If you want to get a good indication of the health of the economy, just look at your local restaurants.
Packed restaurants are a sure sign of a bustling, vibrant economy. It’s hard to be bearish when you can’t get a table on a Wednesday evening.
Empty restaurants – like those with more staff than guests – show the opposite condition.
[ad#Google Adsense 336×280-IA]All summer long, the restaurants in my neighborhood have been jam-packed.
We’d often have to wait an hour or more just to get a table for four at my local sushi restaurant on a Thursday night.
And if you didn’t make reservations for a Friday or Saturday night, forget about it.
You were going to be eating at home that evening.
After what I saw this past weekend, though, I can say things have suddenly changed…
On Friday night, my family joined two others to form a party of 12. We walked into a nearby Greek restaurant and fully expected to wait an hour or more to get served. We expected they’d have to break up our group into separate tables. We figured some of us would get stuck at the table nearest the men’s bathroom.
We were seated right away, together, at multiple tables pushed together in the middle of the restaurant.
“Where is everybody?” I asked Mario, the proprietor.
He explained business has been slow for the past two weeks…
“It was busy all summer,” Mario said, “Maybe too busy. Then it just dropped off. At first, we welcomed the break. We were working so hard, it was nice for it to be less busy. But now I’m hoping it picks up again.”
After my son’s late-afternoon baseball game on Saturday, we joined a bunch of teammates and families at a Mexican restaurant near Silicon Valley. There were more than 25 people in our party. But despite it being just after 7 p.m. on a Saturday night, we were seated, fed, and on our way home by 8:30.
Then on Sunday, my family elected to have brunch at one of the nicer restaurants in the area. It was just the four of us, but I thought I’d call ahead and see how bad the wait time was.
“Come right on over,” said the voice on the other end of the line. “We’ll be able to seat you right away.”
At noon on a Sunday, the place was almost empty. Just two other families, dressed in their Sunday best, dined alongside us while 20 or so tables sat vacant.
Gina, the hostess, told me the same story Mario had two nights before. “It was so busy,” she said. “Then it just stopped. I’ve never seen anything like it.”
I, however, have seen this before… And I remember the day vividly…
On September 30, 2007, I officially retired from the money-management business. A few days later, a bunch of my trader friends helped me celebrate my retirement by playing golf, drinking scotch, smoking cigars, and heading to the best steakhouse in the area for dinner.
Sixteen of us staggered into the restaurant and noisily bellied up to the bar. We didn’t worry too much about the ruckus we were making bothering anyone else in the steakhouse. There really wasn’t anybody else there.
“Where is everybody?” I asked the bartender.
“It’s the weirdest thing,” he said. “We were so busy all summer long. Then it just stopped all of a sudden.”
After hearing this, my friend Mark turned and looked at me. He clinked his glass of scotch with mine and said, “Wouldn’t it be great if you retired at the absolute peak of the stock market?”
That was October 3, 2007.
The S&P 500 peaked one week later at 1,565.
Maybe there’s something to this “Empty Restaurant Indicator.” We’ll probably know for sure within the next couple weeks.
Best regards and good trading,
Jeff Clark
[ad#stansberry-ps]
Source: The Growth Stock Wire