Fenton Research Weblog

Things to watch

Lately there have been a few excellent City/economic related programmes on the old goggle box (in my opinion):

On BBC i-player

• The Money Programme - variety
• 1929: The Great Crash
• The City Uncovered with Evan Davis

On Channel 4

• The Ascent of Money

Supersize me

The latest Big Max index is published in The Economist January 24th 2009.  It is based on the ideas of purchasing-power parity, which says currencies should trade at the rate that makes the price of goods the same in each country.  For example, if a Big Mac is above $3.54 (the US price) then the currency is 'expensive'.  If it's below $3.54 it's 'cheap'.

Pucker up

According to the 'lipstick index', a term coined by Leonard Lauder of Estee Lauder in the 2001 recession, women buy more lipstick in difficult times.  Cosmetic sales increased by 25% during the Depression and employment in the cosmetics industry has been known to rise as overall employment falls.  But why?  Does demand for cosmetics increase when consumer confidence is low, as they are seen as an affordable indulgence?

According to Karen Grant of NPD Group, a 'beauty index' may be a better guide of consumer confidence than purely a 'lipstick index', as the sector tends to hold up well in recessions.  Most women would sooner give up silk scarves or designer shoes than mascara or eye shadow.

See also: Dhaval Joshi of RAB Capital; Kline & Company

The Economist