UK Opinion Pollsters Inquiry Smoke Screen for Election Forecast Failure of Polls Sales Industry
ElectionOracle / Opinion Polls & Surveys Jan 19, 2016 - 11:42 AM GMTBy: Nadeem_Walayat
The run up to the May 2015 general election had the the people of Britain convinced that they were going to the polls that were unanimously proclaimed by the mainstream media as being too close to call, one where the Labour and Conservative parties were virtually neck and neck and where even if the Conservatives managed to pull a a handful of seats ahead would still lose be default as they would not be able to form a majority even with Lib Dem support and therefore the Labour party was destined to win the 2015 general election, all of which was based on a year of opinion polls that consistently presented this consensus view right up to the polls closed at 10pm.
Opinion pollster's seats forecasts averaged to:
- Conservatives : 276
- Labour : 271
- SNP : 53
- Lib Dems : 25
- DUP 8
Which were forecasting an extreme hung parliament -
Conservatives + Lib Dems = 301 - FAIL
Add DUP 8 seats = 309 - FAIL
Labour + Lib-Dems = 296 - FAIL
Labour + Lib-Dems + Plaid Cymru + Greens = 303 - FAIL
Thus according to the opinion polls the only workable majority would have been one of a minority Labour government supported by the SNP (53) to total 323. Instead, the reality proved to be the exact opposite as instead of the Ed Milliband walking into No 10 we had David Cameron texting the removal vans to do an about turn as he raced back to Downing Street before the locks were changed.
Now over 6 months later the pollsters have come out with a whole litany of excuses and promises in an academic led inquiry to promise to make amends and do far better next time. However my articles in the run up to the general election consistently pointed out that the opinion polls were wrong and the reasons, with reasons why they were wrong covered in this May 2015 video :
And in this in-depth analysis - 14 May 2015 - Deconstruction of UK General Election 2015 Result - Why Opinion Pollsters Got it Wrong, I further explained the real reasons why the opinion pollsters go it wrong which apparently given today's report the pollsters still remain largely blind to for the obvious reason that the opinion polls are a sales industry for which election campaigns that are sold as being tight, too close to call tend to SELL MORE OPINION POLLS! :
Why the Opinion Pollsters Got the 2015 Election Badly Wrong
Since my view was consistently contrary to what the opinion polls were stating, therefore I have had the whole year to ponder why the opinion were wrong, some of which I illuminated in the lead up to election day -
01 May 2015 - UK Election Forecast 2015 - Who Will Win?
Therefore come May 8th virtually all pollsters will have egg on their faces as the mainstream media will have flushed untold millions down the drain on commissioning opinion polls that turned out to be WRONG just as the polls were wrong in the run up to the Scottish referendum that was never a 50/50 proposition which at the time I concluded was mainly so as to allow pollsters to sell opinion polls and the mainstream press to sell copy and so it is the case with today's election campaign.
UK Saved From I.S. Threat But Scottish Independence Nightmare is Not Over!
There is another reason as well for why the polls were so close and that is one of SALES, the polling industry SELLING a tight election so that the gullible mainstream press would buy their polling services. Therefore painting a picture of a tight race by manipulating the data will have turned out to be a huge money spinner for the polling agencies.
My article concluded in the most probable forecast for the outcome of the result would be for at least show a 10% gap between NO and YES, and definitely not reflective of the mass hysteria.
Therefore the most probable outcome is inline with the polling ranges of before the YES campaigns intimidation and fear phase began to play a prominent role in the frenzy of campaigning of September that rather than a 50/50 tight race is more probably going to result in at least a 55% NO vote victory, and I would not be surprised if the NO vote even breaks above 60%!
Therefore here is my list of 7 key reasons why the Opinion Pollsters got it wrong, most of which the pollsters will never ever be able to arrive at as reasons for being wrong.
