Thursday, December 24, 2009
Merry Christmas & Happy Long Holiday Ahead Of A Great New Year 2010
Final Days before this Blog to be suspended for about 2/3 weeks & upgraded to a new blog / web (all brand new address, format, links, contents). Enjoy your long holiday & make yourself cozy to be prepare for the heavy trading in 2010 (The Year of Volatility). Wish You Readers All The Best!!!
Top 10 Outrageous Predictions for 2010
By: Robin Knight, CNBC Assistant Web
GOLD, BONDS, POLITICS & GOVERNMENT, CURRENCIES, STOCK MARKET, INVESTMENT STRATEGY
As New Year's approaches, money managers, strategists, sell-side analysts and economists turn their attention to what the next year holds. Which sector will do best? Which currency, country, asset class? Is it time to invest in that leather-bound waste-paper basket that would really tie the office together? But one group of analysts at Saxo Bank goes one step further to lay out its "outrageous predictions," or "Black Swans" for the year ahead.
It looks to those high-impact, hard-to-predict and rare events that can blindside investors. The exercise aims to challenge market conceptions, but the chance of one of the predictions actually coming true is no better than 50 percent, they say. Judging by last year's list of predictions, it would appear the success rate is closer to zero. Click here to see last year's "Black Swans" and read below to see what Saxo Bank thinks could be happening in 2010.
Bunds Yields Will fall to 2.25%
German bunds, and other sovereign fixed-income assets, will see their yield slump because of deflationary forces and easy monetary policy, according to Saxo Bank. Traders will refuse to buy into the "growth story" that is being pushed by the stock market, the report said. The German 10-year government bond could be forced from 122.6 to 133.3 by the end of 2010, it added.
VIX Will Fall to 14
The VIX could fall from 22.32 to 14 points as trading ranges narrow and implied options volatility declines, according to the report. Investors are showing the same kind of complacency toward risk as they were in 2005-06, Saxo Bank said.
Yuan Will be Devalued by 5% Vs. Dollar
The yuan could be set to fall 5 percent against the dollar due to the spare capacity in China and the general economic backdrop, according to Saxo Bank. The efforts of Chinese authorities to stem the credit growth and avoid bad loans, coupled with the creation of several growth bubbles could spell weakness for the Chinese currency, the report said.
Gold Will Fall to $870 in 2010
The rally in gold prices will be brought to an end by a strengthening dollar, Saxo Bank claimed. Pushing gold higher has become too easy and too widespread to bring results in the short term and a serious correction could send the precious metal toward $870, the analysts said. However, it will reach $1,500 within five years, they said.
Dollar Vs. Yen to Reach 110
The dollar could snap back next year, sending the yen to 110, because the greenback carry trade has been too easy and too obvious for too long, Saxo Bank said. Meanwhile, the yen is not reflecting the economic reality in Japan, which is laden with growing debt and an ageing population, the report said.
Angry Americans to Form Third Party
Next year will bring see an anti-incumbent mood in U.S. politics as a result of bail-outs and general disapproval of both the big parties, the analysts said. The demand for change could bring about a new third party to offer an alternative, they added.
US Social Security Trust Fund Will Go Bust
"This is not so much an outrageous claim as an actuarial and mathematical certainty," the report said. "The outrageous part is that social security taxes and contributions have been squandered for so long." Next year outlays for the non-existing trust fund will have to be part-financed by the federal government's General Fund, Saxo Bank said. Part of the social security outlays will have to be financed by higher taxes, which will bring more borrowing or more printing, they said.
Price of Sugar Will Drop One Third
A return to more normal weather conditions in 2010 could make sugar one of the less attractive commodities, Saxo Bank said. Meanwhile, Brazil and the US have lowered the ethanol content of gasoline by five percentage points because of the rising price of the commodity, the report pointed out. Both factors could push prices of sugar lower.
Tokyo Small Caps Will Rise by 50%
Tokyo's small-cap stocks have been underperforming the Nikkei 225, but their fundamentals indicate this is a "bargain index," according to Saxo Bank.
"With a price/book ratio of only 0.77 and only about 12 percent of the index consisting of financials, we know no other index this cheap," the report said.
