This completely ignores any perspective of markets and investing and absolutely points to the uselessness and idiocy of Wall Street and the brokerage industry. What a useless bunch of idiots.
And the guy recommends bonds even as the Fed has just begun to raise rates for the first time in nine years. They were probably saying go short Treasuries when the Fed was conducting QE.
Investors face a “cataclysmic year” where stock markets could fall by up to 20% and oil could slump to $16 (£11) a barrel, economists at the Royal Bank of Scotland have warned.
In a note to its clients the bank said: “Sell everything except high quality bonds. This is about return of capital, not return on capital. In a crowded hall, exit doors are small.” It said the current situation was reminiscent of 2008, when the collapse of the Lehman Brothers investment bank led to the global financial crisis. This time China could be the crisis point. Read more.
China "crisis point." Wow.
People, stay away from Wall Street. Stay away. Stick here, you get much better info. We may not get everything right, but we get most of it.
Remember, I said that January will be a major bottom for the year in the stock market.
3 comments:
I'm fading any market rise, but I'm scared because suddenly is all "doom and gloom", so may get overcrowded. Anyway, any pull towards 2000 in the SPX500 is a fade for me, I don't think the market is going anywhere this year (like last year, btw). Also, only large cap is doing ok, small caps have been bearish for a while, there may be pull backs but on the mid-term this is not going to change (I think btw this distribution amongst corporations is signalling pretty well what is happening to the overall population), is also good signal because 1 year ago many small caps still could pull the stock buyback trick, but right now less than 30% of publicly traded companies can still do it in a constant basis.
Overall the theme for the following months is a 'flight' to safety as disinvestment keeps going and recession/depression (Brazil) settles in the DM, where much of the profit of the multinationals was coming. Some stocks will raise due to this, but most of them will do poorly, specially on sectors which have suffered from over investment in recent years (all related to carbon energies, the IPO unicorn complex, real estate). Europe and specially some countries like Spain is copying the Japanese development >20y ago re. the stock market, so relatively easy to predict.
BTW I think the FED will be back to zero bound in a few months, is all posturing, but as soon as there are weakening signals they will lower and start talking again about negative rates.
P.S: Before anyone mentions how strong the job market is (I don't think it matters mmuch either way, currently the financial markets are not driven by fundamentals): the job market is all bullcrap, Bill has a good analysis today on his blog re. USA, but is even worse for Europe. I'm pretty sure the FED actually knows this, but the bankers in Wall St. and pension funds are struggling with rates at zero for so long, that's why they are signaling they are going to raise, despite the overall weakness.
China readjustment will take a long time, the stock market there is ridiculous small compared to USA, so it's not even what matters, the shadow banking system is going to struggle a lot even if the govt is supportive.
The fundamental question is where the demand is going to come from globally now that the US consumers is not the buyer of last resort and Chinese demand for resources to fuel its export market is being cut back in the shift to increasing domestic consumption share.
Skip the malpractice lawsuits, just relocate Wall Street to Riker's Island. They can do their work from there.
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