Nov 17, 2007

Jan Hatzius: U.S. could face $2 trillion lending shock

The macroeconomic consequences could be quite dramatic, Hatzius said in the note to clients. If leveraged investors see $200 billion of the $400 billion aggregate credit loss, they might need to scale back their lending by $2 trillion.

Hatzius said such a shock could produce a "substantial recession" if it occurred over one year, or a long period of sluggish growth if it occurred over two-to-four years.

~Jan Hatzius, Goldman Sachs economist, U.S. could face $2 trillion lending shock, November 16, 2007

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