This week’s fashion shows confirmed a new trend: Hemlines are getting lower. That’s not good news for stock watchers, because in the past falling hemlines have coincided with falling stocks—as they did in the Great Depression—and skirts have risen along with booming stocks, as they did when flappers showed lots of leg in the roaring ‘20s.

At Fashion Week in New York, designer Nicole Miller showed hemlines at the knee for spring; Tracy Reese unveiled dresses cut 3 inches below the knee. This made analysts nervous as it appeared to suggest that stocks would not bounce back after sinking on the fear that the subprime mortgage crisis would spread to the rest of the economy. “I don’t think fashion leads the street,” said analyst Ralph Acampora of Knight Capital Group. “It’s the other way around.”

The record speaks for itself, said Jan Paschal in Reuters. “The past few fashion seasons, short skirts have ruled and, this spring, stocks rallied.” Now stocks are sinking, and so are hemlines.

Great, said BloggingStocks, like everybody needed one more reason to panic. Some people think the correlation between fashion and the economy is “pure folly.” But the fear inspired by the alleged link between falling hemlines and falling stocks might come true if it scares enough people and feeds the general atmosphere of pessimism.

Designers “pooh-pooh the old stock-market adage,” said Cheryl Lu-Lien Tan in The Wall Street Journal. They say that women have simply had enough of the micro-mini look, and they’re ready for the more elegant look of longer lengths. The “fashion pendulum” always swings like that. So don’t panic—maybe the new looks will do what they’re supposed to, and lure more shoppers into stores.