the height of the Covid economic downturn, Estee Lauder’s CEO Fabrizio Freda said that the lipstick index had been replaced by a skincare item as customers donned masks and worked from home.
What’s worse than losing money? Losing money and being lonely.
It makes sense. Unemployed people have plenty of time to swipe around. Online dating is (relatively) inexpensive and misery, as we all know, loves company.
If the indicator is correct for the current times, analysts should be worried. Match competitor Bumble reported stronger-than-expected fourth quarter earnings this month and received an analyst upgrade, leading shares to surge by 22%.