Steen Jakobsen, Chief Economist of Saxo Bank
Publishes Views on EU Summit
SINGAPORE, Dec. 12, 2011 /PRNewswire-Asia/ -- Steen Jakobsen, Chief
Economist of Saxo Bank publishes his views on the EU Summit. Full
text as follows:
(Logo: http://www.prnasia.com/sa/2010/01/18/20100118801199.jpg )
EU Summit: Extend and Pretend
Continues
Steen Jakobsen
The outcome from this EU Summit is a classic
extend-and-pretend and follows the same modus operandi at the
previous meetings of European leaders on the EU debt crisis.
Despite it being the 17th meeting (yes 17th!) the stakes have
increased but the Grand Plan is still not in place. Now we have a
new deadline in March which happens to be right in the middle of
Italy and Spain trying to raise 300-500 bln. EUR for their debt
refinancing!
I would be very surprised if there is a lot of
risk-on upside in the summit's outcome. One has to acknowledge
however the effort made to use the International Monetary Fund,
which is a slippery road vis-a-vis the EU treaty. On a positive
note, putting the EU debt brakes on is fine, except they already
exist in the form of a 'stability and growth pact' but have never
been adhered to.
The worst thing from this summit's outcome is the
public scolding of UK Prime Minister Cameron. I would not be
extremely surprised if this will lead to further discussion in the
UK to have a referendum on the EU. This will result in a clear 'no'
and could ultimately result in the UK leaving the EU. The odds of
the UK actually leaving the EU before Greece should be falling
right now!
The Eurozone versus EU-27 is also at an all-time low
in terms of solidarity and agreement. (Note how Sweden, Hungary,
the Czech Republic and the UK stayed outside for now.) Investors
are likely to reward countries not moving forward, as the EU
project, unfortunately through the inaction of politicians, is
losing credibility for every meeting that's held. The whole focus
has been on surviving from one meeting to the next, but ultimately
the leaders will lose this battle, even though they also keep on
fighting to win.
The EU debt crisis no longer has best solutions, not
even second best solutions. We are dealing in choices of extremely
negative options, most of them making the situation worse not
better. Europe has a solvency issue but every single EU Summit has
led to increasing liquidity to deal with it, i.e. to deal with debt
more debt is created. I foresee a 'Cardinals Meeting' in 2012,
meaning that: following a major drop in the stock market, the EU
will close the bond markets for a week or two and work out who is
in, at what price and what the loss is.
Time is running out, and the cost of no-action is
rising. 2012 will be a new low for European politics, growth and
markets, but it will probably also be a time to reset so that
Europe and the rest of the world can move away from 'Fiat' money,
and liquidity at all costs, towards focusing on survival, jobs and
optimism.
The focus needs to be on improving solvency, working
out a tri-party agreement (unions, governments, employees) on how
to improved productivity, make an internal devaluation of costs
(salaries) and maintain social balance.
Disclaimer:
Saxo Capital Markets Pte Ltd ("Saxo Capital
Markets") is licensed as a Capital Market Services provider and an
Exempt Financial Advisor, and is supervised by the Monetary
Authority of Singapore.
You should carefully consider whether trading in
leveraged products is appropriate for you in the light of your
financial circumstances. You should be aware that dealing in
products that are highly leveraged carry significantly greater risk
than non-geared investments such as share trading. As such, you
could both gain and lose large amounts of money. You may sustain
losses in excess of the moneys you initially deposit and also in
excess of the margin required to establish and maintain any
positions in leveraged products.
For further information, please
see:
http://sg.saxomarkets.com/about-us/general-disclaimer
About Saxo Capital Markets
Saxo Capital Markets Pte Ltd is a wholly-owned
subsidiary of Saxo Bank A/S, the Copenhagen-headquartered online
trading and investment specialist. It serves as the Asia Pacific
headquarters and holds a Capital Markets Services license from the
Monetary Authority of Singapore. Saxo Capital Markets also holds a
Commodity Broker licence from The International Enterprise
Singapore.
Clients can trade Forex, CFDs, Stocks, Futures,
Options and other derivatives via SaxoWebTrader and SaxoTrader, its
leading multi-asset online trading
platforms.
SaxoTrader is available directly through Saxo
Capital Markets or through one of its institutional clients. White
labelling is a significant business area for Saxo Capital Markets,
and involves customising and branding of its online trading
platform for other financial institutions and
brokers.
About Steen Jakobsen
Steen Jakobsen was appointed to the position of Saxo
Bank's Chief Economist in March 2011.Mr. Jakobsen returned to the
Bank after two years' absence. During that time he has been Chief
Investment Officer for Limus Capital Partners. Prior to his
departure in early 2009, Mr. Jakobsen was with Saxo Bank for almost
nine years as Chief Investment Officer. Mr. Jakobsen has more than
20+ years of experience within the fields of proprietary trading
and alternative investment. In 1989, after finishing his studies in
Economics at Copenhagen University, he started his career at
Citibank N.A. Copenhagen from where he moved to Hafnia Merchant
Bank as Director, Head of Sales and Options. In 1992, he joined
Chase Manhattan in London as VP, Head of Scandinavian Sales, and
then the Chase Manhattan Proprietary Trading Group. 1995-1997 he
worked as a Proprietary Trader and Head of Flow Desk at Swiss Bank
Corp., London. In 1997, he became Global Head of Trading, FX and
Options at Christiania (now Nordea) in New York until he joined UBS
in New York in 1999 as the Executive Director in the Global
Proprietary Trading Group.
Media contacts:
Saxo Capital Markets Pte Ltd
Elaine Xu / Mychelle Chen
+65-6303-7718 / +65-6303-7712
[email protected] /
[email protected]
SOURCE﹛Saxo Capital Markets Pte Ltd