Demographics is destiny?

[nmap]

The following piece seems to offer some interesting perspectives into terrorism trends. It was a portion of a longer piece titled:

No Short and Shallow for Asian Slide

Barron's, February 28th, 2009

LOOKING OUT EVEN LONGER, the case for global equities seems strong, in part because terrorism is peaking, avows Ajay Kapur, the global strategist at Mirae Asset Global Research, the Seoul-based fund manager. Kapur, formerly a Citigroup strategist, doesn't credit any policies to combat terrorism, just demographics.

Says Kapur, "My thesis is real simple. Axiom One: Young men generate almost all violence/conflict. Assumption One: The relative supply of young men is about to decline in most problem areas. Ergo: The supply of global violence/conflict has peaked out, with some exceptions, despite current anchored thinking."

Kapur sees a sharp drop in what he calls "projected youth-bulge ratios" -- the universe of young men aged 15 to 29 divided by men aged 30 to 50 -- for some of "the most conflict-prone countries in the world." In 2000, 96 countries had a youth bulge exceeding 100%. He sees that falling to 84 countries in 2010, 75 in 2015, and to 65 in 2020. Most of what remains will be in Sub-Saharan Africa, where mortality rates have been distorted by the AIDS crisis. Kapur draws heavily from the work of Henrik Urdal of the International Peace Research Institute, published by the World Bank in 2004.

In Pakistan, he says, the youth bulge will remain high into 2015, "then drop sharply into 2020. The Indian youth bulge is highish now, but drops sharply into 2020. Afghanistan will remain problematic all they way into 2020 and actually deteriorates! I foresee Afghanistan and Pakistan to remain the epicenter of violence for some time to come." He sees "sharply reduced" youth bulges in the Middle East, including Israel.

"The relative abundance of angry young men in faraway, potentially dangerous lands is about to fade away," Kapur writes (http://www.miraeasset.com/ourMarkets/outlookList.do). "Their numbers will shrink relative to phlegmatic middle-aged and older men, this outcome predetermined by reproductive decisions already made years ago...the potential enemy combatants will simply fall victim to middle age over the next decade...There will still be random acts of terrorism, but the frequency should decline."

Is it actionable as an investment thesis, as Kapur believes? There are doubters, of course. But Kiril Sokoloff, president of 13D Research, which studies global markets, calls the thesis "brilliant."

Kapur says "good things" lie ahead for global equities in the next five to 10 years, as risk [premiums] fall in response to greater peace. The greatest beneficiary won't be Asia -- in India, the decline in the youth bulge will be "good but not great" -- but in the Middle East and North Africa, where the changes are most dramatic. He likes Powershares MENA Frontier Countries exchange-traded fund (ticker: PMNA). He also claims that more competitive military spending by emerging countries makes the iShares Dow Jones U.S. Aerospace & Defense ETF appealing (ITA). Under such circumstances, emerging-markets investment banks, fund managers and brokers, tourism and leisure stocks also look attractive. In more ways than one, that's quite a reversal.

[Ret10Echo]

Of course this makes the assumption that the areas considered "problematic" will remain static. I would disagree in that the problem seeks the base as opposed to staying in one location and dying off like a species of tree or shrub that only lives in that environment.

Islam has repeatedly become problematic for Europe through the centuries. The difference now being that the conditions in the host nation are no longer the only thing that control the increase or decrease in the available group. Pakistan may come out of its 'Bulge" but the base has simply relocated to areas that present an environment where the numbers available can grow (UK, US...other western nations) due to much better moratlity rates.
I would also argue that there doesn't necessarily need to be a large youth population....

Parallel the decline in younger numbers in the "problem" areas with a similar decline in the nations that are working to counter the terrorist base.

[Given the current world financial issues, I am cautious to take on the ideas of someone (formerly) from Citigroup]

Just my thoughts...



http://www.khouse.org/6640_media_ser...w_day=thursday

[Team Sergeant]

Originally Posted by nmap

The following piece seems to offer some interesting perspectives into terrorism trends. It was a portion of a longer piece titled:

No Short and Shallow for Asian Slide

Barron's, February 28th, 2009

LOOKING OUT EVEN LONGER, the case for global equities seems strong, in part because terrorism is peaking, avows Ajay Kapur, the global strategist at Mirae Asset Global Research, the Seoul-based fund manager. Kapur, formerly a Citigroup strategist, doesn't credit any policies to combat terrorism, just demographics.

Two issues I have with this piece, one is noted above......

The other is that the yellow terrorist cowards "peaked" at 9/11 and have been on a down-hill slide since.

TS

[nmap]

Citicorp has earned quite a reputation for itself, hasn't it? Perhaps it is no longer a resume builder.

Ret10Echo and Team Sergeant, thank you both for your insights. Clearly, those who have been on the ground know far more about the situation than can any analyst. I value your thoughts greatly.

[SF_BHT]

Originally Posted by Team Sergeant

Two issues I have with this piece, one is noted above......

