Danish investment bank Saxo Bank published its Outrageous Predictions report on Tuesday, saying that 2019 may see an economic recession in Germany, the introduction of a global transportation tax and purchase of Tesla by technology giant Apple
MOSCOW (Pakistan Point News / Sputnik - 04th December, 2018) Danish investment bank Saxo Bank published its Outrageous Predictions report on Tuesday, saying that 2019 may see an economic recession in Germany, the introduction of a global transportation tax and purchase of Tesla by technology giant Apple.
"A global leader for decades, Germany is struggling to upgrade its leveraging of modern technology. The crown jewel of the German economy, representing a cool 14% of GDP, is its car industry. The German automotive world, however, is far behind in terms of its conversion to electric vehicles and the use of big data. When [German Chancellor Angela] Merkel was in China in May, she was so stunned at the country's production facilities that she asked for Chinese help to speed up German adaption of this critical export commodity," the report predicted.
According to the forecast, electric vehicles will account for 55 percent of global automobile sales by 2040, and Germany's car exports will not in any way benefit from the situation, especially given that US tariffs were getting more severe.
"[The year] 2019 will be the peak of anti-globalisation sentiment and will create a laser-like focus on costs, domestic markets and production, and the further use of big data and reduced pollution footprint - the exact opposite of the trends that have benefitted Germany since the 1980s. As such, we see a recession arriving as early as Q3'19," the report added.
"Acknowledging that Tesla needs more capital to realise its potential and Apple needs to expand its ecosystem to the car in a more profound way ... Apple goes after Tesla. It secures funding for the deal at a 40% premium of $520 per share - acquiring the company at $100/share," the bank predicted.
The year 2019 may also see US President Donald Trump fire Chair of the US Federal Reserve Jerome Powell, whose policy might lead to a decline in the US economy in the first quarter of 2019, and replace him with Neel Kashkari, the president of the Federal Reserve Bank of the US city of Minneapolis.
Amid the worsening global warning forecasts, Saxo Bank also predicts the introduction of a new Global Transportation Tax (GTT) on aviation and shipping sectors in the amount of $50 for each tonne of greenhouse gas emissions.
The authors of the 2019 Outrageous Predictions also believed that GDP would be removed from its position as the key indicator of economic growth by the International Monetary Fund and World Bank because of its failure to take into account the true economic impact of low-cost services using technology and promotes policies that ignore their negative environmental impact.
"Instead, the IMF and World Bank propose a focus on productivity which provides a better gauge to assess change in an economy's productive capacity over time ... Simply defined, it [productivity] refers to output per hour worked. In the real world ... it can be considered as the greatest determinant of the standard of living over time," Saxon Bank said.
Outrageous Predictions covers unlikely and underestimated events that could deliver a hard blow to financial markets. Saxo Bank says that the forecast does not reflect its official predictions for the market but warns investors that they should not underestimate the probability of such situations occurring as negligible. Saxo Banks itself assesses that the probability of the events included in the report amounts to 10 percent.