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Saxo Bank's 10 Outrageous Predictions For 2014

Tyler Durden's picture





 

Although the probability of any one of the predictions coming true is low, they are deduced strategically by Saxo Bank analysts based on a feasible - if unlikely - series of market and political events. As Saxo's chief economist notes, "This isn't meant to be a pessimistic outlook. This is about critical events that could lead to change - hopefully for the better. After all, looking back through history, all changes, good or bad, are made after moments of crisis after a comprehensive failure of the old way of doing things. As things are now, global wealth and income distribution remain hugely lopsided which also has to mean that significant change is more likely than ever due to unsustainable imbalances. 2014 could and should be the year in which a mandate for change not only becomes necessary, but is also implemented."

 

These Outrageous Predictions are not Saxo Bank's official calls for 2014, but rather an exercise in feeling out the major risks to capital preservation, and intended to encourage investors to prepare for the worst case scenario before trading or investing...

Saxo Bank's Outrageous Predictions 2014

1. EU wealth tax heralds return of Soviet-style economy

Panicking at deflation and lack of growth, the EU Commission will impose wealth taxes for anyone with savings in excess of USD or EUR 100,000 in the name of removing inequality and to secure sufficient funds to create a "crisis buffer". It will be the final move towards a totalitarian European state and the low point for individual and property rights. The obvious trade is to buy hard assets and sell inflated intangible assets.

2. Anti-EU alliance will become the largest group in parliament

Following the European Parliamentary elections in May, a pan-European, anti-EU transnational alliance will become the largest group in parliament. The new European Parliament chooses an anti-EU chairman and the European heads of state and government fail to pick a president of the European Commission, sending Europe back into political and economic turmoil.

3. Tech's 'Fat Five' wake up to a nasty hangover in 2014

While the US information technology sector is trading about 15 percent below the current S&P 500 valuation, a small group of technology stocks are trading at a huge premium of about 700 percent above market valuation. These 'fat five' - Amazon, Netflix, Twitter, Pandora Media and Yelp - present a new bubble within an old bubble thanks to investors oversubscribing to rare growth scenarios in the aftermath of the financial crisis.

4. Desperate BoJ to delete government debt after USDJPY goes below 80

In 2014, the global recovery runs out of gas, sending risk assets down and forcing investors back into the yen with USDJPY dropping below 80. In desperation, the Bank of Japan simply deletes all of its government debt securities, a simple but untested accounting trick and the outcome of which will see a nerve-wracking journey into complete uncertainty and potentially a disaster with unknown side effects.

5. US deflation: coming to a town near you

Although indicators may suggest that the US economy is stronger, the housing market remains fragile and wage growth remains non-existent. With Congress scheduled to perform Act II of its "how to disrupt the US economy" charade in January, investment, employment and consumer confidence will once again suffer. This will push inflation down, not up, next year, and deflation will again top the FOMC agenda.

6. Quantitative easing goes all-in on mortgages

Quantitative easing in the US has pushed interest expenses down and sent risky assets to the moon, creating an artificial sense of improvement in the economy. Grave challenges remain, particularly for the housing market which is effectively on life support. The FOMC will therefore go all-in on mortgages in 2014, transforming QE3 to a 100 percent mortgage bond purchase programme and - far from tapering - will increase the scope of the programme to more than USD 100bn per month.

7. Brent crude drops to USD 80/barrel as producers fail to respond

The global market will become awash with oil thanks to rising production from non-conventional methods and increased Saudi Arabian ouput. For the first time in years hedge funds will build a major short position, helping to drive Brent crude oil down to USD 80/barrel. Once producers finally get around to reducing production, oil will respond with a strong bounce and the industry will conclude that high prices are not a foregone conclusion.

8. Germany in recession

Germany's sustained outperformance will end in 2014, disappointing consensus. Years of excess thrift in Germany has seen even the US turn on the euro area's largest economy and a coordinated plan by other key economies to reduce the excessive trade surplus cannot be ruled out. Add to this falling energy prices in the US, which induce German companies to move production to the West; lower competitiveness due to rising real wages; potential demands from the SPD, the new coalition partner, to improve the well-being of the lower and middle classes in Germany; and an emerging China that will focus more on domestic consumption following its recent Third Plenum.

