There's no crystal ball, but this researcher from Rice University is trying to see if some metrics work for economic forecasting. Photo via Getty Images

Research by Rice Business Professor K. Ramesh shows that the Fed appears to harvest qualitative information from the accounting disclosures that all public companies must file with the Securities and Exchange Commission.

These SEC filings are typically used by creditors, investors and others to make firm-level investing and financing decisions; and while they include business leaders’ sense of economic trends, they are never intended to guide macro-level policy decisions. But in a recent paper (“Externalities of Accounting Disclosures: Evidence from the Federal Reserve”), Ramesh and his colleagues provide persuasive evidence that the Fed nonetheless uses the qualitative information in SEC filings to help forecast the growth of macroeconomic variables like GDP and unemployment.

According to Ramesh, the study was made possible thanks to a decision the SEC made several years ago. The commission stores the reports submitted by public companies in an online database called EDGAR and records the IP address of any party that accesses them. More than a decade ago, the SEC began making partially anonymized forms of those IP addresses available to the public. But researchers eventually figured out how to deanonymize the addresses, which is precisely what Ramesh and his colleagues did in this study.

"We were able to reverse engineer and identify those IP addresses that belonged to Federal Reserve staff," Ramesh says.

The team ultimately assembled a data set containing more than 169,000 filings accessed by Fed staff between 2005 and 2015. They quickly realized that the Fed was interested only in filings submitted by a select group of industry leaders and financial institutions.

But if Ramesh and his colleagues now had a better idea of precisely which bellwether firms the Fed focused on, they still had no way of knowing exactly what Fed staffers had gleaned from the material they accessed. So the team decided to employ a measure called "tone" that captures the overall sentiment of a piece of text – whether positive, negative, or neutral.

Building on previous research that had identified a set of words with negatively toned financial reports, Ramesh and his colleagues examined the tone of all the SEC filings accessed by Fed staff between one meeting of the Federal Open Markets Committee (FOMC) and the next. The FOMC sets interest rates and guides monetary policy, and its meetings provide an opportunity for Fed officials to discuss growth forecasts and announce policy decisions.

The researchers then examined the Fed's growth forecasts to see if there was a relationship between the tone of the documents that Fed staff examined in the period between FOMC meetings and the forecasts they produced in advance of those meetings.

The team found close correlations between the tone of the reports accessed by the Fed and the agency’s forecasts of GDP, unemployment, housing starts and industrial production. The more negative the filings accessed prior to an FOMC meeting, for example, the gloomier the GDP forecast; the more positive the filings, the brighter the unemployment forecast.

Ramesh and his colleagues also compared the Fed's forecasts with those of the Society of Professional Forecasters (SPF), whose members span academia and industry. Intriguingly, the researchers found that while the errors in the SPF's forecasts could be attributed to the absence of the tonal information culled from the SEC filings, the errors in the Fed’s forecasts could not. This suggests both that the Fed was collecting qualitative information that the SPF was not—and that the agency was making remarkably efficient use of it.

"They weren’t leaving anything on the table," Ramesh says.

Having solved one mystery, Ramesh would like to focus on another; namely, how does the Fed identify bellwether firms in the first place?

Unfortunately, the SEC no longer makes IP address data publicly available, which means that Ramesh and his colleagues can no longer study which companies the Fed is most interested in. Nonetheless, Ramesh hopes to use the data they have already collected to build a model that can accurately predict which firms the Fed is most likely to follow. That would allow the team to continue studying the same companies that the Fed does, and, he says, “maybe come up with a way to track those firms in order to understand how the economy is going to move.”

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This article originally ran on Rice Business Wisdom and was based on research from K. Ramesh is Herbert S. Autrey Professor of Accounting at Jones Graduate School of Business at Rice University.

