Macroeconomic Analysis
UEA conducts macroeconomic analysis for small business and retail clients with a specific interest, agenda or concern with the goal of providing insightful (we call it “brilliant”) observations of where the world, various nations of the world, or subsets of either are going, will be or can’t be in the near and distant term.
Unlike expensive economists hired by more expensive consulting firms, UEA applies the skill of real people to divine the future. Consequently, are results are much more prescient and incredibly more accurate.
How can that be, the skeptical (meaning ourselves) ask? Highly compensated, highly trained numerologists with impressive degrees are bested by humble working people?
In truth, it’s simple. We don’t start our analysis with numbers; we start with people. People in government, people in business, people in institutions, people on the street who actually live in this world and not the world of economists “rational man”. In late 2007, economists were telling us that housing prices were due to increase another 12% by year end, the US economy would zoom upward another 4% and Elvis would be sighted in Kalamazoo. Um, sorry, that’s a different prediction…
UEA didn’t agree. We told our readers that the housing bloat was about over, the economy about toasted and banks about at the precipice of doom. We were right because we listened first to the people then studied the numbers.
The people told us they were in way over their heads on speculative, no-cash mortgages while the numbers (27% of new housing loans were no-doc, no-down, or no-way-to-survive ARM’s) and they told us when diaspora would happen (when those ARMS reset). The people told us any blip in unemployment would be terrifying and the people told us they had diminishing confidence in the economy, government, bankers and Elvis.
People, in aggregate, can’t lie and can’t be misinterpreted. At least not easily. Not like data which is nothing but interpretation rooted in horrid economist assumptions.
Understand that we are, to varying degrees, economists also. A couple of us even have those “PhD” things that say so but we avoid talking about that to avoid being pelted with rotten tomatoes and similar vegetation.
Unlike “those” kind, we start our study with history – history of countries, institutions and people. We have a solid understanding of where we come from and know that rarely are directional changes made suddenly or radically without dramatic outside causes. We look at what governments want to accomplish and what degree they can make reality and we study what businesses are influential. We consider where people around the globe find their entertainment and what vexes them the most. We understand what good infrastructure is, what corruption does to economies and why we won’t see Elvis in Kalamazoo. Professional economists live in numbers; we live in the world.
Various and consistent academic studies show how “professional” economists and their ilk predict wrongly, over the years, around 80% of the time. This result is rooted exactly in the fact they are “professionals” – their income and livelihood depends on being safe and conservative, going along with the lemmings so to minimize risk, and producing “papers” proving how smart they are no matter how wrong they may be. They assume if they can model it with math that it becomes correct. They assume what was will continue to be, forecasting to continuing trends.
We assume that what was demands examination and rigorously challenge the trends to find turning points, inflections and cross-currents favorable to more accurate analysis of what will be. We don’t rely on the numbers and rarely depend on calculus. On our good days, we have trouble with addition and subtraction because we’re absorbed in details about how people live.
We believe, to a soul, that econometrics is the worst pretender to science existing today and happily set our results over the years against “theirs”.