China and India lose their appeal for investors on inflation fears

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Fund managers are still super-bullish on Russia, betting that the energy boom has life yet. A net 62pc are overweight oil and gas shares. The most hated trio are travel and leisure (-66), banks (-62) and property (-60).

Karen Olney, Merrill’s European equity strategist, said oil is nearing its cycle peak. “Is the trade too crowded? Probably. As long as fundamentals remain strong, we retain our overweight stance,” she said.

“The burning question is when to sell oil companies and move back to banks.

“We resist the temptation. The time is nearer when inflation rolls over, towards the end of this year and certainly into 2009.”

A record number (net 29pc) are now underweight on European equities; many have switched into cash as they wait for the European Central Bank to inflict punishment – ever more likely after eurozone inflation reached an all-time high of 3.7pc in May.

The ECB’s chief economist, Jurgen Stark, said yesterday that the price spike was a “cause for alarm”.

Mr Bowers said Europe is now facing a triple whammy as the downturn in global export markets combines with a strong euro and a monetary squeeze.

“Eurozone retail sales have been worse than in the US on a year-on-year basis and eurozone GDP growth has also been worse,” he said. “If you look at Spain and Italy, and even France, they are very weak.

“The Fed has eased dramatically, but the ECB hasn’t eased at all. It intends to tighten regardless of the consequences on growth. This is what is eating away at confidence in Europe,” he said.

Merrill Lynch said fund managers were belatedly adapting to a global inflation shock that poses a serious danger to asset prices, and risks setting off “civil protest” in Argentina, Indonesia, South Africa and the Gulf states.

As the new story unfolds, America is coming back into favour, emerging as a sort of safe haven in a fast-changing world where trusted institutions command a premium. Investors are quietly rotating back into Wall Street – despite a chorus of pessimists. A net 23pc are overweight US equities, the highest since August 2001.

The long awaited “decoupling” has begun.

The United States looks like the winner after all.

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Public Safety and Public Spending: Forecasting America’s Prison Population, 2007-2011

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Slide 1: Public Safety, Public Spending: Forecasting America’s Prison Population, 2007-2011 Adam Gelb, Project Director Public Safety Performance Project The Pew Charitable Trusts, Pew Center on the States October 2, 2007

Slide 2: Where We’ve Been

Slide 3: Where We’ve Been – Costs Growth in State Corrections Costs $50,000,000,000 $45,000,000,000 $40,000,000,000 $35,000,000,000 $30,000,000,000 $25,000,000,000 $20,000,000,000 $15,000,000,000 $10,000,000,000 $5,000,000,000 $0 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 Source: Bureau of Justice Statistics

Slide 4: Where Are We Going? Report Objectives  To estimate the future size and cost of state and federal prison systems  To examine the reasons for projected growth  To highlight state efforts to control corrections spending  To outline the challenges ahead for state policy makers

Slide 5: Projection Formula 2011 State Prison Population = [2006 population x 0.453957294846] µ 2005 UCR ± 29384823 ÷ Census projection of 16-24 year-olds x .267 – .364SES¥ – [1/HS graduation rate x .8003] JUST KIDDING! – We called the states

Slide 6: What We Found – National

Slide 7: National

Slide 8: National

Slide 9: Estimating Future Prison Costs  Operating Costs: National average in 2005 dollars – $23,876 per inmate  Capital Costs: Midpoint estimate $65,000 per bed

Slide 10: What We Found – Costs New Prison Spending, 2007-2011 $16,000,000,000 $15,000,000,000 $14,000,000,000 $12,500,000,000 $12,000,000,000 $10,000,000,000 $8,000,000,000 $6,000,000,000 $4,000,000,000 $2,000,000,000 $0 Operating Costs Capital Costs

Slide 11: Regions

Slide 12: State Highlights

Slide 13: State Highlights 10 Lowest-Growth States  Delaware 0%  New York 0%  Connecticut 0%  Maryland 1%  Louisiana 4%  Wisconsin 5%  Tennessee 5%  Missouri 6%  Massachusetts 6%  Rhode Island 7%

Slide 14: Key Drivers and Trends  Population growth, esp. in West  Growing admissions (1980-1992)  Longer length of stay (1992- )  Probation and parole violators (60% of growth)  Women (57%) growing faster than men (34%)  Rising age (up from 31 to 34)  Methamphetamine cases  Mental health cases  Workforce recruitment and retention  Sex-offender laws will be felt in out-years

Slide 15: Tremendous State Variation

Slide 16: Tremendous State Variation Admissions x Length of Stay = Prison Population Admissions, Length of Stay Determined Largely by Policy Choices State Policy Choices = State Prison Population / Costs

Slide 17: CT –Targeted Reform  Problem  Identified technical violators as driver  Solution  Set goal of reducing TVs by 20%  Hired 96 new POs  Started 2 new supervision/service programs  Public awareness campaign  Result  Highest growth to flat  Crime drop parallel to national reduction

