Goldman's Latest Boiler-Room Stock: America

[TomClash]

It seems Jim O'Neill, the head of Goldman's Asset Management department, is predicting that the United States stock market may go up "15 to 20 percent." O'Neill apparently believes Ben Bernanke and the Federal Reserve will resort to another round of money-printing, and finally green-light the long-awaited "Qe3," or third round of "Quantitative Easing."

The QE programs involve the Fed printing hundreds of billions of dollars and pumping them into the marketplace, where they ostensibly stimulate the economy (although recent experience tells us that the money mostly ends up being swallowed by the financial services industry – but that's another subject for another time). Anyway, Bernanke declined to go ahead with a third QE program in late 2011, but O'Neill apparently thinks we'll get it in 2012. From Bloomberg:

"If QE2 doesn’t work, then we’ll get QE3," said O’Neill, who was named chairman of the money manager in September after working as the co-head of global economics research and chief currency economist at New York-based Goldman Sachs Group Inc. since 1995. There’s a "good chance" the S&P 500 will rise 15 percent to 20 percent in the next 12 months, he said.

<snip>

Even Goldman wrote in a Dec. 7 report that that BRIC has already seen its crest. "We have likely seen the peak in potential growth for the BRICs as a group," Goldman analyst Dominic Wilson wrote in the Dec. 7 report.

I laughed when I read Wilson's quote, wondering exactly how long ago the bank privately came to that conclusion and started shorting BRIC countries. Goldman's Dec. 7 report, incidentally, arrived just before O'Neill released his new book, a Tom Friedmanesque volume of cheerleading nonsense called The Growth Map: Economic Opportunity in the BRICs and Beyond. That book was published on December 8, meaning O'Neill was seen spending 256 pages predicting "rosy prospects" for the BRIC bloc exactly one day after Goldman itself had officially bailed on its own cheesy marketing gimmick.



Read more: http://www.rollingstone.com/politics/blogs/taibblog/goldmans-latest-boiler-room-stock-america-20120102#ixzz1iKzakP9B

[xchrom]

1. Du rec. Nt

[Octafish]

2. Taibbi is spot-on. Government Sachs is a problem for democracy.

Goldman Punk'd Clients Yet Again

On Friday, following the announcement from Goldman that the firm's had just turned more bullish on European financials raising banks from Underweight to Neutral, we said: "Goldman has just started selling European bank stocks to its clients, whom it is telling to buy European bank stocks. Said otherwise, the Stolpering of clients gullible enough to do what Goldman says and not does, has recommenced. Our advice, as always, do what Goldman's flow desk is doing as it begins to unload inventory of bank stocks. Translation: run from European bank exposure." Sure enough: European banks (as per BEBANKS) are now down 3.84% today alone, or -1.5% from the Thursday close, while the general MSCI Euro Fin sector, EUFN, is down 6% today. While not quite a slam dunk trade as a Stolper FX anti-reco, nobody has ever filed for bankruptcy by making money. Thank you Goldman.

http://www.zerohedge.com/news/goldman-punkd-clients-yet-again

[izquierdista]

3. And an equal chance it will go down 15-20%

Considering the S&P was unchanged for 2011, I would say that we could be starting year 2 of a loooong sideways trend. If you thought the '00s were a lost decade.....

[Demeter]

4. It will be the purchasing value of the dollar going down

sinking quickly into the West.