STAMFORD, CT — Three weeks into the federal shutdown, with the Bureau of Labor Statistics dark and no Consumer Price Index release in sight, the alt-data desk at Crestmount Strategic Capital has settled on a replacement: Don Pavlik, a 71-year-old retired letter carrier in Wadsworth, Ohio, who texts the price of a dozen large brown eggs every Sunday at 6 p.m. for $60 a week and a $20 Cracker Barrel gift card at Christmas.
Don’s most recent reading was $4.79, sent at 6:04 p.m. from a Samsung A14 in the parking lot of a Giant Eagle. Crestmount’s October inflation print, derived from this data point and a smoothing algorithm, is 2.3%, which the firm has begun distributing to clients in a one-page PDF titled “Pavlik Index — Preliminary.”
“Look, BLS is gone, the Cleveland Fed Nowcast is gone, even the ADP guys are dragging their feet,” said Larry Brennick, the senior alt-data analyst who personally onboarded Don in early October over a 14-minute phone call. “Don is reliable. Don has a Costco card. Don has opinions about Sysco beef that I think the buy-side will eventually want to hear.”
The desk has since expanded the program. A retired HVAC tech in Altoona reports ground-beef prices on Tuesdays. A widow in Mesa texts a screenshot of the Circle K pump every other Friday. An on-leave substitute teacher in Asheville is being paid $35 a week to walk through a Publix and “just sort of describe the vibe,” per the Slack channel where these arrangements are coordinated.
Crestmount’s compliance officer, who keeps a small ceramic owl on her desk that one analyst described as “watching us all the time, frankly,” has so far signed off on the structure as “survey research,” though an internal memo in 11-point Calibri notes that several of the contributors have not been told the data is being used to inform an $84 million long-short equity book.
Don, reached by phone Monday afternoon while taking the trash to the curb, said he assumed Larry was “a guy doing some kind of college project” and was surprised to learn the texts were affecting trades on Kraft Heinz. He added that the eggs at Aldi this week were $4.39 but he hadn’t reported that because Larry had been clear, in their first conversation, that the program was Giant Eagle only.
Rival firms have noticed. A trader at a Greenwich macro fund, eating a turkey wrap over a Bloomberg terminal that has displayed the same stale September retail-sales print for 21 days, said his shop is now “three days into a bake-off” between two retired women in Tampa and a man in Boise who works at a NAPA Auto Parts. The Boise man is winning, he said, because he answers texts within four minutes.
Crestmount’s October flash estimate of 2.3% inflation will be revised next Sunday, Brennick confirmed, pending Don’s next message and whether his daughter is in town, in which case Don sometimes shops at a different store and the print becomes, in Brennick’s phrasing, “noisier than we’d like.”
The fund is up 1.4% on the month.