U.S. GDP Growth Percent Change, Year Ago 5 4 3 2 1 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Source: International Financial Statistics
A Brief Period of U.S. Budget Surplus % of GDP 4 2 Surplus 0-2 -4-6 Deficit -8 1981 1986 1991 Source: U.S. Department of the Treasury, Bureau of the Public Debt 1996 2001 2006
Where the U.S. Budget Money Goes Spending, 2008 Budget, % of Total Total = $2.9 Trillion Medicare and Medicaid 20% Other nondiscretionary 11% Defense 17% Other security 6% Social security 21% Non-security discretionary 16% Net interest 9% Source: Office of Management and Budget
Increasing Int. Expense on Public Debt $406 Billion in 2006 U.S. Billions % 450 Average interest rate on public debt (R) 10 400 350 300 250 Interest expense on public debt as % of GDP (R) Interest expenses on total government debt 8 6 4 200 1988 1990 1992 1994 1996 Source: U.S. Department of the Treasury, Bureau of the Public Debt 1998 2000 2002 2004 2 2006
Declining U.S. Dollar Role Currency Denomination of International Debt Outstanding 1999 US$ 4,999 Billions 2006Q3 US$ 16,267 Billions Japanese yen 10% Pound sterling 8% Other 6% U.S. dollar 47% Pound sterling 8% Japanese yen 3% Other 5% U.S. dollar 37% Euro 29% Euro 47%
Decline of the Dollar Yen/USD Euro/USD 135 1.3 Yen (L) 130 1.2 125 1.1 120 1.0 115 0.9 110 105 Euro (R) 0.8 0.7 100 Source: Bloomberg 2001 2002 2003 2004 2005 2006 0.6
Lower Dollar, Higher Oil Price January 2000 = 100 January 2000 = 100 300 250 Crude oil (L) 140 130 200 Trade-weighted dollar (R) 120 150 110 100 100 50 90 0 2000 2001 2002 2003 2004 2005 2006 Source: Bloomberg, International Financial Statistics 80
Rising Household Spending on Debt Services Percent of Disposable Income 15.0 14.5 14.0 13.5 13.0 12.5 Ratio of mortgage and consumer debt payments to disposable personal income 12.0 Source: Economy.com 2000 2001 2002 2003 2004 2005 2006
Corporate Bond Credit Spread Yield to Maturity Percent 10 8 6 ML Corp BBB 1-3 Yr (L) Percent 3.5 3.0 2.5 2.0 4 2 0 ML Corp AAA 1-3 Yr (L) 1996 1997 1998 1999 2000 Spread (R) 2001 2002 2003 2004 2005 2006 1.5 1.0 0.5 0.0 Source: Bloomberg
Step by Step 17 Fed Fund Rate Hikes Since 2004 Percent 6 5 4 3 2 1 0 2004 2005 2006 Source: Federal Reserve
Mortgage Rates United States Percent 9 8 7 30-Year Fixed 15-Year Fixed 1-Year ARM 6 5 4 3 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Sources: Freddie Mac, Economy.com
Quickly Flattening Treasury Yield Curve Percent 6 5 4 Dec. 29, 2006 Dec. 30, 2005 3 2 Dec. 31, 2004 1 0 1M 3M 6M 1Y 2Y 3Y 5Y 7Y 10Y 20Y Source: Federal Reserve
Converging Yield Percent 7.5 30-year Treasury bonds 2-year Treasury bonds 6.0 10-year Treasury bonds 3-month Treasury bills 4.5 3.0 1.5 0.0 2001 2002 2003 2004 2005 2006 Source: Federal Reserve
U.S. Homes Price and Availability 3.7 millions homes and condos for sale in January 2007 Millions US$ Thousands 4.1 300 3.6 270 3.1 2.6 Average sales price of existing homes (R) 240 210 2.1 1.6 Source: Economy.com Number of homes available for sale (L) 1999 2000 2001 2002 2003 2004 2005 2006 180 150
