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Goldman Now Thinks "The Economy Might Start To Overheat Unless Growth Slows From The Current Pace"
Remember when a month ago Goldman "called it" on the question whether there would be a rate hike in 2015, when, in response to the rhetorical question of "What is your own view of the appropriate liftoff date?" chief economist Jan Hatzius said the following:
A: Our own answer to that question has long been 2016. In fact, our own view is similar to that of Chicago Fed President Charles Evans, who recently shifted his call from early 2016 to mid-2016. Although it is definitely possible to rationalize a December 2015 liftoff using various forms of the Taylor rule, there are two good reasons to delay the move longer. First, the risk of hiking too early is bigger than the risk of hiking too late when inflation is so far below target and we have spent so much time stuck at the zero bound. Second, we have seen a sizeable tightening of financial conditions. At this point, our “GSFCI Taylor rule” suggests that the FOMC should be trying to ease rather than tighten financial conditions. Our own view in terms of optimal policy is quite strongly in favor of waiting well into 2016.
Well, the gambit worked and while the "rate hike delay thesis" sent markets soaring in October on one after another piece of bad news as "bad news was good news", the tables have now turned, and following the "stellar" October jobs report, it is time to attempt "good news is good news" for a change, and engage in the most hypocritical game of revisionist history, and pitch a rate hike as the bullish catalyst this economy has needed all along - because if only the Fed has raised rates in 2009 instead of engaging in QE2, Twist, QE3 and keeping ZIRP until now, the middle class would be thriving... just ignore the S&P at 2100.
So here comes Goldman, not two months after it said that the Fed should think about easing, with what can only pass for Sunday evening humor saying that 7 years to the day after it landed on the zero bound on December 16, 2008, the Fed will hike because, "the economy might start to overheat by late 2016/early 2017 unless growth slows from the current pace".
And just like that the economy goes from needing "further easing" to being on the verge of overheating.
One can't make it up.
Here is Goldman who did make it up:
Friday’s numbers have dispelled the earlier fears of a sharp labor market slowdown. Although the 271k payroll gain in October benefited from a couple of special factors—including a bounceback in sectors such as retail trade and business services from earlier weakness—the trend still looks to be close to 200k, well above the 85k “breakeven” pace that we think is needed to keep the unemployment rate stable. In the household survey, the headline unemployment rate edged down and the U6 underemployment rate dropped another 0.2pp to 9.8%, on top of the 0.3pp decline in September. We regard U6 as reasonable “shorthand” for broad labor market slack, and it is now less than 1pp above our estimate of its structural rate.
The better data combined with steadfast communication from Chair Yellen have increased our confidence that the FOMC will hike the funds rate on December 16, after exactly seven years at the zero bound. Nothing is ever certain, but it would now probably take major downside surprises in the data or markets to dissuade the leadership from starting the normalization process next month. Barring such surprises, the data over the next month probably matter mostly for the path of rates after the first hike, not the rate decision in December itself.
Is it a good idea to tighten monetary policy at this point? We still have some sympathy for the “risk management” approach recently laid out by Governor Brainard and others. The main reason is that financial conditions look tighter than warranted in the current economic environment and could tighten further as the dollar appreciates. Nevertheless, the case for waiting has become less compelling, as the risks to the outlook have clearly diminished and our baseline view of the economy now implies a clear need for higher rates before long. In particular, the continued rapid pace of labor market improvement—best illustrated by the 1.7pp drop in U6 over the past twelve months—suggests that the economy might start to overheat by late 2016/early 2017 unless growth slows from the current pace. In addition, we expect both core inflation and the equilibrium funds rate to recover gradually in coming years. Putting these pieces together in a Taylor-type rule—even one that focuses on U6, puts greater weight on labor market slack than Taylor’s original formulation, and assumes a depressed near-term equilibrium funds rate—implies that the FOMC should start the normalization process. All in all, we can now see a decent case for a December liftoff.
And this, according to the Fed's 2016 GDP "central tendency" forecast is what economic overheating looks like.
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More layoffs, more printing.
Goldman is Pyschotic. They are having a total break from reality. They are going to play the insane card.
"Because cannot have TOO much growth like is bad thing - must have some inflation and healthy unemployment or is just not good for stability." Boris is often wonder what is hell ecommunist talking about and then is remember psychological detach state of narcissist sociopath financial type.
FFS, stable pricing in any asset class is acheived by having NO INFLATION. Inflation eats away at values, diminishes your buying power, reduces and steals your labor input over time, and defrauds you of your wealth.
Trust a fucking banker to release a statement about "growth" - pure bullshit. Yet, they keep going up to the podium, putting on press conferences, or "growth conferences", taking money for "services", and issuing statements that the shuttered stores up and down my city streets are too good. Why do we allow them to keep justifying their positions? Why are we not burning banks down yet?
Fucking sick of these banker assholes.
HANG ALREADY for financial crimes against humanity!