The other is that the yellow terrorist cowards "peaked" at 9/11 and have been on a down-hill slide since.

TS

I agree to a point but you have to look at this in a historical view. They were allowed to build up because governments around the world would not go after then and they were also used as a tool for many governments to advance their national agendas.

They have had their ass kicked but when you look at their operations they have hit, hid and hit again after many years. Their time-line is a long one and they have been trying to attack us but we have been out there actively attacking them and working Intel to counter them. They are planning and working on other Big Opns and if we do not keep up the fight and aggressive Intel we will get hit again like 9/11 or even bigger.

These guys are just like the old Muslim's from hundreds of year ago and they are willing to sit back and fight again down the road (1-10 or even 20 years+)
The Chinese are the same. They look at things in a different light than we do and their short term plans are 10-20 yrs. Long Term is 50-100 years. We the western infidels are looking at things on different time lines and that is what hurts us besides MSM 24x7.
Just my take on things....

[Richard]

In addition to what others have stated, I don't understand how anyone can make such a prediction and use these assumptions in his reasoning:

"...doesn't credit any policies to combat terrorism, just demographics."

"I foresee Afghanistan and Pakistan to remain the epicenter of violence for some time to come."...which, as we all know, does not limit their activities solely to those countries, regions, or continents.

I think this guy's thesis needs a re-do.

Richard's $.02

[Peregrino]

To paraphrase - "when all you know is hammers, every solution set can be defined with nails". Is this guy a Muslim?

[nmap]

Originally Posted by Richard

In addition to what others have stated, I don't understand how anyone can make such a prediction and use these assumptions in his reasoning:

"...doesn't credit any policies to combat terrorism, just demographics."

Sir, perhaps he is extrapolating from the idea that crimes are predominantly caused by the young. I notice the following abstract that also suggests that the underlying premise of a connection between youth and crime may be flawed.

Abstract: The dominant position in criminology is that crime peaks in the late teens and early 20s, and declines thereafter. This is almost always based on arrest rates, and is subject to selection bias. Younger criminals might be more reckless and less adept at escaping arrest than older criminals. The most active criminals might be less likely to be apprehended and to continue their careers longer. This study addresses the issue directly by using state UCR crime category and Census age distribution data in panel analysis over 35 years. There is the expected peak relationsip for the late teens and early 20s, but for most crimes there is also an equally strong relationship for the early 30's. This suggests the individual level studies are exaggerating the crime decline with age, perhaps because the subjects are relatively minor criminals.

LINK

Originally Posted by Peregrino

To paraphrase - "when all you know is hammers, every solution set can be defined with nails". Is this guy a Muslim?

Sir, his name, Mr. Ajay Singh Kapur, seems to indicate Northern Indian descent, although I don't suppose that precludes Muslim affiliation. LINK. However, he offers surprisingly few details about himself; many people at that level offer a biographical sketch, but that does not seem to be the case with Mr. Kapur. It is also possible he wishes to offer a bullish scenario in order to promote his business interests.

Originally Posted by SF_BHT

I agree to a point but you have to look at this in a historical view. They were allowed to build up because governments around the world would not go after then and they were also used as a tool for many governments to advance their national agendas.

Sir, thank you for your thoughts. Recent events in the securities markets add a strong emphasis to what you say here; an article in Barron's, back in 1995 (as I recall) predicted much of what we are experiencing right now. It is ironic that no one has mentioned it; and yet, it was one of those rare instances of genuine foresight. This is an example of our own society's tendency to have a short time horizon. The long-term perspectives you mention are an insight that I had not considered with regard to the Islamic mindset.

Again, thank you all for sharing your perceptions.

[Peregrino]

nmap - I did the Google search on AS Kapur before I asked. I too found a lot of hits with little details. Hits for his most recent move to Hong Kong and a couple other subjects gave me pause to think. I'm not an expert but I'm pretty sure I wouldn't invest any money with him. My "hammer" comment was directed towards what I inferred as to his background and possible motivation; weighted in light of the fact that he's trying to start his own business that will rely heavilly on public perceptions of future international stability.

[Team Sergeant]

Originally Posted by Peregrino

nmap - I did the Google search on AS Kapur before I asked. I too found a lot of hits with little details. Hits for his most recent move to Hong Kong and a couple other subjects gave me pause to think. I'm not an expert but I'm pretty sure I wouldn't invest any money with him. My "hammer" comment was directed towards what I inferred as to his background and possible motivation; weighted in light of the fact that he's trying to start his own business that will rely heavilly on public perceptions of future international stability.

I could not have put it better.... often when someone says "there two sides to this story" never factors in the the "public perceptions" into the equation.
And in my opinion most of the public can be motivated/steered by simply espousing the obvious with a twist.

[Richard]

This guy's 'analysis' would not make it as an IOAC/CAS3 staff study. If supposedly 'smart' people are susceptible to this type of overtly biased and self-promoting shtick, it's no wonder the global financial markets are in such turmoil today.

Richard's $.02