We have said from time to time that we had expected growth in China to be lower than mainstream forecasts. Although China is not as export dependent as widely believed, it had been enjoying not only a trade boom, but also a commercial real estate bubble. With two engines of growth in stall, China seems poised to suffer a sharp slowdown.
From Bloomberg (hat tip reader Michael):
China faces an economic “hard landing” and the risk of social unrest with growth slowing to 6 percent or less this year, the weakest pace since 1990, Fitch Ratings said…
That would be less than half of the 13 percent pace that pushed China past Germany to become the world’s third-biggest economy in 2007, according to revised statistics released this week. As many as 4 million migrant workers lost their jobs last year as factories closed and that figure may jump by another 5 million in 2009, according to Credit Suisse AG…
The key one-year lending rate may fall to about 3 percent from 5.31 percent by the middle of the year and the government may also hasten spending, McCormack said….
China faces its biggest “employment adjustment” since reforms of state-owned enterprises in the 1990s, so social stability “is clearly an issue,” McCormack said. “There is a question of how easy it is to redeploy millions or tens of millions of unemployed factory workers to infrastructure construction products that may be located elsewhere in the country.”
Waning exports have led to protests by fired employees, an exodus of 600,000 migrant workers from the manufacturing hub of Guangdong last year, and an urban unemployment rate estimated at more than 9 percent by the Chinese Academy of Social Sciences…
Central bank Governor Zhou Xiaochuan and Liu Mingkang, the chairman of the China Banking Regulatory Commission, both acknowledged this week that the government risks missing its 8 percent target for creating jobs and maintaining social stability.
Ambrose Evans-Pritchard of the Telegraph from time to time has raised the notion that Chin’s efforts to promote exports in the face of a big downdraft in trade could make matters far worse by evoking protectionist reactions. He latest line of thought from “Will China lead the world into depression?“: He discusses a scenario from uber-bear Albert Edwards of Societe Generale:
Mr Edwards said investors have a “touching faith” that China’s authorities are in control of events.
“Could the economic situation in China become so bad that it threatens the regime itself? Of course it could. But before being swept away in a tidal wave of worker unrest it has one key tool in its economic armoury it has used before. MEGA-DEVALUATION. China has a track record of such things. At the end of 1993 the authorities devalued the yuan by 33pc.”
A replay would be the surest root to a Smoot-Hawley II.
“Amid confidence that the ongoing, massive, monetary and fiscal stimulus will prevent a repeat of the Great Depression, will it instead be competitive devaluation and implosion of world trade that we should watch out for.”
Evans-Pritchard questions this forecast, and thinks the Chinese will stand pat, in a replay of 1998.
45 comments
Comments are closed.
The supply and demand figures for oil going forward:
http://changealley.blogspot.com/
Looks like an (un)Hot Commodity.
My own reading is that China won’t be the first major trading nation to pull the trigger on mass FX devaluation. It can always be used as an effective retaliatory policy choice.
So guerrilla warfare on trade front? Yes. All out war? China will be a “responsible stakeholder.”
There is a remarkable sense of Imperial hubris listening to Americans talk about China’s RMB exchange rate, which is pegged to the USD.
Forgotten in this discussion is the RMB to other currencies like the Euro.
In Euro terms, the value of the RMB skyrocketed as the USD rose in late 2008.
This virtually killed Chinese exports to Europe even as American exports got throttled by consumers retrenching.
At the same time, the collapse in commodity prices meant that many formerly decent markets for Chinese products in Africa and other developing countries have collapsed because they can no longer afford even modest priced Chinese goods.
For practical purposes, the export trade that has taken decades to build is now set back at least 5, perhaps a decade without any replacement by higher value added industries.
Given the magnitude of export collapse and also the collapse of the domestic bubble it created in China, there is virtually no way for the Chinese economy to avoid a severe recession with growth rates dipping below zero for at least a couple of quarters in the next year.
As it stands, Beijing have few fine instruments of policy.
About the only one left is a sizable devaluation: 10-15% would just bring the RMB back to pre-appreciation levels and probably not be sufficient to halt, let alone reverse the damaged done by a decade of misguided economic policies.
Therefore, I would not be surprised to see 20% devaluation — anything to get the export industries back on their feet and stimulate exports.
This is not a “Smoot Hawley” issue because most Chinese products do not compete with products manufactured in developed countries.
