Fareed Zakaria GPS – CNN 05-31-15

Salient to Investors:

Fareed Zakaria said:

  • Iraq no longer exists. Many of the Arab states around Iraq are more anti-Shiite than they are anti-ISIS. ISIS gets support from the discontent of Sunnis who feel persecuted by the Shiite and Alawite governments of Iraq and Syria.
  • Britain that has lost its special relationship with the US for complicated reasons, including the increasing importance of Asia, and a Europe not in as much crisis as it was in the Cold War.

Iraqi pollster Munqith al-Dagher says over 90% of Iraqis in Sunni predominant areas regard ISIS as a terrorist organization but ISIS has capitalized on the discontent Sunnis felt with the central Iraqi government.

Mark Hertling at CNN said ISIS’s use of infiltration, assassination, and intimidation in big cities and smaller towns allows them to get a support structure where they will continue to flow their logistics which supports their operations.

Michael O’Hanlon at Brookings said the most fanatical guys win – and that is ISIS and not the Iraqi army.

The Pew Research Center reports:

  • Self-described Christians in the US declined from 78.4% of the population to 70.6% in just 7 years, while atheists and agnostics et al increased to 22.8% from 16.1%. The decline was across the board in age, race, education and geography. By 2050, the proportion of Christians in the US will have declined but remain the majority, while the number of non-religious Americans will rise to over 25%.
  • By 2050, Christians in developed countries, including the UK and Australia, will significantly decline to below majority status: in France and New Zealand, the religiously unaffiliated will become the largest sector.
  • Worldwide, the numbers of Christians and Muslims will keep up with population growth or better, while the non-religious share will decline due to religion thriving in developing countries, like sub-Saharan Africa, where birthrates are high.
  • In 2010, Christianity was the most popular religion followed by Islam. In 2050, Islam will almost equal Christianity.
  • In 2050, only 10% of Europe’s population will be Muslim.
  • Outside of the US and Europe, economic development has not contributed to a drop in religious faith.

The Week reports that only 18% of Catholics in Ireland attended mass every week in 2011, versus almost 90% in 1984.

Jan Eliasson at the UN said:

  • Global water use has risen at double the rate of population growth.
  • Competition for water will increase and lead to conflict, full-on wars over water. ISIS uses water as a weapon.
  • The problems over border rivers affecting two countries are growing, e.g. electricity generation versus irrigation – Egypt vs. Ethiopia, Tajikistan vs. Uzbekistan.
  • The challenge for clean water is bigger for developing countries than in the rural areas.
  • We have to seriously look at the price of water, which we have taken for granted.
  • 1,000 children under age 5 die every day because of lack of water and lack of sanitation.

Nathan Myhrvold at Intellectual Ventures said:

  • In 1908, an asteroid luckily hit in Siberia and devastated hundreds of square miles, and was bigger than the largest ever atomic explosion on earth. If it had hit in Europe, the US, or even in the middle of the ocean, the whole 20th century would have been shaped by the event.
  • In 2013, an asteroid hit in Chelyabinsk, Russia but luckily came in at only 18 degrees above the horizon and so exploded in the upper atmosphere, breaking a million windows and causing 1,500 injuries. At a steeper angle, it would have killed a million people.
  • We put very little resources into finding asteroids. If an asteroid is only a week away, then we can only party – if  small, we might be able to evacuate the area. If the asteroid is further out, we have, or could develop, the technology to meet and nudge it.

