When You Can’t Trust The Data

by | Sep 15, 2025 | Real Estate

When You Can't Trust The Data-Real Estate Investment Data Analysis


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When You Can’t Trust The Data

Welcome to the Real Estate Espresso podcast, your morning shout out to what’s new in the World of Real Estate Investing. I’m your host, Victor Menasce. On today’s show, we’re looking at macroeconomic metrics, and hopefully, by the end of this episode, you’ll see exactly how bad headline economic measurements are showing what’s really happening in the economy. This has been made clear by the revisions that come months and often years later.

We’re seeing revisions in the labor market data, in gross domestic products, in inflation data. All of these numbers are being continually revised, and often in a very material way. In the meantime, business news analysts are crafting all kinds of narratives about the economy on the basis of incorrect data. If the numbers were truly being reported correctly, would those narratives be different? I happen to think so. In some cases, the numbers are correct, but the context of the narrative is incorrect. There are a few of those which I’ll highlight today.

I follow the work of Dr. Anas Al-Haji, who lives in Dallas and is one of the foremost global oil analysts. He has a sub-stack publication targeted at institutional investors, and frankly, his work is second to none. Let’s start with the production quotas for oil in the OPEC nations and for this discussion, we’ll include OPEC Plus, which comprises the 23 nations consisting of the original 10 OPEC member states, plus the 13 new countries which form OPEC plus.

Production targets are not actual production on the world market. More importantly, production targets don’t take into account cheating and selling above reported numbers, which is, by the way, rampant in OPEC nations, if they have the ability. Furthermore, raising oil production quotas doesn’t mean oil production is, in fact, increasing. There’s only four out of the 23 OPEC nations that have the ability to increase production today. These four are Saudi Arabia, United Arab Emirates, Kuwait, and Iraq. The other nations only have very limited ability to increase production on a short term basis.

The next thing to consider is that production doesn’t mean that oil is available for export. If a producer nation increases domestic consumption for whatever reason, then the amount of oil available on the world market for export is going to be reduced, and the global oil analysts almost never report on this aspect. So when oil future prices are being bid, they’re rarely based on oil available for purchase internationally, and that’s a major flaw.

We also have to remember that these numbers are looking overwhelmingly at the supply side and not the demand side of the equation. And, yes, you can do the math where you take the supply side plus inventory, which eventually should equal out to demand since arguably demand is more difficult to measure. Now, the International Energy Agency, IEA, has been the primary source of data when it comes to oil forecasts. Turns out, there have been some major revisions to these numbers as well. It’s not just the BEA and the Bureau of Labor and Statistics, almost every source of economic data is being revised.

Turns out that Mexico has been underreporting oil demand since 2020. In fact, that demand error has been short by 100,000 barrels a day for five years. We’re talking about the miscalculation of 110 million barrels of oil over that time period, which is not a small error. These models are extremely influential when it comes to setting prices in the futures market.

The point of all this discussion is that you can’t necessarily trust the economic data that’s being reported. You certainly can’t trust it enough for the data to materially influence critical decisions. And I don’t have an easy answer. Maybe you could try matching multiple data sources and see if you can find inconsistencies. At least it might alert you to some other trends that may be otherwise elusive. As you think about that, have an awesome rest of your day, go make some great things happen and we’ll talk to you again tomorrow.

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