D
Forgotten in this discussion is the RMB to other currencies like the Euro.
In Euro terms, the value of the RMB skyrocketed as the USD rose in late 2008.
This is, to a non-trivial extent, a portfolio allocation decision by China. They have stupefyingly large reserves. If China wanted to see EUR/CNY weaker, they could very well have chosen to sell off some EUR for USD and held dollars instead. Some 25% of China’s reserves appear to be in Euros.
Exports may decline 6 percent in 2009 from a year earlier because of the global recession, he said. That compares with a 17.2 percent gain last year and the 2.8 percent drop in December.
Calculated Risk has some pretty charts demonstrating the collapse in imports at Long Beach through December. Things are getting worse rapidly.
As this massive trading flow shuts down, so too will the capital recycling flows that associated it. That would have significant impacts on real interest rates in the US and the value of the USD.
About the only one left is a sizable devaluation: 10-15% would just bring the RMB back to pre-appreciation levels and probably not be sufficient to halt, let alone reverse the damaged done by a decade of misguided economic policies.
Were this to happen, D, I would expect a renewed surge of capital flows, a plunge in US real interest rates, and a weakening of the dollar. However, in the longer term, it would only worsen structural overcapacity, imbalances, and deflation globally, and as you note, may not even be sufficient in the short term.
Psychology’s pretty dang powerful.
If China wanted to see EUR/CNY weaker, they could very well have chosen to sell off some EUR for USD and held dollars instead. Some 25% of China’s reserves appear to be in Euros.
I meant, of course, the opposite; buy some EUR for USD and hold euros instead. Sorry for the brain glitch.
So ndk, your point re: collapsing exports to US impeding Chinese $ recycling had been on my mind for a while, but now we see the real practical demonstration. The entire argument that China ‘must’ continue to buy US sovereign debt rests on the idea that they will continue to have the _opportunity_ to vendor finance at sustained high levels. If we quit buying [because the US consumer is broke and scared], the whole cycle shorts out. And that has severe implications for US real rates. At the same time, the $ soaring in the process of deleveraging has killed, just KILLED our exports, witness evidence also at Caluclate Risk: the $ is too high, for anything and everything.
The only question to me is, Will the equities markets crater before we devalue the $ or the reverse? I do expect the US public policy makers will be _the last_ to accept the reality of the need for a $ devaluation, so it will be very nearly forced upon them by a debt market crisis of confidence methinks rather then negotiated in a Beijing Woods I Agreement.
If we quit buying [because the US consumer is broke and scared], the whole cycle shorts out. And that has severe implications for US real rates.
Yes, I think that is a profoundly important point that many miss, Richard.
At the same time, the $ soaring in the process of deleveraging has killed, just KILLED our exports, witness evidence also at Caluclate Risk: the $ is too high, for anything and everything.
Strongly agreed, but that has little to do with whether or not it can or will go higher. Currency crosses become less informative when they don’t all float.
Will the equities markets crater before we devalue the $ or the reverse?
I don’t believe we can unilaterally devalue the dollar so long as pegs exist. I don’t think pegs can be reasonably fought. The best we can do is spark a trade war. I haven’t thought too much about what that would entail, but maybe I should.
“The best we can do is spark a trade war.”
The trade war aspect of the current crisis is a key point that a lot of people haven’t thought through. We know that all governments go native in a crisis. It is easy from the outside to cite game theory on why they shoudn’t go native, but they all do. I am not smart enough to think through all the nations in Europe, China, Russia and Japan, and calculate where and how it will play out. But it seems there are a large number of plausible scenarios, and growing pressures on governments.
Without trade barriers, deleveraging will decrease trade, which disprotionately harms exportering/saving economies. So they are going to be the ones with the greatest pressure.
All but the most breathless bears are viewing their worst case scenarios without considering trade wars.
Actual wars often follow economic dislocations. A fair amount of excess capacity and wealth was neutralized by two world wars – which may have been as important to subsequent opportunite as full employment was. I hope that our recent experiences in Iraq and Afganistan will help us show restraint as countries around the world become increasingly restless with the restraints of the current world order, and I hope other countries show restraint because of our reputation as aggressors.
“I hope that our recent experiences in Iraq and Afganistan will help us show restraint as countries around the world become increasingly restless with the restraints of the current world order, and I hope other countries show restraint because of our reputation as aggressors.”
