Skycraper Index
January 22, 2010 11:48 AM Subscribe
V, Double dip (W) or L recession? Things look bad for the EURO is the skyscraper index is right. We have heard recently about problems in the Eurozone.
Is the worst over or is the worst still to come? The skyscraper index
indicates: Trouble ahead.
The Skyscraper Index is a concept put forward in January 1999 by Andrew Lawrence, research director at Dresdner Kleinwort Wasserstein, which showed that the world's tallest buildings have risen on the eve of economic downturns. Business cycles and skyscraper construction correlate in such a way that investment in skyscrapers peaks when cyclical growth is exhausted and the economy is ready for recession. Lawrence used skyscraper projects as a predictor of economic crisis, not boom.
* The first notable example was the Panic of 1907. Two record-breaking skyscrapers, the Singer Building and Metropolitan Life Insurance Company Tower, were launched in New York before the panic and completed in 1908 and 1909, respectively. Met Life remained the world's tallest building until 1913.
* Another string of supertall towers - 40 Wall Street, Chrysler Building, Empire State Building - was launched shortly before to the Wall Street Crash of 1929.
* The next record holders, World Trade Center towers and Sears Tower, opened up in 1973, during the 1973–1974 stock market crash and the 1973 oil crisis.
* The last example available to Lawrence, Petronas Twin Towers, opened up in the wake of the 1997 Asian Financial Crisis and held the world height record for five years.
Picture to visualize this.
Since then:
The Dubai Tower, the world largest building, opened 2010, during the major Dubai financial crisis.
The European Central Bank Tower will be finished in 2014. If the skyscraper index is a good indicator then the Euro zone should have it biggest problems around 2014.
Of cause the Austrians like the indicator since it is in accordance with their business cycle theory.
You might want to enjoy some skyscraper pics while it lasts (Skyscraper discussion board, you have to browse)
The Skyscraper Index is a concept put forward in January 1999 by Andrew Lawrence, research director at Dresdner Kleinwort Wasserstein, which showed that the world's tallest buildings have risen on the eve of economic downturns. Business cycles and skyscraper construction correlate in such a way that investment in skyscrapers peaks when cyclical growth is exhausted and the economy is ready for recession. Lawrence used skyscraper projects as a predictor of economic crisis, not boom.
* The first notable example was the Panic of 1907. Two record-breaking skyscrapers, the Singer Building and Metropolitan Life Insurance Company Tower, were launched in New York before the panic and completed in 1908 and 1909, respectively. Met Life remained the world's tallest building until 1913.
* Another string of supertall towers - 40 Wall Street, Chrysler Building, Empire State Building - was launched shortly before to the Wall Street Crash of 1929.
* The next record holders, World Trade Center towers and Sears Tower, opened up in 1973, during the 1973–1974 stock market crash and the 1973 oil crisis.
* The last example available to Lawrence, Petronas Twin Towers, opened up in the wake of the 1997 Asian Financial Crisis and held the world height record for five years.
Picture to visualize this.
Since then:
The Dubai Tower, the world largest building, opened 2010, during the major Dubai financial crisis.
The European Central Bank Tower will be finished in 2014. If the skyscraper index is a good indicator then the Euro zone should have it biggest problems around 2014.
Of cause the Austrians like the indicator since it is in accordance with their business cycle theory.
You might want to enjoy some skyscraper pics while it lasts (Skyscraper discussion board, you have to browse)
Similar to the skyscraper index - buildings at top 5 business schools.
posted by JPD at 11:59 AM on January 22, 2010
posted by JPD at 11:59 AM on January 22, 2010
Fortunately, friends, I have here in my possession a MAGICKAL STONE of most ASTOUNDING PROPERTIES. It is 100% guaranteed* to prevent the bearer from being CRUSHIGATED under a falling SKYSCRAPER.
*Guarantee void in Tennessee.
posted by Mister_A at 12:00 PM on January 22, 2010 [1 favorite]
*Guarantee void in Tennessee.
posted by Mister_A at 12:00 PM on January 22, 2010 [1 favorite]
Your main link is to Wikipedia?
posted by Chocolate Pickle at 12:01 PM on January 22, 2010
posted by Chocolate Pickle at 12:01 PM on January 22, 2010
There's also a link to that awesome MetaFilter blog; don't be such a dick!
posted by Mister_A at 12:02 PM on January 22, 2010 [1 favorite]
posted by Mister_A at 12:02 PM on January 22, 2010 [1 favorite]
If there's one thing I learned in Psych 303: Research Methods, it's that correlation is always, always causation.
posted by mullingitover at 12:05 PM on January 22, 2010
posted by mullingitover at 12:05 PM on January 22, 2010
So how many MAGICK STONES shall I put you down for, mullingitover?
posted by Mister_A at 12:07 PM on January 22, 2010
posted by Mister_A at 12:07 PM on January 22, 2010
None, Mister_A, I have accepted the lord as my saviour and now am effectively protected from tigers through the power of prayer.
posted by mullingitover at 12:10 PM on January 22, 2010
posted by mullingitover at 12:10 PM on January 22, 2010
And now back to your regularly scheduled doom.
