Jump to content
House Price Crash Forum
Sign in to follow this  
DC10

Rbs Uber-bear Issues Fresh Alert On Global Stock Markets

Recommended Posts

RBS bear alert August 2009

RBS uber-bear issues fresh alert on global stock markets

12 August 2009

Britain's Uber-bear is growling again. After predicting a torrid "relief rally" over the early summer, Bob Janjuah at Royal Bank of Scotland is advising clients to take profits in global equity and commodity markets and prepare for another storm as winter nears.

"We are now in the middle of a parabolic spike up," he said in his latest confidential note to clients.

He expects global stock markets to test their March lows, and probably worse. The slide could last three months. "A move to new lows is highly likely," he said.

"The last two Augusts proved to be pivotal turning points: August 2007 being the proverbial 'head-fake' when everyone wanted to believe that policy-makers had seen off the credit disaster at the pass, and August 2008 being the calm before the utter collapse of Sept/Oct/Nov… 3rd time lucky anyone?"

He also predicted 2008 Autumn meltdown.

RBS bear alert August 2008

Of course no mention of what was in store for his own bank, but still, not a bad record

Share this post


Link to post
Share on other sites
Of course no mention of what was in store for his own bank, but still, not a bad record

RBS is a hard one to call: AFAICT not quite as clear-cut as NR, B&B or HBOS. Might it have survived intact if it hadn't been for government meddling?

OTOH, the meddling had already started in summer 2008 ...

Share this post


Link to post
Share on other sites

Seemingly backed up by this contribution at Market Oracle...

Financial Markets Behaviour of 2009 Tracking that of 2009

Ok, now I’m starting to get spooked.
Long-time readers know that I’ve frequently commented on the eerie similarities between how the financial markets behaved in 2008 and 2009. However, at this point, things are beginning to border on “conspiracy theorist.â€
In both years, commodities bottomed first (Jan 23, 2008 vs. Feb 23 2009). In both years, the Feds stepped in with a major intervention in Feb/ March (Bear Stearns ’08 vs. Obama Stimulus ’09). This in turn kicked off a major rally in which both stocks and commodities soared higher together.
Both asset classes began to lose momentum in the early summer with the Baltic Dry Index peaking in late May ’08 vs early June ’09. Stocks and the Baltic then rolled over, falling into July:
June 1-August 5, 2008: Baltic collapses 28%
June 1-August 5, 2009: Baltic collapses 25%
Stocks first followed the Baltic, but then staged a massive reversal due to interventions/ short squeezes. In 2008, this came in the form of the Fannie/ Freddie bailout and the SEC banning cracking down on naked short selling. The actual bottom for stocks was July 15.
In contrast, the July 2009 bottom came July 10: the week Meredith Whitney forecast a short rebound in financials and the Federal Reserve pumped $80 billion into the markets (its first expansion in four weeks). We also got a major short squeeze from various brokerage firms banning inverse ETFs and the SEC jumping in with another move against naked short-selling on July 29.
Thus the short-covering rallies in 2008 vs. 2009 are as follows:
July 15- August 5, 2008: S&P 500 rallies 5%
July 10- August 5, 2009: S&P 500 rallies 14%
In both years, the Baltic Dry Index failed to confirm the stock rally: implying that the stock rally represented a disconnect from underlying economic realities (refer to the above listing of Baltic collapses June-August).
2008: the Baltic doesn’t join in the July party:
Ditto for 2009:
In a nutshell, the Baltic and the CRB’s drop served as a major warning sign in 2008. And this is precisely what is happening today. The Baltic continues downward and commodities are showing some signs of weakness. Meanwhile stocks are highly overbought and in serious need of a correction.
If we continue to follow the 2008 pattern from here, stocks will have a choppy August. We’ll then see a complete unraveling of the market rally in late August/ early September. This will then segue into a nightmarish September-October.
Bottomline: if 2009 continues to follow the 2008 pattern, we are in for a NASTY autumn. The fact that both the Baltic Dry Index AND commodities are not confirming today’s stock rally is a serious warning to the Bulls’ argument that this is a new Bull market.
My advice is to watch commodities and the Baltic Dry Index closely. These two sectors lead stocks on the upside. They’ll likely lead on the downside too. I suggest you watch commodities in particular. These, more than stocks, follow economic realities. So if commodities roll over in a meaningful way, stocks are on borrowed time.
I’ve put together a FREE Special Report detailing THREE investments that will explode when stocks start to collapse. I call it Financial Crisis “Round Two†Survival Kit. These investments will not only protect your portfolio from the coming carnage, they’ll also show you enormous profits: they returned 12%, 42%, and 153% last time stocks collapsed.

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • The Prime Minister stated that there were three Brexit options available to the UK:   291 members have voted

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.