What are you implying, bg?
“What are you implying, bg?”
The UK blew their empire in WW1, due to worldwide instability and arrogance built on wealth. The same could happen to us.
We can’t wish peace to happen, and the great moderation is over.
ndk comments: “I don’t believe we can unilaterally devalue the dollar so long as pegs exist”
Pegs can be knocked out through deterrence. Although this would be painful: defaulting on overseas held debt (agencies? – maybe that is why agencies are being dumped by foreign SW’s in return for Treasuries). Also pegs can be knocked out through inflation. This nearly happened in the GCC two years ago during the dollar bear market.
The other option is to learn from history – for example the Sterling Zone – when almost 50 countries had exchange rates pegged to sterling. It worked for a while. But I think the answer to “how” is that the average living standards in the UK were not much higher than in the rest of the world. So the UK was competitive in manufactured exports. In recent decades this has been displaced by “headquarterization” mentioned a few weeks ago on NC. This is not enough of a substitute for a manufacturing base.
The US needs to become competitive where it imports from countries with currency pegs.
“A replay would be the surest root to a Smoot-Hawley II.” Now we know how you pronounce “route”.
Although this would be painful: defaulting on overseas held debt (agencies? – maybe that is why agencies are being dumped by foreign SW’s in return for Treasuries).
That would do surely something, wintermute. It’d be a pretty severe international incident, and better avoided than deliberately performed, in my opinion. Certainly not to be ruled out of the realm of possibility, though…
Also pegs can be knocked out through inflation. This nearly happened in the GCC two years ago during the dollar bear market.
I’m less confident of that. You’d be relying on the US’ ability to cause inflation in pegging countries, not in itself the friendliest of economic policies. More importantly is an implied loss of peggers’ ability to sterilize currency intervention. China has every reason to prevent the US inflating away its obligations, from supporting exports to forcing repayment of debt accrued.
After reviewing the inflation-fighting policies available to the Fed, all of which and more are available to the PBoC, I honestly don’t see inflation-fighting limits imposed on the PBoC, particularly when the Chinese economy is in structural oversupply of labor and capital with trade surpluses and strong domestic savings. Severe inflation would be more of a policy decision than an eventuality.
Actual wars often follow economic dislocations. A fair amount of excess capacity and wealth was neutralized by two world wars – which may have been as important to subsequent opportunite as full employment was.
This would be the worst outcome, bg, and I hope all parties can look past their short-term individual interest to avoid it.
It’s not so hard to see that all western economies are going to see GDP cut by well over 30%. We’re in a Greater Depression, unemployment will go upto 25%. Export economies like China, Japan and Germany will be even harder hit. Civil war in China is inevitable as well as social strife in most western countries, it’s a negative sum game according to game theory. Huge rise in unemployment, too few women given the prference for male babies. Angry, hungry, horny men…never good.
A power structure exists in trade- surplus countries which is used to getting rich off export industries and trade. This makes it difficult to re-orient the country without severe fractures in the ruling elite, let alone worrying about the workers employed in those industries. Japan’s basic economic model has been geared towards exporting to the West for a very long time. I’m sure they aren’t happy with that, but why hasn’t it changed ? Stasis is preferred over disruption unless there is a total breakdown. The same with China.
“the whole cycle shorts out. And that has severe implications for US real rates. At the same time, the $ soaring in the process of deleveraging has killed, just KILLED our exports, witness evidence also at Caluclate Risk: the $ is too high, for anything and everything. “
IMO, the cycle has allready shorted out. The current cost of capital for competitive businesses in the US is allready sky high. The onliest money available seems to be subsidies for non-competitive banking. The US is trying like crazy to devalue, has been for years but the trade surplus countries have been playing at competive devaluation for so long it has been, and remains, suicidal, for the US to devalue. Kind of like Russian roulette.
American exports are a mixed bag. One of our largest exports, agricultural products, is subsidized by the US taxpayer. The more we export, the more it costs the American consumer (reduced domestic supply) and the taxpayer.
For a few decades, Boeing has been a huge exporter to foreign governments looking for non-strategic American goods to purchase.
The writing is on the wall. A continuation of the status quo cannot continue. Never could. IMO, that is one of the greatest lessons from the Great Depression that contemporary economists refuse to acknowledge.
ndk,
I followed your links and read your posts. It all sounds very reasonable and compelling. But at the end of the day, I find your arguments that it has to be deflation unconvincing.