1. Back Fitting Data - Lack of Mechanism to Say the Methodology is Wrong
Virtually every experienced 'successful' market analyst / trader understands that 'Trading Systems' just do not work going forward i.e. all that trading systems do is back fit data onto what has already happened and thus WILL FAIL going forward. Which is the precise mistake that opinion pollsters tend to make as they weight, adjust and fine tune to take account of this, that and other which just as is would be the case for systems that trade the markets and so is the case for public opinion polls that fitting data to mast past election outcomes just does not work!
And worse for pollsters is that they do not have any daily mechanism to demonstrate that they are wrong for general elections only come along every 5 years or so, which means that there is no data to test the opinion polls against in real time and hence why opinion polls can be wrong for years as was the case for the 2015 general election.
2. Opinion Polls Sales Industry - Fear Sells!
As I covered earlier that the primary objective of opinion pollsters is to SELL their daily polling services. Where it is to the benefit of the pollsters and the mainstream media that commission the polls for the election race to be very tight, exciting or frightening rather than a dull certainty. Hence the picture painted did not reflect probability even if the pollsters methodologies actually worked, for reality does not sell daily opinion polling services or mainstream media copy. Just as market realities of a dull 6 year relentless stocks bull market will not sell much media copy hence the constant obsession with stories that always warn of an imminent stock market crash, collapse, meltdown, bear market etc that has failed to materialise for 6 years as I have covered at length in articles and my stocks stealth bull market series of ebook's (FREE DOWNLOAD).
FEAR SELLS
The following video illustrates how most mainstream news stories are created.
The pollsters apparently tend to be pseudo-academics i.e. linked to research institutions, universities etc where the tendency is to lean to the left of centre which not just for 2015 but for countless elections before hand that tended to exhibit a bias towards Labour where whatever subsequent excuses the pollsters made of ensuring that they would get it right next time, in reality never do because the polling institutions fundamentally remain leaning LEFT of centre.
4. Opinion Polls are Political Propaganda
Just as economics is mainly economic propaganda to massage the general populations future expectations, for instance the Bank of England's persistent propaganda of the danger of always imminent deflation when the reality is one of the UK being immersed in an exponential inflation mega-trend.
The bottom line is that the Inflation mega-trend is exponential and the politicians, central banks and their vested interest academics deflation fears amount to nothing more than economic propaganda so as to allow governments to print debt (money) to buy votes with during an election year which ultimately means that a couple of years from now CPI Inflation will back above 2% as the Bank of England will use the cover of deflation to print more money to monetize government debt.
Then so are opinion polls propaganda to massage the general populations election expectations, as clearly the opinions polls propagandised expectations for a Labour election win as being probable.
5. Clueless Academics
Its not just that academics are left leaning but just as is the case with their economics counterparts who nearly always get it wrong because academics tend to live in ivory towers who are heavily invested in theories and methodologies that are only rarely tested by reality whereas one who trades the markets has to get it right more often then wrong else they will go bust as I have written several times over the years -
20 Oct 2012 - Stock Market Crash Investing Lessons and the Real Secrets of Successful Trading
Why 90% of Traders Lose
The failure rate for financial market and commodity traders has remained at a consistently high 90% for many decades, this despite all of the advances in information technology and the flood of new learning materials that is churned out annually, therefore why is it that 90% of traders still lose ?
In my opinion, a high 90% of traders are destined to lose because they are in fact learning from / listening to the 90% of losing traders that preceded them, who following wipe out in the markets have gone on to focus on writing about market price action and methodology with an even greater concentration observed to occur in the mainstream press as account busted traders / investors turn failure to trade into full time media careers and thus perpetuate a continuous cycle of failing traders guiding new traders towards similar failure.
This explains why those in the mainstream financial press can literally miss WHOLE Bull and Bear markets despite trends that end up spanning many, many years. They can be recognised by their rhetoric such as the perpetual the end of the trend is coming mantra that is based on fundamentally flawed understanding of what actually moves markets, which is why they failed to succeed in trading in the first place.
