Goldman Sachs: “Mr Market” wrong in recession warnings

Goldman Sachs is betting “Mr Market” is wrong in its recession warnings. While sliding stocks, declining long-term bond rates and higher credit yields are sounding the alert, the New York-based bank’s economics team, led by Jan Hatziusis, is more confident about the outlook for the developed world.

Their model, based on a series of economic and market indicators, points to just a 25% risk of recession in the industrial economies in the next four quarters and 34% over the next two years.

Both undershoot the average risk of the past 35 years despite the recent fears of financial markets.