Société Générale tells clients how to prepare for potential 'global collapse'

[katty]

more:
http://www.telegraph.co.uk/finance/economics/6599281/Societe-Generale-tells-clients-how-to-prepare-for-global-collapse.html

Société Générale tells clients how to prepare for potential 'global collapse'
Société Générale has advised clients to be ready for a possible "global economic collapse" over the next two years, mapping a strategy of defensive investments to avoid wealth destruction.

By Ambrose Evans-Pritchard
Published: 6:12PM GMT 18 Nov 2009

[Locrian]

1. can someone explain what this means? - nt

I mean in regards to what a "normal" person can do? Seems like any and all investment strategies are f-ed, and if the dollar tanks where do you run? I have no clue about currency or any strategies to protect against inflation in this scenario.

[Joanne98]

2. Very important article. Thanx for posting it! Here's the higlights

Under the French bank's "Bear Case" scenario (the gloomiest of three possible outcomes), the dollar would slide further and global equities would retest the March lows. Property prices would tumble again. Oil would fall back to $50 in 2010.

Governments have already shot their fiscal bolts. Even without fresh spending, public debt would explode within two years to 105pc of GDP in the UK, 125pc in the US and the eurozone, and 270pc in Japan. Worldwide state debt would reach $45 trillion, up two-and-a-half times in a decade.

SocGen advises bears to sell the dollar and to "short" cyclical equities such as technology, auto, and travel to avoid being caught in the "inherent deflationary spiral". Emerging markets would not be spared. Paradoxically, they are more leveraged to the US growth than Wall Street itself. Farm commodities would hold up well, led by sugar.

Mr Fermon said junk bonds would lose 31pc of their value in 2010 alone. However, sovereign bonds would "generate turbo-charged returns" mimicking the secular slide in yields seen in Japan as the slump ground on. At one point Japan's 10-year yield dropped to 0.40pc. The Fed would hold down yields by purchasing more bonds. The European Central Bank would do less, for political reasons.

[Warpy]

3. I'm not altogether certain I'd take much of their advice

I've just been reading the .pdf file of their outlook for the US and it reads like they're quoting Cramer. If only our outlook were as rosy as they find it.

Although they mentioned unemployment, they minimized it in the face of (wait for it) CEO confidence.

Uh, it's easy to be confident when you've got a platinum parachute that will see you to a mink lined retirement in a Caribbean villa.

[grasswire]

4. Hmmm. Ambrose Evans Pritchard.

Wasn't he involved in the blowback in the days of the Vast Right Wing Conspiracy that engaged in a conspiracy to remove Bill Clinton from office?

On edit: it's all here. http://en.wikipedia.org/wiki/Ambrose_Evans-Pritchard