Saxo Bank Warns There Are 3 'Other' Geopolitical Risks Investors Are Ignoring

Tyler Durden's picture

Via Saxo Capital Markets,

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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besnook's picture

the chinese should legalize criminal behavior. that will clean up corruption. it works brilliantly in the usa. there is no corruption here anymore.

Bastiat's picture

Are you available to take Ginsberg's spot on the Supreme Court?

PartysOver's picture

If the Senate goes Republican and Ginsberg retires there may not be a placement for a couple of years.  Showtime!

S.M.T.U.Q.I.'s picture

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.

max2205's picture

#1. BarryObo gets thrown out of office

BlindMonkey's picture

And take the Ferguson fun coast to coast? That will be a riot to see!

mvsjcl's picture

"Risk: Republican victory in the Senate and House results in lame duck presidency, derailing the US recovery."

 

I stopped reading there.

BlindMonkey's picture

That is where I started laughing.

orez65's picture


"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.

Bangin7GramRocks's picture

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.

GOSPLAN HERO's picture

Replacement for Ginsberg?

One must be a Jewess.

LawsofPhysics's picture

Remember, one man's "corruption" may be another man's income...

 

i wish the chinese well and good luck.

Bloppy's picture

"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

caconhma's picture

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.



indygo55's picture

"derailing the US recovery? "

What recovery?

NOTaREALmerican's picture

Not including the Trash Class, there's been quite a recovery in the US and the UK. 

Carpenter1's picture

Every one of these "risks" is within the control of the vampiric status quo class= No risk.

Article is B.S.

WarHorse's picture

Well - if it comes from Saxo Bank ..... 

NoDebt's picture

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.

NoDebt's picture

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.

MalteseFalcon's picture

"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?

NoDebt's picture

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,

Honey Badger's picture

Plus, political gridlock is a good thing.  Everything .gov touches turns to shit in a hurry.

conspicio's picture

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.

NoDebt's picture

"bespoke-suited-serious-collar-and-windsor-knotted-tie-analysis"

I'm borrowing that one, if you don't mind.

Kirk2NCC1701's picture

"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.

vintageyz's picture

That is the crux of the bisquit

 

hedgeless_horseman's picture

 

 

As Cembalest notes, the list is long... and growing

I already covered this...

  1. Ebola killing doctors in bunny suits,
  2. blacks rioting in St Louis,
  3. coup d'etat and then war in Ukraine,
  4. war and then coup d'etat in Iraq,
  5. NSA violating the Fourth Amendment,
  6. Argentine sovereign default,
  7. Fukushima pumping radiation into the Pacific,
  8. epic drought in California and Nevada,
  9. airliners falling out of the sky in droves,
  10. US Army General killed in the 13th year of American occupation of Afghanistan,
  11. US State Dept pulls out of Libya,
  12. Israel killing 100s of civilians in Gaza,
  13. a majority of American teens use drugs,
  14. a majority of American adults in debt,
  15. no toilet paper in Venezuela,
  16. etc.

Saxo's three risks being ignored by "investors" all fall under #16.

MalteseFalcon's picture

#1 should read "West Africans and American missionaries flying nilly willy all over the globe."

Utah_Get_Me_2's picture

Is 'Nilly Willy' a subsidiary of Malaysia Airlines?

Steaming_Wookie_Doo's picture

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/

 

cro_maat's picture

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.

BlindMonkey's picture

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.

samcontrol's picture

omg... and the French are the dirty ones.

john39's picture

you left out a zero in number 12...

UselessEater's picture

and forgot the Blood Moons and Legarde's Magic No. 7.... serious economic fundmentals count today ;)

Groundhog Day's picture

Fear mongerer....BTFD

pauhana's picture

besnook - Yup, not even a smidgin!

SilverIsMoney's picture

Lol.. "Derail recovery" AKA our scapegoat...

SilverIsMoney's picture

Lol.. "Derail recovery" AKA our scapegoat...

Dr. Engali's picture

Anti-corruption drive in China? They should just learn to live with it and love it like us. Hey Vaseline is free with Obamasnap.

Oquities's picture

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.

tjeffersonsghost's picture

So by cleaning up corruption in China that would be bad for the economy, did I read that right?

NoDebt's picture

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.

BlindMonkey's picture

Only the pesants respect honesty.

i_call_you_my_base's picture

"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.