Slide 18: NC – Broad System Reform  Problem  Lack of truth, violent offenders serving short terms  Solution  Build prisons for violent/chronic offenders  Abolish discretionary parole release  Establish comprehensive guidelines  Create state/local partnership for low risk  Result  One of highest incarc. rates to middle of the pack  Crime fell in sync with national drop  Estimated $2 billion in savings over past 12 years

Slide 19: Exciting Time in Criminal Justice  Advances in science of behavior change  Cognitive-Behavioral Treatment  Motivational Interviewing  Contingency Management  Advances in supervision technology  Accurate, on site, rapid-result drug screens  GPS monitoring  Broad public support for alternatives  Trend toward Managing for Results  Budget pressure  Bipartisan reform efforts across the nation

Slide 20: Implications Central Question is Being Reframed OLD “How can we demonstrate that we’re tough on crime?” NEW “How can we deliver taxpayers the best return on their investment?”

Slide 21: Public Safety, Public Spending: Forecasting America’s Prison Population, 2007-2011 Adam Gelb, Project Director Public Safety Performance Project The Pew Charitable Trusts, Pew Center on the States October 2, 2007

What is the Price of Failure? A Comparative Analysis of Prevention and Delinquency in US Prisons

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Slide 1: What is the Price of Failure? A Comparative Analysis of Prevention and Delinquency Mary Magee Quinn and Jeffrey Poirier, American Institutes for Research National Center on Education, Disability, and Juvenile Justice (EDJJ)

Slide 2: Overview s The role of school-based prevention in meeting the needs of at-risk youth s The importance of ensuring at-risk youth are educated s The financial and social costs of not preventing juvenile/adult crime s The impact of the justice system on juvenile offenders and their families s The long-term benefits and savings of reduced delinquency

Slide 3: Why Prevention? s An 18 year old is five times more likely to be arrested for a property crime than a 35 year old s In 1997, 15-19 year olds comprised 7% of the overall population but 1 out 5 arrests for violent offenses and 1 out of 3 property crime arrests s Overall, teenagers are responsible for 20- 30% of all crime Source: National Bureau of Economic Research, 1999

Slide 4: Levels of Prevention Tertiary Secondary Primary

Slide 5: Primary Prevention s Strategies applied to intact groups or populations, such as a school-wide discipline plan used to help all students in a school meet behavioral and academic expectations s Focuses on avoiding the initial occurrence of a problem

Slide 6: Reading Programs s Youth in Correctional Facilities x Median age 15.5 years x 9th grade (placement) x 4th grade reading level (mean) x More than 1/3 read below 4th grade

Slide 7: Adult Literacy 40 35 30 25 Completely 20 Illiterate Functionally 15 Illiterate 10 5 0 General Incarcerated Population Adults

Slide 8: Reading Programs s Prison-based literacy programs are significantly more effective than boot camps or shock incarceration s The more education prisoners receives, the less likely they are to be re-arrested or re-imprisoned

Slide 9: Literacy s Quality reading programs can reduce recidivism by 20%. s Probationers had significantly lower re-arrest rates (35% vs. 46%) s Recipients of GED had significantly lower re-arrest rates (24% vs. 46%) s Inmates with 2 years of college (10% vs. 60%)

Slide 10: Education Level Findings from Texas study, 1994 60% 50% 40% Without degrees All Degrees 30% AA 20% BA 10% MA 0% Recidivism Rates (1990-1991)

Slide 11: Levels of Prevention Tertiary Secondary Primary

Slide 12: Secondary Prevention s Focus on preventing repeated occurrences of problem behavior through more targeted interventions s Efforts provide additional support when universal preventative efforts are not sufficient

Slide 13: Secondary Prevention s Example: students who have more than one disciplinary referral in a given month for fighting may be provided with special instruction in conflict resolution or social skills

Slide 14: High/Scope Preschool Programs s Benefits x fewer acts of misconduct x higher grade point averages x higher rates of employment x lower rates of welfare dependence

Slide 15: High/Scope Preschool Programs s Costs x $39,278 per child x $964 increased need for funds for secondary education programs s Savings x reduced need for special education x reduced crime rate x $6,495 lifetime tax payments

Slide 16: Tertiary Prevention s Most intensive level of support and intervention s Attempts to reduce the impact of a condition or problem on the individual’s ability to function in the least restrictive setting

Slide 17: Tertiary Prevention s Example: the needs of students identified as having an emotional/behavioral disability are addressed through special education services and behavior intervention plans so that they may benefit from the educational program s Includes outside agency support

Slide 18: Home Visit Programs s Costs x $2700/year from third trimester through age 2 x $6000/year for day care and early childhood education s Benefits x 11 serious crimes prevented per million dollars spent Source: RAND, 1996

Slide 19: Parent Training s Costs x $500/year per family for instruction and supplies x $2500/year per family for program management s Benefits x 157 serious crimes prevented per million dollars spent Source: RAND, 1996

Slide 20: High School Graduation s Adult Inmates in State Facilities x 70% have not completed high school x 46% have had some high school x 16.4 % have had no high school at all Source: U.S. Department of Justice, 1996