The reason why is this: underlying it all is the assumption that China and other countries will continue to exchange their human labor and natural resources for little pieces of green paper with pictures of dead U.S. presidents printed on them–forever.
To me this is the stuff of bubbles, not sound forecasting.
Ambrose’s article is quite complementary about Albert’s uncanny ability to correctly predict the market and we should not forget that he was right to say buy in late November. What Ambrose’s article conveniently sidesteps is the rather good graphs that Albert produced linking electrical energy consumption to GDP and how GDP tends to closely follow after a short lag energy consumption. Assuming those graphs are correct then China went from a declining state to falling off a cliff and you can forget about a very weak 6 percent growth and ought to be thinking about significant outright contraction. It is quite telling that at the end Ambrose says I wouldn’t want to bet the farm that Albert Edwards is wrong.
It looks to me though that Ambrose has slightly misinterpreted the reasons why the US would go into a deep depression as a result of a Chinese collapse. The major thrust of his argument was not strictly that China be forced to devalue but that it would be forced to spend every penny it has internally as a result. FT Alphaville has some more details.
http://ftalphaville.ft.com/blog/2009/01/15/51216/the-perfect-storm/
In terms of trade war then I think I would be watching Japan closely as they seem in the toughest spot at the moment and the UK is doing a rather good number on Ireland at the moment with one of their banks nationalised over night.
To paraphrase a comment from Pettis: “The overcapacity adjustment in China may be much larger than the one faced by the US during the GD – with 40% of global GDP in 1930, the US had to absorb a trade surplus of roughly the same magnitude as China does today, but China’s economy currently accounts for only 7% of global GDP.”
@mxq- I don’t follow- if China is 7% of world GDP currently and the U.S. was 40% of world GDP at the start of the GD- wouldn’t that have made much harder for the U.S.since they had to absorb much more global surplus?
The major thrust of his argument was not strictly that China be forced to devalue but that it would be forced to spend every penny it has internally as a result.
moreover, if i am reading brad setser correctly, hot money is flowing out of china so rapidly now that they are actually consuming forex reserves to defend the yuan. if that condition persists, it would make a significant devaulation quite easy to execute.
MAybe I am wrong here, but if China were to enforce a devaluation of its peg AND protect that peg vis a vis the USD, doesnt that mean that they would have to buy large amounts of USD treasuries to keep it propped up.
And if they were to prevent a major appreciation versus the Euro wouldnt they have to buy Euros as well.
The question re Pegs is can they be sustained not can they be set. If I have this right then maybe someone here can give some hint of the scale of the reserves that China would have to accumulate to enforce a 30% devaluation.
As well, would the Chinese be buying the treasuires and then effectively burning them, they have no desire to collect the pricipal.
I don’t see how this is a sustainable path, it could be done, but for how long, at what cost. Pegs eventually lose their firmness as they fall further away from reality.
I agree with the previous poster that the Chinese people will only accept USD for a finite period of time, unless they feel they are “buying low”. As well, at some point the Chinese people will want to see their standard of living rise. The below normal standard of living is currently beong masked by the growth generated from exports. As that ends the only way to see increases in standard of living is to let the Chinese currency increase n value and let in more goods from other jurisdictions.
I am having trouble with the concept that the Chinese can force their currency to be significantly and seriously undervalued for any significant period of time AND continue to maintain huge and growing trade surpluses. Just seems counterintuitive to me, maybe I am missing something. Or is it just that the time scales the adjustments take place are so long that it doesn’t matter?
“headquarterization” comment from Wintermute;
As much as is looks nonsensical I disagree with the idea that “headquaterization” can’t replace manufacturing. Now at this exact moment that is not seemingly possible.
But understand the highly efficient nature now to which fraud (stealing) can occur within these “headquarterization” areas. Simply the touch of a key on a computer’s keypad. Presto, theft at the speed of light!!
As an economy matures the intrinsic moral character of the “headquartization” districts becomes much more critical. If the level of moral character does not keep up with the level of efficiency for mischief then these centers are better suited to be within the “halls” of the manufacturer.
With all that money (loot) being aggregated at Exxon, Mobil, BP, etc. these centers (Dallas, Houston, London [BP is very proximate to the Economist journals physical “headquarters”] now are poised to be financial centers. What to do with all that money (they shirly won’t invest that in more refineries).
