Sky falling, rain of frogs, etc etc etc

Via FT Alphaville: RBS strategist Bob Janjuah has overdosed on sad pills today. “The very nasty period is soon to be upon us – be prepared“… “S&P 500 could drop 30% in three months” (it closed at 1338ish yesterday) … “the massive credibility chasms down which the Fed and maybe even the ECB will plummet” …

Not that I disagree, but wow, did that guy wake up on the wrong side of the bed this morning or what?

To be fair, our mate Bob isn’t the only one raising alarm bells about the US economy. About halfway through yesterday’s Markets Live, this pops up:

MONACO – HEDGE FUND MANAGER JOHN PAULSON SAYS US ECONOMY GOING INTO RECESSION, TO LAST INTO 2009

And then this:

PAUSLON [sic] PUTS TOTAL FINANCIAL SECTOR LOSSES AT $1.3 TRILLION

PAULSON SAYS CREDIT CRISIS IS NOT OVER, STILL SHORT CREDIT



(For non-credit-trader readers: “short credit” means he’s expecting companies’ creditworthiness to deteriorate. The companies don’t actually have to go bankrupt to make money on that sort of position, but it’s the best possible result if they do.)

You may’ve heard of John Paulson before – he’s the guy who made nearly four billion dollars last year by predicting the subprime mortgage meltdown. (And don’t worry, he shared the wealth around: investors in his Paulson and Co. hedge funds would’ve made about twenty billion dollars at the same time.)

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