US Trade Balance Will Turn Positive
The dollar has become weak enough to stimulate US exports and put strain on imports, the report pointed out. The changing trend could see one or two months of positive US trade in 2010, it said.
GOLD, BONDS, POLITICS & GOVERNMENT, CURRENCIES, STOCK MARKET, INVESTMENT STRATEGY
As New Year's approaches, money managers, strategists, sell-side analysts and economists turn their attention to what the next year holds. Which sector will do best? Which currency, country, asset class? Is it time to invest in that leather-bound waste-paper basket that would really tie the office together? But one group of analysts at Saxo Bank goes one step further to lay out its "outrageous predictions," or "Black Swans" for the year ahead.
It looks to those high-impact, hard-to-predict and rare events that can blindside investors. The exercise aims to challenge market conceptions, but the chance of one of the predictions actually coming true is no better than 50 percent, they say. Judging by last year's list of predictions, it would appear the success rate is closer to zero. Click here to see last year's "Black Swans" and read below to see what Saxo Bank thinks could be happening in 2010.
Bunds Yields Will fall to 2.25%
German bunds, and other sovereign fixed-income assets, will see their yield slump because of deflationary forces and easy monetary policy, according to Saxo Bank. Traders will refuse to buy into the "growth story" that is being pushed by the stock market, the report said. The German 10-year government bond could be forced from 122.6 to 133.3 by the end of 2010, it added.
VIX Will Fall to 14
The VIX could fall from 22.32 to 14 points as trading ranges narrow and implied options volatility declines, according to the report. Investors are showing the same kind of complacency toward risk as they were in 2005-06, Saxo Bank said.
Yuan Will be Devalued by 5% Vs. Dollar
The yuan could be set to fall 5 percent against the dollar due to the spare capacity in China and the general economic backdrop, according to Saxo Bank. The efforts of Chinese authorities to stem the credit growth and avoid bad loans, coupled with the creation of several growth bubbles could spell weakness for the Chinese currency, the report said.
Gold Will Fall to $870 in 2010
The rally in gold prices will be brought to an end by a strengthening dollar, Saxo Bank claimed. Pushing gold higher has become too easy and too widespread to bring results in the short term and a serious correction could send the precious metal toward $870, the analysts said. However, it will reach $1,500 within five years, they said.
Dollar Vs. Yen to Reach 110
The dollar could snap back next year, sending the yen to 110, because the greenback carry trade has been too easy and too obvious for too long, Saxo Bank said. Meanwhile, the yen is not reflecting the economic reality in Japan, which is laden with growing debt and an ageing population, the report said.
Angry Americans to Form Third Party
Next year will bring see an anti-incumbent mood in U.S. politics as a result of bail-outs and general disapproval of both the big parties, the analysts said. The demand for change could bring about a new third party to offer an alternative, they added.
US Social Security Trust Fund Will Go Bust
"This is not so much an outrageous claim as an actuarial and mathematical certainty," the report said. "The outrageous part is that social security taxes and contributions have been squandered for so long." Next year outlays for the non-existing trust fund will have to be part-financed by the federal government's General Fund, Saxo Bank said. Part of the social security outlays will have to be financed by higher taxes, which will bring more borrowing or more printing, they said.
Price of Sugar Will Drop One Third
A return to more normal weather conditions in 2010 could make sugar one of the less attractive commodities, Saxo Bank said. Meanwhile, Brazil and the US have lowered the ethanol content of gasoline by five percentage points because of the rising price of the commodity, the report pointed out. Both factors could push prices of sugar lower.
Tokyo Small Caps Will Rise by 50%
Tokyo's small-cap stocks have been underperforming the Nikkei 225, but their fundamentals indicate this is a "bargain index," according to Saxo Bank.
"With a price/book ratio of only 0.77 and only about 12 percent of the index consisting of financials, we know no other index this cheap," the report said.
US Trade Balance Will Turn Positive
The dollar has become weak enough to stimulate US exports and put strain on imports, the report pointed out. The changing trend could see one or two months of positive US trade in 2010, it said.
