Barclays warns of a financial storm as Federal Reserve's credibility crumbles - Daily Telgraph Daily Telegraph reports Barclays Capital has advised clients to batten down the hatches for a worldwide financial storm, warning that the US Federal Reserve has allowed the inflation genie out of the bottle and let its credibility fall "below zero". "We're in a nasty environment," said Tim Bond, the bank's chief equity strategist. "There is an inflation shock underway. This is going to be very negative for financial assets. We are going into tortoise mood and are retreating into our shell. Investors will do well if they can preserve their wealth." Barclays Capital said in its closely-watched Global Outlook that US headline inflation would hit 5.5% by August and the Fed will have to raise interest rates six times by the end of next year to prevent a wage-spiral. If it hesitates, the bond mkts will take matters into their own hands. "This is the first test for central banks in 30 years and they have fluffed it. They have zero credibility, and the Fed is negative if that's possible. It has lost all credibility," said Mr Bond.
The US will massage the data, so they don't have to raise. That only helps banks and harms everyone else. Replace Bernake is the answer.
I see why Barclays had to raise capital the other day, wage spiral inflation? lol. According to Citi, BCS is gonna need another $17 billion. In other words, they don't know what they're doing so blame the Fed.
Below zero, eh? Did BC put in 110% effort into this calculation? If they did, would it change their position 360 degrees? I guess you could say this is "beyond hyperbole". Not saying I disagree with the article, but it's tough to take such superlative exaggerations seriously.
So now we had RBC and Barclay's harping about doomsday. What's the next bankrupt Brit outfit to chime in? HBOS?