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U.S. Economy Is Better Than People May Feel: Cohn
Posted on 2/26/16 at 2:33 pm
Posted on 2/26/16 at 2:33 pm
Gary Cohn, president and chief operating officer at Goldman Sachs, discusses the U.S. economy, a global monetary policy and the impact of low interest rates.
Really great, somewhat basic, summary of what is going on with global fiscal policy and general struggles for growth in the last couple years.
I'm sure most already have this 30,000 ft view of the global economy but I thought he laid it out in a very straight-forward educational manner. Good watch.
Really great, somewhat basic, summary of what is going on with global fiscal policy and general struggles for growth in the last couple years.
I'm sure most already have this 30,000 ft view of the global economy but I thought he laid it out in a very straight-forward educational manner. Good watch.
This post was edited on 2/26/16 at 2:34 pm
Posted on 2/26/16 at 5:27 pm to TigerDeBaiter
Saw this today, I think he's right. People are looking for excuses that pain is on the horizon. Of course they can find it
Posted on 2/26/16 at 6:25 pm to TigerDeBaiter
Exchanges at Goldman Sachs is a very good podcast where GS executives share their views of the current news in the capital markets and the over all macro economy. Gary Cohn is a regular member there. He sounded very bullish in the latest podcast too.
Posted on 2/26/16 at 9:05 pm to TigerDeBaiter
quote:
Better Than People May Feel
That's the key phrase. It's all relative, right?
I like Gary Cohn, but if you listen closely to what he said, he's not exactly painting a rosy macroeconomic picture. He puts too much Keynesian emphasis on the stability of consumer spending and the theory of beggar-thy-neighbor monetary policy for my tastes, but generally speaking, I think he's on target. But if on target means predicting yet another year of real U.S. GDP growth in the 1.5-2.0% range, then that's plain abysmal given where we are now relative to 2007... or 2000 for that matter.
So while I agree that his 1.5-2.0% range sounds reasonable to me, this in no way contradicts the notion that, in the realm of U.S. equities, we are in the midst of a corporate earnings recession that has yet to be priced into the market. I also think that in terms of asset price evaluations, he is toeing the way-too-bullish corporate line from Goldman Sachs. As I noted in a post about a month-and-a-half ago ( LINK), GS is really sticking their necks out on the chopping block here. I think they've been giving their big client investors some very bad advice lately.
oil research -- $200/barrel
Jan Hatzius -- need I say more?
Abby Joseph Cohen -- S&P 500 closes above 2,100 at 12/31/2016, and U.S. equity markets were just being "overly emotional" in January
David Cohn -- the drop in oil was "confusing" investors in January
equity research -- $120 EPS projections for 2016
Now it may be that Goldman Sachs is right about the bullish case they're selling investors asserting that U.S. equity prices will keep rising past 2,100 this year. I still think the market will drop below 1,800 this year, and even if it doesn't, I certainly don't think $120 EPS projections will hold up in a year of sub-2.0% GDP growth in the U.S., and even worse news from the rest of the world's economies.
This post was edited on 2/26/16 at 9:10 pm
Posted on 2/27/16 at 11:52 am to TigerDeBaiter
I think he has several excellent points but I don't think any of these guys EVER take into account debt levels. We have a consumer spending driven economy. If you immediately tripled the average household debt and tripled the national debt, he would sing the same song.
I never hear these guys say, "this is a BAD time" financially. They are like realtors. It's never a bad time to buy a house or sell a house.
I never hear these guys say, "this is a BAD time" financially. They are like realtors. It's never a bad time to buy a house or sell a house.
Posted on 2/28/16 at 6:47 pm to TigerDeBaiter
Our economy is doing well. Anyone that disagrees is not looking at the facts. We sold the most new cars in history last year. That does not happen if we have 42% unemployment like a certain orange wanna be politican is telling his uninformed crowds.
Posted on 2/28/16 at 8:43 pm to TigerDeBaiter
Of course Goldman Sachs thinks so. The current administration is lousy with their executives and lobbyists. I bet Halliburton thinks the Bush economy was great too.
The reality is that the labor participation rate is at a 40 year low, the median income has declined over the past seven years after also declining under W, health insurance premiums and deductibles are rising, and more people than ever are forgoing medical treatment due to cost.
