Begin forwarded message:
From: "don.stacey" <[EMAIL PROTECTED]>
Date: June 18, 2008 6:37:36 AM PDT
To: <Undisclosed-Recipient:;>
Subject: ECONOMY: RBS issues global stock and credit crash alert /
Writedowns May Reach $1.3 Trillion
RBS issues global stock and credit crash alert
By Ambrose Evans-Pritchard, International Business Editor
18/06/2008
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.....
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/18/cnrbs118.xml&CMP=ILC-mostviewedbox
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Paulson & Co. Says Writedowns May Reach $1.3 Trillion
By Tom Cahill and Poppy Trowbridge
June 18 (Bloomberg) -- John Paulson, founder of hedge fund Paulson &
Co., said global writedowns and losses from the credit crisis may
reach $1.3 trillion, exceeding the International Monetary Fund's
$945 billion estimate.
``We're only about a third of the way through the writedowns,''
Paulson, 52, told the GAIM International hedge fund conference in
Monaco today. ``There are a lot of problems out there and it will
continue to be felt through the year. We don't see any signs of
stabilizing.''
Paulson, whose company manages about $33 billion, shorted subprime-
mortgage debt after he noticed ``bubble like'' prices that made a
collapse ``inevitable.'' His Paulson Partners fund has risen about
18 percent a year since it was founded in 1994, while one of his
main funds for betting on declines in subprime debt rose 591 percent
last year.
The U.S. is heading into a recession as falling home prices weigh on
consumer spending, Paulson said. The second half of this year will
be worse than the first as the economic slowdown continues into
2009, he said. Signs of stress are ``accelerating'' in the housing
market.
``I don't consider myself a bull or a bear,'' he told the audience
at Monaco's Grimaldi Forum. ``I'm a realist.''
Ambac Financial Group Inc., the second-biggest bond insurer, is...
http://www.bloomberg.com/apps/news?pid=20601087&sid=aqnHlADd0vUU&refer=home
