Global Economy

Institute Chairman Mike Milken will discuss the perception and reality of financial markets around the world and how entrepreneurs, companies and nations create value.

While London, especially the City financial sector, remains far enough away from the ailing euro zone to maintain a vigorous property market, European real estate watchers worry about impaired assets piling up at Continental banks. Accordingly, the value gap is widening between prime properties in Europe and lower-quality holdings. Our expert panelists will forecast trends and discuss strategies in a challenging environment. Across the developed world, central banks have aided real estate. Can their support be counted on going forward? What other regions have growth potential? Should investors train their sights on multi- or single-family properties, office or industrial? The U.S. is working through its foreclosure inventory, and apartments are hot. In China, will there be a hard or soft landing in real estate?

As the world gets smaller, its economy is having a hard time getting bigger. Under the surface, though, diverse regions and industries have different stories to tell. Two of the biggest stories are in China, where a generational political transition is imminent, and the United States, where the outcome of its presidential election could have a profound impact on the world. Meanwhile, Europe continues to struggle and hold down the global economy. Can Western economies regain their mojo? Can Europe hold together? What's the impact of the wave of regime change in the Middle East? We'll also consider energy, global demographic trends and the prospects for growth in emerging markets to get a window into the future. This panel will survey opportunities and risks for 2013 and beyond from a global perspective.

Russia is a complex but potentially rewarding landscape for American businesses. A mainstay of the world energy and minerals trade, the country boasts a large consumer market, high technology and much more. What do companies need to know to help them get an initial foothold or expand their operations? Where can local capital be accessed, and how does a company navigate the legal, currency and capital markets terrain? This panel will offer the insights of entrepreneurs who have succeeded in the Russian marketplace.

The innovators who launch enterprises in the world's emerging regions are crucial for sustained development and the creation of ecosystems that encourage creativity and prudent risk-taking. But these entrepreneurs face obstacles not widely encountered in developed countries - a lack of access to seed-stage capital, mentors and management expertise. Many are coming to the United States to take their businesses to the next level. How do entrepreneurs from countries with nascent business climates gain a foothold and eventually flourish? If the ingredients for success are similar, what can ambitious people in emerging and developed regions learn from one another? In this panel, we will hear from entrepreneurs who have built businesses in emerging markets and those who help early-stage ideas reach their full potential.

Seismic demographic shifts have shaped global events over the past decade and had profound influence on capital flows. How did those forces figure into the financial crisis, and how are they impacting the recovery? In the U.S., the population is aging and profits, productivity and social insurance payments are up, but wages are stagnant. Are these trends embedded in sliding PE ratios? Market economies have become a virtual global monopoly, yet emerging nations are taking a bigger piece of the pie, and they've got the momentum in building productive infrastructure. What about energy costs and trade balances? How are policymakers going to respond in their effort to manage events? Our panel will divine what all this, and more, means for the global investment outlook.

A year ago, few pros expected Apple to fall and the Facebook IPO to fizzle. On the other hand, it wasn't a long shot that yields would stay low and Congress would still be wrangling over fiscal issues. Our panel of investment sages will offer their analysis and opinion on the questions facing the markets, and some that aren't on the radar yet. What has changed in the world's two top economies after the U.S. election and the transfer of power in China? With uncertainty reduced and optimism rising, will PE ratios continue to climb? Or are dividends, which have staged a lively rebound since the financial meltdown, the core of a smart strategy? The market may be ready to embrace a new group of bellwethers -- names, please. Has the love of Treasuries run its course? Will risk-takers in Europe be rewarded or regretful? Will hedge funds have a good year? Which asset classes, and regions of the world, will stand out in the next 12 months?

A waning manufacturing base can blunt an innovative edge. Recently, though, some of the conditions that multinationals care about have made the U.S. more inviting. With cheap natural gas abundant while wages rise overseas, manufacturers are giving the U.S. a second look. Many countries, however, continue to offer more "business-friendly" and lower-cost environments than the U.S., and even China. Places like Vietnam and Mexico have improved their positions as manufacturing centers. The scope of capital investment continues to broaden and the global movement of goods remains in expansion mode, yet the nature of competitive advantage is changing. This panel will map the pathways of manufacturing and explore where the industries of the future will flourish.

In this session, Carlyle Group co-founder David Rubenstein interviews former U.S. Treasury Secretary Robert Rubin and Nobel laureate economist Gary Becker about global economic trends, public finance and the capital markets. Join us for a multifaceted discussion among three renowned leaders of finance.

