Skyscraper Index – Believe It Or Not

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. Mark Thornton’s Skyscraper Index Model successfully sent a signal of the Late-2000s financial crisis at the beginning of August 2007.

Over-saturated real-estate activity reflects over-saturated markets. Eventually, optimism runs dry and the period marked by over-exuberance recedes, and we notice the good times are over.

Ironically – China is scheduled to complete construction of the “new worlds tallest building” sometime late March.

Skyscraper Index

skyscraper-index

skyscraper-index

skyscraper-index

It’s entertainment at the very least – and something to consider / keep an eye on as the general principals run true.

12 Responses

  1. schmederling March 11, 2013 / 12:14 am

    Hey Kong….. my gut is talking again – something is building all over. I suspect the expected retail data coming out will suprise and deflate the recent employment numbers in the US. Will this drive the top in the DXY and let the EUR start a run remains to be seen. Imay well be off the mark but again something is ready to make a move.

    Also we all know stocks are at highs & should correct, however with many people crying this even in the media I suspect we may have a small pull-back and then power forward. This should create further confidence setting up for the final kill when it’s least expected.

    My weird thinking again…. Cheers Schmed…

    • Pot Stock Watch March 11, 2013 / 12:34 pm

      Schmed!

      Active as always……way to go man – you gotta have skin in the game if you wanna win.

      The usual co relations are off the table as we’ve seen the dollar rise along with the recent rise in equities. CAN ANY ONE SAY TOPPING IN PROCESS??

      Large positions are jockeying for the “hand off” if you ask me – and yes….dolla is set to make its move downward – only question is – how “little”?

      I don´t expect the USD to crater here at all – and will ( as previously posted ) be moving to neutral / 100% cash in coming days – short of playing this next move on extremely small time frames / positions. Anyone drawing a staight line “down to the 70’s” in $DXY fromhere – needs there head examined.

  2. schmederling March 11, 2013 / 2:38 am

    Time to get my feet wet again….

    For now..

    euraud short
    usdcad short
    audusd long

    Thanks Schmed,

    • schmederling March 11, 2013 / 3:07 am

      also adding…

      usdjpy short
      nzdusd long

    • Pot Stock Watch March 11, 2013 / 12:36 pm

      I like everything here Schmed – only cautious on the short USD/JPY….as with dollar weakness one can usually expect “super yen weakness”….so in this pair….it’s not a matter of which is rising or falling – only wich is rising / falling the “most”.

      Let’s watch it in real time – and see what shakes out.

      • schmederling March 11, 2013 / 1:02 pm

        Yeah was not expecting much out of usdjpy…. stops hit expected it but rolled the dice…. everything else is still running… this could make my second quarter … but I’ll wait until all positions are close before a put pen to paper….

  3. schmederling March 11, 2013 / 6:29 pm

    Hey Kong – I closed out 95% of my positions at 2:50pm EST….I think I cleared over 1000pips easy…. looked things over after reading you reply’s and decided to close up shop. I was suprised however after being away for a week or so it was like duck to water. Took a couple days to refresh from a forex perspective.

  4. schmederling March 11, 2013 / 6:36 pm

    Looking at a daily DXY – high 82.83 close 82.57, looks to be a top … usually runs a couple days before the turn….so we will see…

  5. schmederling March 11, 2013 / 7:57 pm

    back on…….. same gig…. except not USDJPY…. just the three pairs as before…..

  6. Alex Red March 11, 2013 / 8:53 pm

    Hi Pot Stock Watch, do you have a trading service?

    • Pot Stock Watch March 11, 2013 / 9:16 pm

      Hi Alex. I am currently holding long positions in AUD,NZD, CAD, USD vs JPY. as well long AUD/USD, NZD/USD and short USD/CAD.

      The usd has been stubborn at these levels – and the turn has taken longer than one might expect. It looks like Oil has now bottomed as well so….

    • Pot Stock Watch March 14, 2013 / 6:17 am

      Hi Alex sorry for the late response as I’ve had some kind of stomach flue here.

      No trade service “yet” but currently in the works. Have you had much experience with these? – I’d love to get your input as to what works best.

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