Future for Investors Prof. Jeremy J. Siegel ~ The Wharton ... · Future for Investors Prof. Jeremy...
Transcript of Future for Investors Prof. Jeremy J. Siegel ~ The Wharton ... · Future for Investors Prof. Jeremy...
Future for InvestorsProf. Jeremy J. Siegel ~ The Wharton School
Milken Institute Global Conference ~ April 26, 2006
Copyright Jeremy J. Siegel Stocks for the Long Run and Future For Investors by Jeremy J. Siegel2
The Aging of the Population
The Most Critical Long-term EconomicIssue Facing the Developed World
The Next Fifty Years
Copyright Jeremy J. Siegel Stocks for the Long Run and Future For Investors by Jeremy J. Siegel3
Long Term Demographic Trends
U.S. Life Expectancy and Retirement Age
56
60
64
68
72
76
80
1950-1955
1955-1960
1960-1965
1965-1970
1970-1975
1975-1980
1980-1985
1985-1990
1990-1995
1995-2000
Life Expectancy
Retirement Age
Past marked by (1) rising life expectancy and (2) falling Retirement Age
But this trend Cannot Continue
1.6 Years 14.4 Years
Copyright Jeremy J. Siegel Stocks for the Long Run and Future For Investors by Jeremy J. Siegel4
Age Wave -- US
Copyright Jeremy J. Siegel Stocks for the Long Run and Future For Investors by Jeremy J. Siegel5
Age Wave – Japan
Copyright Jeremy J. Siegel Stocks for the Long Run and Future For Investors by Jeremy J. Siegel6
Big Questions
The Biggest Questions Facing the Developed World
Who Will Produce the Goods?
Who Will Buy the Assets?
Copyright Jeremy J. Siegel Stocks for the Long Run and Future For Investors by Jeremy J. Siegel7
Retirement Age must rise dramatically
U.S. Life Expectancy and Retirement Age
Life Expectancy
Retirement Age
5660
6468
7276
8084
88
1950
-1955
1955
-1960
1960
-1965
1965
-1970
1970
-1975
1975
-1980
1980
-1985
1985
-1990
1990
-1995
1995
-2000
2000
-2005
2005
-2010
2010
-2015
2015
-2020
2020
-2025
2025
-2030
2030
-2035
2035
-2040
2040
-2045
2045
-2050
`
14.4 Years
9.2 Years
Copyright Jeremy J. Siegel Stocks for the Long Run and Future For Investors by Jeremy J. Siegel8
Productivity Growth and Retirement
Can faster productivity growth help the Aging Problem?Let us be extraordinarily optimistic and assume future productivity growth averages 3 ½ % per year, 70% above long term average of 2.2%.
Copyright Jeremy J. Siegel Stocks for the Long Run and Future For Investors by Jeremy J. Siegel9
3.5% Productivity reduces retirement age 2-3 years
U.S. Life Expectancy and Retirement Age
Life Expectancy
Retirement Age
3.5%Productivity
5660
6468
7276
8084
88
1950
-1955
1955
-1960
1960
-1965
1965
-1970
1970
-1975
1975
-1980
1980
-1985
1985
-1990
1990
-1995
1995
-2000
2000
-2005
2005
-2010
2010
-2015
2015
-2020
2020
-2025
2025
-2030
2030
-2035
2035
-2040
2040
-2045
2045
-2050
`
Copyright Jeremy J. Siegel Stocks for the Long Run and Future For Investors by Jeremy J. Siegel10
Immigration?
The number of immigrants to the US over the next 45 years needed to keep the retirement age in the mid 60s would be about one-half billion, far in excess of the current population.
Copyright Jeremy J. Siegel Stocks for the Long Run and Future For Investors by Jeremy J. Siegel11
But there is Hope
Outside the developed countries, the population of the world is much younger.Let’s look at India.
