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RBS advised clients to brace for a full-fledged crash in global stock and credit markets over the next three months

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Anonymous Coward
User ID: 447109
6/20/2008 8:02 AM

Re: RBS advised clients to brace for a full-fledged crash in global stock and credit markets over the next three months	Quote
I urge you to consider the significance of the RBS alert and the Morgan Stanly alert. Either an information firewall has been breached or the S is HTF or both. Quoting: Polynonymous Howard Something's up, Chairman from RBS was at the Bilderberg meeting on June 8.

Dolomite
User ID: 101285
6/20/2008 8:13 AM

Re: RBS advised clients to brace for a full-fledged crash in global stock and credit markets over the next three months	Quote
Beleive it or not, but another new alltime high in the Dow is due in the summer-autum before a spectacular crash

Anonymous Coward
User ID: 449411
6/20/2008 9:21 AM

Re: RBS advised clients to brace for a full-fledged crash in global stock and credit markets over the next three months

Quote

[link to www.telegraph.co.uk]

RBS stock market alert: Fund managers react
Last Updated: 12:19am BST 19/06/2008

Fund managers respond to the RBS prediction of a fully-fledged stock market crash. By Paul Farrow

Fund managers have reacted strongly to the forecast by the Royal Bank of Scotland of stock market crash and warn investors not to act in haste and panic.

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.

Stock market storm: but do turbulent times really lie ahead?

"A very nasty period is soon to be upon us - be prepared," said Bob Janjuah, the bank's credit strategist. But Richard Buxton, fund manager at Schroders, says Mr Janjuah's comments are 'alarmist'.

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"If you strip out anything stocks related to oil, energy and mining in the FTSE you will see that the market is already down by 30 per cent over the past year. We are in a bear market which has been masked by the performance of those sectors."

Buxton points out that many UK shares closely connected to the slowing economy are down between 50 and 80 per cent over the year already and it is too late for investors who have yet to protect their portfolios. They will merely crystallise losses, he says.

advertisement"Yes, we are in for a tough time and there may be another sell-off but average earnings are cheap and an awful lot of the bad news is already priced in. It is too late to sell, investors need to look through the volatility - I am investing aggressively on downturns. Any falls will be temporary - the falls are simply pushing down on a spring in valuation terms."

Robin Geffen, chief investment officer at Neptune Asset Management says that he finds it 'amusing' that the grim outlook from RBS has emerged just days after the beleaguered bank completed its Rights Issue.

He echoes Buxton's sentiments. "The RBS analyst is a bit late with his forecast, about a year and half late. We have already had a bear market in many areas of the market. The guy has got the financial world confused with the real world where the consumer is real and the building of infrastructure is real. Any parallels to the stock market crash in the late 1920's are ga-ga."

Geffen argues that there is value and opportunities to be found - he has around 10 per cent in cash and is selectively adding to his portfolios.

"I still like emerging market, oil, gas and mining stocks."

The RBS report 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.

Such a slide on world bourses would amount to one of the worst bear markets over the last century.

"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.

Yet Martin Walker, fund manager at Invesco Perpetual says the market has de-rated to such an extent that he can't envisage the market falling much from here.

"Much of the market is trading on historic low valuations, aside from the resource and basic materials. Even if those sectors fall by half it will not make a massive difference to the overall fall in the FTSE."

Walker is keen on the pharmaceutical stocks such as GlaxoSmithKline and AstraZeneca because they are uncorrelated to the economic cycle.

"There are also great opportunities to invest in companies that are growing profits and growing sustainable dividends. BT is yielding 7.5 per cent - and it is a safe yield – that's fantastic value."

Leading portfolio manager John Chatfeild-Roberts at Jupiter admits that the US economy which is teetering on the brink of a recession is a concern and that stagflation (stagnant economic growth and rising inflation) remains a real threat to all Western economies. But he is looking to invest and make the most of the volatility.

He has recently increased his exposure to Japan which he reckons is the one major economy in the world that will benefit from the re-emergence of inflation.

He adds: "The portfolios remain very underweight the UK, which is still in the early stages of a significant consumer slow down. We are underweight financials and have no direct property exposure. On the other hand, we favour a variety of energy, infrastructure and emerging market plays and think that the current risk/reward ratio of investing in good quality corporate bonds to be very favourable. We will look to increase our exposure to these securities where appropriate. We do expect volatility to pick up over the summer months and look forward to taking advantage of this across the portfolios."

