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You Haven't Realized, Goldman Sachs Is Predicting A Major Economic Turn To Happen In 2013
TBI ^ | 12-8-2012 | Joe Weisenthal

Posted on 12/09/2012 5:07:50 PM PST by blam

In Case You Haven't Realized, Goldman Sachs Is Predicting A Major Economic Turn To Happen In 2013

Joe Weisenthal
December 8, 2012

Goldman Sachs continues to dribble out its 2013 forecasts and top trades.

And as the firm peels back more and more, it's clear that the forecast is for major change to the economy.

This can be seen across multiple calls, from multiple analysts.

It starts with top economist Jan Hatzius, who sees, for the first time since the financial crisis, the economy accelerating to above-trend growth in the second half of next year.

The call is based on an expectation of private sector releveraging, coupled with the end of the fiscal drag.

In turn, Goldman commodity analyst Damien Courvalin is calling for the end of the great gold bull market next year, based on the fact that real interest rates are finally going to start heading higher.

The essence of the call comes down to this chart, which shows the relationship between gold and 10-year real interest rates (when interest rates are ultra-low or negative, holding cash is expensive, this gold is appealing. If real interest rates turn positive, gold loses its luster).

Goldman Sachs

Other big calls follow.

Its top stock idea for 2013 is going long huge megabanks, a trade that's based on an accelerating economy, an improving housing market, and the efficacy of monetary policy.

They write:

Fed policy is set to remain extraordinarily accommodative, with ongoing MBS purchases and a focus on the housing market as an important channel for monetary policy.

(snip)

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


TOPICS: News/Current Events
KEYWORDS: 2013; economy; goldmansachs

1 posted on 12/09/2012 5:07:58 PM PST by blam
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To: blam

Down turn?


2 posted on 12/09/2012 5:11:27 PM PST by BenLurkin (This is not a statement of fact. It is either opinion or satire; or both)
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To: blam

Does Ben Bernake know about this? His QE-Infinity plans don’t support any increase in interest rates ...


3 posted on 12/09/2012 5:12:55 PM PST by Ken522
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To: blam
Suddenly, There's Been A Burst Of Good News That Markets Should Like

Sebastien Galy of SocGen writes, in regards to the latest developments:

The market wanted a year end rally and it just got a nice boost over the week end.

... Hold your breath. Republicans are starting to give in on taxes (FT), China's economy surprised positively, Canada allowed the CNOOC deal for China's energy reserves, the US labour was stronger than expected and the Greek debt buy back seems to be going as hoped. Breath.

4 posted on 12/09/2012 5:14:26 PM PST by blam
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To: blam
Goldman Sachs continues to dribble out its 2013 forecasts and top trades. And as the firm peels back more and more, it's clear that the forecast is for major change to the economy. This can be seen across multiple calls, from multiple analysts.

It starts with top economist Jan Hatzius, who sees, for the first time since the financial crisis, the economy accelerating to above-trend growth in the second half of next year. The call is based on an expectation of private sector releveraging, coupled with the end of the fiscal drag.

In turn, Goldman commodity analyst Damien Courvalin is calling for the end of the great gold bull market next year, based on the fact that real interest rates are finally going to start heading higher.

Ping for revisiting a year from now

5 posted on 12/09/2012 5:20:39 PM PST by Alex Murphy ("If you are not firm in faith, you will not be firm at all" - Isaiah 7:9)
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To: blam
The author is saying "gold will go lower after it peaks". What is shown in the chart is real interest rates rising which is due to inflation falling which is nicely depicted by the gold price dropping in 1980.

Fast forward to today, inflation is only getting warmed up and BB is not going to lower nominal rates as long as he is breathing and head of anything to do with rates. Gold will peak after nominal rates rise to 10% or whatever makes a serious dent in inflation and inflation expectations. I would guess that will be after the US debt is cut in half by inflation, i.e. gold doubles and overshoots (i.e. 3-4k)

6 posted on 12/09/2012 5:30:20 PM PST by palmer (Jim, please bill me 50 cents for this completely useless post)
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To: blam

Talk, unlike most everything else, is cheap.


7 posted on 12/09/2012 5:35:08 PM PST by Ouchthatonehurt
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To: Alex Murphy
In turn, Goldman commodity analyst Damien Courvalin is calling for the end of the great gold bull market next year, based on the fact that real interest rates are finally going to start heading higher.

No mention of the fact that inflation will be headed far past Jimmy Carter's 22% record into triple-digit territory.

