Next year could bring more, equally unbelievable, happenings such as another 400 points being wiped off the S&P 500 and a slump in Chinese growth to zero, according to a report from Saxo Bank titled "10 Outrageous Claims 2009."
1. Iranian Revolution
If oil prices continue to decline, which Saxo Bank believes they will, the Iranian society will be badly affected due to the country's reliance on its number one commodity. The government may not be able to provide the basic necessities its citizens need, which would lead to widespread social unrest, according to Saxo Bank.
2. Crude Oil to $25
The ongoing economic crisis will further dent oil demand throughout next year, sending the price ever closer to $25 a barrel, Saxo Bank said. OPEC production cuts will be hampered by disagreement and fail to stem the slide, it added.
3. S&P 500 to 500
The S&P 500 will fall to 500 points in 2009 as slowing corporate earnings will drag on the U.S. index, according to Saxo Bank. Earnings will slow because of a continued consumer recession, lead by the credit shortage. An increase in corporate funding costs, falls in house prices and a slowdown in investing programs will also add to the weakness, the report said.
4. Italy Could Drop the Euro
Italy could make good on threats to leave the European Exchange Rate Mechanism (ERM) and may drop out in 2009, Saxo Bank said, a decision which would mean the country effectively gives up the euro. The EU is likely to crack down on excessive government budget deficits, which could prompt Italy to leave the currency regulation, it said.
5. Australian Dollar to Slump vs Yen
The Australian dollar will sink to 40 Japanese yen as next year's continued slump in commodities hurts the Australian economy, Saxo Bank said. The whole commodity complex will be left dead in the water for the next ten years, the report said.
6. Dollar to Outstrip the Euro
The euro will fall to 0.95 cents versus the dollar in the New Year, before shifting direction and rising to 1.30 cents, according to Saxo Bank. The euro-zone will face a tough year in 2009 as the banking sector will suffer because of its exposure to Eastern Europe, a region that will increasingly falter next year, the report said.
7. Chinese GDP Growth to 0%
Export-led China will be hit by the double blow of a slowing U.S. economy and the souring of commodity-based investments, according to Saxo Bank. Japan will not actually sink into recession, despite gross-domestic-product growth all but disappearing, the report said.
8. Eastern European Forex Pegs to Fail
Several of the Eastern European currencies currently pegged or semi-pegged to the euro will come under increasing pressure to decouple next year, the report said. The emerging economies are vulnerable to more credit-market disruptions, it added.
9. Commodities Prices to Plunge
Commodities are facing widespread weakness next year with the Reuters/Jefferies CRB Index to drop 30 percent, according to Saxo Bank. The consensus belief that demand has been outstripping supply for years might not even be true and more stockpiles could be revealed, the report said.
10. Yen to Become Currency Peg
Asian countries could shun dollar pegs in favor of the Chinese yen next year, according to Saxo Bank. China's economic, political and cultural influence is growing and shifts in market re-evaluations will favor the country, the report added. - CNBC
If the above isn’t bad enough …
2008 was the year that subprime borrowers and speculators got hurt by the real estate crisis. 2009 could be when everyone else gets hit.
Until now, the nation's most serious home price declines have been in low-cost markets that were dominated by subprime mortgages, and in overbuilt markets such as Florida, California, and Las Vegas, where residential values are sliding fast toward pre-housing boom levels.
The Commerce Dept. reported Dec. 23 that November new-home sales in the U.S. fell to their lowest level in 17 years, down 35.3% compared with November 2007. And the outlook is even bleaker. The same day, Credit Suisse (NYSE:CS - News) forecast that more than 8 million homes will go into foreclosure over the next four years, or approximately 16% of all U.S. households with mortgages.
That's because the big story in 2009 could be that, with the deepening recession and mounting job losses, serious housing troubles could infect wealthier communities and markets that were just beginning to stabilize this summer before the bankruptcy of Lehman Brothers on Sept. 15 sparked the most serious financial turmoil in decades. In fact, according to online real estate research firm HousingPredictor.com, based in Destin, Fla., housing prices nationwide will fall 12.5% next year, compared with an estimated 11.1% this year.