9. CAC 40 drops 40% on French malaise

Equities will hit a wall and tumble sharply on the realisation that the only driver for the market is the greater fool theory. Meanwhile, the malaise in France only deepens under the mismanagement of the Hollande government. Housing prices, which never really corrected after the crisis, execute a swan dive, pummeling consumption and confidence. The CAC 40 Index falls by more than 40 percent from its 2013 highs by the end of the year as investors head for the exit.

10. 'Fragile Five' to fall 25% against the USD

The expected tapering of quantitative easing in the US will lead to higher marginal costs of capital from rising interest rates. This will leave countries with expanding current account deficits exposed to a deteriorating risk appetite on the part of global investors, which could ultimately force a move lower in their currencies, especially against the US dollar. We have put five countries into this category - Brazil, India, South Africa, Indonesia and Turkey.

Full article - with details here...

TF OutrageousPredictions 2014

 


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Thu, 12/19/2013 - 19:50 | Link to Comment Newsboy
Newsboy's picture

I predict an event that will scare us all and it will be obvious that we just need to get on board and go along with the program.

Thu, 12/19/2013 - 19:53 | Link to Comment Seer
Seer's picture

LONG clean underwear! (not to be confused with "long johns")

Thu, 12/19/2013 - 20:26 | Link to Comment acetinker
acetinker's picture

Post 50, NEVER trust a fart!

Thu, 12/19/2013 - 21:13 | Link to Comment negative rates
negative rates's picture

Deal me in for 4 and 5, and double the anti.

Thu, 12/19/2013 - 21:48 | Link to Comment acetinker
acetinker's picture

It's ante, and 2 is as far as I dare to avoid unacceptable risk.  I have no idea what you meant, btw.

Fri, 12/20/2013 - 02:34 | Link to Comment A Nanny Moose
A Nanny Moose's picture

That's why God invented Depends, isn't it?

Thu, 12/19/2013 - 19:59 | Link to Comment Zero Point
Zero Point's picture

And that the crisis actors will be required to bring their own lunch to that event.

Thu, 12/19/2013 - 20:13 | Link to Comment 666
666's picture

11. Obama is not assasinated and we have to endure yet another year of his antics.

Thu, 12/19/2013 - 20:50 | Link to Comment NoDebt
NoDebt's picture

That sounds about as likely as the balcony of the London Theatre collapsing.

Thu, 12/19/2013 - 21:15 | Link to Comment negative rates
negative rates's picture

Or as likely as Biden becoming president.

Fri, 12/20/2013 - 02:21 | Link to Comment Notarocketscientist
Notarocketscientist's picture

Why would anyone assasinate Obama?  He is doing EXACTLY what his minders (the same people who killed JFK for opposing them) want of him.  He is a super star - he will be rewarded with tens of millions on his speaking tour once out of office (think Blair who made 50M in a few years on steroids)

 


http://hongkong.asiaxpat.com/features/jfk-assassination.html

Operation Northwoods - The U. S. Joint Chiefs of Staff Plan to Terrorize the U. S. Populace

Source ABC News, New York:  The Joint Chiefs are the 5 generals and admirals in charge of the 5 branches of the U. S military. In 1962, those men were George Decker (Army), David Shoup (Marines), Georg Anderson, Jr. (Navy), Curtis LeMay (Air Force), and Edwin Roland (Coast Guard), along with a few others, all chaired by Lyman Lemnitzer (Army).

The entire board of the Joint Chiefs of Staff proposed, drafted, and agreed on a plan to concoct a casus belli for war against Communist Cuba, under Fidel Castro. Their collective motive was to reduce the constant threat of Communist encroachment into the Western Hemisphere, per the Monroe Doctrine.

This plan was named Operation Northwoods, and entailed the most impossibly indifferent cruelty ever envisioned by a government against its own people. In order to sway public sentiment in favor of the war, the Joint Chiefs planned to bomb high pedestrian-traffic areas in major American cities, including Miami, New York, Washington, D. C., and possibly Chicago and Los Angeles; to frame U. S. citizens for these bombings; to shoot innocent, unarmed civilians on the streets in full view of hundreds of witnesses; to napalm military and merchant vessels in port, while people were aboard; to sink vessels carrying Cuban refugees bound for Florida; to hijack planes for ransom.

Not only did every single member of the Joint Chiefs sign his approval of this plan, they then sent it to Secretary of Defense Robert McNamara for his approval, and then to President Kennedy. McNamara claimed years later never to have seen it, but that he would have rejected it. Kennedy, however, did receive it, and promptly called a meeting of the Joint Chiefs, in which he threatened, with severe profanity, to court martial and incarcerate every one of them.

