Royal Bank of Scotland to investors: 'Sell everything'

What is your problem?

You trail me around like a yippy ass with your dumb "SELL MOTHERFUCKERS." posts. You do this all the time. You ignore what I have actually said and try to turn conversations into some idiocy. You seemingly have no clue what i am even posting about because you aren't even having the same conversation half the time. But it always ends up as some asshole narrative that you try to attach to me that I stupidly end up responding to.

I pointed that out again just now, as annoying as you are. My fault, I guess for not ignoring you.

But then you quote a post in which I said the exact opposite of the annoying bullshit you had JUST put into my mouth. Some guy asked what to do with his 401(K). And my advice for most people was was what is in that post: "Don't try to time markets. Have a long time horizon. Find an asset allocation that works for you and stick with it."

That is a long fucking way from "SELL MOTHERFUCKERS." Thanks for quoting it and pointing out for yourself how stupid your mischaracterizations of me are. I'm done even responding. There is nothing to constructive to be had from even responding to someone who does that.

 

Exactly. Profits are the mothers' milk of stocks (I hate the saying actually because Larry Kudlow says it over and over again; but it is the truth).

We got into a stock market that has not been driven by profits. Obviously. It has been driven by liquidity created by the cost of borrowing being kept artificially low for a long time. I think that way too many people ignored it and there is going to be a price to pay. As there is whenever debt levels get unsustainable. This doesn't just apply to the U.S. stock market. The cost of borrowing having been suppressed has thrown MANY areas out of whack. And there is going to HAVE to be a deleveraging -- one we shouldn't have had to deal with, but a lot of poor and short-sighted decisions to push future growth forward and put off having to deal with reality have us where we are. If I am right about this, there is a buying opportunity coming in stocks, because equities the in the U.S. and Japan and Europe ran up based on it being cheap to borrow. And that is not only unsustainable, but when a deleveraging of any sort comes (on the back of a credit event), I am fairly certain that stocks are going to blow off -- I am betting significantly.

Me pointing that out -- and having seen it develop while it was happening, as ridiculous as others on here seemed to have found it -- has zero to do with where I think equities will be 10 years from now or 20 years from now. Historically, over those kinds of time periods, broad baskets of stocks have appreciated in value.

 

The short-squeeze / dead-cat bounce rally you guys were all excited about probably has run its course.

Mario Draghi came out with all of his bazookas this morning. He wasn't going to disappoint the way he did two meetings ago. He was going to show that he REALLY means, "Whatever it takes!" A rate cut (farther into negative rates), more quantitative easing, expansion to allow them to now buy corporate debt (yet more reckless market manipulation) as part of their QE, etc. He essentially threw the kitchen sink at the markets in his attempt to monetize debt and try to get people gambling again.

And at 7:45 this morning, the initial reaction was, "Good news! The casino is open again" The Euro sold off, dollar up, gold sold down, etc. Dollar was up. Equities were up -- U.S. and Europe. Just the kind of reaction that you would have gotten 3 years ago; the phoniness that drove equity markets higher over the last few years. . ...

And then. ... it all started to reverse. Within 2 hours. The euro is soaring relative to the dollar -- the opposite of what he was going for. Gold and silver back up near their 12 month highs. Equities are selling off, and on much more volume than you got during the short-squeeze rally you guys were jacked about.

Bear market rallies have no legs. They can be violent, but they only flush out weak hands before they resume. And we are most likely in a bear market for equities -- one that has good chance of being prolonged -- whether you want to believe it or not.

The only thing that can support U.S. equities at the insane valuations we are at, is a ramping up of fiscal debt that feeds liquidity into markets. ... or some kind of monetary stimulus that markets actually don't tune out the way they are starting to tune out central banks. Right now it looks like those monetary authorities no longer have the ammo -- because if the phoniness he threw at the markets this morning doesn't get everyone gambling on risk assets, there isn't enough monetary liquidity to make up for the economic stagnation and high debt levels they have created (and are going to dog the global economy until all of the debt and leverage can get flushed out). Fiscally, everyone is already way too in debt, so no go on that route of "stimulus" to prop up markets without causing a sovereign debt crisis sooner rather than later.

The Federal Reserve meets next week. If they follow through on last years' rhetoric and raise another 25 basis points, the sell off is likely to be violent. Which is why I doubt they will -- they have backed off (as was predictable to anyone not sniffing the bubble fumes). Even if they don't, it's not going to be enough. Not doing anything is not going to be dovish enough for any long-term sustainability for this market at these levels. They need QE4. ... and even if that happens, it is probably not enough anymore. I am hoping they are truly of bullets and give up, so we can get them out of the markets and start dealing with the mess they created -- namely flushing out all of the overleverage and misallocation of risk they created. We'll see. But you can only run up endless debt and monetize it for so long, regardless of whether it is coming to an end now or it happens later. When the market tunes out the "bad news is good news" BS, bad news becomes bad news again, which is what seems to have been starting to happen for the last half year.

As I said to you guys, I felt strongly that the it was way more likely that the S&P is heading to 1550 / 1600 before it goes to 2200. Or as Jeff Gundlach said in his presentation the other day, there is maybe 2 percent potential upside and 20 percent downside, as he sees it. The broader stock market is already down quite a bit more than the S&P is -- stocks have been getting hit for the last 18 months, with only a handful of stocks propping up the S&P and DowI think ultimately, the S&P is likely to get down below 1550 / 1500, and I am braced for it to potentially go significantly lower than that before this plays out. I am sure there will be a violent bear market rally in there, and maybe you guys will get excited again. I just hope most people realize that now is a time to be very careful with any money they are going to need relatively soon. If it is retirement money with a very long-term horizon, yeah, for most people they should ride it out and try not to look at their statements. If it is money you may need sometime soon, and you are gambling on stocks, you are taking on way more risk right now than you probably realize.