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Goldman Slashes EURUSD Forecasts Further
In tonight's data dump, in which Goldman has just slashed its forecast for the world economy and now sees a recession in France and Germany, among the actionable idea is the following update by forecast farce Thomas Stolper, whose batting average over the past 2 years is precisely 0.000 (go ahead, we dare you to calculate it). Instead of seeing a 1.40, 1.45 and 1.50 for 3, 6 and 12 months, the perpetually wrong Goldman FX team now expects 1.38, 1.42 and 1.48 in the EURUSD cross. From Stolper: "Given the latest global forecast revisions—and in particular the more marked downward revisions to our Euro-zone growth profile—we are shifting our EUR/$ forecast path slightly lower again and discuss potential additional downside risks. These changes follow a more substantial revision published in our latest Global FX Monthly Analyst. Despite these revisions, however, our strongest conviction remains that the underlying broad Dollar weakening trend remains intact. This is also reflected in the clear upward trajectory in our new EUR/$ forecasts of 1.38, 1.42 and 1.48 in 3, 6 and 12 months." Based on the tried and true strategy of always doing the opposite of whatever Stolper recommends, if anyone needed a catalyst to long the EURUSD, this is it.
From the Goldman note:
A Further Downward Shift in our Upward Sloping EUR/$ Forecasts
As discussed in more detail in other research pieces published today, our growth forecasts have been revised lower globally, with some of the most pronounced revisions in Europe. A key reason for these changes are the dangers of a prolonged ‘muddling through’ scenario for the Euro-zone fiscal crisis, which is now part of our base-line forecasts. Slow political progress linked to the complex and mainly reactive decision-making process in the Euro-zone will likely remain a dominant feature in the foreseeable future.
This brings us further towards the centre of the distribution of possible outcomes than before. Although our bias remains skewed towards a belief that policymakers will ultimately make the right choices, the time-frame has become a lot longer. In this context, we have to give more weight to the negative feedback loop between slow political decision making, the resulting need for more frontloaded fiscal consolidation and the resulting slower growth.
Some of these concerns were behind the reason for our recent FX forecast changes published in the latest FX Monthly. We argued that the fiscal risk premium will likely remain higher on a permanent basis than previously thought. However we did not expect what now looks increasingly likely—a mild recession in the Euro-zone and rate cuts by the ECB, in addition to further credit measures to alleviate funding pressures in the periphery.
Symmetric Risk Scenarios
To summarise our new EUR/$ view, the two main building blocks remain a large and persistent fiscal policy risk premium in the EUR, and a strong and persistent downtrend in the USD.
Combining the two suggests we will still end up with a gradual drift higher in EUR, albeit on a downwardly revised trajectory.
The risks to this forecast are essentially symmetric.
Lower EUR/$: As discussed in a recent Global Markets Daily, the Italian debt situation is likely the biggest single risk for the Euro—and for the Euro-zone as a whole. The ECB is currently intervening in the Italian government bond markets to alleviate contagion pressures from Greece. Of course, the debt situation in Italy is quite different to that in Greece. The country already runs cyclically adjusted primary surpluses and on the latest IMF Fiscal Monitor projections, the debt level is expected to decline to only 114% of GDP by 2016. However, this is based on still slightly optimistic assumptions and in addition the projected improvements are likely not convincing enough to build market confidence.
Without further clear growth enhancing reforms in Italy, the ECB may well end up with unsustainable quantities of Italian Government debt on the balance sheet.
The second main EUR/$ downside scenario is continued growth weakness, beyond our new forecasts, and the resulting negative feedback loop of falling tax revenues and addition growth destroying fiscal tightening.
The third downside risk, though potentially related to the other ones, is continued broad weakness in cyclical assets. Given the persistently high negative correlation with the USD a negative growth shock would almost certainly boost the Dollar further and even more so if the shock originates outside the US.
Higher EUR/$. Most of the upside scenarios are linked to better policy implementation in Europe, including with regards to the use of the enhanced EFSF—for example, for a proactive bank recapitalisation. Via the unwinding of the existing speculative short positions in the market this could lead to a notable bounce in EUR/$, in particular when taking into account how low expectations are already.
A more hawkish ECB would likely lead to a stronger EUR also, although it is difficult to separate ECB tightening from a declining fiscal policy risk premium. More dovish surprises by the Fed would add to the upside risks for EUR/$.
Finally, generally improving risk sentiment on the back of better cyclical data would likely lead to a steeper EUR/$ trajectory than currently anticipate.
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only when goldman sachs gets slashed will we be appeased
It takes a lot of balls to call for EUR/USD at above 1.40 in the midst of this epic drop... Even though i've seen it bounce before.. It still takes a lot of balls to call it..
Goldman is intent on proving that it is financial freak show. Their FX is other worldly.
Wonder what their prop trading desk is doing in the FX market - certainly not following their FX desk fantasies.
Don't worry. Everything will be fine.
Congress just passed a new Social Security Reform act.