Given that 90% of trader fail, it can be assumed that that at least 90% of those that provide financial commentary are failed traders that spend their time writing about the act of trading rather than ever engaging in actual trading which culminates in the big name media whores that we see prancing around between make up rooms and TV Studio's, usually regurgitating what other failed traders have already commentated upon or make such weak statements that can be easily applied to virtually any outcome i.e. that the market will definitely fall, but then again it may definitely rise. The media whores are well practiced in applying such phraseology that ensures that they can always claim victory for publicity purposes whatever the actual outcome is, as the viewers are left to perceive whatever they want to in the media whore sales men's commentary, based on their own pre-existing market bias. The mainstream financial media is more than eager to push the selectively edited past commentary that results in nothing more than blatant misleading advertisements masquerading as financial market commentary. Stop for a moment and dissect what the latest utterance of a media whore actually is and you will soon realise the game of deception that is being played in an attempt to hook you in towards ultimately purchasing a product or service.
In actual fact perhaps as little as 1% of the material floating out there is produced by successful traders because successful traders are primarily going to be focused on trading rather than writing about trading or marketing trading services, with probably only enough spare time to write a couple of books over their whole lifetime which compares against the book factories that can churn out as many as several titles per year that virtually ensures that at least 95% of your trading book shelf is packed full of garbage, totally useless, and you know it!
Still it could be worse, academic economists inhabit a zone that is based purely on mumbo jumbo that is guaranteed to result in unforeseen outcomes, for academic economists tend to be the second greatest media whores just a step down from politicians, who exist purely to give off the air of authority and certainty as though economics is a science when in reality it is pseudo science more akin to the art of psychologically managing the general populations expectations aka economic propaganda than in determining any sense of economic reality. Economic theories are just that theories that have been modeled on selective editing of past economic data for political purposes which every trader should know (failing or successful) is just over optimised back fitting onto selective past trends that proves totally worthless going forward.
Therefore the problem once more is one of lack of a mechanism to demonstrate that the methodology works or not. And even then, there is a tendency for academics to ignore reality and continue with stick with theories and methodologies over reality, which is just the case with the opinion pollsters who are busy putting up a smoke screen of excuses that put the blame for being wrong elsewhere i.e. onto shy tories.
6. Corruption
As mentioned earlier a number of pollsters are now starting to make ridiculous statements (Labour pollsters) that they secretly knew Labour would lose the election but waited to publish their findings until several days AFTER the election result. How stupid do the pollsters think people are?
There is no evidence for this whatsoever as is apparent by the election campaigns fought by both Labour and Conservative that implied a tight election race and resulting shock and surprise at the result which was CONTRARY to their opinion polling! This illustrates that opinion pollsters are nothing more than bullshit artists whose primary objective is to SELL their services to the gullible mainstream media who actually want a tight election race so as they can also maximise sales. So today we are seeing an opinion polls sales industry trying to reinvent history so that they can continue selling their services in the future.
7. Telephone Polling Facing a Crisis of User Engagement
Last but not least, calling people for their opinion illustrates a public sector mentality, that of pollsters going through the motions of providing a service because its accuracy is only tested once every 5 years so that for most of the time they can get away with selling garbage as illustrated through the practice of telephone polling.
It does not take a genius to work out that most of the people who are going to pick up the phone at home are people who are likely to be sat on their lard asses on benefits. Hence the the bias towards labour voters for phone polling at least, as the same is likely to happen for high street and shopping malls polling as the people who tend to vote Conservative will be busy working.
