Anyone else heard this Fortis Bank prediction?

[WolfeMacleod]

Picked this up on a guitar forum a couple days ago. Looking for more information on it, but can't find anything solid.





Fortis Bank predicts US Financial market meltdown within weeks

BRUSSELS/AMSTERDAM - Fortis expects a complete collapse of the US financial markets within a few weeks. That explains, according to Fortis, the series of actions by the bank of last Thursday to raise €8 billion. "We have been saved just in time. The situation in the US is much worse than we had thought", says Fortis chairman Maurice Lippens. Fortis expects bankruptcies amongst 6000 American banks which have a small coverage currently. But also with Citigroup, General Motors, a complete meltdown in the US is beginning."

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.


RBS issues global stock and credit crash alert


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.



But I did find this....

http://www.gata.org/node/6392


Barclays warns of disaster as Fed loses all credibility
Submitted by cpowell on Fri, 2008-06-27 02:02. Section: Daily Dispatches
By Ambrose Evans-Pritchard
The Telegraph, London
Friday, June 27, 2008

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/27/cnbarc...

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 under way. 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 5.5pc 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 markets 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 grim verdict on Ben Bernanke's Fed was underscored by the markets yesterday as the dollar fell against the euro following the bank's dovish policy statement on Wednesday. Traders said the Fed seemed to be rowing back from rate rises. The effect was to propel oil to $138 a barrel, confirming its role as a sort of "anti-dollar" and as a market reproach to Washington's easy-money policies.

The Fed's stimulus is being transmitted to the 45-odd countries linked to the dollar around world. The result is surging commodity prices. Global inflation has jumped from 3.2 to 5pc over the last year. Mr Bond said the emerging world is now on the cusp of a serious crisis. "Inflation is out of control in Asia. Vietnam has already blown up. The policy response is to shoot the messenger, like the developed central banks in the late 1960s and 1970s," he said.

"They will have to slam on the brakes. There is going to be a deep global recession over the next three years as policy-makers try to get inflation back in the box."

Barclays Capital recommends outright "short" positions on Asian bonds, warning that yields could jump 200 to 300 basis points. The currencies of trade-deficit states like India should be sold. The US yield curve is likely to "steepen" with a vengeance, causing a bloodbath for bondholders.

David Woo, the bank's currency chief, said the Fed's policy of benign neglect toward the dollar had been stymied by oil, which is now eating deep into the country's standard of living. "The world has changed all of a sudden. The market is going to push the Fed into a tightening stance," he said.

The bank said the full damage from the global banking crisis would take another year to unfold. Rob McAdie, Barclays' credit strategist, said: "The core issues have not been addressed. We're still in a very large deleveraging cycle and we're seeing losses continue to mount. We think smaller banks will struggle to raise capital. We're very bearish -- in the long-term -- on high-yield debt. The default rate will reach 8 to 9pc next year."

He said investors had taken their eye off the slow-motion disaster engulfing the US bond insurers or "monolines." Together these firms guarantee $170 billion of structured credit and $1,000 billion of US municipal bonds.

The two leaders -- MBIA and Ambac -- have already been downgraded as the rating agencies belatedly turn stringent. The risk is further downgrades could set off a fresh wave of bank troubles. "The creditworthiness of many US financial institutions will decline in coming months," he said.

The bank warned that engineering and auto firms we're likely to face a crunch as steel and oil costs surge. "Their business models will have to be substantially altered if they are going to survive," said Mr McAdie.

A small chorus of City bankers dissent from the view that inflation is the chief danger in the US and other rich OECD countries. The teams at Societe Generale, Dresdner Kleinwort, and Banque AIG all warn that deflation may loom as housing markets crumble under record levels of household debt.

Bernard Connolly, global startegist at Banque AIG, said inflation targeting by central banks had become a "totemism that threatens to crush the world economy."

He said it would be madness to throw millions out of work by deflating part of the economy to offset a rise in imported fuel and food prices. Real wages are being squeezed by oil, come what may. It may be healthier for society to let it happen gently.

[azasadny]

Very scary times, indeed!

[Rick Lee]

Don't these kind of doomsday predictions come and go every single day? Is there a single day since the dawn of the Internet when someone couldn't find such a prediction?

[tabs]

The Bear Sterns buyout averted a melt down in the credit market.

