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GOLDMAN: Investors Need To Wake Up Because The Fiscal Cliff Is Only Getting Scarier
TBI ^ | 8-19-2012 | Matthew Boesler

Posted on 08/19/2012 8:31:37 AM PDT by blam

GOLDMAN: Investors Need To Wake Up Because The Fiscal Cliff Is Only Getting Scarier

Matthew Boesler
Aug. 19, 2012, 11:05 AM

It may be time for a reality check for investors who are shrugging off the fiscal cliff.

That's according to Goldman Sachs chief U.S. equity strategist David Kostin, who writes in his latest note to clients that "portfolio managers have been swayed by hope over experience" when it comes to anticipating the effects the fiscal cliff will have on markets.

Kostin writes that investors aren't giving as much attention the fiscal cliff as they should be, and that may be helping to set the markets up for a repeat of last year, when the debt ceiling negotiations sent stocks plummeting.

From the note:

A look at the 2011 trading pattern of the S&P 500 explains the reason for our belief that the market has an asymmetric risk profile and offers more downside than upside. Last year the deadline for Congress to raise the federal debt ceiling was known months in advance. Nevertheless, Congress was unable to reach an agreement that satisfied all factions. Investors were stunned and the S&P 500 plunged 11% in 10 trading days (and more than 17% from the level one month prior to the deadline). Eventually Congress reached a compromise on raising the debt ceiling.

We believe the uncertainty is greater this year than it was 12 months ago...Political realities and last year’s precedent suggest the potential that Congress fails to reach agreement in addressing the “fiscal cliff” is greater than what most market participants seem to believe based on our client conversations. In our opinion, equity investors seem unduly complacent on this issue. Portfolio managers have been swayed by hope over experience.

This month's stock market rally marked a major divergence

(snip)

(Excerpt) Read more at businessinsider.com ...


TOPICS: News/Current Events
KEYWORDS: economy; fiscalcliff; gold; investing; recession

1 posted on 08/19/2012 8:31:44 AM PDT by blam
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To: blam
From yesterday:

Goldman Sachs: The Economy Is Stronger Than You Think

2 posted on 08/19/2012 8:34:12 AM PDT by blam
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To: blam

So I guess we should be piling up money to buy when the market falls.

I don’t care much about the market value of my current portfolio, as long as the dividends keep coming in, but I haven’t been buying anything in this market.


3 posted on 08/19/2012 8:35:01 AM PDT by proxy_user
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To: blam
Something is bothering George:

Report: Soros Unloads All Investments in Major Financial Stocks; Invests Over $130 Million In Gold

4 posted on 08/19/2012 8:36:01 AM PDT by blam
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To: bruinbirdman; MrEdd
EU: Lord Rothschild takes £130m bet against the euro
5 posted on 08/19/2012 8:41:17 AM PDT by blam
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To: blam
"Investors Need To Wake Up Because The Fiscal Cliff Is Only Getting Scarier"

This is baseless fear-mongering - once you get past a certain height, the results are always fatal.

6 posted on 08/19/2012 8:45:04 AM PDT by Flag_This (Real presidents don't bow.)
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To: blam
Report: Soros Unloads All Investments in Major Financial Stocks; Invests Over $130 Million In Gold

The ten, standing with pomp and glitter, head for their vaults.
The people, angry and in disarray, loot the shops.
Which of these knew in advance? The eagle? The bear? The crown? The Sun?
No, fate was not a consideration for this race.

The earth will be found wanting and crying:
"We want our entitlements!"

7 posted on 08/19/2012 8:53:15 AM PDT by concerned about politics ("Get thee behind me, Liberal")
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To: Flag_This
This is baseless fear-mongering

Isn't that how the most money is made on the market ?

Isn't that how Presidential election campaigns are run ?

Isn't that how the MSM sells laundry detergent ?

8 posted on 08/19/2012 8:57:08 AM PDT by UCANSEE2 (RED NECK KUNG FU by Corn Fuschas)
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To: blam

So which of the two are we to believe?