Watch the video at http://globalpublicsquare.blogs.cnn.com/category/gps-episodes/ or read the full transcript

at http://transcripts.cnn.com/TRANSCRIPTS/1505/31/fzgps.01.html

Fareed Zakaria GPS – CNN 05-24-15

Salient to Investors:

Fareed Zakaria said:

  • Britain, which created the world we live in, has become parochial and has essentially resigned as a global power: a tragedy for us all.
  • The Royal United Services Institute predicts that the British army could shrink to 50,000, smaller than at any point since the 1770s and equivalent to the size of the NYPD.
  • Britain’s Foreign Office budget, down by more than a quarter under PM Cameron, will fall further.
  • More than a third of Londoners were born outside the UK, and the city continues to seek investment from China, Russia, Arabia, and others.
  • The US military budget is becoming like that all American institutions, largely devoted to pensions and health care.
  • College in America costs more than 13 times what it did in 1978, far outpacing inflation and health care costs. Student loan debt has more than tripled in the past decade to over $1 trillion.
  • Germany and Denmark offer free college education. Germany mainly through high taxes and with universities that do not offer billion dollar student union buildings, huge sports facilities, or a lot of student housing.
  • The two paths to solving America’s education cost crisis are a) the government paying or reining in the costs, and b) the use of technology. Technology won’t be enough so state governments  must fund state universities, the real highways to the middle class in America.

David Miliband at the International Rescue Committee said:

  • As the Syria war continues, the choices get worse, and the dangers of inaction become clearer and clearer.
  • America may not want to have anything to do with ISIS et al, but they will end up having something to do with us. America cannot have the blessings of globalization with none of the burdens.
  • Without American leadership for a rules-based international system, we have a vacuum, and thus danger.
  • China is not trying to upend the international order and it worries about the meaning of America’s decline.

Gideon Rose at Foreign Affairs said:

  • The real problem in Iraq and Syria is not ISIS, but the lack of any kind of political order to oppose it.
  • The US has to show that it actually cares about maintaining and reviving the liberal international order.

Danielle Pletka at the American Enterprise Institute said:

  • The US left Iraq in 2011 with comity between the Shia and the Sunni.
  • The narrative of Sunni vs. Shiite, Persian empire vs. Ottoman empire, is enormously detrimental to US interests, so the more Saudi Arabia et al support the Sunnis, and Iran support the Shias, the more likely is conflict.
  • Ultimately ISIS, al Qaeda, Jabbath al-Nusra will come for us.
  • Even if we wanted to, and even if the Middle East was not on fire, the US no longer has the necessary resources to fully resource a pivot to Asia.
  • At the end of the day, the American electorate values security and genuineness in a candidate.
  • The US defense budget is a declining piece of a declining pie: 50% of which is spent on personnel. The US does not have the carriers, the attack ships, the refueling capability, the new technology to be in Asia in the way that we need to, or to contend in the Middle East. 

Ian Bremmer at Eurasia Group said:

  • There is a huge generational divide in America over its role as a global policeman, with the younger you get, the more Americans want to leave things alone.
  • Defeating ISIS with no boots on the ground does not stand.
  • ISIS is a much greater threat in the region and to Europe than the United States – America has the energy production now.
  • China, not the US, is the one country in the world with a global strategy, creating institutions like the BRICS Bank, the Asian Infrastructure Bank, and spending over a trillion dollars on infrastructure and equities to align other countries economically towards China over the long-term.
  • With 37% of the world’s defense budget, the US is capable of pivoting to Asia, but it requires US leaders that engage in consistency, and a president who believes that strategy matters and is a top priority.

Jeff Hawkins at Redwood Neuroscience Institute said:

  • Artificial Intelligence is not a real threat for the foreseeable future because machine intelligence is not about recreating humans, if that was even possible.
  • Machines will get smarter than humans, like IBM’s Deep Blue or Watson, but the idea of a runaway intelligence explosion is nonsense – brains take a long time to train.
  • There is nothing we are doing today, that is dangerous, that we could not undo.
  • It is impossible to answer now what will be the big benefit to the world of AI.

Charles Murray said:

  • Ordinary people cannot live their lives as they see fit anymore and live under a constant presumption that they need permission.
  • The number of stupid, pointless regulations has just grown astronomically. The Federal Code of Regulations is now 175,000 pages.
  • The only time drivers get stopped by police going 5 miles over the speed limit is when they are on a deserted stretch of highway. On an ordinary interstate, 70% of vehicles are going 6 miles over the speed limit.

