On the other hand, there is unlikely to be any tightening in monetary policy, at least in the US, for the next two years because of relatively high unemployment. Private savings in the US are at their highest level since about 1973, while government saving is at its lowest (mostly debt). Balance sheet cash is abnormally high, perhaps a sign of a round of M&A activity. Robson says: “The market’s focus will inevitably be on those companies with sufficient balance sheet firepower to be immune from credit concerns. In what will be a low-growth environment for most developed economies, these stocks will be able to take advantage of distressed situations to grow their market shares. “Given the depressed economic environment in developed economies and premium growth in developing markets, we expect dominant franchises to be rewarded in 2010.”

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