The Hemline Theory

One of the classic bits of market wisdom is the Hemline Theory.

Financial analysts have loosely used it to determine where the economy is headed. So far it’s been pretty accurate. In the ’20s and ’60s, hemlines were at a high and so was the stock market. And in the ’30s and ’40s, the stock market was so low that women were almost tripping on their skirts. The hemline theory was also on the ball in 1987. Miniskirts were all the rage, and the stock market was at a matching high. But then the market quickly crashed in October, right when designers such as Bill Blass decided that miniskirts looked ridiculous. Hemlines dropped and so did the market. Coincidence? I think not!

I just learned from CNBC that USA Today reports that “Short shorts are sexier, and totally hip.” This also means that I’m only two media degrees of separation away from knowing what’s totally hip.

Inseams are inching up this spring. Capris begat gauchos, which crept up to become bermudas. Now, short shorts — thigh grazers with 2½- and 3-inch leg lengths — are emerging as the top bottom.

The market closed lower today. Daisy Duke, I blame thee.

Posted by Eddy Elfenbein on April 7th, 2006 at 4:28 pm

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