How Bad Will It Get: Goldman's Private Worst-Case Scenario

Tyler Durden's Photo
by Tyler Durden
Monday, Dec 19, 2022 - 02:58 PM

It was almost exactly one month ago when we observed that a clash had broken out on Goldman's trading floor, where the most vocal bear, Matthew Fleury predicted that "this looks like a reasonable time to take a shot on the downside", while Goldman Sales and Trading permabull, Scott Rubner, expected a continued rise in stocks driven primarily by some $15 billion in programmatic buying and stock buybacks.

In retrospect, Fleury's call for stock "downside" was wrong - at least initially -  as the S&P not only failed to drop below where they were on Nov 20 when he made his prediction (roughly 3950), they spiked as high 4150 after last week's CPI report. This meant that Rubner's optimism, a flows and technicals guru, was right again. However, Fleury would also be right - eventually - if modestly, as the S&P finally cracked late last week, dropping to 3850 under the weight of all the latest central bank hikes and hawkish talk, and the growing fears that central banks will push the global economy into a recession.