Royal Bank of Scotland geht von einem
Crash innerhalb 3er Monate aus
Artikel in Redaktion - wird übersetzt - FED in PANIK - EZB evtl. mitbetroffen
The Royal Bank of Scotland has advised clients to brace for a full-fledged crash in global stock and credit markets over the next three months as inflation paralyses the major central banks.
"A very nasty period is soon to be upon us - be prepared," said Bob Janjuah, the bank's credit strategist.
A report by the bank's research team warns that the S&P 500 index of Wall Street equities is likely to fall by more than 300 points to around 1050 by September as "all the chickens come home to roost" from the excesses of the global boom, with contagion spreading across Europe and emerging markets.
RBS warning: Be prepared for a 'nasty' period
Such a slide on world bourses would amount to one of the worst bear markets over the last century.
RBS alert: Quotes from the report
Fund managers react to RBS alert
Support for the euro is in doubt
RBS said the iTraxx index of high-grade corporate bonds could soar to 130/150 while the "Crossover" index of lower grade corporate bonds could reach 650/700 in a renewed bout of panic on the debt markets.
"I do not think I can be much blunter. If you have to be in credit, focus on quality, short durations, non-cyclical defensive names.
"Cash is the key safe haven. This is about not losing your money, and not losing your job," said Mr Janjuah, who became a City star after his grim warnings last year about the credit crisis proved all too accurate.
RBS expects Wall Street to rally a little further into early July before short-lived momentum from America's fiscal boost begins to fizzle out, and the delayed effects of the oil spike inflict their damage.
"Globalisation was always going to risk putting G7 bankers into a dangerous corner at some point. We have got to that point," he said.
US Federal Reserve and the European Central Bank both face a Hobson's choice as workers start to lose their jobs in earnest and lenders cut off credit.
The authorities cannot respond with easy money because oil and food costs continue to push headline inflation to levels that are unsettling the markets. "The ugly spoiler is that we may need to see much lower global growth in order to get lower inflation," he said.
Morgan Stanley warns of catastrophe
More comment and analysis from the Telegraph
"The Fed is in panic mode. The massive credibility chasms down which the Fed and maybe even the ECB will plummet when they fail to hike rates in the face of higher inflation will combine to give us a big sell-off in risky assets," he said.
Kit Jukes, RBS's head of debt markets, said
"The political fall-out could be substantial as finance ministers from the weaker economies rail at the ECB. Wider spreads between the German Bunds and peripheral markets seem assured," he said.
Ultimately, the bank expects the oil price spike to subside as the more powerful force of debt deflation takes hold next year.
Und eine andere Meinung gefällig (von ASIA-Times) ?
Jul 9, 2008
Purchasing power blown away
By The Mogambo Guru
Agora Financial's 5-Minute Forecast reports that "in terms of major stock indexes around the world ... there are few places to hide. The Euro Stoxx 50, a gauge of the big indexes in the eurozone, is down 24% this year. Germany's DAX has fallen 20%. The CAC in France is down 22%. Britain's FTSE is doing the 'best,' down 15% year to date."
In case you were wondering, the MSCI Asia Pacific Index is down 13% since the beginning of the year, the Shanghai Composite is down around 50% this year, Indian markets have fallen about 40%, Japan's Nikkei 225 is down 12% year-to-date, Australia is down about 16%, Germany is down 20%, India down 32% and
China is down 48% year to date. To name a few.
And, closer to home, the S&P 500 is down about 15% year-to-date, and the Dow is off about 14%, which when coupled with the ugly fact that the dollar is down about 7%, means that foreigners are getting whacked harder for investing in America than Americans! And I thought Americans were stupid! Hahahaha!
The Bank for International Settlements figures, "The current market turmoil in the world's main financial centers is without precedent in the postwar period. Given the possibility of such a worsening economic and financial environment, it would not be surprising if asset valuations also came under further pressure," made worse by an "uncomfortably long period of high inflation, along with slower growth".
