Trump's Top Econ Advisor Accuses Goldman Of Slanting Research To Help Democrats

Zero Hedge | 10/2/2018 | Staff
SweetStuff33 (Posted by) Level 3
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Over the weekend we reported that as increasingly more banks evaluate the worst case scenario in the ongoing US-China trade war, we highlighted that Goldman Sachs, which assigns a 60% probability the US will impose tariffs on most or all of the additional $267 billion of imports from China that are not covered by the tariffs announced to date, issued a warning that whereas so far S&P profits and margins have been able to avoid a direct hit, this may change soon:

"Tariffs threaten corporate earnings through higher costs and lower margins. Conservatively assuming no substitution or pass-through of expenses, we estimate a 25% tariff on all imports from China could lower our 2019 S&P 500 EPS estimate by roughly 7% (from $170 to $159), resulting in no EPS growth next year."

Goldman - Impact - Market - Stocks - Bank

And while Goldman did not predict a severe impact to either the market or stocks, the bank's chief equity strategist David Kostin repeated an analysis he made three weeks ago, warning that if trade tensions spread significantly and a 10% tariff were implemented on all US imports - the highest rate since 1940s - the bank's EPS estimate could fall by 15% to $145 in the "severe case", resulting in a bear market for equities; a less draconian scenario of imposing 25% tariffs on all Chinese imports would wipe out all corporate profit growth in 2019.

As it turns out, Goldman's analysis made its way all the way to the White House, and on Tuesday Kevin Hassett, the chair of President Donald Trump's Council of Economic Advisers, took heavy aim at the Goldman Sachs research team, which he claimed was overtly political...
(Excerpt) Read more at: Zero Hedge
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