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Saxo Bank Warns There Are 3 'Other' Geopolitical Risks Investors Are Ignoring
From Ukraine to Gaza, geopolitical risks are weighing heavily on investors’ minds. But there are plenty more out there that may not be getting headlines.
US mid-term elections
Risk: Republican victory in the Senate and House results in lame duck presidency, derailing the US recovery.
Obamacare and a general ennui with the presidency means the Democrats could be in for a pasting later this year when voters go the polls. If the President loses control of Congress he’ll be unable to push forward reforms, but more importantly the feeling of being rudderless could knock investor confidence and dent the recovery. A reversal in the economy could mean the Fed is unable to raise rates next year as planned.
Scottish independence referendum
Risk: Voters say "Yes" to Scottish independence referendum, sending UK recovery into reverse gear.
Victory for the 'Yes' vote could see a messy dispute between Edinburgh and London as they define the terms of independence. It would send shockwaves through UK markets as they wrestle over the pound and Scotland works out its currency options. Businesses could head south, while investment north of border could come to a halt until there is agreement. More importantly, perhaps, the UK’s very existence would be called into question; Britain’s stake at the top table of the UN and G7 no longer assured - the fallout for the UK economy could be enormous and send the pound into reverse gear.
Anti-corruption drive in China
Risk: Political backlash from anti-corruption drive in China dents business confidence in Asia’s economic powerhouse, harming the global recovery.
Beijing is ramping up its anti-corruption efforts and increasingly those in the commercial sector are fearing they could be caught in the net. After years of grab-what-you-can growth there are many whose records are not completely clean. The problem is that by going after individuals China risks dismantling chunks of its economy. Even rumours about a chief executive can hit investment and derail contract negotiations, with all the knock-on effects this can have on the economy. Just the spectre of investigations is having a chilling impact on companies’ plans.
* * *
Of course - aside from the fact that stocks are ignoring EVERY geopoltical risk in the world...
Deutsche Bank warns Geopolitical Risks Remain High
As Cembalest notes, the list is long... and growing
The downing of a Malaysian jetliner in eastern Ukraine and escalating sanctions against Russia, the Israeli invasion of Gaza, renewed fighting in Libya, civil wars in Syria, Afghanistan, Iraq and Somalia, Islamist insurgencies in Nigeria and Mali, ongoing post-election chaos in Kenya, violent conflicts in Pakistan, Sudan and Yemen, assorted mayhem in central Africa, and the situation in North Korea, described in a 2014 United Nations Human Rights report as having no parallel in the contemporary world. Only in Colombia does it look like a multi-decade conflict is finally staggering to its end.
For investors, strange as it might seem, such conflicts are not affecting the world’s largest equity markets very much (for now). Perhaps this reflects the small footprint of war zone countries within the global capital markets and global economy, other than through oil production.
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the chinese should legalize criminal behavior. that will clean up corruption. it works brilliantly in the usa. there is no corruption here anymore.
Are you available to take Ginsberg's spot on the Supreme Court?
If the Senate goes Republican and Ginsberg retires there may not be a placement for a couple of years. Showtime!
The bleeding hart liberals are whining so loud about warming globe. I can't even hear myself think. Obozoma is draging these country to the ground.
#1. BarryObo gets thrown out of office
And take the Ferguson fun coast to coast? That will be a riot to see!
"Risk: Republican victory in the Senate and House results in lame duck presidency, derailing the US recovery."
I stopped reading there.
That is where I started laughing.
Doubled
"Risk: Republican victory in the Senate and House results in lame duck presidency, derailing the US recovery."
I stopped reading there
100% AGREE.
What kind of b--l s--t is that!
The best thing that could happen is that Obama would take a vacation until the end of his term.
Do these assholes actually get paid to write this drivel? How about this one. The entire world financial system is not based in reality. It is fake, made up, conjured and plain fraud. That's all one needs to know. U.S. mid-term elections! You must be shitting me.
Replacement for Ginsberg?
One must be a Jewess.
Remember, one man's "corruption" may be another man's income...
i wish the chinese well and good luck.
