From sublime to reeeediculous - now we believe the politicians?

[TGregg]

So some number cruncher at the OECD says Greece is golden:

Greece Can ‘Make It’ Without Restructuring, OECD’s Padoan Says

June 15 (Bloomberg) -- Greece’s “powerful” steps to overhaul the economy should enable it to escape the fiscal crisis without having to restructure its debt, said Pier Carlo Padoan, chief economist of the Organization for Economic Cooperation and Development.

But further down in the story, it spells out his "logic":

Papandreou delivered a “very, very powerful speech” about Greece’s economic revamp at a June 11 forum in Vienna, Padoan said. “Why should I not believe the prime minister?”

Faced with overwhelming evidence like that, how can a trusted org like Moody's downgrade Greece to junk?

 

[Scataphagos]

They make about 10% of the adjustment which is "necessary"... then, because they made ANY adjustment at all... they claim victory. HOGWASH!

We can't point fingers, however. We'll soon be in the same boat.

 

[Kassz007]

Quote from TGregg:

Faced with overwhelming evidence like that, how can a trusted org like Moody's downgrade Greece to junk? [/B]

I sincerely hope this was a sarcastic comment. There are no trusted ratings agencies anymore.

 

[Kassz007]

Quote from Scataphagos:

They make about 10% of the adjustment which is "necessary"... then, because they made ANY adjustment at all... they claim victory. HOGWASH!

Or they claim the country will be OK because they will employ measures for deficit reduction as opposed to deficit elimination.

When you're up to your eyeballs in debt, it's time to reduce the debt, not simply decrease the amount of new debt you incur.

 

[Mnphats]

Quote from Kassz007:

I sincerely hope this was a sarcastic comment. There are no trusted ratings agencies anymore.

Its fairly astonishing that they are still "rating" anything.

 

[Kassz007]

Quote from Mnphats:

Its fairly astonishing that they are still "rating" anything.

Has anyone else noticed how quickly ratings agencies have been to move (specifically downgrade) lately?

My theory is that due to the criticism of the ratings agencies after the financial collapse of their perfectly safe ratings of certain assets, ratings agencies are now more inclined to downgrade more quickly. When in doubt, downgrade. If wrong, better to have debt rated too low than too high. Sort of like a company lowballing earnings projections to ensure they don't miss.

In any case, who in their right mind actually relies on these ratings agencies? And why?

 

[SomeYoungGuy]

Quote from Kassz007:

In any case, who in their right mind actually relies on these ratings agencies? And why?

That's a good question. I always thought they had "public numbers" and "private numbers". They release one set of numbers to get themselves headlines and mentioned on TV; a form of advertising. Then to their paying customers they give different numbers, or perhaps finer details like "buy this asset class and that tranch, stay away from x".

Now we know that even their private numbers are useless as a crap sandwich.

 

[Ghost of Cutten]

Does anyone remember that economist from the the real estate agents association? The one who kept giving bullish forecasts all the way through the housing bust? Well, it looks like he found a new job at the OECD.