RBS issues global stock and credit crash alert

[krakknisse]

Re: RBS issues global stock and credit crash alert

Uh... guys. No more silly Iran stuff from me. When is the time to withdraw actual paper cash from your friendly neighbourhood bank? I'm sort of waiting for EJ to put "CRASH - GO GET YOUR CASH" in 72-point letters on the ITulip front page. But seriously, I'm getting a little queasy right now.

If there are bank runs in the US, that big sucking whirldwind is not going to stop in the middle of the Atlantic. Banks are a con game, so when the game's up, it may be so globally. How much of your portfolio would you have in physical cash and other in-your-hand assets?

EJ: any helpful hints here? Sapiens, metalman, grapejelly, lukester? Am I just overdosing on doom and gloom?

Re: RBS issues global stock and credit crash alert

Damn EJ...that little quote ought go down in history!!!!

I must put it on my wall just to reassure me that my basic idea is correct!
Like most others around here i tend to be a bit early on things...with negative consequences! So sometimes one questions one's prescience!!!!!

[Starving Steve]

Re: RBS issues global stock and credit crash alert

It simply can't be stupidity because that seems utterly impossible. I figure one could only call it a "deliberate catastrophe"... there's no other way to describe it... maybe, likely, I'm wrong...

Meet idiot #2, Mr. Donald Kohn, the Vice-Chairman of the U.S. Fed, another of Bush's appointees to the FOMC.

According to Kohn, some inflation from oil is just fine because inflation creates jobs. Mr. Kohn argued the absurd logic of the Phillips Curve which is part of so-called basic economics education.

Here is what Mr. Kohn had to say in Boston last week. (I am not making this up!)
http://www.cnbc.com/id/25126035

[EJ]

Re: RBS issues global stock and credit crash alert

Olivegreen...they think thye can!!! They think they can run negative interest rates forever, so inevitably they must think they can "create" new money forever.

Central banks can create new money forever. However, they can't control where it goes and they cannot control its value.

[olivegreen]

Re: RBS issues global stock and credit crash alert

It simply can't be stupidity because that seems utterly impossible. I figure one could only call it a "deliberate catastrophe"... there's no other way to describe it... maybe, likely, I'm wrong...

Re: RBS issues global stock and credit crash alert

Olivegreen...they think thye can!!! They think they can run negative interest rates forever, so inevitably they must think they can "create" new money forever.

[olivegreen]

Re: RBS issues global stock and credit crash alert

"Gold market disagrees with RBS, says the banks will keep shoveling money against the debt deflation tide"


...until they run out of money, right? because you can't print forever?

[Starving Steve]

Re: RBS issues global stock and credit crash alert

"end game moves like a drunken sailor"

That I like... mind you, a drunken sailor is probably happily oblivious, unlike the Feds...

It all seems surreal...

This RBS article is on the Drudgereport now. More mainstream.

I beg to differ: A drunken sailor would make for a better steward of the U.S. economy than the current FOMC under the so-called leadership of Bernankee.

If there is any solution to painting themselves into a corner the way the FOMC has, raising interest rates--- yes, RAISING interest rates--- is the solution.

Higher interest rates would mean lower oil, a stronger dollar, and a far better environment for investment in the U.S, higher stox, more savings, less inflation, and probably even a better real estate environment too.... But Bernankee just doesn't see it.

Enjoy the depression. The Royal Bank of Scotland says that the fun really begins this summer. :eek:

[FRED]

Re: RBS issues global stock and credit crash alert

US leeway to counter Trichet is between a rock and a hard place:

Toughness required:

U.S. wholesale-level inflation jumps 1.4% in May; PPI up 7.2% in past year

But evaporating asset-backed collateral to the banking system requires the yield curve get a fresh pump-prime instead, to steepen it and give the banks some "air". Just exactly like everybody here pictured it would work out, 18 months ago. Fed seems to be playing out it's end-game moves like a drunken sailor.

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Gold market disagrees with RBS, says the banks will keep shoveling money against the debt deflation tide

[olivegreen]

Re: RBS issues global stock and credit crash alert

"end game moves like a drunken sailor"

That I like... mind you, a drunken sailor is probably happily oblivious, unlike the Feds...