"Investors" (are there any these days?) are only worried about whether Tesla is up $10 or only $5 (a "down" day).
Just in: Hollywood backing Obama's Dem candidates bigger than ever this year with a $$$ avalanche:
http://tinyurl.com/nyhzt3f
Anti-corruption drive in China is good for China and it is very bad for the International Banking Mafia whose power ientirely depends on printing fiat money (US$ and Euro) and on corruption.
Presently China attacks both US$ reserve currency status and own corruption. Without addressing these vital issues China has no future as an independent and prosperous country.
Just compare China and Russia. For all practical purposes NATO invaded and and Putin is doing nothing since his own elite is utterly corrupt and its interests have nothing to do with Russia since their families and their money are in USA and EU. So much for dying Putistan.
"derailing the US recovery? "
What recovery?
Not including the Trash Class, there's been quite a recovery in the US and the UK.
Every one of these "risks" is within the control of the vampiric status quo class= No risk.
Article is B.S.
Well - if it comes from Saxo Bank .....
Nuff said.
That was my reaction, too. And it's all the Republican's fault for being voted into office and blocking Obama's recovery? Are you fucking kidding me?
I couldn't read past that point.
+1
Suprised he left out the repeal of the global warming/cooling/changing/respiration tax in Australia.
Yeah, that one's gonna come back and bite us all in the ass next quarter. No doubt.
You hit on my favorite stories, BTW. Oh, the wailing and gnashing of teeth over that in the Environmentalist camps! "We just didn't get our story out effectively." "We just had the wrong people implementing it!" Every damned excuse under the sun except for reality- the law was a stupid idea to fix a non-existant problem and people finally got tired of paying for it.
"Risk: Republican victory in the Senate and House results in lame duck presidency, derailing the US recovery."
LOL. This is already a lame duck presidency. And what recovery?
I think it's fair to say almost all of us pulled up short when we read that little gem. This guy might be in the running for "most wrong person in the world", though still a distant second to Dennis Gartman,
Plus, political gridlock is a good thing. Everything .gov touches turns to shit in a hurry.
Always good to let the progressive socialists self identify. And this is what passes for bespoke-suited-serious-collar-and-windsor-knotted-tie-analysis is just sad. What a fucking joke.
"bespoke-suited-serious-collar-and-windsor-knotted-tie-analysis"
I'm borrowing that one, if you don't mind.
"What recovery?" you ask?
A: The Recovery of the portfolio of the Top 2%. Which, BTW, is pretty much how "US" or "National Interest" are defined.
That is the crux of the bisquit
I already covered this...
Saxo's three risks being ignored by "investors" all fall under #16.
#1 should read "West Africans and American missionaries flying nilly willy all over the globe."
Is 'Nilly Willy' a subsidiary of Malaysia Airlines?
If they were, then far fewer would've actually gotten out of W.Africa.
See how well containment is handled once they get to a high population area:
http://theunhivedmind.com/UHM/ebola-biosecurity-level-4-safety-procedures-now-breached-in-spain-2/
15. no toilet paper in Venezuala
Are you telling me they don't have Fiat in Venezuala?!!!! Hell if they use real money (gold / silver) I'll use a bidet. Sign me up.
I had to look up what a bidet was. I was horrified when I saw the pic. I always thought those were fancy water fountains.
omg... and the French are the dirty ones.
you left out a zero in number 12...
and forgot the Blood Moons and Legarde's Magic No. 7.... serious economic fundmentals count today ;)
Fear mongerer....BTFD
besnook - Yup, not even a smidgin!
howzit, bruddah
Lol.. "Derail recovery" AKA our scapegoat...
Lol.. "Derail recovery" AKA our scapegoat...
Anti-corruption drive in China? They should just learn to live with it and love it like us. Hey Vaseline is free with Obamasnap.
the real risk is the straw that broke the camel's back, the last snowflake that sets off the avalanche, the first rock thrown that starts the riot, the last honest man throwing in the towel, the flock of black swans landing in the polluted pond simultaneously.
So by cleaning up corruption in China that would be bad for the economy, did I read that right?
