U.S. Will Likely be Fine in Spite of Europe: O’Neill

Jim O'Neill, chairman of Goldman Sachs Asset Management, is optimistic about the U.S. economy, according an interview he had with CNBC TV.

First, if Europe falters because of its sovereign debt crisis, the U.S. will likely survive it, said O'Neill.

People in the U.S. seem convinced that Europe going down will drag down the U.S. economy along with it, he said.

Indeed, in the past few weeks, the U.S. stock market has traded on Eurozone headlines. On Thursday, for example, it initially fell on a report that Germany has not ruled out delaying the highly anticipated Eurozone weekend summit.

Now, at 2:47 p.m. ET, the S&P 500 Index and Dow Jones Industrial Average are in positive territory on a Dow Jones report that the meeting will proceed as scheduled and that Germany and France will unveil a bailout plan by next Wednesday at the latest.

O'Neill said the U.S. economy survived nearly 20 years of stagnant growth from Japan, at one point the second largest economy in the world and a large U.S. trade partner. Therefore, it will likely survive a slowdown from Europe.

However, despite what O'Neill said, what is undeniable is that U.S. banks have massive exposures to peripheral Eurozone debt.

O'Neill also thinks investors are too bearish on the U.S. economy itself. He said there is a belief that the U.S. economy will slip into recession in 2012.

However, there is no indication of that in recent economic data. Absent some significant negative shocks, he thinks the U.S. economy will be fine.