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Saxo Bank’s shocking outlook for 2019

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Saxo Bank’s shocking outlook for 2019
December 06
09:00 2018

Saxo Bank has made a shocking forecast for 2019.  Saxo Bank chief economist Steen Jakobsen commented: “We find the forecast rather interesting and intriguing. It enables investors to keep an open mind.”

Saxo Bank has been publishing its forecasts for 16 years. Their peculiarity is “black swans” – the events, having become a reality, can seriously affect the world.

The bank notes that a “shocking review” is not an official forecast, but any event on this list can seriously change the financial structure of the global economy. The program includes 10 events that are not related to each other.

In 2018, some bank forecasts have come true. This is about the crash of  Bitcoin and the rise in volatility.

Apple will buy Tesla

Apple will buy Tesla and get a chance to penetrate deeper into the car market. Now the company is represented here only in the form of Apple CarPlay software.

Such a transaction is quite logical, as it is within the concept of the company’s development. Perhaps, coming to the car market will be in a different form and not so soon, but still it is possible.

Currently, Apple has reserves of $ 237 billion. The money can be distributed among the shareholders, but the development of the company will stop there. Investing in the auto industry looks like a good option.

The next step for the corporation is cars, or rather electric cars. Now IT is widely used in the technology of this type. In the best traditions of Steve Jobs, Apple should continue to evolve and make risky moves.

In turn, Tesla will experience a shortage of funding. Apple can make an offer that will be difficult to refuse – $ 520 per share, which is significantly more than the price stated in the removed tweet of Elon Musk.

Such a deal will provide an opportunity to set up the production in Europe and China and become the leader of the emerging industry.

Decline in Germany

During a long period of time, Germany was one of the leaders of the world economy, but now it is experiencing difficulties in the field of new technology. Developed auto industry that gives 14% of the country’s GDP is no longer enough to drive progress.

The production of cars was supposed to provide a great growth. It was planned to sell more than 100 million cars this year. That did not happen. You can only count on 81 million cars, which is only 2% more than in 2017.

In 2040, half of sales and about 30% of all cars will be electric cars. However, Germany is just in the process of changing to these models, which throws it off a few years.

Next year, the country will focus on costs, the domestic market and the production. The growth will begin to slow down and by the 3rd quarter we will see a decline.

Dismissal of Fed Chairman

Donald Trump will sack Jerome Powell from the position of Fed Chairman. In December, the US Central Bank will increase the rate again, and the President will lose his patience.

According to this scenario, the growth of the country’s economy will slow down, and the stock market will begin to fall gradually. By the summer, the trend will have changed its direction, and Chairman Powell will be fired. Neel Kashkari will be appointed instead, supporting a reduced rate.

He will provide a loan of $ 5 trillion for the purchase of the Ministry of Finance bonds. The money will be spent on administration projects and the compensation of GDP lost during the crisis years.

As a result, GDP will rise to 7%, and inflation will reach 6% (when the official level is 0.3%). The rate will remain within 1%.

“Forgiveness of debts”

History shows that people like to forget about debts. Europe can prove this once again. Next year, the national debt will only increase, populist sentiments will begin to revive, investments will decrease, and the amount of liquidity will decrease. The economic growth will also slow down. Because of this, discussions how to offset the risk of a global crisis will begin.

Germany, along with the rest of Europe, does not want to break up, so it is necessary to support the debt monetization. Debt amounts over 50% of GDP will be financed from a special fund.

The world no longer needs GDP

Global regulators will decide to forget about GDP and pay more attention to the productivity. This is a popular and not fully understood concept. In a narrow sense, it shows the amount of goods released per hour of work. In the global economy, this concept is becoming more complex and multifaceted. It is able to reflect a change in the standard of living of a person for a certain time.

If the state wants to improve the standard of living and health of people, it should raise labor productivity.

Equality of pound and dollar

Theresa May won’t agree with Parliament regarding Brexit. If the country comes to the date of the withdrawal from the EU without a contract, re-elections will be held, where Labour will succeed due to their promise to undertake reforms in different areas and conduct a second Brexit referendum. Jeremy Corbyn will become Prime Minister.

The new government will resort to the scorched- earth strategy straight from the 20th century. This will make it possible to eliminate large social inequalities.

New types of taxes will be introduced and municipal services as well as railways organizations will be nationalized.

Inflation will jump and investment will drop to the minimum. Foreigners will search for a safe place and leave the country with their money.

The pound will be in a difficult situation. On the one hand, there will be the budget deficit, on the other hand the lack of investment. It will fall out of the $ 1.3 zone and slip at least by 20%. Thus, 1 dollar will be paid for 1 pound.

The end of Netflix

Netflix’s owners will begin to worry about the share of borrowed and own funds. They will experience difficulties in attracting new money. There will be less content and the shares will lose their value.

The situation will be complicated by the emergence of Disney as a competitor. Because of this, Netflix’s development will slow down even more.

Nationalization of Australian banks

Australia escaped the crisis 10 years ago, but now there will be a catastrophe caused by a drop in lending.

After the proceedings on account of the activities of the banks, a shortage of liquidity will be revealed. The country will survive the recession. The economy will be undermined, and the welfare of citizens will deteriorate.

Investment in housing will decrease several times. Increasing the number of defaults will reduce bank profits and make them unprofitable. Nationalization will be their only option.

Transport tax

The global tax will be expressed in allowances for airline tickets and the weight of ships. International traffic with large tax exemptions will be the first goal of taxes.

The rate will be equivalent to CO2 emissions into the atmosphere. 1 ton will be paid in the amount of 50 US dollars.

Additional fees will trigger a general increase in prices.

The shares of travel, air and shipping organizations will begin to fall due to global uncertainty and the reduced growth.

A solar storm at the cost of $ 2 trillion

In 2019, a new cycle of the solar activity will begin. The western hemisphere will face a violent storm. Some satellites will be destroyed, and the transport system using GPS will plunge into chaos.

Rehabilitation of infrastructure will cost about $ 2 trillion.

The storm of Carrington in 1859 was the most powerful. Then all the telegraph systems in America and Europe stopped working. The Northern Lights – the effect of the storm was visible in Cuba in the daytime.


The material was prepared with the participation of Katya Gordon,
a leading analyst of the brokerage company CT Trade

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