As countries implement new regulations in response to the global financial crisis, will safer and sounder markets be the result? Or just more burdens and costs? What impact can we expect on financial institutions, lending, the flow of capital around the world and, eventually, the global economy? Has the too-big-to-fail problem been solved, or should the giants simply be broken up? Is there a place for a global financial regulator? And what should be done about the shadow banking system - the institutions that wield influence but go largely unregulated? Our panel will delve into whether there are more effective ways to oversee financial markets than current methods.

Global property markets are recovering unevenly by geography and asset class. Many observers felt that commercial real estate was the next shoe to drop after the subprime housing crisis, but it has outperformed most investment options. Where around the globe are the best investment opportunities - Asia, where growth has been strong, or the eurozone while it is enduring a rough patch? What's the optimal combination of asset class (commercial, retail, industrial, multifamily, hospitality or something else) and geography? Asia has many enthusiasts but in a recent survey of foreign investors, 60 percent identified the U.S. as offering the best potential for appreciation. Indeed, capital availability for existing properties appears to be improving in the U.S., but other regions face challenges. What are the leading sources of capital? Is debt or equity the better approach? What about capital access for new construction? Our panel of experts will sift through the data and discuss their strategies.

As mid-2013 comes into view, the crisis sparked by the international mortgage meltdown is receding into memory, spreading a sense of relief. In the eurozone, the debate is about austerity versus spending, but not dissolution. Meanwhile, living conditions are rising in many parts of the globe as millions join a swelling middle class. The expanding availability of healthcare could have a profound effect as well. Yet some regions continue to struggle. In our annual big-picture look at the world economy, we'll discuss whether China and the U.S. can pull other players along and how the debt bomb can be defused. What are the most potent trends steering capital markets? Which industries are rising, which are fading, and what governments are demonstrating they know how to solve problems? Can the flare-up in the Middle East be contained and give way to democracy and economic growth?

Institute Chairman Mike Milken will discuss the perception and reality of financial markets around the world and how entrepreneurs, companies and nations create value.

Do nations, like a good drama, have a beginning, middle and end? Why do civilizations succeed, why do they fail? Is it culture, economics, geography, climate, or an interaction among them? Is reinvention and rejuvenation possible? Our panel of celebrated scholars will examine the forces that propel the lifecycles of empires and how they may apply in today's world. Many are asking whether the U.S. is past its peak and China will inevitably reclaim the preeminence it enjoyed centuries ago. More broadly, is the global center of gravity moving from West to East? This event may also yield insights for businesses - they don't live forever either.

How do economies, and individuals, thrive? It's largely a matter of values and motivations, in the view of Nobel laureate Edmund Phelps. At this private Milken Institute event, presented in partnership with RAND Corporation, the renowned economist will offer a sweeping argument about what makes nations prosper and why those sources of affluence are in jeopardy. That argument fills the pages of Phelps' new book, "Mass Flourishing: How Grassroots Innovation Created Jobs, Challenge, and Change." Phelps credits the Western world's prosperity to what he terms "modern" values, such as the desire to create, explore and meet challenges. That explosion of innovation and productivity gave rise to not only unprecedented wealth, but "flourishing"--meaningful work, self-expression and personal growth. Yet the West's vigor is waning, threatened, he believes, by the return of values that stifle individual aspirations. Phelps asks whether industrialized nations will recommit themselves to modernity, grassroots dynamism and widespread personal fulfillment, or will only a few in those societies flourish.

Speakers: Laurence Boone, Managing Director and Head of Developed Europe Economics, Bank of America Merrill Lynch Global Research Jason Cummins, Head of Research and Chief U.S. Economist, Brevan Howard Inc. Spencer Dale, Executive Director and Chief Economist, Bank of England Brian Sack, Senior Vice President and Co-Director of Global Economics, D.E. Shaw Group Moderator: David Zervos, Managing Director and Chief Market Strategist, Jefferies LLC. Rattled by prospects of the Federal Reserve "tapering" its unconventional stimulus, and happy that it hasn't, investors are wondering what changes to expect from monetary policy around the world. Most observers believe that the European Central Bank and Bank of England will leave key interest rates as they are for several years. But could a more-rapid-than-anticipated tapering by the Fed change this outlook? The uncertainty for Japan - which continues to move full speed ahead with Abenomics and its own brand of quantitative easing - is whether an unexpected turn in the economy might derail this policy. As for emerging markets, many have been rocked by a sudden shift in capital flows as Fed policy helped draw cash back to the core regions. And there is concern that monetary policy might need to be tightened because of continuing currency depreciation. Will central bankers launch the global economy into the much-discussed but elusive escape velocity, or are we set for an even more anemic version of the "new normal"?

