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

The city of Copenhagen does not want to do business with the Israeli settlements (photo: Yoninah)
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.

The city of Copenhagen does not want to do business with the Israeli settlements (photo: Yoninah)
Copenhagen Municipality votes to boycott Israeli settlement products
Copenhagen councillors voted last Friday in favour of a boycott of products...
A schoolboy threatened his teacher with an axe (photo: djrsterenborg)
Schoolboy reported to police for threatening his teacher
A 10-year-old boy from Løsning school, located in eastern Jutland near Hor...
Can a UEFA boycott of the World Cup become reality? (photo: UEFA)
Danish UEFA member calls for World Cup boycott
The scandals and corruption that have embroiled the international football ...
Melting sea ice is creating challenges and opportunities in Greenland (photo: John Lumen)
International conference in Greenland to highlight the dichotomy of climate change
Scientist from more than 15 countries are gathered in Ilulissat in western ...
It's been a good year for stock investors (photo: iStock)
Denmark’s elite have benefited from hot share markets
Many of Denmark’s wealthiest people and families have made a killing on t...
It could be rough on the seas today (photo: Ben Pierce)
Strong winds and rain today
A low pressure system situated between Norway and Scotland will deliver rai...