Cover of MoneyWeek issue no 431

Riding the bear

17 April 2009 / Issue 431

Our experts on where to put your money now... PLUS:

  • Why you should buy index-linked gilts
  • Matthew Lynn on how to revive the UK economy
  • The cobbler making millions from the recession

Excerpt

What Y-fronts predict now

I’ve heard of the lipstick indicator – the idea that lipstick sales rise in a recession as women avoid big purchases in favour of little luxuries. Then there’s the hemline indicator, whereby dresses get longer in hard times, reflecting a less confident climate. But men’s fashion indicators are thinner on the ground.

So it was interesting to read in the Daily Mail this week that the ex-Federal Reserve chief, Alan Greenspan, sets great store by a particular item of clothing – men’s underpants. Apparently, or so Greenspan told US broadcaster Robert Krulwich, it’s because even when times are good, “men wear them until they are in total tatters” and only buy new ones when they really, really need to. So if sales fall, the economy is in big trouble – men are “so pinched” that they can’t even replace their shabby old boxers.

What are sales of pants doing now? Well, research group Mintel has just declared that it expects sales for 2009 to fall 2.3% compared with an earlier forecast for 2.6% growth. Presumably that’s bad news in Greenspan’s book.

There’s just one problem. We already know the economy’s in trouble – it’s been obvious for 18 months or more.

• Read the full editor’s letter here: What Y-fronts predict now