Goldman's Latest Boiler-Room Stock: America [View all]

[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.

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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