HOW I.T TRENDS ARE SHAPING ECONOMIC FORECASTS IN BANKING – GOOGLE’S VALUE AS AN INFORMATION COLLECTOR NEWS

No one is more paranoid about knowing early what’s going to make money in the future, than a bank. IT companies exist to give bankers this information. Here’s a story of that.

Ottawa Citizen website takes a look today at how Google trends is shaping the flow of policy in Israel and banking system’s flows too.

Some points worth a mention: Israel Bank uses google’s trend data to to assess the state of the nation’s $243billion economy. Economic indicator analysis data is used by the The Federal Reserve and the central banks of England, Italy, Spain and Chile  followed up with studies to see if search volumes track trends in the economies they oversee.

Erik Brynjolfsson, a member of the Federal Reserve Bank of Boston’s Academic Advisory Council who doubles as a professor at the Massachusetts Institute of Technology in  Cambridge has been studying what IT data can do as early indicators of the economy’s temperature.

The December 2009 study he co-authored on predicting U.S. home sales using search volumes was cited by three of the central bank studies.

“If the Fed had had access to this information, they would have been able to  make better forecasts of what was happening to the housing market and known more quickly the depth of the problem” during the 2007-2009 recession, he said.

(Again, The Fed is four big US banks with the fifth bank being Lloyds of London, that has sign off for The Fed).

The housing markets collapse was designed to make the wealthy, even more wealthy. That strategy worked. In doing damage control after the fact, it’s nice to know Google can play a key part in restoring trust here. Maintaing a blog, you see trends track everyday. It took me forever to see beyond ‘personality’ into the real trends trending. The stats though, helped a lot. Especially in regards to a worldview that is global, not just one dimensional. Google trends recent choices shared with audiences, tends to favor American stars and products, there is a bias on that. Fair enough as the US owns it. Also, a lot of countries news stories that google recommends to readers, are written by the US, and not the people of the nations involved in the news.

So, I was wondering if Google can be a bit kinder in that regard to representation on Google’s searches. Otherwise you have a situation where American authors are the only people who are allowed to define the world. Not the case in reality. So this needs to be reflected a lot better from google when suggesting trends that are being tracked by global audiences.

Google is such a wonderful invention we take for granted so much, each day. Without it, this blog or E-Commerce wouldn’t be. [Thanks!]

On my own website, on the topics rating in the top 10 each day is the word “water.” So, the Canadian article quoted above, didn’t mention that. Yet anyone with a bank, and using google trends to forecast financially, will be following water pathways, to predict economic growth perhaps. That’s what horiwoodblog stats tracking has alerted me to in the least two months.

[Photo - David Paul Morris/Bloomberg files].

~Posted by Horiwoodblog, Aotearoa New Zealand, Polynesia Asia-Pacific. 5.8.12~