In the beginning it was just risk.
Two years ago when we first started working on the concept paper that later became Pakistan Risk Review, we felt that covering prices, volatilities and limits in secondary markets would be a full time job and would certainly be sufficient for a number of customers. After all what more could customers want then pure data and trends, neatly packaged in a publication that they could use to draw their own conclusion. Over the first few issues it was interesting to see our ideas and our own analysts change as we got deeper into the dataset.
What started off as a focused effort to document the Pakistani data set turned into a full time job tracking changes in numerous markets and their impact on the global economy. At the end of the first issue it was obvious that while we faced problems that were immediate and significant as a nation, they were by no means unique or static. And to appreciate their impact on our national economy and our life style we had to look outside Pakistan.
First came the regional macro economy followed by current and capital accounts, then came the currency, with currency came the commodities market, with commodities, volatility, with volatilities the global economic outlook, with the outlook came consumption, production and price trends and with trends we completed a full circle back to our place in the grand scheme of things. It wasn’t enough to cover oil prices, you had to cover the dollar-euro exchange rate and then it wasn’t enough to cover the Euro, you had to cover gold to cover inflation and with gold the Australian dollar to complete the connection.
With relationships and connections came the appreciation that data wasn’t static. Looking at data, running basic numbers and metrics was not sufficient. To stand out, you had to do trends, evaluate and match the trend with the economic cycle and then match both with price levels to see if a view or a trade could be presented. You had to be on the lookout for how relationships changed over time and how markets changed to introduce new connections no one was looking at.
In the beginning we thought if we understood oil and commodities we would understand Pakistan risk. We would understand why a remarkable success story went off track in just twelve months. A year later we humbly realize that oil, commodities and Pakistan were only the beginning. The real story behind the numbers is far more complex and just as interesting.
This issue of Pakistan Risk Review is the first issue that reflects the lessons that we have learnt over the last year tracking data and relationships. We hope that the new direction and outlook will help make this a better, a more useful and powerful publication.