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Goldman Explains "Where To Invest Now"
Goldman's David Kostin has just released a whopper of a 72-page script for the latest episode of the "El Muerte De Muppet" telenovella in the form of a comprehensive report titled "Where to invest now - Cliff Notes". And since the qualifier is obviously a reference to the fiscal cliff which Congress will continue to ignore as long as the market is at or near 2012 highs courtesy of Ben Bernanke's politicized promises of massive easing on any market downtick, thus providing zero impetus for any proactive legislation that resolves the imminent GDP collapse, one can provide a not so rhetorical answer to Goldman's rhetorical question: "nowhere" (if one is limited to investing in paper-based pyramid schemes of course in which the "catalyst" is not hope and prayer for more printing or the emergence of a greater fool).
The "Cliff Notes" Cliff notes:
Our attached client handout “Where to Invest Now” includes key exhibits we use to analyze the US equity market. The subtitle of the presentation is “Cliff Notes” and refers to our view that many investors are too complacent regarding “fiscal cliff” risks for both the economy and stocks (pages 3-13). We show the weak outlook for sales, margins, and earnings (pages 14-27). We present six approaches to valuation (pages 28-33). We explore corporate and investor money flow trends (pages 34-39), review sectors (pages 40-44), and assess hedge fund positioning (pages 46-52). We conclude with our strategy basket recommendations (pages 53-64).
and the Cliff chart of the "Cliff Notes":
and full slideshow:
»
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The fiscal cliff has already been factored into the stock market prices.
Otherwise, the S&P would be circa 1999 with today's ludicrously low interest rates..
BofA: 'CODE RED..RISK OF SELL-OFF IS HIGH' http://www.businessinsider.com/bofa-code-red-risk-of-a-sell-off-is-high-...
Indeed.
With Goldman i always read 'Where NOT to invest now"
Same as for Goldman is valid for BofA also, so I guess that the only winning move is not to play.
"Positives"..."Housing bottomed"
We need not read this "note" any further. Next article...
This was an interesting title because yesterday my daughter asked me to evaluate her retirement invest options. After looking at the sad list of choices I told her to go with 7 day treasuries. Plan to buy in increments into the downturn if/when it happens but there is nothing available now that doesn't scream "Danger! Danger!"
Funny, it was nearly the same advice I just gave to my two kids who have graduated from college and have "real jobs" now. They are trying to decide what to do in their 401ks. I told them to put a bit of money into gold and the rest into TIPS, short dated bonds, or cash. Then wait because over the next several years they'll get the buying opportunity of a lifetime...or the world as we know it will end and it won't matter where they put their money. I'm an optimist so I'm looking forward to the opportunity.
Think, i will stick to my tea leaves.
Mon Dieu! Business Insider! Just a little less trustworthy than Goldman Sachs. And that's a hard place to reach I'll grant you.
I thought that the S&P is heading to be somewhere near 1929-1933.
Well done.
I see what you did there.
From FT -
Chancellor Angela Merkel said Germans were ready to help Greece “as much as we can” on Friday, but declined to support a Greek plea for more time to implement austerity measures and pay back eurozone loans.Greeks being world class seaman are in need of long hard structural support, with depth.
Germans happen to be great at creating/building long hard structural devices capable of carrying greek seamen to great depths.
I see a win here.
bullish you muppets!
Not Facebook Yet ;-)
Can someone please goddamn tell me how in the hell they can just toss out a number like EPS $106???
I guess they just pull the number out of thin air like the Fed prints money, or the BLS comes up with it's BS...
Seems to me you already know the answer to your question. Perhaps it's just another "lucky number", because those have worked out so well for us in the past.
I'm just going off the top of my head here (no charts)... But I seem to remember that Rosie (back in the 2008 & before TARP)... Had the EPS pushed way below $30 (something like $19), from what had been a RECORD somewhere around $80-$85 during the peak in '07 when:
- subprime was contained (cough cough)
- The S&P was at all time highs
- Official unemployment was below 5%
- 30 million LESS were on foodstamps
- The budget [remember those things] deficit was less than a half billion (or even 40% higher than the giddy 2007 forecasts, when housing hadn't even shown indications of an 'official' collapse)...
- gasoline prices had a "2" handle
So you want to tell me that 4 years later, with higher unemployment, gas prices, food stamp usage, more wars than ever before... That the EPS has gone up 5 fold?
IMO it's called Central Bank manipulation of the Stock Market.
It's all a joke. They have the aiblity to make up any numbers they want.
Who has the ability to check all the sources?
Who has the resources to enforce any kind of legitimacy?
The S&P should be around 6-700 right now, if it were actually reflecting reality.
As soon as people stop believing it, the whole facade will collapse.
