I was once asked by a businessman about the validity of business information. He preferred to think that he could rely on his gut instincts. I told him that what we aim to achieve is something better than a guess. In today’s highly competitive world, the margins are too fine to rely solely on gut instinct, we need all the help we can get. We’ll win some, we’ll lose some but if we can win slightly more that we lose, often that’s the best we can hope for. This fine line between winning and losing is what so many businesses today count on to survive.
You can imagine the pressure when having to present a board of directors with information that may not be what they wish to hear. Diplomacy is called for and the temptation to massage the data, something that is too easy to do, is overwhelming for some. Putting the correct interpretation on data, though, is what you get paid the big bucks for if you’re consistently right.
If a client spent millions on your advice and lost the lot, not only would you lose a client that probably had taken year to develop but word would get around. I have seen this happen but fortunately not to me.
What, though, about the pressures on perhaps an academic, researching something like global warming, perhaps having his whole career based on this field of research and with clients like the European Union with pots of money for funding?
What about a politician or political party with an election or referendum to win and able to call upon an army of civil servants, perhaps even the Office for National Statistics, to provide information and analysis?
Let’s look at a very simple example:
Around 20 years ago, just for interest, I did an analysis of the housing market. People talk about trends, indeed sometimes things are trendy but in statistical terms it’s something that we calculate. I discovered that historically property wasn’t a particularly good investment, the trend over two hundred years was for price increases of around one percent above inflation. Here then we can start to analyse these trends and ask if they’ll continue or has something fundamentally changed to affect the trend.
Of course in recent years we’ve had a dramatic increase in immigration and population increases beyond anything we’ve seen in the last 200 years. We must have all had presentations from Life Assurance salesmen where they tell us that their funds have achieved 50 percent growth in a year. They’re just very particular about which year they pick; sometimes you have to look at a longer term trends to see the reality.
Simply by calculating trends over different time periods we can get dramatically different results, but it gets even more complicated. Property sales are seasonal and prone to periods of boom and bust. The trends don’t show this and so we use mathematical or statistical weightings based on past figures to try and calculate future projections and there are many different models to choose from. If we don’t like the look of these projections we can simply choose a different model or just tweak some of the variables in these models.
People talk about supply and demand but it is more complicated than that. There is potentially endless demand for property given the rapid population growth on our islands, but it is often tempered by the availability of credit. This makes it a highly leveraged investment and it has become very speculative. People have enjoyed spectacular returns on property but as with any speculative investment, the losses to the downside are equally to the downside – just ask any options trader.
The hype of politicians and the mainstream media would have us believe that property only ever goes up but I’ll leave this analysis here as I don’t have space. The point is though (I’m not making any predictions here), if you know what you are doing you can make numbers mean anything you want them to mean. Unfortunately a large part of the population doesn’t understand this. Most people believe the lies and reassurances that come out of the mouths of politicians and civil servants.
Like the Life Assurance salesman that I mentioned above, politicians, civil servants and academics alike manipulate data and information and are very selective in the information that they use, only presenting you with the information that seems to support their latest fob off. Much of this information is only a little better than a guess and often much worse, just plain manipulated propaganda.
The run up to Brexit has seen this kind of selective, gerrymandering approach to the presentation of information reach extraordinary levels of deceit and deception. We’re told that we must have a trade deal with the EU but we never hear about the massive trade deficit that results from free trade with the EU.
When our government tells us about the benefits of a free trade deal with the EU, they never tell us about who exactly this benefits, because it certainly is of no economic benefit to the majority of we the people. It seems that we must pay to subsidise the profits of a select few. Perhaps it would be simpler to cut out the middle men, the EU, and give our money directly to these privileged few.
We were never told that Donald Tusk had offered the UK a comprehensive trade deal but that Theresa May and her cronies turned it down, preferring a Brexit in Name Only.
It frightens me when talking to lefties and remainers, just how ignorant they are of facts, their complete inability to perform any kind of analysis of their own, seemingly only able to regurgitate media sound bites and the lies of politicians.
As for Theresa May, I’d feel far more confident about buying a used car from Arthur Daley than buying her dreadfully deceptive and despicable Withdrawal Agreement.
Our current Prime Minister is a disgrace; her arguments don’t stand up to much scrutiny and it’s well past time to shed some light on her lies and deceit.
