The Sure Thing

Tyler Durden's picture

Submitted by Michael Lebowitz via 720Global.com,

The Sure Thing

The New England Patriots pulled off a stunning come-from-behind victory in Super Bowl LI, and one that was truly unprecedented in American football. Throughout modern NFL history, playoff teams that had a 19 point lead or greater in the fourth quarter, as the Atlanta Falcons did, were 93-0. A Patriots comeback was deemed virtually impossible by the odds-makers. There is an important lesson here worth considering. The Patriots improbable victory follows a variety of other unlikely, but surprising high-profile events in the past several months, some of which will have far greater impact on our lives than we may realize.

The British referendum to leave the Euro

Last summer, the odds of Brexit gaining a majority vote briefly dipped below 5% in the days preceding the vote. In a premonition to the upcoming U.S. election, The Sun newspaper in London mistakenly announced that the head of the Brexit campaign, Nigel Lafarge, conceded to the “Remain” vote.  

Graph and Newspaper cover courtesy: Hypermind.com and The Sun respectively

Leicester City’s improbable Premier League Championship

Leicester City entered the 2016 Premier League season as a 5,000 to 1 underdog to win the league championship. Fortunately for Leicester City, the existence of long odds bear no direct influence on outcomes as they went on to win the Premier League Championship. For the sake of comparison, the worst team in the NFL, the Cleveland Browns who finished the 2016 season with one win, started the year with odds of 200-1 to win the Super Bowl. According to odds-makers, the Browns were 25 times more likely to win the Super Bowl than Leicester City was to win the Premier League Championship.

Image Courtesy: ESPN

The U.S. Presidential Election

In the days leading up to the U.S Presidential election, Donald Trump was a serious underdog with only a 20% chance of winning the election.  Even after some states had closed their polls and results were trickling in, a Hillary Clinton victory was all but a foregone conclusion. Newsweek infamously released their upcoming issue with a picture of Hillary Clinton under the words “Madam President.”

Graph and magazine cover courtesy: New York Times and Newsweek respectively

Super Bowl LI

With the Patriots trailing 28-3 mid-way through the third quarter, the odds of a Patriots Super Bowl victory were placed at 0.3% or 333 to 1. The Falcons were a virtual lock to win. The graph below charts the progression of the in-game odds for each respective team winning. The gray line highlights the point where the Falcons had the greatest chance of winning.

Graph Courtesy: Matthew Cascio @mattcascio  

Why?

Given that “impossible” events are seemingly occurring with regularity, we must ask, “Why?”

Maybe another question that should be entertained is why the favorite, at any point in the contest, is given such commanding status? Given what we have seen out of Tom Brady in his illustrious career, why would experts count him out with a seemingly eternal 23:29 remaining to play in the biggest game of the biggest sport in America?

To apply this concept to another great global sport, do U.S. equity market valuations imply similar false confidence in future outcomes for the pace of earnings and economic growth?

The Dow Jones Industrial Average just crossed the 20,000 mark with great fanfare. Immediately following the celebration, the media and market “experts” began discussing the next benchmarks they expect to fall, Dow 25,000 and 30,000.  Like those supporting the aforementioned clear favorites, everyone seems to be caught up in euphoria and the absolute certainty of an outcome. Like the attitudes that prevailed in 1929 and 1999, market experts appear to be convinced that the equity markets are moving in one direction, higher.

Spot VIX, an indicator that conveys confidence or concern about future equity price moves, is near-record lows. This implies tremendous confidence that stock prices will indeed move higher. Conversely, however, lesser followed VIX futures currently trade at historically steep premiums which suggest more than a few market participants harbor anxieties about the future.

We have been vocal in our thoughts about the confluence of historically high valuations, economic headwinds and the uncertainties of a new administration. It is hard for us to get on a bandwagon that is not supported by fundamentals. We feel like the sole Patriots fan listening to everyone around us debate whether Falcon’s quarterback Matt Ryan or star receiver Julio Jones will be the MVP.

Like all of the instances listed above, the odds are clearly wrong. The fundamentals governing each event were carelessly neglected, and probabilities radically miscalculated, sending the experts and their followers, in the wrong direction. While sports or politics may not be your thing, we urge you to pay attention.

The odds of equity market victory are very near 100%.  What could go wrong?

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stinkhammer's picture

hey everybody! we're all going to get laid!!

JackT's picture

What are the odds that these occurrences would happen together?

Richard Chesler's picture

Fuck you libturds and your homosexual Obondinga!

abyssinian's picture

Twitter CEO? Does that clown know anything? He is just clueless as my pet turtle.   Actually my turtle knows more. 

Placerville's picture

Dude, quit pumping your own posts!

Right after you post a comment with your link, it immediately has a 10-0 vote.

EVERY FRICKIN' TIME!

Lone_Star's picture

This "Arab Spring Event" that's supposed to happen. Even with the IC backing them the snowflakes and paid protestors are outgunned by about 300 Million to 0, probably higher, because of all the gun sales.

Most of them are too scared of guns to own one, let alone know which end to point.

