As most folks not living under a rock know by now, Zynga and Facebook did a "Thelma and Louise" improvisation this week. Herein lies a cautionary tale for both quants and macro-economics. Not necessarily the same lesson, though.
For the quants, the lesson is that real world events, not time series data, determine what happens in the market at the corporate level. Data analysis is useful in estimating, and with luck front running, money movements across sectors, variously defined. All those retail holders feverishly pounding out R graphs to tell them what's gonna happen tomorrow. Not gonna happen. With Thelma and Louise, both "make" ephemera, paid for with adverts, and the occasional lunatic who buys virtual tractors. In the case of Facebook, it went public after it had maxed out the easy 80% of users on the planet. All of these advert agencies, Google being the archetype, are vulnerable to *any* other advert agency which can convince buyers their brand of hokum peddling works better. It needn't be on the web. Have you noted that apps are increasingly iOS and Android based? For Thelma and Louise, here's a new and insurgent advert platform they don't control. Oops.
For the macro-ists, the lesson is even bleaker. Real growth in real economies comes from producing more stuff better and cheaper, with a large share of that productivity growth going to the widest spectrum of the society; either the output gets consumed domestically or it has to be exported, the latter is useful only if the consequent importers' currencies are valuable, see China and Germany for the folly of relying on exports. Not surprising then, that our decade of discontent was marked by financialization of our economy, where we forsook making widgets for money laundering and with the mass of productivity increase going not to the masses, but the Koch brothers, et al. And not surprisingly, consumer demand remains lethargic since the masses aren't garnering increasing real income. That's also why the Inflation Monster and the Bond Vigilantes are nowhere to be found; the $$$ are hold up in mattresses of the Koch brothers and their friends. But that makes the Koch brothers happy (well, not the lack of bad outcomes, of course), in that they get richer as the masses get poorer. After all, wealth and income are relative measures; make my neighbour poorer and make myself richer. Too bad the yokels in Kansas are too stupid to understand that.