Macro hedge funds, stockpickers tipped for 2010
* Countries set to exit downturn at different speeds
* Big asset price rises of 2009 not expected
* Opportunities to differentiate between economies, stocks
* Investors shuffle winning credit bets of 2009
By Laurence Fletcher and Svea Herbst
LONDON/BOSTON, Dec 23 (Reuters) - Hedge funds making big bets on currencies, commodities and equities are favoured by fund selectors in what is likely to be a more testing 2010 after a bumper year for hedge fund returns.While 2009's best trade has been to buy riskier assets rebounding from last year's depressed prices, funds of funds think 2010 will not see such large price rises and will instead belong to managers with the skill to differentiate between economic and corporate scenarios.
http://www.reuters.com/article/idUSLDE5BK1JT20091223
* Big asset price rises of 2009 not expected
* Opportunities to differentiate between economies, stocks
* Investors shuffle winning credit bets of 2009
By Laurence Fletcher and Svea Herbst
LONDON/BOSTON, Dec 23 (Reuters) - Hedge funds making big bets on currencies, commodities and equities are favoured by fund selectors in what is likely to be a more testing 2010 after a bumper year for hedge fund returns.While 2009's best trade has been to buy riskier assets rebounding from last year's depressed prices, funds of funds think 2010 will not see such large price rises and will instead belong to managers with the skill to differentiate between economic and corporate scenarios.
http://www.reuters.com/article/idUSLDE5BK1JT20091223
BNP Paribas/Fortis: Commodity Outlook 2010
Introduction
China’s rapacious appetite for base metals has shaped this market throughout 2009; without China, and the promise of its long-term growth, prices would be languishing at almost half their current level. Now that China has reiterated it will maintain a relatively loose monetary policy in 2010, and forecasts for China’s GDP growth next year are already exceeding 9%, the year ahead is unlikely to see much price weakness for base metals – if anything, the reverse. We also expect speculative investment levels to rise, given what is now almost certain to be an effectively zero interest-rate environment during the whole of 2010. That spells persistent weakness for the US dollar and, with economic recovery likely across almost all the OECD countries, 2010 is shaping up to see
base metals prices shift beyond their 2009 highs and perhaps challenge levels last seen in H1 2008. The only real negatives are the massive inventories and the threat of over-supply, as miners and smelters ramp-up by too much, and too soon.
http://www.ziddu.com/download/7871686/BNPCommodityDec2009.pdf.html
China’s rapacious appetite for base metals has shaped this market throughout 2009; without China, and the promise of its long-term growth, prices would be languishing at almost half their current level. Now that China has reiterated it will maintain a relatively loose monetary policy in 2010, and forecasts for China’s GDP growth next year are already exceeding 9%, the year ahead is unlikely to see much price weakness for base metals – if anything, the reverse. We also expect speculative investment levels to rise, given what is now almost certain to be an effectively zero interest-rate environment during the whole of 2010. That spells persistent weakness for the US dollar and, with economic recovery likely across almost all the OECD countries, 2010 is shaping up to see
base metals prices shift beyond their 2009 highs and perhaps challenge levels last seen in H1 2008. The only real negatives are the massive inventories and the threat of over-supply, as miners and smelters ramp-up by too much, and too soon.
http://www.ziddu.com/download/7871686/BNPCommodityDec2009.pdf.html
Hong Kong stocks to rally in 2010 on China stimulus
(Reuters) - Hong Kong shares will likely rally in the first half of 2010 on hopes that China will maintain the massive stimulus spending program launched last year, a Reuters poll showed on Wednesday. The benchmark Hang Seng Index .HSI, one of the best performing stock markets in the world so far this year, will eke out mild gains in the fourth-quarter to finish 2009 at 22,000 points, as investors pause after a blistering nine-month rally, the poll of over 20 analysts taken over the last week said.The index could post a full-year gain of over 50 percent in 2009, which would be its best in a decade and a remarkable turnaround from huge losses in 2008, when investors shunned stocks after the global financial crisis.
http://www.reuters.com/article/idUSTRE5BM36K20091223
http://www.reuters.com/article/idUSTRE5BM36K20091223
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