• Home Prices up in May

    Average home prices rose 2.2% in May, according to the latest S&P/Case-Shiller Home Price Indices release.  Home prices rose in 17 of the 20 metro areas that make up the 20-city composite index. On an annual basis, prices dropped 1.0% for the 10-city composite index and 0.7% for the 20-city composite. Here's a look at the long term trend:

    From the release:

    “With May’s data, we saw a continuing trend of rising home prices for the spring,” says David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices. “On a monthly basis, all 20 cities and both Composites posted positive returns and 17 of those cities saw those rates of change increase compared to what was observed for April. Seventeen of the 20 cities and both Composites also saw improved annual rates of return. We have observed two consecutive months of increasing home prices and overall improvements in monthly and annual returns; however, we need to remember that spring and early summer are seasonally strong buying months so this trend must continue throughout the summer and into the fall.

    “The 10- and 20-City Composites were each up 2.2% for the month and recorded respective annual rates of decline of 1.0% and 0.7%, compared to May 2011. While still negative, these annual changes are the best we’ve since in at least 18 months.

    “Taking a closer look at the cities, Phoenix again posted the best annual return. Average home prices in that region were up 11.5% versus May 2011. It was one of the hardest hit cities in the collapse, and prices are still more than 50% below their June 2006 peak, but the past five months have been positive for that market. Miami and Tampa are two other Sunbelt cities that were hard-hit in the downturn, but are now showing positive annual rates of change. Boston, Charlotte and Detroit, on the other hand, saw their annual rates of return deteriorate compared to April, even though prices rose over the month of May. Las Vegas posted both a positive monthly change in May and saw an improvement in its annual return; that said, the market is still more than 60% below it August 2006 peak.

    Read the full release here.

  • Grappling with Which Olympic Athletes to Hire?

    If you are watching the Olympic Games and wondering which athletes would make the best employees, Steve Cooper says to focus on the wrestlers.  Writing in Forbes, Cooper points to some (not a lot, but some) research that suggests the traits required to succeed in wrestling translate best to the working world.  It isn't the most scientific argument, but it does raise some interesting points about how we value certain skills and attitudes in the workplace over others:

    In 2002, professors Daniel Gould and Kristen Dieffenbach published a study in the Journal of Applied Sport Psychology which noted that Olympic champions display higher levels of specific attributes directly linked to success, in particular emotional intelligence. Their research showed that these elite athletes displayed high levels of stress management, interpersonal skills, and self regard.

    The conclusion of all this research could be seen during the 1972 Olympic Games in Munich, Germany, when American wrestler, Dan Gable, won the gold medal without giving up a single point! This is perhaps one of the greatest Olympic performances of all time. And while this level of performance would be hard to duplicate on any stage, can you imagine this same type of focus and determination on display in your office?

    While I acknowledge that nearly all athletes at an elite level have a tremendous amount of drive, wrestlers in particular seem to operate at a higher level of fortitude. Not that my athletic history is anything to write about, but I wrestled in college and have been surrounded by amazing athletes of all sports. I’ve known Olympians, world champions, college champions and everything in between. The one constant observation is that wrestlers have a capacity to push themselves harder than most and display an unrivaled mental toughness—that and a deep desire to eat.

    Read Why Wrestlers Make the Best Employees here.

  • Barofsky: TARP was 'An abysmal failure'

    If you are fortunate enough to be heading off to the beach someplace, and you need a little ballast in your beach bag, we have an idea.  Bring Neil Barofsky's new book, in which Barofsky describes his experience as special inspector general for the Troubled Asset Relief Program.  As SIGTARP, Barofsky seems to have struggled mightily to get members of the Bush and Obama executive branches to pay attention to areas where he felt TARP was failing most American citizens.  

