The Holy Grail

The Holy Grail of Stock Predictions

Goldman Sachs Prediction’s for 2011

Investors411 has an inside look at what GS sent its preferred clients on Dec. 30th about 2011. Each year the Chief analyst David Kostin, the chief economist Jan Hatzius and their staffs put together an outlook for 2011.

Why is it the Holy Grail of Predictions?

  • Bias -I hate these bastards. No one firm shares more of the responsibility for the 2008 meltdown that cost a huge drop in housing prices, soaring unemployment and a worldwide Great Recession.
  • Former GS CEO Robert Rubin was Sec. of Treasury under Clinton when investment banks (GS) were deregulated. His protegee was Larry Summers became the new head of Treasury after him and is now the outgoing Chief Economic advisor to Obama. Another CEO of GS, Henry Paulson, was Bush’s Sec. of Treasury from 2006 to 2009. He oversaw the massive over leveraged shadow bank buildup and the 2008 bailouts when the financial/housing bubble burst. All these men have profited enormously while working Americans and homeowners have suffered.
  • NO other entity even comes close to GS in being tied to government finance and therefore understands the role of government (has access to inside information) in the markets. If you’ve been paying attention, Investors411 has reported how our Fed and Treasury Department are now manipulating stocks and bonds to the tune of trillions of dollars.
  • CNBC popular analyst, Jim Cramer, was a mere hedge fund manager for GS. When GS speaks he listens.
  • No other firm has an inside connection to the Fed & Treasury than GS.
  • David Kostin’s 2010 predictions were so good he made Partner at GS & Jan Hatzius (Wikipedia calls him usually “bearish”) is one of the most respected economist on Wall Street. Once he speaks his views are parroted by everyone from Cramer to a bevy of lesser economists.

Does GS take advantage of its position as puppet master to government finance? – An old line from the 1939 movie Casablanca used by Claude Rains sums it up -“I would be shocked shocked to find out theirs gambling going on in Casablanca.”

Goldman Sach’s inside knowledge and ties to government give them an advantage that no one else has. This is vastly more important now because both the Fed & Treasury are manipulating far more than they have than they have at least in my lifetime. Therefore its the Holy Grail

Basically Goldman Sachs is bullish on almost everything from except the dollar and natural gas.

Here’s the Chart  GS is giving its clients that outlines their outlook.

They see a flat first 3 months, but a very strong finish to 2011.

Note – The Fed’s quantitative easing ends in 6 months. This has got to be factored in. If we have a QE #3 over the course of those months my read of the tea leaves is that the figures go up.  I think its nothing short of a minor miracle that the government/Fed has been able to stimulate the economy without  interest rates going significantly higher.


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