It's about time too. The Planet Money podcast was getting kind of boring. Check out the VIX baby! Keep your eye on the TED Spread. Whoooooo!
posted by diogenes at 12:12 PM on January 22, 2010
It's about time too. The Planet Money podcast was getting kind of boring. Check out the VIX baby! Keep your eye on the TED Spread. Whoooooo!
posted by diogenes at 12:12 PM on January 22, 2010
So, when the economy dives, we stop building new skyscrapers, so the ones most recently built hold the record for longer. Have I got it?
posted by echo target at 12:13 PM on January 22, 2010 [3 favorites]
posted by echo target at 12:13 PM on January 22, 2010 [3 favorites]
GuyZero: "Wait until you hear about the relationship between ice cream consumption and drowning deaths at the beach."
mullingitover: "correlation is always, always causation"
If I understand the Skyscraper Index, it does not claim that building of the tallest buildings causes an economic bust, but rather it would be an indicator that one is coming.
So we could viably watch ice cream consumption as a sign of a need to get more lifeguards watching the beach, if we somehow were prevented from directly observing how many people were out there swimming.
posted by idiopath at 12:15 PM on January 22, 2010
mullingitover: "correlation is always, always causation"
If I understand the Skyscraper Index, it does not claim that building of the tallest buildings causes an economic bust, but rather it would be an indicator that one is coming.
So we could viably watch ice cream consumption as a sign of a need to get more lifeguards watching the beach, if we somehow were prevented from directly observing how many people were out there swimming.
posted by idiopath at 12:15 PM on January 22, 2010
David Lee Roth's album Skyscraper (in which Steve Vai manages to make his guitar say 'skyscraper'!) was released shortly before Black Monday
posted by Flashman at 12:16 PM on January 22, 2010 [2 favorites]
posted by Flashman at 12:16 PM on January 22, 2010 [2 favorites]
echo target: "So, when the economy dives, we stop building new skyscrapers, so the ones most recently built hold the record for longer. Have I got it?"
And the corollary would be that "we are not currently in a bust" is a reliable indicator of a coming bust. Which I think both Marxist and Austrian school economics would agree with wholeheartedly.
posted by idiopath at 12:17 PM on January 22, 2010 [1 favorite]
And the corollary would be that "we are not currently in a bust" is a reliable indicator of a coming bust. Which I think both Marxist and Austrian school economics would agree with wholeheartedly.
posted by idiopath at 12:17 PM on January 22, 2010 [1 favorite]
David Lee Roth's album Skyscraper (in which Steve Vai manages to make his guitar say 'skyscraper'!) was released shortly before Black Monday
Hmmm. Interesting. We should probably look into what Peter Frampton is up to right now.
posted by diogenes at 12:19 PM on January 22, 2010
Hmmm. Interesting. We should probably look into what Peter Frampton is up to right now.
posted by diogenes at 12:19 PM on January 22, 2010
The skyscraper index? Seriously? According to Wikipedia, it started as a joke. I'm not sure it ever stopped being a joke.
Is it just me, or is economics the science of everybody guessing what's going to happen, then the 2% who guessed right get to go on TV as scientific prophets during the next news cycle to rationalize their guesses with authoritative econolingo?
I'm not saying it should be easy, or that economists aren't working hard enough understanding the economy, I just think they shouldn't pretend that they know what's going on when they really don't seem to at all.
posted by Salvor Hardin at 12:19 PM on January 22, 2010
Is it just me, or is economics the science of everybody guessing what's going to happen, then the 2% who guessed right get to go on TV as scientific prophets during the next news cycle to rationalize their guesses with authoritative econolingo?
I'm not saying it should be easy, or that economists aren't working hard enough understanding the economy, I just think they shouldn't pretend that they know what's going on when they really don't seem to at all.
posted by Salvor Hardin at 12:19 PM on January 22, 2010
What giant building was built in the middle of 2008?
posted by shakespeherian at 12:22 PM on January 22, 2010
posted by shakespeherian at 12:22 PM on January 22, 2010
Hmmm. Interesting. We should probably look into what Peter Frampton is up to right now.