The President cannot actually do this, but can order the Congress and military branches to do so, and in these circumstances, they most certainly would have. But Kennedy decided that it would cause irreparable disrespect around the world for the U. S. military. He did remove Lemnitzer from his position as Chairman and assign him as Supreme Allied Commander in Europe, not much of a demotion.

Theorists claim that the military may have had a hand in Kennedy’s assassination because of his blistering rebuke of the Joint Chiefs. This remains unproven.

However, the official records reveal that one man stood against this heinous plan… and that this man was dead within months.

Many will say that the Kennedy assassination happened decades ago, that it no longer matters.

It matters. For we know that no president since JFK has dared to buck the military-intelligence-industrial complex.  We know a Pax Americana has spread its tentacles across the globe with U.S. military in over 130 countries on 750 plus bases.  We know that the amount of blood and money spent on wars and war preparations has risen astronomically.

Thu, 12/19/2013 - 22:49 | Link to Comment jbvtme
jbvtme's picture

ZP...all over Schauberger. thanks for that call

Fri, 12/20/2013 - 03:16 | Link to Comment Zero Point
Zero Point's picture

Schauberger was one of the earths great geniuses, very similar to Tesla.

In fact their lives mirror each other quite a bit.

Glad you read up on him brother.

Thu, 12/19/2013 - 19:48 | Link to Comment TuesdayBen
TuesdayBen's picture

Mandate for change in 2014 huh? Obamas mandate and promises of change 5 years ago seem to have been counterproductive. Here's hoping your change comes with capable leadership.

Thu, 12/19/2013 - 19:57 | Link to Comment Seer
Seer's picture

You're smoking crack if you think that "leadership" is going to do a fucking bit of good.  Our "predicament" is fully grounded in the reality of hitting the growth-wall.

I think that we ought to grow up and be done once and for all with "leaders."

Thu, 12/19/2013 - 20:48 | Link to Comment Ignatius
Ignatius's picture

Oh, I'm done with leaders, though they are certainly not done with us.

 

Thu, 12/19/2013 - 19:55 | Link to Comment bigdumbnugly
bigdumbnugly's picture

11.   janet yellen/jamie dimon sex tape released...

Thu, 12/19/2013 - 21:02 | Link to Comment mayhem_korner
mayhem_korner's picture

 

 

Yes, but which one is on the take?

Thu, 12/19/2013 - 22:54 | Link to Comment quasimodo
quasimodo's picture

Thanks for that scenario ugly. I was promised sex tonight after a bit of a dry spell, and after the image of those two pigs sweating it out I just lost ALL fucking interest in getting laid. 

I'll let you explain to her why I can't get it up.

Fri, 12/20/2013 - 01:26 | Link to Comment StychoKiller
StychoKiller's picture

I find that a bust in the mouth helps get my full attention! :>D

Fri, 12/20/2013 - 02:35 | Link to Comment A Nanny Moose
A Nanny Moose's picture

It can be found in the Horror Section

Thu, 12/19/2013 - 19:50 | Link to Comment jubber
jubber's picture

Isn't the Turkish Lire already at a 32 year low against the US dollar now?

Thu, 12/19/2013 - 19:52 | Link to Comment Gromit
Gromit's picture

Yes to most of them....the only way a mainstream bank can say what they really think is to dress it up as outrageous.

Thu, 12/19/2013 - 19:52 | Link to Comment Seer
Seer's picture

Doesn't point #2 counter/negate point #1?

Otherwise, these seem to have strong possibilities.

Thu, 12/19/2013 - 19:55 | Link to Comment Ms. Erable
Ms. Erable's picture

Predictions from a fucking investment bank? I predict they're on the other side of all of these potential trades.

Thu, 12/19/2013 - 20:08 | Link to Comment falak pema
falak pema's picture

bull run? Saxophone players are dangerous as Sugar Kane Marilyn said in "some like it hot!"

Imagining Herr Von Rompuy as Soviet Czar makes me laugh; a Bilderberger aristocrat confused with a bolshy ham berger.

However bail ins have my approval more than more bail outs; as if push comes to shove it'll be one or the other.

Thu, 12/19/2013 - 20:38 | Link to Comment Seer
Seer's picture

"However bail ins have my approval more than more bail outs; as if push comes to shove it'll be one or the other."

There's ONLY bail-ins left.  Sadly, however, it is no "solution" for our problems: we can't even define what our problems are, in which case we should really stop trying to solve what we THINK they are.