Homeownership and Adjustable Mortgage % of Total U.S. Households % of Total Mortgage 70 69 68 67 Conventional Adjustable Mortgage Share of Total Mortgage 64 62 60 66 65 64 Homeownership Rate 58 56 63 1992 1994 1996 Source: Federal Housing Finance Board and Census 1998 2000 2002 2004 2006 54
Mortgage Rate and Mortgages Outstanding US$ Billions 14 12 30-years fixed mortgage rate $13.3 trillion total mortgages outstanding Percent 9 8 10 7 8 6 6 5 4 96 97 98 99 00 01 02 03 04 05 06 4 Source: Economy.com
U.S. Subprime Mortgages Composition of Total Mortgages Originated US$ Billions 1,200 "Alt A" 1,000 Subprime 800 26% 32% 34% 600 400 200 9% of total 10% 0 2002 2003 2004 2005 2006 Sources: Inside Mortgage Finance and Milken Institute staff estimates
Subprime Problems Drive Down Financial Stock Prices The Dow Closed Down 243 Points on March 14, 2007 Source: Wall Street Journal Stock price change on March 14 Points Contribution to the Dow J.P. Morgan Chase -4.4-17.1 American Express -3.5-15.7 Citigroup -3.2-12.9 Altria -3-21 McDonald's -2.7-9.5 Microsoft -2.6-5.8 GM -2.6-6.5 Dupont -2.3-9.5 Wal-Mart -2.3-8.7 Home Depot -2.2-6.6 Merck -2.1-7.4 AIG -2.1-11.4 Hewlett-Packard -2-6.6 Alcoa -2-5.4 Boeing -1.9-14
Riskier in Mortgage? By Type of Mortgage Loan Percent 100 80 60 0.4 2 Negative Amortization Interest Only (zero) Amortization 8.4 34 98 40 20 Normal (positive) Amortization 58 0 2001 2005
U.S. Energy Supply and Consumption Quadrillion BTU, 2005
U.S. Oil Imports Annual Percent Change, Year Ago 200 180 160 140 120 100 80 60 40 20 0 Venezuela Cyprus Botswana Morocco Russia Peru Vietnam China Yugoslavia Croatia Source: Energy Information Administration
Foreign Holdings of U.S. Securities $15.5 Trillion, June 2006 Russia 1% S. Korea 2% Taiwan 2% HK 1% Australia 1% Others 11% Euro Area 26% Singapore 2% Middle East 3% Switzerland 3% Canada 5% U.K. 8% China 9% Japan 15% Offshore Financial Centers 11% Source: U.S. Treasury
Most Costly Disaster in US History Drastically reduced tax revenue base, unemployment, displacement, bankruptcy Interrupted oil production, importation, and refining in the Gulf area had a major effect on fuel prices Loss of approximately $500,000 in tax revenue for each day riverboat casinos were closed Loss of timber products estimated at $1.3 billion; USDA declared 31 agricultural disaster areas TOTAL ECONOMIC IMPACT ~ APPROX. $200B USD
Insurance Industry Loss Estimate September 2005 Loss Component First Landfall in Florida Offshore Energy Wind & Surge, Second Landfall New Orleans Flooding Additional Sources of Loss Total Gross Industry Loss $1-2 Billion $2-5 Billion $20-25 Billion $15 25 Billion $2 3 Billion $40 - $60 Billion Claims Filed 1,752
Government Aid After Disasters 2005 Billion USD Billions USD 120 104 100 80 60 40 20 Within 3 weeks of Katrina s landfall, the federal govn t authorized $75B in aid -- more than all the federal aid for 9/11, 2004 s hurricanes and Hurricane Andrew combined 44 18 16 0 Hurricane Katrina (2005) Sept. 11 Attacks (2001) Hurricane Andrew (1992) Hurricanes Charley, Frances, Ivan & Jeanne (2004)
