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RBS: ‘Sell everything’ ahead of ‘cataclysmic year’

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RBS has warned 2016 will be a “cataclysmic year” and has urged clients to “sell everything” as the “exit doors are small”.

The bank has warned clients of a tough year ahead, with a note from its credit team, seen by the Telegraph, cautioning markets could fall by 20 per cent.

The note says: “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 says the current crisis in China will “snowball” and lead to a downward spiral in global markets.

RBS credit chief Andrew Roberts adds: “China has set off a major correction and it is going to snowball. Equities and credit have become very dangerous, and we have hardly even begun to retrace the ‘Goldlocks love-in’ of the last two years.”

In particular he sounds a word of warning to those invested in oil and mining stocks for the dividends.

He says: “All these people who are long oil and mining companies thinking that the dividends are safe are going to discover that they’re not at all safe.”

He claims brent oil could drop as low as $16 a barrel, which follows on from Morgan Stanley’s prediction today that it could drop as low as $20 a barrel.

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Comments

There are 11 comments at the moment, we would love to hear your opinion too.

  1. One thing I wish is that China had been completely cut off from world trade until it started to play by developed economies rules. How can we be in a position where analysts must play guessing games with the 2nd largest economy in the world (such as using electricity usage to guess economic growth figures) because the Chinese government fakes figures. Where corruption is rife, humans rights abuses exist, the government actively create bubbles in different asset classes which ripple out and affect the rest of the world, summary executions take place, pollution levels are at astronomical levels, citizens don’t have free acces to the internet or freedom of speech, they reclaim land off other countries using nothing but military muscle, elections are a farce….

    Actually I will answer my own question. The reason we are in this position is because the developed world wanted iPads as cheap as possible, no matter the long-term cost, and China turns a blind eye to slave labour. Simple as that.

  2. Thanks Andrew , that’s sure to help !!

  3. How have all your other predictions fared in the past Andrew?

  4. Does this constitute financial ‘advice’? If so, they may want to be a little more careful and balanced in their delivery.

  5. Is he telling the market to dump their RBS shares as well ?

  6. Lindsay he actually is believe it or not – sell the heap is his warning

  7. Robert Ellsworth 12th January 2016 at 3:31 pm

    Possibly a very good hint to do the opposite …

  8. That would be be the reaction pre 2008 now we have other triggers and safeguards if needs be RBS is not known for being shrewd. Also If I get one more email from china asking my biz to buy products I think I will go mad!

  9. So where should they put all of this cash? In an RBS deposit account? What could possibly go wrong there?

  10. RBS Credit – does what exactly?
    Which part of the “Everyone against Iran” fallout in the middle east is depressing the oil price?
    Which part of the collapsed oil price is bad for, hmmm, Japan? Germany? France? Italy? The eastern bloc? Any manufacturing country anywhere?

    Collapse in commodity prices makes goods a) more expensive, or b) cheaper?

    Oil price collapse and equities collapse don’t fit in the same sentence, unless your blinkered eyes only see the FTSE100. There are industries other than oil, miners and banks. Anyone care to bet against Unilever selling more toothbrushes in Indonesia this year than it did last? Colgate in India? Tesla anywhere? House prices in the UK going up? Anadin in Africa? Anyone?

    If a bank analyst knew anything…well for a start they wouldn’t tell anyone else now would they – if there was a staggeringly obvious trade to be placed, they would place it, not go to print and tell the Torygraph. (Go on, say ‘altruism’).

    If RBS think that the last seven years capital building under regualtor guidance has been for nought can they please close their bank and turn off the lights when they leave. (Of course the RBS board will now be seeking the credit departments opinions on why they are now doomed, and laying off payroll to cope…starting with, hmmm, the cred… no that would be just too obvious).

    Good grief Charlie Brown, hold the front page, markets can fall as well as rise…

  11. Does anyone else with RBS that the world will end in 2016.

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