A regular exercise every December is looking forward to what the financial world will look like in the coming year. No scientific involvement.
Analysts take for granted that they can anticipate reality, and this certainty prevents them from assuming that reality is always more surprising than imagination. This is why analysts’ forecasts are traditionally fearful in the face of events, and any anomaly that occurs is almost always overlooked in the forecasts.
Of course, there’s always someone who gets it right – but that’s due to pure chance rather than effective data transmission. Of course, there is the statistical work: if it happens once, it can always happen again. Pandemic is one such event: no one expected it, but then no one stopped predicting the next one.
The war in Israel was a strange phenomenon: no one in his right mind could have failed to foresee it. Either way, each December, you can expect explorers, seers, and magicians to try to pull out their own scrolls of knowledge and begin to anticipate what will happen in the coming year. It’s a risk-free exercise: if they fail, no one will remember it next December; If they get an unpredictable event right, they will have a permanent place in the columns of top newspapers for at least the next 12 months.
The most interesting part of crystal ball gazing is the ‘black swans’ (highly unlikely events, but they have huge and planetary impact. Saxo Bank economists decided to take the risk. End capitalism, oil back to $150 a barrel, or the end of the Bank of Japan’s extreme expansionary policies in its Black swans are the ones. And if the end of capitalism is as unlikely as seeing the tree grow down from the roots, the others are always predictable. But there are other speculations.
For example, Saudi Arabia has the potential to become an economic and footballing power. As for the first one, there is nothing too difficult. For years, the most important country in the Arabian Peninsula has been trying to diversify its sources of income – and this diversification will not be paid for by Saudi hard work, but by the sale of barrels of oil, as it probably will. Oil prices rising to $150 will contribute, Saxo says. Yes, one day, obviously, 150 dollars will be reached – but probably not before COP 32 or maybe 35.
As far as football goes, it’s supposed to be a joke. In recent years Saudi Prince Mohammed bin Salman (MBS), a well-known football enthusiast, has personally involved himself in the field. Even so, despite the money pouring into the Saudi Pro League, the country’s teams continue to be a repository of respected former greats. Cristiano Ronaldo comes from countries that do not guarantee social security payments for eternity.
Even so, the bank’s analysts remain confident in the Saudi Arabians’ ability to try to transform their championship into a global club competition. The FIFA World Champions League becomes a reality and a significant number of matches will be played in Riyadh. The new competition is made up of 48 teams, similar to the current UEFA Champions League format with European clubs occupying 32 places, Asia-Middle East, Africa and the Americas each occupying five places in the competition, with the rest going to Oceania. According to the most far-sighted forecasts of Saxo Bank’s economists.
Returning to the end of capitalism, Saxo Bank analysts say geopolitical changes are undermining US security. This increase in global risk is forcing the U.S. government to expand defense spending, while the Federal Reserve continues to tighten credit conditions — paying for federal spending in that category. To avoid social unrest, Congress is forced to increase this same spending, fueling further inflation and rising debt service. With the budget deficit growing rapidly, the government must find ways for investors to buy US Treasuries.
On the bonds front, the bank expects the ‘Magnificent Seven’ (Apple, Alphabet, Google, Microsoft, Amazon, Meta, Tesla and Nvidia) to join the other five (Eli Lilly, Novo Nordisk, JP Morgan Chase, LVMH and ASML). . All this could lead to the end of capitalism. It’s not clear why, but that’s it. Bank analysts seem to forget that there is already a worthy answer to the whole incredible problem of liberal capitalism, unfettered: state capitalism. When the US president (whoever he is) doesn’t know what else to do to stop the slide of liberal capitalism, he should call his Chinese counterpart and ask how it ended. With a phone in your hands, you should take the opportunity to call Moscow in an attempt to understand why Russian oligarchs fall from very high windows or suffer serious home accidents. Then, follow practices that have already been proven efficient and liberal capitalism will soon be back on track. But Saxo Bank did not expect this.
Stein Jacobsen, the bank’s investment director, expects a ‘Club of Rome’ to emerge among the many powers that are starting to grapple with deficits. “As the US debt situation becomes unmanageable by 2022, a group of six deficit nations is forming the Club of Rome to cooperate in reducing the deficit by jointly negotiating new global trade terms,” he says – after of course an in-depth study of the BRICS proposals. The six founding countries of the ‘Club of Rome’ are the United States, the United Kingdom, India, Brazil, Canada and France. Correcting the current account gap in core countries is a painful adjustment for the largest surplus countries (China, Germany, Norway, Japan, the Netherlands and Singapore). The world’s reserve currency, the dollar, will spiral out of control and undermine confidence in the monetary system, leading to big gains for gold, silver and cryptocurrencies, Jacobson predicts. It’s an interesting scene.
Chief analyst John Hardy outlines a world in 2024 in which a third independent candidate becomes president of the United States for the first time: Robert F. Kennedy Jr. In terms of analysis, John F. Kennedy rejected the Democratic Party and adopted his own populist platform for the 2024 presidential election. The two ‘problems’ were that the young populist candidate would have already emerged (primaries begin. less than a month) and the seat was already occupied.
On the other hand, as the European Union (EU) needs more funding for various policy objectives, including climate change mitigation, health and education, and people realize how little millionaires pay in taxes, the European Commission is implementing a 2% tax law. Wealth every year, imagines Peter Cornry, head of equity market strategy at Saxo Bank. According to him, this property tax will raise 42 billion euros in additional tax revenue. And now,is less than the next Ukraine-Russia war fund, there is still room for the rich to leave the poor alone – but Cornry doesn’t say that.
Next year, we’ll see who got what right.
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