Accelerate or Decelerate? IMF: World Economic Outlook Global GDP Forecast Percent 6.0 5.5 5.0 4.5 4.0 3.5 50% Confidence interval 70% Confidence interval 3.0 2.5 90% Confidence interval 2.0 2001 2002 2003 2004 2005 2006 2007 2008 Source: International Monetary Fund
Global Risk Factors Impact on GDP Percentage Points of Global GDP Growth U.S. housing sector Domestic demand in Europe Emerging market growth Inflation risks Oil supply Disorderly unwinding of global imbalances Financial stability -5.2% 2.5% 3.1% -3.8% -3.9% -2.6% -3.9% Source: International Monetary Fund
Major Contributors to World GDP Growth Percent 1981-1995 Percent 1996-2006 U.S. 26.1 U.S. 31.9 Japan 23.9 China 9.9 Germany 9.6 U.K. 6.6 France 5.0 Italy 3.9 Italy 3.8 Canada 3.7 U.K. 3.4 Russia 3.6 Brazil 3.1 France 3.6 Korea 2.6 Spain 3.4 China 2.4 Mexico 2.9 Spain 2.1 India 2.7 Others 18.0 Others 27.8 Source: World Economic Outlook
Is Inflation Still A Threat? Percent 14 12 10 8 6 4 2 0 1997 1999 2001 2003 2005 2007E 1998 2000 2002 2004 2006 2008E Africa The Middle East Latin America and the Caribbean Developing Asia Developed Countries Source: International Monetary Fund
GDP Growth: Is Europe Left Behind? Percent 12 9 6 World Euro area Newly Industrialized Asia United States 3 0-3 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Est. 2008 Est. Source: World Economic Outlook
Europe s Energy Reliance on Former Soviet Union Countries Percent of Total Oil Imports, 2005 South & Central America 2% Asia 1% Unidentified* 5% North America 3% Sub-Saharan Africa 5% Former Soviet Union 45% North Africa 15% Source: BP Middle East 24% * Includes changes in the quantity of oil in transit, movements not otherwise shown, unidentified military use etc.
World s Equity Market Share December 1950 vs. December 2006 Market Capitalization 1950 Market Capitalization 2006 Europe 26% Other 6% Other 23% U.S. 39% Japan 9% U.S. 59% Europe 26% Japan 9% Source: World Exchanges Federation
World s Equity Market Share December 1988 vs. December 2006 Market Capitalization 1988 Market Capitalization 2006 Europe 26% Other 14% U.S. 29% Other 23% U.S. 39% Japan Source: World Exchanges Federation Europe 26% Japan 9%
World Equity Market Performance Top 10 USD Adjusted Returns, 2006 Percent Change, Year Ago 200 180 160 140 120 100 80 60 40 20 0 Source: Bloomberg Venezuela Cyprus Botswana Morocco Russia Peru Vietnam China Yugoslavia Croatia
Robust Global Equity Markets Despite $70 Crude Oil Jan.2003 = 100 350 300 250 200 150 100 DJIA FTSE Nikkei Emerging Markets Crude Oil US$ per Barrel 80 70 60 50 40 30 20 50 2003 2004 2005 2006 10 Source: Bloomberg, Datastream
Countries That Export Capital 2006 Other countries 22.2% Venezuela 2.1% China 13.5% Algeria 2.3% Japan 12.2% U.A.E. 2.7% Source: IMF Singapore 2.8% Kuwait 3.6% Netherlands 3.7% Switzerland 37% Norway Saudi Arabia Russia 8.8% Germany 8.8%
Countries That Import Capital 2006 Other countries 15.2% Italy 1.9% Turkey 1.9% United States 63.7% France 2.8% Australia 3.0% United Kingdom 4.1% Spain 7.4% Source: IMF
Net Direct Investment Developing Countries, 1997-2006 US$ Billions 120 Africa Middle East 100 Developing Asia Western Hemisphere 80 60 40 20 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Source: World Economic Outlook