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Houston wearable biosensing company closes $13M pre-IPO round

fresh funding

Wellysis, a Seoul, South Korea-headquartered wearable biosensing company with its U.S. subsidiary based in Houston, has closed a $13.5 million pre-IPO funding round and plans to expand its Texas operations.

The round was led by Korea Investment Partners, Kyobo Life Insurance, Kyobo Securities, Kolon Investment and a co-general partner fund backed by SBI Investment and Samsung Securities, according to a news release.

Wellysis reports that the latest round brings its total capital raised to about $30 million. The company is working toward a Korea Securities Dealers Automated Quotations listing in Q4 2026 or Q1 2027.

Wellysis is known for its continuous ECG/EKG monitor with AI reporting. Its lightweight and waterproof S-Patch cardiac monitor is designed for extended testing periods of up to 14 days on a single battery charge.

The company says that the funding will go toward commercializing the next generation of the S-Patch, known as the S-Patch MX, which will be able to capture more than 30 biometric signals, including ECG, temperature and body composition.

Wellysis also reports that it will use the funding to expand its Houston-based operations, specifically in its commercial, clinical and customer success teams.

Additionally, the company plans to accelerate the product development of two other biometric products:

  • CardioAI, an AI-powered diagnostic software platform designed to support clinical interpretation, workflow efficiency and scalable cardiac analysis
  • BioArmour, a non-medical biometric monitoring solution for the sports, public safety and defense sectors

“This pre-IPO round validates both our technology and our readiness to scale globally,” Young Juhn, CEO of Wellysis, said in the release. “With FDA-cleared solutions, expanding U.S. operations, and a strong AI roadmap, Wellysis is positioned to redefine how cardiac data is captured, interpreted, and acted upon across healthcare systems worldwide.”

Wellysis was founded in 2019 as a spinoff of Samsung. Its S-Patch runs off of a Samsung Smart Health Processor. The company's U.S. subsidiary, Wellysis USA Inc., was established in Houston in 2023 and was a resident of JLABS@TMC.

Elon Musk vows to launch solar-powered data centers in space

To Outer Space

Elon Musk vowed this week to upend another industry just as he did with cars and rockets — and once again he's taking on long odds.

The world's richest man said he wants to put as many as a million satellites into orbit to form vast, solar-powered data centers in space — a move to allow expanded use of artificial intelligence and chatbots without triggering blackouts and sending utility bills soaring.

To finance that effort, Musk combined SpaceX with his AI business on Monday, February 2, and plans a big initial public offering of the combined company.

“Space-based AI is obviously the only way to scale,” Musk wrote on SpaceX’s website, adding about his solar ambitions, “It’s always sunny in space!”

But scientists and industry experts say even Musk — who outsmarted Detroit to turn Tesla into the world’s most valuable automaker — faces formidable technical, financial and environmental obstacles.

Feeling the heat

Capturing the sun’s energy from space to run chatbots and other AI tools would ease pressure on power grids and cut demand for sprawling computing warehouses that are consuming farms and forests and vast amounts of water to cool.

But space presents its own set of problems.

Data centers generate enormous heat. Space seems to offer a solution because it is cold. But it is also a vacuum, trapping heat inside objects in the same way that a Thermos keeps coffee hot using double walls with no air between them.

“An uncooled computer chip in space would overheat and melt much faster than one on Earth,” said Josep Jornet, a computer and electrical engineering professor at Northeastern University.

One fix is to build giant radiator panels that glow in infrared light to push the heat “out into the dark void,” says Jornet, noting that the technology has worked on a small scale, including on the International Space Station. But for Musk's data centers, he says, it would require an array of “massive, fragile structures that have never been built before.”

Floating debris

Then there is space junk.

A single malfunctioning satellite breaking down or losing orbit could trigger a cascade of collisions, potentially disrupting emergency communications, weather forecasting and other services.

Musk noted in a recent regulatory filing that he has had only one “low-velocity debris generating event" in seven years running Starlink, his satellite communications network. Starlink has operated about 10,000 satellites — but that's a fraction of the million or so he now plans to put in space.

