When Times Turn Flat
If you want to know the direction of the economy this year, don’t just listen to the words of President Bush or Alan Greenspan. It might be better to check out the lyrics of a chart-busting artist like country phenom Garth Brooks.
Gaining widespread attention is a theory from Columbia University research fellow Harold Zullow that says popular songs are an exceptionally accurate predictor of the economy’s direction. Pessimistic lyrics in hit songs indicate a recession, while optimistic songs suggest good times ahead. Zullow, who published extensive data on his theory in a recent edition of the Journal of Economic Psychology, came to that conclusion after studying the lyrics of popular songs going back 40 years.
A similar theory--one that doesn’t rely on a linear regression or correlations to prove its point--is that recessions begin when a lousy song reaches No. 1. Some examples at the start of recent downturns:
* December, 1969: Steam’s “Na Na Hey Hey Kiss Him Goodby.”
* January, 1980: “Escape (The Pina Colada Song)” by Rupert Holmes.
* November, 1973: “Keep on Truckin’ (Part 1)” by Eddie Kendricks.
* July, 1981: “The One That You Love” by sugary pop group Air Supply.
* July, 1990: Because of the demise of 45s in the age of compact discs, the start of the latest recession can be attributed not to any one song but a New Kids on the Block album that was among the top sellers.
Miracle in Washington, D.C.
Some of the unluckier investors these days have been holders of R. H. Macy junk bonds. Last Monday, they saw their bonds plunge after the New York retailer filed for protection under Chapter 11 of the U.S. Bankruptcy Code.
So give some credit to those savvy (or lucky) investors that bailed out when they had a chance--like the federal government.
The federal Resolution Trust Corp., the savings and loan cleanup agency that has become one of the nation’s biggest junk bondholders, back in 1990 had accumulated from failed thrifts Macy’s bonds with a face value of nearly $32 million. But agency officials rid themselves of the last of their Macy bonds by the beginning of 1991, and now have none on the books.
Texas-Sized Tribute
He’s a “man of great vision,” “daring” and “of imagination.” If that isn’t enough, he’s “a man who dreamed big dreams.”
Thomas Edison? Wozniak or Jobs? Preston Tucker?
No, it’s former Lincoln Savings & Loan owner Charles H. Keating Jr., who faces up to 10 years in prison and fines up to $250,000 for defrauding investors who bought bonds in his American Continental Corp.
The description is included in a letter sent by longtime Keating acquaintance and former Texas Gov. John B. Connally to Los Angeles Superior Court Judge Lance A. Ito, urging the judge to go light when he sentences Keating in April.
Briefly. . .
Let’s hope Bush’s fate won’t be the same: Texas oilman T. Boone Pickens Jr. praises President Bush’s proposals to boost the economy by comparing them to the dramatic drawing of a line in the dirt by William Travis at the Alamo. . . . History for sale: A former New Hampshire home of late 1800s writer and philosopher William James is being sold in a bank-ordered auction on Feb. 14. . . . Appropriate name: The Irvine branch of the BCCI-linked Independence Bank that was seized by state banking regulators last week is located on Teller Avenue.
