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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
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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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