Regional Share of World Trade US$ 21 Trillion in 2005 West Hemisphere 5% Middle East 4% Africa 2% Europe 7% Asia 22% Industrial countries 60% Source: Direction of Trade Statistics
Composition of China s Financial Market China Total = $5.3 trillion United States Total = $53.7 trillion Bonds 17% Equity 15% Equity 32% Bank Assets 23% Bank Assets 68% Bonds 45% Sources: International Financial Statistics, Bank for International Settlements, and Global Stock Market Factbook
Fixed Investments Contribute More than 40% to China s GDP Growth Percent of GDP Growth 50 45 40 35 30 25 20 15 10 5 0 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 Sources: International Financial Statistics and Bureau of Statistics (China)
Accumulating Appreciation Pressure on Renminbi Index, 2000=100 RMB/USD 200 Renminbi Pressure Indicator 7.8 190 Renminbi Exchange Rate 8.0 180 170 160 150 140 130 2004 2005 2006 Source: International Financial Statistics and Milken Institute 8.2 8.4 8.6 8.8
100 Most Underfunded S&P 500 Defined-Benefit Plans US$ Billions 40 20 0 $26-20 -40-60 -80 -$141 -$114 -$137 -$138 -$94-100 -120-140 -160 2001 2002 2003 2004 2005 2006 Source: Bloomberg
Cash Flows from G-10 Government Bonds and Projected Pension Payments Percent 4000 3000 2000 1000 Payments from G-10 Government Bonds Outstanding Projected Payments Out of G-10 Pension Fund Liabilities Cash Flows Assumption: 75 percent of total pension fund assets are allocated to bonds 0-1000 -2000 2006 2014 2022 2030 2038 2046 2054 Source: OECD, Global Pension Statistics, Insurance Statistics and other administrative sources.
$100 Invested in These Asset Classes in 2000 Would Give You: $303 $230 $201 $190 $189 $179 $171 $102 Energy Gold Mid-Cap U.S. Emerging Markets Small-Cap U.S. Hedge Funds Commodities Large-Cap U.S. Stocks Stocks Stocks Source: Bloomberg
U.S. Stock Market Plummeted on February 27, 2007: A Market Correction Made in China Dow Jones Index 12,450 12,400 The Dow dropped 241 points in 3 minutes 12,350 12,300 12,250 12,200 12,150 12,100 12,050 11:00 11:15 11:30 11:45 12:00 12:15 12:30 12:45 13:00 Source: Bloomberg
Higher Degree of Integration Between NYSE and Shanghai Stock Exchange Index, Jan. 2006 = 100 120 115 110 105 100 95 Correlation = 0.8773 January 2006 March 2007 Dow Jones Industrial Average (L) Shanghai Stock Exchange (R) Composite 300 250 200 150 100 50 90 Source: Bloomberg 2006Q1 2006Q2 2006Q3 2006Q4 2007Q1 0
21 st Century Global Equity Market Convergence Correlation with Dow, 12-Month Rolling Returns 1.2 1.0 0.8 0.6 0.4 0.2 0.0 Source: Bloomberg S&P 500 COMPOSITE NASDAQ COMPOSITE FTSE 100 EURONEXT 100 DAX 30 MSCI WORLD 95 96 97 98 99 00 01 02 03 04 05 06 07
Converging Yield to Maturity Percent 16 14 Emerging Markets Sovereign Plus Index 12 10 8 U.S. Government Index 6 4 2 1999 2000 2001 2002 2003 2004 2005 2006 Source: Merrill Lynch
Convergence in Sovereign Bond Yields, 1870-1913 40 35 30 25 20 15 10 5 0 1870 1875 1880 1885 1890 1895 1900 1905 1910 1915 Source: Michael A. Clemens and Jeffrey G. Williamson (2004)