Copyright Jeremy J. Siegel Stocks for the Long Run and Future For Investors by Jeremy J. Siegel12
Age Wave -- India
Copyright Jeremy J. Siegel Stocks for the Long Run and Future For Investors by Jeremy J. Siegel13
Trade Deficits and Aging
Throughout history, the “old” have sold assets to the young in exchange for goods.Today in US, Florida’s retirees sell assets to and import goods from other 49 states.In the future the US will sell its assets to the rest of the world.Success depends on rapid growth in the developing world.
Copyright Jeremy J. Siegel Stocks for the Long Run and Future For Investors by Jeremy J. Siegel14
Western Europe 6.41%
U.S.4.68%
Low Income13.64%
Mid Income5.63%
Eastern Europe5.02%
Latin Am/Carib
8.57%
India16.66%
China21.05%
Hi Inc. nonOECD
1.12%
Canada0.51%
Aus / NZ0.38%
Japan2.10%
Sub-Saharan
Africa10.74%
Indonesia3.50%
World GDP 2000Population 2000
84.8%
15.2%
Western Europe
21%
U.S.22%
Low Income5%
Mid Income5%
Eastern Europe
5%
Latin Am/Carib
8%
India5%
China11%
Hi Inc. nonOECD
4%
Canada2%Aus / NZ
1%
Japan8%
Sub-Saharan
Africa2%
Indonesia1%
44.6%
56.4%
Copyright Jeremy J. Siegel Stocks for the Long Run and Future For Investors by Jeremy J. Siegel15
Western Europe
6%
U.S.11%
Low Income10%
Mid Income6%
Eastern Europe
3%
Latin Am/Carib
11%
India16%
China20%
Hi Inc. nonOECD
3%
Canada1%
Aus / NZ1%
Japan2%Sub-
Saharan Africa
7%
Indonesia3%
23.1%
76.9%
Population 2050 World GDP 2050
Western Europe 3.76%
U.S.4.26%
Low Income17.38%
Mid Income5.54%
Eastern Europe2.39%
Latin Am/Carib
8.64%
India16.86%
China15.68%
Hi Inc. nonOECD
1.32%
Canada0.43%
Aus / NZ0.33%
Japan1.17%
Sub-Saharan
Africa18.88%
Indonesia3.34%
11.8%
88.2%
0% 20% 40% 60% 80% 100%
U.S.
Western Europe
Japan
Canada
Aus / NZ
Hi Inc. nonOECD
China
India
Latin Am/Carib
Eastern Europe
Mid Income
Low Income
Sub-Saharan Africa
Indonesia
Per Capita IncomeRelative to US 2000
Per Capita IncomeRelative to US 2050
0% 20% 40% 60% 80% 100%
U.S.
Western Europe
Japan
Canada
Aus / NZ
Hi Inc. nonOECD
China
India
Latin Am/Carib
Eastern Europe
Mid Income
Low Income
Sub-Saharan Africa
Indonesia
Copyright Jeremy J. Siegel Stocks for the Long Run and Future For Investors by Jeremy J. Siegel17
Retirement Age with high growth in LDCs
U.S. Life Expectancy and Retirement AgeLife
Expectancy
Retirement Age Developing
Countries High Growth
56
60
64
68
72
76
80
84
88
1950
-1955
1955
-1960
1960
-1965
1965
-1970
1970
-1975
1975
-1980
1980
-1985
1985
-1990
1990
-1995
1995
-2000
2000
-2005
2005
-2010
2010
-2015
2015
-2020
2020
-2025
2025
-2030
2030
-2035
2035
-2040
2040
-2045
2045
-2050
`
Copyright Jeremy J. Siegel Stocks for the Long Run and Future For Investors by Jeremy J. Siegel18
The Global Solution
The answer to our question: Who will produce our goods?
Who will buy our assets?
Is the same:The Developing Countries
By the middle of this century Developing Countries will
own most of world’s capital.
