Policymakers Tinker While Business Burns: The 99% is Ready for Change

Hellerup, Denmark (ots/PRNewswire) -

2013 will be about bridging the huge reality gap between improving
conditions of the financial system with the still stumbling real
economy. That job is far bigger than consensus seems willing to
admit, Saxo Bank [http://www.saxobank.com ] writes in its financial
outlook for Q1 2013.

In the report published today, the Bank writes that the lack of
confidence among small businesses in the US - a segment that
represents 65% of all jobs and growth in the US - is the reason that
Saxo Bank is below consensus on Q1 growth for the US but also the
world. The consensus for 2013-Q1 US GDP is +1.6% but Saxo Bank says
it will be closer to +0.8%

In Europe, Saxo Bank believes this year will be a critical test for
Germany's attitude toward the EU project. The Germans are being
forced, step by step, to accept debt mutualisation and this will have
a huge impact on not only Germany's credit rating, but also its
export numbers. The Bank predicts that the painfully high
unemployment rate and waning growth will make Club Med more
forcefully call for all-in measures from the ECB similar to what the
US Fed is doing. The ECB board has a majority for printing money and
this will leave the German Bundesbank contingent very isolated. Saxo
Bank is increasingly worried that violations of the EU Treaty once
again will be ignored when Europe-wide unemployment keeps rising in
coming months.

In Asia, the Bank will keep an eye on China and its need to change
its business model. China's economic experiment is now one generation
old, having been born in 1979. China's next step is to move through
the eye of the needle - evolving from the world's largest "emerging"
economy to a fully developed superpower. In its quarterly outlook,
Saxo Bank lists three key changes China will need to make this
transition:

1) Increasing competition to reduce corruption;
2) Deeper and more developed domestic capital markets to cater for 
increased
  wealth and its storage, and, most importantly;
3) An extension of social welfare programmes, particularly 
healthcare.

All of these will help secure the hand-over from an economy
over-reliant on infrastructure building and exports to one that is
balanced with domestic consumption demand. This will only happen if
the propensity to save is reduced through a more comprehensive social
safety net, otherwise the average Chinese will keep his 40-50 per
cent savings rate forever.

Steen Jakobsen, Chief Economist, Saxo Bank A/S, says:

"Our old theme of supporting the micro economy is still our main
message for 2013, as it was in 2012. We need more micro, and less
macro, because the only real multiplier that works is a belief in
ourselves rather than in money printing. However, we are not that
pessimistic on the prospects for 2013. The downside for risk and the
economy in 2013 comes down to this being a year of transition, where,
first, we will try more of the same, but we will increasingly see the
admission that time is running out and that something new must be
tried - and that's a good thing. The 99% are ready for change now but
when will policymakers wake up?"

Download the Q1 Outlook report here:
http://www.tradingfloor.com/quarterly-outlook

About Saxo Bank

Saxo Bank is a leading online trading [http://www.saxobank.com/forex
?csref=b1744_Link_boilerplate_pressrelease ] and investment
specialist, offering private investors and institutional clients a
complete set of tools for their trading and investment strategies. A
fully licensed and regulated European bank, Saxo Bank enables clients
to trade FX, CFDs [http://www.saxobank.com/cfds?csref=b1745_Link_boi
lerplate_pressrelease ], ETFs, Stocks, Futures, Options and other
derivatives via three specialised and fully integrated multi-asset
trading platforms [http://www.saxobank.com/demo-account?csref=b1746_
Link_boilerplate_pressrelease ]; the browser-based SaxoWebTrader, the
downloadable SaxoTrader and the SaxoMobileTrader application. The
platforms are available in over 20 languages and are white-labelled
by more than 100 major financial institutions worldwide. Saxo Bank
also offers professional portfolio and fund management as well as
traditional banking services through Saxo Privatbank. Founded in
1992, the Saxo Bank Group is headquartered in Copenhagen with 23
local offices throughout Europe, Asia, Middle East, Latin America and
Australia.

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