logging in or signing up Comparing Old and New Realities Manuele Download Post to : URL : Related Presentations : Let's Connect Share Add to Flag Embed Email Send to Blogs and Networks Add to Channel Copy embed code: Embed: Flash iPad Dynamic Copy Does not support media & animations Automatically changes to Flash or non-Flash embed WordPress Embed Customize Embed URL: Copy Thumbnail: Copy The presentation is successfully added In Your Favorites. Views: 217 Category: Education License: All Rights Reserved Like it (0) Dislike it (0) Added: February 20, 2008 This Presentation is Public Favorites: 0 Presentation Description No description available. Comments Posting comment... Premium member Presentation Transcript Comparing Old and New Realities:Are We Going Forward to the Past?: Comparing Old and New Realities: Are We Going Forward to the Past?Past causes of megaconflict: Past causes of megaconflict Economic volatility Ethnic disintegration Empire(s) in decline Eastern resurgence1. Economic volatility: 1. Economic volatility2. Ethnic disintegration: 2. Ethnic disintegration3. Empires in decline: 3. Empires in decline4. Eastern resurgence: 4. Eastern resurgenceFuture causes of megaconflict?: Future causes of megaconflict? Middle East volatility? Ethnic meltdown in Iraq US empire in decline? Iran and China advance1. No shortage of vol. in ME: Source: World Bank 1. No shortage of vol. in ME2. Iraq: Insurgency to civil war: Source: Brookings 2. Iraq: Insurgency to civil war3. America’s overstretched ‘empire’: 3. America’s overstretched ‘empire’4. The descent of the West: Source: Goldman Sachs 4. The descent of the West NB US/China per capita income ratio forecast to fall from 23 to 6So where’s the financial fear?: Source: MSCI So where’s the financial fear? NB Of BRICs + N-11 (15), 9 are in the bottom third of the world as ranked by the Global Peace Index, and 3 are in the bottom 10.Where’s the political risk premium?: Where’s the political risk premium?Are we being fooled by liquidity?: Are we being fooled by liquidity? … and the joy of “Chimerica”?: … and the joy of “Chimerica”?Have we been here before?: Have we been here before? Long-term rates were low …: Long-term rates were low …Credit spreads narrowed …: Credit spreads narrowed … “The Sterling Carry Trade”Stock markets trended upwards: Stock markets trended upwards… and volatility declined: … and volatility declined—despite rising energy prices: —despite rising energy pricesBritish savings c/w Asian today: British savings c/w Asian todayBut then …: But then … The Times, July 22, 1914, p. 19 (Note: Assassination of Franz Ferdinand June 28)August 1, 1914: August 1, 1914 The Times, August 1, 1914, p. 13 (Note: Britain declares war on Germany, August 4)What might have happened?: What might have happened? London reopens: January 4, 1915What did happen: What did happenEmergency markets: Emergency marketsThe price of imperial decline?: The price of imperial decline? Source: Global Financial DataLooks familiar?: Looks familiar?The big problem: The big problem A “low probability, high-impact event” like a major war (or revolution) is less improbable than we assume … But like all “black swans” it’s impossible to predict with any accuracy … So it’s easier to ignore, because if it happens we’ll all go down togetherThat’s no bell curve: That’s no bell curveThat’s no bell curve: That’s no bell curveThe limits of history: The limits of history I can’t promise you a Third (or Fourth) World War The First World War was unexpected The Second World War was expected, but came later than investors feared The Third World War was expected, but didn’t happen (or only in the Third World) A Great Middle Eastern War is more likely today than a World War I can’t advise you on the optimal wartime portfolio, so don’t askThe limits of history: The limits of history I can’t promise you a Third (or Fourth) World War The First World War was unexpected The Second World War was expected, but came later than investors feared The Third World War was expected, but didn’t happen (or only in the Third World) A Great Middle Eastern War is more likely today than a World War I can’t advise you on the optimal wartime portfolio, so don’t askConclusion: They do exist: Conclusion: They do exist © Niall Ferguson 2007 You do not have the permission to view this presentation. In order to view it, please contact the author of the presentation.