Fareed Zakaria GPS – CNN 06-14-15

Salient to Investors:

Fareed Zakaria said:

  • The cold war between Russia and the West over Ukraine is worsening.
  • Saudi Arabia will not build a nuclear weapon whatever happens with Iran’s nuclear program because it cannot – oil is 44 % and manufacturing less than 10% of GDP. Saudi Arabia could not openly buy a nuclear bomb due to Western retaliation and interception. Pakistan is unlikely to sell nuclear bombs to Saudi Arabia for fear of jeopardizing its own future.
  • Saudi Arabia’s education system is backward and dysfunctional: ranks 73rd in math and science education v. Iran at 44th. Karen Elliott House says 1 of every 3 people in Saudi Arabia is a foreigner, 2 of 3 has a decent job, and 9 of 10 with private sector jobs are non-Saudi.
  • Saudi Arabia is no danger of collapse due to strong finances and smart use of patronage, politics, religion and repression.
  • The lesson of the last 10 years in Iraq and Afghanistan is that fixing the military side but not the political side is a mistake – the minute the US leaves or relaxes, the whole thing crumbles.
  • The UN estimates that the average woman needs 2.1 children to maintain the population of a developed country. Every EU country is below the 2.1 level.
  • Europe’s over-65s will increase to more than 25% and Japan’s to more than 33% of the population by 2050. Pew predicts double-digit percentage population drops for Greece, Portugal and Germany by 2050. France’s fertility rate is one of the best in Europe.
  • Pew predicts America’s population will grow by 27 percent from 2010 to 2050 due to immigrants, who tend to have more children than native-born Americans.
  • Japan expects to lose over 2 million people in the next 5 years, lose 20% of its population by 2050, and decline to 43 million people by 2110.
  • The US will be demographically vibrant and growing for decades.
  • Magna Carta was nullified in less than 3 months by  Pope Innocent III  at the request of King John.

David Rothkopf at Foreign Policy and Foreignpolicy.com said:

  • The latest addition of US troops to Iraq is the illusion of action, and a mistake – insufficient because it does not call for trainers to go out into the field with troops, which works best.
  • The emergence of Kurdistan as an entity will continue and ultimately be a good thing.  Iran have seized a big chunk of Iraq, which it will not return, and which the US won’t get back.

Richard Haass at the Council on Foreign Relations said:

  • Agree that the lesson of the last 10 years in Iraq and Afghanistan is that if you fix the military problem without fixing the politics behind it, then the minute the US leaves or relaxes the whole thing crumbles.
  • The Middle East conflict will worsen. The move to send additional troops to Iraq won’t succeed because it does not change any of the politics of either Iraq or Syria. It is a baby step and a consensus decision from people who know the policy is not working but reject doing anything dramatic or decisive. Incremental adjustments tend not to work and will be overwhelmed by events beyond our control.
  • IS will never be content until it has power over Saudi Arabia because it controls the two holiest cities of Islam.

Michael Porter at Harvard Business School said:

  • The US has become by far the lowest energy cost nation – oil and natural gas add at least $430 billion to the economy every year, or the equivalent of a large state. Low energy costs are revitalizing the US petrochemical and plastics industries – in an advanced industrial country, energy plays a large part, labor not so much.
  • US industrial electricity prices are half those of our major trading partners, gas prices a third.
  • The oil industry is in denial about the earthquake and water problems, which are significant, but is getting more able to control most of the problems, and at low-cost.

Michael Specter at The New Yorker said:

  • Luanda, Angola is the world’s most expensive city for expats because of oil – Angola is the second biggest center of oil in Africa after Nigeria. Angola oligarchs make Russian oligarchs look like pikers. Angola is a beautiful country with rich agricultural possibilities, an incredible coastline, but with very bad roads and infrastructure. The Chinese are building everything.
  • Every major city in the developing world and our part of the world has a huge discrepancy between very rich and very poor people.