Narrowing Spread Between Hedge Fund Return and One-Year Treasury Yield Percent 16 14 12 10 8 6 4 2 0 Spread between average hedge funds return and 1-year Treasury yield 1981 1986 1991 1996 2001 2006 Sources: Hedgefund.net, Bloomberg and MI staff
Historical Bond Default Rates US$ Billions Percent 100 Par Value Defaults (L) 15 80 Default Rates (R) 12 60 40 20 0 1971 1976 1981 1986 1991 1996 2001 2006 Sources: Altman 9 6 3 0
Increasing International Financial Convergence Sum of Foreign Assets and Liabilities as a Ratio to GDP Percent 140 120 100 80 60 Emerging Markets China India 40 20 0 1981 1986 1991 1996 2001 2006 2006 (e) Sources: Lane and Schmukler and Milken Institute staff estimates
Sources of Funds into Emerging Markets Percent 100 80 1980-1984 1990-1994 2000-2004 60 40 20 0 Foreign Direct Investment Source: International Monetary Fund Equity Debt
Global Futures Market Notional Amounts US$ Trillions 1.5 1.3 1.0 0.8 0.5 0.3 Equity index (R) Interest rate (L) Currency (R) 30 25 20 15 10 5 0.0 94 95 96 97 98 99 00 01 02 03 04 05 06 Source: Bank for International Settlements 0
Global Options Market Notional Amounts US$ Billions 180 60 150 Currency (R) Interest rate (R) 50 120 40 90 30 60 20 30 0 Source: Bank for International Settlements Equity index (L) 94 95 96 97 98 99 00 01 02 03 04 05 06 10 0
Global Credit Derivatives Market US$ Trillions 35 33.1 30 25 20 20.2 15 10 5 0 0.2 0.3 0.4 0.6 0.9 1.2 2.0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2006 2008 (est.) Source: British Bankers Association 3.5 5.0
Global Derivative Markets: Rating of Underlying Assets 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 99-00 01-02 03-04 05-06 07-08 (Est.) Below B BB B A BBB AAA AA Source: British Bankers Association
Banking Crises Since Late 1970s 168 Crises in 138 Countries 117 Systemic in 93 Countries 51 Nonsystemic in 45 Countries Source:Caprio, Gerard and Daniela Klingebiel (2003) Information not Available
Cost of Resolving Bank Problems Norway (1987-1993) Spain (1977-1985) Paraguay (1995-ongoing) Colombia (1982-1987) Sri Lanka (1989-1993) Malaysia (1985-1988) Sweden (1991-1994) Indonesia (1992-1994) Poland (1992-1995) United States (1984-1991) Ghana (1982-1989) Turkey (1982-1985) Thailand (1983-1987) Australia (1989-1992) Turkey (1994) New Zealand (1987-1990) France (1994-1995) Argentina (1995) Egypt (1991-1995) Philippines (1998-ongoing) Thailand (1997-ongoing) Uruguay (1981-1984) South Korea (1997-ongoing) Côte d'ivoire (1988-1991) Venezuela (1994-1997) Japan (1992-ongoing) Mexico (1994-ongoing) Malaysia (1997-ongoing) Slovenia (1992-1994) Brazil (1994-1996) Philippines (1983-1987) Bulgaria (1996-1997) Ecuador (1996-ongoing) Czech Republic (1991-present) Finland (1991-1994) Hungary (1991-1995) Senegal (1988-1991) United States 3% S. Korea 27% Chile (1981-1983) Thailand 33% Argentina (1980-1982) Indonesia (1997-ongoing) Indonesia 50% 0 10 20 30 40 50 60 Percent of GDP
Share of World Oil Production 2005 Rest of World 31% Total: 81.1 million Barrels per Day Saudi Arabia 14% Russia 12% Nigeria 3% Kuwait 3% U.A.E. 3% Source: BP Norway Venezuela 4% 4% Canada 4% China 4% Mexico 5% United States 8% Iran 5%