Money Room: Social Security Reformhttp://www.youtube.com/watch?v=mizl_YxoAko
GS is down...when are we going to hear "Goldman slashes headcount, forecasts further"
Do these asshats snort cocaine all day while banging $1,000/hour hookers and make these calls just before going home to the family after a hard days work? Shit...nevermind, stupid question....my bad.
Hi mom.
Oh yes, they call him the streak
Fastest thing on two feet
He's just as proud as he can be
Of his anatomy
He's gonna give us a peek
Oh yes, they call him the streak
He likes to show off his physique
If there's an audience to be found
He'll be streakin' around
Invitin' public critique...
too bad the squids stock price is near a 52wk low
im a big fan of karma....
Karma gets you fucked in the ass. We're the makers of our own Destiny, just as Goldman is - if they want their stock at 101, all they have to do is fire up the machines.
karma is when they are selling off goldman desks, chairs and computers in a bankruptcy auction.......
That would be a revolution.
nah, karma is when you have a bankster work 100 hour weeks his entire career when he knows he is selling bullshit ripping off innocents, goes through several divorces, never sees his kids, gets addicted to drugs, gets ulcer, loses all of his hair due to stress, his son commits suicide, and right before he makes partner, goldman execs he so dearly kissed up all these years screws him and declares BK making his life savings in GS commons worthless.
He will then report to the local unemployment office and apply for welfare.
That my friend is karma.
karma
and justice
ill make sure im there to get a good deal on some new hardware :)
i'd settle for some wooden chairs...
nice big fire
mmmmmmmm....marshmellows...
Smores...
speaking of smore...
who was that woman on his avitar....
http://www.reuters.com/article/2011/10/03/eurozone-idUSL5E7L34AJ20111003 just posted on google news.... Greece claiming doesn't need bailout money for almost another whole month... wow.
The article also highlights how Greece missed its deficit targets.
again.
http://printbuttonmoney.blogspot.com
Well Ollie Renn (Stimpy's pal's brother) said earlier today that it was too early to tell if the latest would be enough. So they just found out.
Fucktards.
It's true. We all know Reuters reports the truth, the whole truth, and nothing but the convenient semi-truth.
http://printbuttonmoney.blogspot.com
Right Reuters...
Well, anyhow, here's the actual timeline.
*Germany and the rest of the neighborly folks kindly approve the next one of the apparently never ending bailout troughs.
*Greece recieves what was it 77 Billion (I know it's the right number in some currency or other...) whatever, it's a big fucking number.
*Greece says thank you, neighbors.
*Ollie Renn says he's not sure it's enough or not, too early to tell.
*Within 24 hours, Greece says we'll be back next month.
*And nobody shrugs!
Amazing. Absolutely fucking amazing.
The Whole World Has Gone Mad.
This is not sanity.
Sanity is defined as clarity of thought.
Not happening here.
And everybody rattles on and on about what is good/bad, solid/dumb investments, etc. Just think of it this way. It's Inasne, We're on The Fucking Crazy Train! This is Collective Insanity!
It's Insane!
Well, obviously they can just print more money so it doesn't matter. I hear that worked well for post world war one Germany.
Why doesn't Greece pay back its debt in olives? Germans don't eat Greek salad?
gold news....
Tukey talks with Felix Zulauf about Greece and Gold.
Zulauf, "...a practice in procrastination..." Nice!
What an { Effervescent thought
I thought that Goldman's "Public" forecasts were intended to be incorrect so that the (Now non-existant) Prop desk could trade oppositely?
the prop desk doesn't care which way you trade, only that you do trade. the squid's public pronouncements are meant to help them unload unbalanced positions they acquire as market-makers &/or speculators.
Goldies doesn't have a prop desk. Matter of factly, prop desks are Passe'. Hence the ETF/ CFD/ debacle.
The Benites want an out door!
not officially they don't. you are correct. any hft shenanigans are strictly arms length.
Buzz you are the best of the best! Silent and Smart. Thanks for your knowledge. Secondary markets are the bastions of " REQUIEM">...?
here is a blast from the past:
http://zerohedge.blogspot.com/2009/07/is-case-of-quant-trading-industria...
fun stuff, serg steals the SecDB-douche-slang program and goldman went into instant hiding. risk off bitchez. frozen in time lol free sergey. :smirks:
Thanks buzz! Watching right now! I got your back BUZZ!
"the prop desk doesn't care which way you trade, only that you do trade."
Word.
Word +1 I like you to new-man! I respect your infiltratration!
Same here Yen...when Buzz pipes up everyone should listen & learn.
They really don't give a flying fish which way anyone goes (long/short/net) as long as they get to see which way you go a millisecond before everyone else.
They're not into 50/50 propositions/bets...lol.
Based on the tried and true strategy of always doing the opposite of whatever Stolper recommends, if anyone needed a catalyst to long the EURUSD, this is it.
Given the fact that EUR/USD is now at 1.3175 and Goldman's forcast is for it to still to be above that, though a bit less, I say short the pair doing the opposite what Goldman said.
