Fareed Zakaria GPS – CNN 09-06-15

Salient to Investors:

Fareed Zakaria said:

  • ITER says there is enough hydrogen in the ocean to power humanity with fusion for millions of years, with zero carbon emissions. China is making super conducting magnet cables, the US is building ITER’s largest magnet, India is making the steel structure that will surround the magnets.
  • The moon landing mission spawned almost miraculous commercial applications: the integrated circuit, Fairchild Semiconductor alumni that founded Intel, GPS technology.
  • Battelle Memorial Institute said human genome sequencing from 1988 to 2010 benefited the economy by almost $800 billion.
  • Recent US funding for R&D has barely kept up with inflation. The National Science Foundation says the US share of global R&D has dropped from 37% in 2001 to 30%. China is on track to surpass the US share of global R&D in just a few years.

Charles Bolden at NASA said a multi-planet species can survive in perpetuity but a single planet species will die.

Stewart Williams at University of Louisville said:

  • We will be able to bioprint a human heart in a single day within 10 years.
  • We can now transform adult cells into other types of cells.
  • When the one major blood vessel in the heart fails, the patient often dies, so we are designing a new heart with 2 or 3 blood vessels for redundancy.

Larry Bonassar at Cornell estimates 3-D printed ears and other body parts could be used in human trials in less than 5 years.

Mark Henderson at ITER said you can get all of the hydrogen you need to power fusion from ocean water.

Michio Kaku said:

  • We have learned more about the brain in the last 15 years than in all of human history. We can photograph a thought and communicate it to a robot or computer. We can see desire, self-awareness and guilt as blood flows as registered by an MRI.
  • The human genome project was about 20,000 genes that governed the human body, whereas the brain has 100 billion neurons, each connected to 10,000 other neurons.
  • Eventually we will connect the human mind to a robot, possibly outliving our bodies.

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

or read the full transcript at http://transcripts.cnn.com/TRANSCRIPTS/1509/06/fzgps.01.html

Bankruptcies Starting To Pile Up In Coal Industry – OilPrice.com 07-21-15

Salient to Investors:

After decades of strong performance, coal producers are starting to fail faster than anyone expected. Walter Energy is filing for bankruptcy,  Alpha Natural Resources was delisted from the NYSE due to its low share price. Arch Coal implemented a 1-for-10 reverse stock split to avoid delisting.

Coal prices are down 70% from 2011 as the US shifts to natural gas for electric power, amid new regulations to reduce greenhouse gas emissions and protect nearby water streams. The window of exporting coal to energy hungry countries like China is quickly closing due to an international oversupply and China’s less than expected demand. China’s economic growth is slowing, and it is implementing air pollution measures and propping up domestic producers.

SNL Financial estimates the total market cap of the publicly listed coal industry in the US is down more than 80% since April 2011 to under $9.30 billion, of which 40% is Consol Energy.

Read the full article at http://oilprice.com/Energy/Coal/Bankruptcies-Starting-To-Pile-Up-In-Coal-Industry.html

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Fareed Zakaria GPS – CNN 06-28-15

Salient to Investors:

Fareed Zakaria said:

  • Singapore mandates ethnic diversity in all neighborhoods – over 80% of Singaporeans live in public housing. US efforts in the 50s and 60s to desegregate schools and integrate neighborhoods were largely abandoned by the 80s and America is now strikingly segregated. A UCLA study in 2014 said many black and Latino students face almost total isolation, not only from white and Asian students but also from middle class peers as well.
  • Singapore’s Deputy PM Tharman Shanmugaratnam said half the Muslim population in Britain lives in the bottom 10% of its neighborhoods by income.
  • The Nuclear Threat Initiative says 25  countries have weapons usable nuclear material, stored at hundreds of different sites under no strict international rules for security. NTI says nation states are not the only entities with the knowledge to build bombs. Some sites rely on local police for protection, or must call in military units. IAEA says more than 100 incidents of unauthorized activity, including thefts, are reported every year involving nuclear and radioactive materials.
  • The Fissile Materials Working Group says enough material to make tens of thousands of nuclear bombs as powerful as the Nagasaki bomb. A terrorist only needs enough highly enriched uranium to fit into a 5-pound bag of sugar to create a nuclear weapon.
  • Since 2012, 7 countries have eliminated most or all of their weapons usable nuclear material, including Ukraine.

