German Billionaires: Data Reconciliation

We  looked at the billionaire's lists available from Forbes and MM (Manager Magazin behind paywall, the 2010 list is available in Wikipedia) and compared the entries. To convert the numbers in Manager Magazin we used a exchange rate of EURUSD = 1.30.

Most strikingly the Forbes list is much smaller (55 entries with a total of USD 251.3 billion) than the MM list (156 entries with a total of 482.4 billion)

The differences in more detail are as follows:

• Five entries with a total wealth of USD 12.1 billion (according to Forbes) are not recorded in the MM billionaire list:
• Three entries (Schoeller, von Opel, Thurn und Taxis) appear in MM but significantly below the USD 1 billion threshold
• Ludwig Merckle is recorded with with USD 5.3 billion in Forbes, while there is significant valuation uncertainty after the near collapse of the group in 2008/2009, the group has successfully deleveraged und is probably worth above USD 1 billion
• Finally Vladimir Iorich (according to Forbes Russian born, German nationality and Swiss residence) is neither recorded by MM nor by the Bilanz list of billionaires resident in Switzerland)
• The Herz family is recorded with five entries in Forbes (Michael, Wolfgang, Günter, Daniela, Ingeburg), while MM only has the two family entries (one for Günter and Daniela and another one for Ingeburg and her children)
• 109 entries with a total wealth of USD 248.6 billion (according to MM) are not recorded in the Forbes list:
• Two entries with a net worth of more than USD 10 billion (Dieter Schwarz with Lidl and Kaufland, Reimann family with Reckitt Benckiser and Coty)
• Six entries with a net worth between USD 5 and 10 billion (Oetker family with Oetker Group, Braun family with B. Braun Melsungen, Jacobs family with Barry Callebaut and Adecco, Knauf family with Knauf Gips, Peter Thiel with early investments in Paypal, Facebook, Zynga and Linkedin, Liebherr family with Liebherr Group)
• 32 entries with a net worth between USD 2 and 5 billion
• 69 entries with a net worth netween USD 1 and 2 billion
• Finally 47 names are recorded on both lists (Forbes and MM) with a total wealth of USD 233.8 billion according to MM and USD 239.2 billion according to Forbes. Despite total wealth for these entries matching nicely, for individual records the differences are more significant as shown in the graph below:

Obviously putting together billionaire lists is a difficult tasks especially when it comes to valuation of private companies. Nevertheless the overall differences are quite striking. When German billionaires are recorded at 156 instead of 55, the number of German billionaires exceeds those of China or Russia and its per capita number increases from 6.4 to 18.3 (exceeding the US level of 13.2) billionaires per 10 million population.

In a future post we will look the billionaires resident in Switzerland, where Bilanz has 131 entries (USDCHF exchange rate 0.95) compared to Forbes with only nine entries. Obviously one major source of differences for this list can be easily explained in terms of Forbes' nationality criteria versus Bilanz residency criteria.

90-Year Precipitation and Temperature Data for Santiago de Chile (Quinta Normal Measuring Station)

We have looked at the meteorological/climatological yearbooks (Anuarios Meteorologicos 1920-1996/Anuario Climatologico 1997-2010) available for the period of 1920 to 2010 at the website of the Chilean Metearological Services (Dirección Meteorological de Chile). The data is unfortunately only available in pdf format, so we had to get through each report and retrieve the data manually. The datapoints for 1930 and 1962 were omitted as for the former, the 1931 reports was posted and for the latter data was not available for the Quinta Normal measuring station (we pondered whether to replace with Cerillos measuring station for 1962).

The following shows the time series for precipitation and temperature:

 

The correlation matrix looks as follows. No surprises: temperature is correlated with AMO annd precipitacion with ENSO.

The temperature in Santiago (Quinta Normal) and AMO track each other quite closely. The increase in temperature was roughly 0.008 °C per year during the observation time.

Correlation between precipitacion and ENSO is not so strong, but it is still visible from the following graph that high precipitation years typically go together with negative SOI values and vice versa. 2012 was a neutral year in terms of the ENSO cycle and a below average year in terms of precipitation.

