Three-speed recovery GDP growth Percent 1 8 6 4 2-2 -4-6 198 1985 199 1995 2 25 21 215 Source: IMF WEO; Milken Institute. Emerging and developing economies Advanced economies World
Output is still below the pre-crisis level in some major countries Real GDP (Q1 28=1) U.S. 1 Germany Japan U.K. Italy 9 28 29 21 211 212 Sources: Bloomberg and Milken Institute.
Is the global banking system too big? Index (1977 = 1) 5, 4, Global bank assets 3, 2, 1, Global GDP Note: Global bank assets are international claims of banks in 43 reporting countries to the Bank of International Settlements (BIS); Global GDP is in nominal terms. Sources: BIS, IMF, and Milken Institute.
Central bank assets vs. GDPs of world s largest economies US$ trillions 18 16 14 12 1 8 6 4 2 United States China Japan Germany European Central Bank US Federal Reserve Bank France United Kingdom Sources: Federal Reserve, IMF 212.
Central bank target interest rates remain low Policy interest rates, percent 6 United Kingdom 5 4 3 2 1 United States Bank of Japan Eurozone 28 29 21 211 212 213 Source: Bloomberg.
Government debt-to-gdp ratio in advanced countries 213 estimated General government gross debt (% of GDP) 25 224 193 2 15 1 5 133 13 128 113 113 11 18 12 1 86 Source: OECD Economic Outlook.
Government debt in advanced countries is expected to continue rising Gross debt, percent of GDP 12 11 1 Euro area 9 8 7 6 Total OECD 5 4 1992 1994 1996 1998 2 22 24 26 28 21 212 Source: OECD Economic Outlook.
Expansion of balance sheets of major central banks Central bank total assets (% of GDP) 35 3 25 2 15 BoJ ECB BoE Fed 1 5 Q1 26 Q1 27 Q1 28 Q1 29 Q1 21 Q1 211 Q1 212 Source: Bloomberg.
Equities rally in 213 Equity indices in major countries Index (January 1, 21 = 1) 15 U.S. 14 Eurozone 13 12 11 1 U.K. 9 Japan 8 7 Note: U.S. (S&P 5), Eurozone (German DAX), UK (FTSE 1), Japan (Topix). Source: Bloomberg.
Performance of emerging market equities Compared to developed market equities Percent 2 MSCI equity indices, returns in U.S. dollars 212 1-1 211-2 -3 Developed markets Emerging markets EMEA Emerging Asia Latin America Source: Bloomberg.
Eurozone recession deepens Annual GDP growth (%) 6 4 2 Germany France -2 Spain -4 Italy -6-8 Q1 23 Q1 24 Q1 25 Q1 26 Q1 27 Q1 28 Q1 29 Q1 21 Q1 211 Q1 212 Source: Datastream.
Flight to safety Decline in the government bond yields in major advanced countries 1-year government bond yield (%) 6 5 Germany U.K. U.S. 4 3 2 1 Japan 26 27 28 29 21 211 212 213 Source: Bloomberg.
Euro area: Divergent trends in unemployment rates 212 Unemployment rate, percent 3 25 25. 24.3 2 15 15.9 14.8 11.4 1.7 1.2 1 5 8.1 7.9 5.5 Spain Greece Portugal Ireland Euro area average Italy France U.S. U.K. Germany Source: EuroStat.
Bank deposits rise in some troubled Eurozone states Bank deposits (annual % change) 3 Greece 2 1 Bank deposits (annual % change) 3 Spain 2 1-1 Ireland -1 Portugal -2 25 29 213-2 25 29 213 Source: DataStream.
Cyprus: Large bank assets relative to GDP Bank assets (% country GDP) 8 7 6 5 4 3 2 1 Note: Data as of 2/1/213 Source: Datastream and Milken Institute. Cyprus Ireland France Spain Portugal Germany Italy Greece
Performance of emerging market equities By region MSCI Index (January 1, 213 = 1) 14 13 12 EMEA Emerging Asia 11 1 9 8 7 Latin America EMEA = Europe, the Middle East and Africa. Source: Bloomberg and Milken Institute.
