Sell everything! 2016 will be a 'cataclysmic year,' warns RBS

[Bavaria]

"Sell everything."

That harrowing advice is from The Royal Bank of Scotland, which has warned of a "cataclysmic year" ahead for markets and advised clients to head for the exit. Do not wait. Do not pass go.
"Sell everything except high quality bonds," warned Andrew Roberts in a note this week.
He said the bank's red flags for 2016 -- falling oil, volatility in 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," he said.
Related: Fear & Greed Index
Morgan Stanley warned this week that oil could touch $20 a barrel. RBS says if it falls below $30, then $16 is on the horizon.
The world is in a global recession, Roberts wrote. This terrible cocktail means investors should now be thinking about getting a "return of capital, not return on capital."
RBS compares the market mood with that of 2008 before the collapse of Lehman Brothers and the start of the global financial crisis.

Related: Is this another 2008 for the stock market?
At least then, emerging markets were there to save the world from complete collapse.
China cannot this time around, let alone any other big emerging market. RBS remains "deeply skeptical" that Chinese authorities can right the ship any time soon. It warns that without allowing a massive devaluation of its currency -- around 20% -- China can be of no help.
Related: China spent $500 billion to prop up yuan last year
RBS believes China suffered a massive outflow of capital in December -- perhaps as much as $170 billion - with much of that money going straight into the dollar. A chart showing Chinese outflows in 2015 is "surely now the most important chart in the world," concluded Roberts.
CNNMoney (London) First published January 12, 2016: 8:17 AM ET

Markets are heading for a 'cataclysmic year' in 2016, warns RBS

CC. Davion Delmonte Jr.

 

[Bavaria]

Is this another 2008 for the stock market?

by Paul R. La Monica @lamonicabuzz January 7, 2016: 12:21 PM ET
5 Things you won't believe about China's stock market
The calendar may say 2016. But some investors are starting to worry that it could be another 2008.

Stocks around the world plunged again on Thursday. The market volatility in China has raised concerns that a new financial crisis may be just around the corner.
Billionaire investor George Soros sounded the 2008 alarm bells Thursday.
"China has a major adjustment problem. I would say it amounts to a crisis. When I look at the financial markets there is a serious challenge which reminds me of the crisis we had in 2008," Soros said in a speech in Sri Lanka. His remarks were originally reported by Bloomberg and confirmed by a Soros spokesman.
Is Soros on to something? China's economic weakness could have even nastier ripple effects on the global economy and financial markets than it has already.
Related: Another nasty day for stocks
We've seen what concerns about slowing China demand have done to oil and other commodities. And if the continued devaluation of China's yuan leads to an outright currency war, that could be truly scary.
But other market experts think comparisons to 2008 are way overdone.
"I don't think China is going to implode," said Jeffrey Saut, chief investment strategist for Raymond James. He adds that there is little risk of contagion now since banks have cleaned up their balance sheets after the credit crisis eight years ago.
So far, investors are simply worrying about the same risks that have been known concerns for the past year.
It's no secret that China's economy is slowing as it shifts to a more consumer-led economy.
"There is a risk of overreacting. China's transition from an exporter and factory to the world to an economy that's driven by domestic demand is well known," said Nicholas Yeo, head of Chinese equities at Aberdeen Asset Management.
And the collapse in commodity prices has been going on for awhile too.
Related: China stock trading halted after 7% plunge
In order for the current selloff to mushroom into a real bear market, another proverbial shoe would have to drop. Lisa Kopp, head of traditional investments at U.S. Bank Wealth Management, doesn't see that happening.
"There isn't really some new structural smoking gun for the economy and markets like mortgages were back in 2008," Kopp said.
In some respects, China's market woes are actually being exacerbated by the Chinese government trying too hard to fix what's clearly broken. The new circuit breakers didn't work. But at least it is doing something.
Kristina Hooper, U.S. investment strategist for Allianz Global Investors, said that one of the main reasons that things got so bad eight years ago was that U.S. regulators were too late to realize how messed up the banking system was.
Related: China drops circuit breakers
"In 2008, you can argue there wasn't as much U.S. government involvement as there should have been. Bad mortgages were allowed to snowball," she said. "What's happening today is cause for caution ... but not for panic."
Caution is the operative word. Even if China does not lead to a major market pullback, that doesn't mean stocks are about to shoot drastically higher.
This bull market will celebrate its seventh anniversary in early March. That's a long time for stocks to rally. It may be tough for the market to keep climbing, particularly if the Federal Reserve is really intent on raising rates four times this year.
Related: Get ready for an earnings recession
Bob Landry, portfolio manager with USAA Investments Solutions, said the U.S. economy is still fragile and may not be strong enough yet to handle multiple rate hikes.
"The Fed may need to tone down its interest rate rhetoric to calm the market," Landry said. "It wouldn't surprise me to see stocks go down this year, especially if economic growth in the United States is tepid."
Still, many of my followers on Twitter don't seem too concerned about a bear market. I asked if they thought this year would be another 2008 for the markets and the majority said no.
But what do you think?

