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The National Christmas Tree… Indicator?
Another Measure of Social Mood
The National Christmas Tree has a fascinating history, especially at Christmastime. Like the price of gold, the height of the Tree has actually been “regulated” at times. In December 2006 I wrote a tongue-in-cheek piece for EWI's Market Watch page, which explained the correlation between stock prices and the height and number of lights on the National Christmas Tree.
This year I’ve updated the story and added a real chart of the “National Christmas Tree Indicator” (NCTI). It may be a less-sensitive meter of social mood than the Dow Industrials, but across several decades has still managed to reflect the waxing and waning of festive sentiment.
The chart clearly shows that, until the mid-1980s, the most bullish periods in the Dow correspond with the tallest trees. Selected from around the country, these trees were in turn cut and trucked to Washington. For example, the 30-foot Colorado blue spruce planted in 1977 during the Carter presidency is still alive and has grown to about 42 feet in thirty years. The NCTI was a useful leading indicator of the stock rally from 1948. The 1993 break of the 1965 high in the Dow/PPI was unconfirmed by the NCTI, a bearish signal. On this chart, the Dow/PPI crossed above the height of the tree for the first time in 1989, peaked in 1999, and appears headed back toward another crossing.
The following are highlights from the National Park Service’s National Christmas Tree web page.
- 1923: 48 feet -- The first National Christmas Tree was a cut, 48-foot fir, electrically lit by Calvin Coolidge touching a switch at the base.
- 1924: 35 feet -- The first live tree, a 35-foot spruce. The same living tree was used through 1928.
- 1929: A new, live tree of the same variety replaced the previous one. Smaller bulbs were used to lessen stress on the new tree, and ornaments were used for the first time.
- 1931: 25 feet -- A new live tree replaced the 1929 tree that was damaged by trimming, and decorating.
- 1934: 23 feet, 250 ornaments -- The lights briefly didn’t work when Roosevelt pressed the button, causing a stir in the press.
- 1936: 23 feet --
- 1939: 36 feet -- Mercury vapor lights. "The President decried war, invoked the beatitudes of Christ, and called on 'belligerent nations to read the Sermon on the Mount.'"
- 1940: 32 feet – 700 lights, 150 “twinkling stars.”
- 1941: 30 feet -- "The White House grounds were not open to the public until 4:30 p.m. for security reasons." In order to enter the grounds, the public was required to "check all packages with soldiers outside the Executive Mansion grounds" and pass through an "electric searcher."
- 1945: 34 feet -- Truman re-lights the tree, dark for the past three years for security reasons.
- 1949: 30 feet -- Truman lights the tree by remote control from Independence MO.
- 1954: 67 feet, 2100 lights -- A cut tree was used again, and decorators were hired. From this year through 1972 tree heights were as high as 78 feet and never went below 60 feet.
- 1957: 60 feet -- "500 multi-colored plastic balls, 9,000 9-watt electric bulbs, 200 clusters of glitter ornaments, approximately 350 plastic snowflakes, and a five-foot plastic star at the top."
- 1958: 74 feet, 7000 lights, 10 live reindeer from Alaska.
- 1959: 70 feet, 3800 lights.
- 1960 through 1970: Cut tree heights in feet were 75, 75, 72, 71, 72, 70, 65, 70, 74, 75, and 78.
- 1971: Tree heights began crashing in with a fall to 63 feet. A rebound in 1972 to 70 feet was followed by an environmentally correct return to live trees, which precipitated a devastating collapse to 42 feet in 1973, 34 feet in 1977, and a final bottom at 30 feet in 1979.
- 1978 to date: The Carter administration’s Colorado blue spruce has grown steadily at about six inches per year and today it stands at about 42 feet. To augment the straight-line height data, we have intermittent data on the numbers of lights. Numbers of lights peaked along with the Dow/PPI in 1966 and again in 2000, reaching an all time high of 125,000 lights. The downturn began in 2001 with 100,000 lights. In 2002, there is no light data, possibly reflecting a dark mood. In 2003 there was a "return to yesteryear" with 400 ornaments. A weak rebound began in 2004 with 15,000 lights and continued through 2005 with 25,000 lights. In 2007, according to General Electric, 26 strings of 500 energy-efficient LED lights were used for the first time, a maximum of 13,000 lights.
The only light description we could find for the 2008 tree mentions “thousands of lights.” Even though the new LED technology reduces power consumption and increases the longevity of lights -- lowering the overall cost of lighting the National Christmas Tree -- the numbers of lights on the tree are declining, exactly as we would expect when social mood shifts toward a desire to conserve.
The Federal Reserve is trying to inflate the credit markets, but can’t convince lenders to lend or borrowers to borrow. Similarly, LED technology now allows a gigantic inflation of the numbers of lights on the National Christmas Tree, but there are limits to how much light you want on a tree, just as there are limits to how much credit you want at Christmas.
We hope you have happy holidays.