Saturday, October 20, 2007

Capitalism and The Rising Middle Class in India

The chart above (click to enlarge) is from a McKinsey Global Institute study "The Rise of India's Consumer Market" from May 2007, showing the expected changing patterns of 5 different income groups in India (shown above in constant 2000 Indian rupees), below in US dollars:

Deprived: Less than $2,250 in annual income

Apsirers: $2,250 to $5,000

Seekers (Middle Class): $5,000 to $12,500

Strivers (Middle Class): $12,500 to $25,000

Globals: > $25,000

Notice that:

1. The "deprived group" is expected to decrease from 77% of the Indian population in 1985 to only 3% by 2025.

2. India's middle class (seekers and strivers) is expected to increase from 8% of the population in 1985 to almost 60 percent of the population in 2025.

Conclusion: As a result of market capitalism and globalization India will experience a dramatic rise in its middle class and a significant reduction in its low-income, deprived group. Far from a story of the "rich getting richer and the poor getting poorer," free market capitalism in India will result in the "rich getting richer" and the "poor getting richer," the same story as the U.S.

(HT: Ray Titus and Sanil Kori)

Friday, October 19, 2007

Indian IT Firms Increase Outsourcing TO the U.S.

Indian IT and outsourcing companies earn revenues in dollars but pay most of their costs in rupees. Profit margins for these companies have been squeezed lately because: a) wages have been rising by 10-15% in India because of the high demand for workers and b) the dollar is trading at a 9-year low vs. the India rupee and has fallen by almost 15% in the last year.

Solution? Outsource to the U.S.

MUMBAI--Tata Consultancy Services plans to open two computer services centres in the U.S. in one of the biggest expansions by an Indian information technology outsourcing company in a developed market.

India’s largest computer services company, part of Tata Industries, said the first centre of 500-1000 people would open in Cincinnati, Ohio, by the end of this year or early next year, with the second to follow in late 2008 or early 2009 at an undisclosed location.

Bottom Line: Globalization works both ways.


Walking Away From Hate

Manhattan Institute fellow John McWhorter asks an interesting question and makes an interesting proposal:

Imagine if after the Jena incident, black kids had just taken the nooses down and kept on hanging out under that tree. Why is that such an unthinkable alternative to shouting it to the rooftops only to watch similar things keep happening nationwide anyway?

Hence my modest proposal. The next time — and there will be one, and another, and another — let it go. Not because it's okay, but because that is the way to discourage it from happening.

Thursday, October 18, 2007

Record Low Unemployment Rate in Arizona

PHOENIX - Woes in the home construction and mortgage industries grab the headlines, but a new report shows continued strength in Arizona's economy, with unemployment at a record low rate in September of just 3.3%, down from 3.7% in August and matching the previous low of 3.3% set 40 years ago in 1967.

She Can Get Your Kid into an Ivy

Michele Hernandez boasts that 95% of her teenage clients are accepted by their first-choice school. Her price: As much as $40,000 a student.

Read about it in the current issue of Business Week.

Wednesday, October 17, 2007

Hyphens Eliminated

A discussion was generated recently based on this post about grammar, and I corrected the spelling of "nitpicking" to "nit-picking," at the suggestion of a commenter.

Update from NYTimes: The Shorter Oxford English Dictionary, the scaled-down, two-volume version of the mammoth 20-volume O.E.D., just got a little shorter. With the dispatch of a waiter flicking away flyspecks, the editor, Angus Stevenson, eliminated some 16,000 hyphens from the 6th edition, published last month.

I'm not sure if the hyphen was elminated from "nit-picking," but chances are pretty good that it was one of the 16,000?....

Craigslist Meets Wall Street

Original Craigslist post: "Okay, I'm tired of beating around the bush. I'm a beautiful (spectacularly beautiful) 25 year old girl. I'm articulate and classy. I'm not from New York. I'm looking to get married to a guy who makes at least half a million a year."

From a repsonse on Craigslist (below original post): "Cutting through all the B.S., what you suggest is a simple trade: you bring your looks to the party and I bring my money. Fine, simple. But here's the rub, your looks will fade and my money will likely continue into perpetuity...in fact, it is very likely that my income increases but it is an absolute certainty that you won't be getting any more beautiful!"