Is the market headed for another year like 2008?
— Paul R. La Monica (@LaMonicaBuzz) January 7, 2016​

Go to Twitter and vote "Lehman 2.0" if you think Michael Lewis needs to write a sequel to "The Big Short." And pick "This too shall pass" if you're now hunting for stock bargains.
CNNMoney (New York) First published January 7, 2016: 11:47 AM ET

 

[itv]

Sell what?

 

[Davion Delmonte Jr.]

Duu mbona hatari hii,,, ila hali ilivo huko kwenye masoko ni mbaya mno Oil is dropping, China is crushing and America stock market is losing points every day. There might another depression coming so i take your advice of selling everything... Bavaria

 

[Bavaria]

Duu mbona hatari hii,,, ila hali ilivo huko kwenye masoko ni mbaya mno Oil is dropping, China is crushing and America stock market is losing points every day. There might another depression coming so i take your advice of selling everything... Bavaria

Very frightening especially for the younger and emerging investors. Its like taking the risks of a life time.

But If you speculate correctly, during the peak of depression, put all your money in everything.

When the market recovers, you'll see the massive gains.

 

[Davion Delmonte Jr.]

Very frightening especially for the younger and emerging investors. Its like taking the risks of a life time.

But If you speculate correctly, during the peak of depression, put all your money in everything.

When the market recovers, you'll see the massive gains.

The question is: if everyone is selling, what will happen next? (presumably supply will increase to infinite and demand stays at zero with no one who is buying, only people who are selling and in theory at that situation price may get to zero. So i try to imagine what kind of life will exist .... Au ndo mwisho wa dunia nini.....

 

[Davion Delmonte Jr.]

Very frightening especially for the younger and emerging investors. Its like taking the risks of a life time.

But If you speculate correctly, during the peak of depression, put all your money in everything.

When the market recovers, you'll see the massive gains.

But for sure this is the year to sell. Halafu market is booming. Changamka basi

 

[GIUSEPPE]

Sell everything to whom? who will buy if everyone has to sell? This is another Y2K. Someone should do something for me to beliave this

 

[bukoba boy]

"Sell everything."

That harrowing advice is from The Royal Bank of Scotland, which has warned of a "cataclysmic year" ahead for markets and advised clients to head for the exit. Do not wait. Do not pass go.
"Sell everything except high quality bonds," warned Andrew Roberts in a note this week.
He said the bank's red flags for 2016 -- falling oil, volatility in 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," he said.
Related: Fear & Greed Index
Morgan Stanley warned this week that oil could touch $20 a barrel. RBS says if it falls below $30, then $16 is on the horizon.
The world is in a global recession, Roberts wrote. This terrible cocktail means investors should now be thinking about getting a "return of capital, not return on capital."
RBS compares the market mood with that of 2008 before the collapse of Lehman Brothers and the start of the global financial crisis.

Related: Is this another 2008 for the stock market?
At least then, emerging markets were there to save the world from complete collapse.
China cannot this time around, let alone any other big emerging market. RBS remains "deeply skeptical" that Chinese authorities can right the ship any time soon. It warns that without allowing a massive devaluation of its currency -- around 20% -- China can be of no help.
Related: China spent $500 billion to prop up yuan last year
RBS believes China suffered a massive outflow of capital in December -- perhaps as much as $170 billion - with much of that money going straight into the dollar. A chart showing Chinese outflows in 2015 is "surely now the most important chart in the world," concluded Roberts.
CNNMoney (London) First published January 12, 2016: 8:17 AM ET

