The following are quotes from Blankfein- Goldman Sach's CEO- from NYT DealBook conference on Wednesday...
"At some point growth will come back. I think its going to come back sooner than people think. Now what's going to happen when growth comes back, interest rates rise?" Blankfein said. "That will have an effect on portfolios and people will have losses."
Further still- Goldman is advising all its corporate clients to borrow "as much as they're going to need for as long as they think they could need it" because of the low interest rate environment.
Video on CNBC after the jump
We shall see if Blankfein's outlook comes to pass. I believe that we are still dealing with the fallout from a balance sheet recession, which can take a long time to correct. Growth may comes back but growth is likely to be fleeting. If rates were to rise, it would likely come from some combination of rising inflation expectations and selling pressure on US treasuries.
"At some point growth will come back. I think its going to come back sooner than people think. Now what's going to happen when growth comes back, interest rates rise?" Blankfein said. "That will have an effect on portfolios and people will have losses."
Further still- Goldman is advising all its corporate clients to borrow "as much as they're going to need for as long as they think they could need it" because of the low interest rate environment.
Video on CNBC after the jump
We shall see if Blankfein's outlook comes to pass. I believe that we are still dealing with the fallout from a balance sheet recession, which can take a long time to correct. Growth may comes back but growth is likely to be fleeting. If rates were to rise, it would likely come from some combination of rising inflation expectations and selling pressure on US treasuries.
No comments:
Post a Comment