RBS: "This Is Simply The Worst Week We Had In Recent History... After Too Much Policy Kool-aid"

This week is simply the worst we had in recent history for markets, RBS exclaims, the worst ever start to the year for The Dow, the worst since 1999 for S&P and the second-worst for credit since 2008. Worst still is, they think there’s more weakness ahead and that many fundamental risks will continue to haunt markets. Why? Simple! Investors drank too much policy kool-aid last year.

Worst ever start to a year...



And worst week for equity and credit markets in recent history...


In Europe, it was ECB QE2; in China, it was the October plenum and a long list of reforms; in the US it was the Fed saying the US economy is strong enough to withstand hikes.

But the reality is that policymakers have increasingly less dry powder to use.

Source: RBS