Goldman CEO gives optimistic forecasts for economy

Goldman Sachs Group Inc Chief Executive Lloyd Blankfein offered shareholders a guardedly optimistic forecast for economic recovery. "My hope is, and if I had to guess I'd say, that business feels like it's off its lowest ebb," Blankfein said at the bank's annual shareholder meeting, a day after Goldman received a clean bill of health from the U.S. government stress tests. The former commodities trader hedged his comments, though, telling shareholders, "It's hard to make those kinds of forecasts. You have to make them every minute, because markets are so volatile." Blankfein said Goldman that they have no plans for further job cuts because they do not feel it is necessary now. He added that investors today are talking about an eventual recovery. Credit markets have improved, as illustrated by Goldman, Morgan Stanley and other banks tapping bond markets without guarantees from the government. Goldman shares were up 3.2 % in Friday afternoon trade, bringing their gains for this year to 64 %, compared with a 27 % rise in the Amex Securities Broker-Dealer index. Shareholders in Wall Street's top investment bank, which converted to a bank holding company during last fall's financial crisis to improve access to government funding, reelected all of its directors. Those voted back included Stephen Friedman, who on Thursday resigned as chairman of the New York Federal Reserve Bank's board of directors amid questions about his purchases of Goldman stock and potential conflicts of interest.