New response on Craigslist: "Though you did not mention the details of your occupation, it is clear that you are an investment banker and not a trader, as any good trader would understand that human courtships are based upon a semi-efficient open market, and not an investment banking cartel. However, your inability to grasp the realities of the dating market is not surprising, given that you have successfully employed the tools of collusion and market manipulation rather that true acumen in your supposed wealth generation."

Greg Mankiw Has Turned Off Comments on His Blog

He explains why here.

Airbus Delivers The First A380, With Double Beds


TOULOUSE, France (AP) — Nearly two years late, Airbus finally delivered its first A380 superjumbo on Monday, a revolutionary behemoth that includes luxury suites equipped with comfy double beds (pictured above).

Singapore Airlines fitted its jet with 471 seats configured in three classes: 399 economy class seats on both decks, 60 business class seats on the upper deck and 12 luxury suites on the main deck (two with double beds).

A standard return fare for a suite, created by French luxury yacht designer Jean-Jacques Coste, will cost around $7,160 on the inaugural Singapore-Sydney route. That's about 20-35% more than the current top-class fare. Each suite comes with sliding doors and self-adjustable roller blinds for privacy — with only a small fabric screen at the bottom to allow cabin crew to check on passengers.

Question: Will this have any effect the "
Mile High Club?" New rules? Increased membership?

State Fare: America's Offbeat Regional Foods

Check out this interactive map from National Geographic featuring some of America's offbeat regional foods like fry sauce, half-smokes, Texas caviar, and liver mush; recipes included.

(HT: Tom McMahon)

CME Introduces Emerging Markets Index Futures

Stock returns in the emerging markets have soared over the last 4 years (33% per year for the MSCI Emerging Markets Index) compared to the U.S. (10% annual return for the S&P500), see the chart above (both indexes are set to 1000 in October 2003).

In response to the increasing interest in investing in emerging markets and rising demand to hedge investments in those markets, the Chicago Mercantile Exchange (CME) is launching a new futures contract on emerging-market stocks.

Starting next Monday, the CME will offer futures contracts on the MSCI Emerging Markets Index, a free float-adjusted market capitalization index containing more than 800 stocks from 25 emerging markets.

Read more here.

Just another indicator of how: a) globalization is affecting investment patterns, and b) how markets respond quickly to demand for new products.

Surface Navigation Help for NYC Subway Riders

NEW YORK TIMES: It is one of those embarrassing, frustrating, infuriating experiences of everyday life that many New York subway passengers are loath to admit: that disorienting moment when they step onto the street, lost in a city they know — or think they know — perfectly well. Which way is Ninth Avenue, anyway?

Now the city is experimenting with a new way to help people go where they want to go without wasting more steps than they have to. The city and the private business improvement district for the neighborhood around Grand Central Terminal have installed compass-shaped decals on sidewalks, right where riders emerge from heavily used subway stairwells.

The gold-on-black decals are 24 inches in diameter, larger than a large pizza but smaller than a manhole cover. They carry two kinds of information: directions for north, east, south and west, and the names of the nearest streets (pictured above).

(HT: Sanil Kori)

Nitwitery: Force-feeding Ethanol As Energy Savior, Despite 1,700 Gallons H20 Per Gallon of Ethanol

WSJ Editorial: If the Senate's new "renewable fuels" mandate becomes law, get ready for a giant slurping sound as Midwest water supplies are siphoned off to slake Big Ethanol. House and Senate negotiators are preparing for an energy-bill conference, and if the Senate's language prevails, America's economy will be forced to consume more than five times current ethanol production.

Heavily subsidized and absurdly inefficient, corn-based ethanol has already driven up food prices. But the Senate's plan to increase production to 36 billion gallons by 2022, from less than seven billion today, will place even greater pressure on farm-belt aquifers.

Ethanol plants consume roughly four gallons of water to produce each gallon of fuel, but that's only a fraction of ethanol's total water habit. Cornell ecology professor David Pimentel says that when you count the water needed to grow the corn, one gallon of ethanol requires a staggering 1,700 gallons of H2O.

Slowly but surely, these problems are beginning to alert public opinion to the huge costs of force-feeding corn ethanol as an energy savior. The ethanol lobby is still hoping it can keep all of this under wraps long enough to shove one more big mandate through Congress, but the Members need to know the problems they'll be creating. We hope that House conferees, who did not include a new mandate in their energy bill, insist that any final bill is ethanol-free.


