Saxo Bank forecast barely short of financial apocalypse

Bank’s 2013 predictions are intentionally outrageous, but our “extreme complacency” might make some of the scenarios more realistic than they appear

December 21st, 2012 5:33 pm| by admin
facebooktwittergoogle_pluspinterestmail

The world may not have ended today (as of writing this, anyway), but Saxo Bank seems more than ready to pick up where the Mayans’ predictions left off.

The Danish investment bank has published its unofficial ‘Outrageous Predictions 2013’, and according to their findings, the economic forecast for next year is gloomy at best.

The report indicates ten possible financial scenarios for the coming year based on current economic conditions. And while the events may seem unlikely, according to Steen Jakobsen, chief economist for Saxo Bank, the scenarios are closer than they may appear.

The predictions are “far more probable than appreciated and could have significant (mostly very negative) consequences on investment returns in the New Year”, Jakobsen wrote in the report.

Among the predicted catastrophes are Spain’s debt downgrading to junk status, oil falling to as low as $50 per barrel, and the German stock index DAX falling by 33 percent.

The events, Jakobsen pointed out, could drastically alter the financial landscape and potentially threaten the political status quo.

The biggest concern on the cusp of the new year – and the cause of the predicted unrest – he wrote, was an odd combination of what he called “extreme complacency about the risks presented” and “rapidly accelerating social tensions”.

He went on to explain that society will move increasingly towards political radicalism in 2013, as mainstream politicians are quickly losing ideological ground. Jakobsen pointed to the Occupy movement, which recently won a symbolic victory over Danske Bank, as a warning of unrest to come.

“The far left and far right will both gain ground by appealing to the desperately disenfranchised voters who have very little to lose in responding to their messages,” Jakobsen said.

Though many express doubts about the reports, a few of Saxo’s predictions have come true in the past, according to Ekaterina Kondrashova of Investcafe.

“In 2011, nine out of ten predictions didn’t come true,” Kondrashova told Russian news organisation RT. “However, one of their predictions that yields on 30-year US  [treasury] bills would fall to three percent was correct.”

Jakobsen himself was quick to dismiss sceptics, saying that the fiscal deficits in the Western world are currently at levels unseen since the Second World War.

“We may not be fighting in the trenches, but we may soon be fighting in the streets,” he said.

First Siemens invested in the Humber, and now DONG (photo: iStock)
Trading Kingdoms: Continued investment bodes well for UK wind energy sector
Danish energy giant DONG will invest £6bn (60 billion kroner) in the UK of...
This cosy café is perfect for those that want their coffee first
Always first for chocolaty mixes at the cutting edge of coffee
As I entered this little cafe on Gammel Kongevej, there was only one rule: ...
Sometimes drones present danger to public security, for instance, when they get too close to airports (photo: iStock)
Falcon centre on Samsø to train birds of prey to destroy hostile drones
A falcon centre on the Danish island of Samsø is considering training bir...
Pegida was founded in the eastern German city of Dresden in 2014 as a protest against Muslim migrants in Germany (photo: Kalispera Dell)
Five men arrrested in anti-Islam demonstration
Five men were arrested at an anti-Islam demonstration that took place on Ax...
The donations will be divided among 12 Danish non-profit organisations, including CARE Denmark, Mellemfolkeligt Samvirke, Red Barnet, Danish Red Cross and UNICEF Denmark (photo: iStock)
Danes donate almost 100 million kroner to charity campaign
Danes have donated 97 million kroner to a national fundraising campaign org...
People are encouraged to report their observations and any possible findings of a meteorite to ildkugle.dk or stjerneskud.info (photo: H. Raab)
Meteorite hits Denmark
On Saturday night, hundreds of Danes witnessed a spectacular phenomenon as ...