    Barofsky spoke about the book, Bailout: An Inside Account of How Washington Abandoned Main Street While Rescuing Wall Street with Yahoo! Finance's Aaron Task:

  • Olympic Opportunity for Brazil in 2016 Goes Way Beyond Medals

    The 2012 Olympic Games are well underway in London, and we're anxious to see whether hosting the games has positive economic benefits for the UK.  But while we await meaningful data, let's get way ahead of ourselves and look at Rio 2016.  According to a Goldman Sachs report, The Olympics and Economics 2012, Brazil has a need to make significant infrastructure improvements.  So in that regard, hosting the Olympic Games, and the World Cup just two years from now, presents the perfect excuse to catch up to other key emerging economies.  Here is a look at how Brazil measures up against other emerging economies in key infrastructure investment:

    From the report:

    In recent years, Brazil has embraced a set of conventional market-friendly macroeconomic policies that allowed the economy to overcome a number of structural imbalances and attract record high levels of foreign capital. This, in tandem with a favourable external backdrop on average, has led to important social and economic gains over the last 15 years. Happily, the benefits of growth and overall macro-financial stability have trickled down the income scale. For example, the middle class has grown significantly over the past decade—an estimated 31mn people were lifted out of poverty between 1999 and 2009, and more than 100mn people are now part of the middle class (i.e., more than half of the population). Furthermore, the middle class is expected to reach around 60% of the population by 2018. The opportunities presented by these transformations should not be underestimated, as there are now as many middle-class and high-income earners in Brazil as the combined population of France and Britain. In all, the days of large fiscal deficits, high inflation and debt levels, external imbalances, and economic booms and busts have given way to smoother business cycles.

    Despite these advances, potential growth (at slightly below 4% per year) is still low in absolute terms and in comparison with other more dynamic EM and fellowBRIC economies. This is a reflection of structural impediments to growth that have yet to be addressed: a large infrastructure deficit after years of low investment, low domestic savings, a high and distortionary tax burden, high levels of labour informality, still comparatively low levels of human capital, and a low degree of openness to trade. In this regard, hosting two very large global sporting events presents an opportunity to boost investment in infrastructure. Brazilian government estimates suggest that up to US$50bn (about 2% of GDP) will be spent over the next seven years in preparation for these two large events. Hopefully, this will generate large long-term multiplier effects in the economy and boost potential GDP growth in the years to come. 

    Infrastructure gains should have a strong economic influence following the Games.  The hope in Rio is to see overall economic benefits following the Games as Seoul and Barcelona did, and not feel the weight of debt that other cities have felt.  

    Read the full report here

  • William Gale on Some Long Term Benefits to "Falling off the 'Fiscal Cliff'"

    Based on a deal signed by Congressional leaders and President Obama following the 2010 election, the U.S. is on a collision course with significant, mandatory cuts in spending.  If Congress does not come to an agreement on taxes and spending cuts, then $109 billion in cuts will be triggered on January 2, 2013.  This has recipients of federal funding concerned.  It also means a set of tax cuts--known simply as the Bush tax cuts--will be revoked across all income levels.  To follow the political rhetoric is to believe that members of Congress do not want this to happen.  But Brookings Tax Policy Center Co-director William Gale argues that the consequences for "falling off the fiscal cliff" won't be so bad, at least in the long term.  

  • Draghi: 'Euro area is much, much stronger than people acknowledge'

    Mario Draghi has had a challenging eight months as president of the European Central Bank. But to hear him speak yesterday from the Global Investment Conference in London one would think him quite the optimist.  Draghi laid out the case for the euro in spite of all the drag on the currency from debt-ridden nations in the euro zone. 

    If you compare today the euro area member states with six months ago, you will see that the world is entirely different today, and for the better.

    And this progress has taken different shapes. At national level, because of course, while I was saying, while I was glorifying the merits of the euro, you were thinking “but that’s an average!”, and “in fact countries diverge so much within the euro area, that averages are not representative any longer, when the variance is so big”.

    But I would say that over the last six months, this average, well the variances tend to decrease and countries tend to converge much more than they have done in many years - both at national level, in countries like Portugal, Ireland and countries that are not in the programme, like Spain and Italy.

