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Jim O’Neil,  Chairman of Goldman Sachs Asset Management is optimistic about global stock markets and doesn’t see the falls of August and September happening in the near future. Regarding the debt crisis, he is optimistic that the new Italian government, helped by “strong support from the ECB” will find its way out of the crisis.

The dangers of 2008 still exist, but O’Neil sees decision makers in Europe heading in the right direction. In addition, an OK situation in the US and a soft landing in China, global growth will continue, and stock markets will follow.

In an interview to Israel’s Globes (Hebrew), the senior Goldman Sachs manager said that the situation in Italy can’t continue, but he finds optimism in Mario Monti’s appointment (a former Goldman Sachs adviser) and “strong support” of the ECB will prevent a default in Italy.

O’Neill, which coined the term BRIC around 10 years ago, marks the next 11 countries to follow the lead of Brazil, Russia, India and China, and says that the latter doesn’t need to save Europe. What China can do for Europe and for the whole world is continue growing – this is better than investing in European bonds.

Signs of monetary easing in China could support the undervalued Chinese stocks, as inflation eases as well. The Russian stock market is the most attractive for O’Neill, and Brazilian stocks look cheap.

He sees advanced economies growing in 2012, but at a slow pace. The US enjoys good corporate results, low inventories and positive economic indicators. All these should support good growth in 2012 and this should support the stock markets as well.

Further reading: Jim O’Neill: EUR/USD Should Be 1.20

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