Hemline Index And Bear Markets

People are truly hardwired to seek patterns to rationalize desired outcome/s.

And some even take a cue from evolving fashions...

According to the Daily Reckoning,

``The "Hemline Index" was first developed by technical analyst/economist George Taylor in 1926. It gained popularity around the 1929 stock market crash. The theory states that the stock market rises and falls with women's hemlines. Below is a famous graphic depicting the stock market and hemlines from 1897 to 1990 constructed by Alan Shaw's legendary technical analysis group at Smith Barney."

``If this theory still holds, the story below is a bearish indicator for the stock market."

Why so? Because today's fashion reveal of the return of "lengthy" hemlines as shown by the New York Times article

The New York Times, “There is definitely a movement to a very lengthy look, especially among the young,” said Nevena Borissova, a partner in Curve, a progressive retailer with stores in New York, Los Angeles and Miami. Ms. Borissova favors radically stretched-out skirts and dresses that “drag on the floor, with raw edges, and worn with combat boots,” she said. And as she pointed out, these myriad calf- or ankle-grazing iterations of the milelong skirt bear no relation to “Big Love” or, for that matter, the Summer of Love."

Well, I wouldn't know of anyone who would buy or sell of financial securities solely based on "fashion" trends. And I don't think people buy or sell securities because they wake up on the right/wrong side of the bed too.

This makes the above correlations more coincidental and subject to the flaws of "cognitive bias". Nevertheless, an amusing anecdote.

Onion News Network: Wipe Out National Debt Through A Staged Coup

From the Onion News Network (Hat tip: Investment Postcards)

U.S. Government Stages Fake Coup To Wipe Out National Debt

Cartoon of the Day: Swine Flu or Pork Flu?

Nice one from the Investor's Daily...

What happens When The US Runs Out of Financing For Its Bailout Programs

From the Onion News Network


Treasury Department Issues Emergency Recall Of All US Dollars

Cartoon of the Day: Occupational Hazard

From Dilbert (Hat tip Greg Mankiw)

George Carlin on Saving The Planet

Some trenchant excerpts from comedian George Carlin [Hat tip Mark Perry]...

``Saving endangered species is just one more arrogant attempt by humans to control nature. It’s arrogant meddling. It’s what got us here in the first place. Doesn’t everybody understand? Interfering with Nature”

``We’re so self-important. Everybody’s gotta save something else…and the greatest arrogance of all is save the planet. What? What is this @#$%^ people kidding me? Save the planet when we don’t even know how to take care of ourselves yet! We haven’t learned to care for one another, we’re gonna save the@#$%^ planet? I am getting tired of that %^&#!

``I am tired of the @#$%^ earth day, I am tired of this self-righteous environmentalists, this white bourgeois liberals who think that the only thing wrong with this planet is that there isn’t enough bicycle paths. People trying to make the world safe for their Volvos.

``Besides, environmentalists don’t give a $%^& about the planet, they don’t care about the planet. Not in the abstract they don’t. You know what they are interest in? A clean place to live. Their own Habitat. They’re worried that someday that they’d be personally inconvenienced. Narrow unenlightened self-interest doesn’t impress me. Besides, there is nothing wrong with the planet.

``...there is nothing wrong with the planet, the planet is fine, the people are @#$%^&! Difference…compared to the people the planet is doing great. It has been here for 4 ½ billion years…

``We’ve been only engaged in heavy industry for a little over 200 years…200 year versus 4 ½ billion, and we have the conceit to think that somehow we are a threat, that somehow we’ll put in jeopardy….

``The planet has been through a lot worst than us…earthquakes, volcanoes, quake tectonics, continental drift, solar flares, sun spots, magnetic storms, the magnetic reversal of the poles, hundreds of thousands of years of bombardment by comets and asteroids and meteors, worldwide floods, tidal wave, worldwide fires, erosion, cosmic rays, recurring high stages….and we think some plastic bags and some aluminum cans are going to make a difference???!!!

``The planet will be here for a long long looonngg time after we’re gone, and will heal itself, it will cleanse itself, because that is what it does, it is a self correcting system…

Cartoon of the Day: Sons of Frankenstein

A recent headline from the Wall Street Journal says "China Takes Aim at Dollar".

Maybe this is the reason why....

Good humorous stuff from about.com

Superman Gordon Brown: The World's Savior?

In a session at the House of Commons last December, England's Prime Minister Gordon Brown goofs about saving the world....errr the banks. (source: Telegraph).

Anyway this just an example of F. Hayek's 'Fatal Conceit', or the overweening belief of one's omniscience. A good quote from Thomas Sowell, ``Politics is largely the process of taking credit and putting the blame on others-- regardless of what the facts may be. Politicians get away with this to the extent that we gullibly accept their words and look to them as political messiahs."