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

at http://transcripts.cnn.com/TRANSCRIPTS/1506/14/fzgps.01.html

Fareed Zakaria GPS – CNN 03-08-15

Salient to Investors:

Fareed Zakaria said:

  • Netanyahu’s alternative to the Iran nuclear deal is divorced from reality – his predictions about Iran’s nuclear threat have been wrong for 25 years.
  • Without a nuclear deal, Iran in 10 years will have 50,000 centrifuges, massive stocks of highly enriched uranium, new facilities, thousands of scientists and technicians, and a heavy water reactor that can produce plutonium.
  • Graham Allison at Harvard said the West’s maximal demands and rejection of potential agreements in negotiations with Iran in 2003 to 2005 led to Iran going from being 10 years away from producing a bomb to only months away today.
  • Expect more trouble in oil-rich countries, like crackdowns, repression and chaos, a la Venezuela.
  • Barclays says Venezuela’s debt is even riskier than Greek debt due to the nationalization of private industries and its inefficient exchange rate policy. IMF predicts that Venezuela’s economy will drop 7% in 2015.
  • In the most developed continent in the world, Europe, nationalism, conflict and even preparations for war are back in play.

Moises Naim at Carnegie Endowment for International Peace says:

  • Venezuela’s elections are rigged, its judiciary run by the government, and its national assembly operates with no checks or balances.
  • Parliamentary elections won’t happen in 2015 unless the ruling party knows it will win, so expect potential riots over food shortages.

Mark Falcoff at American Enterprise Institute predicts a civil war in Venezuela because the government is polarizing and is not embarrassed to use violence.

Anne-Marie Slaughter at New America said:

  • No Iran nuclear deal would be the worst outcome because it will be seen as having been blocked by the US at the behest of Israel and the coalition to keep sanctions on Iran will fall apart as other nations will lift their sanctions, the US will be stuck with its, and Iran will progress towards a nuclear weapon.
  • The Nemtsov demonstration shows that Putin is again facing significant demonstrations at home.

Joseph Nye at Harvard said:

  • The Middle East is going through the equivalent of Europe’s 30-year war, with religious divisions, state divisions, and non-state groups all battling: it takes 2 or 3 decades for these things to work themselves out. We cannot manage this situation any more than we could have managed the French Revolution after 1789.
  • Russia is in serious decline. It is a one-crop economy, with the terrible demographic problem of fewer and fewer Russians – the average Russian male dies at age 64. Russia has rampant corruption so any attempt to reform it is blocked.
  • Declining societies are often more dangerous than rising ones – Russia is more dangerous than China. Austria and Hungary were the only major powers that really wanted WW1 because they were both in decline.

Bret Stephens at the Wall Street Journal said:

  • There is no zero hour in diplomacy, so if the current Iran nuclear deal falls through, people will regroup and rethink and with oil at half of what it was when negotiations began, more economic pressure on Iran will make them rethink.
  • The Sunset provision telling the Iranians that in 10 years they are free and clear to build a nuclear weapon is a tremendous defect and shows that the West continues to move towards the Iranian position.
  • The nuclearization side of Iran’s program only stopped in 2003 because it found itself having to choose between a nuclear program and keeping its regime.
  • Iran is economically vulnerable but is winning everywhere it looks, throughout the Middle East, helped by an absence of American will to defend US interests in Syria, Yemen, and Iraq.
  • Many of Putin’s political opponents have met untimely deaths. When Russians start paying attention they will realize that their enemy is not in the West but in the Kremlin.

Peter Beinart at City University of New York said:

  • Whether oil prices stay low or stay strong, it would be impossible to return to the current sanctions’ coalition, build a much stronger one, or retard the progress Iran will make in the interim.
  • Iran has a very nasty, brutal, malevolent regime but it is not ISIS and is a country with the capacity to become a stable democracy – 20,000 Jews now live in Iran with 11 functioning synagogues. Most Americans believe that Iran and ISIS are dissimilar threats to the US.
  • Russia is a brutal regime.

