| Videos | Channels | Search |
Jakobsen: My worst fears confirmed
Saxo Bank's Chief Investment Officer, Steen Jakobsen, says after a week travelling through Asia, his worst fears have been confirmed. The world, he says is "seriously slowing down" and declining growth and deflationary pressures have him seriously worried. It means two things: one, the fiscal deficit will increase and two,countries which have significant current account deficits will be weakening their currencies. Basically Steen says we've done "fundamentally nothing" over the past few years and disposable income is still falling.
Austerity and fiscal reforms are leading to lower growth and this is a real problem in developed countries. On top of that, deflation is now becoming a tax not just on individuals' but also governments' balance sheets if they're carrying debt.
Looking into 2014, Steen says pressure on corporate balance sheets will increase. That, he believes, will lead to a slide on equities. Because of that, fixed income will benefit, says Steen, and he suggests increasing your bond exposure to core Europe. He also points out that fixed income has a "free put" on the equity markets that all investors should consider.
02:10 minutes
Tags: 2014, asia, auterity, balance sheets, bonds, corporate america, corproate, current account, deficit, deflation, delfation, eco, eco reforms, economic fears, economy, equities, equity, europe, exchange rates, fiscal deficit, fixed income, foreign exchange, forex, free put, fx, global, global economy, global growth, markets, news, recession, reforms, saxo, saxo bank, saxo tv, saxotv, slowdown, steen jakobsen, tradingfloor.com, us economy, usa, video