Furthermore what the pollsters failed to realise is that the people of Britain over the past 10 years have become increasingly sick to death of junk phone calls, such as PPI insurance claims, accident claims, change your broadband that prompts many to offer mis-information to whomever is calling as an practiced automatic response to unsolicited phone calls. Therefore pollsters making unsolicited calls were far more likely to be on the receiving end of deliberate misinformation this year than in years past, not just in answering who will you vote for questions but all of the other leading questions that pollsters tend to ask so as to focus the voters mind before they get to the punch line who will you vote for question. Why? not just because of irritation at being on the receiving end of a continuous stream of unsolicited phone calls but also because it is none of anyone else's business how the person will vote, so a little bit of mischief making tends to come into play to teach the pollsters a lesson which clearly could have had a major effect on the opinion polls conducted in the marginal seats. This also means that as time goes on the opinion polls will only get ever more worse as the people polled can only become ever more irritated at the ongoing flood of unsolicited calls.
Apparently he pollsters have announced an independent inquiry to investigate why their polls were completely wrong, which in my opinion will prove to a be a total white wash as illustrated by the subsequent behaviour of many pollsters who are coming out with a string of excuses so as to lay the blame for being WRONG elsewhere -
a. That there was a late swing towards the Conservatives.
b. That they secretly really expected that the Conservatives would win but for whatever reason did not think about publishing until well AFTER the election results were out.
c. Blaming the shy tories for a late swing.
d. Blaming lazy Labour voters for not voting.
Therefore expect the pollsters independent inquiry to be just as much BS as their opinion polls turned out to be.
And so it has turned out to be so today. Sales men do what sales men do which is to attempt to maximise sales of a service for which they need to create maximum demand.
UK House Prices Accurately Forecast the UK General Election Result
My original analysis of December 2013 as later featured in the UK Housing Market ebook (FREE DOWNLOAD) converted the forecast UK house prices trend trajectory into expectations for an outright Conservative election victory where the only thing to do was to track the actual house prices against the forecast trend trajectory to fine tune the expected result on approach to the May 7th election day.
30 Dec 2013 - UK House Prices Forecast 2014 to 2018, Inflation, Trend Trajectory and General Election 2015
UK General Election Forecast 2015
In terms of the 'fixed' May 2015 general election, the implications of 10% per annum house price inflation for another 18 months, that builds on the housing bull market of the previous 12 months and on the embryonic bull market of 2012 are that probability strongly favours an outright Conservative election victory.
The following graph attempts to fine tune the outcome of the next general election by utilising the more conservative current house prices momentum of 8.5% which has many implications for strategies that political parties may be entertaining to skew the election results in their favour.
In conclusion a May 2015 general election at an average house price inflation rate of 8.5% would result in a Conservative overall majority of at least 30 seats. Therefore this is my minimum expectation as I expect UK house prices to start to average 10% per annum from early 2014 with my actual forecast converging towards average UK house prices breaking to a new all time high just prior to the May 2015 general election which would be a significant boost for housing market sentiment and thus the Conservative's election prospects.
The following video of 6th January 2014 (16 months ago) further illustrates my house prices based UK general election forecast:
My most recent update of 1st of May confirmed my UK house prices based expectations for an outright Conservative election victory on a small single digits majority -
01 May 2015 - UK Election Forecast 2015 - Who Will Win?
The updated election seats trend graph suggests that the Conservatives are on target towards achieving a single digits outright majority which is completely contrary to every opinion poll published this year. Which if it materialises then I am sure for Election 2020 everyone will be staring at the house prices indices rather than the opinion polls. Though as is usually the case that when the consensus becomes focused on an particular indicator then it usually stops working.
With the accompanying video published on 3rd of May that also confirmed that UK house prices were forecasting a single digit outright Conservative election victory, which was contrary to every opinion poll and political pundit:
Therefore my analysis of UK house prices converted into seats by far proved to be the most accurate forecaster for the UK general election 2015 outcome, and as I reported at the time that I had a good idea of how house prices will perform over the next 5 years then with some confidence I expected the Conservatives to also likely to win the 2020 general election!
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By Nadeem Walayat
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Nadeem Walayat has over 25 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of five ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series that can be downloaded for Free.
Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 1000 experienced analysts on a range of views of the probable direction of the financial markets, thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk
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