"We know from history that rating agencies tend to have a herd mentality – when one agency initiates a downgrade, the others follow. If that happens, it could mean a rough ride for the domestic economy." - Malaysia cannot afford another rating downgrade by Anna Taing, The Edge/fz.com
But instead of learning from that history, Malaysians start pissing in their pants at the sound of Fitch's ratings threat. Our politicians and financial experts, too, are rather quiet, perhaps cowed by the complexity of the subject or too busy making money to care. Even Anwar Ibrahim when he was our Minister of Finance, credit to him, would leap to the country's defence and vilify the ignorant foreigners and then preach about our "strong fundamentals" before signing off with his signature "Arigato". Surely Anna Taing remember those days?
So when I was sent a link to her commentary on Twitter this morning, my immediate retort was: I smell a rat. I can't help but take Fitch with a handful of salt: Is this not, after all, the same rating agency that empowered the US economy with triple-A marks just before the sub-prime crisis just a few years ago? It's all part of history: the US went on to file a lawsuit against one of the so-called Big Three rating agencies - of which Fitch is one - for fraud! Read S&P Lawsuits: US accuses rating agency of Fraud leading up to financial crisis.
I'm not saying we ignore warning signs. I expect our economists and financial experts to analyze and address Fitch's concerns and the concerns of any investor. MoF and Bank Negara have got to assure them that our economic is a-OK. You can't do that by keeping quiet. How I wish we still had a strong EPU; see, you can't rely on Pemandu for things like these (they might even agree with Fitch for all you know!). The facts are: our fundamentals are, indeed, strong, our GLCs (Khazanah, where are you?) have been making healthy profits, our companies are investing abroad again, and the domestic economy, while not at its strongest, is well managed.
Leave the rest to us. Some of us think Fitch is here to wage an economic warfare. Me, I am suspicious of its timing vis-a-vis the Trans-Pacific Partnership Agreement (read TPP will be another bad pact - Dr M). History has taught us that some countries will go to great lengths - even "plant" weapons of mass destruction in enemy territories - for oil and gas, and we happen to be an oil/gas-rich country ...
p.s. As for the difference between Fitch and a bitch, you tell me. But do read this article by Forbes: Do we need them?