8 things for markets to watch out for in 2010

Unless Tiger Woods is voted Husband of the Year, it is hard to see how 2010 can offer anything more surprising.

Bearing in mind that any predictions made here are about as reliable as the repayments on a Dubai bond, here are eight things that might grab our attention in the next 12 months.

1. Tax Cuts

Every government in Europe faces a fiscal crunch. They have tried spending their way out of the recession and run up huge deficits. By the middle of 2010, governments will start to realize that only rapid economic growth will dig them out of the budgetary hole. The only way they can do that is with pro-business policies and lower taxes. Germany is leading the way, with an 8.5 billion-euro (US$12.2 billion) package of tax cuts aimed at companies and individuals. As the year progresses, the rest of Europe will catch up.

2. BT Group Plc and Vodafone Group Plc Merge

In a world marked by low growth and fierce competition, companies will be calling their mergers-and-acquisitions bankers to help them out. Only a big deal that allows them to strip out costs will keep profits rising. How about a link-up between the British telecommunications companies? The fixed-line operator BT Group and the mobile-phone giant Vodafone both face rapid technological change and pressure on their earnings. Like two drunks in a bar, they could prop each other up.

3. News Corp. Sells the Times

Rupert Murdoch has always been the smartest, least sentimental player in the media industry. Now he's considering putting up pay walls on his UK newspaper Web sites. By the middle of the year, he will realize that's crazy. No one wants to pay for papers online. If he wanted to go down that road, he should have done so 10 years ago. Murdoch didn't become a billionaire without knowing when to fold a losing hand. The Times is still a prestigious name, so there should be a Russian oligarch or Middle Eastern oil sheik willing to pay something for it. Why not sell now while it is still worth money?

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