8 posted on 12/09/2012 5:47:12 PM PST by E. Pluribus Unum ("The more numerous the laws, the more corrupt the state." - Cornelius Tacitus, Roman Senator)
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To: blam

Those “analysts” wouldn’t want to wager their own money on this, I am sure. Bob


9 posted on 12/09/2012 5:51:33 PM PST by alstewartfan ("And if you're saying something not right, You're floating in the river at night." Al Stewart)
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To: blam

I see a bad moon arising,
I see trouble on the way....


10 posted on 12/09/2012 5:52:56 PM PST by Red Badger (Lincoln freed the slaves. Obama just got them ALL back......................)
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To: Red Badger

Are you looking out you back door again?


11 posted on 12/09/2012 5:57:35 PM PST by blam
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To: blam

“based on the fact that real interest rates are finally going to start heading higher.”

Which will collapse the fragile economy and cause a financial crisis. These firms are interested in one thing, making money off of gullible investors who buy their propaganda.


12 posted on 12/09/2012 5:59:23 PM PST by ScottfromNJ
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To: blam

Goldman Sachs doesn’t sell their investment advice to Joe Sixpack.

Usually, of not always, you can take whatever they say and reverse it. Because they need plenty of peons on the other side of their gigantic trades.


13 posted on 12/09/2012 5:59:55 PM PST by Cicero (Marcus Tullius)
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To: blam

Goldman Sachs doesn’t sell their investment advice to Joe Sixpack.

Usually, if not always, you can take whatever they say in news releases like this, and reverse it. Because they need plenty of peons on the other side of their gigantic trades.


14 posted on 12/09/2012 6:00:55 PM PST by Cicero (Marcus Tullius)
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To: Cicero

You got it. Goldman Sucks puts out BS so the Muppets will take it on face value and Goldman Sucks will make a fortune.


15 posted on 12/09/2012 6:04:46 PM PST by RetiredTexasVet (The law of unintended consequences is an unforgiving and vindictive b!tch!)
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To: blam

Whatever the “experts” say...run the other way...GS thinks theirs clients are muppets. I know GS is the devil.


16 posted on 12/09/2012 6:05:13 PM PST by BreezyDog (Illegitimi non carborundum)
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To: ScottfromNJ

Yeah, since when did higher interest rates signal a strengthening economy? Usually, they signal an overheating economy. Don’t really see being near that stage yet. And won’t higher interest rates make servicing a $16 trillion debt just a little bit harder? That’ll just release the chains that are holding back the U.S. economy.


17 posted on 12/09/2012 6:16:19 PM PST by fhayek
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To: BreezyDog

I will stay at high growth, aggressive. We can compare this time next year.


18 posted on 12/09/2012 6:18:27 PM PST by eyedigress ((zOld storm chaser from the west)/?)
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To: blam

Who’ll stop the rain?


19 posted on 12/09/2012 6:44:06 PM PST by JPG (Stay strong.)
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To: blam

I don’t understand. Real earnings for individuals are down. Inflation is on the rise. Interest on loans is going to go up. Taxes are going up for several reasons including Obamacare. We are going into debt at the rate of $4.8 billion per day with no let up in sight. And, GS is predicting a good coming year? Someone please explain this to me.


20 posted on 12/09/2012 6:53:10 PM PST by MCF
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To: MCF

We are going into debt at the rate of $4.8 billion per day with no let up in sight. And, GS is predicting a good coming year? Someone please explain this to me.

________________________

I assume they mean it will be a good year for Goldman Sachs and their ilk.


21 posted on 12/09/2012 6:55:13 PM PST by Chickensoup (Leftist Totalitarian Fascism coming to a country like yours.)
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To: MCF; blam

This is the kind of thinking at GS. They lowered their 4th Qtr 2012 GDP estimate 0.5% due to Sandy, then they raised 1st Qtr 2013 GDP 0.5% because of Sandy - that really makes no sense since capital has to come from somewhere, i.e. the broken window parable.

They fail to note that QE infinity is actually helping Asia more since capital, like people, will only go where wanted.


22 posted on 12/09/2012 7:05:16 PM PST by Perdogg (Rep. Tom McClintock (R-CA4) for President 2016)
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To: JPG

There’s the bathroom on the right.


23 posted on 12/09/2012 7:16:57 PM PST by Lancey Howard
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To: MCF

I’m thinking they’ll funnel our taxes into their accounts with a Bozo-stamped pipeline.


24 posted on 12/09/2012 7:20:51 PM PST by GreatRoad (O < 0)
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To: blam
This is the type of scenario that will benefit a very few - and I'm sure you people have a good idea who I am talking about.

By the time this brew fully manifests itself market-wide, nation-wide, and eventually worldwide, those few will have pocketed what may be the last remaining profits to be had in this economy, and will be protected by the powers that be from any potential future prosecution that may arise.

Indeed, you will likely see them disappear.

Much like Red Badger says, I, too, see a bad moon rising.