Finance and information centers are a PRIVILEGE. We are not mature enough for our future; so we “step back”.
The reason why is this: underlying it all is the assumption that China and other countries will continue to exchange their human labor and natural resources for little pieces of green paper with pictures of dead U.S. presidents printed on them–forever.
DownSouth, it really depends just how Machiavellian you want to get in your interpretation. It’s the best in the short-term for the Chinese economy, and we’ve witnessed the devastating distorting effects it’s inflicted on the US economy. While instinctively it seems very foolish, if you start thinking about second-round effects…
moreover, if i am reading brad setser correctly, hot money is flowing out of china so rapidly now that they are actually consuming forex reserves to defend the yuan. if that condition persists, it would make a significant devaulation quite easy to execute.
It’s certainly the right time for this move if such a move were to be made, gaius.
I am having trouble with the concept that the Chinese can force their currency to be significantly and seriously undervalued for any significant period of time AND continue to maintain huge and growing trade surpluses.
The undervalued currency is precisely what allows them to maintain the huge and growing surpluses, Stephen.
Again, if you think about this in a non-cooperative way, China’s not giving a very nice gift to the US, even as it seems the US is being handed presents every day.
The summary of these comments reveals an interesting conundrum.
The US (and Europe too) is a victim because China has undercut their manufacturing base – seemingly making recovery from a deflationary depression much harder.
China is a victim because it has committed a huge percentage of GDP manufacturing products for export only to receive “worthless bits of paper with dead presidents” in exchange. Export markets have collapsed seemingly making recovery from a deflationary depression much harder.
Will the real victim please stand up!
—–
Waldo – I do believe that headquarterization is a partial substitute for manufacturing. As an extension – I also believe that in 20 years time nanotech self-assembly will kick all manufacturing debate into a cocked hat. Unfortunately we have GD II and Peak Oil to navigate before reaching the calm waters of a nanotech future.
“Export economies like China, Japan and Germany will be even harder hit”
This is ridicilous! A bunch of nail salon, real-estate agents and gym master consultants (=useless service economy workers aka US economy) are going to be better off than technicians and engineers (=Germany/Japan economy)?
Man, I seriously don’t understand these so called pundists. “exporter is worst than importers, seller is worst than buyer…la la la”
How about : those with cash and no debt IS bettr than those with gigantic debt?
China at this point in time can do whatever it wants (of course limited by the vision of communist party) But with raw material so cheap, it can ignite wealth revolution as much as it wants.
(eg. low cost housing for everybody, cheap education, cheap computing tools, start consuming like there is no tomorrow, etc. Use the cash pile. They don’t need anybody to start spending. Of course spending need sophistication. And sophistication needs certain amount of information freedom.)
This is exactly like the talking heads opinion on Russia. onooz, they are going to collapse. (yeah right, they are the first one to get out of the ditch and roll ahead.) Not even the hedge fund now dare to speculate on russian currency. Everybody is toast.
My bet: China will get out of the funk before we do. Late spring, early summer. Depending whatever national mood is after their new year, and government policy to pump the economy.
“Japan’s basic economic model has been geared towards exporting to the West for a very long time”
That view is so outdated. Japan’s biggest export partner is now China, not USA. Japan’s biggest trading partner is Japanese customer aka domestic markets.
As a natural resource poor country Japanese viciously keep their trade surpluses, even if the costs a lot in their domestic markets.
off topic- what’s with the Asian brides ad?
@Robert.
If I understand it correctly, it’s a question of relative size.
Relative to global GDP, 1930 US and 2008 China are responsible for a similar share of global trade surplus. But as a share of global GDP, 2008 China is a quarter the size now that the US was then. So, they must absorb the same relative adjustment, but as a proportion of their GDP the adjustment will be substantially largerm than it was for the US.
“How about : those with cash and no debt IS bettr than those with gigantic debt?”
Exactly. What American consumers really have now against major economic depression? Most have no savings whatsoever, nothing but debt, debt, debt.
Their job skills are also geared towards that easy credit consumption nirvana of yesterday. They do not produce anything of value anymore. Situation will be much worse than even Chinese workers..
dearieme,
For once, that typo is not mine, If you re-read the text, it comes from Evans-Pritchard.
