The Great British Shill Off

Fairly recently (Jan. 8th) in a note to their investors RBS Economisseds gave some pretty stellar investment advice.  While I normally wouldn’t bother writing about something that happened 2 weeks ago, this one is entirely therapeutic in the sense that bottling up my misgivings regarding this missive would likely give me an untimely aneurysm.

The 55 page document was a harmonious interplay between the sort of sage one-liners which would make Sun Tzu blush, and forecasting with a level of clarity that has not been witnessed since the days of the Delphic Oracle. Thankfully, given the marvel of our glorious and entirely impartial global press, the letter somehow managed to go viral, bombarding the average person with a torrent of alarmist rhetoric within the space of 24 hours.


(An average investor as he digests the client letter and the realization that going all in on margin while offering his family home as collateral was not a good idea.)

In a jubilantly hard hitting and hefty one-two combo of investment wisdom, RBS offers investors the ideal strategy on how to pick up pennies in front of a steamroller by suggesting that Bunds are short-term cheap as is “high-quality govt FI”.  While suggesting that it’s time to “sell everything” in the equities space and run for the hills. 2008 all over again!  Game over!

Nestling these two gems amidst prevailing market sentiment regarding commodities and the emerging markets, was either an ingenius ploy which should come with a hefty criminal offense, or negligent beyond all belief.  Just in case anyone didn’t get the memo during the Financial Crisis (or again during Hollywood’s recently released “The Big Short”), banks can, and will trade against clients and do all sorts of shady crap to maintain profitability.

But hey, it’s not like they really need to worry about the consequences when there’s a working schmuck to pick up the tab.

I guess what I’m saying is.. follow the information listed in an investment bank memo that managed to go viral in the media over three continents at your own peril. Don’t fall into the trap in believing that good investment advice comes for free (including my BS.)


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