Saxo Bank Presents Its 10 Black Swan Predictions For 2011

black swan

Saxo Bank has released its 10 outrageous predictions for 2011 and they include some notable tail-risk possibilities.

Among the subjects: What might happen between Congress and the Fed, who Apple might buy, and the future of the US dollar.

As FT Alphaville points out, Saxo’s list got 3 out of 10 correct in 2010. Not a bad haul for a list meant to find the sort of Black Swans Nassim Taleb writes about.

The Congress stops Fed Chairman Bernanke's plans for quantitative easing 3.

U.S. politicians, including new House subcommittee chair on domestic monetary policy Ron Paul, lead a public charge against the Federal Reserve. When U.S. banks start to weaken under new mortgage concerns, Bernanke attempts another round of QE, only to have the Congress block their move.

Source: Saxo Bank

Apple acquires Facebook.

Apple's Steve Jobs, seeking a means to get into the Social Networking space and out compete Google, buys Facebook. The deal gives Jobs' company access to Facebook's massive amount of users, sees FaceTime combine with Facebook chat, and helps the company to sell more iOS devices.

Source: Saxo Bank

The U.S. dollar index rises to over 100.

Weakness in Europe and Japan is followed on by the failure of China's new domestic growth strategy to materialise. The result is a slowing world economy, and investors moving into the U.S. dollar.

With a great deal of early 2011 shorts in place, the USD index rises 25% to over 100.

Source: Saxo Bank

The yield on the U.S. 30-year treasury sinks to 3%.

A combination of emerging markets demand, a Japanese style deflationary crisis, and the eurozone crisis forces more investors into safe haven U.S. treasuries. The result is a 30-year yield below 3%.

Source: Saxo Bank

The Australian dollar falls 25% against the UK pound

The UK bounces back, with austerity cuts creating a growth environment, and the country is the fastest growing in Europe in 2011.

Australia, simultaneously, grapples with a slowdown in China and a property market that looks likely to burst.

Source: Saxo Bank

Crude oil surges, but then drops in price by one third.

Crude oil surges on the belief that the U.S. economy is back. But, it doesn't come through, and the value of crude falls by one third towards the end of 2011.

Source: Saxo Bank

The price of natural gas rises by 50%.

Natural gas turns around after years of losses due to its cheapness versus other energies and changes in U.S. government policy on exports.

Source: Saxo Bank

The price of gold soars to $1800 as the global currency war rages.

The U.S. government, faced with renewed spending from consumers, finds its export growth strategy not working. Voters insist the devalue to make U.S. exports more competitive, and gold soars.

Source: Saxo Bank

With Bernanke's support, the S&P 500 rises to a new all time high.

U.S. investors buy in to Ben Bernanke's strategy and start getting in on the stock surge. Those investors start spending their earnings too. Businesses continue to pay down debt and the U.S. economy enters a full blown recovery.

Source: Saxo Bank

The Russian RTS index nearly doubles, rises to 2500

A global bubble grows, oil, which Russia has plenty of, surges, and the Russian stock market suddenly looks deeply undervalued.

Source: Saxo Bank

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