Markets are heading for a 'cataclysmic year' in 2016, warns RBS

CC. Davion Delmonte Jr.

Sisi nchi za kiafrika kama tanzania we are not that much connected to their financial system,kwahyo mambo yao yanavoenda vibaya huko wala haituhusu sisi tutaendelea na maisha yetu kama kawaida nakumbuka JK alisema "we are on the periphery of financial system of the world" ndo maana we weren't hit significantly na ile ya 2008/9

 

[Bavaria]

Sisi nchi za kiafrika kama tanzania we are not that much connected to their financial system,kwahyo mambo yao yanavoenda vibaya huko wala haituhusu sisi tutaendelea na maisha yetu kama kawaida nakumbuka JK alisema "we are on the periphery of financial system of the world" ndo maana we weren't hit significantly na ile ya 2008/9

Hampo connected kwasababu makampuni yao hayapo huku mengi. Nchi kama Kenya, Nigeria au S. Africa lazima wawe na kiwewe.

Kwamfano, Usishangae Makampuni machanga yanayofanya utafiti wa mafuta na gesi kama Schlumberger au Petrobras yakasimamisha operations kwasababu bei ya mafuta ipo chini sana na hawapati faida ambayo inakwamisha shughuli zao.

 

[Bavaria]

But for sure this is the year to sell. Halafu market is booming. Changamka basi

Una sell wakati market ina recover, huwezi kuuza wakati your portfolio is shrinking.

Kwamfano, ununue pipa moja la mafuta kwa 30$ na uuze kwa 25$ endapo litaendelea kushuka zaidi.

Ila kama ina recover na kuwa 40$, thats bingo..

 

[Bavaria]

The question is: if everyone is selling, what will happen next? (presumably supply will increase to infinite and demand stays at zero with no one who is buying, only people who are selling and in theory at that situation price may get to zero. So i try to imagine what kind of life will exist .... Au ndo mwisho wa dunia nini.....

Walio wahi kuuza ndio wanachekelea.

Wanaoshindwa kuuza ndio wanaolia sasa. Angalia mabilionea wanavyoshuka kiutajiri.

 

[Laigwanan76]

the evil power behind the 1% of wealthy holding society at work........................some big companies will loose and some will gain.....that is why most big companies have diversified.

mostly katika haya makampuni wawekezaji wakubwa hua hawaathiriki kwa sabau za are well protected bali wawekezaji wadogo especially wanunua hisa mmoja mmoja na wale wa through Trust Funds ndio wanaumia!

 

[Davion Delmonte Jr.]

Walio wahi kuuza ndio wanachekelea.

Wanaoshindwa kuuza ndio wanaolia sasa. Angalia mabilionea wanavyoshuka kiutajiri.

Ya ni kweli wanasema tangu mwaka uanze stock markets ime wipe more than $ 1 trillion possibly kwa ajili ya kuporomoka kwa bei

 

[Davion Delmonte Jr.]

Una sell wakati market ina recover, huwezi kuuza wakati your portfolio is shrinking.

Kwamfano, ununue pipa moja la mafuta kwa 30$ na uuze kwa 25$ endapo litaendelea kushuka zaidi.

Ila kama ina recover na kuwa 40$, thats bingo..

Na tatizo kubwa kwenye financial markets ni kuwa na uwezo wa kutambua if the existing price is the lowest or highest. Hiyo ni changamoto kubwa sana. Kuna watu oil ilivofika 32 wakadhani ndo itakuwa the lowest wakanunua lakini baada ya siku kadhaa oil imeenda 29 kwa hiyo washakula hasara kubwa.

 

[Bavaria]

Ya ni kweli wanasema tangu mwaka uanze stock markets ime wipe more than $ 1 trillion possibly kwa ajili ya kuporomoka kwa bei

Na uchumi wa china kuporomoka umechangia sana.

 

[Bavaria]

Na tatizo kubwa kwenye financial markets ni kuwa na uwezo wa kutambua if the existing price is the lowest or highest. Hiyo ni changamoto kubwa sana. Kuna watu oil ilivofika 32 wakadhani ndo itakuwa the lowest wakanunua lakini baada ya siku kadhaa oil imeenda 29 kwa hiyo washakula hasara kubwa.

Unaweza kujua endapo itaanza ku-recover.

 

[Fuga Kisasa]

Asanteni, nimegain kitu kidogo.