RBS brace for a “cataclysmic year”

Generali

anchovypizza wrote: »

My favoured price would be 50 cents a barrel, but the price is not the issue, it's what it reached and fell back to that is the problem.
Trouble with people like you is that if oil had reached $250 barrel it would mean high house prices, and I know the argument you lot would have used. But prices have fallen off a cliff and you still cannot see it. But of course you can see the damage that would be done with a 30% fall in house prices.

It has just going to be hillarious when it all kicks off, I have paid for my home and my ego is strong enough to withstand a reduction in it's so called value, I doubt very much many of the posters will feel the same way.

Good for you and your ego. Do you exercise it or are you naturally blessed with a powerful ego?

What is going to kick off do you think and why will it be hilarious?

DiggerUK

This thread is supposed to be about the Telegraph story.

A part of the story raised concerns about the recent Federal Reserve Bank of Americas' recent rate rise. Not as nonchalantly as the usual suspects here did.

"RBS first issued its grim warnings for the global economy in November but events have moved even faster than feared. It estimates that the US economy slowed to a growth rate of 0.5pc in the fourth quarter, and accuses the US Federal Reserve of “playing with fire” by raising rates into the teeth of the storm. “There has already been severe monetary tightening in the US from the rising dollar,” it said."

Liquidity could prove problematic for many a solvent concern..._

Generali

DiggerUK wrote: »

This thread is supposed to be about the Telegraph story.

A part of the story raised concerns about the recent Federal Reserve Bank of Americas' recent rate rise. Not as nonchalantly as the usual suspects here did.

"RBS first issued its grim warnings for the global economy in November but events have moved even faster than feared. It estimates that the US economy slowed to a growth rate of 0.5pc in the fourth quarter, and accuses the US Federal Reserve of “playing with fire” by raising rates into the teeth of the storm. “There has already been severe monetary tightening in the US from the rising dollar,” it said."

Liquidity could prove problematic for many a solvent concern..._

And guess what the Fed will do if it turns out that corporations can't cope with a whopping 25bp rate rise?

Note that what compnies have been doing over the last couple of years is borrow cash at < 1% to buy back stock that pays a dividend of > 2%. If rates rise then companies will issue stock and repay the debt.

US companies have borrowed $1,100,000,000,000 over the past 2-3 years alone for this purpose.

Generali

It's also worth noting that the vast majority of corporate debt is issued at a fixed not floating rate.

DiggerUK

Companies doing buy backs of their own shares, may be good for the stock price......and a massive boost for CEO's bonuses, but they don't produce anything beyond that.
For economies to prosper 'stuff' needs to be produced.

The overhang of debt means that liquidity is in high demand, if a liquidity drought is the result, then even solvent outfits will be brought down.
Doesn't matter if you dig coal or carrots out of the earth, products need to be made and sold to keep going. If debt servicing eats all profits up, then surplus suppliers will be 'creatively destroyed'..._

Mistermeaner

Why this strange ranting about rising house prices? Im a bit lost with anchovy pizzas point - did I miss something.

I do like anchovies though

kinger101

Graham_Devon wrote: »

Think you are making far too much of this to be honest.

Reason? The savings are not THAT large. It's around 25p on a litre of fuel since last year.

Or in other words, around £10 per 40 litre tank.

I feel I must explain before you purposly twist my words (again) that I'm all in favour of this saving personally.

However, I don't see why you are going all out ramper on us over these savings at the pumps. By your theory, the UK would have taken off and gone stratospheric when people saved sometimes £100's of pounds per month on their mortgage payments when interest rates fell.

It didn't. So I don't know why you these much smaller savings are going to light the touchpaper to something.

It's not just about the price of filling up your car. Oil is used directly or indirectly in most industries. Food prices in particular have fallen with oil prices.

http://www.worldbank.org/en/topic/poverty/publication/food-price-watch-june-2015-prices-hit-five-year-low-impact-of-low-oil-price-on-global-food-prices-poverty-and-inequality

It's particular noticeable on things like bread and eggs. A sliced white loaf (used for CPI) is down from about £1.25 to £1 now.

https://timetric.com/index/uk_price_bread_white_loaf_sliced_800g/

kinger101

Mistermeaner wrote: »

Why this strange ranting about rising house prices? Im a bit lost with anchovy pizzas point - did I miss something.

I do like anchovies though

I think anchovy = crashy time. They are about as coherent as each other. We'll know for sure once Aberdeen is mentioned.

luvpump

luvpump wrote: »

http://www.telegraph.co.uk/finance/economics/12093807/RBS-cries-sell-everything-as-deflationary-crisis-nears.html

http://www.telegraph.co.uk/finance/economics/12094473/Pound-plunges-to-five-year-low-as-manufacturing-performance-worse-than-anyone-expected.html

http://www.telegraph.co.uk/finance/oilprices/12094394/Oil-price-could-fall-to-10-a-barrel-warn-investment-bank-bears.html

kinger101

luvpump wrote: »

http://www.telegraph.co.uk/finance/economics/12094473/Pound-plunges-to-five-year-low-as-manufacturing-performance-worse-than-anyone-expected.html

http://www.telegraph.co.uk/finance/oilprices/12094394/Oil-price-could-fall-to-10-a-barrel-warn-investment-bank-bears.html

Gosh, has the Telegraph's economics section always been so morose? This forum has been full of their stories of doom recently. I think they all need to go away on a corporate away day where they play with some kittens or something.