Bond crash would be ‘interesting’ for us says Goldman Sachs COO Gary Cohn

Goldman Sachs President and COO Gary Cohn told Bloomberg TV’s Erik Schatzker at the World Economic Forum yesterday that a rotation out of bonds and into equities would be ‘interesting’ for his firm. Cohn said, ‘The cause of interest rates going up, which is greater economic activity and greater growth, will be very positive for our business.’

However, he doubted whether the banking system was ready for such a massive shock in the bond market and could handle it successfully, and predicted a major downturn for financial markets when this happens. The rotation into equities would be far from smooth, even if those buying and holding came through OK…