The reality is that the labor participation rate is at a 40 year low, the median income has declined over the past seven years after also declining under W, health insurance premiums and deductibles are rising, and more people than ever are forgoing medical treatment due to cost.
Posted on 2/29/16 at 6:40 am to CaptainBrannigan
Our economy is always doing well if our personal financial situation is doing well. I agree with the physician on corporate earnings. We could use some inflation though.
Posted on 2/29/16 at 5:45 pm to Doc Fenton
quote:
I like Gary Cohn, but if you listen closely to what he said, he's not exactly painting a rosy macroeconomic picture. He puts too much Keynesian emphasis on the stability of consumer spending and the theory of beggar-thy-neighbor monetary policy for my tastes, but generally speaking, I think he's on target. But if on target means predicting yet another year of real U.S. GDP growth in the 1.5-2.0% range, then that's plain abysmal given where we are now relative to 2007... or 2000 for that matter.
I agree, but I appreciate the honesty and not some perma-bull or perma-bear for that matter. We are in for some sideways action at best, but I am also tired of the "geniuses" who think we are about to fall off a cliff.
I also do find it somewhat ironic that the biggest hurdle talked about lately is deflation, when, for the last several years all we've heard is the fear of hyperinflation from QE and "the printing presses", etc. etc. It'll be interesting to see the push for a global currency if we do see some sort of collapse from central banks constantly underpinning each other. The world certainly seems to shrink a little more each day.
Posted on 2/29/16 at 7:10 pm to TigerDeBaiter
Yeah, I don't see any reason to suspect an economic crash, and I can't stand when people like Peter Schiff use the term "hyperinflation" to refer to anything less than 1,000%-per-year inflation. I do admit to being one of the people who thought that monetary policy in 2008 would lead to significant inflation by 2010, but it never happened.
It's interesting to think about what will happen with currencies for the remainder of the 21st century. I tend to think that the deflationary malaise of our current period is resulting more in pushes for nationalist currencies, rather than in pushes for globalist currencies. Historically speaking, economic globalization and financial integration seems to occur more during good times than during bad times.
Here's the weird thing about that though--the last time there were movements based on changing monetary policy during deflationary episodes (like the bimetallism movement of the 1840s, the populist "Free Silver" movement of William Jennings Bryan, or the Keynesian movement toward nationalist fiat currencies), these were movements away from currencies that were backed by hard metal. Now we are dealing with the specter of deflation yet again, except this time there is no hard metal baseline to delink the currency from. So whereas previous movements in the past away from hard gold standards were essentially movements away from global currencies and toward nationalist currencies; today we see a situation where currencies are already nationalist, and thus there is no way to push further in that direction.
Monetary theorists in the Cold War era always seemed to assume that consumer price inflation was something that was extremely easy and tempting for governments to do. Now we are seeing that such assumptions were unwarranted. I suspect that in coming decades, many countries will find novel ways to produce consumer price inflation with their national currencies, but so far no major economies have pioneered such a route.
It's interesting to think about what will happen with currencies for the remainder of the 21st century. I tend to think that the deflationary malaise of our current period is resulting more in pushes for nationalist currencies, rather than in pushes for globalist currencies. Historically speaking, economic globalization and financial integration seems to occur more during good times than during bad times.
Here's the weird thing about that though--the last time there were movements based on changing monetary policy during deflationary episodes (like the bimetallism movement of the 1840s, the populist "Free Silver" movement of William Jennings Bryan, or the Keynesian movement toward nationalist fiat currencies), these were movements away from currencies that were backed by hard metal. Now we are dealing with the specter of deflation yet again, except this time there is no hard metal baseline to delink the currency from. So whereas previous movements in the past away from hard gold standards were essentially movements away from global currencies and toward nationalist currencies; today we see a situation where currencies are already nationalist, and thus there is no way to push further in that direction.
Monetary theorists in the Cold War era always seemed to assume that consumer price inflation was something that was extremely easy and tempting for governments to do. Now we are seeing that such assumptions were unwarranted. I suspect that in coming decades, many countries will find novel ways to produce consumer price inflation with their national currencies, but so far no major economies have pioneered such a route.
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