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 banks 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.
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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.