Matt Nolan

Recession in New Zealand: What does iPredict say?

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In practical terms this seems like an absolute fact – New Zealand has had a recession over the first half of 2008. However, to satisfy the iPredict contract we need a technical recession.

As we have suggested before, the main risk to this contract stems from the March quarter being revised up – as partial indicators are telling us that June will be very negative. If March is revised to zero (or positive) the contract will not pay out.

Now interestingly, Goonix (who is a big fan of iPredict) said that the contract slumped to 0.70c on Sunday (suggesting that there is a 70% chance of a recession) – well down on the 0.93 it was recording a couple of days earlier. Given that Stats released manufacturing on Monday, and needs GDP for the Friday BOP release the GDP number would have been finalised by Friday. Does this imply that some people at Stats have some inside knowledge about an upward revision to the March numbers and have been trading on it? If so, they are going to make an absolute killing!

9 replies
  1. CPW
    CPW says:

    Just looking at the page it seem like a more realistic explanation is that the price moved when they clarified the contract rules on Sep 09.

  2. Matt Nolan
    Matt Nolan says:

    “Just looking at the page it seem like a more realistic explanation is that the price moved when they clarified the contract rules on Sep 09.”

    But the plunge in prices was on September 13-14 – did it really take that long for that clarification to get through?

  3. CPW
    CPW says:

    Well their graphs are far from easy to read but it would seem to me that the only plunge took place on Sep 10 or Sep 11 – the price went from 93 to 83. Am I missing something?

  4. Matt Nolan
    Matt Nolan says:

    “Well their graphs are far from easy to read but it would seem to me that the only plunge took place on Sep 10 or Sep 11 – the price went from 93 to 83. Am I missing something?”

    I was told by Goonix that the contract slumped to 0.70c at some point on either Saturday or Sunday (I wasn’t entirely clear). My suspicion would be Saturday (although I got his text on Sunday) as that was the day when the daily index dipped from 0.93 to 0.83, and the day when there was a ridiculous number of trades – on the 13th.

Trackbacks & Pingbacks

  1. June 2008 GDP preview: Recession! « The visible hand in economics says:
    September 23, 2008 at 08:06

    […] if you are interested in the recession call, keep an eye on March – if March is revised positive then we haven’t had a “technical recession” in that sense. Possibly related […]

  2. Business blog » Blog Archive » Recession in New Zealand: What does iPredict say? says:
    September 16, 2008 at 14:24

    […] Read the rest of this great post here […]

  3. ezineaerticles » Blog Archive » Recession in New Zealand: What does iPredict say? says:
    September 16, 2008 at 13:33

    […] Original Matt Nolan […]

  4. Conspirama says:
    September 16, 2008 at 13:15

    Recession in New Zealand: What does iPredict say?…

    Now interestingly, Goonix (who is a big fan of iPredict) said that the contract slumped to 0.70c on Sunday (suggesting that there is a 70% chance of a recession) – well down on the 0.93 it was recording a couple of days earlier. ……

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