----- Forwarded Message ----- For someone interested in modern architectural marvels, not knowing Burj Dubai is akin to being a car enthusiast and not knowing the Ferrari! At 2,684 feet, it is the tallest man made structure ever built. And until most recently, it was a testimony to the rapid strides the Emirate kingdom of Dubai had taken in establishing itself as one of the most popular destinations in the world. But henceforth, Burj Dubai is also going to be remembered for something else. It will be remembered for validating once again, an economic theory called as 'The Skyscraper Index'. Created by the economist Andrew Lawrence, the theory states that the building of world's tallest building may be a useful way to predict the onset of a major economic downturn.
Interestingly, in October 2009, Emaar, the construction company that was constructing Burj Dubai announced that it had completed the exterior of the building and within two months, the Dubai government came close to defaulting on its loans. And this is not an isolated case. As shown in the table below, *there seems to be a healthy correlation between construction of landmark buildings and the occurrence of a financial crisis.* *Skyscrapers & economic crisis: Is there a link?* *Year* *Skyscrapers* *Height* *Economic crisis* 1907 Singer Building 612 ft US banking panic 1931 Empire State Building 1,250 ft The Depression 1973 Sears Tower, Chicago 1,450 ft Oil crisis 1998 Petronas Tower, Malaysia 1,483 ft Asian crisis 2009 The Burj, Dubai 2,684 ft Subprime crisis? And this phenomenon could not be without reason? Construction of tall buildings is a long gestation and a capital intensive project and the most favorable time for it to start is during a low interest and strong liquidity regime. Hence, by the time the building gets completed, the loose policy may have run its course and the markets ripe for a correction, leading to the completion of construction coinciding with a slowdown. It should be noted that like all economic theories, this one may also not be a foolproof one, but is definitely an important tool towards assessing the health of the economy. __._,_.___ <http://groups.yahoo.com/;_ylc=X3oDMTJlOGZvamJzBF9TAzk3NDc2NTkwBGdycElkAzE1ODM3NDUyBGdycHNwSWQDMTcwNTY0NDExOARzZWMDZnRyBHNsawNnZnAEc3RpbWUDMTI1OTg2MzIxOQ--> . __,_._,___ The information contained in this electronic message and any attachments to this message are intended for the exclusive use of the addressee(s) and may contain proprietary, confidential or privileged information. If you are not the intended recipient, you should not disseminate, distribute or copy this e-mail. Please notify the sender immediately and destroy all copies of this message and any attachments contained in it. -- Click for exclusive coverage on the New Bajaj Pulsar 220 the fastest Indian bike -- You received this message because you are subscribed to the Google Groups ""GLOBAL SPECULATORS"" group. To post to this group, send email to [email protected]. To unsubscribe from this group, send email to [email protected]. For more options, visit this group at http://groups.google.com/group/globalspeculators?hl=en.
