Weeoo, weeoo, weeoo.
From The Pascometer this morning, a little crowing as Labor references him in Parliament:
In question time, shadow treasurer Chris Bowen made loose with his adjectives to ask:
“I refer the Treasurer to recent comments by respected market journalist Michael Pascoe suggesting that:
“PASCOE: The evidence keeps mounting that his [the Treasurer’s] Mid-Year Economic and Fiscal Outlook forecasts were rubbery.
“Does the Treasurer stand by the economic assumptions that contributed to a $68 billion deterioration in the budget since the election?,” Mr Bowen asked.
Carefully avoiding the actual issue, the Australian Treasurer replied:
” Yes, Michael Pascoe is so respected that he wrote a few days, a few days before I put $8.8 billion into the Reserve Bank he wrote that I was going to rip money out of the Reserve Bank. That’s how good Michael Pascoe is. That’s how good Michael Pascoe is. So if you’re taking economics lessons from Michael Pascoe, I’d suggest you go back to Swanny.”
I’ll simply point out that:
- If Joe Hockey persuaded Treasury to lower estimates then good for him; the forecasts have been delusionally bullish for years. If the budget delivers better than forecast this year then that will be a case of top-notch expectations management by Hockey, not the result of some dark conspiracy. It appears that the “budget conspiracy” nuts want to sink the new government’s credibility rather like Wayne Swan did to himself by accepting overly-bullish Treasury forecasts and then missing badly. I would have thought that a Budget that actually delivers would also be good for the consumer confidence that the Pascometer so worships.
- The Budget into 2014/15 is still over-bullish. The terms of trade are projected to fall 5% and are close that level already, meaning the nominal growth forecasts are too high. The forecasts for business investment are for -2% and they are currently projected by the ABS at -17%, meaning the unemployment forecast of 6.25% is also too low. Whether it ultimately plays out this way or not, the projections are in no way overly bearish. This is much larger issue than this year’s budget.
How do we short the Pascometer itself?
Weeoo, weeoo, weeoo.