Copyright Jeremy J. Siegel Stocks for the Long Run and Future For Investors by Jeremy J. Siegel19
Western Europe 25.88%
U.S.41.21%
Low Income0.53%
Mid Income0.53%
Eastern Europe1.14%
Latin Am/Carib
2.00%India1.90%
China1.19%
Hi Inc. nonOECD
5.30%
Canada2.99%
Aus / NZ2.08%
Japan14.82%
Sub-Saharan
Africa0.38%
Indonesia0.03%
Western Europe 8.84%
U.S.16.59%
Low Income6.37%
Mid Income5.56%
Eastern Europe3.43%
Latin Am/Carib10.62%
India14.06% China
20.33%Hi Inc.
nonOECD3.15%
Canada1.11%
Aus / NZ0.72%
Japan2.64%
Sub-Saharan
Africa4.23% Indonesia
2.36%
Stock Market Capitalization 2000
7.7% 92.3% 33.0%
67.0%
Stock Market Capitalization 2050
Copyright Jeremy J. Siegel Stocks for the Long Run and Future For Investors by Jeremy J. Siegel20
New Professors interviewed at Wharton in 2006
Day Date Type Candidate School Where From?Thursday 12-Jan MICRO Pavel Savor Harvard Canadian from Latin America
Tuesday 17-Jan MACRO Virgiliu Midrigan Ohio State Moldova
Thursday 19-Jan MICRO Camelia Kuhnen Stanford Romania
Thursday 26-Jan MICRO Vito Gala Chicago Italian
Tuesday 31-Jan MACRO Emmanuel Farhi MIT French from N. Africa
Thursday 2-Feb MICRO Gustavo Manso Stanford Brazil
Tuesday 7-Feb MACRO Santiago Bazdresch Yale Mexico
Thursday 9-Feb MICRO Zhi Da Northwestern Singapore
Tuesday 14-Feb MICRO Gustav Sigurdsson Princeton Iceland
Thursday 16-Feb MICRO Jan Schneider British Columbia Germany
Tuesday 21-Feb MICRO Peter Kondor London Economics Budapest/Hungary
Thursday 23-Feb MICRO Dana Kiku Duke Ukraine
Thursday 2-Mar MICRO Yuri Tserlukevich UC Berkeley - Haas Belarus
Wharton Finance Department Recruitment Seminar Schedule: January - March 2006
Baby Boom, Baby Bomb?Baby Boom, Baby Bomb?
Milken Institute Global ConferenceApril 26, 2006
Michael MilkenChairman, Milken Institute
Milken Institute Global ConferenceApril 26, 2006
Michael MilkenChairman, Milken Institute
Sources of Demand for Health CareSources of Demand for Health Care
• Developing world: Growing middle class
• Developed world: Chronologically aging population
• Developing world: Growing middle class
• Developed world: Chronologically aging population
World Geographic Sharesand Population Shares
World Geographic Sharesand Population Shares
Land: 19%Pop: 7%
Land: 19%Pop: 7%
Land: 14%Pop: 7.5%Land: 14%Pop: 7.5%
Land: 8%Pop: 10%Land: 8%Pop: 10%
Land: 24%Pop: 14%
Land: 24%Pop: 14%
Land: 29%Pop: 61%
Land: 29%Pop: 61%
Land: 6%Pop: 0.5%Land: 6%Pop: 0.5%
Economic Shares From GDP, 2005Economic Shares From GDP, 2005
North America South America Europe Africa Asia Australia / N.Z.
35% 4% 28% 1.6% 30% 1.4%
Source: U.S. Department of Agriculture
Economic Shares from GDP, 2030Economic Shares from GDP, 2030
North America South America Europe Africa Asia Australia / N.Z.
