Economic Secrets You’re Not Supposed to Know

 

What they taught you in school barely scratches the surface of economic reality.

Why it matters: You must understand what drives economic change to discover financial opportunities.

Behind the scenes: Most news is just noise that captures clicks, followers, and likes.

• However, some news influences economic activity, but it is not always obvious.
• For example, the price swings of everyday items are a more vital indicator of economic change than the S&P 500.
• Influential social media posts often have a more significant impact than an article in a business newspaper.

What to watch: The economy runs on electricity, oil, food, and metals.

• A disruption in these areas will cause problems.
• Electricity is becoming the most crucial aspect of economic activity.
• Oil becomes transportation or electricity.
• Changes in food prices signify whether geopolitical relations are improving or deteriorating.
• Metals are a critical input for economic output.

Between the lines: What is reported and what is occurring are often very different.

• The green agenda is designed to create a carbon credit market.
• Major corporations announcing inclusive hiring are doing so to lower labor costs.
• Large shareholders have a more significant influence on companies than their customers.

Follow the money: Much has come to light since Estimand’s CR-2** causal AI has begun learning from global economic data.

 

** Estimand’s CR-2 represents a significant advancement in the field of causal artificial intelligence (AI). Let’s explore what it entails:

1. CR-2:
• CR-2 is a causal model developed by Estimand.
• Its primary purpose is to discover cause-and-effect relationships from a vast array of time series datasets.
• Unlike traditional statistical models, CR-2 aims to connect the dots between global financial events at a level beyond human capabilities.
• By analyzing thousands of data points, CR-2 uncovers hidden patterns and provides insights into the underlying causal mechanisms¹.
2. Applications:
• CR-2’s applications extend beyond finance. It can be leveraged in various domains where understanding causality is crucial.
• Researchers and practitioners can utilize CR-2 to make informed decisions, predict outcomes, and identify interventions that lead to desired effects.
• Its ability to handle complex, dynamic systems makes it valuable for addressing real-world challenges¹.

In summary, Estimand’s CR-2 represents a powerful tool for unravelling causal relationships, bridging the gap between data-driven observations and actionable insights. Its impact on decision-making and understanding complex phenomena is substantial

 

Example: Estimand’s CR-2

 

 Let’s explore a practical example of how Estimand’s CR-2 can be applied in practice:

Scenario: Predicting Stock Market Trends

1. Problem Statement:
• Imagine you’re a financial analyst working for an investment firm.
• Your goal is to predict stock market trends and identify optimal times to buy or sell stocks.
• Traditional statistical models struggle to capture the intricate relationships between various economic indicators, market sentiment, and stock prices.
2. Data Collection:
• Gather a comprehensive dataset that includes:
• Historical stock prices (e.g., S&P 500 index, individual company stocks).
• Economic indicators (e.g., GDP growth, inflation rates, interest rates).
• Sentiment analysis from news articles and social media.
• Other relevant data (e.g., geopolitical events, corporate earnings reports).
3. Model Building with CR-2:
• Apply Estimand’s CR-2 to the dataset.
• CR-2 will automatically discover causal relationships between different variables.
• It considers both direct and indirect effects, capturing complex interactions.
• CR-2 can handle time series data, making it suitable for predicting stock market trends.
4. Insights and Predictions:
• CR-2 reveals insights such as:
• How changes in interest rates impact stock prices.
• The lag effect of economic indicators on market movements.
• Sentiment-driven fluctuations.
• Predictions can be made based on these insights:
• Identify potential stock market downturns or upswings.
• Optimize trading strategies by timing buy/sell decisions.
5. Decision-Making:
• Armed with CR-2 insights, you can:
• Adjust investment portfolios based on predicted market movements.
• Allocate resources strategically during volatile periods.
• Implement risk management strategies.
6. Monitoring and Adaptation:
• Continuously update the model with new data.
• Monitor its performance and adapt as needed.
• CR-2’s ability to handle dynamic systems ensures robust predictions even in changing market conditions.

Remember that this is a simplified example, but it illustrates how Estimand’s CR-2 can revolutionize decision-making by uncovering causal relationships in complex domains like finance. Its applications extend beyond stock markets to areas like healthcare, marketing, and policy analysis.

  

• Companies with inclusive hiring practices have seen a steady decline in payroll expenses, including lower salaries.
• Organizations promoting sustainability are financially invested in green technology and carbon credit markets.
• Brands doing things that alienate their customers are under the influence of assertive shareholders.

Zoom in: Regardless of your position, the point is that economic activity has an agenda.

• By understanding the agenda, you can realize what will happen next.