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

Aberdeen Asset Sells Health-Care to Buy Industrial Stocks – Bloomberg 09-09-14

Salient to Investors:

Martin Connaghan at Aberdeen Asset Mgmt said:

  • Buying industrial stocks with stable revenue and selling health-care stocks as uncertainty about the global economy has caused cyclicals to lag pharma and other defensive stocks by a margin that is too wide to ignore. The outlook for cyclical stocks won’t necessarily change in the immediate future, but there is a lot of bad news and low expectations.
  • Some industrials such as elevator and escalator makers have stable income from contracts that make them less sensitive to global growth.
  • Some industrials are not as cyclical as they appear at first glance if you look at their revenues, because there is always a base level of income and revenues coming from areas that are more stable, regardless of the economic environment.

Worldwide industrial shares are trading near the lowest valuation relative to health-care stocks in more than a decade.

The MSCI World Industrials Index trades at 18 x earnings versus 22 x for the global health-care index, the widest margin since October 2002.

US ETFs tracking health-care have attracted $4.3 billion in 2014 versus $530 million for industrial ETFs.

Read the full article at http://www.bloomberg.com/news/2014-09-09/aberdeen-asset-sells-health-care-to-buy-industrial-stocks.html

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Federal Debt to Reach 106% of Economy in 2039, CBO Says – Bloomberg 07-15-14

Salient to Investors:

The CBO predicted:

  • Current federal tax and spending policies are unsustainable.
  • US debt held by the public will rise 74 percent of GDP in 2014 to 78 percent in 2024, and to 106 percent in 2039.
  • Social Security and federal health-care programs would account for 14 percent of GDP by 2039 versus the 7 percent average over the past 40 years.
  • Net interest payments on the debt would increase to 4.5 percent of GDP by 2039 versus the average of 2 percent over the past four decades.
  • The budget deficit will drop to $492 billion in 2014, the lowest level since 2008 and versus a record $1.4 trillion in 2009, but will increase in 2016 on higher spending on Medicare and Medicaid.
  • The budget deficit will increase to 3.7 percent of GDP in 2024 and 6.4 percent in 2039 versus 2.8 percent in 2014.

Read the full article at http://www.bloomberg.com/news/2014-07-15/federal-debt-to-reach-106-of-economy-in-2039-cbo-says.html

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Jim Rogers: Biggest Event of Next 10-20 Years Just Happened in China – Moneybeat 11-18-13

Salient to Investors:

Jim Rogers said:

  • The most important economic event of the next 10 to 20 years is what happened in Beijing, though largely ignored, particularly by the Western media.
  • Current efforts to reform, if followed through, could take a generation to really bear fruit but Chinese agriculture, railroads, medical care and defense are attractive investments, even if the country’s stock market collapses
  • Buying Chinese stocks, including financials, for the first time since 2008.
  • The overriding concept from the plenum is “when in doubt, the market will decide.” Policy makers seem to have the wind at their back and leaders have put a lot of prestige on the line.
  • Talk about China’s economy being a bubble or that its ascendance will end is reminiscent of what Europeans said about the US after the Civil War. And within a generation after WWI, the undisputed No. 1, the United Kingdom, was no longer that.

Read the full article at http://blogs.wsj.com/moneybeat/2013/11/18/jim-rogers-biggest-event-of-next-10-20-years-just-happened-in-china/

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GE to IBM Ending Retiree Health Plans in Historic Shift – Bloomberg 09-09-13

Salient to Investors:

America’s biggest employers are increasingly moving retirees to insurance exchanges where they select their own health plans, a historic shift that could push more costs onto US taxpayers.

Towers Watson said 44% of companies plan to stop administering health plans for their former workers over the next 2 years. Ron Fontanetta at Towers Watson said things are going to change dramatically and over the next 2 to 3 years, we see a much more aggressive rethinking of what employers are going to provide.

John Grosso at Aon Hewitt said a healthier retiree might find a less expensive policy with a higher deductible, or one that saved money by favoring generic drugs, but less healthy workers or those who need more comprehensive coverage may not fare as well. Grosso said only 50% of large employers still provide the benefit, a decrease from 80% two decades ago.

Paul Fronstin at the Employee Benefits Research Institute said many companies exclude new hires from retiree benefits and cap contributions to covered retirees.

