Goldman Sachs unconcerned about Irish economy
Goldman Sachs has today come to the rescue of the Irish authorities with a suggestion that a Greek style collapse is very unlikely. This comes after days of speculation in the investment and the money markets regarding a potential collapse of the Irish economy, which has gone into reverse in the second quarter of 2010. So why is Goldman Sachs so positive about the future?
The financial giant believes that Irish spreads in the money markets and the bond markets, currently at an all-time high, are already factoring in the financial risks associated with the economy. As a consequence Goldman Sachs does not believe that the spreads will expand any further, something which would increase the cost of debt to the Irish authorities. When you also take into account that the Irish authorities have already slashed the budget for the current year and will soon be looking at the budget for next year then perhaps investors have overreacted?
However, in this era of financial difficulties around the world many investors are running scared and very concerned about the next major downfall whether this be the Irish economy, Spanish economy, Portuguese economy of any other economy around the world.
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