January of every year is wonderful for the prediction industry. Almost everyone who made a prediction in the prior year is taking credit for the few things they got right and, conveniently forgetting or minimizing what they missed. There are only a few groups who actually score themselves like Barron’s and certain columnists in The Economist. The rest of us rely on failing memory and a complete lack of accountability.
Almost all of the January savants are quick to point out the macro trends and tailwinds that will influence the shape of 2018 like Tax Reform, the price of oil, reversals of Quantitative Easing in the US and Europe, the weak dollar, the travails of cryptocurrencies, capital spending, deficit spending, Fed interest rate increases and the VIX. However, based on my experience in the first 20 days of 2018 in Cleveland, Ohio Betsy Kling had more impact on our local economy than Warren Buffet, Jamie Dimon and Jim Cramer.
Our Chief Meteorologist
Betsy Kling is our favorite weather personality and she has a following that can challenge Justin Bieber, Taylor Swift and Oprah Winfrey all rolled into one. Her resume is pretty modest. She graduated from Bowling Green State University and received her Certification in Broadcast Meteorology from Mississippi State University. She has been a Meteorologist for 20 years and the Chief Meteorologist at WKYC-TV for 14 years. Like the oracle from Delphi she divines millibars and winds aloft from Doppler radar and atmospheric sensors to predict weather, and most recently, end of days.
I watched her single-handedly shut down most of greater Cleveland for about 36 hours with her prediction of a cataclysm of sleet and ice on Friday, January 12, followed by several feet of snow and freezing temperatures on Saturday, followed by more freezing and more snow on Sunday, and again Monday. As far as I know, the only event that took place was the Browns “0-16 parade” – suggesting losing is inexorable. Except for the temperature, Betsy pooched this prediction in a big way (no ice/ little snow) and probably cost greater Cleveland businesses more money on Martin Luther King weekend, than Lebron has made in his career. The other thing about her job and most of the expert prediction business, is nobody seems to care. Just think where we would be in private equity if we were as consistently wrong about big predictions as Chief Meteorologists.
They Use To Just Call It Winter
When I was a kid they called this winter and we dealt with it. I can’t ever remember anything being cancelled. Gross Domestic Product (GDP) marched forward without interruption from the weather. Weather is now entertainment. It takes on tsunami proportions and is usually accompanied with a name or acronym that makes it memorable. It is frequently blamed for quarterly earnings shortfalls.
I have learned that The Weather Channel now has a materiality standard (population or geography) for naming not just hurricanes but also winter storms. Any storm on the East Coast, especially one that touches New York City is automatically a super storm. There is no worry or mention about the middle of the country. These are Red states in the fly over zone, devoid of economic impact and deserving of all the bad weather they get because their citizens are too stupid to live in New York or California. This is certainly supported by The Weather Channel’s naming criteria:
“The Weather Channel’s winter storm naming system is based on how many people or how much real estate is affected by the worst part of a storm. A localized but extremely impactful winter storm could affect 1,000,000 people, but since it doesn’t reach a 2,000,000-population requirement, it wouldn’t receive a name.”
Bad News For The Fly Over Zone
This is bad news for Buffalo, Bismarck, and Butte where a 90-year-old who dies shoveling eight feet of snow is remembered as having died of natural causes, but his counterpart in New York is remembered as having been ravaged, and ultimately slain, by Killer storm Kyle that shut down the entire East Coast and left millions without power.
All I know for sure is I want this job, I get the power to interrupt life based on Doppler radar predictions, and I am almost always wrong and no one cares. They call me an expert and I am more popular than free cell phones.