Royal Bank of Scotland: Sell Everything!!!

[GA Russell]

The Royal Bank of Scotland today predicted a major depression in 2016, and recommended to its clients that they sell everything except "high quality bonds."

http://www.infowars.com/great-depression-2-0-sell-everything-2016-cataclysmic-year-for-stocks-warns-rbs/

RBS is respected, right?  Is this something being discussed on UK radio or television?

What do you think?

[BFrank]

I think anyone who says they can "predict" what's going to happen in the financial world is someone to avoid. Or at the very least, have a high degree of skepticism.

[JSngry]

If everybody's selling, who's buying? And why?

[Larry Kart]

Although the RBS warning seems to be genuine, in the sense that a RBS honcho said that, the site on which this "news" appears, Info Wars, is run by this conspiracy theorist:

https://en.wikipedia.org/wiki/Alex_Jones_(radio_host)

 

[T.D.]

57 minutes ago, GA Russell said:

The Royal Bank of Scotland today predicted a major depression in 2016, and recommended to its clients that they sell everything except "high quality bonds."

http://www.infowars.com/great-depression-2-0-sell-everything-2016-cataclysmic-year-for-stocks-warns-rbs/

RBS is respected, right?  Is this something being discussed on UK radio or television?

What do you think?

I'm not sure how "respected" RBS is. The bank exploded spectacularly in the 2008 financial crisis, and the British Government was forced to step in and take an 81% (according to Wikipedia) stake. My impression is that RBS has continued to underperform, and that the Government's sale of RBS shares (which began only quite recently) resulted in significant losses.

I mistrust any predictions by Wall St. firms (those who advise you to buy often are actually sellers, and vice versa). And if RBS is so clever, why weren't they suggesting "sell" before the recent correction?

Edited January 12, 2016 by T.D.

[GA Russell]

Larry, thanks fore the link.  That was an enjoyable read.

I have found that InfoWars is one of those sites which thinks that the Democrats and Republicans are all in it together. Their views are not mainstream, but I have never known them to lie.

A well-respected economist named Paul Craig Roberts submits a column from time to time. And Donald Trump made an appearance and complimented the site a few weeks ago.

27 minutes ago, T.D. said:

I'm not sure how "respected" RBS is. The bank exploded spectacularly in the 2008 financial crisis, and the British Government was forced to step in and take an 81% (according to Wikipedia) stake. My impression is that RBS has continued to underperform, and that the Government's sale of RBS shares (which began only quite recently) resulted in significant losses.

I mistrust any predictions by Wall St. firms (those who advise you to buy often are actually sellers, and vice versa). And if RBS is so clever, why weren't they suggesting "sell" before the recent correction?

Thanks, TD.  I didn't know that.  I will be interested to see how the British stock market tomorrow reacts to the RBS advisory.

And now I see that Bing is highlighting this story.

https://www.bing.com/search?q=RBS+sell+everything&filters=tnTID%3a%2294C9CDA5-CFA4-4ac4-B200-4E55BA445892%22+tnVersion%3a%221243622%22+segment%3a%22popularnow.carousel%22+tnCol%3a%228%22+tnOrder%3a%22e68e4ee5-e645-4c98-9032-59581e09a4f5%22&FORM=BSPN01&crslsl=0

[T.D.]

GA, if you Google (or Google News) "RBS sell everything", an Aussie source  broke the story 18 or 19 hours ago (from 6:14 PM EST 1/12). The tip was contained in a letter to clients received even earlier. So the message is not "new", and the market's already had time to react.

Edited January 12, 2016 by T.D.
link

[clifford_thornton]

Alex Jones is a nut. I used to make fun of him until I realized that he has a TON of followers who act on his rantings and ravings.

[JSngry]

19 minutes ago, GA Russell said:

 

Their views are not mainstream, but I have never known them to lie.

 

I dunno man, I'd feel better - at some level -  if the whole Sandy Hook "truther" thing was a genuine lie instead of just some batshit crazy "not mainstream" view.

 

[Larry Kart]

36 minutes ago, GA Russell said:

Larry, thanks fore the link.  That was an enjoyable read.

I have found that InfoWars is one of those sites which thinks that the Democrats and Republicans are all in it together. Their views are not mainstream, but I have never known them to lie.

