As Figure 2 shows, the youth bulge has predictive power when it comes to projecting equity market returns. We broke down youth bulges in developed countries into two groups - the five countries with the highest youth bulge ratio and the five with the lowest. We then looked at equity market performance for these two groups in the ensuing five-year period. Countries with the lowest youth bulge levels outperform the countries with the highest levels in six out of eight discrete periods between 1970 and 2010. Of course, other equity market movers also played their part, but we wanted to isolate just the impact of the youth bulge. Based on this simple chart, in developed countries, everything else being equal, the equity market prospects for the US, UK, New Zealand, Australia and Ireland are less attractive than for Italy, Spain, Greece, Japan and Germany.

A declining youth bulge should lead to lower conflict and greater political stability There is a significant body of research that isolates the key drivers of conflict and war - youth bulges, weak political regimes, poor economic growth, income inequality, a history of prior conflicts and population size. The history of war is the history of young men in conflict. Over history, a number of revolutions and wars have been associated with rising youth bulges, among other factors - the civil war in Medieval Portugal (1384), the Spanish Conquistadors in Latin America were mainly second and third sons, a youth bulge spillover2, and the French Revolution of 1789. Student uprisings in the late 1960s have also been linked with the youth bulge.

Eoin Treacy's view Huge numbers of births are not the kind of statistics that simply slip by unnoticed. However, not all governments have had the forethought to plan for how such a massive increase in the population can be incorporated into the workforce. China has aggressively tackled this issue through large scale industrialisation, urbanisation and clearly defining a path for poor rural dwellers to improve their lot. India has been slower to develop its infrastructure but has successfully embarked on an aggressive growth trajectory to help expand the ranks of the middle class. Much of the Middle East, particularly countries with less oil and more people, have done a far from convincing job of providing for their young people.

China demonstrates that democracy is not a pre-condition for successful long-term planning in this regard. However democracies by their very nature are forced to provide for their voters. Administrations that do not cater for the needs of a large proportion of voters don't tend to last long. The recent surge in food prices, coupled with high unemployment and the perception of a massive wealth gap between a privileged few and an impoverished majority are all symptoms of the lack of planning and poor governance.

The Egyptian stock market remains closed and the Tunisian market closed again on Friday. The Dubai and Kuwaiti Indices both hit new lows this week. The Bahrain and Jordan markets remain in medium-term downtrends. The Saudi Arabia, Abu Dhabi and Oman markets have pulled back sharply and look likely to extend their base formations. Qatar, has been a regional leader, but has also pulled back sharply to test the 200-day MA and the upper side of the previous range. A clear upward dynamic will be required to indicate support in this area. (Also see Comment of the Day on January 11th).

Stock market weakness in countries such as Saudi Arabia and Abu Dhabi which have no government debt and plenty of cash to spend on social welfare programs suggests a wider pattern of deleveraging rather than a systemic threat to these countries at this stage. The heighted sense of anxiety is contributing to higher volatility. Just as with any crisis, this one will provide investment opportunities. We are probably not there yet.

Turkey has been marketed as the gateway to the Middle East. (Also see Comment of the Day on January 28th). The National 100 Index encountered resistance near 70,000 from October and pulled back to test the 200-day MA by late December. It broke below the MA two weeks ago and below the psychological 60,000 this week. Enough technical damage has now been sustained to indicate that a swift rally back to the highs is less likely. The Index will need to demonstrate evidence that it has found support and that demand is returning at progressively higher levels to indicate renewed bullish interest.

However, it should also be noted that Turkey has done a considerably better job of catering for its growing population. Standards of governance have been improving, fiscal discipline is fairly robust, economic growth has been impressive, the currency remains stable and rampant inflation has been brought under control. High oil prices are a headwind and the regional backdrop is not favourable, but Turkey could be one of the better regional recovery candidates once this crisis subsides.

In the meantime, oil continues to advance with West Texas Intermediate pushing back above $100 today and Brent crude closer to $117. As long as the Libyan crisis persists and oil prices remain firm, anxiety levels among investors are likely to remain high.