From a related story in yesterday's USA Today:

The tightest world grain stocks in about 30 years are contributing to rising food inflation, fueling worries about food shortages in some countries and straining international aid budgets. Prices are being pushed up by bad weather in a host of countries, surging world demand and a drive in the USA and abroad to devote more acres to corn for ethanol production, which has tightened supplies of some grains and tied crop prices more closely to energy prices.

Cutting the Umbilical Cord: Canadians Are Now Getting Richer Than Americans


Canadians might have to wait a long time for an MRI or surgery (see post below), but the Canadian economy will outperform the U.S. economy in 2008, according to this report from CIBC World Markets, a leading Canadian investment bank. Highlights of the report:

1. By the end of next year Canadians will get as much as a nickel back when they trade their loonies for greenbacks, the biggest premium for the C$ since 1960 (CIBC's forecast is C$0.95/USD for 2008).

2. U.S. housing prices will continue to fall on mounting foreclosures, while Canadian housing prices continue to rise on a surging domestic economy.

3. For the fourth year in a row, the resource-based TSX Stock (Canada's benchmark stock index) is set to outperform the S&P500 (see top chart above, click to enlarge).

4. Across a wide spectrum of assets, the tables have suddenly turned. Canadians are getting richer compared to their American neighbours, after having fallen so far behind during the IT-driven economy of the 1990s.

5. At the heart of this reversal of fortune is the huge shift in the global terms of trade over the last decade, which has seen economic value-added migrate from information technology back to resource rents under the ground. Nowhere is that shift more evident than when comparing soaring crude oil prices against stagnant or plunging technology prices. It takes only a third as many barrels of oil to buy a basic computer as it did at the start of the decade (see chart above), when Silicon Valley drove the world economy.

6. Real GDP growth in Canada (forecast of 2.7%) will surpass the US in 2008 (1.9%).


7. Today it’s not Russian or Mexican defaults that de-stabilize global credit markets, but defaults by homeowners deep inside the American heartland. The American economy has gone from the global engine of growth to the world economy’s Achilles heel in the space of a decade.

8. With the developing world, not the US, now driving global resource demand, the umbilical cord that has always connected the Canadian economy to the much larger American market is being severed.

Tuesday, October 16, 2007

Surgery Wait Times in Canada Hit Record High

Canadians waited longer than ever before (18.3 weeks) for non-emergency surgery in 2007, despite a multi-billion-dollar effort by government to speed up medical care, according to a report released yesterday by Canada's Fraser Institute. Highlights of the report include:

1. A typical Canadian seeking surgery had to wait 18.3 weeks in 2007 between referral from a general practitioner and treatment (averaged across all 12 specialties and 10 provinces surveyed), reaching an all-time record high, up from 17.8 weeks in 2006.

2. Ontario recorded the shortest waiting time overall at 15 weeks and Nova Scotia recorded the longest waits in Canada at almost 25 weeks.

3. The waiting time between referral by a GP and consultation with a specialist rose to 9.2 weeks from the 8.8 weeks recorded in 2006. The shortest waits for specialist consultations were in Ontario (7.6 weeks) and the longest waits for consultation with a specialist were recorded in Prince Edward Island (12.7 weeks).

4. The waiting time between specialist consultation and treatment—the second stage of waiting—increased to 9.1 weeks from 9 weeks in 2006. The shortest specialist-to-treatment waits were found in Ontario (7.3 weeks), while the longest waits were in Manitoba (12.0 weeks).

5. Between 2006 and 2007, large increases occurred in the waits for internal medicine (additional 4.9 weeks), gynaecology (additional 2.1 weeks), urology (additional 1.9 weeks), and otolaryngology (additional 1.8 weeks).

6. The median wait for a CT scan across Canada was 4.8 weeks. British Columbia, Alberta, Ontario, New Brunswick, and Nova Scotia had the shortest wait for CT scans (4 weeks), while the longest wait occurred in Manitoba (8 weeks).

7. The median wait for an MRI across Canada was 10.1 weeks (in other words, early 2008 if you call tomorrow). Patients in Ontario experienced the shortest wait for an MRI (7.8 weeks), while Newfoundland residents waited longest (20 weeks - in other words March 5, 2008 if you schedule tomorrow).

