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Policy Risk Momentum Data -- Brexit Case Study

Thank you for reading this blog! Some have asked for a concrete example of how and why high level momentum data regarding policy risk can deliver predictive analytics and unparalleled insight. Thanks for asking.....

As it happens, today's momentum chart provides the perfect example to answer this question.

Quick Recap

As a quick recap for readers new to the blog, our patented process converts the language of the public policy process (unstructured data) into integers (structured data) in order to construct an objective and transparent measure of policy risk.

  • This POST explains why the language of policy is different from the vernacular language used by most natural language processing programs for sentiment analysis.

  • This POST explains why this kind of data is so different from other kinds of "alternative" data generated by smart devices and other processes.

For today, let's focus on the concrete momentum measurement delivered this morning by our platform.

Get ready for a surprise.

Surprising Outcome

If you follow public policy and geopolitics closely, then this morning you likely would have concluded that the most active and important development in the last 24 hours occurred in Washington DC due to the ongoing trade war/tariff/trade talks underway between the United States and China. This is where the majority of media coverage occurred.

The strategic significance of the bilateral US-China trade talks cannot be denied. The talks hold major implications for the global 21st century economy given its focus on intellectual property rights, digital trade, and non-tariff barriers. If you think that the main item on the agenda in this trade war dispute is the old-economy tariff battle, please read this January 2019 post from the Atlantic Council's New Atlanticist and yesterday's post from the ITIF (Information Technology & Innovation Foundation).

But trade was NOT the most active issue area yesterday! look:

Sure, policymakers were talking more about trade than about Brexit. But it turns out that policymakers were doing more about Brexit in the last 24 hours.

Wait, what???? Where were the headlines? What happened? What is all that data????

Most people would have a familiar reaction to this unexpected outcome. They would Google "Brexit." Just for fun, that's what we did at lunch time today in our offices. This is what Google gave us on page 1:

No sign of data releases. So we clicked on the first three media sources on page 1 (Guardian --both the US and UK editions, CNBC, FT). This is what those media sources had reported regarding Brexit:

Still no sign of massive data releases regarding Brexit from media sources that reliably cover Brexit. We searched for "Brexit" on the free versions of Bloomberg, PoliticoEU and ThomsonReuters also. Same result.

So we went back to our trusty platform and did the easiest, first think anyone would do when they receive that chart at the top of this post. We clicked on the "data" portion of the column.

The Data Answer -- Wonky but Strategically Significant

Yesterday, the UK Government released to the House of Commons its "Supply Estimates" which constitute the government's spending budget proposals. The estimates require approval from the UK Parliament.

Our system automatically read the document, identified that Brexit-related budget data was included in the document regarding strategic issues from NATO to Northern Ireland to migration. So when we clicked on the data portion of the high level momentum measurement, we received the detailed chart below.

If you are not a policy expert, it may be helpful to know that budget documents provide one of the most transparent and valuable components for policy risk analysis. Among other things, the data in budget documents is often overlooked.

Even if the information in yesterday's budget documents had been leaked to the media in advance and the numbers were known, they only matter when they are published officially and publicly because leaked versions can differ from the final version. For more on how to interpret leaks in the media cycle, check out this Traders' Insight post from Interactive Brokers.

There is no substitute for wading through official budget documents to get a sense of where a government really wants to go on any issue.

Here is the best part -- you did not even have to read the document to know that something important occurred which had not made it into the news cycle. It's almost like reading a secret because noone is paying attention.

Everyone using our platform is already miles ahead of everyone else in the Brexit universe except the policymakers themselves. Why? Because within three or four mouse clicks, everyone using our platform has identified concrete data about what the UK Government is actually doing to prepare for Brexit. And it is ALL publicly available information.

While everyone else is whining and fretting and pontificating, BCMstrategy, Inc. platform users have access to transparent, timely data about concrete government actions. In today's case, that alternative policy risk data provides quick, efficient access to actual official government data and forward-looking budget projections. The gateway was the momentum measurement which delivered an unexpected outcome.

Conclusion -- Enhanced Cognition Delivers Superior Outcomes

Sometimes, the most strategically significant moves made by government officials occur in plain view. But the noise of the news cycle makes it hard to see what happened. Even the world's best journalists cannot cover everything. Technology in general actually amplifies the noise of the news cycle, obscuring further the ability to discover new developments, especially when we start talking about how social media outlets like Twitter turbo-charge the 24/7 news cycle.

Our patented metadata tagging process makes it possible to perform advanced information triage amid all the noise. The momentum measurement by itself makes it possible to allocate time more efficiently and effectively, which is the cornerstone of any strategic analytical function.

  • A senior executive using this platform would have likely sent the UK budget document to a junior analyst before breakfast for analysis.

  • A junior analyst using this platform would have skimmed the document before breakfast, arriving at the office ready to deliver advanced insights well beyond what the headlines were saying about Brexit.

Everyone wins across the seniority chain by accessing daily the policy cycle with our patented language-based data and interactive visualizations.

Just wait until we use this alternative data to train machine learning and artificial intelligence algorithms!

#enhancedcognition #predictiveanalytics #Brexit #dataanalysis

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