Goldman Sachs sees recession in 2008

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Goldman Sachs on Wednesday said it expects the U.S. economy to drop into recession this year, prompting the Federal Reserve to slash benchmark lending rates to 2.5 percent by the third quarter.

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The unemployment rate will rise to 6.5 percent in 2009 from the current 5 percent, it said.

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The three most significant changes to their sector recommendations are the reduction in the financial sector weighting by 300 basis points to 14 percent, the information technology weighting by 400 basis points to 15 percent, and the increase in their health care weighting by 300 basis points to 17 percent, the firm said.

Their reduced allocation to financials reflects weak fundamentals and their declining weight in the S&P 500. The reduction in information technology reflects that the group has been the second-worst performing sector in both the six months leading up to a recession and during the first phase of a recession, Goldman said.

The health care weighting change reflects strong performance of the group during the six months leading up to and during the first phase of a recession in addition to an attractive valuation, Goldman said.

On Monday, Merrill Lynch economist David Rosenberg said the jump in U.S. unemployment in December confirmed that the economy was entering a recession.

http://biz.yahoo.com/rb/080109/usa_economy_goldman.html

[almaty 19]

f#3k them, they are using this logic to f##k their staff and only give them a 15% bonus

[mawilson 2,133]

If Goldman Sachs sees its shadow, will there be 6 more weeks of recession?