    The progress in undertaking deficit control, structural reforms has been remarkable. And they will have to continue to do so. But the pace has been set and all the signals that we get is that they don’t relent, stop reforming themselves. It’s a complex process because for many years, very little was done – I will come to this in a moment.

    But a lot of progress has been done at supranational level. That’s why I always say that the last summit was a real success. The last summit was a real success because for the first time in many years, all the leaders of the 27 countries of Europe, including UK etc., said that the only way out of this present crisis is to have more Europe, not less Europe.

    A Europe that is founded on four building blocks: a fiscal union, a financial union, an economic union and a political union. These blocks, in two words – we can continue discussing this later – mean that much more of what is national sovereignty is going to be exercised at supranational level, that common fiscal rules will bind government actions on the fiscal side.

    Read the full speech here

  • Ask the IMF: Europe

    This is so not your father's International Monetary Fund.  In an effort to better engage with the general public, the IMF has a new series of videos that are essentially Q&As with citizens across a variety of countries.  This one is from Europe:

    View Ask the IMF videos from China, Italy, and Great Britain here

  • Impact of a Business's 'Socially Responsible' Practices on Employee Productivity

    Michael Vlassopoulos and Mirco Tonin, lecturers in economics at the University of Southampton, have been conducting research into the impact that Corporate Social Responsibility initiatives have on workers at the companies that take ton those initiatives.  At VoxEU, they provide a summary of their initial findings.  The takeaway here seems to be that there are real benefits to CSR strategies when it come to worker productivity. 

    Specifically, they are associated with a 20% rise in productivity and this effect is present whether the donation to the charity is lump sum or related to subject’s performance. This suggests that what motivates workers is the presence of social incentives rather than their specific form. Consistent with this, in the real world firms introduce CSR policies in a variety of ways. For example, in the US, large retailers and grocery chains, such as Target Corporation and Whole Foods Market donate 5% of their pre-tax profits to charitable groups, while in the UK there exists the so-called Percent Club for companies that pledge to donate at least 1% of their pre-tax profits to charitable causes, with members like GlaxoSmithKline, Deloitte, and the John Lewis Partnership. On the other hand, other firms opt not to explicitly link their CSR budget to profits.

    When we compare the effectiveness of private and social incentives in boosting productivity, we find that social incentives are at least half as effective in motivating subjects as compared to private incentives. What this means is that an employer that spends $1 on a charitable cause will generate at least the same increase in productivity as $0.50 spent on paying workers directly.

    If we consider the additional gains arising from tax benefits, and additional advantages coming from the appeal of CSR to customers, regulators, or investors, we may well conclude that social incentives are cost-effective. Also, one could expect social incentives to become increasingly more effective in motivating employees relative to private incentives as earnings increase and the marginal utility of money decreases. This may be one of the factors behind the increasing importance of CSR policies. For instance, in a survey by the Economist Intelligence Unit (2007), 34% of corporate executives indicated that CSR was a high or very high priority for their firms three years earlier, compared to 55% saying so with regard to the present and almost 70% expressing their expectations on how high a priority it will be three years hence.

    Read Do social incentives matter? Evidence from an online real effort experiment here

  • China's Rare Earth Metals Wealth

    We follow coverage of China's economic ups and downs closely here at The Watch.  Or, should we say, China's ups and ups-but-not-as-up-as-other-ups.  One of the key factors for China's future growth in the global economy of the 21st century is that nation's access to the types of raw materials that have become essential in the manufacturing and high tech sectors.  The below infographic makes China's advantage in rare metals clear.  And that advantage is really quite astounding.  

    This was produced by Buckyballs, a company that depends on rare metals in its products.  (Hat tip Barry Ritholtz)

     [Via: Buckyballs rare earth metals]

    Get the full size graphic here

  • Seth Godin's Circle of Marketing

    At his blog, marketing guru Seth Godin shares a helpful tool to direct our thinking about the different aspects of marketing.  Take a look:

    When a marketing strategy isn't working, instead of blaming the masses for not "getting it," Godin says to look at a different aspect of the effort.  And go one circle in.