We might wake up one morning and find that the $$ is worthless. Then what will be of value? SPOONS!!!!!

[m21sniper]

gunpowder.

[lowyder993s]

http://news.yahoo.com/s/afp/20080626/bs_afp/netherlandsbelgiumbankingcompanyfortis&printer=1

[pwd72s]

Originally Posted by Rick Lee

Don't these kind of doomsday predictions come and go every single day? Is there a single day since the dawn of the Internet when someone couldn't find such a prediction?

Since the dawn of civilization, methinks. I remember coming home from high school after a (of course liberal) teacher had lectured that the end was near because Stalin had "the bomb".

God bless my dad, who told me there were always people in his lifetime predicting that "the end is near".

I guess I'll know the end is here when I see it.

[Flatbutt1]

Where would a savvy person put their money at a time like this? My mutual funds are well diversified but if something like this were true seems like theres no place to hide. A very conservative approach in the past was to stow money away in the money market rather than stocks and bonds..but now who knows. Time to dump overseas funds?

[pwd72s]

Flattbut? We're 60/40 bonds, most of them issued by the Fed, vs. equities. Meaning 40% still in the market, mostly index funds.

My dad grew up during the depression. Trust me on this one...if you are worried about where to put your money? That means you have money. Therefore, you're not in real trouble.

As my dad said: "Then, NOBODY had any money."

[Flatbutt1]

Thanks pwd, thats pretty good. Yes I have some and I'd like to hang on to it as it is my retirement. I'm not far off your split ,though I do have a bunch in the money market. I'd be alot more comfortable if the house was paid for.

[wrecktech]

Originally Posted by Rick Lee

Don't these kind of doomsday predictions come and go every single day? Is there a single day since the dawn of the Internet when someone couldn't find such a prediction?

I check out a site every now and then called rense.com. There is an article in it every day about doom and gloom and monetary collapse. It hasn't happened yet and I don't think it will happen tomorrow. Everyone who has predicted the end of the world so far has been wrong.

[kstar]

Yup, there's always someone predicting the end of the world or the demise of a civilization . . . but, there are now conditions that could lead to some type of severe banking crisis or limited collapse in the USA and Europe, IMO.

Some would argue, including myself, that many banks are already in severe crisis mode, trying to raise money to maintain capital ratios as they write off bad debt.

[cashflyer]

Originally Posted by m21sniper

gunpowder.

While many are currently investing in gold, I have been investing in lead and brass.

[Hugh R]

No expert here, but I don't see a lot of shorting going on with US $ or stocks. If there is an imminent collapse coming, the market doesn't seem to be realizing it.

[kstar]

Originally Posted by Hugh R

No expert here, but I don't see a lot of shorting going on with US $ or stocks. If there is an imminent collapse coming, the market doesn't seem to be realizing it.

I haven't looked at the numbers re shorted stock, and I am also no expert, but the fact that the US markets and dollar are already so battered may be the reason.

FWIW, I read today that profits for the S&P's 500 were down 25% in the first quarter.

YTD Chart on NAS, DJ and SP not looking so good either:



Add into the mix continued bad-debt write downs by banks and their continued efforts to raise capital ratios via new cash . . . plus the "unknown" of when the bleeding will stop re the housing crunch and things don't look rosy, IMO.

Oh, I forgot high energy costs! It is certainly possible an economic "perfect storm" is forming.

If Obama wins and does what he has outlined, look for the marginal tax rate to go from around 39% to over 50% and the cap gains rate to go from 15% to 25%. This will be, if BO wins and IMO, what sends the US into a tailspin which will suck down Europe as well.

I don't think this is "chicken little" stuff, but fundamental problems which will not be helped by more insidious, higher taxation.

A broader collapse can be started by just a stumble or fall of one major institution.

Of course, times of extreme movement in either direction of the markets create opportunities for capitalists.

Ever hear of ICBC? It's the world's largest publicly traded financial institution (market cap of over $250B), and it's Chinese. China looks pretty good throughout this mess, IMO.

FWIW.

Best,

[K. Roman]

Originally Posted by tabs

the Bear Sterns Buyout Averted A Melt Down In The Credit Market.

We Might Wake Up One Morning And Find That The $$ Is Worthless. Then What Will Be Of Value? Spoons!!!!!

:d