2009 Financial Pediction

[Bizz]

2009 FINANCIAL PEDICTION

No Growth in China and Other Outrageous Prophecies

Thursday, January 1, 2009

click me

Last year was marked by astonishing and market-changing events including a $100 fall in the price of oil, the drop to zero of U.S. interest rates and the collapse of Wall Street giants such as Lehman Brothers.

This year could bring more, equally unbelievable, happenings such as another 400 points being wiped off the S&P 500 and a slump in Chinese growth to zero, according to a report from Saxo Bank titled "10 Outrageous Claims 2009."

1. Iranian Revolution

If oil prices continue to decline, which Saxo Bank believes they will, the Iranian society will be badly affected due to the country's reliance on its number one commodity. The government may not be able to provide the basic necessities its citizens need, which would lead to widespread social unrest, according to Saxo Bank.

2. Crude Oil to $25

The ongoing economic crisis will further dent oil demand throughout this year, sending the price ever closer to $25 a barrel, Saxo Bank said. OPEC production cuts will be hampered by disagreement and fail to stem the slide, it added.

3. S&P 500 to 500

The S&P 500 will fall to 500 points in 2009 as slowing corporate earnings will drag on the U.S. index, according to Saxo Bank. Earnings will slow because of a continued consumer recession, lead by the credit shortage. An increase in corporate funding costs, falls in house prices and a slowdown in investing programs will also add to the weakness, the report said.

4. Italy Could Drop the Euro

Italy could make good on threats to leave the European Exchange Rate Mechanism (ERM) and may drop out in 2009, Saxo Bank said, a decision which would mean the country effectively gives up the euro. The EU is likely to crack down on excessive government budget deficits, which could prompt Italy to leave the currency regulation, it said.

5. Australian Dollar to Slump vs Yen

The Australian dollar will sink to 40 Japanese yen as this year's continued slump in commodities hurts the Australian economy, Saxo Bank said. The whole commodity complex will be left dead in the water for the next ten years, the report said.

6. Dollar to Outstrip the Euro

The euro will fall to 0.95 cents versus the dollar in the New Year, before shifting direction and rising to 1.30 cents, according to Saxo Bank. The euro-zone will face a tough year in 2009 as the banking sector will suffer because of its exposure to Eastern Europe, a region that will increasingly falter this year, the report said.

7. Chinese GDP Growth to 0%

Export-led China will be hit by the double blow of a slowing U.S. economy and the souring of commodity-based investments, according to Saxo Bank. Japan will not actually sink into recession, despite gross-domestic-product growth all but disappearing, the report said.

8. Eastern European Forex Pegs to Fail

Several of the Eastern European currencies currently pegged or semi-pegged to the euro will come under increasing pressure to decouple this year, the report said. The emerging economies are vulnerable to more credit-market disruptions, it added.

9. Commodities Prices to Plunge

Commodities are facing widespread weakness this year with the Reuters/Jefferies CRB Index to drop 30 percent, according to Saxo Bank. The consensus belief that demand has been outstripping supply for years might not even be true and more stockpiles could be revealed, the report said.

10. Yen to Become Currency Peg

Asian countries could shun dollar pegs in favor of the Chinese yen this year, according to Saxo Bank. China's economic, political and cultural influence is growing and shifts in market re-evaluations will favor the country, the report added.

Do not ask me i'm to upset to comment.

Edited January 2, 2009 by Bizz

[PhilHarries]

10. Yen to Become Currency Peg

Asian countries could shun dollar pegs in favor of the Chinese yen this year, according to Saxo Bank. China's economic, political and cultural influence is growing and shifts in market re-evaluations will favor the country, the report added.

Do not ask me i'm to upset to comment.

Chinese yen? Is that your typo or from the report?

Also it is stated above that China's influence is growing but earlier it is stated that GDP growth slows to 0%. How can they have growing influence when their economy is stagnant?

There's no point getting upset over anything after all they are only predictions (aka guesses).

btw I would have said Greece is more likely than Italy to dump the Euro so that would be my guess, sorry prediction.

[LaoPo]

2009 FINANCIAL PEDICTION

No Growth in China and Other Outrageous Prophecies

Thursday, January 1, 2009

This year could bring more, equally unbelievable, happenings such as another 400 points being wiped off the S&P 500 and a slump in Chinese growth to zero, according to a report from Saxo Bank titled "10 Outrageous Claims 2009."

Do not ask me i'm to upset to comment.

Easy...easy....

