Saxo Bank 10 economic outrageous claims

http://www2.saxobank.com/Documents/pressreleases/Outrageous%20Predictions%202009%20final.pdf

 

SAXOBANK.COM. THE SPECIALIST IN TRADING & INVESTMENT. SAXO BANK A/S | Philip Heymans Allé 15 | DK-2900 Hellerup Telephone +45 39 77 40 00 | Telefax +45 39 77 42 00 | www.saxobank.com | Team-corporatecommunications@saxobank.com December 17, 2008

Saxo Bank predicts 2009 will hit all economic lows

London and Copenhagen – 17 December 2008: Crude trading at $25. S&P 500 falls 50% to 500. China's GDP growth falls to zero. EURUSD falls to 0.95. Italy could leave the ERM. If Saxo Bank's 10 outrageous claims for the year ahead transpire, economic conditions will worsen dramatically in 2009. "The good thing is, overall, we predict 2009 will be a turning point because it can't get much worse" says Chief Economist David Karsbøl.

The Copenhagen‐based online trading and investment specialist's predictions are an annual attempt to predict rare but high impact 'black swan' events that are beyond the realm of normal market expectations. Compiled as part of the bank's 2009 Outlook, the thought exercise this year present a dismal view of the global financial landscape.

Saxo Bank's Outrageous Claims for 2009:

1. There will be severe social unrest in Iran as lower oil prices mean that the government will not be able to uphold the supply of basic necessities.
   
2. Crude will trade at $25 as demand slows due to the worst global economic contraction since the great Depression.
   
3. S&P will hit 500 in 2009 because of falling earnings, vaporizing housing equity and increased cost of funds in the corporate sector.
   
4. The EU is likely to crack down on excessive government budget deficits in several member states, and Italy could live up to previous threats and leave the ERM completely.
   
5. The AUDJPY will drop to 40. The decline in the commodities markets will affect the Australian economy.
   
6. EURUSD will fall to 0.95 and then go to 1.30 as European bank balances are under tremendous pressure because of exposure to the faltering Eastern European markets and intra‐European economic tensions.
   
7. Chinese GDP growth drops to zero. The export driven sectors in the Chinese economy will be hurt significantly by the free‐fall economic activity in the Global Trade and especially of the US.
   
8. Pre‐In's First Out. Several of the Eastern European currencies currently pegged or semi‐pegged to the EUR will be under increasing pressure due to capital outflows in 2009.
   
9. Reuters/ Jefferies CRB Index to drop to 30% to 150. The Commodity bubble is bursting, with speculative excesses so large they have skewed the demand and supply statistics.
   
10. 2009 will see the first Asian currencies to be pegged to CNY. Asian economies will increasingly look towards China to find new trade partners and scale down their hitherto US‐centric agenda.