1. 8/29/2018
The Quickest Way to Extract Trends and Alerts from Massive Amount of Text Case Study “Economic Recovery & Interest Rates Trends”
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Dirk Wenzel VP Business Development InfoTame Corporation  Sky Lane, Suite 201 Los Gatos, CA 95032
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Los Gatos, California

2. Back to Year 2000: When Is The Next Recession Due?
8/29/2018
Back to Year 2000: When Is The Next Recession Due?
Economic recessions are repeating but not periodic events. They always come but at rather irregular intervals.
How can you anticipate the next one on the horizon?

3. Can NASDAQ Predict Recession?
8/29/2018
Can NASDAQ Predict Recession?
NASDAQ Composite, Dec ‘99 – Nov ‘01
There is a common wisdom that stock market declines of a significant magnitude signal a recession ahead.
But which substantial decline during the bear market in was a true recession signal?
What was the lead time to the recession onset?
Which index is the best predictor?

4. Object “NASDAQ”, Mar ’00 – Sep ‘01
8/29/2018
Object “NASDAQ”, Mar ’00 – Sep ‘01
Instead of looking at numbers, we used InfoTame to analyze text data: over 1,000,000 news clips for the March 2000 – September 2001 period.
The histogram shows the number of articles containing the word “NASDAQ” for each month.
We then further analyzed these 15,511 documents for the most statistically significant associations for each time period.
“Recession” was one such association and here is what we found.

5. InfoTame Indicated Onset of Recession 2001 back in Dec 2000
8/29/2018
InfoTame Indicated Onset of Recession 2001 back in Dec 2000
The significance of “Recession” was zero through November Then it jumped in December 2000 and grew further in January From other studies based on correlations of significance of a given topic and the real world events, we know that InfoTame mirrors the trends as they unfold. The significance values calculated by InfoTame’s analytics engine reflect the collective wisdom buried within the 15,511 articles talking about NASDAQ and saying something once in a while about recession. No analyst, or a group of analysts, having read all these articles and news clips, could make sense of how the occasional mention of recession related to the ups and downs of NASDAQ in each of the monthly periods.
InfoTame, however, found that there was something significantly different about the way “recession” was mentioned in the 1,051 articles in Dec 2000 and the 960 documents of Jan 2001, compared to thousands of documents for The Mar-Nov period of 2000, when significance of “recession” was zero.
Significance Values
“Recession” significance; Object “NASDAQ”, Mar Sep 2001
M A M J J A S O N D J F M A M J J A S
Zero significance of “Recession” prior to Dec ‘00

6. Recession Announced Nov 26 ‘01
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Recession Announced Nov 26 ‘01
Much later, all of us learned that the US economy entered the recession around June 2001, and perhaps as early as March 2001.
It appears that InfoTame first indicated recession on the horizon after analysis of 1,051 documents for Dec 2000.
The recession alert came 3-6 months before the recession started.

7. Timing Of The Recession Of 2001
8/29/2018
Timing Of The Recession Of 2001
When did NASDAQ charts signal the next recession?
Using “Dow Jones” or “S&P” in place of “NASDAQ” produced identical results for this data base: the first non-zero significance of recession occurred in Dec 2000 in all cases.
InfoTame indicated recession several months ahead,
in Dec ‘00
“Recession” significance; Object “NASDAQ”, Mar Sep 2001
M A M J J A S O N D J F M A M J J A S
Recession acknowledged on Nov 26, 2001

8. More Recent Trends:
The following slides show longer term trends for the 15 quarters, from April 2000 to December 2003
Extracted from queries “Interest Rates” and “NASDAQ”, we plot the significance of terms:
“Economic Slowdown”
“Economic Recovery”
“Cut Rate”
“Rate Hike”
“Raise Interest”
“Budget Deficit”

9. ITee Indicates Recession And Then Recovery
Recession acknowledged on Nov 26, 2001
ITee Indicates Recession And Then Recovery
Query “Interest Rates”
Recession
Mar-Nov
2001
ITee gives
first alert in
Dec 2000
ITee signals
subsequent
recovery
Dec Dec Dec Dec

10. ITee Detects Re-Emergence Of Budget Deficit
Query “Interest Rates”
Recession
Mar-Nov
2001
Re-emergence
of Budget Deficit
Dec Dec Dec Dec

11. ITee Indicates The End Of Interest Rates Cuts
Query “Interest Rates”
Recession
Mar-Sep
2001
Dec Dec Dec Dec

12. ITee Indicates Possible Rates Hikes Ahead
Query “NASDAQ”
Recession
Mar-Sep
2001
Are we done
with Rate Cuts?
Re-emergence
of Rate Hikes?
Dec Dec Dec Dec

13. ITee Indicates Continuing Economic Recovery
Query “NASDAQ”
Recession
Mar-Sep
2001
Dec Dec Dec Dec