Hans Rosling at Karolinska Institute said:

  • In the last 20 years, the percentage of people living in extreme poverty in the US and Sweden halved.
  • 80% of the world’s 1-yr-old kids have got measles vaccines.
  • The most important change in the world is the size of families, and follows child survival, education for girls, getting out of poverty.
  • Europe’s family size has gone from 6 in 1800 to below replacement level today and its population is now decreasing even despite immigration. Asia and America’s family sizes have fallen to 2, and half of India has 2 children or less. Africa is down to 4.5.
  • The UN predicts that by 2050, Europe’s population we be the same, America’s almost the same, and both Asia and Africa will increase 1 billion.
  • By 2100, the populations in America and Europe will be the same, there will no more increase in Asia, and two more in Africa. There will be twice as many people in Africa as in the Americas and Europe combined, and 80 percent of the world population will live in Asia and Africa.

Peter Diamandis and Steven Kotler said:

  • 1,000 years ago you had to be the king or the queen to affect a country or region, 100 years ago you had to be the industrialist or rubber baron, and today anyone can.
  • The 1.8 billion people online in 2010 will increase to potentially 7 billion in the next 5 years.
  • Twitter and apps democratize the power for anybody to make a living
  • $15 billion in 2015 in crowd funding will increase to $100 billion.
  • What matters in successful entrepreneurship is how big is the idea, because everything else is basically the same.
  • To become a billionaire, help a billion people.

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

at http://transcripts.cnn.com/TRANSCRIPTS/1503/08/fzgps.01.html

Fareed Zakaria GPS – CNN 02-01-15

Salient to Investors:

Fareed Zakaria said:

  • Negative foreign policy is about preventing bad things from happening, confronting dangers and dealing with bad guys. Positive foreign policy is about building new relationships, expanding markets and opportunities, strengthening alliances and values.
  • India will be the next global Goliath, though not as fast growing as China, because of its size. Indian society, increasingly pro-American, has long been attracted to America.
  • Mexico has gone from being anti-America 30 years ago to a country whose economy is closely linked to the US, a culture that has been Americanized in many respects, and whose politicians regard America as its natural partner.
  • Asia, Latin America, and Africa are moving in the right direction.

Watch the video at http://globalpublicsquare.blogs.cnn.com/category/gps-episodes/ or read the full transcript at http://transcripts.cnn.com/TRANSCRIPTS/1502/01/fzgps.01.html

Fareed Zakaria GPS – CNN 09-28-14

Salient to Investors:

Fareed Zakaria said:

  • Destroying ISIS will take collaboration with Iran (which has far more influence than the US with the Iraqi government) which would  have beneficial effects from Iraq to Syria to Afghanistan.
  • While air strikes are usually successful, what usually follows is messy.
  • The US cannot both destroy ISIS and fight al-Nusra’s  and Khorasan’s and not strengthen their principal rival, the Assad regime.
  • The US has more than 240 doctors per 100,000 people, Liberia has under 1 per 100,000 people.

Shimon Peres said:

  • We will see no more wars – they have been replaced by terrorism.
  • Globality put an end to racism – you cannot be global and racist, global and nationalistic. Globality does not hang on power but on goodwill.
  • Israel has to give the Palestinians a state.
  • When you are president you live in a golden cage, so if you like gold you stay, but if you like to fly like a bird, you leave the cage.

The CDC said that by January there could be 1.4 million cases of Ebola in just Liberia and Sierra Leone.

Chelsea Clinton at the Clinton Foundation said Uganda has had 5 Ebola outbreaks in the last 14 years, yet none became epidemics because of their strong health care system: likewise there is only one isolated case in Senegal and geographical containment in Nigeria.

Paul Farmer at Harvard Medical School said:

  • A good health care system goes from communities, community health workers, to clinics where the majority of health care can be delivered, and hospitals for the critically ill.
  • Most people with Ebola should not die.