I think he's buying a cloud-stalked island in the sun out of season.
posted by shakespeherian at 12:25 PM on January 22, 2010
I think he's buying a cloud-stalked island in the sun out of season.
posted by shakespeherian at 12:25 PM on January 22, 2010
The problem with these MAGICK STONES is that they're made from fallen skyscrapers. It's a real hassle getting them.
posted by Mister_A at 12:27 PM on January 22, 2010
posted by Mister_A at 12:27 PM on January 22, 2010
Silly people. Skip the middle man approach and pray directly to the tigers.
posted by Babblesort at 12:31 PM on January 22, 2010 [2 favorites]
posted by Babblesort at 12:31 PM on January 22, 2010 [2 favorites]
Burj Dubai
That was finished this year and gets credited with the major Dubai financial crisis in the post. I don't think mammoth buildings get two crises per hex, do they?
posted by shakespeherian at 12:31 PM on January 22, 2010
That was finished this year and gets credited with the major Dubai financial crisis in the post. I don't think mammoth buildings get two crises per hex, do they?
posted by shakespeherian at 12:31 PM on January 22, 2010
I'll stick with the Mac and Cheese Index, thank you very much. It's tastier.
posted by brundlefly at 12:31 PM on January 22, 2010
posted by brundlefly at 12:31 PM on January 22, 2010
I saw some excellent arguments the other day that it's going to be a 'teepee-shaped recovery'; consumers are completely tapped out on debt accumulation, and interest rates were already low and are now at zero. There's just nothing to drive growth, and the major reason the world economy has recovered even a little is because of the major interventions by most world governments.
It seems quite likely to me that the Fed will be forced to continue 'quantitative easing' (aka, printing money) to try to make up for the lack of demand, but the fundamental problem is too much debt, and injecting new debt into the system that way won't be a long-term solution. It's not a cure, it's more of what made us sick.
The only real way back to long-term health would appear to be a significant reduction in the total systemic debt, but there's just so damn much of the stuff, and the system is so reliant on vast new amounts of it being issued every year, that attempts to pay it down could very easily result in catastrophic failure.
posted by Malor at 12:38 PM on January 22, 2010 [2 favorites]
It seems quite likely to me that the Fed will be forced to continue 'quantitative easing' (aka, printing money) to try to make up for the lack of demand, but the fundamental problem is too much debt, and injecting new debt into the system that way won't be a long-term solution. It's not a cure, it's more of what made us sick.
The only real way back to long-term health would appear to be a significant reduction in the total systemic debt, but there's just so damn much of the stuff, and the system is so reliant on vast new amounts of it being issued every year, that attempts to pay it down could very easily result in catastrophic failure.
posted by Malor at 12:38 PM on January 22, 2010 [2 favorites]
if we somehow were prevented from directly observing how many people were out there swimming.
The big if.
This is basically a third-order doubly-indirect indicator of doom. I'll stick to watching unemployment numbers and keeping alert of the sounds of rioting.
posted by GuyZero at 12:48 PM on January 22, 2010
The big if.
This is basically a third-order doubly-indirect indicator of doom. I'll stick to watching unemployment numbers and keeping alert of the sounds of rioting.
posted by GuyZero at 12:48 PM on January 22, 2010
teepee-shaped recovery
A teepee that leans to the left.
posted by diogenes at 12:57 PM on January 22, 2010
A teepee that leans to the left.
posted by diogenes at 12:57 PM on January 22, 2010
A communiss teepee?
posted by Mister_A at 1:08 PM on January 22, 2010 [1 favorite]
posted by Mister_A at 1:08 PM on January 22, 2010 [1 favorite]
Two record-breaking skyscrapers, the Singer Building and Metropolitan Life Insurance Company Tower, were launched in New York before the panic and completed in 1908 and 1909, respectively. Met Life remained the world's tallest building until 1913.
* Another string of supertall towers - 40 Wall Street, Chrysler Building, Empire State Building - was launched shortly before to the Wall Street Crash of 1929.
So in other words, a new project became the world's tallest building in 1913, but no financial meltdown occurred? The cited evidence contains its own counterexample.
posted by yesster at 1:17 PM on January 22, 2010
* Another string of supertall towers - 40 Wall Street, Chrysler Building, Empire State Building - was launched shortly before to the Wall Street Crash of 1929.
So in other words, a new project became the world's tallest building in 1913, but no financial meltdown occurred? The cited evidence contains its own counterexample.
posted by yesster at 1:17 PM on January 22, 2010
And that Eurotower? At 600 feet it wouldn't be the tallest building in Philadelphia! Some crisis predictor that'd make. SCOFF@!
posted by Mister_A at 1:18 PM on January 22, 2010
posted by Mister_A at 1:18 PM on January 22, 2010
I think everything is going to be just fine.
posted by skyscraper at 1:24 PM on January 22, 2010 [5 favorites]
posted by skyscraper at 1:24 PM on January 22, 2010 [5 favorites]
That was finished this year and gets credited with the major Dubai financial crisis in the post. I don't think mammoth buildings get two crises per hex, do they?