8. The median wait for ultrasound was 3.9 weeks across Canada. Alberta and Ontario displayed the shortest wait for ultrasound (2 weeks), while Prince Edward Island and Manitoba exhibited the longest ultrasound waiting time (10 weeks).

The Fraser Institute concludes that “The promise of the Canadian health care system is not being realized. The only way to solve the system’s most curable disease – lengthy wait times that are consistently and significantly longer than physicians feel is clinically reasonable – is for substantial reform of the Canadian health care system.”

MP: The disparity in wait times for surgery and other procedures like MRIs among Canadian provinces seems somewhat puzzling - isn't socialized medicine supposed to provide "free" and uniform medical care to all Canadians, regardless of which province they live in? Perhaps the significant geographical disparity in Canadian health care is because market prices and profits are suppressed under socialized medicine, resulting in an inefficient and uneven allocation of scarce medical resources?

Grammar Citation

From today's front page WSJ article on McDonald's in Russia:

"During morning hours, McDonald's used to offer it's typical lunchtime fare."

Let a Thousand McDonald's Bloom in Russia

Excerpts from today's WSJ article "As Burgers Boom in Russia, McDonald's Touts Discipline":

Of the 118 countries where McDonald's does business, none can boast more activity than Russia. On average, each location serves about 850,000 diners annually -- more than twice the store traffic in McDonald's other markets.

MP: That's pretty amazing. Assuming 5 holidays, that's almost 2,400 meals per day per McDonald's, and 150 meals per hour if they're open 16 hours per day, and 2.5 meals every minute, and one meal served every 24 seconds!

Opening a single McDonald's here can require as many as 200 signatures from local officials. Real-estate prices have increased as much as tenfold over the past decade. And in Moscow and St. Petersburg, the big cities that are McDonald's main focus, low unemployment rates make it difficult to find qualified personnel.

The Pushkin Square location (pictured above), with its 900 seats, 26 cash registers, and free wireless Internet access, has long drawn more customers than any other McDonald's in the world.

When McDonald's opened its first Russian drive-throughs in 1996, some people got their food from the window, parked their cars and brought the meals inside to eat. Customers bought fewer drinks because their cars often didn't have cup holders. Now, Russians are more comfortable with drive-throughs.

As for the persistent crowds, many customers remain indifferent. "Our country's a country of lines," says Andrey Shatskiy, a 40-year-old soap-opera cinematographer, while eating lunch at the Pushkin Square restaurant. "We all got used to it."


Hayek's Influence on 2007 Nobel Economists

Yesterday Leonid Hurwicz, Eric Maskin and Roger Myerson won the Nobel Prize in Economic Science for their pioneering work in the field of "mechanism design." Strangely, some have used this occasion to disparage free-market economics. But the truth is the deserving recipients owe a direct debt to free-market thinkers who came before them.

While we celebrate the brilliance of Messrs. Hurwicz, Maskin and Myerson, we should also remember that Hayek's challenge provided their inspiration. Hayek concluded that the private-property rights that come with the rule of law, freedom of contract, and freedom of association is still the one mechanism design that mobilizes and utilizes the dispersed information in an economy. Furthermore, it does so in a way that tends to capture the gains from trade and innovation so that wealth is continually created and humanity is made better off.

~George Mason Economics Professor writing in today's Wall Street Journal

Update: WTO Rules Against US Cotton Subsidies

GENEVA - The World Trade Organization has found that the United States failed to scrap a series of illegal subsidies paid to American cotton growers, a ruling that could open the door to billions of dollars' in Brazilian trade sanctions against the U.S., trade officials said Monday.

The result is a major victory for Brazil's cotton industry and for West African countries that have claimed to have been harmed by the American payments.

The Brazilian government claims the U.S. retained its place as the world's second-largest cotton grower by paying out $12.5 billion in government subsidies to American farmers between August 1999 and July 2003.

Critics of U.S. cotton subsidies say they drive down prices, making it impossible for small farms to compete in international markets, and more difficult for poorer countries to develop their economies by selling their agricultural produce abroad.

Bottom Line: Not only are cotton subsidies an unjust, immoral and unfair transfer of wealth from the American taxpaying middle class to wealthy corporate agribusinesses in the U.S., they are also illegal according to WTO trade policy laws. Not to mention that they make desperately poor people in Africa even poorer.

See previous post on cotton subsidies here.