Mark Whitaker wrote that it was American culture change over the last 3 decades that transformed race relations, and Bill Cosby and “The Cosby Show” were crucial to that change.

UNICEF says that 1 in 5 children live in poverty in America, worse than almost every other economically advanced country.

Watch the video at http://globalpublicsquare.blogs.cnn.com/category/gps-episodes/ or read the full transcript http://transcripts.cnn.com/TRANSCRIPTS/1409/28/fzgps.01.html

Ebola-hit nations may ‘face collapse’ – BBC News 09-24-14

Salient to Investors:

The International Crisis Group said:

  • The Ebola outbreak threatens to become a political crisis that could unravel years of effort to stabilize West Africa – the worst-hit countries face widespread chaos and, potentially, collapse.
  • Adding social breakdown to the epidemic would create a disaster perhaps impossible to manage.
  • West African governments have tried to manage these crises unilaterally, ignoring that their citizenry are deeply linked and interdependent.
  • Special attention is needed also for Guinea-Bissau and The Gambia, both near the epicentre and with inadequate health systems.
  • The international community needs also to provide more resources to the longer-term problems of strengthening governance and rebuilding health-care systems.
  • Ebola has exposed citizens’ lack of trust in their government in already fragile societies, and in the three worst-hit countries past civil conflicts could resurface.

The WHO warned that Ebola infections could treble to 20,000 by November if efforts to tackle the outbreak were not stepped up.

Afri-Dev.Info said Liberia has a population of 4.2m population with 51 doctors, 978 nurses and midwives, and 269 pharmacists, and Sierra Leone has a population of 6m population with 136 doctors, 1,017 nurses and midwives, and 114 pharmacists.

Read the full article at  http://www.bbc.com/news/world-africa-29349796

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Ebola Worst-Case Scenario Has More Than 500,000 Cases – Bloomberg 09-19-14

Salient to Investors:

  • The US Centers for Disease Control and Prevention said Ebola could spread to hundreds of thousands more people by the end of January, 2015,  with a worst-case scenario at 550,000 or more infections assuming no additional aid or intervention by governments and relief agencies.
  • UN envoy David Nabarro said the disease is advancing in an exponential fashion, and to get ahead of the outbreak our level of response needs to be 20 times greater.
  • The University of Tokyo and Arizona State University predicted last month that in a worst case scenario there would be as many as 277,124 new cases by the end of the year, while uncontrolled cross-border transmission could fuel a major epidemic to take off in new geographical areas.
  • Columbia University predicted 18,755 cases by October 26 under the status quo, but 49,129 if intervention and containment efforts degraded.
  • The UN said curbing the outbreak will require investments of $988 million over the next 6 months – 30% of which has come in so far.

Read the full article at  http://www.bloomberg.com/news/2014-09-19/ebola-worst-case-scenario-has-more-than-500-000-cases.html

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Ebola could wreck W Africa economies, warns World Bank – BBC News 09-17-14

Salient to Investors:

The World Bank said:

  • The economic impact of Ebola could grow eight-fold in Guinea, Liberia and Sierra Leone, but can be limited if it and public fear is contained by a fast global response.
  • If Ebola continues to spread, billions of dollars could be drained from West African countries by the end of 2015 – worst case a loss of 11.7% growth in Liberia, 2.3% growth in Guinea and 8.9% growth in Sierra Leone.
  • Aversion fear is having a bigger economic impact than the direct cost of Ebola.

Andrew Walker at BBC News said worst case Liberia’s economy would decline sharply in 2015, while Guinea and Sierra Leone would see sluggish growth. Walker said the worst case impacts on Sierra Leone and Liberia would be more severe than a normal global recession, but not as large as the most devastating conflicts which saw their economies contract by more than 20%.

The IMF said growth will slow in all three countries because of disruption in key sectors – a shortage of $300m in the next 6 to 9 months.