Handful of Dust's picture

woof Shitzer's arrogant prancing about on stage pre-election was truly worthy of a peacock.

I'll never forget the look of dismay, no it was shock, when he saw the numbers coming in and Trump winning by a landslide.

How could this happen?

He was guaranteed by the Clinton Foundation, the DNC and soros...

How?

 

 

nmewn's picture

Hey! Remember when Hillary was a guaranteed lock with her big Blue Electoral Wall? I mean...that was money in the bank...a sure thing!

Yeah, me too.

How about when Obama said we'd all save on average $2,500 on average per year and couldn't even get a website up & running? With the FULL POWER OF THE STATE behind the effort I might add.

Yeah, me too.

Remember Hillary's broken plastic reset button?

Yeah, me too.

Remember when Dodd-Frank was going to stop the outright theft of Wall Street?

Yeah, me too.

Remember when Solyndra and Solyndra accessories along with creating criminals under ObamaCare as going to create Jobs! Jobs! Jobs! that Americans would come out of the shadows and do?

Yeah, me too. 

Remember when Chuck Schumer defined the three branches of government as the executive, house and senate?

Yeah, me too.

Remember when "The One" flew so close to the sun on Air Force One combating manmade global warming his bowels actually burst open from all the caviar and shrimp cocktail he consumed at one of those Davos-type elitist conferences?

Yeah, me too.

Well, strike that last one, it was just wishful thinking ;-)

Takeaction2's picture

That Patriot game was so rigged.  Come back from that far...then score...get the extra 2 points then overtime...then the win.  Yeah right.  A few friends and mine called it at 1/2 time how it would play out...as we watched it happen...astounding.  How much extra money was generated worldwide...

Beer Sales

Advertising

On and on...

And with the NFL ratings falling and falling due to those guys kneeling all the time..

Rigged.

HyperinflatmyNutts's picture

U sound like a Snowflake . Get over it your team sucks lol

besnook's picture

the odds of you getting it from the one person you fantasize about getting some from are nil to zero. enjoy yourself!

Ban KKiller's picture

I live in an alternate universe where there are no Patriots....they were banned due to cheating. 

any_mouse's picture

There is no regulation/over time nor a season nor an election day in financial markets.

Game Over is The Reset.

Odds are deep wealth will prevail.

The rest will drop to zero.

bobbbny's picture

Wow, that magazine with Cankles D. Pantsuit still sends shivers up my spine.

LawsofPhysics's picture

"Full FAITH and credit"

...that is all.

Handful of Dust's picture

"Lock her up!"

"Boycott Starbucks!"

 

Lets not forget these things also.

Uncle Sugar's picture

That was a lot of words to say the market is topped out

skbull44's picture

As Nassim Taleb argues, it's never a good idea to be the turkey and experience that Black Swan event known as Thanksgiving.

cowdiddly's picture

"Never invest in anything that eats or needs painting".   Grandpa

Placerville's picture

If it has tits or wheels, it will give you problems. - A wise man

JetRx's picture

If it FLIES, FLOATS, or FUCKS...it's cheaper to rent. - Sourdough

WTFUD's picture

1) What are the odds of the DNC & Establishment Repugs getting over losing the Election by Spring?

2) What are the odds of Rex Tillerson signing a Mega Energy Deal in Russia by Spring?

Tlön Uqbar's picture

Human beings are improbable, given that so called expert Anthropologists (edit: Anthro-appologists) don't know what the fuck happened. History is fucking wrong. Maths are twisted. The ecomonies of every major country are absolutely shitty. Archaeologists talk shit. The weather report is wrong. News is fake. Truth is lies. Governments are corrupt. Private banksters are just dandy.

Human beings do withdraw consent and become unpredictable. Spiritually, psychologically. We're a slippery bunch. But yes. I'd say that the odds makers are predictable while individuals are increasingly aware, complex, motivated, and simply tired of being told what reality is by some grasping soulless asshole fakers we call "experts".

In truth, people who get paid to say their lines are degenerate robots and aren't worth shit. They produce garbage and the more they produce the more we don't want it.

francis scott falseflag's picture

 

I guess you could cap the whole thing off in May

 

   when RUSSIA and AMERICA engage in 

 

           NUCLEAR MUD WRESTLING


 

 

 

indio007's picture

The true odds of the patriots winning ....

2465 NFL games where the point difference was 25+

4 comeback wins and 2 comeback ties.

 

That being said probability mapping to reality is unproven and in fact unprovable.

 

MuffDiver69's picture

This is to some extent the fruition of decades of liberal mind fucking...Those of us who aren't of the left spend our lives questioning/battling propaganda and have a much more nuanced relationship with bias....The left is always going to be handicapped by chance because any critical thinking destroys the narrative...

My dad used to call these people Simple....I would bet many on this site were probably on the right side of the examples above and the vast majority that read left wing propaganda went out and rioted or boycotted a produc or called the Patriots racist for being to white etc....

JohninMK's picture

Yup, winning bets on Brexit and Trump.