25% 3% 12.5% 0.7% 58% 0.8%
2.13.13.63.85.96.16.727.835.244.5
Current GDP(US$ Trillion)
40,901Italy51,594France48,952Germany59,122United Kingdom49,646Russia26,592Brazil66,805Japan17,366India83,710United States31,357China
GDP Per Capita(US$)Country
Top 10 Leading Economies in 2050
Top 10 Leading Economies1820 vs. 2005
1820, Share of World Total
71.770.6Top Ten Total
1.11.7Russia
0.91.8U.S.
1.11.9Spain
1.31.9Austria-Hungary
2.93.1Japan
4.24.9Prussia
2.05.2U.K.
2.95.4France
19.616.0India
35.728.7China
PopulationGDP
2005, Share of World Total
32.970.4Top Ten Total
0.71.8Korea
0.52.5Canada
0.72.6Spain
0.93.9Italy
20.44.4China
0.94.8France
0.95.0U.K.
1.36.4Germany
2.010.6Japan
4.628.4U.S.
PopulationsGDP
Most Wealth Was Created in Last 200 YearsCan we continue this trend for another 200 years?
Population hits 1 billion
Population hits 6 billion
20,000
18,000
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
2000BCE
1500BCE
1000BCE
500BCE
0 500 1000 1500 1750 2000
Population hits 0.1 billion Population
hits 0.3 billion
Egyptian Empire
Holy Roman Empire
Nation States
Middle Ages
(Feudalism)
Renaissance/ Enlightenment
Industrial Revolution
Bronze Age
Iron Age
Classical/ Roman Period
Population hits 0.5 billion
Population hits 3 billion
Rea
l Per
-Cap
ita O
utpu
t (in
U.S
. dol
lars
)
Time
Wealth and Technology
Cotton Gin
Circuit Integrator
20,000
18,000
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
2000BCE
1500BCE
1000BCE
500BCE
0 500 1000 1500 1750 2000
Rea
l Per
-Cap
ita O
utpu
t (in
U.S
. dol
lars
)
Time
Ceramics
Metallurgy
Paper
EyeglassesPrinting Press
Telescope TelegraphAirplane
TV
CDBarcode
Hubble Telescope
WWWStem Cell Research
Super ComputerCAT Scanning
Computer Operating SystemMinicomputer
Commercial Satellite
Penicillin
PlasticGas-Powered Car
Structural Steel Bridge
In 1900, 40 million Americans livedon farms and fed 76 million domestically plus 15 million people outside the U.S.
In 1900, 40 million Americans livedon farms and fed 76 million domestically plus 15 million people outside the U.S.
In 1900, 40 million Americans livedon farms and fed 76 million domestically plus 15 million people outside the U.S.
In 1900, 40 million Americans livedon farms and fed 76 million domestically plus 15 million people outside the U.S.
Each farm person fed about two others.Each farm person fed about two others.
In 2000, 1.5 million Americans livedon farms and fed 290 million
domestically plus 220 million others
In 2000, 1.5 million Americans livedon farms and fed 290 million
domestically plus 220 million others
In 2000, 1.5 million Americans livedon farms and fed 290 million
domestically plus 220 million others
In 2000, 1.5 million Americans livedon farms and fed 290 million
domestically plus 220 million others
Each farm person fed about 340 others!Each farm person fed about 340 others!
“Everything that can be invented has been invented.”
“Everything that can be invented has been invented.”
Charles H. DuellCommission of U.S. Office of Patents, 1899
Charles H. DuellCommission of U.S. Office of Patents, 1899
On Everything New On Everything New
The iPod has 7,500 times the storage capacity of IBM’s largest computer in 1976
The iPod has 7,500 times the storage capacity of IBM’s largest computer in 1976
The cost-per-megabyte of the IBM computer is 143 million times the iPod.
The Cell Chip by IBM2 trillion calculations per second
The Cell Chip by IBM2 trillion calculations per second
Estimated Cost of Sequencing a GeneEstimated Cost of Sequencing a Gene
• 1974 >$100,000,000
• 1998 $150
• 2002 $9
• 2006 $3
• 2013 $0.03
• 1974 >$100,000,000
• 1998 $150
• 2002 $9
• 2006 $3
• 2013 $0.03
(That’s faster than Moore’s Law.)(That’s faster than Moore’s Law.)
