Goldman's sellside research desk has traditionally been one of the most bullish on Wall Street, usually to the point of comedic and mind-numbing obstinacy, refusing to cut their cheerful economic outlook until the US is deep in a recession. Which is why we note today's decision by chief economist Jan Hatzius to hike his 12-month ahead recession probability from 10% to 25% (full note here) as a flashing red warning for the simple reason that by the time Goldman raises this subjective indicator even a tiny bit from its resting baseline, the wheels are already falling off if not the economy then certainly the market. And indeed, as shown below, the last time Goldman hiked recession odds from the 15% baseline back in July 2022, the market proceeded to crater into the worst bear market since covid.

Which is why we were very surprised to read a note published by the bank's Thematic desk this afternoon pitching the bank's first short trade reco in a long time, one which when reading between the lines, is what Goldman is telling its top clients is the best way to hedge a potential crash.