Phil Mudd at CNN said:

  • ISIS is trying to draw a sharp line between Sunni and Shia, at the heart of Middle Eastern culture.
  • Sunni-Shia conflict is more likely in Yemen because other countries like Saudi Arabia have lots of money to spend on security forces who would come in with an iron fist.
  • Iraq is finished as a state because of Sunni-Shia divide.
  • The Middle East will worsen on two fronts. The divide between moderate Sunnis and extremist Sunnis will last for decades. Many countries, including Iraq and Syria, will become more conservative over time even if IS does not take over. The centuries-old Sunni-Shia divide is rising up everywhere.
  • The argument that terror organizations are focused on fighting the government or each other, and so are less likely to spend a lot of energy on Western cities, is problematic because the world is changing. The number of foreign terrorists is so substantial that to believe that none of them will focus on Western Europe or North America is short-sighted: though most of their energy will be against each other.

Gary Samore said the myth that the Iranians benefit more than the US from the nuclear deal status quo is completely wrong – the status quo is very much in the US’s favor.

Watch the video at http://globalpublicsquare.blogs.cnn.com/category/gps-episodes/ or read the full transcript at http://transcripts.cnn.com/TRANSCRIPTS/1506/28/fzgps.01.html

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 03-15-15

Salient to Investors:

Fareed Zakaria said the NSF reports the US share of global R&D at 30%, down from 37% in 2001. China % of GDP spent on R&D is on track to surpass the US in just a few years.

Charles Bolden at NASA said a multi-planet species can survive in perpetuity; single planet species will die away.

Dr. Steward Williams at University of Louisville said we can now take an adult cell and transform it into other types of cells and will be able to print an entire heart within 10 years.

ITER says there is enough hydrogen in the ocean to power humanity with fusion for millions of years – fusion reactions do not produce any carbon emissions. China is making cables for the super conducting magnets which the US is building, and India is making the steel structure that will surround the magnets.

Michio Kaku said:

  • We have learned more about the brain in the last 10 and 15 years than in all of human history combined.
  • We can now photograph a thought and communicate it to a robot or a computer. We can see desire, self-awareness or a guilty conscience.
  • If we can upload our brains into a computer, we could outlive our frail bodies and perhaps achieve immortality.

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

at http://transcripts.cnn.com/TRANSCRIPTS/1503/15/fzgps.01.html

Dividend Stocks Could Be Dangerous in 2015, Ketterer Says – Bloomberg 12-31-15

Salient to Investors:

Sarah Ketterer at at Causeway Capital Mgmt said:

  • Buying energy stocks very incrementally as oil prices eventually reach a floor and rise again but no idea when. Looks for companies with tremendous financial strength that can continue to pay dividends. Smart companies will use  their balance sheet strength to buy distressed company assets.
  • Do not be passive and just buy the S&P 500 or a world index in an ETF because markets are fully priced and the largest weighted stocks are the most fully priced.
  • Active management fees pay to identify stocks left behind and avoid those that won’t blow up the portfolio.
  • Owns some Russian stocks but not aggressively. If crude oil stays at current prices or slightly higher, there will be further economic strains in Russia over the next several quarters.
  • Underweight US-listed stocks in global funds at 45 percent versus the almost 60 percent benchmark. Some of the best-managed oil and gas companies are US-domiciled.
  • Outside the US there are few tech stocks and no managed care. Some of the best opportunities in financials are abroad.
  • Consumer staples, utilities and health care globally are overpriced so it will be hard for them to meet expectations.
  • Likes industrial stocks in Europe that have fallen because of concerns about growth in China and Europe because they will end up outlasting their competitors, taking market share and becoming even more efficient. If businesses are doing their job and constantly evolving they can succeed even in a stagnant environment.
  • Investors worst mistake is short-term thinking, by selling at just the wrong time.

Read the full article at http://www.bloomberg.com/news/2014-12-31/dividend-stocks-could-be-dangerous-in-2015-ketterer-says.html

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Greenlight’s Einhorn Said to Back Solar Stocks at Robin Hood – Bloomberg 10-20-14

Salient to Investors:

David Einhorn at Greenlight Capital is believed to have recommended renewable power companies on the declining cost of solar energy and rising price of electricity, while betting against French sovereign debt.