Slide 21: Graduation Incentives s Costs x $3130/year for 4 years for each youth s Benefits x 258 serious crimes prevented per million dollars spent on incentives Source: RAND, 1996

Slide 22: Delinquent Programs s Costs x $10,000/year per youth (conservative estimate) s Benefits x 72 serious crimes prevented per million dollars spent

Slide 23: Comparison of Number of Prevented Serious Crimes per Million Dollars 300 258 250 200 157 150 100 72 50 11 0 Home Visits Parent Training H.S. Graduation Incentives Delinquency Programs

Slide 24: Students with Disabilities  The arrest rate among high school dropouts with disabilities was 56%, compared with 16% among graduates, and 10% among those who “aged out” of school.  Among dropouts with serious emotional disturbances, the arrest rate was 73% three to five years after secondary school Source: SRI International, 1992

Slide 25: The Costs of Crime for Communities and Victims s Lost property and wages s Medical and psychological expenses s Decreased productivity s Pain and suffering s Decreased quality of life/societal well- being (e.g., fear of crime, changing lifestyle due to risk of victimization)

Slide 26: The Costs of Crime for Communities and Victims s Incarceration (prisons/correctional facilities) s Increased demand for criminal/civil justice services s Opportunity costs: since greater percentage of government expenditures must be dedicated to crime-related costs, fewer resources are available for education/other government services

Slide 27: Who incurs these costs? s Crime victims s Government agencies s Taxpayers s Society

Slide 28: Cost of Victimization s 23% of all U.S. households victimized s Crime victims lost $17.6 billion in direct costs in 1992 (includes losses from property theft/damage, cash losses, medical expenses, and amount of pay lost because of injury/activities related to the crime) s Crimes included: attempts and completed offenses of rape, robbery, assault, personal and household theft, burglary, and motor vehicle theft Source: U.S. Department of Justice, National Crime Victimization Survey, 1994

Slide 29: Expenditures for the Criminal and Civil Justice System s Total: $147 billion in 1999 (police protection, corrections, and judicial/legal activities) s 309% increase from 1982-1999 s Local government funded half of these expenses (note: local government funded 44% of education costs in 1999) Source: U.S. Department of Justice, 1999

Slide 30: Expenditures for the Criminal and Civil Justice System s States contributed another 39% s Criminal and civil justice expenditures comprised 7.7% of all state and local expenditures Source: U.S. Department of Justice, 1999

Slide 31: Costs of Juvenile Crime s A life of crime costs society $1.5-$1.8 million s Cost of juvenile crime: x Victim costs: $62,000-$250,000 x Criminal justice: $21,000-$84,000 3 Total: $83,000-$335,000 x For every 10 crimes committed, only one is caught x Chronic juvenile offenders are very likely to become involved in the adult system Source: Cohen, Journal of Quantitative Criminology, 1998

Slide 32: Costs of Dropping Out s In 1991, annual cost of providing for youth who fail to complete high school and their families: $76 billion s Lost wage productivity: $300,000 Source: Joint Economic Committee, 1991

Slide 33: Cost of Effective Prevention and Intervention Source: Washington State Institute for Public Policy, 2001 Program Net Cost Taxpayer Taxpayer Benefit-to- per Savings Savings Cost Ratio Participant and Victim Benefits Early Childhood $8,936 -$4,754 $6,972 $1.78 Education for Disadvantaged Youth Quantum $18,964 -$8,855 $16,428 $1.87 Opportunities Program Multidimensional $2,052 $21,836 $87,622 $43.70 Treatment Foster Care

Slide 34: The Costs of Crime for Juvenile Offenders s Separation and isolation s In correctional settings: x Negative behaviors are often reinforced x Higher rates of sexual victimization and suicide x For youth with cognitive disabilities, it is difficult to un-learn the prison experience x Lack of special education services and an absence of skill-based programming

Slide 35: The Costs of Crime for Juvenile Offenders s For youth who are sent to adult facilities, there are higher rates of re-offending and the number of serious crimes committed s More youth today are being referred to correctional settings for behaviors that are mental health related s Competing missions within the juvenile justice system (protection v. rehabilitation) s The juvenile court is not familiar with the impact of mental health/cognitive disabilities on behaviors

Slide 36: The Cost of Ignoring Families s Family involvement (surrogates, extended family, etc.) and stability are critical to the success of prevention and corrections programs s The family will be a part of the youth’s life long after the professionals leave s When parents do not have the skills/knowledge to advocate for their child’s learning/mental health needs, their children are more likely to drop out of school and become involved in the justice system

Slide 37: The Cost of Ignoring Families s Families are seen as the problem and not part of the solution, leading to increased reliance on foster care and costly, ineffective multiple placements s Families become distrustful of the systems that have failed their children often for many years s The rate of recidivism is impacted by the degree to which youthful offenders have a stable adult in their lives

Slide 38: Conclusion s Prevention/intervention programs for at-risk youth will not eliminate juvenile crime, but can reduce it and will bring net benefits to both society and the juvenile s Have a long-term vision when considering the costs of prevention programs s Consider the impact of incarceration on juvenile offenders and the role of families

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