Major Foreign Holders of US Treasury Securities

The US treasury produces a handy list of major foreign holders of US securities which can be found here. As  of September 30, 2012 the total was USD 5.5 trillion up from USD 5.0 trillon on December 31, 2012.

The distribution between the major foreign holders is shown in the following graph (total USD 5.5 trillion):

The countries fall within one or more of the following categories:

• financial centers
• strong export nations
• participant in competitive quantitative easing and currency devaluation

When looking at the change for the first three quarters in 2012 against the absolute value the following picture emerges (Asian countries in green and Latin American countries in yellow).

The increase of Switzerland and Japan are notable while China and the Oil Exporters remained at a stable level.

Voter Turnout Chile 1870 to 2012

The recent municipal election in Chile, saw a dramatically reduced voter turnout. This was mostly triggered by a change from compulsory to voluntary voting.

The following post briefly addresses the history of Chilean voter turnout from 1870 to present (2012). The period from 1870 to 1973 has been covered by Patricio Navia in a paper in the Revista de Ciencia Política (Journal of Political Science) from which the following table is extracted. The data is actually extracted from two books, namely:

• Meller, Patricio. 1996. Un Siglo de Economía Política Chilena. 1980-1990. Santiago: Andrés Bello.
• Cruz-Coke, Eduardo. 1984. Historia electoral de Chile, 1925-1973. Santiago: Editorial Jurídica de Chile.

The period from 1988 to 2001 is covered in a second table basing itself on the INE (for Population data) and two government sites covering the current and previous (since 1989) elections.

We have completed the data from 2001 to 2012. We added the population data back to 1988 and the voting age population data back to 1992 using INE's population projection. For the voting age population we took all the 20+ age cohorts and 40% of the 15-19 age cohort (rounded to values of 50'000). Note that the 2012 population data point (17.402 million) is significantly higher than the census data (16.572 million, see our previous post on the subject) and the 2012 voting age population data point (12.750 million) is significantly lower than the electoral registry data (13.404 million).

The census data and the electoral registry are just horribly inconsistent, as shown is the following side by side table (note that the age cohorts for census data have been extrapolated from the total using the ratio of 0.7333 in terms of voting age population to total population as observed in the INE projection data, for the electoral registry the total population has been extrapolated using the same ratio). Given that some persons should appear in the census, but not in the electoral registry (foreigners with less than five years of residence, prisoners etc), the data of either the census or the electoral registry (or most likely both) seems indeed quite flawed.

The voter turnout (voters as a percentage of voting age population) can be graphically summarized as follows:

Copper, Gold and Silver Price Changes after Quantitative Easing Announcements

Following a post of ZeroHedge ("Spot the Odd One Out") we were curious to see how copper price reacted to the various QE announcements in the last couple of years. The complement the picture we also looked at gold and silver.

Price data we have downlaoded from Wikiposit (front contracts): Copper, Gold and Silver.

According to our count we have five FOMC announcement with QE characteristics:

1. November 25, 2008
2. March 18, 2009
3. November 3, 2010
4. September 13, 2012
5. December 12, 2012

In order to capture the entire price change due to the announcement we have looking at the closing prices at the day before the announcement (t-1) and after the announcement (t+1) and obtained the following results:

Data is here.

Update on Analysis Program

We have now had the pleasure to blog for one full year and would like to recapitulate our most successful posts in the three categories Copper, Chile and General Interest:

Copper
3. Relationship between Copper Price and Copper Production / Consumption
4. Copper Substitution by Aluminium
6. Top Copper Producing Countries
9. Copper Price Forecasting
10. Relationship between Copper and Chilean Peso Series (1 of 3) (2 of 3) (3 of 3)
12. Peak Copper
        Copper Volume Forecasting
        Relative Conductivity of Ag, Al, Au and Cu
        Copper to Aluminium Price Ratio
        Copper Use in Energy Generation
        Relationship between Copper Price Change and S&P 500 Total Return
        Copper Inventories with Producers

Chile:
7. Voter Turnout Chile 1870 to 2012
10. Relationship between Copper and Chilean Peso Series (1 of 3) (2 of 3) (3 of 3)
        Chile's Export Destination and Products
        Chile's Population (2012 Census)

General Interest:
1. World Population, GDP and GDP per Capita Growth 1820-2020
2. GDP per Capita Time Series for Spanish Speaking Countries
5. Peak Lithium
8. GDP Per Capita Time Series 1820-2008 (Western Europe)
11. Luxury Car Ownership per Capita Series (1 of 2) (2 of 2)
        World Population Data 1820-2008
        Earliest National Day Celebration Events

For 2013 we plan to keep the number of monthly posts at two, more or less equally distributed between the three topics of Copper, Chile and General Interest. We are also happy to include topics suggested by our readers (please use comments).