Read the full article at http://www.bbc.com/news/world-africa-29239604

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Booming African Lion Economies Gear Up to Emulate Asians – Bloomberg 08-04-14

Salient to Investors:

  • A two-decade surge in growth in Africa has raised the prospect of the “African lions” emulating the “Asian tiger” economies in the 21st century.
  • Africa’s has vast untapped resources, a young population and an expanding middle-class.  It also has rampant poverty and inequality, a rise in Islamist militant violence and appalling infrastructure.
  • Average life expectancy was 58 in 2011 vs. 37 in 1950. Primary school enrollment was 77% in 2011 versus 52% in 1990. The Mo Ibrahim Foundation said governance improved in 46 of 52 African countries in the 13 years through 2013.
  • Stuart Culverhouse at Exotix Partners sees nothing to stop Africa from benefiting from its  reforms and become a stronger, faster-growing, more inclusive region like Asia.
  • The IMF estimates sub-Saharan Africa’s economies will grow 5.4% in 2014 and 5.8% in 2015 versus 1.7% and 3% in the US, and 7.4% and 7.1% in China, respectively.
  • McKinsey said Nigeria has the potential to grow 7.1% a year through 2030, making it one of the world’s top 20 economies, with a consumer base exceeding the current populations of France and Germany.
  • Sim Tshabalala at Standard Bank said the rapidly emerging middle class in Africa is driving large-scale diversification of Africa’s economies, which offers immense opportunities to invest.
  • Michael Bloomberg said US companies are not familiar enough with Africa and losing out on opportunities for growth and job creation there and in America, whereas China is wisely diving into Africa head first.
  • Jacques Verreynne at NKC Independent Economists said hostility still constrains economic development in Africa, but the number of affected African countries has declined significantly over the past few decades and the overall economic prospects are positive. Verreyenne said African countries with a proven track record of prudent governance and the willingness to reform should continue to attract substantial amounts of foreign direct investment.
  • EY said Africa attracted 5.7% of global foreign direct investment projects in 2013 versus 3.6 percent a decade earlier.
  • The UN said African nations held the bottom 18 positions in its 2014 ranking of development in 187 nations, while 72% of the sub-Saharan African population live in or on the brink of poverty.
  • Renfrew Christie at the University of the Western Cape said the number of oil and gas-producing nations will rise to 45 within a decade from 22 currently, though oil has caused war throughout history.
  • Mark Rosenberg at Eurasia Group said rising Islamist militant violence in Africa does not pose the same threat to stability and growth as civil wars and violent coups, which are declining. Rosenberg said the longer-term risk to the ‘Africa Rising’ scenario is the potential for jobless growth.
  • Robert Schrire at the University of Cape Town sees progress varying in Africa, depending on security and governance challenges, and says Africa will always ‘promise’ but will never actually deliver. Schrire sees winners, like Botswana, and chronic failures, like Congo and Angola, and he is not optimistic about Nigeria or South Africa.

 

Read the full article at http://www.bloomberg.com/news/2014-08-03/booming-african-lion-economies-gear-up-to-emulate-asians.html

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Recession Warnings Found in Asset Price Declines: Cutting Research – Bloomberg 10-03-13

Salient to Investors:

John C. Bluedorn, Joerg Decressin and Marco E. Terrones at the IMF said:

  • Slumping asset prices show a recession is probably on its way for the G-7 economies as declining asset prices are significantly associated with the beginning of an economic contraction.
  • From 1970 to 2011, stocks tended to fall more frequently and further than property values, so were better recession-predictors.  The 1929 US stock market crash and subsequent depression, the Japanese deflation caused in part by the asset-price collapse at the start of the 1990s, and the recent financial crisis.
  • However, the US stock market drop of 1962 and the October 1987 crash did little to unsettle the economic recovery.
  • Oil prices were not useful predictors of shrinking output.

