Economists play soccer pundits, bet on Brazil to lift World Cup
Jun 10 2014
The tournament’s host nation eclipsed Germany and Argentina as the top choice among 171 economists from 139 companies in a Bloomberg poll. The Latin American country is also tipped to find the net the most times, topping Argentina and Spain.
Projections of a sixth World Cup victory for Brazil mesh with bookmaker odds and forecasts based on economic models created by Goldman Sachs Group, UniCredit and Danske Bank. Paddy Power and Ladbrokes both rank Brazil as favorite, at odds of 3/1.
“It’s kind of hard to bet against Brazil — they have home advantage, the climate, crowd and recent record,” said Peter Dixon, a poll participant and global equities economist at Commerzbank in London. “It’s pretty obvious if you look at Brazil’s soccer rankings who should win.”
Goldman Sachs, Danske Bank and Unicredit all crunched data to predict Brazil will beat Argentina in next month’s final.
Goldman Sachs and UBS disagree over whether victory will buoy Brazilian equities, with Goldman Sachs citing historical data for past winners in predicting it would create a short-term bou nce.
UBS said defeat would help equities by further eroding the popularity of president Dilma Rousseff’s government.
Respondents were asked to select their top four teams for the tournament, which kicks off June 12 with Brazil playing Croatia in the opening match. The competition ends on July 13 with a final taking place at the Maracana stadium in Rio de Janeiro.
While 98 respondents chose Brazil as the winning team in the Bloomberg survey, points were also awarded, with 10 for first place, 7.5 for second, four for third and one for fourth.
Brazil topped the league with 1,270.5 points, almost twice Germany’s 763 and Argentina’s 641. Defending champion Spain secured 614.5 points, and after that support for other teams fell away, with Portugal the next highest ranked on 94.5 points. The US got just 8.5 points and England 7.
The predictions for the World Cup winner centred almost exclusively on Brazil, Germany, Argentina and Spain. Of the 171 responses, only six economists diverged from that trend, with three choosing Portugal, two backing Italy and one Uruguay.
“It seems as if this isn’t going to be a wide open tournament,” said Lou Crandall, chief economist at Wrightson ICAP in Jersey City, New Jersey. “I spent a lot of time trying to forge a way for Italy to get as far as the final four, but couldn’t get them there.”
Four-time champion Italy last won the tournament in 2006. The nation got 73 points in the Bloomberg survey. Breaking away from the consensus, Deutsche Bank analysts Bilal Hafeez and Henrik Gullberg said in a report on Monday that England is their pick, though they admit the analysis is based on “well-reasoned arguments” such as patterns of World Cup winners and the performance of previous champions. They apply these to a model that points to Brazil having most chance of winning followed by Germany, Spain, and France.
When it came to goals, 72 economists picked Brazil to score the most, while 44 identified Argentina. Eighteen said Spain and 16 picked Germany. Ladbrokes has Brazil and Argentina as joint favourites to be the highest scoring team.