Skyscraper Index: Tallest Buildings Rising as Mercury of Looming Economic Crisis Skyscrapers, a building backed up by powerful economic forces, are viewed by people and politicians mostly as the symbol of social progress and economic boom, a notion some economists turn up their noses at. The tallest buildings spring up usually as the herald for an economic downturn at hand, typically when setting a new record, the economists argue. “The bad times come once the edifices are finished”(1), judged by Andrew Lawrence, a security analyzer at Deutsche Bank(2), in 1999. On Feb. 15, 2006, Lehman Brothers Holdings Inc. set up an international economic meeting in Beijing. “If there would be any global depression in the near term, it mostly could be in 2007 or 2008”(3), Mr. Llewellyn, chief economist for Lehman Brothers, said to their China clients in the meeting, looking ahead when referring to the “Skyscraper Index”. The chief economist predicted the bust through 2007 into 2008, only to find out later the century-old corporation he worked for was toppled down in that recession. In terms of the economy, here come our questions: Is the high-rise a glory or curse? And whether the buildings do have a close relationship with the economic disaster? In 1999, Andrew Lawrence’s study proved there’s connections between skyscrapers and recession, which the researcher described as the “Skyscraper Index”(4). In fact, every record-breaking structure normally rises along with the economic downturn. From early-20th-century, there’s four rounds of global skyscraper-building spree, coming with them the depression or financial turmoil each time.(5) In the 1920’, America’s economy turned up, with an unprecedented roaring stock market back and a surge in building on residential and commercial properties. During that period, three record-breaking skyscrapers had leapt into existences in a string: 40 Wall Street, Chrysler Building, and Empire State Building, constructions in New York, were erected through 1929 to 1931. Nonetheless, hot on the heels of them was not a new boom but a disastrous economic debacle. After the long-and-robust-growth 1960’s, a period called by the Americans as the “Golden Age”(6), World Trade Center in New York and Sears Tower in Chicago broke ground. In 1972 and 1974, the two world-record-breaking skyscrapers were completed in turn, in the wake of them a serious global economic stagnation. Hardly anyone believes it is a coincidence that skyscrapers had a close relationship with economic crisis. Then what makes the depression stay with skyscrapers? First, human nature makes a contribution.(7) People’s optimism sometimes is unwarranted. To put it another way, men do not fully understand the objectives in the real world as they thought do, and stubbornly stick to the subjectives in their minds. Although Mr. Lawrence named the nexus between skyscrapers and depression as the “century-ailing-link”(8), that “ailing-link” had been existing not the least of 100 years in human society. In retrospect, one can easily find that “ailing-link” was standing as far back as in China’s long-time history. King Zhou, a monarch of Shang Dynasty, constructed Lutai when his kingdom was well-off, a then magnificent architecture, while the resentments cropped up from everywhere, and he was forced to incinerate himself on the construction. Emperor Qian Long, a ruler of Qing Dynasty, had gardens built on a large scale at a time of the dynasty’s greatest grandeur, leading to the waning in national power, humiliating the nation and forfeiting its sovereignty Second, profit weighs in. Margin is primary to any business behavior. Before the onset of a boom, low interest rates are paving the way for the economic upturn as a prerequisite. Yet in a prosperous economy, interest rates are always lower than the expectation of income. And there come the flows of money in the form of the said so- -called money-flow-pipe(9). In addition, the economic boom and comparably low interest rates work on land values and capital costs directly. Consequently, a plan for a new world-record-breaking construction is mapped out in keeping with the flow of money, to which three contributing factors are land prices, business demands and supporting capitals. As we know, like the alternation of day and night, or seasonal cycle, business cycles back and forth between good and bad; price of goods depends on the supply and demand. Thus, the demand for the high-rise stems from a so-called “golden status”, a volatile state, in which the darkest hour is just before the dawn(10), and the bust rolls out from the peak of the boom, in which interest rates are lower, and demands are growing, and in which prices are rising, and most people are blindly optimistic. Generally, the economy staggering into a recession, the tallest buildings have just been finished, and after they are occupied, the economy might have already been bogged down, resulting in the depression keeping pace with the building of skyscrapers and the NO.1 building in the world being the monument to the faded boom. Notes: (1) This is not the original words from Lawrence but the translation of the Chinese article. (2) Actually, Andrew Lawrence was then research director at Dresdner Kleinwort Wasserstein. From Wikipedia, "Skyscraper Index". (3) This is not the original words from Llewellyn but the translation of the Chinese article. (4) In fact, Lawrence brought out the concept as a joke. From Wikipedia, "Skyscraper Index". (5) Lawrence’s data was based on United States experience. And there's more than four rounds of building fever in USA history. From Wikipedia, "Skyscraper Index". (6) The Chinese writer may have been confused with the "Golden Age" of Europe and America. But obviously, he just wanted to say in the 1960's, American's economy was very good. (7) The first reason is typical of Chinese writing cliches, and it's hardly to be found on any research book/article of Skyscraper Index on the internet. (8) This is not Lawrence's original words but the translation of the Chinese article. (9) It seems that the Chinese author had dug more than other researchers on the theory of Skyscraper Index. His concept of "money-flow-pipe" is seldom to be found on the internet. (10) The author uses a Chinese saying as a metaphor to indicate the buisness cycles.