SOURCE: Alliant Insurance Services

Alliant Insurance Services

January 28, 2010 08:00 ET

Alliant Emerging Markets Forecasts "Restructuring Not Recovery" for Global Economy in 2010

Global Investment Landscape Will Be "Vastly" Reshaped by a Decline in Value of U.S. Assets, New Emerging Markets, Report States

NEW YORK, NY--(Marketwire - January 28, 2010) - By the end of 2010, investors will look at a global investment landscape that is vastly different than what existed prior to 2008 along with new macro fundamentals, forecasts a report released by Alliant Emerging Markets (AEM), a specialized practice of Newport Beach-based Alliant Insurance Services and a leading provider of credit and political risk analysis and mitigation solutions.

The report, "2010 Global Macro & Strategy Outlook," says the new global investment landscape "will be driven by growth shifting from the G20 to emerging markets, specifically countries relying on demographics and domestic consumption -- not exports -- for growth."

Dr. Michel Léonard, AEM chief economist and senior vice president, said the report's theme, "Restructuring Not Recovery," was chosen because "a recovery implies a return to what existed before, in this case, global markets before the credit crisis. In our opinion, this return will not happen."

According to Dr. Léonard, "Investors face a new landscape that includes growth coming from a new set of emerging markets, the declining value of U.S. assets, and short-term market risk driven by further liquidation of 'bubble-era' assets, whether in small G20 countries or some of the BRIC stalwarts such as Brazil and China."

Highlights of AEM's 2010 Global Outlook include:

--  U.S.: More Like Old Europe -- Market sentiment in the U.S. has been ahead
    of fundamentals by three to six months, according to the report. It
    forecasts further decline in housing prices and unemployment above 10%
    throughout 2010. "In the long run, as the government's share of GDP and
    debt servicing grows, productivity and output will stagnate, eroding the
    added returns of U.S. assets, including equity over European assets,"
    Léonard said.
--  Emerging Markets: Domestic Demand Not BRIC -- AEM's Outlook notes that
    for 2010, growth will come from domestic demand in Domestic Household
    Demand (DHD) countries. Top performers will include Malaysia, Indonesia,
    the Philippines, and Peru, along with such industries as domestic credit
    and lending, insurance, real estate, and consumer services and goods. "The
    BRIC lost Russia; Brazil, and China are on our watch list; and India alone
    isn't a strategy," notes Léonard. "The only growth markets are emerging
    markets. The question is which ones. The time has come to focus on domestic
    demand as opposed to trade and exports relying on the U.S. or Europe."
--  Crisis Watch: Brazil and China -- Trade credit data indicates the
    contribution of emerging markets to global credit risk has diminished but
    spreads have yet to price this shift in risk, the study notes. "For
    emerging markets, the difference between actual risk and expected returns
    is strongest in China and Brazil," Léonard said. "For the G20, sudden
    realignment is expected in the value of fixed income assets, especially in
    smaller countries such as Ireland and Greece and larger ones such as the

The full "2010 Global Macro & Strategy Outlook" report is available on the Alliant Insurance Services website at:

About Alliant Emerging Markets

With offices in Chicago and New York City, Alliant Emerging Markets is a specialized practice of Alliant Insurance Services, a Blackstone Group company, and is a leading provider of credit and political risk analysis and mitigation solutions. Political and economic risk ratings available through AEM provide forward-looking assessments of the risks of doing business in 176 countries and territories.

About Alliant Insurance Services

Headquartered in Newport Beach, Calif., Alliant Insurance Services, Inc. is one of the largest insurance brokerage firms in the United States and has a history dating back to 1925. Alliant provides property and casualty, workers' compensation, employee benefits, surety, and financial products and services to more than 15,000 specialized clients nationwide, including public entities, tribal nations, healthcare, energy, law firms, real estate, construction, and other industry groups. More information is available on the company's web site at:

Contact Information

    Dr. Michel Leonard
    Chief Economist
    Senior Vice President
    Alliant Emerging Markets
    (212) 895-0280
    Email Contact

    Lynda Lane
    Senior Vice President
    Director, Business Relations and
    Corporate Communications
    (949) 260-5050
    Email Contact