Perenially bullish economists at Goldman Sachs have turned bearish; Their just released gloom and doom report warns of the likelihood of a Japanese recession and increasing risks that the U.S. real estate slump could spread internationally.:
In a new report, "The Global Economy
Hits a Crunch", the US investment bank said it was no longer sure that Asia
and Europe would be able to pick up the growth baton as America stumbled. It
fears that turmoil is spreading beyond the debt markets to the factory floor."Much has changed since mid-July, when
we wrote that ‘the global economy continues to enjoy one of the strongest
sustained expansion in modern history’. The mood in financial markets is clearly
darker, and the economic data in the developed world is showing signs of
wear," it said.
"Japan’s recovery is tottering, with
the chance of an outright recession having risen to nearly two in three,"
said the report, authored by chief economist Jim O’Neill.It is an abrupt change of tack for the bank
known as the "cheer leader" of the global boom. Until now Goldman has
insisted that Asia and the developing world are strong enough to shrug off an
American slowdown, allowing world growth to keep racing ahead without missing a
step — despite subprime woes….
Goldman Sachs warns of spreading economic turmoil – Daily Telegraph
(NYSE: GS)
Tags: Economy, Goldman Sachs