Maite Blazquez Cuesta and Santiago Budria at the Bank of Spain study found that earning 1 standard deviation less than others can be as harmful to well-being for men as a 30 percent permanent pay cut, but the effect was not statistically significant among women.

McKinsey & Co said:

  • There are 8,000 companies with revenues over $1 billion and another 7,000 will grow over the next 12 years, 70% of which will be created in the emerging markets. All will actively search the world when deciding where to open a HQ.
  • Half of the volatility in US GDP is traceable to the performance of 100 companies, whose global revenues total $57 trillion, the equivalent to 95 percent of global GDP. Revenues will reach $130 trillion by 2025.
  • Three times more large company headquarters will be in emerging regions by 2025 than in 2010 and 330 cities will host HQs of a large firm for the first time.

Peter Hooper, Torsten Slok and Matthew Luzzetti at Deutsche Bank said:

  • The Fed is set to raise interest rates more slowly than it has done in the past.
  • In the past 6 tightening cycles back to 1961, the Fed initially tends to raise its key rate before economic slack is fully reduced to zero.
  • The median gap between the jobless rate and that at which inflation is expected to accelerate at the time of the first increase has been 0.9 percent.
  • The slower the policy tightening, the greater the acceleration in inflation over the 5 years after interest rates returned to normal.

John Calverley at Standard Chartered said Ghana and Uganda topped Standard Chartered index of 31 advanced and emerging economies based on indicators including output per capita, years of education and life expectancy, followed by South Korea, Bangladesh and Singapore. They said the idea that GDP growth is not the only thing worth pursuing has become much more widely recognized.

The World Economic Forum said Switzerland, Finland and Singapore are the best of 122 countries at being able to develop healthy, educated and able workers. 8 of the top 10 were in Europe, including Germany at 6th and the UK at 8th. The US ranked 16th. China was the highest of the major emerging market economies at 43rd, ahead of Brazil at 57th and India at 78th.

Read the full article at  http://www.bloomberg.com/news/2013-10-03/recession-warnings-found-in-asset-price-falls-cutting-research.html

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Slumping asset prices show a recession is probably on its way.

That’s the case for the Group of Seven economies, according to a study by International Monetary Fund economists John C. Bluedorn, Joerg Decressin and Marco E. Terrones. It found that declining asset prices are “significantly” associated with the beginning of an economic contraction.

Stocks tend to fall more frequently and further than property values, so they are better recession-predictors, said the economists, who studied the period 1970 to 2011. Oil prices don’t seem to be useful predictors of shrinking output, they said.

They cited the 1929 U.S. stock market crash and subsequent depression, the Japanese deflation caused in part by the asset-price collapse at the start of the 1990s and the more recent financial crisis. At the same time, the U.S. stock market slide of 1962 did little to unsettle the economic recovery nor did the plunge of October 1987.

Siding with those who say asset prices can influence economic performance, the Washington-based IMF economists said extending their work to all advanced countries may help policy-makers assess the risks of a new recession both in their own countries as well as in their finance and trade partners.

* * *

Where men’s income stands relative to society is associated with mental well-being.

A Bank of Spain study published Oct. 1 found that for men, earning 1 standard deviation less than others can be as harmful to well-being as a 30 percent permanent pay cut. The effect was not statistically significant among women.

“Policies, practices and initiatives aimed at improving well-being among European citizens require a better understanding of individuals’ sensitivities to others’ income,” authors Maite Blazquez Cuesta and Santiago Budria said.

* * *

Emerging markets will create 70 percent of new companies with revenues over $1 billion by 2025 and all will actively search the world when deciding where to open headquarters.

That’s the projection of McKinsey & Co. which estimated in a report yesterday that there are now 8,000 such corporations and another 7,000 will grow over the next dozen years.

Such businesses have an outsized impact on their home economies — half of the volatility in U.S. gross domestic product is traceable to the performance of 100 companies, according to the report. Together, the companies report global revenues of about $57 trillion, the equivalent to 95 percent of global GDP. Revenues will reach $130 trillion by 2025.

