The Skyscraper Index Is Predicting Another Global Economic Crisis
Skyscraper construction can be used to
predict imminent doom for the global economy.
Originally conceived of by Barclays, the idea is that there's
correlation between construction of the next world's tallest
building and an impending financial crisis.
From the Empire State Building in 1930 to the Burj Khalifa in 2007,
it's unfortunately but eerily accurate.
Now, as Azizonomics points out,
China
is announcing it wants to build the tallest building in
the world: a 220-story "car-free city" in the inland town
of Changsha.
And it wants to do so within the next seven months.
Is that how much longer we have to sell out of our positions?
Look How
Skyscrapers Have Predicted Recession Through History
Investors look at everything from macro indicators like
inflation, unemployment and GDP growth, to more bizarre ones
like the diaper rash indicator and the hemline index to
measure the health of the economy.
Now, Barclays is out with its Skyscraper Index, which shows
a correlation between construction of the next world's
tallest building and an impending financial crisis. In fact
the report even suggests that the rate of increase in height
could also reflect the extent of that economic crisis.
Drawing on Barclays' report we put together a timeline of
the construction of skyscrapers and the financial crises
that coincided with them.
The Long Depression, 1873 - 1878
The pervasive U.S. economic recession with bank failures
that came to be known as the Long Depression coincided with
the construction of the Equitable Life Building in 1873. At
the time the building was the first skyscraper at a height
of 142 feet.
British banking crisis, 1890, and a
world recession
New York World building aka Pulitzer
Building
Chicago's 269-foot tall Auditorium building completed in
1889, and the 309-foot tall New York World building
completed in 1890, coincided with the British banking crisis
of 1890, and a world recession.
U.S. panic marked by the collapse of
railroad overbuilding, 1893
Chicago's 302-foot tall Masonic Temple, and the 348-feet
tall Manhattan Life Building, and the 353-foot tall
Milwaukee City Hall coincided with the US panic of 1893
marked by the collapse of railroad overbuilding. It also
coincided with a string of bank failures and a run on gold.
First stock market crash on the NYSE,
1901
The construction of the 391 feet tall Park Row Building
presaged the US stock market crash and panic of 1901, as did
the completion of Philadelphia City Hall, which stood at a
height of 511 feet.
The Bankers' Panic and U.S. economic
crisis, 1907 - 1910
Singer building, New York
The construction of New York's 612-foot tall Singer
building, and the 700-foot tall Metropolitan life building
corresponded with the panic of 1907. The Bankers' Panic was
a financial crisis that occurred after the NYSE fell nearly
50% from its peak, and reflected a monetary expansion
brought about by the establishment of trust companies.
The Great depression, 1929 - 1933
The construction of three record breaking buildings
coincided with the onset of the Great Depression. 40 Wall
Street which on completion in 1929 reached 927 feet,
followed by the 1,046 foot tall Chrysler building in 1930,
and the Empire State building in 1931, which towered over
the others at 1,250 feet.
U.S. and worldwide economic crisis,
1973 - 1975
The 1972 construction of One World Trade Center, the 1973
completion of Two World Trade Center, and the 1974
construction of the Sears Tower in Chicago, coincided with a
period of speculation in monetary expansion from foreign
lending.
It also coincided with the collapse of the Bretton Woods
system, a rise in oil prices that caused a global economic
crisis, and speculation in stocks, property, ships and
aircrafts.
Asian economic crisis, 1997 - 1998
The Asian economic crisis, currency devaluation and
speculation in stock and property coincided with the
completion of the Petronas Towers in 1997. At 1,483 feet,
the Petronas Towers were the tallest buildings in the world
and heralded a crisis in that region.
Dot-com bubble, 2000 - 2003
The construction of the 1,671 foot tall Taipei 101 began in
1999 and was completed in 2004. The duration coincided
without the recession in the early 2000s and the tech
bubble.
The Great Recession, 2007 - 2010
The 2010 completion of the tallest building in the world,
the Burj Khalifa, which towers at 2,717 feet coincided with
the current global financial crisis. The building surpassed
Taipei 101's height on July 21, 2007.
China, ???
Of all of the world's skyscrapers under construction, China
is home to 53% of them.
India, ???
India just finished building two skyscrapers and has 14
skyscrapers currently under construction.
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