No Landing - 50% . Hard Landing - 30% . Soft Landing - 20% ...
Goldman analysts assessed probabilities the U.S. economy faces ``no landing,' a ``hard landing' or a ``soft landing.'
In the ``no landing' scenario, the economy slows but continues to grow above trend, the financial gap remains little changed to below its historical average of 12 percent, stock market volatility declines and spreads decline slightly.
In the ``hard landing' scenario, the economy moves into recession in late 2000, the financing gap widens, stock market volatility averages an annualized 17 percent and Treasury yields rise 100 basis points above Goldman's expectations.
In the ``soft landing' scenario, GDP growth slows to below trend, the financing gap is eliminated at the end of next year as investment spending is reduced, stock market volatility matches the historical average and Treasury yields fall 100 basis points below Goldman's baseline.
Goldman assigned respective probability weightings to ``no landing,' ``hard landing' and ``soft landing' of 50, 30 and 20 percent.
TRADE IDEA -Overweight corporate debt -- Goldman
biz.yahoo.com
(The factors which effect the timing of their conclusion expanding trade deficit, rising US and international rates, y2k risk aversion, rising import prices, holiday wage pressures and spending, and beginning signs of inflation may continue to expand the equilibrium credit spread in all scenarios for now? Skeet) |
