So some number cruncher at the OECD says Greece is golden: But further down in the story, it spells out his "logic": Faced with overwhelming evidence like that, how can a trusted org like Moody's downgrade Greece to junk?
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.
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.
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?
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.
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.