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Saxo Bank’S 10 Outrageous Predictions For 2013

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Is it time for 2013 predictions yet? Here are 10 from Saxo Bank. I ask the goldbugs not to turn this into a gold thread - cheers

1. DAX plunges 33 percent to 5000

China’s economic slowdown continues, putting a halt to Germany’s industrial expansion. This causes large price declines in industrial stocks and low consumer confidence. Approval ratings for Angela Merkel plunge ahead of the German election, and in a weak economy combined with political uncertainty as Germany moves closer to signing up for further EU debt mutualisation, the DAX stock market index declines to 5,000, down 33 percent for the year.

2. Nationalisation of major Japanese electronics companies

Japan’s electronics industry, once the glory of the country, enters a terminal phase after being outmatched by South Korea. With combined annual losses of USD 30 billion for Sharp, Panasonic and Sony alone, creditworthiness deteriorates greatly and the Japanese government nationalises key industry players, similar to the US government’s bailout of its automobile industry.

3. Soybeans to rise by 50 percent

Bad weather during 2012, which wreaked havoc on global crop production and saw a nine-year low in US soybean ending stocks, leaves the price of new crop soybeans exposed to any new weather disruptions, either in the US, South America or in China. Increased demand for biofuel will also play its part in exposing the price to spikes, and speculators will be ready to re-enter the market, pushing the price higher by as much as 50 percent. Food security becomes a buzz phrase

4. Gold corrects to USD 1,200 per ounce

The strength of the US economic recovery in 2013 surprises the market and especially financial investors in gold. This and a lack of pick-up in physical demand for gold from China and India, both struggling with weak growth and rising unemployment, trigger a major round of gold liquidation. Gold slumps to USD 1,200 before central banks eventually step in to take advantage of lower prices.

5. WTI crude hits USD 50

US energy production continues to rise, primarily through advanced production techniques such as in the shale oil sector. US production of crude oil rises strongly, and with domestic inventory levels already at a 30-year high and export options limited, WTI benchmark crude oil prices come under renewed selling pressure and slump towards USD 50 per barrel.

6. USDJPY heads to 60.00

The Liberal Democratic Party comes back into power in Japan, with its supposedly JPY-punishing agenda. Only half-measures are introduced however, and at the same time the market has become over-positioned for JPY weakness and Japanese investors repatriate a portion of their trillions of USD invested abroad as risk appetite retrenches. The yen vaults to the fore as the world’s strongest currency, with USDJPY heading as low as 60.00 – ironically paving the way for the LDP government and the BoJ to reach for those more radical yen-weakening measures they promised in the first place.

7. EURCHF breaks peg, touches 0.9500

European Union tail risks are re-aggravated – perhaps by the Italian election – or over the nature of Greece’s exit from the European Monetary Union and the worry that Spain and Portugal will follow suit. This sends capital flows surging into Switzerland once again and the Swiss National Bank and Swiss Government decide it is better to abandon the Swiss franc’s peg to the euro for a time rather than push reserves past 100% of Switzerland’s GDP. As a consequence EURCHF touches a new all-time low below parity before Switzerland is forced to introduce capital controls to stem its strength.

8. Hong Kong unpegs HKD from USD – re-pegs to RMB

Hong Kong moves to unpeg its dollar from the US dollar, and repeg it to the Chinese renminbi. Other Asian countries show signs of wanting to follow suit. RMB volatility increases as China loosens its grip on the currency’s movements, and Hong Kong quickly grows to become a major world currency trading centre and the most important centre for trading the RMB.

9. Spain takes one step closer to default as interest rates rise to 10 percent

With social tensions in Spain already high, the public sector simply cannot cut its public outlays further. In 2013, Spanish sovereign debt is downgraded to junk and the social strain pushes Spain over the edge, seeing Spain reject the extend-and-pretend policies of EU officialdom. Yields rapidly increase after the downgrade and as an inevitable default is priced in.

10. 30-year US yield doubles in 2013

The Federal Reserve’s zero interest rate policy forces investors to leave fixed income. With no or even negative return, the substitution of bonds with stocks is appealing. The bond market is far larger than the equity market and a 10 per cent reduction of funds allocated to bonds and reallocated to stocks would amplify equity fund inflows by around 30 per cent. This could lead to higher US rates and also be the beginning of decade-long outperformance by stocks over bonds.


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It seems to me that Saxo Bank are really just making the same prediction 10 times. There will be another drought in the US next year but with enough growth that the Fed starts to withdraw stimulus while the rest of the world's growth is weak to negative and other central banks leave all of their ineffective stimulus in place.

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Denmark's Saxo Bank Tuesday said it is axing 266 jobs, saying the extremely low levels of activity in financial markets could continue.

Of the total staff cuts, 168 jobs will be lost at the bank's Danish headquarters, Saxo Bank said. "Financial markets are quiet and that could continue for some time. We have therefore decided to adjust our organisation to the current activity level," human resource director Ditte Buchwald said in a statement.

The world's leading central banks in July reported a 5% drop in currency trading activity – the first year-on-year decline since the global financial crisis – and compelling evidence since then from a host of foreign exchange dealers and trading platform operators shows the slide in activity has continued in recent months.

Saxo Bank isn't among the world's biggest currencies-dealing banks but it is a major player among retail investors, whose share of the overall forex market has been growing.

The bank Tuesday said its profit before tax year-to-date is DKK190m ($33m), of which it made DKK76m in the first half of the year. Its client deposits have risen by 21% since the start of the year.

The bank said its product offering won't be affected by the changes.

During the first half of 2012, Saxo Bank had on average 1,527 employees.

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DAX down to 5000? Is that before or after it hits the all-time high it's about 2% away from? :lol:

In fact, the near-term set up has never been more bullish. On all the fraudexes. Fiscal cliff yadda yadda BS non-event. Abe, Benny and Carnage promising to spend spend spend like never before. Anybody who isn't full-tits long right now is missing the opportunity of a lifetime.

This year's Santa Claus rally is going to the Moon, baby!


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