Speakers: Willem Buiter, CBE, Chief Economist, Citi Ann Cairns, President, International Markets, MasterCard Ed Daniels, Chairman, Shell UK; Executive Vice President, Downstream Technology, Royal Dutch Shell Alexander Friedman, Global Chief Investment Officer, UBS AG Tidjane Thiam, Group CEO, Prudential Plc Moderator: Gillian Tett, Assistant Editor and Columnist, Financial Times. The Great Recession is shrinking in the rear-view mirror - and the relief is palpable. Economic prospects in the United States seem to be brightening, with GDP growth expected to surpass 3 percent next year. And while China's expansion no longer dazzles, it remains robust. Even Japan has enjoyed a short-term boost. Yet amid the inconsistency - some might say lethargy - of the recovery, investors remain noticeably nervous. Some regions are still grasping for growth, such as Europe. And some up-and-coming countries once considered both safe and vibrant, e.g., Turkey and Brazil, have seen political turmoil that raises questions about their futures. What will central banks do in the coming months - will they modify their activist stance? Will the Middle East heat up even further in 2014? And with its own energy boom, does the West still care? Are other emerging markets still alluring? How will innovation and public policy shape the next waves in health and technology? Our opening plenary will set the stage for the Summit by examining these and other consequential challenges and trends.

Speakers: Mathew Burrows, Counselor, National Intelligence Council, Office of the Director of National Intelligence. Wesley Clark, Chairman and CEO, Wesley K. Clark & Associates; Army General (ret.) and former Supreme Allied Commander, NATO. Jane Harman, Director, President and CEO, Wilson Center; former Congresswoman. Larry Zimpleman, Chairman, President and CEO, Principal Financial Group Moderator: Joel Kurtzman, Senior Fellow and Executive Director, Milken Institute Senior Fellows Program; Publisher, Milken Institute Review. The world is changing rapidly - that's the only constant. What's different about how it's changing now? Europe is still mired in a debt crisis and economic slump. But the worst didn't happen and the euro zone is intact. China did slow down, but avoided the hard landing that many feared. And while the U.S. still faces mountains of debt, the economy is growing again and companies are hiring. On the other hand, North Korea threatened a nuclear attack on the U.S. and fired shells into the ocean near South Korea. A bloody civil war persists in Syria, while Egypt and much of the Arab world lurch to (and from) democracy. All the while, fears of energy scarcity are being replaced by visions of abundance. This panel will examine this new world and the tensions that keep policymakers up at night.

Speakers: Maria Boyazny , Founder and CEO, MB Global Partners, LLC Richard Cantor, Chief Risk Officer, Moody's Corporation; Chief Credit Officer, Moody's Investors Service Joshua Friedman, Co-Founder, Co-Chairman and Co-CEO, Canyon Partners, LLC Tony Ressler, Chairman of the Executive Committee, Ares Management LLC Steven Tananbaum, Managing Partner and Chief Investment Officer, GoldenTree Asset Management David Warren, Chief Investment Officer, Brevan Howard Credit Catalysts Fund Moderator: Michael Milken, Chairman, Milken Institute In our annual look at the state of global credit markets, Institute Chairman Mike Milken and leading players will discuss a rapidly shifting landscape. This year, some observers believe we are in the early stages of the Great Rotation - a broad shift in investor preference from debt to equity that would reverse the cycle begun in 2009. Quantitative easing, a favored tool of central banks in recent years, can't last forever. Indeed, the U.S. Federal Reserve balance sheet recently crossed the $3-trillion mark, more than three times pre-crisis levels. What has that thumb on the scale done for credit quality, particularly in mortgage markets, where the Fed owns $1 trillion in debt? As central banks slow their purchasing, will corporate borrowers feel the side effects? Should we worry about the return of covenant-lite loans? Are early signs of rising default rates about to change the picture for credit availability? And what role will towering sovereign-debt levels play in fixed-income markets this year?

