Richard Russell has been around long enough to know that wild swings in the spending habits of the wealthy generally correlate with broader economic trends. And according to one of his “secret barometers” the economy is beginning to slide (via King World News):
“La Jolla is a wealthy town. Walking around La Jolla you note that this town is unlike most of the country. La Jolla is an isolated town built on wealth. But I have a secret barometer. I often call out to a local deli to order a sandwich.
In normal times it takes 20 minutes from the time I call the order in until the time the sandwich is delivered. But lately I note that I call in my order, and five minutes later the order is delivered here. Evidently, business is very slow at the deli and my order goes out immediately.
I also hear that the La Jolla restaurants have slowed down in April — for the first time in this recession. Evidently, what’s happening in the rest of the country is finally hitting La Jolla.”
Not sure how much credence I’d put in an indicator like that, but it’s interesting to note nonetheless. Being a resident of the same area I can’t say that I’ve noticed similar trends and La Jolla has kind of been in a weird little recession (at least local businesses with tons of store closings and empty shops) for years now….Then again, Russell’s been a San Diegan far longer than I have so respect the elder….
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.