Read the full article at  http://www.bloomberg.com/news/2013-09-09/ge-to-ibm-ending-retiree-health-plans-in-historic-shift.html

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Obamacare Insurance Costs Affordable, Kaiser Survey Finds – Bloomberg 09-04-13

Salient to Investors:

Larry Levitt at the Kaiser Family Foundation said for the most part insurers are finding the market for Obamacare attractive and are pricing accordingly. Levitt said it is surprising how inexpensive some of the Bronze plans will be: they carry high deductibles and significant out-of-pocket costs, but for catastrophic protection there will be some inexpensive options, particularly if you are eligible for a tax credit.

The highest premiums in the Kaiser survey are in Vermont and New York, who require insurers to charge the same amount to people of all ages.

Christine Eibner at Rand Corp. said their analysis found no widespread trend toward sharply higher prices in the individual market.

Read the full article at  http://www.bloomberg.com/news/2013-09-05/obamacare-insurance-costs-affordable-kaiser-survey-finds.html

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Baum’s View on Money – Bloomberg 08-16-13

Salient to Investors:

Caroline Baum writes:

Private foreign investors sold a net $67 billion of Treasuries in June, a record and the second consecutive monthly outflow, and sold agency securities, corporate bonds and equities. The US Treasury is looking at much higher borrowing costs as 41 percent of the debt has to be rolled over in the next 2 years.

Jan Hatzius at Goldman Sachs said the Philly Fed’s business outlook survey and the ISM’s monthly manufacturing survey are more insightful on the economy.

Austen Goolsbee said the biggest concern for the US economy is Europe, whose problems are not going away anytime soon.

Only 35 percent of Americans surveyed by Gallup approve of the president’s handling of the economy despite the University of Michigan consumer sentiment index hitting a 6-year high in July.

Gene Steuerle at the Urban Institute says there’s a disconnect between our nation’s health care policies and the simple, unavoidable arithmetic of health care costs.

Read the full article at  http://www.bloomberg.com/news/2013-08-16/baum-s-view-on-money.html

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Baum’s Views on Money – Bloomberg 08-08-13

Salient to Investors:

Caroline Baum  writes:

  • Health-care spending has collapsed in most developed nations, not just the US. But as more people get health insurance, the demand for medical care will go up, and with it the price.
  • If Fed talk of tapering was enough to send 10-yr Treasury yields soaring 1 percent, imagine what actual tapering will do. Richard Koo  at Nomura Research says the Fed will need help.

Read the full article at  http://www.bloomberg.com/news/2013-08-08/baum-s-views-on-money.html

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Heart Surgery in India for $1,583 Costs $106,385 in U.S. – Bloomberg 07-28-13

Salient to Investors:

Indian heart surgeon Devi Shetty has cut the price of artery-clearing coronary bypass surgery to $1,583, half of what it was 20 years ago, and versus $106,385 at the Cleveland Clinic in Ohio. Shetty said the current price of everything in health care is predominantly opportunistic pricing and the outcome of inefficiency.

Srinath Reddy at the World Heart Federation said it is possible to deliver very high quality cardiac care at a relatively low-cost.

Two-thirds of the Indian population lives on less than $2 a day and 86 percent of health care is paid out-of-pocket by individuals. The Public Health Foundation of India and the London School of Hygiene & Tropical Medicine found that in India non-communicable ailments such as heart disease are more common among the poor than the rich.

A Vascular Health and Risk Management study puts the mortality rate from coronary artery disease among South Asians at 2 to 3 times higher than that of Caucasians.

The AMA said the average age for a first heart attack in India, Pakistan and other South Asian nations was 53 years, versus 58.8 years in countries outside the region.

More Asian electronics companies are entering the market for CT scanners, MRIs and catheterization labs, bringing down prices.

Many of the cost-saving approaches could be duplicated in developed economies, especially in the US under health reform.

Read the full article at  http://www.bloomberg.com/news/2013-07-28/heart-surgery-in-india-for-1-583-costs-106-385-in-u-s-.html

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Gary Shilling position update 2013 – Gary Shilling blog 07-15-13

Salient to Investors:

Gary Shilling writes:

  • The fog remains thick, so reducing long positions in Treasury bonds and Japanese stocks and cut yen shorts, euro shorts and dollar long positions.
  • Maintaining long positions in US defensive stocks like utilities and health care.
  • Increased short position in junk bonds and initiated shorts in emerging market stocks and bonds.

Read the full article at  http://garyshilling.blogspot.com/2013/07/gary-shilling-position-update-2013.html

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