It all seems surreal...

This RBS article is on the Drudgereport now. More mainstream.

[Jim Nickerson]

Re: RBS issues global stock and credit crash alert

Well... the thing that is not good to my mind is that this is mainstream media (somewhat). Regular people seeing this will be pretty jittery. And its never a good thing from what I understand when regular people start thinking.... (being a regular people, I can say that)

Check out Yahoo Finance for the type of stuff "regular people" might be reading, but more likely they are reading crap about Britney et. al. luminaries. They are not likely reading the Telegraph.

Unless something has changed galactically since you wrote the above 15 minutes ago or so, you are grossly misplacing your concerns to consider that regular Americans have begun thinking. I don't think iTulip is necessarily the epitome of enlightenment, but it definitely is not a bad place to be seeking financial/economic enlightenment, and if you are reading and contributing here you place yourself a bit outside of the "herd."

After a piece Mega posted yesterday by Ambrose Evans-Pritchard I was looking on the Telegraph earlier tonight and saw neither the piece you put in nor the one Rajiv put up. Thanks to both of you.

Re: RBS issues global stock and credit crash alert

US leeway to counter Trichet is between a rock and a hard place:

Toughness required:

U.S. wholesale-level inflation jumps 1.4% in May; PPI up 7.2% in past year

But evaporating asset-backed collateral to the banking system requires the yield curve get a fresh pump-prime instead, to steepen it and give the banks some "air". Just exactly like everybody here pictured it would work out, 18 months ago. Fed seems to be playing out it's end-game moves like a drunken sailor.

US YIELD CURVE NEEDS A NEW PUMP PRIME.jpg

[olivegreen]

Re: RBS issues global stock and credit crash alert

Well... the thing that is not good to my mind is that this is mainstream media (somewhat). Regular people seeing this will be pretty jittery. And its never a good thing from what I understand when regular people start thinking.... (being a regular people, I can say that)

[Rajiv]

Re: RBS issues global stock and credit crash alert

This seems to go along with the following warning
Morgan Stanley warns of 'catastrophic event' as ECB fights Federal Reserve

The clash between the European Central Bank and the US Federal Reserve over monetary strategy is causing serious strains in the global financial system and could lead to a replay of Europe's exchange rate crisis in the 1990s, a team of bankers has warned.

"We see striking similarities between the transatlantic tensions that built up in the early 1990s and those that are accumulating again today. The outcome of the 1992 deadlock was a major currency crisis and a recession in Europe," said a report by Morgan Stanley's European experts.

Just as then, Washington has slashed rates to bail out the banks and prevent an economic hard-landing, while Frankfurt has stuck to its hawkish line - ignoring angry protests from politicians and squeals of pain from Europe's export industry.

Indeed, the ECB has let the de facto interest rate - Euribor - rise by over 100 basis points since the credit crisis began.

Just as then, the dollar has plummeted far enough to cause worldwide alarm. In August 1992 it fell to 1.35 against the Deutsche Mark: this time it has fallen even further to the equivalent of 1.25. It is potentially worse for Europe this time because the yen and yuan have also fallen to near record lows. So has sterling.

Morgan Stanley doubts that Europe's monetary union will break up under pressure, but it warns that corked pressures will have to find release one way or another.

This will most likely occur through property slumps and banking purges in the vulnerable countries of the Club Med region and the euro-satellite states of Eastern Europe.

"The tensions will not disappear into thin air. They will find fault lines on the periphery of Europe. Painful macro adjustments are likely to take place. Pegs to the euro could be questioned," said the report, written by Eric Chaney, Carlos Caceres, and Pasquale Diana.

The point of maximum stress could occur in coming months if the ECB carries out the threat this month by Jean-Claude Trichet to raise rates. It will be worse yet - for Europe - if the Fed backs away from expected tightening. "This could trigger another 'catastrophic' event," warned Morgan Stanley.

[Jim Nickerson]

Re: RBS issues global stock and credit crash alert

Nice find, olive, thanks for putting it up.