Re the Asian brides, I am not happy with them, that is Google’s doing, and they apparently get high click-throughs. You cannot ask Google to block a type of ad, merely particular ads, and there seem to be a lot in this category.
robert…re: china/us circa 1930…cm202bc nailed it. thanks cm!
Some of the effects of the down turn are overstated.
Many investors will be just happy to get their money back and people who are laid off sometimes appreciate the time off to do personal projects? As long as there is food and medicine
Thanks for the feedback cm202bc & mxq- a light bulb is starting to flicker over my head.
@ Yves- got it! I was starting to think you had a separate business you were promoting! Your blog is great by the way- keep up the good work.
The trade war aspect of the current crisis is a key point that a lot of people haven’t thought through. We know that all governments go native in a crisis. It is easy from the outside to cite game theory on why they shoudn’t go native, but they all do. I am not smart enough to think through all the nations in Europe, China, Russia and Japan, and calculate where and how it will play out. But it seems there are a large number of plausible scenarios, and growing pressures on governments.
I think bg hits on an essential point here. Even at the best of times the choices (including economic choices) made via politics are at least partially subrational. Angry scared people are even less likely to make good long range decisions. I fail to see how anything less than a full bore trade war can emerge from the political environment created by deflation. That this is a bad outcome globally matters little when politics is local.
Ndk,
I understand the undervalued currency is what enables the surplus.
So here is where the question is. If it were a free floating currency the RMB would rise due to the large and growing surpluses. The Peg keeps it low….so what pressure builds to keep the RMB low while. Is it just the purchase of USD’s and/or treasuries that does that? Can that be sustaind indefinitely?
Thi sis the piece of the puzzle thatisnt clear to me, things like this cannot go on indefinitely, so what is the catalyst that would correct it…if any? For example, if the PRoC couldnt find enough cash to buy USD/Treasuries…would that be the constraining limit to this scenario? And if so, would they ever realistically reach that limit?
Sorry for the questions but perpetual scenarios dont work, there is a limit somwhere.
Is it just the purchase of USD’s and/or treasuries that does that? Can that be sustaind indefinitely?
Yes, and possibly, respectively. The PBoC only needs to buy as many USD and Treasuries as necessary to stabilize its peg. It won’t run out of yuan with which to buy dollars, so the only limiting factors are the associated negative impacts on China’s domestic economy and the global economy.
The major one considered most often is the issuance of so many CNY that sterilization begins to fail and serious inflation erupts. I don’t find that to be credibly limiting. A central bank has a lot of ways to stop inflation, if it’s willing to accept the resulting loss of seigniorage and potential economic pain. China’s government runs surpluses and a failure to continue the peg would probably be more economic pain, so I don’t doubt their willingness.
Sorry for the questions but perpetual scenarios dont work, there is a limit somwhere.
You’re right, and I think the limit is the one Richard enunciated earlier in this thread: the willingness and ability of the US and its consumers to borrow and spend. We hit that limit last year, so now the government is fighting as hard as possible to overcome the consumers’ newfound reluctance for indebtedness by borrowing and spending itself.
Godspeed, I guess.
Of course we all know that Smoot-Halley doesn’t apply here. In 29 the US was the China of 2009.
The economists are so full of s—.
NDK get your own web site. One post per day, OK. Most of your stuff is nonsense.
As China’s Jobless Numbers Mount, Protests Grow Bolder
Economic Woes Shining a Light On Social Issues
Limits.
>> NDK get your own web site. One post per day, OK. Most of your stuff is nonsense.
Hey, cut the unpleasantry.
I searched for *your* posts on nakedcapitalism, didn't find many, and — although I agreed with your posts — don't think I learned anything from them.
In contrast, I learn from ndk's posts and intend to read his blog, too.
So…don't be hatin'.
@ sandi rubinspan
he’s got one; and you would know about stuff and nonsense.
Judging by your intellectual input Sandi, suggest you do like wise and put up an idea. NDK contributes an opinion that alot of us respect even if he spells capitalisation with a ‘z’.
Has anyone seen the SOCGEN report AEP is referring to? FT Alpha must have lifted the terrifying electricity charts from somewhere. I cant find a link anywhere obvious but i may just be being obtuse.
Oh, they do do they. Right! Like Fitch, and so many others, have impressed all of us with their prowess for their predictive skills over the past several years. They should all probably just lie quiet for a while I would think.