“We could reach a tipping point where the chance of collision is going to be too great," said University at Buffalo's John Crassidis, a former NASA engineer. “And these objects are going fast -- 17,500 miles per hour. There could be very violent collisions."

No repair crews

Even without collisions, satellites fail, chips degrade, parts break.

Special GPU graphics chips used by AI companies, for instance, can become damaged and need to be replaced.

“On Earth, what you would do is send someone down to the data center," said Baiju Bhatt, CEO of Aetherflux, a space-based solar energy company. "You replace the server, you replace the GPU, you’d do some surgery on that thing and you’d slide it back in.”

But no such repair crew exists in orbit, and those GPUs in space could get damaged due to their exposure to high-energy particles from the sun.

Bhatt says one workaround is to overprovision the satellite with extra chips to replace the ones that fail. But that’s an expensive proposition given they are likely to cost tens of thousands of dollars each, and current Starlink satellites only have a lifespan of about five years.

Competition — and leverage

Musk is not alone trying to solve these problems.

A company in Redmond, Washington, called Starcloud, launched a satellite in November carrying a single Nvidia-made AI computer chip to test out how it would fare in space. Google is exploring orbital data centers in a venture it calls Project Suncatcher. And Jeff Bezos’ Blue Origin announced plans in January for a constellation of more than 5,000 satellites to start launching late next year, though its focus has been more on communications than AI.

Still, Musk has an edge: He's got rockets.

Starcloud had to use one of his Falcon rockets to put its chip in space last year. Aetherflux plans to send a set of chips it calls a Galactic Brain to space on a SpaceX rocket later this year. And Google may also need to turn to Musk to get its first two planned prototype satellites off the ground by early next year.

Pierre Lionnet, a research director at the trade association Eurospace, says Musk routinely charges rivals far more than he charges himself —- as much as $20,000 per kilo of payload versus $2,000 internally.

He said Musk’s announcements this week signal that he plans to use that advantage to win this new space race.

“When he says we are going to put these data centers in space, it’s a way of telling the others we will keep these low launch costs for myself,” said Lionnet. “It’s a kind of powerplay.”

Johnson Space Center and UT partner to expand research, workforce development

onward and upward

NASA’s Johnson Space Center in Houston has forged a partnership with the University of Texas System to expand collaboration on research, workforce development and education that supports space exploration and national security.

“It’s an exciting time for the UT System and NASA to come together in new ways because Texas is at the epicenter of America’s space future. It’s an area where America is dominant, and we are committed as a university system to maintaining and growing that dominance,” Dr. John Zerwas, chancellor of the UT System, said in a news release.

Vanessa Wyche, director of Johnson Space Center, added that the partnership with the UT System “will enable us to meet our nation’s exploration goals and advance the future of space exploration.”

The news release noted that UT Health Houston and the UT Medical Branch in Galveston already collaborate with NASA. The UT Medical Branch’s aerospace medicine residency program and UT Health Houston’s space medicine program train NASA astronauts.

“We’re living through a unique moment where aerospace innovation, national security, economic transformation, and scientific discovery are converging like never before in Texas," Zerwas said. “UT institutions are uniquely positioned to partner with NASA in building a stronger and safer Texas.”

Zerwas became chancellor of the UT System in 2025. He joined the system in 2019 as executive vice chancellor for health affairs. Zerwas represented northwestern Ford Bend County in the Texas House from 2007 to 2019.

In 1996, he co-founded a Houston-area medical practice that became part of US Anesthesia Partners in 2012. He remained active in the practice until joining the UT System. Zerwas was chief medical officer of the Memorial Hermann Hospital System from 2003 to 2008 and was its chief physician integration officer until 2009.

Zerwas, a 1973 graduate of the Houston area’s Bellaire High School, is an alumnus of the University of Houston and Baylor College of Medicine.