Source: Dr. David Agus-Cedars-Sinai; Dr. Leroy Hood, Institute for Systems BiologySource: Dr. David Agus-Cedars-Sinai; Dr. Leroy Hood, Institute for Systems Biology
Lifestyle Affects Quality of LifeU.S. vs. Japan
Lifestyle Affects Quality of LifeU.S. vs. Japan
Life ExpectancyLife Expectancy
67.6 9.4
73.6 7.7
Healthy yearsHealthy years Disabledyears
Disabledyears
Share of Men in Fair or Poor HealthShare of Men in Fair or Poor Health
Slide courtesy of David Wise, Harvard University
Age of Mortality Milestones for Men, 1940-200065-Year-Olds in 2000 Same as 59-Year-Olds in 1970
4545
5050
5555
6060
6565
7070
7575
19301930 19401940 19501950 19601960 19701970 19801980 19901990 20002000 20102010
YearYear
AgeAge
Age When Mortality Risk Reaches 4%
Age When Mortality Risk Reaches 2%
Age When Mortality Risk Reaches 1%
Source: John Shoven, Stanford University
Age of Mortality Milestones for Women, 1940-200063-Year-Olds in 2000 Same as 59-Year-Olds in 1970Age of Mortality Milestones for Women, 1940-200063-Year-Olds in 2000 Same as 59-Year-Olds in 1970
5050
5555
6060
6565
7070
7575
8080
19301930 19401940 19501950 19601960 19701970 19801980 19901990 20002000 20102010
YearYear
AgeAge
Age When Mortality Risk Reaches 1%
Age When Mortality Risk Reaches 2%
Age When Mortality Risk Reaches 4%
Source: John Shoven, Stanford University
Source: Richard Sprott, Ellison Medical Foundation
Source: Richard Sprott, Ellison Medical Foundation
“Improvements in life expectancy alone added approximately $2.6 trillion per year … to national wealth over the 1970-1998 period.”
Kevin Murphy and Robert Topel“The Economic Value of Medical Research”
“Improvements in life expectancy alone added approximately $2.6 trillion per year … to national wealth over the 1970-1998 period.”
Kevin Murphy and Robert Topel“The Economic Value of Medical Research”
Source: Research America
Economic Value of Eliminating DeathsEconomic Value of Eliminating Deaths
$50T$50T
4040
3030
2020
1010AIDS
Source: Kevin M. Murphy and Robert H. Topel/University of Chicago
H E
A R
TD
I S
E A
S E
C A
N C
E R
STROKE
$57T$57T
$46.5T$46.5T$48.4T$48.4T
$7.6T$7.6T $7.5T$7.5T
2 0
0 4
U.S
. B
A L
A N
C E
S
H E
E T
The number of cancer deaths in the U.S. dropped slightly in
2003, the first decline in more than 70 years.
-American Cancer SocietyFebruary 9, 2006
The number of cancer deaths in the U.S. dropped slightly in
2003, the first decline in more than 70 years.