We will, of course, only continue doing what we've been doing, until we can longer do so.  And it's the "what comes next" question that is the biggie (and the equations then shift, meaning, what we might think are our "problems" are no longer applicable).

Thu, 12/19/2013 - 20:01 | Link to Comment Debeachesand Je...
Debeachesand Jerseyshores's picture

Not to Outrageous IMHO.

Thu, 12/19/2013 - 20:16 | Link to Comment loveyajimbo
loveyajimbo's picture

What is so low probability about those?  How about Chakka Caca Obunga comes out of the closet?

 

http://hillbuzz.org/is-barack-obama-gay

Thu, 12/19/2013 - 21:30 | Link to Comment notquantumdum
notquantumdum's picture

With all the many objective criticisms one might propose regarding Obama -- from the Patient Destruction and Un-Affordable Care Act, fast and furious, the IRS apparently politically selectively targeting some groups but not others [of course, to Obama's benefit], Obama changing all kinds of laws by "executive orders" [see the DMA not being defended, the dreamers, Obamacare waivers, Et al.], apparently granting Iran the ability to violate its UN-mandated requirements, the NSA spying, presiding over almost the greatest addition of national debt ever as a percent of GDP, presiding over the lowest percentage of working-aged workers in in 35 years (due to hundreds if not thousands of changes the Dems (if not also the repubs) have made in the last 7 years which all increased the costs of doing business in the US) [and, that was before a substantial number of women even entered the workforce for the first time, so that is pretty bad], and seemingly dozens of other "phony scandals" . . . 'With all this, I'm not sure I understand why the possibility of him being gay would even be relevant.  ['other than as a possible criticism of the media for not vetting him.]

So what if he is?  How does that even tarnish his already completely blemished record?

Thu, 12/19/2013 - 22:50 | Link to Comment BringOnTheAsteroid
BringOnTheAsteroid's picture

I suppose the image of Obama being spit roasted by Dimon and Blankfein is simply the last straw.

Thu, 12/19/2013 - 20:22 | Link to Comment Izznogood
Izznogood's picture

What Saxo seem to ignore is that some of these changes, especially in combination with each other and other external ongoing factors, have a high likelyhood of leading to war. After that, all bets are off.

Thu, 12/19/2013 - 20:21 | Link to Comment Clint Liquor
Clint Liquor's picture

In the next five years, the only things that would really surprise me from the central planners are stability and sanity.

Thu, 12/19/2013 - 20:37 | Link to Comment Seer
Seer's picture

Ours or theirs?

Fri, 12/20/2013 - 01:27 | Link to Comment StychoKiller
StychoKiller's picture

You KNOW what happens to the bacteria colony once it fills the petri dish...

Thu, 12/19/2013 - 20:23 | Link to Comment conspicio
conspicio's picture

I predict Bjarne Riis will have more doper riders (Thanks Mick Rogers...) and Saxo will end up pulling out of the cycling busin...oh wait, this isn't the Saxo Bank cycling thread...

Thu, 12/19/2013 - 20:38 | Link to Comment chump666
chump666's picture

Japan and China war

Oil drops under 80!!!...yes heard that very year after 2008.  anways we are close to 100 now, all eyes on DXY and USD. 

Thu, 12/19/2013 - 20:44 | Link to Comment Seer
Seer's picture

I don't think that China is really thinking through things.  Japan is doing this in order to distract from a certain implosion.  While I believe that China too will implode I don't think that it would before Japan does.  Who would bailout Japan?  Not the US.

Thu, 12/19/2013 - 21:08 | Link to Comment chump666
chump666's picture

China is panicking now, you got rates spiking and higher Yuan fixes, that and they want to smash Bitcoin down and encourage gold buying.  Why?  In preparation for war, cyperwarfare will blow Bitcoin apart, in fact all electronic transaction markets could be under attack at some-point.  The taper was a con, what we have now is the santa rally, nice deal for the cronies all the while they will start cutting positions and buying gold.

 

 

Thu, 12/19/2013 - 22:41 | Link to Comment Mine Is Bigger
Mine Is Bigger's picture

I am no expert, but I think it all depends on how much control Communist Party leaders have over PLA.  PLA may want to go to war with Japan, but I suspect political leaders know better.  They already have their work cut out to contain internal revolt.  A major war will break the country apart, which is more of a natural state for China throughout its history.