Read the full article at http://www.bloomberg.com/news/2014-10-20/greenlight-s-einhorn-said-to-back-solar-stocks-at-robin-hood.html

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Trina Drops as Japan Outlook Sinks Chinese Solar Makers – Bloomberg 10-01-14

Salient to Investors:

  • Concern is growing that a potential change in Japan’s incentives for clean energy may lower demand from the world’s second-largest solar market, amid a glut of panels.
  • Gordon Johnson at Axiom Capital Mgmt said all of the Chinese module companies rely heavily on Japan. He is concerned about the new Trina convertible note and ADR offerings because they are using equity investors to finance the build-out of solar farms amid uncertain demand.

Read the full article at http://www.bloomberg.com/news/2014-10-01/trina-drops-as-japan-outlook-sinks-chinese-solar-makers.html

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Goldman Sees Global LNG Projects at Risk as Demand Growth Slows – Bloomberg 10-01-14

Salient to Investors:

Mark Wiseman et al at Goldman Sachs said:

  • LNG projects in Africa, Canada and Australia face delays or cancellations as global demand slows, US output increases, nuclear reactors restart in Japan, China’s success in shale-gas E&P, and economic conditions in ASEAN.
  • Global demand will compound at 5% annual by 2020, and 4% annual by 2025.
  • The window for US LNG is limited and the US will not be spared from the pull-back.
  • Papua New Guinea has the lowest risks as it expands LNG production.
  • Overseas, Papua New Guinea and East Africa may be the best placed regions to compete on cost competitiveness, while the industry has renewed its focus on capital discipline.
  • Expect strong demand growth in Asia led by China and ASEAN nations – due to strong economic growth, urbanization, and declining local gas supplies – with modest growth from India, South Korea and Japan.
  • China is driving increased gas use, especially in residential and industrial consumption, and transportation. However, gas-fired power generation capacity is not a high priority in China given the lack of competitively priced supply compared with other feedstock.
  • LNG demand in Thailand, Singapore, Philippines, Indonesia, and Vietnam will continue to grow.
  • Read the full article at http://www.bloomberg.com/news/2014-10-02/goldman-sees-global-lng-projects-at-risk-as-demand-growth-slows.html

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

Fareed Zakaria GPS – CNN 09-14-14

Salient to Investors:

Fareed Zakaria said:

  • The purpose of ISIS’ execution videos was to provoke the US and it worked.
  • Al Qaeda tries to appeal to all Muslims while ISIS is distinctly sectarian and anti-Shiite and hostile to Kurds, Christians and many others in the Middle East – if they all fight in a coordinated fashion, ISIS would lose ground.
  • Large parts of supposed territories shown on TV that ISIS controls are vacant desert.
  • This means that it has large numbers of foes in the region who will fight against it not because the United States wants them to but in their own interests.
  • ISIS is a direct outgrowth of America’s invasion of Iraq and the ruinous political decisions to disband the Iraqi Army and de-Baathify its democracy.
  • It is impossible to battle ISIS without strengthening Assad.
  • Sanctions have a poor track record – one study found that sanctions only succeeded a third of the time between 1945 and 2005.
  • Unlike Iran, sanctions against Russia are not coupled with the threat of force and is far less isolated from the global economy. Russia supplies a third of the EU’s gas supply, which is why EU sanctions have been largely toothless.
  • Cutting Russia off from Swift, the network used by more than 10,500 banks, would have far-reaching consequences – it was profoundly damaging to the Iranian economy in 2012.
  • Without a solution to the Ukrainian crisis, Europe’s outlook looks grim; mired in recession, facing a secessionist vote from Scotland with anti-European populists rising in every column.

Henry Kissinger at Kissinger Associates said:

  • In 5 wars since 1945, the US has only achieved its objectives in the first Iraq war and, in a limited way, the Korean War.
  • The West provoked Russia in Ukraine, which can never be just another country.
  • Putin believes he is head of a potentially weak country with a 3,000 mile frontier with China, a strategic nightmare, and thousands of miles with Islam, an ideological nightmare.
  • We are in for an extremely difficult period.

Vinod Khosla at Khosla Ventures said:

  • Solar and wind solutions are naive and simplistic because they only produce power when the wind is blowing or the sun is shining.
  • Like black swans, our solution is some unknown improbable path.
  • It is impossible to innovate without screwing up – innovation means risk, and risk means failure.

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

at http://transcripts.cnn.com/TRANSCRIPTS/1409/14/fzgps.01.html