Don't know. I stopped reading after the first incredibly stupid comment in the article about the "US Recovery". You probably read it right, though. Sounds like something a banker would write.
Only the pesants respect honesty.
"If the President loses control of Congress he’ll be unable to push forward reforms, but more importantly the feeling of being rudderless could knock investor confidence and dent the recovery."
What reforms has he gotten through? This guy is a moron.
Obama is a puppet. And he's dumb like a fox. The agenda he is the figurehead for has been carried out quite successfully.
When you intentionally take a ball pin hammer to a priceless sculpture.. it's been reformed.
How is today any different than 2006? Economically and in terms of law?
Half of the population receives at least one form of government assistance.
50 million Americans are on food stamps.
Healthcare costs are doubling and tripling for most Americans and they are FORCED to buy it.
The US borders no longer exist and illegal aliens are bankrupting municipalities and social services.
Stocks are more overvalued now than they were in 2007.
The President can detain American citizens indefinitely without due process.
Oh yeah and the federal govt is well over $17 trillion in debt up over $9 trillon since 2006 and debt to GDP is 99% up from 61% 2006.
I could go on.. but I think i've made my point.
Obamacare and a general ennui with the presidency means the Democrats could be in for a pasting later this year when voters go the polls. If the President loses control of Congress he’ll be unable to push forward reforms, but more importantly the feeling of being rudderless could knock investor confidence and dent the recovery. A reversal in the economy could mean the Fed is unable to raise rates next year as planned.
Read: The truth about the real economy will be blamed not on 6 more years of Keynesian, academic economic policies but you guessed it, the Republicans.
Resulting in 1 of 2 scenarios.
1.) The sycophants in the MSM will blame everything on the Republican congress. Obama will fade off into the sunset and the new puppet will assume the role as chief teleprompter reader.
2.) Obama announces a series of executive orders to counter the 'obstructive' congress that usher in the full blown police state.
Love the sources for that percentage chart: IMF, World Bank, BIS, UN, BP, WTO.
The unholy union, the top of the pyramid.
In regards to China/Russia vs the west, they have been engaged in a new cold war, mostly over economic interests as China/Russia determined to push the west out of their region.
So I guess we can expect more war by proxy, and then perhaps things can heat up some.
Scottish independence referendum?
I believe the polls show this is a dead issue. Sadly, as I favor it.
ABUJA (Reuters) - A nurse who had close contact with a Liberian Ebola patient skipped quarantine in Lagos and went to her home in the eastern city of Enugu, where she made contact with 20 other people, the government said on Wednesday.
Information Minister Labaran Maku said the nurse, herself a suspected case, and her 20 contacts were all under surveillance in Enugu, bringing the total number being watched in Nigeria to 189.
That is one hell of a growth rate from 1 a week ago.
All the bad news is good news for stocks.....easy money and plenty of it will keep flowing.
If the economy actually improves for the average person, if mortgages are once again being sought (currently at a 14 year low), and the ME quiets down then you should get nervous about the market.
If Repubs win the election Obama will be freed up to play 36 holes a day.
comedic gold in there:
...derailing the US recovery.
If the President loses control of Congress he’ll be unable to push forward reforms...
+1
"If the President loses control of Congress he’ll be unable to push forward reforms, but more importantly the feeling of being rudderless could knock investor confidence.."
Who needs a rudder that always steers us onto the rocks?
What a bullshit article.
We don't know when but we have a solution
There are a few trying to control evolution
When the world blows up in despair
We'll be there for the repair.
Because the banksters will be killedin the revolution.
It's not geopolitical, but the two-day period August 10th and 11th saw 128 new cases of Ebola.
The three-day period August 7-9th had only seen 61.
(The two-day period August 5th and 6th had seen 68).
the algo tracking ebola is scary. there is no way they will be able to contain the spread beyond the current confines. it is curious that none of the first world nations have done much to help especially since the virus is able to infiltrate biohazard suits.
i think de dollarization or the bricsization of the world trumps anything short of a nuclear ww3. all else is trivial.
agreed!
"When you run out of things to re-post you re-post this shit."
Simply put there isn't much to talk about anymore.
