Sep 2, 2009
Goldman Sachs is wrong on economic recovery
Goldman Sachs Group Inc. and Morgan Stanley got it wrong in declaring the start of an economic recovery… record government spending may be forestalling another slowdown and market selloff… This is more likely a ski-jump recession, with short-term stimulus creating a bump that will ultimately lead to a more precipitous decline later
Nice move performed by Paul Tudor Jones of Jones’s Tudor Investment Corp, leading Macro hedge fund. This is one of few cases when official projections are tackled by a sophisticated investor with no direct relationship with the government.
As the article says misleading indicators are driving markets up: sentiment indices, month-on-month changes, neglected seasonality effect, changes in accounting standards, adjusted labor and GDP figures, and of course deceptive interpretations. Many things help in creation of blurred recovery effect, everyday playing adult games with people brains. Hopefully, sustainability of this manipulation is questionable.
What real indicators show is that share on home loans in the US with one or payments overdue rose to 9.24 in the second quarter of 2009 – all time high. Distressed deals including foreclosures account for a third of new sales in the USA, which is not included into news headlines.
They couldn’t prevent one small downtrend, I believe they won’t – a bigger.
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