Trending to Pinot Noir

A recession is now often identified as the reduction of a country's gross domestic product for at least two quarters. You may suspect that a recession is happening, but you can’t be certain until the historical numbers are finalized. At the Plonk household, wine drinking is much the same way. We may have the occasional dalliance with a varietal (say, petite sirah, malbec or nero d’avola), but we regularly purchase blue-chip varietals cabernet sauvignon, zinfanel, cabernet franc and sangiovese. During the past two quarters, we have seen a significant drop in the overall market for this sector, and a precipitous uptick in our investment spending, capacity utilization, and business profits for makers of Pinot Noir.

Looking out recent purchases, the spread between the purchase yield curves of wines to be consumed in the short term versus wines to be cellared as long term investments is significant. Our current monetary policy is to pursue short term investments such as Pinot Noir which typically does not require cellaring for maximum enjoyment. The index of leading consumption indicators (i.e. our reviews on DrinkPlonk) shows increased consumption from value priced pinot producers Kali-Hart, Castle Rock, Hahn, and Fat Cat, as well as higher cost producers Au Bon Climat, Calera, David Bruce, Laetitia, Martin Alfaro, Paraiso, and Windy Oaks. We’ve even increased consumption of Noir de Noir (or, pink champagne as TheWife calls it).

Governments usually respond to recessions by adopting expansionary macroeconomic policies, such as increasing money supply, increasing government spending and decreasing taxation. I’ll toast with Pinot Noir to that…

Best, Joe Plonk

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