"The primary reason for doing this “Black Swan” exercise every year is to counter-balance human psychology, which is usually skewed towards optimism. We tend to be somewhat more pessimistic in our Yearly Outlook than the average analyst in the market, and believe that it is important for the investor to always factor in the less likely scenarios (as perceived by the market). Please keep in mind that this is more of a thought exercise than a set of outright predictions – we do not consider the chances are better than 50-50 for all of these claims."

From the Saxo Bank website where they made a POLL, which you may want to join:

http://www2.saxobank.com/en/market-news-an...tions-2009.aspx

Edit note:

I did the poll myself and was correct 9 out of 10. The incorrect one was the last one and I simply don't believe the score of 57 versus 43 but I won't tell which answer I choose...

Interesting and I recommend to do it yourselves.

LaoPo

Edited January 2, 2009 by LaoPo

[Bizz]

10. Yen to Become Currency Peg

Asian countries could shun dollar pegs in favor of the Chinese yen this year, according to Saxo Bank. China's economic, political and cultural influence is growing and shifts in market re-evaluations will favor the country, the report added.

Do not ask me i'm to upset to comment.

Chinese yen? Is that your typo or from the report?

Also it is stated above that China's influence is growing but earlier it is stated that GDP growth slows to 0%. How can they have growing influence when their economy is stagnant?

There's no point getting upset over anything after all they are only predictions (aka guesses).

btw I would have said Greece is more likely than Italy to dump the Euro so that would be my guess, sorry prediction.

Nope.

yuan

[Familyonthemove]

I reckon that China could be more unstable than Iran. If unemployment rises and trade with US/Europe continues to fall the government may struggle to maintain control.

I also wonder when the economists will realise that the environment and climate change is a major factor on the world economy. A system based on endless growth is not sustainable, and ploughing tax payers money into schemes intended to prop up an unsustainable system is a waste of our money.

But if 2008 showed us one thing ..... it's that economic experts are clueless!

[Naam]

I reckon that China could be more unstable than Iran. If unemployment rises and trade with US/Europe continues to fall the government may struggle to maintain control.

I also wonder when the economists will realise that the environment and climate change is a major factor on the world economy. A system based on endless growth is not sustainable, and ploughing tax payers money into schemes intended to prop up an unsustainable system is a waste of our money.

But if 2008 showed us one thing ..... it's that economic experts are clueless!

you can bet your sweet butt on that!

[CPH]

Saxo Banks prediction for 2008 which came out at the end of 2007 was spot on. Maybe this one for 2009 is also correct.

They seems to be more honest than most economists.

[OlRedEyes]

I reckon that China could be more unstable than Iran. If unemployment rises and trade with US/Europe continues to fall the government may struggle to maintain control.

I also wonder when the economists will realise that the environment and climate change is a major factor on the world economy. A system based on endless growth is not sustainable, and ploughing tax payers money into schemes intended to prop up an unsustainable system is a waste of our money.

But if 2008 showed us one thing ..... it's that economic experts are clueless!

!00% agree re China. I'd change the 'may' to 'will' though.

Agree re climate change.

Economics experts - some may be clueless, I think some are just (like most (climate) scientists) careful to be very conservative. Quite a few reasons for that.

[flying]

Where We Are, Where We're Heading (2009)

http://market-ticker.org/

[samuibeachcomber]

Where We Are, Where We're Heading (2009)

http://market-ticker.org/

too much information,where's my crstal ball,where's nostradas(aka alex lah?)

[samuibeachcomber]

should read nostradamas,having a bad day posting.

[mommysboy]

2009 mommysboy predictions:

UK : GRIM

US : GRIM

EUROZONE : GRIM

OZ : VERY GRIM

THAILAND : EXTREMELY GRIM.

Still at least England are playing decent football at last so who cares.

[LaoPo]

Saxo Banks prediction for 2008 which came out at the end of 2007 was spot on. Maybe this one for 2009 is also correct.

They seems to be more honest than most economists.

Saxo Bank does NOT predict; they've set up a POLL, that's it:

"Please keep in mind that this is more of a thought exercise than a set of outright predictions – we do not consider the chances are better than 50-50 for all of these claims."

From their website:

http://www2.saxobank.com/en/market-news-an...tions-2009.aspx

LaoPo

[Hairy]

Where We Are, Where We're Heading (2009)

http://market-ticker.org/

Just a word of warning, Denninger is a lying bastard who has built a cult of personality around himself on his forum website. If you disagree with him too vociferously, you get banned. If later it turns out he was wrong (and you were right), he changes his publicly-stated position and everyone still remaining on his board starts chanting his new position. "We are at war with Eastasia, we have always been at war with Eastasia".