Maybe Goldman is short on every fucking thing associated with Europe? Front running prior to throwing the continent onto the bonfire to profit from human misery as they destroy an economy? Way to go, fucktards. Coming soon to a street corner near you - traders on a rope. Hell hath no fury like a client taken down............
Gillette ads on ZeroHedge!
How do you know I need a shave??
I feel you also need a haircut ... and a bath
Greece has enough money till somewhere in November. No default next week. Meanwhile, the protests in Greece fade. Moreover, Greece will be paid again and again and the people in North-Europe will accept this more or less. They will simply not care anymore in the length of time. No civil war, no unrest, no collapse in the Eurozone. Euro saved. No Armageddon. Merry Christmas. Boring world we live in.
the 4 hour ES looks like the wheels are about to fall off.. http://bit.ly/oeujuZ
WTF!
Monday, October 3, 2011 - 20:21
Eurogroup Oct 13 Mtg On E8.5 Bln Greek Tranche Is Cancelled"Juncker indicated that the troika was not happy with the continuous delays in Greece's privatization plan and he called on the Greek government to speed it up."
https://mninews.deutsche-boerse.com/index.php/eurogroup-oct-13-mtg-e85-b...
No worries, Greece will get the money.
You've got a non-Greek bureaucrat dictating to the Greek people to "speed it up" with their national financial business?! Does Greece have nukes?
Better. They have Weapons of Mass Financial Distraction (pun) and they have all Europe within reach.
Lots of talk about BAC and Morgan.
UBS headed to the Pink Sheets faster than them.
Do you ever get the idea that all these "smart" "important" "leaders" actually have no clue how to do anything. That when they figure out how to tie their shoes in the morning there is someone standing there saying, Good Job you're such a big boy now, way to go.
I think the silver spoon has been passed on so many times by now a local special ed center probably has more brain power than Harvard.
"Do you not know, my son, with what little understanding the world is ruled?" - Pope Julius III, 1487-1555
It's an old, old problem...
The Savings of Millions of People Are Going to Vanish in Less Than 12 Months by Mac Slavo SHTF Plan| September 30, 2011 (edited)
We often look to Wall Street and wonder how those hedge fund managers, financial institution leaders and even traders can go about their business without regard to the average person on the ground, whose assets may be getting wiped out while those in the financial sector make millions of dollars in stock market manipulations and bonuses.
What it boils down to is money.
Via The Intel Hub and Madison Ruppert – Editor of End the Lie
In a surprisingly blunt interview aired on the BBC, an independent trader admits that he “dreams of another recession” since some people can prepare and treat a market crash as an opportunity to “make a lot of money from this.”
What exactly is “this”? Well, according to Alessio Rastani, “this” is the inevitable crash in the markets that is headed our way.
Rastani, an independent trader, does not treat the crash of the Euro and the stock market as a possibility. He treats it as an inevitability.
He pulls no punches in this interview and it is clear that the BBC presenter is shocked by what he has to say.
When asked what would keep investors happy and mitigate the economic crisis currently unfolding, Rastani reveals, “Personally, it doesn’t matter.
See, I’m a trader. Uh, I don’t really care about that kind of stuff.”
In the BBC interview, stock trader Alessio Rastani provides us a glimpse behind the curtain of the general sentiment and motivation on Wall Street and other financial trading centers. If you want to know what the guys on Wall Street are thinking right now, don’t miss Rastani’s short BBC interview, where he warns that very bad things are coming our way over the next twelve months:
This economic crisis is like a cancer. If you just wait and wait thinking this is going to go away, just like a cancer it’s going to grow and it’s going to be too late.
What I would say to everybody is… get prepared.
This is not a time right now for wishful thinking that the government is going to sort things out. The governments don’t rule the world. Goldman Sachs rules the world. Goldman Sachs does not care about this rescue package, neither do the big funds.
…
The first thing people should do is protect their assets. Protect what they have. Because, in less than 12 months, my prediction is, the savings of millions of people are going to vanish. And, this is just the beginning. …
They will not stop until the host is dead.
Mac Slavo is a small business owner and independent investor.
http://www.lewrockwell.com/slavo/slavo60.1.html
J.R. I respect your campaign. My best to Sue Ellen.
Sue Ellen thinks of you often, Yen. And we both thank you, for the thumbs up.
J.R.
an alien virus is injected to a select few at select schools and government institutions world wide..the result is anti human and insane leaders..grasping for power and wealth..with no remorse no regrets..IMF's run by raping sociopaths is a good example..
trust these alien beings to destroy the world for a NWO to come.
unfortunately they do LIVE. the human world we once knew is run by these beings..if you think Obuma is normal in any way, or Ben, or Tim,
normal humans? extermination is too mild a term for what is coming.
this is a message for the few who "see" them as what they are. there are more of us out here who "see" them. not enough but one can hope others will wake up.
I wish it was a joke..I really do.
Raise Dr Haverstein from the crypt.
http://www.thestreet.com/story/11265588/1/cramer-this-isnt-2008-and-were-not-europe.html?kval=dontmiss?CM_VEN=AD|TWR|JC
Merry Christmas. Crisis is over.
Parity WHEN?
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