Royal Bank of Scotland economists have urged investors to sell everything except high-quality bonds, warning of a “fairly cataclysmic year ahead.”
Writing in a client note dated Jan. 8, the bank’s European rates research team said that clients should be concentrating on return of capital, not return on capital, and that an ominous outlook to the world economy “all looks similar to 2008.”
The Key Points- The note is particularly bearish on China and global commodities, and predicts that oil could fall as low as $16 a barrel.
- In a grim set of predictions, Andrew Roberts, head of European economics, rates & CEEMEA research said that the world has far too much debt to be able to grow well.
- He also warned that advances in technology and automation are set to wipe out up to half of all jobs in the developed world.
- The note says equities could fall 10% to 20%.
- It predicts the year will be spent focusing on how to exit positions that have benefited from long-running QE, including emerging markets, credit and equities.
Source:
http://blogs.wsj.com/moneybeat/2016/01/12/rbs-warns-sell-everything/?mod=e2fbRBSA 10 to 20% fall in equities certainly isn't a long shot. QE has produced a long run-up in stock prices, and on average, we see a market correction of 10% every two years and a 20% correction every five years. Still, the advice to "sell everything" seems a bit much.
For me is everything exaggerated. First I don't believe that in such few time can be something big like that what which is happen at 2008. To not forget that the crisis began at 2008, first, is the second biggest one after the crisis of the '30 and, second, is not you surpassed fully. So, all the world is working to eliminate all the consequences of this crisis and meanwhile are annalists which predict another one similar to that? First of all this mean that everyone has learned nothing from the previous one and I cannot believe that all the other people who worked in this direction are stupid and are not able to learn how to prevent the happening of the same or the similar thing and only the above annalists are good professional. Then (second) how is possible that only the above annalists are so able to understand so very well the overall world economic situation and the other similar of them not?
As for me they want fame.
Downturns in the market are common. RBS is not saying this year is going to be as bad as 2008 (they're not saying it's not either, that's your comparison), they're saying it's going to be a bad year and you should flee to safe assets to preserve capital. The market doesn't only go up or explode in crisis. The market has a down year on average for every two up years, and the 1920s was not the last time the market had a crisis. The market has had significant trouble of varying degrees in the early 2000s, the 1980s, and the 1940s. Downturns are common, and they are a normal and healthy part of the business cycle.
I don't agree or disagree with RBS's analysis that this will be a bad year, only the advice that the reasonable thing to do is sell everything in response.
So you are not agree or disagree with RBS analysis but are telling that "
RBS is not saying this year is going to be as bad as 2008 (they're not saying it's not either, that's your comparison)" and in your main post you wrote:
that an ominous outlook to the world economy “all looks similar to 2008.”. And the part in question mark must be their citation. This my poor in conception and lack in meanings mind understand totally different and against one another these two your sentences. In other words, again according to the above typo my mind, there are simply stupid game of words without meaning and reasoning. So needed to tell something different but have no importance what.
It is not my comparison the comparison with the 2008 but your comparison and if true that you have wrote even their comparison. Written clear in your main post. If something is similar with 2008 like is told in your main post that mean that mean that we are in crisis. This is first.
Second thanks for explaining me that
"The market has a down year on average for every two up years, and the 1920s was not the last time the market had a crisis." It is a big surprise for me to know and to understand today that the crisis of 1920 was not the last crisis that the market had. According to me and to that I teach to my students at the Faculty of Economy since 16 years the crisis of 1920 was the only one before the one of 2008. So I will do a big correction to my book of management in which is treated various times the theme of crisis in capitalism, their cycles, their causes etc writing only this monumental teach had from your post. The crisis of 1920 is not the last one had the capitalism before the crisis of 2008. I have only a little question. Could you please show me where have you read this my big thoughts about this crisis in my post?
Third. I don't see any kind of connection between my post and your post. You give lessons (as for me bullshits) asked by no one about things that have nothing to do with what I have write in my post. It would be better for you that the next time, before do a post or a reply, to try to understand what is told in the post to which you answer. I speak in my post ONLY for the comparison of the actual situation (always based TOTALLY in what you have written in your main post) with the situation of 2008 (given from you with question marks and if so rigorously cited from the source). I don't mention nothing about the overall crisis and their cycle - which is not trued that is 2 year because before were much more longs and now a little shorter and never there are defined time which can be taken as reference because of the complexity of today economy and the learnings had about those in time - but the most two big such. I speak about the Empire State Building and Tour Eiffel and you teach me that are not only these "builds" in this world but even the build when live you.
And the last one that I have pleasure to specify is another BIG teach from you (always given at your monumental post):
"Downturns are common, and they are a normal and healthy part of the business cycle."Really first time in all these years I have on my shoulders, that see with my eyes someone who pretend and write - being totally sure about this - that crisis are healthy for the business. It will be enough this sentence for me to ignore totally your posts but I will not do this because I'm very curious to see until in which point will go your being sure in telling other pearls like this. If it will be again the case to met each other in other threads. Because hope to not have more desire to reply to another your - like above - comment to this my comment to your monumental above comment.
