Saxo Bank’s annual Outrageous Predictions, a brainchild of Steen Jakobsen, CIO at Saxo, have become a global phenomenon, intended to provoke thought and reassess investment strategies.
Saxo Bank’s Outrageous Predictions, including scenarios like the Saudis buying the Champions League franchise, an outsider winning the US election, and countries with large government deficits forming a new Club of Rome, are once again drawing global attention. Is this merely a clever marketing ploy, or do they offer real learning opportunities? We delve into this with Steen Jakobsen, the mastermind behind these forecasts.
For 22 years, Steen Jakobsen has penned Saxo Bank’s Outrageous Predictions. Each year, they captivate media worldwide. While sensational and engaging, Jakobsen emphasizes that accuracy is not the primary goal. “We don’t make these predictions hoping they will be correct,” Jakobsen explains. “They’re designed to make people think, to provoke and encourage a different perspective on investment portfolios.”
Filling the vacuum
Saxo Bank’s first Outrageous Predictions emerged in December 2001, at a time when the markets were relatively quiet. “Back then, there was a vacuum in the market and the financial media. We didn’t have social media to fill the gap,” Jakobsen recalls. What started as a means to fill this void has grown into a significant event, now involving global tours and lectures at central banks and corporate boards.
Over the years, the nature of these predictions has evolved. Initially more provocative, like forecasting the end of China’s dictatorship or the invasion of Taiwan, the balance has shifted towards a blend of creativity and economic analysis. “What was considered ‘outrageous’ two decades ago is now relatively ordinary,” Jakobsen observes. Though some predictions, like Bitcoin’s surge and Brexit, eventually materialized, the intent remains to stir thought rather than predict the future accurately.
Impact and controversy
These forecasts have not been without controversy. “Once, after predicting a halving of Apple’s share price, I received hate mails for the first time in my life,” Jakobsen shares. Despite the mixed reactions, Saxo Bank’s Outrageous Predictions continue to spark debate and reflection in the investment world.
The Outrageous Predictions for 2024
1.Saudi Arabia buys Champions League franchise as oil peaks at $150
Saudi Arabia expands its influence by acquiring one of the most coveted franchises in the sports world.
2. Obesity drugs lead to a decline in exercise
As taking a pill becomes easier, people stop exercising and start consuming more junk food.
3. US marks the end of capitalism with tax-free government bonds
Facing the 2024 elections, the US government must exponentially increase its budget spending to keep the economy running. Persistent inflationary pressure and foreign investors withdrawing capital leave demand for US Treasury bonds weak. In a desperate move to normalize financing costs, the government makes income from government bonds tax-free.
4. Generative AI deepfakes trigger national security crisis
Generative AI becomes a threat after a bold phishing attack using an AI deepfake on a senior official. Governments crack down on AI with new regulations, deflating the AI bubble and causing venture capitalists to abandon the sector.
5. Countries with government deficits form a new club
With the US debt situation becoming unmanageable, a group of six deficit countries forms a ‘Club of Rome’. Their aim: to reduce deficits by collectively negotiating new global trade terms with surplus countries.
6. An outsider wins US presidential election
In 2024, for the first time in US history, a candidate not affiliated with either of the traditional parties wins the presidential election: Robert F. Kennedy Jr.
7. Japan’s ‘lucky 7 percent’ GDP growth forces BoJ to abandon yield curve control
Japan experiences a surprising economic resurgence, leading to a significant policy change by the Bank of Japan. The era of deflation in Japan ends, and wages begin to rise again.
8. Luxury segment in the EU plummets.
The new wealth tax of the European Union leads to a crisis in the luxury market, with significant consequences for brands in the high-end segment.