Aside from the implications to the portfolios of millions of investors, there are plenty of other effects from this cause. The perceived loss of wealth will affect all kinds of decisions not directly associated with stocks and bonds. As such, we'll probably see a reduction in spending, from big-ticket items to international vacations to luxury automobiles. New home construction may moderate. The high priced restaurants that cater to the bonus pool crowd will likely get a bid quieter. And we'll probably see more tan.
This last is according to well know British design guru Sir Terence Conran. We all know anecdotally that certain colors make us feel a certain way or reflect a certain mood. For instance, green is said to ease stress, help gain self-respect and soothe anger, while blue helps overcome hurt, resolves conflict and helps self-acceptance. At the same time, purple helps accept responsibility, relaxes and soothes fears, and helps tune in to the inner voice, while red is the color of courage, self-esteem, sexual expression and mental clarity. Finally, it is believed that orange soothes anxiety, resolves conflicts and reveals emotions, while yellow resolves conflicts and contributes to feelings of harmony.
There is also scientific evidence that color is much more than just a reflection of moods and feelings. In fact, research has demonstrated that that correct use of color can increase motivation, concentration, learning, retention and recall by 55 to 78 percent. The results of these studies can found painted on the walls of factories and hospitals. That's why it comes as no surprise that the battle room on a destroyer or the control room at a nuclear reactor isn't painted flaming red, but rather soothing gray or green.
But what does all of this have to do with the movement of the stock market and interest rate hikes? Well, according to Conran, earth tones would appear to reflect a downtown in the economy. While it's true these non-primary shades don't rate their own lab rats, according to Sir Terrence, they are indicators none-the-less. Says he, "I've been through four recessions. And in bad times, people turn to beige." Actually, they turn to whiskey and scotch, but both of those are in the beige family, so he's probably right.
So color becomes more than just a window into our souls, but into our wallets as well. That's not terribly surprising, when you consider how it has become shorthand, whether slang, metaphor and colloquial expression, for a myriad of things. You can be feeling blue, seeing red, or be green with envy. Perhaps your neighbors are blue bloods, or you gave your boss the red carpet treatment. Then there's William Randolph Hearst and yellow journalism, Mao Zedong and the Red Guard, and Audie Murphy and the Purple Heart. There's even precedent when talking about economics, capitalism and trade. After all, who hasn't heard of goods available on the black market, or a corporate takeover involving the search for a white knight?
Now, before you start scrutinizing Alan Greenspan's ties for clues as to what the Fed will do, it's worth noting that colors don't mean the same all over the world. Most in the west would say that the bride should wear white as a symbol of purity. Yet in China, white is a symbol of mourning. And in India, wearing pure white with no other color is inviting widowhood and unhappiness. So while green may be the color of money and prosperity here, it might be saying "credit tightening" somewhere else.
But back to Conran. His prediction of tan squares nicely with the collapse of the technology sector. How so, you inquire? Well, the experts say that in the new millennium we will draw our color inspiration from the natural world rather than the cybernetic one. Or, put another way by Ken Charbonneau, color-marketing consultant for Benjamin Moore & Co., "We are looking for colors that appear as if they are made from 'real' materials. Colors that appear to be artificial or chemically produced, as in fluorescent colors, will not be part of the consumer palette."
That means that, generally, top-selling colors will reflect nature. So tan is in, as are favorites like water blue, hunter green and those old standbys, black and white. However, color experts are quick to point out that no color can be discounted. Savvy and more sophisticated than ever before, consumers are becoming less slavish to fashion and better in tune with what pleases them most. Consequently while some colors will have more appeal than others, no single color or color combination will be totally "out."
In fact, in a recent survey, when asked to pick the "color of the new millennium," folks didn't opt for brushed silver or metallic gold. Rather, over 40% of respondents selected something else. Now, I'm not making any predictions, but if you take this to heart, perhaps you'll know we've hit a market bottom when the new color from Range Rover is dark red-purple.
Marc Wollin of Bedford likes any color except puce. His column appears regularly in The Record-Review and The Scarsdale Inquirer.