LONDON and COPENHAGEN, December 17 /PRNewswire/ -- Crude trading at $25. S&P 500 falls 50% to 500. China's GDP
growth falls to zero. EURUSD falls to 0.95. Italy to 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 Karsbol.
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.
David Karsbol, Chief Economist at Saxo Bank, comments:
"It is not even outrageous to call this the worst economic
crisis ever. We have, regrettably, been rather precise in almost all
predictions from last year. What used to be outrageous now seems to be the
norm", says Karsbol.
"In a year when markets and economies have fluctuated more widely than
ever before nothing seems out of the ordinary or impossible. We believe that
2009 will be equally unpredictable and therefore have made ten outrageous
predictions largely focusing and what might happen to global indices and
currencies. The good thing is, overall, we predict 2009 will be a turning
point because it can't get much worse" says Karsb0l.
"In 2008 the S&P 500 has fallen well over 25% below its 1182 high of
2007, world oil prices got close to the predicted high of $175, and UK growth
has turned negative. Who knows which of our 2009 forecasts will prove to be
right but judging by previous years some of them most certainly will," he
adds.
About Saxo Bank
Saxo Bank is an online trading and investment specialist, enabling
clients to trade Forex, CFDs, Stocks, Futures, Options and other derivatives,
as well as providing portfolio management via SaxoTrader, the leading online
trading platform. SaxoTrader is available directly through Saxo Bank or
through one of our global partners. White Labelling is a significant business
area for Saxo Bank, and involves the Bank's online trading platform being
customised and branded for other financial institutions and brokers. Saxo
Bank has more than 120 White Label Partners and boasts thousands of clients
in over 180 countries. Saxo Bank is headquartered in Copenhagen with offices
in the UK, France, Switzerland, Singapore, Spain, Australia and Japan.
Saxo Bank
Media enquiries: Saxo Bank: David Karsbol, Chief Economist, +45-39-77-43-30; Jeanette Nielsen, +45-51-59-52-75, Team-CorporateCommunications@saxobank.com. Penrose Financial: Andrew Nicolls, +44-(0)20-7786-4881/ andrewn@penrose.co.uk, Leone Lewis, +44-(0)20-7786-4885/ leonel@penrose.co.uk