Finally, thanks for pointing that out. The biggest risk by far for the govt......more so than any one bank or company failing.......is just what you said, that everyone finds out that it was all a silly game all along , with no real rules or consequences for political players and the value of everything people hold is essentially worthless. That is real risk, and they know it.
its not the air they pull it from. they pull it out of their gefiltefish-eating asses.
You know you are up the creek when you have to list "Fed Model" as a positive. Ugh
and Europe has "stabilized" perfectly true and yet pathologically inaccurate
Isn't the fiscal cliff a paper tiger.
Isn't it something that the congress will may disappear with a wave of thier feather pen - and in so doing they will be heros of homeric proportions.
Isn't this a strawman used to generate interest in a jaded market - after the past year nothing can spoke this market while we are using daddys credit card.
Thanks to coordinated easing the is too much money with no safe place to rest. That is what is delaying the next payload - must be coordinated with Europe and China.
..And zero hedge helps them a little.
yes I thought we had agreed that Goldman was somewhere between worthless and manipulative. What gives?
So now the contrarian play is buy?
'People were expecting more sales over the summer, and it just didn’t happen ... Things are kind of crawling to a halt,' analyst saysGUANGZHOU, China — After three decades of torrid growth, China is encountering an unfamiliar problem with its newly struggling economy: a huge buildup of unsold goods that is cluttering shop floors, clogging car dealerships and filling factory warehouses.
The glut of everything from steel and household appliances to cars and apartments is hampering China’s efforts to emerge from a sharp economic slowdown.
Problems in China give some economists nightmares in which, in the worst case, the United States and much of the world slip back into recession as the Chinese economy sputters, the European currency zone collapses and political gridlock paralyzes the United States.
http://www.msnbc.msn.com/id/48775304/ns/business-us_business/t/economic-...
This will "trickle down" into Australia which relies heavily on China's demand. House mortgage defaults are already rising in Ozland and sales also slow and prices plunge in Melbourne and Sydney.
Accelerating EPS growth in 2013...is this assumption based on an hopium overdose or is this another 'come on muppets buy some crap cuz our prop traders need to sell some crap'-scheme?
http://www.youtube.com/watch?v=cJVewWbeBiY
"...or the emergence of a greater fool"
I have to admit that there's hardly a greater fool than myself when it comes to trading. I learned to ignore the "experts", take a position based on MY criteria and sit on my hands. I sleep better since. Nevertheless, it gets gut-wrenching from time to time, e.g. Sep/Oct last year, when my wife wanted to throw me out because of my over-confidence in the junior miners (I can't believe how stupid I was).
One thing I know for sure though is that we'd be all better off not to even know what GS recommends or doesn't.
Agree, those guys are poison to the mind. I do -however - read Financial Times (european edition) daily, and I am surprised to say I like it. James Mackintosh Is sharp.
(Reuters) - USADA, custodian for Tour de France Medals, reported today that some of its customers' physical holdings appear to have "vaporized".
"El muerte de muppet" Coffee spurtin funny, (though sad at the same time). Tyler, great turn of a phase.
I thought that was particularly awesome too. Just read the phrase again and it made me chuckle one more time.
HOUSING BOTTOM.? Is this a joke?
Everyone who invest and work with Goldman deserves what he get.
Since Taibbi he should know better.
BofA: 'CODE RED..RISK OF SELL-OFF IS HIGH'
If Bernanke studied the Great Depression, why then did he replicate the exact scenario that has led to the current world wide economic collapse?
Was it planned? The evidence is almost irrefutable.
Former Professor of Finance Michael Rozeff on Market Oracle points out that despite Bernanke’s blindness (willful?) to factors that caused the Great Depression, the truth is: the 1920s was a period of "sensational real estate speculation."
Rozeff, in Professor Bernanke’s Terrifying Blindness on the Great Depression, then chronicles the disastrous affects leading to America’s 30s Depression. And, here’s the clincher, those are the steps the Federal Reserve chairman, a self-called student of the Great Depression, has taken in the current buildup to severe crisis.
Here are excerpts from Rozeff’s blockbuster:
“Because of this state of mind, Bernanke doesn’t see or speak of the common features between the latest banking/real estate fiasco and America’s Great Depression nor, for that matter, features common to most other of America’s economic collapses and depressions. These are fractional-reserve banking, bank financing of real estate and stock speculation, and financial fraud.”
Rozeff cites a 1933 article by Prof. Herbert D. Simpson in The American Economic Review titled "Real Estate Speculation and the Depression" that “emphasizes these very banking and real estate factors as bringing on the Great Depression.” Simpson gives an example:
“In support of Simpson,” says Rozeff, “the Baker Library at Harvard writes of ‘The Forgotten Real Estate Boom of the 1920s,’ stating
Why the blackout by economists and analysts? Answers Rozeff: “They prefer other stories, such as that of Friedman and Schwartz which blames the FED for not inflating,” while in actuality it did inflate.