Speakers: Madelyn Antoncic, Vice President and Treasurer, The World Bank Willem Buiter, Chief Economist, Citigroup Terry Duffy, Executive Chairman and President, CME Group Mohamed El-Erian, CEO and Co-Chief Investment Officer, PIMCO Ken Griffin, Founder and CEO, Citadel Moderator: Alexander Friedman, Global Chief Investment Officer, UBS AG. Politics is on the minds of global investors and economic observers. In the United States, debt pressures, ideology and other factors led to the struggle over sequestration, yet the recovery is progressing. Europe is still afloat, but the lifeboat is prone to leaks. In China, a new leadership group is trying to revitalize economic growth amid the pressure of rising needs - which implies growing consumer demand. At the start of the 2013 Global Conference, we'll bring experience and judgment to bear on the unknowns of the global economy and markets. Will central banks modify their activist stance? Where are costs rising or falling, and will that change the direction of capital flows? How long can inflation stay tame? Are the next big opportunities in minerals, manufacturing or technology?

As a destination for direct foreign investment, China is rising - and the U.S. is falling. That's one of the findings in our newest report, The Global Opportunity Index: Attracting Foreign Investment. Foreign direct investment (FDI) has never been more important in catalyzing growth, whether in the developed or developing world. It now accounts for 11 percent of global GDP and more than 80 million jobs worldwide. But which countries are creating the best environments to capture these growth-fuelling investments? Institute researchers have ranked the attractiveness for investment of 98 countries. Sixty-seven variables were assessed across five broad categories: economic fundamentals, regulatory barriers, ease of doing business, regulatory quality, and the rule of law. Hong Kong and Singapore lead the index, with Canada, Switzerland, Australia and five members of the European Union rounding out the top ten. Second from the bottom is Venezuela; as the report notes, the nationalization of foreign firms pursued by the late President Hugo Chavez has made the country a "precarious location for FDI." "The Global Opportunity Index helps identify opportunities for companies contemplating making investments of 'patient' capital," says Keith Savard, senior managing economist and one of the authors of the report. "For policy makers in the host countries, the Index helps illuminate policy changes that can be implemented quickly and often at low cost, in order to make their countries more attractive for FDI." The rank of the United States? Twenty-two - one place behind France. In Europe's economically-troubled periphery, only Ireland remained in the top 10, while Greece plunged below China and many other emerging economies. See the accompanying web tool that provides full access to the rankings, in each of the five categories, with an interactive feature that allows users to customize the rankings, screening for the investment factors that matter most to them. Part of the Milken Institute's Access to Global Capital Initiative, "The Global Opportunity Index" was developed with the support of Liquidnet, an institutional trading network that facilitates trading in 41 markets globally.

The 2008 financial crisis highlighted the critical role that credit rating agencies (CRAs) play in global capital markets. Post-crisis, policymakers on both sides of the Atlantic have introduced a wide range of new regulations intended to improve the oversight or regulation of CRAs. In the United States, Congress passed the Dodd-Frank Act hoping to increase CRA oversight and reduce conflicts of interest, while increasing disclosure requirements. Meanwhile, the European Commission pursued two rounds of legislation focused on mitigating conflicts of interest, enhancing transparency and empowering a new pan-European supervisor. Concerned about the role that CRAs played in the European sovereign debt crisis, the European Commission on November 15, 2011, proposed a third round of significant amendments to existing EU regulations - referred to as CRA3. While the stated intention of CRA3 is to further increase competition, accountability and transparency, there are questions regarding the efficacy and unintended consequences of the proposals, which may have an impact not just in Europe but throughout global debt markets. In partnership with the International Centre for Financial Regulation (ICFR), the Center for Financial Markets at the Milken Institute convened a roundtable discussion in Paris to discuss in depth the merits and potential pitfalls of the proposed regulations. The roundtable participants included a diverse group of stakeholders, including institutional investors, corporate issuers, regulatory officials, legal experts, ratings agencies, special advisors to sovereigns and financial institutions, and academics. While views differed on various aspects of the proposed regulations, concerns were expressed that in many instances the proposed regulations could have the opposite effect of that intended by policymakers - that is, increased costs to issuers or investors, reduced quantity and quality of ratings, and the balkanization of global regulations. The aggregate effect of these outcomes could reduce the depth and liquidity of capital markets. The participants largely agreed, therefore, that the proposed CRA3 required further consideration before adoption by the European Parliament and the Council of Ministers.