Dubai's crisis and the US crisis are the same things. Same causes, same end result.
posted by JPD at 1:34 PM on January 22, 2010
Dubai's crisis and the US crisis are the same things. Same causes, same end result.
posted by JPD at 1:34 PM on January 22, 2010
And that Eurotower? At 600 feet it wouldn't be the tallest building in Philadelphia! Some crisis predictor that'd make.
To be fair, what Europeans call a skyscraper is not what the rest of the world would call a skyscraper. They tend to build their cities horizontally, rather than vertically.
posted by Blazecock Pileon at 1:38 PM on January 22, 2010
To be fair, what Europeans call a skyscraper is not what the rest of the world would call a skyscraper. They tend to build their cities horizontally, rather than vertically.
posted by Blazecock Pileon at 1:38 PM on January 22, 2010
Dubai's crisis and the US crisis are the same things. Same causes, same end result.
But so that means that the skyscraper index works backwards through time.
posted by shakespeherian at 1:40 PM on January 22, 2010
But so that means that the skyscraper index works backwards through time.
posted by shakespeherian at 1:40 PM on January 22, 2010
Skyscraper pyramid contains three simultaneous crash days. Plus there's a fourth that doesn't do anything.
posted by Babblesort at 1:45 PM on January 22, 2010
posted by Babblesort at 1:45 PM on January 22, 2010
Yeah, the European Central Bank Headquarters isn't exactly going to be a record-shatterer - it's only going to be the sixth-tallest building in Frankfurt. There's even going to be one twelve stories taller finished two years before it.
So what, uh, exactly does this have to do with the euro? I think there should be a postulate about how posts that treat it as an acronym are probably going to be weak ones.
posted by The Bridge on the River Kai Ryssdal at 1:46 PM on January 22, 2010
So what, uh, exactly does this have to do with the euro? I think there should be a postulate about how posts that treat it as an acronym are probably going to be weak ones.
posted by The Bridge on the River Kai Ryssdal at 1:46 PM on January 22, 2010
The Pirates to Orange Juice ratios look good, so the message is mixed.
But so that means that the skyscraper index works backwards through time.
We're through the looking glass, people.
posted by codswallop at 1:47 PM on January 22, 2010
But so that means that the skyscraper index works backwards through time.
We're through the looking glass, people.
posted by codswallop at 1:47 PM on January 22, 2010
EURO? Huh? I'll bet you DOLLARS to donuts (and given my YEN for donuts, FRANKly, that's saying something) that this is nonstandard typography.
posted by mr_roboto at 2:48 PM on January 22, 2010
posted by mr_roboto at 2:48 PM on January 22, 2010
> Fortunately, friends, I have here in my possession a MAGICKAL STONE of most ASTOUNDING
> PROPERTIES. It is 100% guaranteed* to prevent the bearer from being CRUSHIGATED
> under a falling SKYSCRAPER.
Does it make soup?
posted by jfuller at 4:26 PM on January 22, 2010
> PROPERTIES. It is 100% guaranteed* to prevent the bearer from being CRUSHIGATED
> under a falling SKYSCRAPER.
Does it make soup?
posted by jfuller at 4:26 PM on January 22, 2010
David Lee Roth's album Skyscraper (in which Steve Vai manages to make his guitar say 'skyscraper'!) was released shortly before Black Monday
The only thing one could do then was Eat 'em and smile.
posted by ersatz at 5:42 PM on January 22, 2010
The only thing one could do then was Eat 'em and smile.
posted by ersatz at 5:42 PM on January 22, 2010
Oh, and wrt the Euro, when it first reached current EUR-USD rates with an upwards trend, ministers and country leaders were complaining that it may be too strong. What about the exports! Now that it's weakening back to Aug09 levels people are complaining because it's weakening.
posted by ersatz at 5:52 PM on January 22, 2010
posted by ersatz at 5:52 PM on January 22, 2010
The problem with this theory is that the buildings keep getting taller as the economy gets better. So as long as things are good, the buildings get higher.
Then, when the economy tanks. people stop building. Thus, tallest buildings = downturns. But it doesn't work as a predictor.
Except in the case of Dubai, it took a long time to build.
posted by delmoi at 7:20 PM on January 22, 2010
Then, when the economy tanks. people stop building. Thus, tallest buildings = downturns. But it doesn't work as a predictor.
Except in the case of Dubai, it took a long time to build.
posted by delmoi at 7:20 PM on January 22, 2010
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posted by GuyZero at 11:57 AM on January 22, 2010 [2 favorites]