    Read Godin's explanation of the circles within the circle here.  

  • Timothy Geithner Defends his Response to the Libor Crisis

    Treasury Secretary Timothy Geithner was Charlie Rose's guest last night.  Geithner and Rose covered a lot of ground, but the Secretary spent a lot of time talking about Europe.  He said that business and policy leaders around the globe are all feeling the pinch, and waiting for the EU to sort out debt problems.  And in this excerpt, Sec. Geithner discussed the Libor crisis in Britain, and defended his own response to early warnings about what was happening at British banks:

    The full video is available here.  

  • Nouriel Roubini Lowers Expectations for U.S. Economic Growth

    At Project Syndicate, Nouriel Roubini warns us not to look at improved home and auto sales or an uptick in manufacturing and come to the conclusion that economic recovery will pick up.  He gives four reasons we should expect growth to slow down even more over the next year:

    First, growth in the second quarter has decelerated from a mediocre 1.8% in January-March, as job creation – averaging 70,000 a month – fell sharply.

    Second, expectations of the “fiscal cliff” – automatic tax increases and spending cuts set for the end of this year – will keep spending and growth lower through the second half of 2012. So will uncertainty about who will be President in 2013; about tax rates and spending levels; about the threat of another government shutdown over the debt ceiling; and about the risk of another sovereign rating downgrade should political gridlock continue to block a plan for medium-term fiscal consolidation. In such conditions, most firms and consumers will be cautious about spending – an option value of waiting – thus further weakening the economy.

    Third, the fiscal cliff would amount to a 4.5%-of-GDP drag on growth in 2013 if all tax cuts and transfer payments were allowed to expire and draconian spending cuts were triggered. Of course, the drag will be much smaller, as tax increases and spending cuts will be much milder. But, even if the fiscal cliff turns out to be a mild growth bump – a mere 0.5% of GDP – and annual growth at the end of the year is just 1.5%, as seems likely, the fiscal drag will suffice to slow the economy to stall speed: a growth rate of barely 1%.

    Fourth, private consumption growth in the last few quarters does not reflect growth in real wages (which are actually falling). Rather, growth in disposable income (and thus in consumption) has been sustained since last year by another $1.4 trillion in tax cuts and extended transfer payments, implying another $1.4 trillion of public debt. Unlike the eurozone and the United Kingdom, where a double-dip recession is already under way, owing to front-loaded fiscal austerity, the US has prevented some household deleveraging through even more public-sector releveraging – that is, by stealing some growth from the future.

    Read American Pie in the Sky here

  • The Economist: A Slowdown in Emerging Markets and What it Means for the Global Economy

    The BRIC countries (Brazil, India, China) have done more than carry their weight for global economic growth over the last decade.  But with recent data showing a slowing of growth in these economies, The Economist's Greg Ip says there has been a "rethink" about how sustainable high growth rates are in emerging economies.  In the below video, Ip and Ryan Avent discuss some troubling signs coming from emerging economies--signs that a slowing growth rate can not simply be explained away as cyclical:

    Read Greg Ip's article, The Great Slowdown, from the latest issue of The Economist here

  • Forbes: ManU and Real Madrid the world's most valuable franchises, but overall, American Football dominates the Top 50

    When it comes to valuable sports franchises, football is king.  Whether it be the original football (aka futbol or soccer) or American football, the top teams in Europe and the US make up 8 of the top 10 on the 2012 Forbes list of the 50 most valuable teams.  Here is the top 10:

    #1 Manchester United ($2.23 billion)

    #2 Real Madrid ($1.88 billion)

    #3 New York Yankees ($1.85 billion)

    #3 Dallas Cowboys ($1.85 billion)

    #5 Washington Redskins ($1.56 billion)