The local McDonalds and Jack's hamburger restaurants are hiring, along with Koch Foods chicken plant. Plus the U.S. government released a document the other day stating we added shitloads of jobs last month. Clearly we have reached the long-promised recovery. I fully expect interest rates will be jacked up in December as promised, and certainly this Holiday Season(TM) will smash all previous sales records, while gasoline continues plummeting below $1/gallon as fracking finally gives the U.S. its well-deserved energy independence. The good ole days have returned at last.
Don't listen to the cynics who claim TPTB are distorting everything in a desperate attempt to avoid/postpone the biggest economic crash in world history, until the next false flag can be arranged. These same fools would have you believe TPTB are also responsible for the extreme drought conditions in the west combined with extremely good weather in the east, for several years in a row, through HAARP and other supposed machinations which alter the course of the jet stream. Reject these lies, and tune in to CNN for more details and analysis.
"Growth" LOL!!
Haldol time
HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAA
HOHOHOHOHOHOHOHOHOHOHOHOHOHOHOHOHOHOHOHO!!!!!!!!
HEEHEEHEEHEEHEEHEEHEEHEEHEEHEEHEEHEEHEEHEEHEEHEEHEE!!!!!!!!
https://www.youtube.com/watch?v=BXOwNOf2QXY
To the FEMA Farm!
Where life is beautiful all the time
And I'll be happy to see those nice young men in their police-state clothes...
The flip side of that 45 was the same song, but recorded in reverse. The label was printed in reverse. It sounded vaguely like Russian.
Either that's complete bullshit or it proves the moderate economic data is total fantasy.
"One toke over the line sweet jesus one toke over the line
sittin downtown in a railway station one toke over the line"
I guess that just proves how clueless they really are in all this.
Goldman Sucks: Bunch of Morons, wich should be hanged as high as possible.
The only growth has been in money printing.
What's up. Logged in. Clicked on an article about subprime. First comment was by a joker who's avatar was big titties.
Them, I clicked, and it said " no acces" . Thought I hit Tyler's name.
Now, for me, the article is GONE, but I can see Beddo's comment. When I click on his comment, it says I'm denied access. W t f? Did I get demoted?
Why the down vote! What happened to the article about subprime mortgages? Does anyone else see it. It was there. As a matter of fact, it's like a whole new batch of articles came up, and the others went away.
And it said access denied.
This never happened. Or am I loosing it?
Edit. Now it's back. Wtf?
I want some of what you're on right now.
You memory's bogged. Click on Task Manager. processes, iexplorer, tehn click on end process. Your internet will recycle and you'll return to this page, and it should refresh.
Has the FED finally seen the value of savers? The importance of interest income to small businesses?
Savers and small businesses are the bedrock of any free market economy. Destroy the small businesses, or cheat savers out of their interest income, and any economy will shrivel up and blow away like so much sand in a desert.
Send in the tall man. His name is Volker.
What would raising policy rates do to an economy which is clearly in depression?
Oh, the games the money mafia play with peoples lives.
A disgusting gaggle that ever was.
Hemm....? Left hand department doesnt know what right hand department is broadcasting to the world.
Go fuck yourself Gollum Sacks. Overheat unless growth slows. What a bunch of lying bullshit.
Yea the economy is overheating. Just today I seen a homeless guy running from a mugger. He did look like he was about to pass out from overheating.
Well, Carlin did warn us that the mental midgets are coming.
Just wow.
What growth? Growth that has kept the employment participation rate at record lows? Where even top engineering grads can't get the proverbial "time of day" from employers before they go overseas to hire? Where the output gap is so gaping wide that a bus could be driven through it? Where inflation is non-existent and deflation is all around us?
PHEW!
what a relief. I was worried.
Goldman has actually said some sensible things lately.
I thought there was a strike by management ... or something.
More Muppet manipulation. Who cares what the Vampire Squid says? Trying to figure out the psy ops would make me dizzy.
Yup..the economy is overheating to the point where the wheels are coming off and it's about to go into grand mal seizures.
Having spoken with a few highly placed execs I really do think between the Fed, Goldie and .gov they have created an alternative reality with a large element of the population.
Three Treasury Secretaries Laughing It Up Over Income Inequality
http://www.youtube.com/watch?v=u79hDi6XBwQ (1:03)
bwahahaaaaa.... good times!
We will never have real growth again with this regime and there is no end to the corruption. It wasn't enough to cause a financial crisis in 2008 with outright criminality. Let's then steal trillions in tax payer bailout funds, and follow it up with trillions more in liquidity injections in the form of Qe
Nothing will ever be fixed in economics and finance, or this world until people wake up and realize that we do have the power and we had it all along. All we needed to do was shut off all the distractions they have given us
Overheating from Trident II false flags.
Obviously the fed has called on GS to help telegraph the rate hike to the market hopping they don't get a panic sell off when they lift rates.
I see a real growth in loans to prevent starvation.
You can't make this stuff up unless your on on narcotics or short selling the market in the ensuing chaos this will cause. Either way Goldman should be raided bt the cops.
"Robot, Dr. Smith says ""the economy might start to overheat by late 2016/early 2017 unless growth slows from the current pace".
WARNING, Will Robinson, this does not compute! Dr. Smith is lying again.
