As the stock market plummets, so do my hemlines

 

SN Money blogger, Michael Brush, offers us several highly scientific measures of recession severity: the Hemline Indicator, the Undies Indicator, and the “Can I Return This?” Indicator, among others.

In his May 27th post, Brush explains the Hemline and Midriff Indicators:

What our economy needs. (image: rollingstone.com)

In tough times, the experts muse, hemlines drop as an expression of conservatism, only to rise again as the markets hit go-go mode. During the late-1990s boom, the hemline indicator was supplanted by a midriff meter, as more women bared their stomachs as the popularity of tech stocks (and Britney Spears) peaked.

When the financial mess hit two years ago, blouses began replacing halter tops, and midriffs started to vanish, observes Jeffrey Hirsch of the Stock Trader’s Almanac, which looks for seasonal and other patterns that traders can play. 

If you believe this indicator, Hirsch says to watch for bellybuttons, plunging necklines and higher hemlines to confirm that we are in recovery mode. As I write this, looking around the streets of New York City on a warm spring day, it doesn’t seem we are there yet.

As for the ever-reliable Undies Indicator, Brush leaves it to former Federal Reserve Chief Alan Greenspan to do the talking:

Greenspan reasons that because hardly anyone actually sees a guy’s undies, they’re the first thing men stop buying when the economy tightens. (He told this to National Public Radio’s Robert Krulwich years ago.)

By extension, pent-up demand means underwear sales should be among the early risers when growth returns and consumers feel confident enough to shrug off “frugal fatigue,” says Marshal Cohen, the chief industry analyst with NPD Group, which tracks consumer behavior. In fact, right now men’s underwear sales suggest that things have bottomed but not started to recover. 

Image: thefrisky.com

For a recovery, we’d need to see a return to 2% to 3% annual growth in underwear sales. And that’s not in the cards, believes Bill Patterson, an analyst at consumer research company Mintel. Based on market research and surveys, Mintel predicts a 2.3% decline this year in men’s underwear sales and no recovery until 2013.

That’s four more years of saggy elastic and threadbare cotton.

And in case you’re wondering why Greenspan appears so sexist with his Undie Economic Theory, here’s Brush’s rebuttal:

Folks such as Greenspan don’t seem to look as closely at women’s lingerie — reasoning, perhaps, that women are more sensitive about wearing worn undergarments.

Oh. Of course.

Finally, let’s take a look at the “Can I Return This?” Indicator, shall we? We shall. 

The amount of stuff consumers return to stores can also tell us when a rebound is in store, says William Angrick, the chief of Liquidity Services (LQDT, news, msgs).

Returns have spiked for pricey discretionary items — such as high-end apparel and shoes, expensive electronics and top-of-the-line tools and grills — just as they did during the previous recession. “It’s been high since October,” says Angrick. And returns aren’t letting up — as you’d expect if consumers felt recovery was on the way.

Here’s another bad sign: Angrick says the number of consumers who band together to amass the larger buying power needed to purchase directly from Liquidity Services — like the soccer moms who recently bought a bunch of Guitar Hero games and game boxes — is not letting up either. That’s a sign they’re not confident enough to pay retail.

Crap. 

Curiously, today I spent $16.99 on an ankle-length, cotton Maxi dress at TJ Maxx. 

Coincidence? Only the NYSE can tell…

For more rather oddly conceived recession indicators, click on MSN Money.

 

* Initial “M” found HERE.