    #6 Los Angeles Dodgers ($1.4 billion)

    #6 New England Patriots ($1.4 billion)

    #8 Barcelona ($1.31 billion)

    #9 New York Giants ($1.3 billion)

    #10 Arsenal ($1.29 billion)

    American football rules when it comes to the full list, with the NFL's 32 teams all making the list.  TV contracts seems to be the key:

    The future looks even brighter for all NFL teams thanks to a new labor agreement, as well as a new round of TV contracts. The league and its players endured a four-month lockout last year, but no regular-season games were lost. The new collective bargaining agreement ensures labor peace for 10 years and gives owners a bigger piece of the pie, as players settled for a salary cap based on 48% of total revenues versus roughly 54% in previous years.

    The NFL inked extensions to its TV deals with CBS, ESPN, Fox and NBC last year. The nine-year deals (ESPN is for eight years) start with the 2014 season and are worth $5 billion a year collectively, a 62% bump on the prior contracts. The average NFL team is worth $1.04 billion.

    Read about the full list here.  

  • Recycling, Reconsidering, and Reinvesting in Past Failures

    Is this the venture capital equivalent of rummaging through someone's trash to find treasure?  In this short video from Big ThinkBruce Gibney, a partner at Founders Fund, says that some ideas that are failures the first time someone tries them may be successes on a later try.  In the energy sector especially, technological development is rapid, and sometimes an idea just comes around at the wrong time.  So the message is to not typecast failed ideas, but rather to be open to reconsidering new ways to make them succeed.  

  • McKinsey: Basel III To Bring Drop in Revenue for Europe's Banks

    With new regulations scheduled to hit, Europe's banks can expect lower returns, according to a new report from McKinsey & Company.  Down the road, banks have an opportunity to make up the lost ground and build more sustainable practices, but first the hit on returns will look something like this:

    We estimate that without any mitigating action by banks or material changes in the economic and competitive environment, recent global rules, especially Basel III,1 and new regional and national regulations will help reduce retail banking’s average return on equity (ROE) in Europe’s four largest markets to 6 percent, from about 10—a 41 percent decline. The analysis, based on 2010 financial-year data, assumes that the cumulative regulatory impact expected over the next several years will be realized immediately.

    The effects vary across the four markets, but in all cases the outlook is grim (exhibit). In France, ROE will fall to 9.5 percent, from 13.5—a 29 percent decline driven by changes affecting mortgages, debit cards, and investments. In Germany, ROE will fall to 3.5 percent, from 6.6 (a drop of 47 percent); almost all retail products will be affected and many will become unprofitable. ROE in Italy’s retail banks starts from a lower base, 5.1 percent, but will fall further, to 3.1 percent. In the United Kingdom, returns will fall to 7 percent, from 13.6 percent. The impact here, 48 percent, is high because of extensive country-specific regulation.

    Access the full report here.  

  • Baba Shiv on Choosing not to Choose

    As professor of marketing at Stanford Business School, Baba Shiv is one of the more influential thinkers in the field of neuroeconomics.  Much of his research focuses on why we make the choices we make, and how various factors--like price or packaging or scarcity--affect consumer behavior.  But in this recent TedX Talk, Shiv got personal when talking about the paradox of choice.  

  • Derek Thompson Goes to 11, with Reasons We Are Bad at Assessing the Value of a 'Deal'

    At The Atlantic, Derek Thompson has neatly summed up a study published by the American Marketing Association  (for purchase here) on how consumers prefer "bonus packs" over price discounts.  Or, as Thompson puts it, " ways consumers are bad at math."  Thompson lists 11 ways that we are bad at truly assessing the value of one deal over another.  Here are two that stood out for us:

    We're heavily influenced by the first number. You walk into a high-end store, let's say it's Hermès, and you see a $7,000 bag. "Haha, that's so stupid!" you tell your friend. "Seven grand for a bag!" Then you spot an awesome watch for $367. Compared to a Timex, that's wildly over-expensive. But compared to the $7,000 price tag you just put to memory, it's a steal. In this way, stores can massage or "anchor" your expectations for spending.


