Originally Posted by
BoilerUP
I'm just a dumb pilot....
...but every time I read something like this RBS note, I think back to Goldman saying oil would hit $200/bbl in 2008 and other investment banks saying the Dow was going to 5000 in 2009.
I also kinda feel much of this is a self-fulfilling prophecy; bankers say "The sky is falling!" and consumers stop spending because they have been told the economy is going down...and the new drop in consumer consumption at best deepens and at worst actually precipitates the very economic drop bankers initially called.
In reality, at the beginning of 2008 West TX Intermediate (WTI) crude was trading at $85.42 and subsequently traded as high as $147.27 in July that year, a 72% gain. Goldman clients who headed the call made out like bandits (assuming they sold on the near-parabolic price rise that year, which even the most novice trading floor clerk would know to do).
And from late '07 to early '09, the DOW went from 14,198.10 to a low of 6,469.95, a 119% decline.
But heck, what the heehaw do those money-grubbers at Goldman and the other banks know, right? It's all just media hype.