|Abby Joseph Cohen|
She began her career in revolving door crony fashion. Her first stop as an economist was in 1973 at the Federal Reserve Board in Washington, D.C., serving until 1977. After various minor stints at various Wall Street firms, she joined Goldman as a vice president and co-chair of the Investment Policy Committee in 1990 and was named a managing director in 1996 and a partner in 1998.
Dealbreaker breaks the news on her abysmal forecasting track record at Goldman:
Cohen [spent] the last two decades being wrong about most things.That's what happens when you don't understand Austrian Business Cycle Theory, you retire with Dealbreaker bashing you. She literally had no clue as to what was going on in the economy.
– Later in 1999, she noted that the market’s big gains could not continue indefinitely, and advised clients to “take a little bit off the table,” projecting a moderating growth rate. Of course, the market was not moderating, with the S&P 500 up nearly 20% that year.
– In 2000, she predicted the S&P 500 would rise 8-10%, based on expectations of strong earnings and economic growth. Instead, with the dot-com bubble bursting, the index fell 9.5%.
– In 2008, she missed the warning signs of the financial crisis (to be fair, just about everyone did). She predicted that the S&P 500 would hit 1675 in 2008. It closed at 903, nearly 50% off from her prediction. After that, she was replaced as Goldman’s senior forecaster by David Kostin