    We're in love with stories. In his book Priceless, William Poundstone explains what happened when Williams-Sonoma added a $429 breadmaker next to their $279 model: Sales of the cheaper model doubled even though practically nobody bought the $429 machine. Lesson: If you can't sell a product, try putting something nearly identical, but twice as expensive, next to it. It'll make the first product look like a gotta-have-it bargain. One explanation for why this tactic works is that people like stories or justifications. Since it's terribly hard to know the true value of things, we need narratives to explain our decisions to ourselves. Price differences give us a story and a motive: The $279 breadmaker was, like, 40 percent cheaper than the other model -- we got a great deal! Good story.

    Read all eleven reasons here

  • Krishna Palepu: Best Expansion Opportunities for Emerging-Market Companies May Be in Other Emerging Markets

    When emerging market companies reach a level of success in their own countries where they feel they may be peaking, where should they go next?  Harvard Business School's Krishna Palepu says the temptation is to enter developed markets, with "higher margins" and strong consumer classes.  But, Palepu suggests a better path might just be to enter other emerging markets, where the conditions for building a successful business, and the potential growth rate, are likely much more similar to their domestic markets.:

  • IMF: Slowing Momentum in Key Economies Puts Global Recovery at Risk

    The IMF has downgraded its already moderate projections for growth in the global economy.  The key word in the latest World Economic Outlook is "momentum."  As in "growth momentum has slowed," in the U.S. and in some key emerging economies.  The EU troubles remain at the center of concerns over global economic slowdown.  From the report:

    Overall, global growth is projected to moderate to 3.5 percent in 2012 and 3.9 percent in 2013, some 0.1 and 0.2 percentage point, respectively, lower than forecast in the April 2012 WEO. In view of a stronger-than-expected first quarter outcome, weaker global growth in the second half of 2012 will primarily affect annual growth in 2013 through base effects.

    Growth in advanced economies is projected to expand by 1.4 percent in 2012 and 1.9 percent in 2013, a downward revision of 0.2 percentage point for 2013 relative to the April 2012 WEO. The downward revision mostly reflects weaker activity in the euro area, especially in the periphery economies, where the dampening effects from uncertainty and tighter financial conditions will be strongest. Owing mainly to negative spillovers, including from uncertainty, growth in most other advanced economies will also be slightly weaker, although lower oil prices will likely dampen these adverse effects.

    Growth in emerging and developing economies will moderate to 5.6 percent in 2012 before picking up to 5.9 percent in 2013, a downward revision of 0.1 and 0.2 percentage point in 2012 and 2013, respectively, relative to the April 2012 WEO. In the near term, activity in many emerging market economies is expected to be supported by the policy easing that began in late 2011 or early 2012 and, in net fuel importers, by lower oil prices, depending on the extent of the pass-through to domestic retail prices (which is often incomplete).

    When it comes to the subject of preventing the global recovery from coming to a complete stop, the report puts some of the onus on U.S. policymakers.  

    In the short term, the main risk relates to the possibility of excessive fiscal tightening in the United States, given recent political gridlock. In the extreme, if policymakers fail to reach consensus on extending some temporary tax cuts and reversing deep automatic spending cuts, the U.S. structural fiscal deficit could decline by more than 4 percentage points of GDP in 2013. U.S. growth would then stall next year, with significant spillovers to the rest of the world. Moreover, delays in raising the federal debt ceiling could increase risks of financial market disruptions and a loss in consumer and business confidence.

    Read the full World Economic Outlook here

  • Investing in Skilled Workers and the Future of Manufacturing in the U.S.

    Last week the Brookings Institution hosted a forum on the future of manufacturing in America.  Representatives from industry and Labor (and some Congressional Reps as well) discussed the potential for growth in the manufacturing sector, in spite of a half-century trend of business moving abroad.  