Obviously, there is a parallel economy and we haven't been invited to enoy the warmth of its camp fire
If there's one thing the Fed knows how to do, it's overheat an economy so damn well that things will be too good for the people. It must be hard to be so successful that the danger is not knowing how to slow things down. Heaven forfend that the economy would do well, the people would suffer.
To think there's Muppets out there that will believe this.
The federal reserve is so transparent, yet few notice what they are doing. Sheesh.
When the next meeting is weeks away, they make noises that imply (to suckers) they will definitely raise rates next meeting. They also conspire with those who release fiat, fake, false, fraud, fiction statistics to release "good numbers" (big job gains, etc). These actions boost the USD and crash precious metals... which is precisely their goal.
When the next meeting is soon, they conspire with those who release fiat, fake, false, fraud, fiction statistics to release "bad numbers" (low job gains, etc), which they then give as reasons they decided to wait "just one more meeting" before they raise rates. While these actions may drop the USD and raise precision metals a bit... a few days later they and their co-conspirators release "good numbers" and make optimistic noises.
Amazingly, in the current world of weak-minded-fools (and others who benefit from the scam), this is accepted and works.
When the federal reserve didn't raise rates in September, there were FINALLY many people who claimed "the federal reserve is [at risk of] losing their credibility". However, since then, the pattern returned to normal.
Clearly the federal reserve has no shame. They'll continue their lies and scam as long as people are stupid enough to allow the strings the federal reserve twiddles to manipulate them.
Does anyone really believe the federal reserve will trash the xmas buying season by raising rates? Seriously? Does anyone really believe the federal reserve will raise rates in an election year? Seriously? Does anyone really believe the federal reserve will raise rates as the entire world economy is in the process of falling off a cliff as it is already doing now? Seriously?
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The predators-that-be know the "only way out" is hyperinflation. They know the USSA cannot repay its debts, and won't. But they won't default in the technical sense either. Which leaves the one and only possibility... pay the debts with micro-pennies.
To be sure, they plan to push off the "collapse in confidence in the USD" until after the next elections... assuming elections are even held in 2016, which is not certain given how utterly corrupt and dangerous the predators-that-be have become. But once election-day passes, all bets are off.
The tendency for all of us who see and understand what's happening so clearly is to assume "this is so obvious, everyone will see and understand very soon". Of course, we are serially wrong in this assumption, and we have to recognize this (or else stop claiming we are observant and rational). So... we can only keep our eyes open and observe when we see signs that recognition of the farse are becoming widespread, as are actions to avoid becoming victims. THAT is when "confidence is quickly lost" and "the con game quickly ends". We can only hope that happens soon.
An observation. Like many newsletter publishers, outfits like GoldmanShafts have someone in their cabal write an article containing just about every possible opinion.
Then, no matter what happens, they can point back to the opinion that panned out and pretend they are sages.
Because GS tells the FED what to do, this is clearly an effort to crush PM's via the FED, IMO.
The United States and Europe are in free fall economic collapse. I am really not worried about a overheating economy. Just hyperinflation. Because the bankers are going to keep printing to bail themselves out and painting the numbers while everything continues to fall apart.
This reminds me of the 'Little Johnny' joke about his pet turtle. The punchline is, as his parents are leaving the room after they gave him a new turtle.. they hear Johnny making a VRROOOOM VRROOOOOM noise...
Needless to say, I didn't bother reading the text of this article, the header was hilarious enough. I just immediately flashed to little Johnny with his turtle, treating it like a toy car. Because the analogy of the US economy 'heating up' at such a blistering pace, as to be an 'issue' was just too Full Retard to waste my time reading.
So, in loose summary:
a. massive scale pollution of air, land and seas
b. worldwide bankruptcy;
c. considering bail-ins (again pretty much worldwide) to combat b (and ensure that the sheeple are powerless to rise up);
c. fighting make-up wars for energy sources that contribute to a and b and d.
d. europe flooded with migrants, most fleeing ghastly conditions, some hoping to foment the same ghastly conditions in europe, all due to a and c
e. have allowed our countries to be run by politicians that are in bed with corporations that don't care (or haven't bothered to consider whether they care) about tomorrow
f. are bombarded with news "feeds" designed to collectively move the herd from one concept (peaceful) to the next, war.
we can turn this around - and the internet will be the key to this process of awakening the peoples of the world to rise up and dump the bankers and the corrupt or listless politicicans.
it is not a "no hope" situation. science and spirit are no longer divergeing lines, sea changes are constituted by tiny drops in the ocean, a new paradigm will emerge and humanity will gear up if we step up but after reading this and other fabulous "reality check/awareness" sites for a while now it seems that while we recoil in disgust or laugh (for want of another reaction) at the horror of global mind manipulation we need to find that new paradigm, something de-centralised and communal and powerful, a blockchain for the people of the world to place the foundations for a better approach to the future?
well their PR department stayed up all night for that line. Coke and hookers for 10 hours and you're totally psychotic and come up with headlines like that.
the maggots didn't install yellen because they wanted a higher ffr. simple really.
Tribe being Tribe.