US Doing Better Than People Think: Goldman's O'Neill
Goldman Sachs Asset Management Chairman Jim O'Neill thinks the U.S. is doing a lot better than people realize.
"There is such an ingrained negative mood internally in the U.S. about itself," he told CNBC Thursday. "People now seem to be convinced that Europe is going to drag the U.S. down. That might happen, but there is a strong likelihood that it won’t."
The U.S. "has coped pretty well with Japan going 20 years without any growth. So why does Europe having problems definitely mean the U.S. goes back into serious trouble?"
The U.S. is "doing a lot better than the mood appears to be. There seems to be this mood around an inevitability about the next course or we’re back in recession or close to it. I don’t really buy that," O'Neill said, adding he sees "no momentum for a recession."
Most U.S. data have been strong, particularly in manufacturing and auto sales, he said, and current U.S. growth in the 2 percent area "strikes me as the cruising speed." In addition, "you have clear bias from the [Federal Reserve] under Ben Bernanke."
After talking with U.S.-based company clients and Goldman's own investment managers "a lot of them seem pretty, I wouldn't say optimistic, but certainly contented."
It would take "a few new negative shocks going on to drag the U.S. down."
He also discounted the effect of Greece, which he said is "only a $350 billion economy. China will import another Greece this year."
Italy is "what it’s all about now. Whatever they do they’ve got to insure that Italy can be funded," he said of the French and German governments and the European Central Bank.
"I think the ECB plays a critical role in the whole thing and one that I think will make a really positive development going forward here if the ECB had a different tone about it," he said, referring to involvement in the European Financial Stability Fund . The ECB "is having to do things it’s obviously having trouble with, but so is Ben Bernanke."