Europe Economy

Current Slowdown 'Nothing Like 2008': Goldman’s O’Neill

While many earnings reports in January 2012 have disappointed investors, stocks performed strongly last month, igniting fears of a market plunge similar to the drop witnessed in the middle of January 2009.

Jim O'Neill
Ben Stansall | AFP | Getty Images

But while there are plenty of risks to an economic recovery, the start of 2012 is nothing like the 2008-2009 crisis, Jim O’Neill, Chairman at Goldman Sachs Asset Management told CNBC on Thursday.

“The key to this market movement over January is that people were worried about everything that could go wrong, literally across the board. And with it, (there was) a staggering amount of cash around,” O’Neill said.

“So just the cessation of bad news itself has sort of appeared (to be) a bit of a positive,” he said.

“We came into the year with people full of fearing (a repeat of) '08 if not worse…and the evidence from all over the place is that it’s nothing like '08,” O’Neill said.

He pointed out that at the core of the euro zone, Germany appeared to be accelerating.

“So one third of the euro zone that’s supposedly falling apart is actually improving,” he said.

China appears as though it’s getting closer to a soft landing, he said, and the United States was also showing signs of moving forward.

China had become a driving force in global growth, he said, adding people would have to acknowledge some of the positive news coming out of the region at some point.

Economy Is Nothing Like 2008: O'Neill
Economy Is Nothing Like 2008: O'Neill

“China has created $1.4 trillion dollars of GDP in a year, that’s 10 percent of the euro zone in one year,” O’Neill said,

“I used to say China creates the equivalent of another Greece every four months. It’s now less than every three months. They’re creating half a United Kingdom every 12 months,” he added.