Igarape says:

  • 10 countries account for 58% of the world’s homicides: Brazil, India, Nigeria, Mexico, the Democratic Republic of Congo, South Africa, Venezuela, Colombia, Pakistan and the US, the world’s deadliest Western democracy. Lebanon, the United Arab Emirates, Kuwait, Bahrain, Saudi Arabia Libya, Egypt, Tunisia, Algeria and Morocco, all have rates lower than that of the USA.
  • Countries with a very low homicide rate include Monaco, Liechtenstein, and Singapore.

Watch the video at http://globalpublicsquare.blogs.cnn.com/category/gps-episodes/ or read the full transcript

at http://transcripts.cnn.com/TRANSCRIPTS/1505/24/fzgps.01.html

Nassim Taleb: World is NOT more peaceful – Yahoo Finance 05-19-15

Salient to Investors:

Nassim Taleb said:

  • Over the last 2000 years, there is no no statistical evidence that violence has dropped, or that the frequency or magnitude of wars is declining.
  • People are lulled into a false sense of security because of the nature of fat tail events, which can take hundreds of years, and because they use mean naively and underestimate the role of randomness
  • Large events can take a long time, and between events is totally unpredictable and random.
  • Catastrophically fatal wars have fatter tails than those of financial crises. Black swan events are far more deleterious in cases of war than finance because a smaller number of events determine a larger share of the casualties.

Read the full article at http://finance.yahoo.com/news/nassim-taleb-on-the-black-swans-of-war-194841536.html

Click here to receive free and immediate email alerts of the latest forecasts.

Fareed Zakaria GPS – CNN 05-17-15

Salient to Investors:

Fareed Zakaria said:

  • Globalization and the information revolution is unstoppable. China cannot be stopped from growing and trading, and Africa from deepening its integration into the global system.
  • The average tariff in the developed world is 3%. China’s average tariff is under 10% versus 40% in 1985. It’s been too late to compete against low-wage countries for decades.
  • Mexico is a core component of the world’s most vibrant regional bloc, chiefly thanks to NAFTA.
  • In voter turnout. America ranks 31 out of 34 OECD developed countries according to PEW research, while only 65% of the voting population is registered.

Bill Gates said:

  • The US economy is very strong and GDP growth is better than it seems, because it does not capture massive improvements that take place, especially digital innovation, including services such as listening to music, finding videos.
  • The dollar is stronger than it should be which holds back export growth.
  • The middle-class lifestyle has immeasurably improved since 20 years ago – comparisons overstate the lack of progress. The ability to read books, find information, contact friends is not reflected in the equivalent income levels.
  • There is no direct connection between innovation and tax rates. The highest economic growth decade was the 1960s when income tax rates were 90 percent.
  • Corporate profit as a percent of US GDP is down to 2%.
  • Water shortage is about the cost of energy.  Desalination is very expensive and energy intense and so would benefit from any breakthroughs in energy.
  • Solar is still not competitive with natural gas, electricity production. We will only be able to convert the energy system to a zero CO2 system through big innovation in storage and reducing costs. Middle-income countries won’t pay a huge premium for their energy.

Watch the video at http://globalpublicsquare.blogs.cnn.com/category/gps-episodes/ or read the full transcript


Fareed Zakaria GPS – CNN 05-11-15

Salient to Investors:

Fareed Zakaria said:

  • There is increasing evidence that the military backbone of ISIS is made up not with Islamic Zealots but high-ranking officers from Saddam Hussein’s army.
  • ISIS recruits primarily because of the rage and rebellion of the Sunnis of Iraq and Syria. Sunni dominated areas will remain in turmoil and ISIS will be able to capitalize that.
  • The allure of ISIS, like other radical Islamic groups, fades under medieval barbarous governing and ever-increasing repression.
  • ISIS hopes the US will come to the Middle East to fight them on their terrain.
  • ISIS’ gruesome videos work on alienated young men who seek revenge, glory and gore.