His forum is useful for getting ideas, but be extremely wary of specifics, especially when Denninger is on one of his rants -- gold is evil and will drop to $200 any day now (throughout the second half of 2007, as it headed up over $1000), Bernanke can't possibly cut interest rates because that will destroy the USD (often repeated during July/August 2007), and so on.

[flying]

Where We Are, Where We're Heading (2009)

http://market-ticker.org/

Just a word of warning, Denninger is a lying bastard who has built a cult of personality around himself on his forum website. If you disagree with him too vociferously, you get banned. If later it turns out he was wrong (and you were right), he changes his publicly-stated position and everyone still remaining on his board starts chanting his new position. "We are at war with Eastasia, we have always been at war with Eastasia".

His forum is useful for getting ideas, but be extremely wary of specifics, especially when Denninger is on one of his rants -- gold is evil and will drop to $200 any day now (throughout the second half of 2007, as it headed up over $1000), Bernanke can't possibly cut interest rates because that will destroy the USD (often repeated during July/August 2007), and so on.

I dont follow him but sawthat link on another forum.

Thought it was interesting. Thanks

[Bizz]

Dollar now you see it now you don't.

For those who are diversifying into dollars they might find interesting reading.

Willem Buiter warns of massive dollar collapse

Americans must prepare themselves for a massive collapse in the dollar as investors around the world dump their US assets, a former Bank of England policymaker has warned.

Start here

next

large pdf lecture

[think_too_mut]

1. Iranian Revolution

If oil prices continue to decline, which Saxo Bank believes they will, the Iranian society will be badly affected due to the country's reliance on its number one commodity. The government may not be able to provide the basic necessities its citizens need, which would lead to widespread social unrest, according to Saxo Bank.

Impossible....their dear Ahmadinejad exclaimed "Oil will NEVER be under 100US$ again!" and tailored his budget for oil at 80$. Now what with 25$?

5. Australian Dollar to Slump vs Yen

The Australian dollar will sink to 40 Japanese yen as this year's continued slump in commodities hurts the Australian economy, Saxo Bank said. The whole commodity complex will be left dead in the water for the next ten years, the report said.

Yeeee-haaaa!

That will make my salary approach half a million A$ a year!!!!

I should send my family to Sydney, with strong yen (and baht) it may be cheaper to live there than in Thailand !

Poor Kevin Rudd...he was campaigning with ideas for "Post commodities economy" thinking he will have 2-3 mandates before, if ever, it happens. Now, he got it within his first year. And having called his currency "Australian peso" already.

[flying]

One more you might like

http://www.sprott.com/pdf/marketsataglance/12_2008.pdf

[think_too_mut]

One more you might like

http://www.sprott.com/pdf/marketsataglance/12_2008.pdf

The article is rubbish. Looks like written by the same dickheads who have been clueless all along the way.

- "565,000 job loses" : how comes then that 60% of laid off workers are not eligible for dole? Because theye were temps, Mexicans, illegals...

- Housing: In depression of 1930s, people were losing their homes although they had borrowed only 20% of the purchasing prices. Street urchins who got home loans over past few years had "self assessed" themselves and paid no cent deposit.

- Unemployment was 20% in the 1930s. What is now? Will it ever get to 20%?

[quiksilva]

2009 FINANCIAL PEDICTION

No Growth in China and Other Outrageous Prophecies

Thursday, January 1, 2009

This year could bring more, equally unbelievable, happenings such as another 400 points being wiped off the S&P 500 and a slump in Chinese growth to zero, according to a report from Saxo Bank titled "10 Outrageous Claims 2009."

Do not ask me i'm to upset to comment.

Easy...easy....

"The primary reason for doing this “Black Swan” exercise every year is to counter-balance human psychology, which is usually skewed towards optimism. We tend to be somewhat more pessimistic in our Yearly Outlook than the average analyst in the market, and believe that it is important for the investor to always factor in the less likely scenarios (as perceived by the market). Please keep in mind that this is more of a thought exercise than a set of outright predictions – we do not consider the chances are better than 50-50 for all of these claims."

From the Saxo Bank website where they made a POLL, which you may want to join:

http://www2.saxobank.com/en/market-news-an...tions-2009.aspx

Edit note:

I did the poll myself and was correct 9 out of 10. The incorrect one was the last one and I simply don't believe the score of 57 versus 43 but I won't tell which answer I choose...

Interesting and I recommend to do it yourselves.

LaoPo

Interesting.. I had exactly the same result Laopao!