For the more successful posts and where appropriate we will do updates including the data which will have become available in the course of 2013. We will also try to address the questions which remained unanswered from our initial analysis program:

Have copper prices actually been a good indicator of turning points in the global economy? Do do so we will assess historical time series of world GDP (possibly also US, China and Chile), copper production volume and copper price. We will also look at the question whether copper prices are early, concurrent and lagging indicators and address the question whether the relationship (provided we find one) has changed over time.

What developments will challenge or strengthen the predictive power of copper prices? We name just a few which we aim to discuss in much more detail:

• Substitution of copper usage (we have heard about Dean Lumber and Dr. Aluminium)

• Monetization and off exchange warehouse storage, i.e. dark inventory (for wealth preservation and finance / securitization purposes)

• Increasing recycling rates (copper doesn't degrade and the copper reservoir is significant)

• Peak copper (lower production and lower grades) compensated by increased copper usage

• New uses of copper (antibacterial, renewable energy)

• More efficient design specifications lowering copper content

Copper Inventories with Producers

For the last two years the off-exchange copper inventory in China has been an important item when evaluating the copper market. While the anecdotal evidence has been strong, it has proven extremely difficult to come up with meaningful hard data. Nevertheless, a number of blogs particularly FT Alphaville have provided significant insight:

• China’s literally ground-breaking copper inventories (August 14, 2012)
• China is being buried alive in copper (April 26, 2012)
• Let’s count the copper with dust on it (May 31, 2011)
• China’s bonded-warehouse copper mystery (December 21, 2010)

We would like to add one additional piece to the puzzle by looking at producers inventory, particularly Codelco, the largest copper producer worldwide. While Codelco is not a publicly listed company, commendably it makes its quarterly reports reports available in the public domain.

We went through the the financial reports and focused on two metrics: inventory and revenues. We understand that inventory is broader than finished products. Nevertheless the ratio between inventory and revenues (inventory expressed in months of production) is very revealing:

The last data point is for the quarter ending on September 30, 2012. We view it to be quite interesting that the two previous episodes with the inventory exceeding 2 months of production were (i) in 2003 with copper prices below USD 2'000 per ton and (ii) in early 2009 with copper prices falling below USD 4'000. At the moment the (relatively) high inventory levels have not resulted in any price reaction.

We would also like to point out to some interesting movement in copper data as jsut published in the FT (Chinese copper data’s warning signal).

Chinese copper data have just taken a worrying turn for the worse. The country’s imports of the red metal tumbled 22 per cent in October to their lowest in more than a year. At the same time, stocks of the metal have risen to a record high: in October alone, inventories at Shanghai exchange and bonded warehouses collectively rose by about 135,000 tonnes, and are now not far off 1m tonnes, most traders believe. Put those two facts together, and the Chinese copper market appears to be flashing a warning signal. Indeed, back-of-the-envelope calculations suggest a month-on-month drop of almost 20 per cent in Chinese apparent copper demand in October.

Chile's Population (2012 Census)

The preliminary results of the 2012 Chilean census were recently covered in an Economist article: "Chile's economic statistics".

“Casengate”, as it has become known, is not the only recent statistical anomaly in Chile. Preliminary findings from this year’s census found only 16.6m Chileans. That was surprising since the projection by the National Statistics Institute (INE) from the previous census in 2002 was 17.4m. The new number seemed to confirm worries that this year’s census was poorly conducted. But it allowed Felipe Larraín, the finance minister, to point out wryly that the country’s income per head, at purchasing power parity, is around $19,000—a handy upward leap from $17,222 last year.