Bernanke, “by sealing off the 1930s from the 1920s” doesn’t have to examine the reality that the “money grew rapidly in the 1920s"…as did the banks’ investments in real estate, or the stock market booms of the 20s, or the malinvestments, or the consequence that “in 1934, the government-sponsored Home Owners’ Loan Corporation made 71 percent of all mortgage loans extended.”
Or that , “None of these government actions resolved the basic banking and money problems. All of them socialized finance. All of them led to new problems, including the establishment of Fannie Mae in 1938.”
No, according to Rozeff, Bernanke concluded that the free market failed, or, in his own words, “that the federally directed financial rehabilitation – which took strong measures against the problems of both creditors and debtors – was the only major New Deal program that successfully promoted economic recovery”…that "the government’s actions set the financial system on its way back to health."
Not only does “Simpson’s article view the banks and their real estate financing as a major cause of the subsequent depression,” but “Simpson alludes to illegality and fraud. These too were a serious part of the 1990s and 2000s (see here).”
The comparison of the real estate bubble is only one of an entire body of evidence Rozeff supplies that replicate today’s step-by-step re-creation of economic disaster. Rozeff continually shows Bernanke’s statements in light of the developments that indicate his ignorance of these causes.
Ignorance? Or is it fraud?
http://www.marketoracle.co.uk/Topic6.html
Ignorance? Or is it fraud?
Considering the world around me I'd say FRAUD.
how much did goldman pay to have this crap posted here?
I agree. "stinkin' up the joint." fact is they're the perma bear...they're out the 100 billion plus on the Social Media...they need this market to come back their short interest...otherwise they're "double down." ZH should know better...
If you have more money than brains, stick it into Silver and Gold Eagles, and TAKE delivery.
Thank me later.
The Keynesian experiment has run it's course. You add more fiat debt currency to the system, and it cannot be serviced. You slow down fiat debt notes entering commerce, and it turns on itself and feeds on itself. It's a mathematical inevitability, that no matter what the idiots in Washington "try" to do, they're fucked.
So, Goldman, the biggest wolf cannibal in the system, is going to tell us where to invest now? That would almost be comical if it wasn't so tragic.
Sooo.... Do they WANT everyone to sell so the Bernank will print?
Remember that black guy many years ago that was unarmed and shot to death by NYC police in a doorway. I believe they pumped 50 shots into him. I saw the video of the shooting at the time. Not even the Nazi executed people with such relish!
If they have no scaled back their fire control, then I can believe most victims were caught in the police free fire zone.
Kermit y Fozzie lean el minilibro de AuroHombre y encuentran las planas para destrucion do los otros Muppets. Fue tiempo para Pronto y Enojado para el Lloyd de BlancoBien para pagar.
The talking heads on TV are now touting housing ... again!
http://confoundedinterest.wordpress.com/2012/08/25/preview-of-case-shiller-20-house-price-index-for-tuesday-up-between-0-2-and-0-4-yoy/
JIM ROGERS IS STILL BULLISH, AND HERE'S WHY (VIA GOOGLE TRANSLATE)...
http://tinyurl.com/8ggddfo
David Kostins 72 page "tome" is now on amazon.com for .99 cents. It's under the category of Fiction................
David Kostins 72 page "tome" is now on amazon.com for .99 cents. It's under the category of Fiction................
Yo quiero Taco Bell...
Housing has bottomed? If my area of FL is any indication then that is because there is a huge shadow inventory waiting to go on the market. What are they " waiting " for?
What part of Florida do you live? I see the opposite. Scum ridden city homes sit idiol, while high end homes are a big catch both for purchase value & location.
Naples, a high end area.
Marco Island.. Its not that bad in Naples. The gated communites are the joke within itself. Winks. Hang onto your property, my advice to you.
Goldman Slacks just needs to use their own business model. You need to spend money in order to make money.
Brewster's Millions (1985)
It’s all about Gods work.
interesting paper, but only on what happen since January 2012.
Goldman Stategist has no idea of where to go tomorrow.
He doesnt even mention that stocks are attractive when compared to others assets classes. huge cash flow, good yield ( vs bonds and gold)
When I was a portfoio manager in the early 90's I met several time this bearish strategist from a large firm. He had all these nice charts that show the end of the world for the equity market
margin where unsutainable, consumer dead..... he wasted 20 years to those that follow him.
One advice, stay diversified. own quality stocks, a few bonds and .....a little gold (like your taxi driver...)
A bird in hand is worth two in the bush!
And a birdshit in the hand is worth two Bushes!
Isn't Goldfuck Sacklickers out of business, no?
Why would anyone anywhere listen to anything they have to say.
Fuck GS, the fetus of aborted capitalism.