Thursday, December 22, 2011

Do People Pay Moody's For Advice?

Why on earth would anyone take any notice of a professional forecaster who gets things so palpably wrong?

Yesterday's headline and commentary:-

World Cup boost hid a struggling economy: Moody's

The group expects a 'solid' 0.6 per cent growth when Statistics New Zealand releases Gross Domestic Product for the three months to September 30 tomorrow, but says that both the World Cup and the Christchurch rebuild have off-set the underlying trends of a "struggling economy."

New Zealand is still seeing consumer caution and a continuing trend of households choosing to save and repay debt rather than spend.

They point also to the manufacturing sector, which has taken a hit from weaker dairy and meat processing as well as wholesale trade.

Today's reality

Far from 'struggling,' the economy delivered a robust 0.8% growth.

"Manufacturing activity rose 2.3 per cent in the latest quarter, led by production of meat, dairy , wood and paper products........."

."household consumption expenditure (up 1.5 percent), driven by a rise in the volume of
expenditure on non-durables........"

Bill English should be having a few stern words to these fellows who now have the temerity to rate our sovereign debt. I hope to God they are not providing any consultancy services to the New Zealand Gummint.


1 comment:

Paulus said...

From experience with Rating Agencies remember - the big three are all American, and they have to adhere to the creed the whatever they do must be in America's best interest - and sod the rest of you in the process.