-American Cancer SocietyFebruary 9, 2006
P=ΣFti*(ΣHCi+ΣSCi+ΣRAi)P=ΣFti*(ΣHCi+ΣSCi+ΣRAi)
P = ProsperityFt = Financial TechnologyHC = Human CapitalSC = Social CapitalRA = Real Assets
P = ProsperityFt = Financial TechnologyHC = Human CapitalSC = Social CapitalRA = Real Assets
America Goes to WorkU.S. and Fortune 500 EmploymentAmerica Goes to Work
U.S. and Fortune 500 Employment
0000959590908585808075757070
200200
180180
160160
140140
120120
100100
8080
6060
Index 1970 = 100Index 1970 = 100
U.S. = +62 million jobsU.S. = +62 million jobs
Fortune 500 = minus 4 millionFortune 500 = minus 4 million
America Goes to WorkU.S. and Fortune 500 EmploymentAmerica Goes to Work
U.S. and Fortune 500 Employment
0000959590908585808075757070
200200
180180
160160
140140
120120
100100
8080
6060
Index 1970 = 100Index 1970 = 100
U.S. = +62 million jobsU.S. = +62 million jobs
Fortune 500 = minus 4 millionFortune 500 = minus 4 million
New financialtechnologies arefully implemented
New financialtechnologies arefully implemented
959590908585808075757070
170170
160160
150150
140140
130130
120120
110110
100100
9090
Index 1970=100Index 1970=100
Western EuropeWestern Europe
Job Creation Since 1970Job Creation Since 1970
United StatesUnited States
200019991998199719961995199419931992
14
12
10
8
6
4
2
Percent
France, Germany, Italy (Avg.)France, Germany, Italy (Avg.)
United KingdomUnited Kingdom
U.K. Teaches a LessonUnemployment: U.K., France, Germany, Italy
U.K. Teaches a LessonUnemployment: U.K., France, Germany, Italy
Hernando de SotoPresidentInstituto Libertad y Democracia
Hernando de SotoPresidentInstituto Libertad y Democracia
“For the past 30 years the poor in most places have been more interested in becoming entrepreneurs than revolutionaries.”
“For the past 30 years the poor in most places have been more interested in becoming entrepreneurs than revolutionaries.”
Source: New York Times
Dead CapitalDead Capital
Dead Capital: $241 billionDead Capital: $241 billion
Equity Market Capitalization: $20.9 billionEquity Market Capitalization: $20.9 billion
Dead Capital: $315 billionDead Capital: $315 billion
Equity Market Capitalization: $91.5 billionEquity Market Capitalization: $91.5 billion
EgyptEgypt MexicoMexico
Housing Price Change, 1997-2004Housing Price Change, 1997-2004
Total value of residential property in developing countries
increased by $20 trillion in the past 3 years.
HKHKJapJap
SwitSwitCanCan
DenDenNZNZ
BelgBelgItlItl
USAUSANethNeth
SweSweFraFra
AusAusSpaSpa
UKUKIrelIrel
S AfrS Afr
280280
210210
140140
7070
00
-70-70
% change, 1997-2004
200520032001199919971995
10
9
8
7
6
5
4
12.5
10.8
9.0
7.3
5.5
3.8
2.0
Percent US$ Trillions
Mortgage Rate and Mortgages Outstanding
Mortgage Rate and Mortgages Outstanding
$11.9 trillions total mortgages
outstanding
30-years fixed mortgage rate
4.04.5
5.05.5
6.06.5
7.07.5
8.08.5
9.0Max = 10
U.S.
United Kingdom
China
Russia
Brazil
India
Hong Kong Czech Republic
Capital Access Index 2005Gauging Entrepreneurial Access to Capital
World Equity Market PerformanceTop 10 USD Adjusted Returns, 2005
World Equity Market PerformanceTop 10 USD Adjusted Returns, 2005
IcelandIcelandQatarQatar
KuwaitKuwaitRussiaRussia
JordanJordanS. ArabiaS. Arabia
LebanonLebanonColombiaColombia
UAEUAEEgyptEgypt
180180
160160
140140
120120
100100
8080
6060
4040
Percent Change, Year AgoPercent Change, Year Ago
How to Save $1-Million in 40 YearsHow to Save $1-Million in 40 Years
Rate-of-Return ConcernsRate-of-Return Concerns
$25,000-a-year @ 0%
$6,642-a-year @ 6%
$1,304-a-year @ 12%
(or a one-time investment of $10,747)
$25,000-a-year @ 0%
$6,642-a-year @ 6%
$1,304-a-year @ 12%
(or a one-time investment of $10,747)
Effect of Changes in Actuarial Assumptions
$100 invested over 30 years
Effect of Changes in Actuarial Assumptions
$100 invested over 30 years
20% $ 23,73814% $ 5,09512% $ 2,99610% $ 1,7458% $ 1,0066% $ 574
20% $ 23,73814% $ 5,09512% $ 2,99610% $ 1,7458% $ 1,0066% $ 574
March 2006March 2006
Copyright: John Ditchburn
Good news! It appears you older workers are valuable after all!
