Saxo Bank, Fintech specialist focused on multi-asset trading and investment, has released a list of 10 ‘Outrageous Predictions’ for 2019. The predictions focus on a series of highly unlikely but underappreciated events which, if they were to occur, could send shockwaves across financial markets.
While these predictions do not constitute Saxo’s official market forecasts for 2019, they represent a warning of a potential misallocation of risk among investors who typically see just a one percent likelihood to these events materialising.
The Outrageous Predictions for 2019 are:
1. EU announces a debt jubilee
2. Apple “secures funding” for Tesla at $520/share
3. President Trump replaces Head of the Fed
4. Prime Minister Corbyn sends GBPUSD to parity
5. Corporate credit crunch pushes Netflix into GE’s vortex
6. Australian central bank launches QE on housing bust Down Under
7. Germany enters recession
8. X-Class solar flare creates chaos and inflicts $2 trillion of damage
9. Global Transportation Tax (GTT) enacted as climate panic spreads
10. IMF and World Bank announce intent to stop measuring GDP, focus instead on productivity
Commenting on the Outrageous Predictions, Chief Economist at Saxo Bank, Steen Jakobsen said:
“We have been publishing Outrageous Predictions for more than a decade and think this year’s list is both fascinating and shocking while encouraging investors to think outside the consensus box. It is important to underline that the Outrageous Predictions should not be considered Saxo’s official market outlook, it is instead the events and market moves deemed outliers with huge potential for upsetting consensus views.
“This year’s edition has a unifying theme of “enough is enough”. A world running on empty will have to wake up and start creating reforms, not because it wants to but because it has to. The signs are everywhere. We think 2019 will mark a profound pivot away from this mentality as we are reaching the end of the road in piling on new debt and next year will see us all beginning to pay the piper for our errant ways. The great credit cycle is already showing signs of strain in late 2018 and will rip through developed markets next year as central banks are sent back to the drawing board. After all, their money printing efforts since 2008 have only dug a deeper debt hole, and it has now grown beyond their mandate to manage.
“If some of these outrageous predictions see the light of day, we might finally see a healthy shift toward a less leveraged society, with less focus on short-term gains and growth, and a new focus on productivity and new economic revolution back toward globalisation with a fairer playing field after the immediate moment of crisis. On the negative side, we could see considerable worsening of central bank independence, a credit crunch, and big losses in the asset where everyone is too long: real estate.”
The Outrageous Predictions 2019 publication is available here.