Global trends, what comes next?

"The world in 20 minutes." This was the promise when Carsten Valgreen took to the stage. Bullish by nature it seemed, he predicted that what lies ahead is simply "lots of growth."

"We have had Armageddon," Valgreen stated, adding: "what matters going forward is growth." This growth is brought on by the change in credit conditions, rather than the state of credit conditions. "Everything has been blamed on the consumer," Valgreen asserted; "we must blame business too." What he referred to was the magnifying effect of a 5% cut in consumer spending, with businesses cutting production by 10%, and their suppliers again cutting another 15%, and thus affecting the entire supply chain. Valgreen suitably labelled this the business panic cycle.

On the bright side, historical data suggests that if growth increases by 1%, profits will be up by 6%. For business lagging behind in the cost-cutting, profits will suffer during the start of a recession due to an over-capacity. But as the business catches on, cuts costs and prepares for the upturn again, every extra sale (ie growth) will positively affect profits.

And finally, his advice to the audience was to stop worrying about US consumers; demand will come from the emerging markets.

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