Percentage Change in U.S. PopulationBy Age Group, 2000 to 2025
Percentage Change in U.S. PopulationBy Age Group, 2000 to 2025
65+65+55 - 6455 - 6435 - 5435 - 5418 - 3418 - 340 - 170 - 17
100100
8080
6060
4040
2020
00
-20-20
14%14% 14%14%
-1%-1%
67%67%80%80%
[Some of the following slides were used
during the conversation.]
[Some of the following slides were used
during the conversation.]
Nelson Mandela, 87Elected president of South Africa
at age 76.
Nelson Mandela, 87Elected president of South Africa
at age 76.
Kirk Kerkorian - 88Kirk Kerkorian - 88
Winston ChurchillBritish Prime Minister at age 71Member of Parliament to age 90
Winston ChurchillBritish Prime Minister at age 71Member of Parliament to age 90
Oliver Wendell Holmes Jr.Served as Supreme Court Justice until age 90
Oliver Wendell Holmes Jr.Served as Supreme Court Justice until age 90
Dr. Armand Hammer Founded the Armand Hammer Museum
of Art and Cultural Center in Los Angeles in 1990 at age 92
Dr. Armand Hammer Founded the Armand Hammer Museum
of Art and Cultural Center in Los Angeles in 1990 at age 92
Siberia
How about Oslo?
How about Oslo?
Average January Temperature:
How about Oslo?
Average January Temperature:19◦
Dubai?
Dubai?
Average July Temperature:
Dubai?
Average July Temperature:103◦
Los Angeles
Year-round average temperature:65◦
U.S. Reading Skills in Urban Districts% of 4th Graders Below “Basic” Levels
U.S. Reading Skills in Urban Districts% of 4th Graders Below “Basic” Levels
District of Columbia 69%
Los Angeles 65%
Atlanta 63%
Chicago 60%
Houston 52%
New York City 47%
Central City 45%Central City 45%
National Public 38%National Public 38%70%70%50%50%30%30%10%10%
Source: NAEP 2004
19781978
1.4% of college-age population was enrolled in college.
1.4% of college-age population was enrolled in college.
20052005
20% of college-age population enrolled in college.
20% of college-age population enrolled in college.
Growth in Number of Chinese College Students
Growth in Number of Chinese College Students
Source: China’s Ministry of Education
• 3 billion people – ½ the world’s population – will live in “water-stressed” countries.
• Water tables are dropping dramatically
• 5 feet per year in Northern China
• 3-10 feet per year in India
• More than 30 nations get water from outside their borders.
• Over-pumping groundwater will increase political tension.
• 3 billion people – ½ the world’s population – will live in “water-stressed” countries.
• Water tables are dropping dramatically
• 5 feet per year in Northern China
• 3-10 feet per year in India
• More than 30 nations get water from outside their borders.
• Over-pumping groundwater will increase political tension.
Water Crisis in the Developing World (2000-2015)
Water Crisis in the Developing World (2000-2015)
Global Trends 2015/National Intelligence CouncilGlobal Trends 2015/National Intelligence Council
Atmospheric CO2Atmospheric CO2
18% increase in CO2in 44 years
• $180 billion available• $50,000 for every man, woman and child• $180 billion available• $50,000 for every man, woman and child
Norway’s Surplus Oil MoneyNorway’s Surplus Oil Money
If there were $50,000 for each of 300 million Americans …
it would equal $15 trillion.
