Not Only Donald Trump Loves to Tweet, Economists Flock to It TooBy
The social network changed these economists’ toolbox
Trend highlights growing need for more prompt analysis
Sixteen years ago, freshly-minted economist Olle Holmgren would hit the trading floor with a mic to squawk his 30-second analysis of the latest economic data before writing a report for his clients.
Now, within minutes of inflation data or a central bank rate decision, the 51-year-old analyst at Stockholm-based SEB AB is chatting with traders while logging onto Twitter to distill his view into 140 characters.
“Twitter is like this middle step in-between deep analysis and knee-jerk reaction,” Holmgren said in an interview on Jan. 23 in Stockholm. “I feel like these days, you need to tweet if you’re going to be on the playing field.”
The practice is being spear-headed by analysts who increasingly rely on social media to voice their opinions and strengthen their personal brand. Frederik Ducrozet, senior economist at Banque Pictet & Cie SA in Geneva with more than 15,000 Twitter followers, attributes his success in part to the social network and his coverage of the European Central Bank.
“I am where I am today because of Twitter,” he said in an interview on Jan. 23, noting that his online persona has played a significant role in advancing his career.
The trend underscores investors’ need for real-time analysis in a fast-moving trading environment while also increasing the risk of errors. A tweet by Nordea Bank AB chief analyst Andreas Wallstrom on Swedish government debt declining to its lowest level in 23 years was retweeted almost 40 times on Jan. 10 before Wallstrom realized he made an error and published a correction. Only four people retweeted the corrected chart.
Wallstrom in an interview on Jan. 25 described himself as an “over-user of Twitter who has to constantly rein myself in.” For him, the benefits of quick communication and interaction — including with leading thinkers and policy makers — still outweigh the potential risks involved.
SEB’s Holmgren said he initially opposed his team’s strategic push to become more active on Twitter, fearing the character limitation could undermine the quality of his analysis. For Carl Hammer, chief currency strategist at SEB, Twitter is better suited for breaking news situations.
“Some things you just can’t say in 140 characters,” he said in an interview last month.
Less Is More
The increasing use of Twitter is making strategists at both Nordea and SEB question whether they should scrap longer reports that take months to develop and opt for shorter and more frequent analysis. A case-in-point is SEB’s currency strategy which this month was turned into a snappy Power Point presentation instead of a 50-page Word document.
While no decision has been made yet, Wallstrom said he believes Nordea’s Economic Outlook, which is published three times a year, may be gone in a few years.
“It’s a sign of the times. Nobody wants to read 40-page reports anymore,” Wallstrom said. “People want short, concise, get-to-the-point bits of information.”