Jurgen Todenhofer

  • ISIS people are completely brainwashed.
  • ISIS wants to provoke the US into sending grounds troops – their dream is the ultimate fight against Americans.

Thomas Friedman  at The New York Times said ISIS’ value proposition appeals to young males who never held a job, power, or a girl’s hand by offering them a wife, a salary, and power over others.

Watch the video at http://globalpublicsquare.blogs.cnn.com/category/gps-episodes/ or read the full transcript

at http://www.cnn.com/TRANSCRIPTS/1505/11/fzgps.01.html

Fareed Zakaria GPS – CNN 05-03-15

Salient to Investors:

Fareed Zakaria said:

  • The US justice system is a rubber stamp for the prosecution due to America overreacting to the crime wave of the 1970s and enacting bad legislation.
  • The vast prison industrial complex lobbies aggressively, which means more arrests, lockups, and prisons.

Conrad Black says:

  • The US has 25% of the world’s prisoners but only 5% of the global population.
  • Because of the plea bargain, US prosecutors win 95% of their cases, 90% without ever having to go to trial: vs. a conviction rate of 60% in Canada and 50% in Britain.
  • Judge Jed Rackoff says the US criminal justice system bears little relationship to what the founding fathers contemplated, to what movies/tv portrays, and to what the average American believes.

Thomas Erdbrink at The New York Times said:

  • Iran’s hardliners are unlike the hardliners in the West and take their cue from Ayatollah Ali- Khamenei, the great architect behind the nuclear talks.
  • Ayatollah Khamenei is very well aware of the wish of his people for sanctions to be lifted.
  • Rouhani and Zarif’s limited power is demonstrated by their inability to get Jason Rezaian released.

The Global Burden of Disease Study found:

  • In 2013, more people died from drowning than from natural disasters, more from road injuries than from malaria, twice from suicide than from breast cancer, and nearly as many from falls as from leukemia and prostate cancer combined.
  • UAE, Saudi Arabia, and Oman had very high injury road injury death rates – Oman twice the global average vs. Sweden with a quarter of the global average.
  • Since 1990, India and China accounted for half of all global suicides; a rising number in India, a falling number in China.
  • US maternal mortality rates are rising and are much higher than in other developed countries.
  • In 2010, Rwanda’s biggest risk factor for premature death and disability was indoor air pollution from cooking.


Blaine Harden said:

  • The Kim family dynasty in North Korea survived its creator – unlike every other totalitarian system – because its family system institutionalized Stalinist tools of control.
  • Kim Jong-un is very rational, very cunning – like his father and grandfather – and good at purging and eliminating challengers. He projects an image of being wild to inhibit challengers.
  • North Korea is exactly where it was 15 years ago, with no indication that the family’s rule is in any imminent danger.

Robert Putnam said:

  • The unbelievable contrast between rich and poor US kids is new and nationwide, and a result of the growing wealth inequality and segregation along class lines.
  • There is growing gap between classes in terms of how much time their parents spend reading to them, a growing and large gap between how much money parents spend for summer camp, piano lessons etc – 7 times as much for the average rich kid vs. the average poor kid.
  • Gaps in quality of schooling, church attendance are growing. Social mobility is low, as seen in getting the college degree with the necessary credentials.
  • Kids with high-test scores and low parental income are less likely to graduate from college than rich kids with lower scores.
  • Universal early childhood education works, and especially so for poor kids.
  • Charging for extracurricular activities – which have a payoff with employers – has resulted in poor kids dropping band and chorus and football, etc.

Watch the video at http://globalpublicsquare.blogs.cnn.com/category/gps-episodes/ or read the full transcript

at http://www.cnn.com/TRANSCRIPTS/1505/03/fzgps.01.html