RBS’s note from a crashing plane: wild headline-grabbing or wise advice?

Should anyone take investment advice from Royal Bank of Scotland, the institution which so misread markets before the crash that it required the biggest taxpayer bailout in banking history? Possibly not, but a bulletin from RBS’s research team this week certainly caused a stir by declaring that ‘in a crowded hall, exit doors are small, risks are high’, ‘sell mostly everything… except high-quality bonds’; and finally, ‘for the world: the game is up’.

Strong stuff, indeed — and written in such staccato City language that it reads like the last scribbled testament of a passenger in a crashing plane. Behind it is the view that assets boosted by quantitative easing can now only go down, that China is in even deeper trouble than first appeared, that the build-up of global debt is even more dangerous, and the share and oil-price falls of recent weeks are merely a harbinger of worse market turmoil to come.