The Tell: How Many Goldman Sachs Private Equity Clients Are Preparing For A Recession? Every Single One Of Them

According to a recent National Association for Business Economics survey, 72% of economists expect a recession by the end of 2021.

That percentage appears to be much higher among some of Goldman Sachs’s GS, +3.44% deepest-pocketed customers.

That’s the view of Alison Mass, Goldman Sachs head of investment banking, who shared her thoughts with Bloomberg TV this week on how firms are putting protections in place to limit risk.

She said earlier this fall she was in Asia where she met with the head of a private equity firm with assets all over the world. “He said he had given a recession checklist to each one of his CEOs with nine things on that checklist that he wanted all of them to work on and come back to him,” Mass recalled.

The checklist provided a blueprint to protect against a weakening economic climate, including asking suppliers to extend terms, limiting capital expenditures to critical items, and hiring only essential employees, she said.

Bloomberg’s consensus forecast is that there is a 33% chance of a recession in the U.S. within a year, but Goldman Sachs, despite the cautious mood among its private equity customers, puts that closer to a more optimistic 20%.

Watch the full interview:

Meanwhile, the stock market continues to hold up, with the Dow DJIA, +1.22% and S&P 500 SPX, +0.91% up slightly in Thursday trading session.

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