Monday, October 15, 2007

Thinking of a Foreign-Made Car? Better Buy Now

Drivers who have been thinking about buying a European luxury car (like the 2008 Jaguar XJ8 pictured above) may not want to wait too long.

As the dollar continues its long slide against the euro, prices of vehicles made by such auto companies as BMW AG, Porsche AG and Volkswagen AG's Audi unit have steadily crept upward ahead of U.S. and Japanese vehicles over the past few years. But while car makers have largely avoided substantial price increases so far, some analysts are warning that could change as soon as next year.

They "can't make money at the current exchange rates, so they either have to raise prices or start building them here," says David Healy, an analyst at financial-services firm Burnham Securities.

The dollar's weakness against the euro makes European products more expensive for consumers using dollars. If the trend continues -- and many analysts expect it will -- European car makers ultimately may have to raise prices on vehicles they build in Europe and sell in the U.S., shift production to the U.S. or other countries with lower costs, or simply live with lower profit margins.

So far, European car makers have been able to hedge against currency fluctuations by buying contracts that guarantee certain exchange rates. But many of these contracts are set to expire soon, analysts say. Hedging lessens the Europeans' need to quickly change prices with every currency fluctuation, but the strategy is of limited value during long periods of weakness for a particular currency.

Read more here in the WSJ article "Euro-Trashed? Why You May Want to Buy That BMW Now."

Static vs. Dynamic Tax Analysis: What's Up?

As the chart above from today's WSJ shows, the 2003 cut in the capital gains tax produced a doubling of tax receipts to $97 billion in 2005 from $47 billion in 2002. That's twice what Congress predicted. For 2006, Congress predicted less than $60 billion in capital gains tax revenues, and the actual revenue collected was more like $105 billion, which is about a 81% forecast error, pretty large even by government standards one would think.

This result seems typical - tax revenues collected after tax cuts are usually much higher than predicted by Congress. What is going on? Here are several possibilities:

1. Congress only knows how to use static tax analysis, and doesn't know how to account for changes in behavior in response to changes in tax rates.

2. Congress knows how to use dynamic tax analysis to account for changes in behavior, but static analysis is easier.

3. Congress understands that changes in tax rates will change behavior, but modeling or capturing or quantifying the changes in behavior is too difficult.

Which one is correct? I am not sure.

Quotes of the Day: Kennedy Was A Supply-Sider?

'The tax on capital gains directly affects investment decisions, the mobility and flow of risk capital . . . the ease or difficulty experienced by new ventures in obtaining capital, and thereby the strength and potential for growth in the economy."

~John F. Kennedy, 1963


All of the leading Democratic contenders for President have endorsed higher taxes on capital gains. Hillary Clinton is the "moderate" in that so far she'd merely raise the tax to 20% from the current 15% -- a 33% increase. John Edwards and Mr. Obama want to nearly double it, to 28%.

"Every generation or so, it seems that the American political class has to re-learn these tax policy lessons the hard way. What's especially striking about this year's Democratic economic proposals is how little any of them mention economic growth. Their message is "fairness," inequality and income redistribution. They seem to think taxes can be raised with ease, and no one's behavior or investment choices will change. Jack Kennedy knew better."

~Wall Street Journal editorial

Harvesting Cash: Cotton Farms & The Iron Triangle

What's wrong with cotton subsidies? Let's count the ways, using information from the WSJ editorial today "The Cotton Club":

1. Cotton subsidies primarily benefits large corporate farms and their wealthy owners. Of the $19.1 billion that was paid out from 1995-2005, the top 10% of cotton-subsidy recipients got more than 80%, or almost $15.5 billion. The bottom 80% of recipients had to make do with $1.4 billion.

2. Cotton subsidies are a brazen wealth transfer from the tax-paying middle class to fat cats, i.e. it's a form of corporate welfare, which creates a damaging, corporate dependency on the public's money.

3. Because cotton subsidies eliminate risk and reward production, U.S. cotton growers produce so much cotton that we export 70-80% of our cotton, which creates a glut on world markets and depresses world cotton prices.

4. Cotton subsidies in the U.S. have devastating effects on poor cotton farmers in Africa, because U.S. cotton farmers compete with them and dump so much subsidized cotton on the world market that it depresses world prices, and thereby depresses African farm income from cotton. It is estimated that some 10 million Africans (living on less than $1 per day) could see their incomes from growing cotton increase 8% to 20% if the U.S. reformed its subsidies, and world supplies and the world price of cotton returned to market levels.

