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Wednesday, January 13, 2016

Royal Bank Of Scotland Warns Investors Of 'Cataclysm', Advises Them To 'Sell Everything'

by JASmius

The harmonic tremors of the Final Collapse of the global economy continue to rattle and shudder.  And unlike the ones that some of us continue to fondly dream are moving us closer to breakthrough success, these are actually real - and the implosion is imminent:

The Royal Bank of Scotland reportedly has advised clients to brace for a “cataclysmic year” and a global deflationary crisis, warning that major stock markets could fall by a fifth and oil may plummet to $16 a barrel. [emphasis added]

A "cataclysmic year," huh?  Gee, who's been saying that in these parts?  Hold on, it'll come to me.....

The bank’s credit team said markets are flashing stress alerts akin to the turbulent months before the Lehman crisis in 2008, the London Telegraph explains.

“Sell everything except high quality bonds. This is about return of capital, not return on capital. In a crowded hall, exit doors are small,” the bank, also known as RBS, said in a client note.

“Andrew Roberts, the bank’s research chief for European economics and rates, said that global trade and loans are contracting, a nasty cocktail for corporate balance sheets and equity earnings. This is particularly ominous given that global debt ratios have reached record highs,” Ambrose Evans-Pritchard reported. [emphases added]

And what does Donald Trump want to do?  Start a nuclear trade war with Red China.  Which will just about shut down global trade altogether.  That'll be an economic stimulus, alright.

Roberts said the bank's red flags for 2016 — falling oil, volatility in [Red] China, shrinking world trade, rising debt, weak corporate loans and deflation — had all been seen in just the first week of trading. "We think investors should be afraid," Roberts said. [emphasis added]

The similarities to the run-up to the Panic of 2008 are ominous in that the steps and factors that were taken to try (and fail) at cushioning the economic impact of the Democrat Financial Logic Bomb were one-shot wonders that can't be repeated.  Back then the Fed just printed up a trillion and a half dollars and threw it at the problem; but the Fed's been doing that for the better part of a decade now, with no measurable effect, monetizing the metastasizing U.S. national debt with no end in sight.  That cannot continue indefinitely, and when it slows down or stops, the mythical facade of the "Obama Recovery" will collapse and the true extent of Obamanomical devastation will be revealed.  Or, to borrow a visceral metaphor, the drug addict will forcibly quit cold turkey, and the patient will not survive the withdrawal throes.

Same thing with the "emerging markets" - Red China, India, Brazil, Russia, etc. - which were on the upswing but have since killed their economic momentum by following our dumbass statist, debt-happy bad example.

This time, the financial/economic hypercane will strike, and there will be nothing to protect any of us, and no shelter to be found.  Except it won't be a hypercane....

....but a financial/economic gamma ray burst....

....and for some in power, behold, all manner of things will become possible.

UPDATE: Dow plunges 360 points, S&P 500 enters correction on oil, earnings fears.

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