Englund Crunches Data in Real Time for Market Clients
Within seconds of the government releasing monthly reports on inflation or employment, NABE member Michael Englund pours through the fresh statistics to meet his deadline for providing real-time analysis to clients who are key players in financial markets.
Founder and director of Action Economics, Englund is a seasoned professional in the art of real-time market commentary. The employee-owned company of about 20 analysts, established in January of 2004, is based in Boulder, Colorado.
“We are nearly all former colleagues that have had over a decade of experience working together, and I and one of the other Directors had twenty one years of experience working together at MMS International before starting Action Economics,” Englund said. It was the sale of MMS that provided an opportunity for Englund and his long-time colleagues to launch their own company.
Interest in Field Began in College
Englund became interested in the field of real-time commentary in 1982, shortly before he began work on a graduate degree at the University of California-Berkeley. He had a bachelor’s degree economics from Middlebury College in Vermont and had spent a year at the London School of Economics.
“As an undergraduate I wanted to launch a career in applied macro, and was attracted to a job at the start-up firm, Money Market Services, in the San Francisco Bay area, because it gave me an opportunity for a few years before graduate school to observe first-hand how macroeconomic data was analyzed in the global bond and currency markets,” he said.
He became a co-owner of Money Market Services (MMS) and was a bond market commentator while attending UC-Berkeley between 1984 and 1990, when he earned his Masters in statistics and a Ph.D. in economics.
Opportunity Came Out of Ownership Changes
In 1990, Englund and the other owners of MMS sold the firm to Standard & Poor’s and continued to provide real-time analysis under the name Standard & Poor’s MMS. In 2002, S&P sold the MMS unit to a London investor, who in turn sold it to a major competitor, Informa Global Markets.
“After that purchase, the company was merged with their MCM unit, and nearly all of the prior personnel of MMS International left the company. This provided a unique opportunity for us to start a firm in the real-time commentary business like the start-up we originally managed in the 1980s,” Englund said.
Action Economics provides “real-time commentary for professionals in the global bond and currency markets, with supporting analysis of the macroeconomic releases for the major industrialized countries, and conduct weekly surveys of market forecasts around the globe,” he said. Clients include trading desk of banks and brokerage houses, as well as hedge funds, insurance companies, and what Englund called “high net worth individual investors.”
Ph.D. Research Spurred His Interest
Englund’s Ph.D. research focused on Federal Reserve operating procedures. During that same period, his work for MMS involved generating weekly money supply forecasts for U.S. bond traders and surveying bank forecasts for money supply in order to monitor “what forecasts were being priced in to the market.” He also surveyed national bank deposits in “a stratified sample that did as good a job at calculating the weekly seasonally adjusted money supply changes as the Fed's own weekly numbers,” he said.
It turned out, Englund said, that “the weekly swings in money supply numbers accounted for the bulk of bond price variation through the 1980s.” The work for MMS and for his doctorate at Berkeley “galvanized my interest in how bond markets digest U.S. economic reports, and how the Fed manages reserves and interest rates on a daily and weekly basis.”
Asked to reflect on his choice of economics as a profession, Englund commented that many jobs call for the application of economic theory, in particular in the global bond and currency markets. “And, there are many related jobs in the policy arena, where theory meets practice, and where one's work can be seen to have a significant impact,” he added.
Those interested in economics should consider pursuing a Ph.D. in a micro field that interests them, he said. “There are few jobs in the macroeconomic forecasting arena, but the ones available are certainly fun and rewarding,” he observed.