The data were contained in a study of global business hubs, which estimated three times more large company headquarters will be in emerging regions by 2025 than in 2010 and 330 cities will host HQs of a large firm for the first time.

* * *

The Federal Reserve is set to raise interest rates more slowly than it has done in the past.

So say economists at Deutsche Bank AG led by former Federal Reserve official Peter Hooper. Their review of the central bank’s past six tightening cycles shows it initially tends to raise its key rate before economic slack is fully reduced to zero.

In the episodes studied, which date back to 1961, they looked at the gap between the prevailing jobless rate and that at which inflation is expected to accelerate. The median gap at the time of the first increase has been 0.9 percentage points, they said in a Sept. 27 report.

If the Fed follows its traditional path, it would begin to act when unemployment fell to 6.3 or 6.4 percent. Waiting until 6.1 percent would be consistent with the 2004 period of policy tightening. The Fed has said it won’t raise its benchmark rate as long as joblessness tops 6.5 percent. Unemployment declined to 7.3 percent in August as more Americans gave up looking for work.

The slower the policy tightening, the greater the acceleration in inflation over the five years after interest rates returned to normal, Hooper and his colleagues Torsten Slok and Matthew Luzzetti said.

* * *

Ghana and Uganda topped Standard Chartered Plc’s first attempt to monitor the pace of development.

An index from the bank was released in September based on indicators including output per capita, years of education and life expectancy.South KoreaBangladesh and Singapore rounded out the top five of 31 advanced and emerging economies studied.

“The idea that GDP growth is not the only thing worth pursuing is far from new, but it has become much more widely recognized,” said John Calverley, Standard Chartered’s head of macroeconomic research.

* * *

Switzerland, Finland and Singapore are the best countries at tapping the economic potential of their people, according to a new index by theWorld Economic Forum.

Attempting to grade global economies for the strength of their human capital, the Geneva-based institution measured 122 nations on their ability to develop healthy, educated and able workers.

Eight of the top ten were in Europe, including Germany at sixth and the U.K. at eighth. The U.S. ranked 16th. China was the highest of the major emerging market economies at 43rd, ahead of Brazil at 57th and India at 78th.

Barclays Joins UBS in Pursuit of African Millionaires – Bloomberg 08-02-13

Salient to Investors:

Barclays is joining Citigroup and UBS in targeting millionaire clients in Africa.

Cap Gemini and Royal Bank of Canada said the number of Africans with at least $1 million of investable assets climbed 9.9 percent to 140,000 in 2012, the fastest rate of increase outside North America. Cap Gemini said 42 percent of the millionaires in Africa and the Middle East are prioritizing wealth accumulation, a higher proportion than in North America, Europe or Asia.

Mark Mobius at Templeton Emerging Markets said it is a great time for private banking, wealth management and asset management in Africa.

UBS, the world’s biggest wealth manager, said in May it will expand its operations in Africa as economic growth rates boost demand. The industries contributing most to wealth creation on the continent include the resources, telecommunications and consumer industries, according to the Zurich-based bank.

The IMF said economic growth in sub-Saharan Africa will accelerate to 5.9 percent in 2014 from 5.1 percent in 2013, while Nigeria will grow 7.2 percent in 2013.

Thabo Khojane at Investec Asset Mgmt said pools of savings are being created across the continent in counties like Nigeria, Kenya and Ghana.

Patrice Rassou at Sanlam Investment Mgmt said local and international wealth managers seek to bolster earnings being squeezed by tougher regulatory requirements. Rassou said South African banks and global banks have been bad in general in the wealth management market – Barclays Africa has the product set to be a game changer.

Read the full article at  http://www.bloomberg.com/news/2013-08-01/barclays-joins-ubs-in-pursuit-of-millionaire-clients-in-africa.html

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