Starbucks Index
If someone were to ask us how much their currency is worth, we’d ask them how much it costs to buy a tall latte. Not necessarily because we’re thirsty, although anytime is a good time for a latte, but because the price of a tall latte is an excellent indicator of a currency’s strength against the U.S. dollar. At least, that’s the thinking behind the “Starbucks index,” which basically says that when lattes cost more in one country than they do in another, the first country’s currency is more valuable.
Of course, that’s assuming there’s the same level of demand for lattes in both countries. If in one country people drink lattes all day every day, and in another everyone despises them, then obvi they’re going to cost more in Country #1. That’s just basic supply and demand. But let’s assume everyone everywhere loves lattes equally. If a tall latte costs $5 here in the United States and $6 in Russia, we could say, “Wow, that’s more.” But if we also take into account the currency exchange rate between the American dollar and the Russian ruble, we might find that $6 in Russia actually feels more like $13 or $14 here. It’s this number that the Starbucks Index is looking at.
Is the Starbucks Index the same thing as the Latte Index? Kind of, except that the Starbucks Index is the brainchild of The Economist, and the Latte Index is handled by the Wall Street Journal. Same idea, though. Might make us think twice the next time we treat ourselves to a latte.
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Finance: What is the Super Bowl Indicato...1 Views
Finance Allah shmoop what is the Super Bowl indicator And
sadly Nostradamus has been dead for five hundred years So
when your tea leaves have dried up and your crystal
ball is in the shop what do you use to
determine whether the stock market is about to go up
or down Well according to the famous Leonard Koppett sports
writer and major superstition aficionado You Khun tell into a
reasonable degree of certainty which way the market will bounce
based on the results of the Super Bowl No this
Super Bowl Okay so he might have been half kidding
But when Kopit proposed his future telling system in nineteen
seventy eight it made a lot of sense to a
lot of people mostly the people who rely on astrology
charge for their investing decisions But still you know the
concept resonated back when the term was coined The market
went up ninety percent of the time that the NFC
team won the big game and reliably went down whenever
the A F C team emerged victorious Anyway assuming that
Tom Landry then coach of the Dallas Cowboys wasn't massively
investing in plastics and pharmaceuticals each time his boys brought
home the trophy Well there was probably nothing to this
theory but it sure seemed convincing at the time Well
as time would tell the theory was proven to be
about as flimsy as the Tampa Bay Buccaneers Front seven
Well between two thousand seven two thousand seventeen the Superbowl
indicator it was exactly fifty percent accurate In other words
you might as well trust this guy to predict market 00:01:30.29 --> [endTime] turns
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