FDI rising amid global economic uncertainty FDI inflows, global and by group of economies US$ billions 2,5 2, 1,5 1, Developed economies Developing economies Transition economies World total 5 Source: UNCTAD. 1995 1997 1999 21 23 25 27 29 211
Record low ten-year treasury yields Ten-year Treasury yield, percent 18 16 14 12 1 8 6 4 Average since 1964: 6.7 percent 2 1964 1968 1972 1976 198 1984 1988 1992 1996 2 24 28 212 Source: Bloomberg and Milken Institute
Global real short-term interest rates are negative Global real interest rate (%) 5 4 3 2 1-1 -2 1996 1998 2 22 24 26 28 21 212 Note: 3-month interest rates; China, Canada, France, Germany, Italy, Japan, United Kingdom, United States; Weighted by 212 GDP. Source: Datastream, International Monetary Fund, Milken Institute.
Relationship between Treasury yield and Fed s buying government bonds US$ trillions Percent 2. 1-year Treasury yield (%, RHS) QE1 QE2 QE3 6 1.6 5 1.2.8.4 Fed holdings of Treasury securities ($trillion, LHS) 4 3 2 1. 25 26 27 28 29 21 211 212 213 Sources: Federal Reserve and Milken Institute.
Has the U.S. policy rate been kept too low for too long? Percent 6 Taylor Rule estimate 4 2 Federal funds target rate -2-4 21 23 25 27 29 211 213 Sources: Federal Reserve, Bloomberg and Milken Institute.
Global M&A activity Deal volume, thousands 6 5 4 3 2 1 Deal volume Deal value Deal value, US$ trillions 6 5 4 3 2 1 1985 1987 1989 1991 1993 1995 1997 1999 21 23 25 27 29 211 Source: Zephyr.
Emerging market PE deal values still in post-crisis slump Emerging market PE investment volume by quarter US$ billions Number 16 3 Deal value Number of deals 14 25 12 1 2 8 15 6 1 4 2 5 Q1 28 Q4 28 Q3 29 Q2 21 Q1 211 Q4 211 Q3 212 Source: Emerging Market Private Equity Association.
Japan s elderly population Age dependency ratio, old (% of working-age population) Percent 4 35 3 25 2 15 1 5 Japan Euro Area UK OECD US China Brazil Mexico Source: World Bank.
Mexican Bolsa Index outperforms Dow Jones since 1995 Index (1995=1) 8 7 6 5 4 3 2 1 Mexico Bolsa Index DJIA 1995 1997 1999 21 23 25 27 29 211 213 Source: Bloomberg and Milken Institute.
Will China dominate the world s economy? Composition of global GDP in 25 PPPs Percent of global GDP in 211 Percent of global GDP in 23 Rest of the World 25% United States 23% Rest of the World 27% China 28% Other OECD 18% Euro area 17% China 17% Other OECD 15% Euro area 12% United States 18% Source: OECD Economic Outlook 91 long-term database.
Apr-7 Sep-7 Feb-8 Jul-8 Dec-8 May-9 Oct-9 Mar-1 Aug-1 Jan-11 Jun-11 Nov-11 Apr-12 Sep-12 Feb-13 China s rapid credit growth Total social financing growth RMB billions 3, 2,5 2, 1,5 1, 5 Source: UBS.
China s economy not yet rebalancing Growth, (%YOY) Percent 4 35 Fixed asset investment 3 25 2 15 1 Retail sales 5 Feb-7 Oct-7 Jun-8 Feb-9 Oct-9 Jun-1 Feb-11 Oct-11 Jun-12 Feb-13 Source: UBS.
Chinese local governments: large spending responsibilities, inadequate revenues Share of local governments to total governments Percent 9 8 Expenditure 7 6 5 Revenue 4 78 8 82 84 86 88 9 92 94 96 98 2 4 6 8 1 12 Source: Ministry of Finance, China.
China: rate of return for non-state firms exceeds that of SOEs Return on equity Percent 3 25 Non-SOEs 2 15 1 SOEs 5 1998 1999 2 21 22 23 24 25 26 27 28 29 21 211 Source: National Bureau of Statistics, China. Note: SOEs stands for State Owned Enterprises.