Day 4 · 09:30
A headline is a chart with the axes removed. Your job, as the person who still has the axes, is to put practical significance back in the room before a press release becomes a strategy.
You will leave able to
- Separate statistical significance from practical significance.
- Read a correlation heatmap without over-claiming.
- Rewrite a media claim as a caption you would sign.
The original lesson used social-media and adolescent-sleep headlines. The mechanism is identical in a Nigerian financial-services EXCO. A typical morning pack:
- *CBN hike tanks bank profits.*
- *Digital share soars as branches die.*
- *Naira slide drives NPLs.*
Each of those sentences asserts causation. The underlying tables are almost always correlations, often small ones, often estimated on a short window, often without a competing explanation (mix shift, one-off fee income, a single name in the NPL book).
Visualise the strength, not the stars
Download macro-correlations.csv· pairwise r for a fictional bank booklibrary(tidyverse)corr <- read_csv("macro-correlations.csv") corr %>% ggplot(aes(var_x, var_y, fill = r)) + geom_tile() + geom_text(aes(label = sprintf("%.2f", r)), size = 3) + scale_fill_gradient2(low = "#B8963E", mid = "#F4F0E8", high = "#0B1F3A", midpoint = 0) + coord_fixed() + labs( title = "What actually moves with what", subtitle = "Pairwise correlations — not a causal map", x = NULL, y = NULL ) + theme(axis.text.x = element_text(angle = 45, hjust = 1))Read the tiles, not the folklore. Policy rate versus NIM is a real relationship in this book (r ≈ 0.48). Policy rate versus digital share is a pale tile (r ≈ 0.05). A slide that treats them as equal ‘impacts’ is how a digital budget gets cut after a hike.
Rewrite the headline
| Headline | What the data can support | What to put on the slide |
|---|---|---|
| CBN hike tanks profits | NIM co-moves with policy rate; fee income does not | NIM vs policy rate, last 16 quarters, r = 0.48. Fee income uncorrelated. |
| Digital kills branches | Digital share vs cost-income is negative and modest | Digital share and cost-income, r = −0.29. Mix, not a funeral. |
| FX drives NPLs | FX vs NPL r ≈ 0.33 — real, not destiny | Name concentration and sector exposure still do more work. |
Exercise 4.1
A press release you would sign
Pick one headline from this morning’s business pages (or invent a plausible one in your sector). Write: (1) the implied causal claim, (2) the association you could actually estimate, (3) a ggplot title and subtitle that refuse to over-claim.
- If the verb is ‘drives’, ‘tanks’, ‘soars because’, it is causal.
- A good subtitle names the window and the unit: *quarterly, 2022–2026, one bank book*.