Fatter Neckties Will Save the Economy

This economic indicator is truly broad. Maybe too broad.
At Closing, June 15th
54.98 USD

The first interesting financial-news story of the week described Wells Fargo's new TV advertisement and its simple strategy: Hey, sorry for all those fake accounts.

It opens with a close-up of a team of horses galloping in slow motion, so initially it looked like the Budweiser Clydesdales. That made me think, hmm, are they really dispatching cold Buds to everyone affected by the scandal? Scandal over!  

But yeah, no. The camera pans out to show the horses pulling that Wells Fargo stagecoach the bank is obsessed with the way a dude in the grips of a midlife crisis obsesses over a Corvette. The voice-over is a hypnotizing legalese that roughly translates to "we're not going to say anything else that'll get us in trouble, so just focus on this cool old-timey stagecoach."

At least it’s better than another recent Wells Fargo ad called “Sales Department.” That one stars a guy running a one-man business in his garage but pretending it's a bigger company by transferring callers to various imaginary employees in various imaginary departments. So basically a bunch of fake identities. LOL, good one Wells Fargo! But it doesn’t work as well after that whole fake identity scam, so it's smart to switch directions.

Trot Faster!

Wells Fargo shares perked up this week, likely on speculation the bank was sending out horse-drawn wagons full of free beers for customers.

Source: Bloomberg data

Anyway, if the best we can find to Gadfly them about is that their spokeshorses were pulling the wrong wagon, then things are looking up for the bank. And we do have to tip our cap to them for smartly choosing the “comments off” option when posting the new ad on YouTube.

Moving on to the other hot links of the week, Dani Burger again made me worry the bosses here will start wondering why they’re paying me when she keeps writing killer stories about quants, like this one about “multifactor investing.” And Dakin Campbell practically broke the terminal reporting on Goldman Sachs's stealth headcount haircuts

Also great reads on Trump's bunker and how his family fortune began in a gold-rush brothel. (I mean, where else could it possibly have begun?)

However, the most important story this week was Troy Patterson's scoop "Sorry Hipsters, the Skinny Tie is Over" about how leading indicator J. Crew was widening its neckties by a quarter-inch. As Eric Balchunas tweeted, this is the men's fashion equivalent of the Federal Reserve raising interest rates by a quarter percentage point.

So the Trade of the Week is exchanging your skinny tie for a real man's tie. 

Now before you roll your eyes, think about it. While growth in women’s clothing purchases to keep pace with evolving fashion trends seem to be noncyclical, men’s have been in a state of great depression ever since "Miami Vice" went off the air. Any boost to this moribund economic sector could have highly stimulative ripple effects.

Imagine the boost in silk demand if the entire financial sector decided it needed wider ties. Or polyester demand if all journalists bought wider ties. Imagine the effects on retail sales; the unemployment rate among designers of paisley patterns; the knock-on effects from the necessary wider collars and lapels. 

Quantitative Widening

The embrace of wider neckties among journalists may result in a boost to sagging polyester prices

Source: Press Information Bureau of India via Bloomberg

Indeed, the width of a man’s tie could be an important indicator of slack in the economy. And before you complain about gender exclusivity, ladies, don't forget you already have hemlines as your ridiculous economic indicator, so it’s only fair we get one, too.

And while excessively wide ties may sound too unbelievably hippy-ish to believe (much like the "greatest vine of all time") remember that it does appear the nation is about to return to the Clinton era

To research the state of the tie cycle, Gadfly surveyed some of the most dapper men in finance and media. (Luckily, most were already in the building). The results were groundbreaking. First, there's a noticeable positive correlation between necktie width and the age of the wearer (i.e. older = wider) and another possible correlation to the aggregate amount of time the respondent has spent in New Jersey. There's also a clear negative correlation with tie width and European-ness.

Here's our first-ever Gadfly Necktie Width League Table:

Tie (a Wide) One On

Gadfly's inaugural necktie width league table was based on a survey of ties worn by some of the sharpest dressed men in finance as well as print and television news. Also a few ties that are best meant for radio.

Source: Data compiled by Bloomberg

Note: Some data is self-reported. For full transparency, see selfies posted on Twitter @reganonymous

Baby Boomers and Gen Xers are in an enviable position as tie spreads widen, but our bosses in the millennial generation are stuck in a crowded, skinny trade. Let that be a lesson to youngsters that, much like the bond market, duration risk in neckties is very dangerous. 

Obviously this is seminal research in ridiculous indicators, but more data is needed. Sartorial representatives of Goldman Sachs and Morgan Stanley declined to provide measurements, presumably for competitive reasons. We didn't even bother with JPMorgan because of the new dress code

Noted dandy Downtown Josh Brown -- CEO of Ritholtz Wealth Management and contributor to a cable network whose name we can't seem to remember -- declined to provide a measurement. That's OK. His ties are likely outliers:  

"I’m from a place called Long Island, where we like our ties as thick as calzones, and as heavy as lead," he explains. "If the silk isn’t substantial enough to create a downward gravitational pull, it’s not fit to be worn around one’s neck."

Preaching to the choir, Josh. 

Some of you may note that the Most-Dapper Men in these parts are known to rock bow ties rather than neckties.

However, we did not measure bow ties. Because that's just ridiculous. 

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

    To contact the author of this story:
    Michael P. Regan in New York at mregan12@bloomberg.net

    To contact the editor responsible for this story:
    Daniel Niemi at dniemi1@bloomberg.net

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