Thu, 12/19/2013 - 20:42 | Link to Comment Mine Is Bigger
Mine Is Bigger's picture
  • Bitcoin to go to $10,000 or -$10,000!!!
Thu, 12/19/2013 - 20:43 | Link to Comment Seer
Seer's picture

STAYBILETEE!

Thu, 12/19/2013 - 20:50 | Link to Comment nmewn
nmewn's picture

Whaaa?...its the perfect currency!

The value for goods and services rendered apparently fluctuates 20% overnight!

Just wait till the workers see their check ;-)

Thu, 12/19/2013 - 21:11 | Link to Comment Seer
Seer's picture

Yeah, no attraction in it for me.  This really ain't no time to be playing in a casino, when there's a huge fire raging outside.

I seem to recall fonestar mentioning that it was perfectly fine if 0.01% of the world's population jumped on board that that would be all it would take.  While I don't wish to lose my wealth (in some uncontrolled event/set of events) I really do not wish to be a hypcrite: it's the small percentage of people who have managed to feel that they know more than the rest which have pretty much pushed us into this corner because of their elitist thinking.

Thu, 12/19/2013 - 21:44 | Link to Comment nmewn
nmewn's picture

I've found, for the majority of the time, it is to my long term benefit to run in the opposite direction of the herd.

My opinion is, fonestar started out with the same "vision" (good or bad is again, a matter of opinion) now its all about fiat profit.

 

Fri, 12/20/2013 - 02:47 | Link to Comment A Nanny Moose
A Nanny Moose's picture

Amen. I suppose, if you could rig a cheap solar/wind array on which to run your BTC miner, you might turn a tidy profit. Is green energy still gummint subsidized?

Thu, 12/19/2013 - 20:55 | Link to Comment samcontrol
samcontrol's picture

my ten stupid as fuck 2014 predictions...

1) Argentina beats Brazil in World Cup final.
2) nobody cares but ..Seahawks over Broncos.Fl state over auburn.
3) gold 2000, silver 50 ,bitcoin 500, more a wish than a prediction....(1500, 32,500)
4) No Www..also a wish
5) Bernanke and/or Obama get cancer. also a .....well you got it by now.
6) Cristina (arg)gets her third FAKE cancer and manages to steal (literally)elections.
7) pope francis gets Nobel peace prize...i dig him,,,
8) Huge volcano blows. Again no hurricanes in playacar mex...please......
9) world temperature raises1degree celcuis in a year.
10) Queen ElizabethII dies...they skip Charles and William becomes king.

Fri, 12/20/2013 - 03:00 | Link to Comment mjcOH1
mjcOH1's picture

"7) pope francis gets Nobel peace prize...i dig him,,,"

My outrageous predictions:
1) Pope Francis gets his Nobel peace prize ... right after turning into a black socialist, announcing he's a native born american, and winning the US presidential election while running as Osama Hussein O'Baracka
2) the Nobel steering committee starts considering some sort of effort to promote peace as requisite for earning a Nobel peace prize, as opposed to being left wing and seizing control of a foundering democracy through a combination of lopsided racial voting patterns and handouts promised to an increasingly large 'entitled' percentage of the electorate at the expense of a rapidly shrinking percentage of the electorate who continue to work and foot that bill

Thu, 12/19/2013 - 20:58 | Link to Comment mayhem_korner
mayhem_korner's picture

 

 

Why is #6 outrageous?  Seems likely to me.

Thu, 12/19/2013 - 21:29 | Link to Comment rhs
rhs's picture

A wealth tax is a pretty blunt instument for retreiving ill-gotten gains, but if it doens't go on for more than a generation, it is a way for the creamy layer to repay part of it's debt to society. That said, 100,000 euros is a low amount. I hope it's progressive, with the very wealthy paying a significantly higher rate.

Fri, 12/20/2013 - 09:41 | Link to Comment TPTB_r_TBTF
TPTB_r_TBTF's picture

of course it will be "progressive", but the opposite of what you describe.

The "very wealthy" will continue to pay no taxes.

There will be a wealth tax on the new rich.  The old rich will continue to not pay any taxes.

Fri, 12/20/2013 - 01:06 | Link to Comment rp1
rp1's picture

My predictions for 2014:

1) The BOJ monetizes debt as necessary to keep Japanese interest rates at zero.

2) The Fed ends QE and demands for reform sweep the US

3) A big global recession, so help your neighbour

4) Interest rates rise much further: remember, if you're retiring, you need bonds

5) Sudden interest in value investing (the only thing that works)

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