The latter due mainly to what was said on this site. Thanks all :)

Pasadena Phil's picture

There's a flip side to this analogy that is at least as important and that is the ABSOLUTE CERTAINTY among all of the bond "kings" that the entire world economy is going to collapse at any minute. Like I've  posted several times, NOTHING is certain. The hidden hand of free markets is returning to dislodge the iron fist of global central planning and if the economy has held together this long with the entire global establishment determined to break it, why is it now going to break with the tide having turned? Do pressure cookers explode when the heat is reduced?

Someone is going to eat shit eventually but not today. And the longer it takes, the less of it there will be to eat and it doesn't have to be us doing the eating. Just sayin'.

adr's picture

During the first quarter of the game I remarked that Brady was really making the Falcons defense work. Even though they weren't getting points, it would pay off big time in the latter part of the game. 

Then there was the strip, Falcons scored. They also scored on an interception. Half the points they scored were mistakes the Patriots made, not because the Falcons offense was that good. 

Even with 28 points, the Falcons were actually playing like shit. 

Then the commentators start with the, "Never before in NFL playoff history has a team come back from this kind of deficit. No team has ever come back from being down by 14 points in the Superbowl."

I told my wife, "Well that seals a Patriots win. They just told Brady there is another impossible task and another record he hasn't broken." She said I was nuts because they were down by 25 points. I told her that if he wants to Brady can score 25 points in five minutes if he has to. The Falcons made him mad and you don't make Tom Brady mad. 

When the Patriots started the comeback, she looked at me and said, how could you know they would come back. I told her to remember what I said in the first quarter. Brady passed for over 600 yards in a Super Bowl, insane. 

Then I made another prognostication, that the next day somehow Trump would be blamed for the Falcons loss and that somehow they rigged the Superbowl. 

I'm not even a Patriots fan or really that much of a football fan. What I am is an observer of everything and a fan of the team with the most white guys showing up the ghetto trash. I hate fucking Atlanta. 

francis scott falseflag's picture

 

Lady Luck got in on the act and gave the Patriots the coin toss for overtime.

They were able to convert their 4th quarter momentum into a sudden death win.

 

I was taking popcorn out of the microwave and didn't see them tie it up

Tom Green Swedish's picture

We have at least another year to go if it does "crash" nless the world falls apart. Other than that we might have more than a year depending on how things go. If it does crash though it will not go down any more than 20 percent (which is reativly nothing given the gains we've had over the last 9 years) unless one of two things happen.  A massive bankruptcy of a country (not going to happen because one can just inflate their way out especially the USA at this period of time). Two A natural / contained disaster of epic proportions. I would presume some type of attack on the USA would trigger the only possibility, however no country is that stupid. Or something happens with China - who knows. So nice try. Go back to the drawing board and look up Dow Theory. Or third we are looking at a calculated exit of the stock market by some mega powerful entity. I highly doubt it.

Lastly you are using sports games and two elections which everybody knew the outcomes of before they happened.

Everybody knew Trump was going to win except the main stream media and the snowflakes. Everybody knew they would vote for Brexit duh? Everybody knows Tom Brady is the shit. And Nobody even knows who Leicester is.

 

Put up some real data, and then please explain why Berkshire is buying tons of stock and 3 trillion has flowed into equity over the last 3 months when they think there is going to be some type of meltdown.

francis scott falseflag's picture

 

You see what the IC, Deep State, and msm are doing to Trump

and you doubt whether the world is going to fall apart.  

 

These acts are worse than the Confederate Army firing on Fort Sumter.

Rebel yell's picture

Maybe the people making all of the predictions are just idiots. That seems more likely to be a sure thing than beating the odds so many times. They just aren't forecasting the odds properly.
Don't ya think?!

SantaClaws's picture

"I told her that if he wants to Brady can score 25 points in five minutes if he has to. The Falcons made him mad and you don't make Tom Brady mad."

It's often a combination of the known and lesser-known all overperforming.

Aside from Brady, recall James White's overtime score.  He got past some five Atlanta defenders to get in the end zone.

And recall in 2015, when Malcolm Butler intercepted the Seahawks' pass near the end zone to prevent the Seahawks' assumed certain victory.

In each case, less well-known players -- having overprepared -- did extraordinary things, without which the incredible end results might well not have happened.

And in Trump's presidential campaign, the post-victory account of how Jared Kushner quickly and quietly set up and expertly managed Trump's internet efforts from a converted warehouse in San Antonio, of all places, seems like a similarly almost unbelievable effort that boosted Trump's own astonishing achievements.

Many grossly underestimated Trump's team in the campaign and will continue to do so.

honest injun's picture

This article confuses two different phenomena: corruption and chance.  TPTB didn't want Trump or Brexit.  So, they rigged the polls to say  that it was pointless to resist globalism.  Some people will vote for the side that they think will win because they want to be on the winning side.  Others will not bother to vote if they think that their vote is meaningless.  This poll rigging is corruption.  This is very different from most sporting events.  If one team is dominating another, the only people who can change the outcome of the game are on the field.  What the TV audience thinks does not matter.