This lead to an response by one of Chile's leading economist, Dr. Klaus Schmidt-Hebbel from the Catholic University of Chile:

Furthermore, the 2012 census showed that Chile’s population fell well below the joint UN and government projection, and not, as you said, only below the projection provided by the National Statistics Institute. You infer that “the new number seems to confirm that this year’s census was poorly conducted.” In other words, you are saying that if reality differs from a projection based on ten-year- old data then reality must be wrong. Nor did you mention that the 2012 census was taken over a three-month period in order to survey a larger proportion of Chile’s population, whereas previous censuses were taken on one day. As a result the 2012 census had the largest coverage in Chilean history: 98.34% of households.

Let's look at the data. The following is an extract from the aforementioned preliminary results, which coincides with the 16.6 million mentioned by the Economist:

Looking at the INE's vital statistics report from 2010, the numbers are as follows (especially note the footnote 1: "the census omission in 1960, 70 y 82 was 4,3%, 6,6% y 1,5%, census 1992 1,1% and for the census 2002 3,8%"). Unfortunately, it is not entirely clear whether the data for the census years is before or after correction for census omission.

The 2010 vital statistics shows a strange anomaly with regard to the population growth which turns negative for the census years and then considerably above trend for the subsequent years (this assumes that omission have been incorporated in the above data set).

Unfortunately, the INE has a third data set, namely it's population projection based in the 2001 census. This looks as follows:

This leads to the following three (four) series of population data, which have been disseminated by the INE.

I started writing this post believing that the the difference between the preliminary census results and the population projection and vital statistics could be pretty much explained by an omission rate in line with the previous census. Now, I'm struggling to understand what is going on.

Demographic projections are pretty stable. In Chile's case it would mean the projection was more than 800'000 higher than the census results (or approximately 5%), almost 100'000 on an annual basis. Of the following possible explanations, I only view the last one as plausible:

• birth's are over-reported by 100'000 birth a year (approx. 150'000 instead of 250'000)
• death are under-reported by 100'000 birth a year (approx. 200'000 instead of 100'000)
• net emigration is 100'000 a year
• census omission rate continues do be in the order of 5%

Relationship between Cooper Price Change and S&P 500 Total Return

Today we would like to address whether any relationship between copper price and stock market returns can be observed. Both are often interpreted as leading indicators of economic health.

For the cooper price data, we have relied as usual on the USGS data (which we expanded back to 1850 also from USGS). For the S&P 500 data we have used Robert Shiller's data (Yale) going back to 1871. For the calculation of total return we took the dividends plus index valuation for any annual period.

Overall the picture is rather disappointing in the sense that there is really no dependency structure between the two variables as can also be seen in the graphic below:

A left tail dependency might be suspected visually (especially the 1931 data point with -37% copper price change and -40% S&P 500 total return), but corresponding statistical tests don't confirm such relationship.

Obviously the hypothesis of the high co-dependency between copper price changers and stock market return dates back to the Great Depression, where there correlation for the time period 1925 to 1935 was 65%.

However, in the recent episode surrounding the Great Recession, this co-dependency was much lower with a correlation coefficient of 31%.

In a future post we will look at monthly time series to better evaluate lagging behavior (for above episodes, it seems that S&P 500 was somehow leading copper price).

Chile's Export Destinations and Products

Based on data from Chile's national costums service and export promotion agency (ProChile), we put together the following table of countries ranked by their exports for the first three quarters (January to September 2012) with the following data points:

• country (only 25 largest export destinations)
• export share (of January to September 2012 total)
• change relative to same period in 2011
• main export product

Some observations:

• the nine largest export market all suffered a decrease in line with the overall decrease of 7.7% (not shown on above table)
• largest export market is China by a wide margin followed by USA and Japan
• significant increases in exports to India, Australia and Switzerland
• significant decreases in exports to Netherlands, Italy, Mexico, Canada, France and Germany
• stable exports to Spain (where a significant decrease might have been expected)

As expected, copper is the principal export product for most markets. The following export categories are exceptions to the rule:

• Services for Peru and Argentina
• Gold for Switzerland
• Fruit for Colombia and Ecuador
• Wine for UK