THE WORLD HAS NOT ENDED!
This author is pro Obongo... i.e... full of crap. WE might be "rudderless" if Bad BO loses the Senate... LOL!!! Like we have any direction now... other than straight down the shitter.
"If the President loses control of Congress he’ll be unable to push forward reforms" ISN'T THAT THE POINT, HIS REFORMS ARE KILLING THE COUNTRY. "but more importantly the feeling of being rudderless could knock investor confidence and dent the recovery" WHAT? WE FEEL RUDDERLESS WITH THIS GUY RUNNING THINGS NOW. ....DENT RECOVERY....LAUGHING VERY LOUD
Every CB printing money like water, even Hedgeless Horsemen of the apocolypse great list is meaningless. BTFD now until next interest rate hike which means your and my lifetimes
You can reveal the authors ideology more starkly by noting the flip sides of the coins he is giving you.
SO...
THIS:
"If the President ... (wi)ll be unable to push forward reforms, but more importantly the feeling of being rudderless could knock investor confidence and dent the recovery."
IS THE SAME AS THIS:
"If the President can push forward all desired reforms then there will be a feeling of direction that will reinforce recovery."
AND THIS:
"Voters say "Yes" to Scottish independence referendum, sending UK recovery into reverse gear"
IS THE SAME AS THIS:
"Voters say "No" to Scottish independence referendum reinforcing UK recovery."
AND THIS:
"Political backlash from anti-corruption drive in China dents business confidence in Asia’s economic powerhouse, harming the global recovery"
IS THE SAME AS THIS:
"The surrender of the anti-corruption drive in China reinforced business confidence in Asia's economic powerhouse, aiding the global recovery."
Now lets boil away the verbage down to the author's key themes:
- Checks on Power are economically harmful.
- Centralised authority is superior to decentralized authority.
- Tolerance of corruption enhances economic growth.
Buyer beware!
Now lets boil away the verbage down to the author's key themes:
- Checks on Power are economically harmful.
- Centralised authority is superior to decentralized authority.
- Tolerance of corruption enhances economic growth.
Well said gc.
Tyler's,
The author of this bullshit article must be revealed.
Sincerely everyone.
BallSaxo Bank > Fine purveyors of scrotal outerware...
Sounds to me like any one of those risks ought to worth at least few hundred point gain.
OT:
Hackers Learned Who Shot Down Boeing In Ukraine.http://beforeitsnews.com/global-unrest/2014/08/hackers-learned-who-shot-...
The biggest geopolitical risk being ignored is oil prices. These have temporarily been kept down by tight oil production in the USA. There's no possibility of this lasting more than a decade. After that, oil prices won't climb so much as leap, with all the knock-on effects on the world economy one might expect.
And remember, the world has to have a certain level of economic activity to support the location, extraction, refining and distribution of oil in the first place. Fall below that level and all that energy production activity just stops, no matter how much oil is in the ground.
On the Scottish referendum:
- Scotland will not vote Yes.
- Britain's recovery is not in any forward gear. It's actually in neutral being pushed by a manufactured property boom and false stats from .gov.
correct, "...the No camp a significant lead, on 61 per cent compared to the Yes camp's 39 per cent once undecided voters were removed."
source , yesterday daily telegraph [uk] ; http://www.telegraph.co.uk/news/uknews/scottish-independence/11026962/Sc...
barring a major catastophe, it is not a threat.
so that's a 'No' from Scotland,.... the US recovery- errr, on planet banker-bonus perhaps... & other ZH articles have said the China 'corruption clampdown' is just taking care of the competition...
so 0/3 for the Saxo Bank...... dont believe any of their 3 points. Worst article on ZH for a while.....
since when did banks tell the truth anyway ? [pm's / libor / ratings - all huge lies and proven manipulations].
I have been watching with wonder as the economic news flowing from the UK has been spun to give the impression of robust growth. In general the UK economy is not particularly competitive and being over-weighted in global finance it is vulnerable to problems that surface throughout the world.