Share of World Oil Consumption 2005 Rest of World 45% Total: 82.5 million Barrels per Day United States 25% China 8% Source: BP Canada 3% South Korea 3% India 3% Germany 3% Russia 3% Japan 7%
Oil Reserves Concentrated in Unstable Regions Other 3% Russia 5% Canada 14% United States 2% Venezuela 6% Africa 10% Middle East 60% Sources: Energy Information Administration
Global Demand for Oil Exceeds Refinery Capacity 90 Thousand Barrels per Day 80 70 60 50 Source: EIA Oil Demand Refinery Capacity 1980 1985 1990 1995 2000 2005
Rising Global Prices of Oil, Gold and Food January 2002 = 100 400 350 Crude Oil 300 250 200 Gold 150 100 Food 50 2002 2003 2004 2005 2006 Source: Bloomberg, Datastream
World Gas Prices November 2006 $ Per Gallon 7 6 5 4 3 2 1 0 Iran S. Arabia U.S. Mexico India Brazil Germany U.K. Venezuela Libya Nigeria China S Africa Japan France Italy Source:GTZ
The True Cost of a Gallon of Gas USD Per Barrel 12 10 Average U.S. Pump Price Hidden U.S. Defense Costs 8 6 4 2 0 World Oil Persian Gulf Oil Source: National Council and GasBuddy.com
Energy Prices and Taxes US Dollars Per Gallon, 2006 Venezeula Indonesia Saudi Arabia Russia China Guatemala Argentina Mexico Jamaica Ghana United States South Africa Canada Brazil Ecuador India Australia Lithuania Finland Japan Poland Korea France Italy Germany United Kingdom Norway Turkey Price Before Tax Tax Source: World Economic Outlook, 2006 0 1 2 3 4 5 6 7
China and India s Energy Efficiency Energy Consumed per $ 1,000 GDP Tonnes Oil Equivalent Per US$ 1,000 GDP 2.0 1.6 China India United States 1.2 0.8 0.4 0.0 Sources: BP, World Economic Outlook 1980 1985 1990 1995 2000 2005
Volatile Oil and Natural Gas Prices US dollars per barrel $80 WTI Crude Oil Price Natural Gas Price $70 $60 $50 $40 $30 $20 US dollars per Thousand Cubic $12 $10 $8 $6 $4 $2 $10 85 90 95 00 05 $0 Sources: Energy Information Administration
Areas Reporting Avian Influenza in Poultry and Birds 2003 April 10, 2007 Source: WHO
Malaria Distribution Where Malaria is Endemic Source: Malaria-vaccines.org
Tuberculosis Distribution 100 or More Cases Per 100,000 People Source: University of South Carolina
HIV Distribution Adult HIV Prevalence of 5% or More Source: WHO
Hepatitis B Distribution Prevalence of 7% or More Source: CIA
Water Shortages High Vulnerability to Water Scarcity Source: World Resources Institute
World Hunger 20% or More Undernourished Source: World Resources Institute
Much Of Africa Remains Poor World Bank Income Groups
Aid Outstrips Private Investment
Dependents - Developed Countries Forecast Dependency Ratio Percent of Working Age (15-64) 80 60 Aged 0-14 Aged 65+ 40 20 0 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 Source: United Nations
Dependents - Developing Countries Forecast Dependency Ratio Percent of Working Age (15-64) 80 60 Aged 0-14 Aged 65+ 40 20 0 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 Source: United Nations
India Laos Viet Nam China Peru Venezuela Philippines Colombia Pakistan Brazil Mexico ndonesia Chile Proportion of Population under $1 a Day 40 35 30 25 20 15 10 5 0 Source: World Bank, Asian Development Bank Korea Malaysia Thailand