It is worth noting that the UK is one of the small number of countries with a positive balance of payments to the rest of the world. … And also Uk has a negative balance with rest of EU. ..So EU will suffer doubly when we leave.
This matter seems to conform to my own experience through my 74 years as a UK/GB National. ….. I supported the Common Market, and had no reason to think that Edward Heath and others would be telling lies.- Truth becomes clear, and by the late 1980s I had a wish to be out of Europe. ….. In 2016 David Cameron, spooked by UKIP, gave us a referendum upon continued membership of the EU.- My Leave Decision was already firm, but I watched with enjoyment and horror at the lies and stupidity told by both sides in the battle for votes. ….. My working life has seen me as a Company’s Managing Director, but also later as a Union Shop Steward, so I know the good and the bad of the red and the blue.- All I can confirm is Thank God for UKIP, with its centred interest upon the benefit to this Nation. UKIP – a far right Party ? – In a pigs arse !
Professor Patrick Minford has written an article (see https://brexitcentral.us14.list-manage.com/track/click?u=d25cbe539be88d77cfaa20e94&id=9bdda374ef&e=525b1c03cc) published today which presented a convincing analysis and plausible predictions concerning the UK economy. Definitely worth a read.
What do you make of it?
That is a very good article, it does however miss an important point. There was an article floating around in the mainstream media about a brewing financial crisis in Spain, it seems to have disappeared now. Spain, Italy, Greece are in trouble and now even Germany has only managed to avoid recession by massaging the numbers. The whole Eurozone is a house of cards and it’s soon going to come down, this anti-Brexit propaganda is a disgrace, Civil Servants should be locked up for it, we desperately need to be gone from the EU.
Correct.
But it does require the gov’t not to obstruct.!!
None of the elephants in the room are mentioned.and it assumes Status quo, as it has to. So, many positive or preventative actions that could make sense have to be ignored.
Flyer,
In my humble opinionYou are absolutely correct in what you say in regard to a huge sector of Brit business. The big ones. The ones the government listens to. The ones who can throw Billions at a problem and get a 3 % gain. Perfect.
But there’s a lot of little ones. Nobody takes any notice of them. But they are most of our economy, and without them the big ones will perish.. Nobody cares if you make a different corkscrew, or better plant pot. But they have always been what holds up the country. They are more important, and the big boys know, but it doesn’t give you the 2 or 3 %. The local fishmonger is every bit as important, but not to the politician who wants a £ half million job later.
Big and small thay all share certain problems already there, but ignored in the government bullsh*t. I keep re iterating them to little avail, but they are the reason we must get out if EU before they can be implimented. We all know what these reasons are but just to refresh the memories :-
Banks and finance. Union Stupidity. Excessive TAX. Regulations. Accountancy /Gov’t link.. Agencies ( a result of EU regs ). NHS drag. The Justice system ( or lack ). etc… None working properly.
And this is just the visible dodgy tip of the sick economy. Think about The stranglehold of commercialism:- Nothing is done or made except for commercial/govt reasons. Why we are still buying computers, cars, packaging and so on, all 50 years old technology. and all to environmental damage. But commercially saleable.
Ridiculous and globalism.
TG – yes I agree, my next article deals with this in more depth, if Viv decides to publish it.
Then there is the bubble about to burst in China, when that blows it will make the euro debacle look like a sideshow.
Well yes, this year is going to have upheavals and dramatics but I’m not liking the look of 2020. What with Russia, China, Iran and others rapidly moving away from the US dollar, you can bet there will be fireworks. The drums of war are already beating with Iran, since Hilary and Theresa failed to get one going with Russia, I suppose Israel will have a go, involving the US, Russia and China will side with Iran and it’ll go on from there: something along those lines.
Whether Trump can stop this or even postpone it until after the US elections I have no idea, there’s nothing like money to get a world war going.
Have a watch of this video then by the Money GPS. If our government wants to keep us tied to this nightmare they must be mad. We have to look at videos like this and I agree with this one, which is why I posted it, nobody else is going to tell us this stuff, least of all our government.
“Europe Deflationary COLLAPSE Accelerates! Trillions Printed and Economy Still In Crisis Mode.”
https://youtu.be/QkU3QW0Uy50