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Last Thursday, Goldman Sachs moved to reassure its nervous merchant banking clients with a conference call led by its chief economist, Jan Hatzius, and its chief medical officer, Michael Rendel. Someone on the call took notes then leaked them. The conversation, which seems to downplay the coronavirus’ effects on the world economy, has since gone viral on social media and through messaging services like WhatsApp—leaving the bank to now downplay the comments made in that meeting.
Among the conclusions apparently reached on this call: Stock markets can fully recover in the second half of 2020—and unlike in 2008, there is no systemic risk to the world’s financial system. Despite that optimism, the call did also focus on the disease’s immense communicability.
To be sure, notes from a meeting are always the work of interpretation. But here are the full comments from the Goldman call circulating on the web:
This is a “very basic summary” of the call, Goldman insists in a written statement to Forbes. “The summary text was not prepared or authorized by [Goldman Sachs] and it contains erroneous information and language which was not used on the call. During the call, various statistics on the pandemic were cited and attributed to legitimate sources including governments and were not necessarily presented as a [Goldman Sachs] view. The market and economic views presented on the call were consistent with current published research views which are available upon request.”
Goldman declined to specifically state what was incorrect about the call in the leaked comments.
A bank spokesperson then directed us to a March 13 and a March 15 economic research report from Goldman. These types of bank documents are common and produced by the dozen every day. They’re always highly sanitized, written in econo-ese and usually only given out to the bank’s paying customers (and sometimes to the media if you ask nicely). Do they jibe with the leaked comments? Well, true enough, the March 15 report forecasts flat U.S. economic growth in the first quarter, a 5% drop in the second quarter—and then a second-half rebound with a 3% gain in the third quarter and a 4% rise in the fourth quarter.