Do these people not see the reality of what rising interest rates will do?

If you've got bonds, dump ‘em - fast!

CA....

25 posted on 12/09/2012 7:21:16 PM PST by Chances Are (Seems I've found that silly grin again....)
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To: MCF
Someone please explain this to me.

Sure.
Think of it as the economy always walking downhill while Goldman Sachs is always walking uphill.
Like this:


26 posted on 12/09/2012 7:23:48 PM PST by Lancey Howard
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To: blam

Total Hog Wash. When the Federal borrowing is forced to stop then the artificially propped up GDP is going to slam through the floor for obvious reasons. For a time then Jobless rates are going to go into never never land. Default by the sheeple will be the name of the game. Goldman Sachs will however find a way to steal blankets from homeless children, and sell them at a profit. As they more than anyone are responsible for the mess the whole world is in.


27 posted on 12/09/2012 7:24:08 PM PST by Revel
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To: Red Badger

I hear the voice of rage and ruin.


28 posted on 12/09/2012 7:40:38 PM PST by dragnet2 (Diversion and evasion are tools of deceit)
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To: blam

starting jan 1, American small business will have a forced 10+% increase in salaries... which will force them to either reduce hours... cut staff... or jack prices

and American small business employs a majority (80%) of the jobs...

which will drive up unemployment...

and food stamps...

exactly what would make the economy improve again?


29 posted on 12/09/2012 7:44:27 PM PST by sten (fighting tyranny never goes out of style)
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To: E. Pluribus Unum

And then all those Obamabucks will be going to banks and China instead of to Obamaphone accounts or EBT cards.


30 posted on 12/09/2012 7:48:08 PM PST by Trailerpark Badass (So?)
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To: blam

I looked out my back door earlier this week and saw that a family business that’s been around for decades has closed. I looked out my back door the week before and saw that the animal rescue thrift store that had been in operation for more than ten years is closed. It was operated by a local vet who provided low cost spaying and neutering for strays anyone brought in and often free care for animals owned by the poor. His regular clinic just couldn’t carry the weight any more as more and more people have had to give up their animals and almost all pet stores are out of business from sky high feed costs and rising prices on cages and other supplies.
Doot, doot, doot, lookin’ out my back door...


31 posted on 12/09/2012 7:48:42 PM PST by piasa (Attitude adjustments offered here free of charge)
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To: ScottfromNJ

It will, though collapse the government when its debt servicing burden doubles, triples....


32 posted on 12/09/2012 7:50:40 PM PST by Trailerpark Badass (So?)
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To: blam

Major economic turn for who?


33 posted on 12/09/2012 9:16:52 PM PST by freekitty (Give me back my conservative vote; then find me a real conservative to vote for)
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To: sten
exactly what would make the economy improve again?

Thank you for posting your right-on observations. I would add the fact that after Jan 1, unemployment benefits will dry up for many, which will also make things worse in the economy. And those going on unemployment will have shortened benefits. And most working people will have a much higher tax burden... How can the economy improve?

34 posted on 12/09/2012 10:40:01 PM PST by roadcat
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To: blam

Interesting.

However, is it true that Goldman trades against its clients and has done so for many years, from what I’ve heard?


35 posted on 12/10/2012 5:54:00 AM PST by OpusatFR
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To: OpusatFR

Wouldn’t be surprised in the least!

CA....


36 posted on 12/10/2012 9:27:36 AM PST by Chances Are (Seems I've found that silly grin again....)
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To: MCF
I don’t understand. Real earnings for individuals are down. Inflation is on the rise. Interest on loans is going to go up. Taxes are going up for several reasons including Obamacare. We are going into debt at the rate of $4.8 billion per day with no let up in sight. And, GS is predicting a good coming year? Someone please explain this to me.

Unless proven otherwise, treat any utterance from GS as if it came directly from the White House.

37 posted on 12/10/2012 9:35:18 AM PST by kevkrom (If a wise man has an argument with a foolish man, the fool only rages or laughs...)
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To: blam

*


38 posted on 12/10/2012 4:35:51 PM PST by PMAS (All that is necessary for the triumph of evil is that good men do nothing)
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To: blam
In turn, Goldman commodity analyst Damien Courvalin is calling for the end of the great gold bull market next year,

Coming from Goldman, what this really means is that they expect the gold bull market to continue, so they claim it's over, so people will sell "at the top", causing the price to go down, so they (Goldman) can buy a little more at a reduced price.

39 posted on 12/12/2012 2:43:10 PM PST by DuncanWaring (The Lord uses the good ones; the bad ones use the Lord.)
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To: DuncanWaring
The Nightmare Continues — Gold Plunges Below $1700
40 posted on 12/12/2012 9:41:02 PM PST by blam
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