If there were $50,000 for each of 300 million Americans …
it would equal $15 trillion.
Norway $225B: $50,000/person
Singapore $250B+: $56,000/person
Abu Dhabi $250B+: $200,000/person
Norway $225B: $50,000/person
Singapore $250B+: $56,000/person
Abu Dhabi $250B+: $200,000/person
199497Degrees awarded in computer science, engineering and IT, per 1,000,000 people
6330Infant mortality rate, per 1,000 live births
116Children 10-14 in the labor force, % of age group
6371Life expectancy at birth
2415Births rate, per 1,000 people
20/351/2Youth illiteracy rate, % Age 15-24, Male/Female35/8017/47Poverty, population below $1/$2 a day, %
1534Exports of goods and services / GDP, %
3245Female % of labor force1,0641,288Population, millions2,8785,087GDP per capita, PPP, $3,0236,574GDP, PPP, $ billionIndiaChina
China or India?
World Equity Market PerformanceTop 10 USD Adjusted Returns, 2005
IcelandQatar
KuwaitRussia
JordanS. Arabia
LebanonColombia
UAEEgypt
180
160
140
120
100
80
60
40
Percent Change, Year Ago
Stock Market Dec. 31, 1989
Nikkei 38,915
Dow Jones 2,753
Stock Market Dec. 31, 1989
Nikkei 38,915
Dow Jones 2,753
Stock Market Dec. 31, 1989 April 25, 2006
Nikkei 38,915 17,010
Dow Jones 2,753 11,283
Stock Market Dec. 31, 1989 April 25, 2006
Nikkei 38,915 17,010
Dow Jones 2,753 11,283
Stock Market Dec. 31, 1989 April 25, 2006
Nikkei 38,915 17,010
Dow Jones 2,753 11,283
Stock Market Dec. 31, 1989 April 25, 2006
Nikkei 38,915 17,010
Dow Jones 2,753 11,283
Nikkei is down 56%.
Dow Jones up four-fold.
World’s Equity Market ShareDecember 1988 vs. March 2006
Market Capitalization1988
Other14%
Europe26%
U.S.29%
Japan40%
Market Capitalization2006
Other15%
Europe26%
U.S.46%
Japan11%
World’s Equity Market ShareDecember 1950 vs. March 2006
Market Capitalization1950
Other6%
Europe26%
U.S.59%Japan
9%
Market Capitalization2006
Other15%
Europe26%
U.S.46%
Japan11%
21 million21 million
43 million43 million
88 million88 million
44 million44 million
83 million83 million
10 million10 million5 million5 million
127 million127 million
19501950
20002000
20502050
21002100
21502150
22002200
22502250
23002300
Japan’s Population ImplosionJapan’s Population Implosion
19001900
Foreign Holdings of U.S. Securitiesby Selected Countries
US$ 6 trillion, June 2004
Japan17%
United Kingdom
8%
Luxembourg7%
Rest of world37%
Singapore 2%Taiwan 2%Germany 3%
S. Korea 1%France 2%
HK1%Italy 1%
Spain <1% Belgium 5%Switzerland 3%
China 6%Poland <1%
Unknown 4%
Countries that Export Capital: 2004Japan is the largest exporter of capital
Japan20%
Germany12%
China8%
Russia7%Saudi Arabia
6%
Other countries
22%
Taiwan2%
Switzerland5%
Norway4%
Sweden3%Singapore
3%
Korea3%
Canada3%
Netherlands2%
Homes Price and Availability 3+ millions homes and condos for sale Feb. 2006
Homes Price and Availability 3+ millions homes and condos for sale Feb. 2006
Average home price (R)
Number of units available for sale
(L)
2005200420032002200120001999
3.2
3.0
2.8
2.6
2.4
2.2
2.0
1.8
1.6
300
280
260
240
220
200
180
160
140
Million of Units USD Thousands