[link to www.telegraph.co.uk]

Matrix
User ID: 451583
6/20/2008 10:01 AM

Re: RBS advised clients to brace for a full-fledged crash in global stock and credit markets over the next three months

Quote

[link to www.mercurynews.com]

Administration: Fed needs more protective powers

WASHINGTON—The Bush administration said Thursday that the Federal Reserve should be given sweeping new powers to protect the integrity of the financial system, contending that this year's market turmoil had exposed a badly outdated regulatory system.

While acknowledging that congressional debate on the issue would take time, Treasury Secretary Henry Paulson said the discussion should begin without delay because the stakes for the financial system are so high.

"We should quickly consider how to most appropriately give the Fed the authority to access necessary information from highly complex financial institutions and the responsibility to intervene to protect the system so they can carry out the role our nation has come to expect—stabilizing the overall system when it is threatened," he said in a speech to a women's banking group in Washington....

Quoting: MARTIN CRUTSINGER

[link to www.marketoracle.co.uk]

Mercury news is reporting Administration calls for giving Fed more powers .

Treasury Secretary Henry Paulson says the government must move quickly to give the Federal Reserve more powers to regulate the financial system. Paulson said today that the central bank's powers should be expanded in the wake of the near collapse earlier this year of Bear Stearns, the giant Wall Street investment firm.

He said there was a need to consider quickly how to give the Fed the power it needs to obtain information from investment banks and the responsibility to intervene to protect the overall financial system. His comments were provided by the Treasury Department as excerpts from a speech he was to give later in the day.

Fed At Fault

This is of course as disgusting as it was predictable. It is all in accordance with the Fed Uncertainty Principle .

Uncertainty Principle Corollary Number Two: The government/quasi-government body most responsible for creating this mess (the Fed), will attempt a big power grab, purportedly to fix whatever problems it creates. The bigger the mess it creates, the more power it will attempt to grab. Over time this leads to dangerously concentrated power into the hands of those who have already proven they do not know what they are doing.

Notice the need to move "quickly". The reason to move quickly in this case is that Bush's days are numbered. Our next president, Obama, may very well have different ideas about what role the Fed should play. My position is clear: Want To Fix The Fed? Get Rid Of It.

Fed Is Cooking The Books

Please consider Fed's Bear Stearns Books Look Prime for Cooking .

Flip through the footnotes to the Fed's latest annual report, and you'll come across an open secret. The Fed doesn't follow normal accounting rules, as promulgated by any of the major standard-setting boards. Rather, the Fed writes its own, in a document called the Financial Accounting Manual for Federal Reserve Banks.

If you ever wanted to design an accounting regime to help a bank cook its books, the Fed's would be perfect. This doesn't exactly inspire faith in the U.S. financial system, at a time when a good example might help a lot.

Imagine if there were no rules specifying when a bank must bring an Enron-style special-purpose entity onto its own balance sheet. The Fed's accounting manual has none. Now picture an accounting system where a bank never had to recognize losses on any securities it holds, as long as it continues holding them. That, too, is the Fed's policy.

JP Morgan Chase & Co., which completed its purchase of Bear Stearns this month, will lend the Delaware entity $1 billion and absorb the first $1 billion of any losses. The Fed is on the hook for the rest. The central bank has hired an outside company, Black Rock Inc., to manage the sale of the assets over the next 10 years. The proceeds will go back to the Fed and then, if anything is left over, to JP Morgan after the Fed is paid.

If the Fed were a normal bank, it probably would have to put the Delaware special-purpose entity's assets and liabilities on its own balance sheet, under the Financial Accounting Standards Board's rules. The reason is that the Fed will bear most of the risk of losses. Under the Fed's 161-page accounting manual, however, there's no such requirement. That's because the manual doesn't have any rules on the subject. The Fed hasn't said yet what it will do.

Are we in a banking crisis? You bet we are, the worst one since the great depression. And the root cause of that crisis is the Fed's micro management of interest rates in conjunction with Bush wasting trillions of dollars we do not have in a senseless and in my opinion illegal war in Iraq, and Congress (both parties) that have no sense of fiscal responsibility.

Now instead of eliminating the problem, the screams are getting louder and louder to expand the powers of those causing the problem.

Ron Paul would fix this in a flash. It would be painful, but it would be short and painful. Giving the Fed more powers is guaranteed to do one thing: make the recovery process long and painful and worse.

Anonymous Coward
User ID: 455495
6/20/2008 10:09 PM

Re: RBS advised clients to brace for a full-fledged crash in global stock and credit markets over the next three months	Quote
I will restate what I know as a favor to all here. My "hints" as to why have been crystal clear. This is planned and WILL happen, regardless of what is done to stop it. Again: You must have cash. Quoting: 535 450972 Listen to the man

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