by Fernando Gonzalez, EvolutionTrading.net, 2 December 2009
Punctuations, as we commonly know them, are used in literary works as a means to identify and distinguish elements, thoughts, sentiments and ideas in writing. We use them to separate, connect, complete, emphasize and even introduce (such as in the Spanish language) words, phrases or sentences. If we were to analogize events in real life to the order of literary works, then opulence would certainly be the punctuation mark that serves to emphasize, end, connect and even begin entire eras, ages or generations.
In January 2010, following a few months of delay, the Burj Dubai, the world’s tallest man-made structure, rising over 800 meters above the United Arab Emirates, is scheduled to open its doors amidst a tremendous amount of media publicity and fanfare. There is good reason for the fanfare, as we can see in the diagram below that compares the Burj to the other tallest buildings in the world and a few famous man-made landmarks:
It’s hard to get more opulent than the Burj. Now, while opulence is always happening somewhere in the world, creating the world’s tallest habitable structure does not come around too often. In the last 109 years, it has occurred 11 times beginning with the Philadelphia City Hall in 1901. Over this time period, we can average the cyclical development of the world’s tallest buildings to about once every 10 years. However, it is very interesting to learn that the creation of the world’s tallest buildings tends to happen in clusters. The great Empire State Building stood unsurpassed for over 40 years, while the Sears Tower (recently named Willis Tower) stood tallest for over 25 years.
Rather than an even distribution every decade, the tallest buildings of the 20th century were actually built in groups of two or three at a time, almost as if there were scheduled periodic competitions, followed by a long period of silence, and then only for the “race to the sky” to recur again several decades later. Why do these races to create the world’s tallest buildings occur in clusters, and is there a pattern to these?
It is said that some of the world’s greatest man-made structures of the past, such as the great pyramid in Giza, the Mayan temples, the Taj Mahal, were all created following periods of great prosperity or power, and that these tended to symbolize a “new height” of an era. To answer the question of whether the tallest and greatest structures of the last century had anything to do with such conditions, we just did what we do best and simply put it on a chart:
As we overlay the development dates of the last 8 tallest buildings in the world onto a historical chart of the DOW, there is no shadow of a doubt that the construction of these record-breaking structures came along following lengthy periods of prosperous economic conditions. Interestingly, none of these structures were erected during Bull Markets – they all came in just at or during the protracted Bear Market eras of the last century, the last two of which lasted approximately 20 years before new Bull Markets were underway.
It is interesting to note that while the 20th century “champions” of height were American, the last 3 that ushered in the new millenium are outside of the US: The Petronas Towers in Malaysia, the Taipei 101 in Taiwan and the Burj Dubai in the UAE. The development of the Petronas Towers in Kuala Lumpur coincided almost perfectly with what was known as the “Asian Economic Contagion” in the late 90’s that began with the collapse of the Thai Baht, and thereafter spread throughout Asia. It is also quite well known now that the Burj Dubai happened to come along just as UAE economy tanked. 2007 was the year that the Burj, while still in construction happened to break all variations of the “world’s tallest” records, which is the very same year that the DOW set its all-time high before collapsing 60% over the next 18 months – its fastest and most violent decline since the 1929 crash. Perhaps the historians were right when they told us that some of the world’s grandest structures in history were built at the height of tremendous prosperity.
Controversy. The Petronas Towers, which coincided with the Asian economic crisis and was completed just months before the Nasdaq bubble peaked in 2000, laid claim to the title of “tallest building in the world.” Some disagreed, and in fact they said the same about the next “tallest building” erected, the Taipei 101. Because the Sears (Willis) Tower actually stood taller counting its antennas, many claimed these buildings that sprouted in Asia were really not the tallest, and that the Sears Tower still was the champion.
And so, there came a need to develop different categories such as “tallest-habitable structure,” “tallest structure with antenna,” “tallest architectural structure,” “building with the most floors,” etc, ad nauseam. There were other structures built or in-construction that also came extremely close to one record or another such as the Shanghai Tower, Abraj Al Bait, Russia Tower and a several others, all seemingly trying to “inch” each other out for a title. Well, come 2010, all of these different categories and records will be smashed by the Burj, which will rise almost 300 meters above anyone else, whether it is habitable or not, antenna or not. It is therefore safe to say the Burj is opulent, and thus we talk about its significance today.
As noted earlier, opulence tends to serve as a punctuation mark to eras, to ages, to “the times.” As we look back in history, perhaps we can gather even more evidence that opulence tends to “mark” an end, just like a punctuation on a sentence. Although great structures have marked ends to certain eras, they have also served as “connections” from one era to the next, and even further, as the mark of a new beginning – just like punctuations can serve those purposes as well: end, middle and beginning. Or we could simply call it the signs of CHANGE. What kind of changes does the awesome Burj signify?
Right at the turn of the 1800’s to the 1900 century, American structures overtook European structures in greatness. The turn of that century ushered-in a new era of American economic dominance worldwide. Perhaps the 3 most recent structures, and many more coming in the next few years, nearly all of which are outside the US signify that the 21st century will be a period where global economic power shifts outside of the US and into a more broad distribution worldwide, particularly towards Asia and Middle East. Or perhaps that the Burj, or Dubai’s long list of opulent landmarks in recent years denotes a spectacular end to the prosperity enjoyed by the Middle East through the sale oil, as the world discovers new resources for energy in the 21st century. We can develop a logical line of reasoning to support nearly any expectation in many different directions, but it is rather clear that dramatic changes in the world economic order are beginning to take shape. As impossible as it was for anyone in the early 1900’s to have envisioned a world driven by cell phones, internet, and navigation systems, the shift in the order of the long-term future will exceed even our wildest imagination today.
As we complete the first 10 years of the new millennium, the changes we have witnessed over this last decade or so – as awesome as they have been, in technology and in world economic order – are most probably just the beginning of a new world, impossible to imagine. As frightening as the potential for these significant changes can be, there is a tint of excitement in that… I hope you like to travel.
