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Goldman Sachs predicts recession

Economists have been flirting with dire predictions for weeks. Today the world's most profitable securities firm, Goldman Sachs, predicted a recession. And many are wondering: what's the government going to do about it? Amid growing fears about the mortgage crisis, securities giant Goldman Sachs said their analysts are increasingly concerned that the housing and credit downturn will trigger not just a slowdown, but an outright recession. Other economists, although somewhat less negative, agree. Senior US economist at Barclay's Capital Julia Coronado said, "We have seen some troubling indicators that add to the uncertainty, that suggest we are clearly in a period of soft growth, softer still, and maybe even a recession." On Wall Street investors are clearly uneasy. Gold trader Louis Grasso said, "They're looking for tangible assets. They're looking to own something that at the drop of a hat you can take, you know the price of, you can sell." But not everyone is certain of gloom. So far, the president maintains the economy is mixed. President Bush said, "I like the fundamentals, they look strong, but there are new signals that should cause concern." Among those concerns: the sub-prime mortgage crisis, with borrowers and lenders told to work it out for themselves. Treasury Secretary Henry Paulson said, "By preventing avoidable foreclosures, we will safeguard neighborhoods and communities and fulfill our primary responsibility of protecting the broader US economy. Also gas prices, now predicted to rise 35 cents per gallon by spring, and the stock market, down again today has declined 5 per cent already this year. Still analysts say there are bright spots enough. Many will look for encouragement on Thursday, when Federal Reserve Chairman Ben Bernanke speaks, possibly giving clues of any stimulus he'll offer in the coming year.

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