Sky's the limit

Do higher skyscrapers mean lower stockmarkets? In a superficial way that may be true, but it's nothing to worry about.

Do record-breaking skyscrapers mean recession, or worse? The theory, which can be traced back to a 1994 observation by a market analyst named Chris Rathke, was revived this week by Barclays Capital, in the UK. That company points out ominously that currently it is China that has the most tall buildings under construction.

As an indicator of market performance, this may be less goofy than some others, such as Paris skirt lengths. The idea is that irrationally exuberant boom-time psychology, which creates asset-price bubbles, transmits itself to developers and architects, who begin reaching for the sky. By the time the building is ready, the bubble has burst.

True, the Empire State Building was started just before the 1929 crash. Malaysia's Petronas Tower was going up as the 1997 Asian financial crisis began. The Burj Khalifa … you get the idea.

But we are not convinced. Yes, the spirit of the age can be a factor, but buildings have been climbing for over a century, as designers eagerly exploit each new development in construction materials and techniques.

And yes, China has many skyscrapers going up now. So does India, because both economies are growing. Booms and busts come and go, but the human impulse to build bigger persists - and so does the progress that makes it possible for each generation to accomplish new feats.