It now appears much of the recent economic strength in the UK comes from the fact that thousands of Britons have been receiving compensation for Payment Protection Insurance (PPI). Most Americans reading about the pickup in Britain's economy never even heard of the PPI. The total paid out so far, £13.3bn or about 22 billion American dollars has been a huge economic boost. More in the article below.
http://brucewilds.blogspot.com/2014/02/uk-economy-flood-of-questions.htm...
You're absolutely correct. Very occasionally, PPI compensation is casually mentioned by MSM economists as a "contributing factor in GDP growth". Most of it is seen as a "windfall" and being spent.
The total sum of compensation put aside by banks so far is about GBP 21 billion, although it hasn't all been paid out yet. The bank with the highest liability is Lloyds: GBP 13billion.
Most of the other GDP growth is accounted for by a 'paper value' house-price boom which generates more borrowing, more debt and more spending. Some GDP also accounted for by savers withdrawing deposits and spending them due to zirp.
Pretending a Republican victory would derail the economy that is already derailed makes you sound silly.
What's wrong with rudderless ? It's the backbone of Obama policy on everything.
Congress has made sure it was a lame duck Presidency from day one.
He had both houses of congress til he forced through Obama 'care'. Next election was biggest other way election ever...
Rudderless is good. It implies you still have a boat, and are not yet drowing.
-neither of which are true...
>>If the President loses control of Congress he’ll be unable to push forward reforms,<<
Huh? Like he reformed healthcare, Solyndra et al., foreign policy, and his other reforms?
That he becomes an even lamer duck is devoutly to be wished.
And regarding rates, they are going to remain lower longer than anyone expects, regardless of Congress.
the article lost me as soon as I saw "repubicans win, derails recovery"
saxo bank has zero idea about the inner workings of u.s. politics. and their opinions are tainted with danish socialism all around.
so ummm yah. geopolitical risk, certainly.
but whether the so-called "recovery" is derailed or not goes waaaaay deeper than simple republicans vs. democrats in national elections.
to be sure, much of the recovery is fake, anyway. pop the artificial fed bubble and give me some real growth from real demand for real products bought with real money (I understand this is somewhat of a mirage, but hey, shoot for the stars, land on the moon....)
Risk: Republican victory in the Senate and House results in lame duck presidency, derailing the US recovery.
That alone proves they have absolutely no idea whatsoever what they're talking about. First, there is no actual "US recovery." Second, the Dems have no more to do with it than the Reps. The illusory "recovery" is entirely due to the Fed's policies.
when I swap out "Investors" for "Muppets" it becomes a smoother read.
explain how a REPUBLICAN SENATE VICTORY "derails" the ""recovery""... first what fucking recovery? second, the repubs can override the idiot in the white house veto (hopefully) and lower corporate tax rates, reel in the epa, reel inthe doj, and impeach the subhuman scumbag if they wish... and repeal obumblercare.... for starters. if there is any real recovery is is IN SPITE of shit for brains and his crew...
Exactly. Who wrote this crap?
That all sounds like upside risk to me. Good economic news and world peace are super bearish but I don't think we will get any of that anytime soon so BTFD while you still can because by the end of this month you will be buying new all time highs again.
An event in the not to distant future that may effect the British currency is when voters in Scotland will be given the choice of opting for independence in a referendum in September 2014. If Scotland wants independence then so be it, but sorting out the political and economic ties with the rest of the UK, may be difficult.
Scotland has to be allowed to stand on its own two feet without the rest of the UK financially and economically supporting it. The Euro proves that more than one sovereign country cannot easily use the same currency. Portugal, Ireland, Greece, Italy and Spain have discovered that you cannot have full independence and share a currency. Another problem is that if the UK Government is to agreeable to a separation, will Wales and Northern Ireland move towards independence? More on this subject in the article below.
http://brucewilds.blogspot.com/2013/06/british-pound-and-independant-sco...
On China - How is clearing the system from corruption a bad thing ? The state owned enterprises (SOE) are dominant across all sectors and there is no large private sector in this economy. These SOEs are also rightly reformed targets with overbloated bureaucracies and subsidised/protected and not competitive in the free markets.
So any measures to reform the economy and stabilise the politics for China's long term benefits are to be bashed because it is China ?