Catastrophic Risk on the Rise Global Number of Catastrophic Events, 1979 2004 250 200 Natural Catastrophes Man-Made Disasters 150 100 50 0 1979 1984 1989 1994 1999 2004 Sources: Allstate Insurance Company
Economic Impact of Catastrophes US$ Billions 250 Insured Property Loss 200 Uninsured Loss and Other Economic Loss $222.0 (Est.) $52.4 (Est.) 150 100 50 0 Sources: Allstate Insurance Company $41.6 $56.0 $15.9 $27.0 $25.7 $29.0 $169.6 Earthquake 1 Hurricanes 2 Hurricanes 3 Northridge, California (1994) Charley, Frances, Ivan and Jeanne (2004) Katrina, Wilma and Rita (2005)
Larger Impact on Emerging Market Economies 38% Hurricane Flood Earthquake 14% 12% 8% 7% 3% 3% 2% 2% Honduras Dominican Republic Ecuador Iran Algeria Poland India Mexico Argentina 1998 1998 1998 1990 1980 1997 1990 1985 1985 Sources: Allstate Insurance Company
Top 10 Military Spending Countries 2006 Military Spending United States United Kingdom France Germany Japan China Russia Italy Saudi Arabia India Source: The World Factbook, CIA Billion $ 532.8 66.2 60.0 57.5 46.0 44.9 32.4 32.1 31.3 21.3
Capital Access Index 2006 Gauging Entrepreneurial Access to Capital Max = 10 9.0 Hong Kong 8.5 8.0 7.5 7.0 6.5 6.0 5.5 5.0 4.5 40 Source: Milken Institute United Kingdom U.S. India China Brazil Russia
Capital Access Index, 2006 70,000 60,000 GDP per Capita, US$ 50,000 40,000 30,000 20,000 10,000 y = 6,821x - 21,731 R 2 = 0.6308 0-10,000 0 1 2 3 4 5 6 7 8 9 Sources: World Economic Outlook and Milken Institute Less access More access C it l A I d
Improved Capital Access Can Add Billions to Emerging Economies Mexico Russia Argentina Pakistan India Forgone GDP Growth % 2.6 2.5 2.0 1.7 1.7 Forgone GDP US$ Billions 15.7 5.7 4.5 2.4 1.7
Cost of Opacity, 2005 70 60 Opacity Index Premium/Discount 6.63% China 9.45% Nigeria 10% 8% Opacity Index 50 40 30 20-1.63% UK -0.48% HK 0.00% USA 5.76% India 6.00% Russia 6% 4% 2% 0% Premuim/Discount 10-2% 0-4% Source: Milken Institute, 2006
Terrorist Attacks Are Becoming More Frequent and More Intensive Number of Incidents 2500 2000 1500 1000 500 0 Incidents Fatalities and Injuries Oct. 23, 1983, Lebanon Apr. 1988, Pakistan Military June 25, 1985, Canada Dec. 21, 1988, U.K. Airline Feb. 26, 1993, U.S. Business Mar. 12, 1993, India Jan. 11, 1998, Algeria Business Aug. 7, 1998, Kenya Diplom atic May 20, 1995, Japan Transportation Jan. 31, 1996, Sri Lanka Business Feb. 21, 2004, Uganda, Private Aug. 11, 2001, Angola Transportation Sept. 11, 2001, U.S. Business Mar. 11, 2004, Spain, Transportation Oct. 22, 2002, Russia Private Sept. 1, 2004, Russia Educational 1968 1973 1978 1983 1988 1993 1998 2003 14000 12000 10000 8000 6000 4000 2000 0 Number of Fatalities and Injuries Sources: MIPT and Milken Institute staff calculation
Corporate Crisis by Category Percent of Total Crisis 30 25 20 15 10 5 0 Sources: Institute for Crisis Management, 2007 White Collar Crime Mismanagement Class Action Law Suits Labor Disputes Catastrophes Casualty Accidents Defects/Recalls Consumer Activism 2005 2002 1990 Discrimination Financial Damages Workplace Violence Environment Executive Dismissal Sexual Harassment Hostile Takeover Whistle Blowers