Following on from yesterday’s post, the revised statistics are up, and here’s a graph that I made:
Just a casual little R143 billion mistake there (by the 15th of July).
Which is a bit bigger than the “R130 billion” number that everyone is throwing around – but perhaps it’s got something to do with the dates.
Anyway, fortunately, the market appears to have reacted by completely ignoring it: the Rand and the stock market barely blinked. I guess it’s comforting to know that the market doesn’t pay any attention to fundamental economic data like foreign inflows and outflows? Because, like, who cares about economic fundamentals – it’s all about gut feels and algorithms. Unless, of course, everyone already knew*.
*And said nothing while skeptically ignoring it in their trading.
But on that algorithmic point, and after this awkward computational “glitch”, here’s a cautionary reminder from the CEO of the JSE, Nicky Newton-King:
“Unfortunately, computers are programmed by people…”
<inserts pause for effect>
Here’s another thing she said:
“We produce an enormous amount of data. This is an opportune moment to make sure that there is nothing in any of the other datasets that should cause us concern. We don’t have any concern as we speak now, but we are doing a full review.”
Some people are taking comfort in this.
I’d take comfort in the fact that no one seems to really trust these numbers enough to trade on them anyway.
Rolling Alpha posts opinions on finance, economics, and the corporate life in general. Follow me on Twitter @RollingAlpha, and on Facebook at www.facebook.com/rollingalpha.
Kosta July 26, 2016 at 10:35
I can’t help but wonder how things would have played out post Nenegate had this computational glitch been avoided and local traders been mindful of the steady outflows. Would they have been as optimistic or would they have sold too? And how would this have affected our ability to avoid the recent prospect of a ratings downgrade?
Yes, that’s it. A genius programmer sacrificed their reputation to save our country from a ratings downgrade. Programmers are the best.Reply
Jayson July 28, 2016 at 20:52
You should write that script. It’s sounds like a George Clooney movie. 😀Reply
Rowann July 27, 2016 at 13:12
You know what is also interesting is how these numbers are justified each month.. i.e foreign investors move to emerging markets, weak rand increasing profitability, avoiding a credit downgrade in June could also be a reason for foreigners once again viewing the local market favourably..
Its actually scary that asset/ wealth managers can explain/justify this incorrect data in a heartbeat.
Also took comfort in the fact that it didn’t move markets and that it doesn’t influence economic decisions. i.e rate decisions etc.Reply
Jayson July 28, 2016 at 20:51
Totally with you. We’re all just inventing narratives to explain a couple of random data points. I mean, over the long term, there are more data points – so you get better and more accurate narratives. But in this short-term, yah. Scary stuff!Reply