This is pretty gloomy news, which may explain why the latest survey of consumer sentiment from Reuters/University of Michigan fell to 56.4 in June, which shows that Americans are the gloomiest since 1980. And for good reason, too, as inflation in prices is going to keep getting higher and higher, because inflation in prices always follows inflation in the money supply, and money just keeps getting created by the idiot central banks of the world by the literal ton every day, as we learn from Ty Andros of TedBits newsletter, who gives us the ugly, ugly News (UUN) that "The AVERAGE amount of M3 central bank money and credit creation is simply astonishing. It is clocking in at an average annual rate of 23%. Yes, that's right, 23%."
Doug Casey of the International Speculator newsletter is a little more conservative, and says, "All over the world, but especially in the US, currencies are being inflated radically; M3 is rising at about 18% per year."
To show the horror of that, Mr Andros notes that a 23% rise in the money supplies, "Using the rule of 72 ... means those money supplies in one form or another are doubling on average every 3.13 years." I involuntarily pee in my pants! Doubling the money supply in three years! This is insane! We are freaking doomed!
In case you were interested in knowing if there were any countries that are not a bunch of dirtbag, fiat-currency, inflationist morons, the answer is, unfortunately, "no". But Mike Hewitt of DollarDaze.org writes, "The Swiss franc was the best-performing currency of the 20th century, losing only 80% of its value." Hahahaha!
And it is all going to get worse, too, and people will get more angry, and some of them will remember that The Magnificent Mogambo (TMM) always said that elementary mathematics and history prove that the majority of stock market investors must always lose in the long run so that a small minority of investors can make some meager gains (sometimes), and this losing majority must also pay the rapacious Wall Street financial services industry huge, huge, HUGE sums so that fancy-suited sharpies can make a lot of money ALL the time by "managing" all that money and making a complete failure of it.
The sting is mostly felt because the losing majority must also pay the government lots of taxes and fees levied on all the various handlings of this money, and they will blame me, like it is my fault that simple mathematics makes it inescapably true, or that the stupid, socialist/communist/fascist way that they vote has created a ravenous, cancerous monster that is going to destroy us all by necessitating that the Federal Reserve keep creating all the money and credit that the government needs to borrow, and these "majority losers" will sue the living hell out of their little "financial planner" or "account executive" that told such a lying piece of stupidity!
In short, the biggest and most damaging lie of all is that everyone can retire on the money they "invest for the long term" in the stock market. It can't be done. It is mathematically impossible. You will lose more in purchasing power (as central bank monetary inflation destroys the currency by printing enough to finance the higher stock prices) than you will ever net in gains, and so the best, absolute best thing that can happen to the majority of investors is that they will invest the equivalent of a whole pizza today to get back a half a pizza when they retire, instead of merely a tenth of a pizza, if that! Hahaha!
Such are the just desserts of people stupid enough, with a media stupid enough, with an educational system stupid enough, and a government both stupid and corrupt enough to create a boom with a fiat currency, and to actually make a bet with everything they have that such a preposterous monetary system will not go bust, although it has, 100% of the time in all of history when any other country full of people stupid enough, with a media stupid enough, with an educational system stupid enough, and a government both stupid and corrupt enough to create a boom with a fiat currency.
The good news is that the astute can succeed where all others fail by merely buying gold and silver the whole time that the government is doing this, which is the easy way ("The Mogambo Way (TMW)). And we all love it when it is easy!
Well, I do anyway. And since it is easy to stop here, I will.
Well, after I make a pitch for buying gold, silver and oil. Now I'll shut up. Just remember what I said. Okay, now I'll REALLY shut up.
Richard Daughty is general partner and COO for Smith Consultant Group, serving the financial and medical communities, and the editor of The Mogambo Guru economic newsletter - an avocational exercise to heap disrespect on those who desperately deserve it.