Thursday, June 19, 2008

 

RBS issues global stock and credit crash alert

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.

"A very nasty period is soon to be upon us - be prepared," said Bob Janjuah, the bank's credit strategist.

A report by the bank's research team 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. [Emphasis added.]


Well, you can't say that you haven't been warned. I do not like it when the crash train gets to crowded. Otoh, these guys are pros who look at the fundamental condition of the world economy, as opposed to technical analysis which is my forte. If they are seeing the same thing then it just bolsters my thesis.

Update: The Fed and the ECB clash over interest rate policy, just like in 1987.

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