A well-respected economist named Paul Craig Roberts submits a column from time to time. And Donald Trump made an appearance and complimented the site a few weeks ago.

Thanks, TD.  I didn't know that.  I will be interested to see how the British stock market tomorrow reacts to the RBS advisory.

And now I see that Bing is highlighting this story.

https://www.bing.com/search?q=RBS+sell+everything&filters=tnTID%3a%2294C9CDA5-CFA4-4ac4-B200-4E55BA445892%22+tnVersion%3a%221243622%22+segment%3a%22popularnow.carousel%22+tnCol%3a%228%22+tnOrder%3a%22e68e4ee5-e645-4c98-9032-59581e09a4f5%22&FORM=BSPN01&crslsl=0

A compliment from Donald Trump -- well that settles it. 

[JSngry]

When it comes to conspiracy theories, make mine The Blacklist. That one actually makes sense - and it has a pretty girl in it. Plus it's only on for an hour a week.

[GA Russell]

LOL!  I want to talk about the Royal Bank of Scotland and whether there will be a worldwide collapse of the economy this year, and you guys want to talk about Alex Jones!

[Larry Kart]

8 minutes ago, GA Russell said:

LOL!  I want to talk about the Royal Bank of Scotland and whether there will be a worldwide collapse of the economy this year, and you guys want to talk about Alex Jones!

So talk about it -- say something other than this RBS guy says the sky is falling. 

[T.D.]

Note that upon reading the actual material (which is available on numerous links via Google or Google News), one finds things like

... Roberts is also bearish stocks saying "negative returns in 2016 are probable, though without a recession they should be manageable, think -10-20%, rather than a rout." ...

While bearish, this is not much different from the outlook of many of the pundits who are calling an equity correction. If you want doomsday shit, you can always read permabears like Marc Faber et al.

[Larry Kart]

Five economists weigh in:

http://www.theguardian.com/business/2016/jan/12/rbs-forecast-doom-global-economy-2016

One of them says this, which is why some of us have reacted the way we have to the cry of "Sell Everything!!!"

“This is a scary warning from RBS but it doesn’t seem sensible to spook investors. As Keynes made clear, consumer and business confidence matters – he called them animal spirits. Volatility is high, but a great collapse doesn’t seem to be in the air. It doesn’t make sense to talk down markets as that can become self- fulfilling." (My italics)

 

 

[sidewinder]

Tulip futures are up !

I think what we will see is the Chinese ponzi panic significantly affecting those resource base economies which were largely spared the impact of the 2008-9 downturn, particularly where their asset values are concerned.

Edited January 13, 2016 by sidewinder

[Guy Berger]

1) Alex Jones is awful.

2) Infowars is not a good source of information, to say the least.

3) Paul Craig Roberts is NOT a "well-respected economist".

4) I know _Andrew_ Roberts professionally.  He is a smart and wonderful guy, but he's also very bearish/pessimistic by worldview, so I would calibrate your opinions appropriately.  Additionally, as someone working for a securities firm, he's probably inclined to let financial market sentiment and the dire state of the investment/banking community color his economic worldview.

5) I think the caution about the wisdom of economic forecasters in general, and those from Wall Street in particular, is warranted.

[Dan Gould]

I think anyone with a brain can recognize that there is significant down-side risk in the global economy this year.

[Guy Berger]

5 hours ago, Dan Gould said:

I think anyone with a brain can recognize that there is significant down-side risk in the global economy this year.

Yes, there is - but that has been the case for many recent years, not just this one.

[JSngry]

Any economic model that has me worrying about oil prices going too low comes from a reward system not at all relevant to anybody I know.

[Guy Berger]

16 minutes ago, JSngry said:

Any economic model that has me worrying about oil prices going too low comes from a reward system not at all relevant to anybody I know.

Agreed, this is a real head-scratcher.  (Though not 100% insane - replace "oil" with "home" and...)

This may reflect the fact that trading commodity contracts, low-quality corporate bonds issued by energy companies, and sovereign debt issued by commodity-exporting countries has been a large chunk of the income for investment banks during recent years.  The world you're familiar with and all that...

Also, to some degree people are blaming the wagging tail (falling energy prices) for the dog (China's economy slowing and becoming less ravenous for commodities) and in some cases getting the attached animal totally wrong (the energy price decline is a function of not just demand but also supply).

 

Edited January 13, 2016 by Guy Berger