what are you buying today stock? USO, KOL, GOOG? oh thats right your fully vested (sic). Turn that frown upside down and average down, and down...Thats how the pros do it, i'm totally serial!
RBS issues global stock and credit crash alert By Ambrose Evans-Pritchard Last Updated: 11:44pm BST 17/06/2008 The Royal Bank of Scotland has advised clients to brace for a full-fledged crash in global stock and credit markets over the next three months as inflation paralyses the major central banks. "A very nasty period is soon to be upon us - be prepared," said Bob Janjuah, the bank's credit strategist. A report by the bank's research team warns that the S&P 500 index of Wall Street equities is likely to fall by more than 300 points to around 1050 by September as "all the chickens come home to roost" from the excesses of the global boom, with contagion spreading across Europe and emerging markets. Such a slide on world bourses would amount to one of the worst bear markets over the last century. RBS said the iTraxx index of high-grade corporate bonds could soar to 130/150 while the "Crossover" index of lower grade corporate bonds could reach 650/700 in a renewed bout of panic on the debt markets. "I do not think I can be much blunter. If you have to be in credit, focus on quality, short durations, non-cyclical defensive names. "Cash is the key safe haven. This is about not losing your money, and not losing your job," said Mr Janjuah, who became a City star after his grim warnings last year about the credit crisis proved all too accurate. RBS expects Wall Street to rally a little further into early July before short-lived momentum from America's fiscal boost begins to fizzle out, and the delayed effects of the oil spike inflict their damage. "Globalisation was always going to risk putting G7 bankers into a dangerous corner at some point. We have got to that point," he said. US Federal Reserve and the European Central Bank both face a Hobson's choice as workers start to lose their jobs in earnest and lenders cut off credit. The authorities cannot respond with easy money because oil and food costs continue to push headline inflation to levels that are unsettling the markets. "The ugly spoiler is that we may need to see much lower global growth in order to get lower inflation," he said. "The Fed is in panic mode. The massive credibility chasms down which the Fed and maybe even the ECB will plummet when they fail to hike rates in the face of higher inflation will combine to give us a big sell-off in risky assets," he said. Kit Jukes, RBS's head of debt markets, said Europe would not be immune. "Economic weakness is spreading and the latest data on consumer demand and confidence are dire. The ECB is hell-bent on raising rates. "The political fall-out could be substantial as finance ministers from the weaker economies rail at the ECB. Wider spreads between the German Bunds and peripheral markets seem assured," he said. Ultimately, the bank expects the oil price spike to subside as the more powerful force of debt deflation takes hold next year.
Some smart guy somewhere once said, "the thing about debt, it's always repaid. Somehow or other, it's always repaid..."
09:01 S&P futures vs fair value: -16.2. Nasdaq futures vs fair value: -42.0. According to futures trading, stocks will open the session with a loss. Reports indicate a Goldman Sachs analyst believes Citigroup (C) may incur addtitional write-downs and may also raise capital in the second quarter. Along with Citi, Goldman cited Merrill Lynch (MER) as another financial institution that may need to raise capital. Goldman has added shares of C to its Conviction Sell List, according to reports. Outside of the financial sector, Goldman has cut estimates for General Motors (GM) and added the company to its Americas Sell List, according to reports.
Pentagon Official Warns of Israeli Attack on Iran U.S. Offical Sees Two 'Red Lines' That Could Prompt Strike BY JONATHAN KARL WASHINGTON, June 30, 2008 Senior Pentagon officials are concerned that Israel could carry out an attack on Iran's nuclear facilities before the end of the year, an action that would have enormous security and economic repercussions for the United States and the rest of the world. A senior defense official told ABC News there is an "increasing likelihood" that Israel will carry out such an attack, a move that likely would prompt Iranian retaliation against, not just Israel, but against the United States as well. The official identified two "red lines" that could trigger an Israeli offensive. The first is tied to when Iran's Natanz nuclear facility produces enough highly enriched uranium to make a nuclear weapon. According to the latest U.S. and Israeli intelligence assessments, that is likely to happen sometime in 2009, and could happen by the end of this year. http://abcnews.go.com/Politics/US/story?id=5281043&page=1