    John White, Jr., President of Taco-HVAC, sponsored the forum and participated.  In this excerpt from the forum, he argued that one of the keys to improving growth in U.S. manufacturing is investing in developing skilled workers.

    Watch more excerpts from the forum here.  

  • Planet Money: The Red Cross, Donuts, and the Power of Free

    As strange as it may seem, we decided to follow up reading about the latest retail sales numbers today by listening in to a conversation about things that are free.  And yet it is somehow fitting.  Because, as Chana Joffe-Walt and Alex Blumberg discuss in the latest Planet Money podcast, there is a cost to free.  Especially if you start to charge for something after originally giving it away.

  • Retail Sales Drop for Third Straight Month

    Retail sales declined 0.5% in June, according to the Commerce Department.  Adjusted for seasonal and holiday variation, U.S. retail and food services came in at $401.5 billion in June, marking the third month in a row that they decreased.  Retail sales were up 0.7% compared to June 2011.  From the Census Bureau:

    The drop came as a surprise to many, including economists surveyed by Bloomberg News

    Read the full release here.

  • Marketplace Whiteboard: Eurobonds

    While some European leaders have been pushing the creation of EU-wide bonds--that is, Eurobonds--German Chancellor Angela Merkel has been working to stop them.  And so far she has succeeded.  Paddy Hirsch takes to the Marketplace Whiteboard to explain why Eurobonds are a "dream investment" for most EU nations, but still just a dream.  

  • Pew Global Attitudes Survey: Support for Free Market Economy Slipping, Emerging Economies More Optimisitic About Economic Future

    Attitudes of people around the world toward free market economies have shifted since the start of the global economic crisis, according to the latest survey from the Pew Research Center's Global Attitudes Project.  Take a look:

    What catches your eye?  The 2012 numbers for Brazil and China catch our attention.  

    Overall, the outlook of citizens in emerging economies come across as significantly more positive in the survey results.  People across Europe and the U.S. see less economic opportunity for themselves than previous generations.  And people living in Arab nations are the most dissatisfied with their economic plight, and see little hope for improvement.  But people living in China, Brazil, India, and Turkey are almost giddy in comparison:

    The Chinese, in particular, are quite positive about their economic situation, with 92% saying they are better off than the previous generation, 83% are satisfied with current national economic conditions, 70% feel they are financially more prosperous than they were five years ago and 69% are happy with their own personal economic circumstances. But the Brazilians are even more upbeat when it comes to their personal finances (75%), and 72% say they are better off financially than five years ago. In contrast, the Turks and Indians, while positive, are generally less optimistic across a range of indicators than are their emerging market counterparts.

    Thinking about the future, while strong majorities of Brazilians (84%) and Chinese (83%) think the economy will improve over the next 12 months, only a plurality of Indians (45%) and Turks (44%) agree. Regarding their children’s future, only in China (57%) does a majority think the next generation will have an easy time exceeding the well-being of their parents. And the median for Brazil, China, India and Turkey is a more pessimistic 35%. Nevertheless, taken together the four emerging market countries are much more optimistic than Americans (only 14% think their kids will have an easy time climbing the economic ladder) or Europeans (a median of 9%).

    Brazilians (69%) and Indians (67%) are among the strongest believers that hard work leads to success. But the Turks (50%) and the Chinese (45%) are more skeptical.

    Brazilians (75%), Chinese (74%) and Indians (61%) are among those with the greatest faith in capitalism. Turks (55%) are slightly less committed to the free market.

    As might be expected, people in emerging markets who have higher incomes are generally more positive in their economic outlook, with some notable exceptions. Upper-income Brazilians and Indians are much more likely to say that their economy is doing well than are their low income compatriots. But there is no effective difference in assessment of the economy between low-income and high-income Chinese or Turks. And, given the recent relative success of their economies, it may not be surprising that Indians and Turks who are well off are particularly supportive of the current free market system.

    Read the full report here