Housing and mortgage problems pushed the nation into a recession that could now amplify, draw out, and expand the reach of the housing declines. –Yahoo News
1. Iranian Revolution
If oil prices continue to decline, which Saxo Bank believes they will, the Iranian society will be badly affected due to the country's reliance on its number one commodity. The government may not be able to provide the basic necessities its citizens need, which would lead to widespread social unrest, according to Saxo Bank.
2. Crude Oil to $25
The ongoing economic crisis will further dent oil demand throughout next year, sending the price ever closer to $25 a barrel, Saxo Bank said. OPEC production cuts will be hampered by disagreement and fail to stem the slide, it added.
3. S&P 500 to 500
The S&P 500 will fall to 500 points in 2009 as slowing corporate earnings will drag on the U.S. index, according to Saxo Bank. Earnings will slow because of a continued consumer recession, lead by the credit shortage. An increase in corporate funding costs, falls in house prices and a slowdown in investing programs will also add to the weakness, the report said.
4. Italy Could Drop the Euro
Italy could make good on threats to leave the European Exchange Rate Mechanism (ERM) and may drop out in 2009, Saxo Bank said, a decision which would mean the country effectively gives up the euro. The EU is likely to crack down on excessive government budget deficits, which could prompt Italy to leave the currency regulation, it said.
5. Australian Dollar to Slump vs Yen
The Australian dollar will sink to 40 Japanese yen as next year's continued slump in commodities hurts the Australian economy, Saxo Bank said. The whole commodity complex will be left dead in the water for the next ten years, the report said.
6. Dollar to Outstrip the Euro
The euro will fall to 0.95 cents versus the dollar in the New Year, before shifting direction and rising to 1.30 cents, according to Saxo Bank. The euro-zone will face a tough year in 2009 as the banking sector will suffer because of its exposure to Eastern Europe, a region that will increasingly falter next year, the report said.
7. Chinese GDP Growth to 0%
Export-led China will be hit by the double blow of a slowing U.S. economy and the souring of commodity-based investments, according to Saxo Bank. Japan will not actually sink into recession, despite gross-domestic-product growth all but disappearing, the report said.
8. Eastern European Forex Pegs to Fail
Several of the Eastern European currencies currently pegged or semi-pegged to the euro will come under increasing pressure to decouple next year, the report said. The emerging economies are vulnerable to more credit-market disruptions, it added.
9. Commodities Prices to Plunge
Commodities are facing widespread weakness next year with the Reuters/Jefferies CRB Index to drop 30 percent, according to Saxo Bank. The consensus belief that demand has been outstripping supply for years might not even be true and more stockpiles could be revealed, the report said.
10. Yen to Become Currency Peg
Asian countries could shun dollar pegs in favor of the Chinese yen next year, according to Saxo Bank. China's economic, political and cultural influence is growing and shifts in market re-evaluations will favor the country, the report added. - CNBC
If the above isn’t bad enough …
2008 was the year that subprime borrowers and speculators got hurt by the real estate crisis. 2009 could be when everyone else gets hit.
Until now, the nation's most serious home price declines have been in low-cost markets that were dominated by subprime mortgages, and in overbuilt markets such as Florida, California, and Las Vegas, where residential values are sliding fast toward pre-housing boom levels.
The Commerce Dept. reported Dec. 23 that November new-home sales in the U.S. fell to their lowest level in 17 years, down 35.3% compared with November 2007. And the outlook is even bleaker. The same day, Credit Suisse (NYSE:CS - News) forecast that more than 8 million homes will go into foreclosure over the next four years, or approximately 16% of all U.S. households with mortgages.
That's because the big story in 2009 could be that, with the deepening recession and mounting job losses, serious housing troubles could infect wealthier communities and markets that were just beginning to stabilize this summer before the bankruptcy of Lehman Brothers on Sept. 15 sparked the most serious financial turmoil in decades. In fact, according to online real estate research firm HousingPredictor.com, based in Destin, Fla., housing prices nationwide will fall 12.5% next year, compared with an estimated 11.1% this year.
Housing and mortgage problems pushed the nation into a recession that could now amplify, draw out, and expand the reach of the housing declines. –Yahoo News
No comments:
Post a Comment