9 posted on 08/19/2012 9:06:58 AM PDT by dynoman (Objectivity is the essence of intelligence. - Marylin vos Savant)
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To: blam

Goldman Sachs is a crony partner of the Obama administration. Goldman bought controlling interest in CARRIX, the largest cargo moving company in the world, and has been busy working to build “Gateway” terminals in this country and around the world. Gateways are part of the Agenda 21, Wildlands Project, which attempts to limit (actually reduce) the rural population of the US, and move the rural population into the cities, while creating multi-modal transportation corridors to move people and cargo through the rural areas, and limit human incursions. The idea is to reverse the economic trends and human migration trends, sending US natural resources to developing countries, where the manufacturing and jobs will be created.

A big part of the plan is to divert trade away from the Mississippi River by increasing rail lines to the west coast and building more terminals on the west coast to ship resources and food to Asia. Goldman Sachs is helping and is getting our tax dollars to do it.


10 posted on 08/19/2012 9:06:58 AM PDT by Eva (Eee)
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To: Eva
The conspiracy theorist in me says that Soros and Goldman-Sachs are conspiring to create a market panic. The non-conspiratorial part of me says these guys, who have been thoroughly ensconced in the white house for the last several administrations, are totally above board, and have our best interests in mind.
11 posted on 08/19/2012 9:18:17 AM PDT by SpaceBar
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To: blam

Maybe the market is anticipating a rout of Zer0.


12 posted on 08/19/2012 9:22:07 AM PDT by Paladin2
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To: Eva
Goldman is not a crony partner of Obama. It is a crony partner of both teams. No matter who wins, Goldman ALWAYS wins. No single entity has done more damage to this country than Goldman Sachs and both parties are in their pocket.
13 posted on 08/19/2012 9:32:07 AM PDT by sakic
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To: sakic
Amen. The list of Treasury Secretaries pulled out of Goldman is long and distinguished. And scary.

It look like the only company that anyone should be investing in is GS! They're too politically connected to both parties to fail.

14 posted on 08/19/2012 9:38:13 AM PDT by HeartlandOfAmerica ("We have prepared for the unbeliever, whips and chains and blazing fires!" Koran Sura 76:4)
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To: dynoman
"So which of the two are we to believe? "

LOL.

I've been anticipating your answer.

15 posted on 08/19/2012 9:38:48 AM PDT by blam
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To: blam
Maybe they fear Obama has charged to the limit - China won't buy our debt - and quantitative easing's hit the point of diminishing returns...
16 posted on 08/19/2012 9:43:49 AM PDT by GOPJ (Politics is war without bloodshed, and war is politics with bloodshed. - Mao Tse Tung. We're at war)
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To: blam

The three entities most responsible for the approaching financial collapse:

1 - The US Government

2 - The Federal Reserve Bank

3 - Goldman Sachs


17 posted on 08/19/2012 10:58:20 AM PDT by Iron Munro ("In any compromise between good and evil, it is only evil that can profit." - Ayn Rand)
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To: Iron Munro
Oops!

You forgot one:

George Bush.

18 posted on 08/19/2012 11:16:47 AM PDT by blam
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To: SpaceBar

I don’t think that Goldman Sachs would benefit from a market panic. Goldman’s tactics are more subtle than that, more fascist. Goldman Sachs is buying up infrastructure around the world, ports, terminals, bridges, etc. Goldman wants to control not only the cargo, but the infrastructure the cargo moves on or through, rather than the cargo, itself. Oh, Goldman probably owns a lot of cargo, too.


19 posted on 08/19/2012 11:18:40 AM PDT by Eva (Eee)
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To: sakic

Fascist government partners never care who represents the government. The governing elite are still the deal makers, which ever party they belong to.


20 posted on 08/19/2012 11:20:59 AM PDT by Eva (Eee)
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To: blam; TigerLikesRooster; Whenifhow; Cincinatus' Wife; familyop; 2ndreconmarine; M. Espinola; ...
The sad truth is far worse than most of us believe -- or even imagine:

The Pyramid Scheme Works and It's Not a Just "Conspiracy Scheme"

Far worse in fact. Exponential growth is also a total illusion, proved already by the Housing Bubble and Stock Market Bubble. The totally corrupt federal reserve is at the crux of everything: Corrupt Banksters are positioned to make $$$$$$$$ Trillions while the rest of us will starve

21 posted on 08/19/2012 12:39:42 PM PDT by ex-Texan (The Time to "Wake Up" is Over !)
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