Presenting Goldman’s “10 Questions For 2017”

Those who frequent these pages have always taken a keen interest in predictions from Goldman Sachs (see here and here for instance).

One particularly popular piece was “Goldman Predictions No Better Than Coin Flip, Bank Admits,” in which the bank revisited eight key questions it asked itself at the beginning of 2016 only to discover that in the final analysis, making predictions is indeed a crapshoot (by its own account, Goldman answered 4 of its questions correctly, 3 incorrectly, and got one sort of right and sort of wrong).

Here’s what I said about Goldman late last month:

Some folks think of Goldman Sachs as a collection of the smartest guys in the room. In an Enron kind of way that’s almost indisputably true.

Others think of the firm as a kind of nefarious, shadowy global bad actor that’s played the revolving door like a fiddle and thus deserves the disparaging moniker “Government Sachs.”

Still others take a more light hearted approach and simply look at the bank’s recos as contrarian indicators distributed solely for the purpose of “muppetizing” clients.

Whichever category you fall into in terms of how you think about the “squid,” you’ll undoubtedly be interested in the bank’s “10 key questions for 2017” – if only so you can decide whether to take the over or the under on how many they’ll get right.

Via Goldman: 

1. Will global growth accelerate? Yes, although most of the improvement is likely behind us in sequential terms.

2. Will global fiscal policy be eased? Only slightly.

3. Will the world turn towards protectionism? Yes, but the uncertainty is very large.

4. Will China slow? Yes, but only slightly.

5. Will labor markets return to full employment? Yes in the US, but no in the Euro area or Japan.

6. Will Euro area core inflation move up significantly? No.

7. Will monetary policy divergence strengthen? Yes.

8. Will the UK head for a “soft” Brexit? No.

9. Will the Euro area crisis reappear? No, but this is a risk.

10. Will the BoJ stick to its 0% yield curve target? Yes.

 

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