Saxo Bank: ten outrageous predictions for 2011

This is the third year I have featured the Danish Saxo Bank’s outrageous predictions list. They are meant to be true outliers and not actual predictions, so don’t expect them to hit 10 for 10 or even 7 for 10. The point of the list is to help people think about outlier scenarios and what it might take to see these come to pass.

Before I give you this year’s list, here’s what Saxo predicted for 2010:

1. Bunds yields will fall to 2.25%
2. VIX will fall to 14
3. CNY (China Yuan Renminbi) will be devalued by 5% vs. USD
4. Gold will fall to $870 in 2010 but will rise to $1500 in 2014
5. USDJPY to reach 110
6. Angry American public to form third party in the US
7. The US Social Security Trust Fund will go bust
8. The price of sugar will drop one third
9. TSE Small Index will rise by 50%
10. US trade balance will turn positive for first time in 34 years

Let’s review:

1. Correct: Bunds fell and went very low. In fact, they did hit 2.25%.
2. Not Quite: The VIX made it to 15.5 in April but no lower.
3. Not Quite: CNY revalued – but only 2%
4. Wrong: Gold did not fall that low – not even close. It is now just below $1400.
5. Wrong: USDJPY went to new depths, rivalling the all-time low.
6. Not Quite: The Tea Party is a movement not a party (yet)
7. Wrong: This is absurd. SS cannot go bust. The US government can always print money to cover funds.
8. Correct: The price of sugar did drop. But, of course it rose again.
9. Wrong: TSE Small Index was range bound
10. Wrong: US with a positive trade balance? Hah. This was a good laugh. Get real.

I count 3 1/2 out 10. Not bad but don’t use this as a predictor of anything.

What about this year?

1. U.S Congress blocks Bernanke’s QE3
2. Apple buys Facebook
3. U.S. Dollar Index tops 100
4. U.S. 30-year Treasury yield slides to 3%
5. Aussie-sterling dives 25%
6. Crude oil gushes before correcting by one third
7. Natural gas surges 50%
8. Gold powers to $1,800 as currency wars escalate
9. S&P 500 reaches all-time high
10. Russia RTS Index reaches 2,500

FT Alphaville has a fuller discussion.