5. Another price of cotton subsidies is damage to U.S. credibility in world trade talks. For example, U.S. farm policies have guaranteed cotton exporters the artificially high domestic price of their crop, and at the same time guaranteed that U.S. mills could buy cotton at the lower world price of cotton, creating a protected U.S. market and worsening the problem of too much U.S. cotton being dumped on world markets.

And what's good about cotton subsidies?

Not much, unless you're a) part of the "Cotton Club" that will receive $3.3 billion of taxpayers' money this year, b) a politician receiving "subsidies" or "kickbacks" (aka campaign contributions) from the Cotton Club, or c) a Department of Agriculture bureaucrat involved in the administration of the cotton subsidy program. In other words, if you're part of the "Iron Triangle," which is behind all farm subsidy programs (special interest farmers, politicians who cater to special interest farmers, and bureaucrats who administer the farmers' subsidies).

Sunday, October 14, 2007

More Grammar Nit-picking: Who vs. That

The grammar rule about the use of "who vs. that" seems pretty simple: Who refers to people. That refers to groups or things. Examples:

1. Hillary is the one who rescued the bird.
2. Bill is on the team that won first place.
3. She belongs to an organization that specializes in saving endangered species.

However, the improper use of "that" for "who" when referring to a person, seems to be increasing all the time. There are more than
700 Google News hits for the phrase "the person that," including the following examples, mostly of quotes within a news article:

"The person that made the call..."

"I loved her for the person that she was...."

"The person that donated the money..."

"The person that is causing the problems...."

In all those cases, I think it should be "The person who... "

Likewise, there are more than 1,000 Google News hits for the phrase "
the man that," such as "...the man that the left hates the most, President Bush..," which I suggest should be "The man who..."

Finally, here's an example of using both "that" and "who" in the same sentence! "The quarterback that lost fumbled and threw three interceptions. The quarterback who won, though, is the one who got pulled on Saturday."

Update: When you use "grammar check" in Microsoft Word for the sentence "She is the one that found the bird," it accepts the "incorrect" sentence as written, and of course it also accepts the correct sentence "She is the one who found the bird."


Finance is Top Major at Boston College

After years of being close, finance has finally overtaken communication as the most popular area of study at Boston College. This marks the first time in University history that a major outside of the College of Arts and Sciences has held the top spot.

While A&S is still the most popular school in terms of student enrollment, the Carroll School of Management's (pictured above) finance concentration boasts 855 enrolled students, a 25-year high. At this time last year, finance was the second most popular concentration, and it has been part of the top five for at least the past 10 years.

Futures Trading for Nobel Prize in Economics 2007

Front runner Robert Barro:

The Nobel Prize in Economics will be announced in the next few days. Based on futures trading on Intrade.com for the contract "Nobel Prize for Economics Winner 2007," Robert Barro is the front-runner, with a 22% chance of winning, followed by Romer (13.5%), Fama and Diamond (both a 11.5%), based on the last trades (see chart above, click to enlarge).

International Stock Market Returns, Local Currency

Chart above (click to enlarge) shows 5-year stock market returns from 50 countries in local currency, using the MSCI/Barra database for international stock markets. In a recent post, a similar chart showed the 5-year returns for the same countries in US dollars. Of course, because the dollar has fallen over the last 5-years by 19% vs. a broad currency index, and by 31% vs. a major currency index, the 5-year returns in USDs are greater for most countries than the 5-year returns in local currency.
An anonymous commenter pointed this out, and wrote "Citing incredible growth in nominal terms without referencing the weakness of the underlying currency might just be enough to win you a spot on 'Zimbabwe Tonight'." Here are some comments in response:

1. The original post and graph were based on a recent NY Times article about the 5-year returns for foreign stock markets (in USD) vs. the 5-year return on the S&P500 (in USD).

2. In USD terms, the U.S. market (13.58% 5-year return) ranks #50 of the international stocks markets available through MSCI.

3. In local currency terms, the U.S. stock market returns rank #45 out of 50 countries, still close to the bottom of the list.

4. Almost 25 countries had 5-year returns in local currency that were double the U.S. return of 13.58%, without any currency appreciation effects.

5. For U.S. investors, only USD returns really matter, so the first chart in the original post with returns in USD is more important than the chart above with returns in local currency.