Epstein Secrets

* PMI data areindexlevel. Housingprice toincome, cement production and steel productionare as of Dec. 2011. All the other data are as of Feb. 2012. Michael Cembalest Chief Investment Officer “What a diffrence a day makes’, Dinah Washington, 1959, Mercury Records “Banks Deleveraging and Real Estate”, Morgan Stanle

reau of Statistics, PROC, China Automotive Information, China Economic Information Network, CLSA-Markit, Haver Analytics. J.P. Morgan Securities LLC, ISI Group, J.P. Morgan Private Bank. * PMI data areindexlevel. Housingprice toincome, cement production and steel productionare as of Dec. 2011. All the other

going to be a smooth one. The global private sector still inhabits a world more affected by government policy than any other in the last 300 years. Michael Cembalest Chief Investment Officer I The new 5-year plan calls for a 7% growth target. Barry Eichengreen at Berkeley notes that the transition to slower grow

ning worldwide Billions of barrels/GDP 3.6 3.3 3.0 2.7 2.4 2.1 1.8 1.5 1.2 0.9 0.6 0.3 1980 1983 1986 1989 1992 1995 1998 2001 Source. ISI Group. 2004 2007 2010 Two views on the impact of an oil price shock %decline GDP 0.0% Australian • U.K Euro land Japar• Brazil • Poland Hungary •

stark contrast with the West, Asia's fiscal accounts are in excellent shape should they be needed to respond to another round of global weakness. Michael Cembalest Chief Investment Officer Sources "A Peace Dividend for North Korea? The Political Economy of Military Spending, Conflict Resolution, and Reform",

ng up again Residential units sold. 5-day moving average 1,200 1,000 800 600 400 200 0 Oc -09 Dec-09 Feb-10 Apr-10 Source: BCA Research, ISI Group. Jun-10 Aug-10 Oct-10 EFTA00751567 Some clarifications are in order. First, inflation in China is mostly related to food (32% of Chinese CPI).

n stark contrast with the West, Asia's fiscal accounts are in excellent shape should they be needed to respond to another round of global weakness. Michael Cembalest Chief Investment Officer Sources "A Peace Dividend for North Korea? The Political Economy of Military Spending, Conflict Resolution, and Reform",

0 Oct-09 Dec.09 Feb-10 Apr-10 Jun-10 Aug-10 Oct-10 Source: National Bureau of Statistics, J.P. Motgan Securities, LLC. Source: BCA Research, ISI Group. Some clarifications are in order. First, inflation in China is mostly related to food (32% of Chinese CPI). Chinese govern- ment responses have a d

ank. • PMIdata are index levet Housingprice to income. cementpiodudion and steel productional.° as of Dec.2011. All theother dataareas of Feb.2012. Michael Cembalest Chief Investment Officer "What a dirrenee a day makes", Dinah Washington, 1959, Mercury Records "Banks Deleveraging and Real Estate", Morgan Stanl

nal Bureau& Statistics, PBOC,ChinaAutomptive Infonnatbn, China Economic Information Network, CLSA•Marbt. HaverAnalytics. J.P. Morgan Securities 11O, ISI Group, J.P. Morgan Private Bank. • PMIdata are index levet Housingprice to income. cementpiodudion and steel productional.° as of Dec.2011. All theother d

2 2005 2008 2011 2014 2017 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 Source: The Intemational Council on Clean Transportation, United Source: ISI Group, International Energy Agency, World Bank. Nations Department of Economic and Social Affairs. There is also room for reduced fuel consumption, althoug

cy hurdle rate for renewable projects, and fiscal problems in the West may reduce the subsidies that underpin many renewable projects and valuations. Michael Cembalest Chief Investment Officer Notes Vaclav Smil is a Distinguished Professor in the Faculty of Environment at the University of Manitoba in Winnipeg and a