Fareed Zakaria GPS – CNN 04-26-15

Salient to Investors:

Fareed Zakaria said:

  • America needs reform and restructuring. The tax code is a corrupt mess. The US ranks third in global competitiveness, 12th in overall infrastructure, 24th in the quality of its electricity supply, and 101st in mobile telephone subscriptions.The average age of the US’s 84,000 dams is 52 years, of its 607,000 bridges is 42 years.
  • Social mobility has stalled largely because poor children have inadequate nutrition, child care, and education. Eduardo Porter at The New York Times says the US spends substantially less on educating poor children compared to rich ones.
  • The US spends less as a % of GDP on in science and research than it did in the 1970s.

Philip Mudd at CNN said the US cannot defeat ISIS – it can win against segments of terrorist groups but not an Islamic idea.

David Brooks at NY Times said:

  • We live in a culture that praises the resume virtues and ignores the eulogy virtues.
  • In 1950, 12% of high school seniors considered themselves very important, versus 80% in 2005.
  • Some audacious narcissism is required to be an entrepreneur.

Ray Dalio at Bridgewater Associates said:

  • My success is due to how I deal with not knowing, not because of what I know. Find people who disagree with you and try to see things through their eyes.
  • Very bullish on the productivity and innovation of the American economy. The US has a legal system that works, capital markets that work, and a culture of innovation.
  • Big data is the greatest American asset and the greatest world asset.
  • However, the quality of the government decision-making is terrible and we have to deal with the tailwind of the debt situation.
  • Bullish longer term on China as the capital that has been stuck with its state-owned enterprises and local governments flows to others parts of its economy.
  • China is richer than the US in assets and liabilities, not per capita, and will grow faster than the US for years. 7% of the 10.3% average growth rate over the last 10 years in China is unsustainable. China’s impressive leadership will manage its debt problem well.

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

at http://transcripts.cnn.com/TRANSCRIPTS/1504/26/fzgps.01.html

Einhorn Adds Short Bets as Markets Rally Amid Economic Slump – Bloomberg 02-20-13

Salient to Investors:

David Einhorn said long positions exceeded shorts 29 percent as of Jan. 31 versus 39 percent on Jan 1, 2013, and has become less enthusiastic as the market rises while the US has slowed  – GDP went negative in Q4 2012 and earnings growth has come to a virtual halt.

Ray Dalio at Bridgewater Associates is bullish on stocks, oil, and commodities, expecting cash to shift to riskier asset classes amid increased economic confidence. David Tepper at Appaloosa Mgmt and David Rubenstein at Carlyle Group are positive on the US economy.

ICI reports investors added $37 billion to equity funds in January, the most since 2004. Birinyi Associates says tech and financial institutions received the biggest inflows.

Quarterly earnings grew 3.6 percent on average in 2012 versus 28 percent the previous 2 years, while analysts project a 1.5 percent contraction in Q1 profits and 6.7 percent growth for 2013.

Read the full article at http://www.bloomberg.com/news/2013-02-20/einhorn-adds-short-bets-as-markets-rally-amid-economic-slump.html

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Bridgewater’s Dalio Sees ‘Game Changer’ as Money Shifts – Bloomberg 01-25-13

Salient to Investors:

Ray Dalio at Bridgewater Associates said:

  • 2013 will be a game changer for the economy as investors reallocate money – currently getting very bad returns – after risks including Europe’s sovereign debt crisis receded.
  • Money will move into stocks and other assets, as well as into goods and services
  • Central banks will have to reduce the supply of money when spending increases, but a successful exit from 6 years of loose money is manageable.
  • China is in a different part of the economic cycle than the US, while Europe will have to contend with social and political pressures in 2013.
  • The fundamental law is we can’t raise debt faster than income going forward.

David Tepper at Appaloosa Mgmt, David Rubenstein at Carlyle Group are bullish on the US economy.

George Soros said the Fed will have to raise interest rates quickly to contain inflation once the economy shows signs of a stable recovery.

Jin Liqun at China Investment Corp said the printing press will have to slow considerably for people to have confidence in the dollar. Liqun said the US can achieve 2 percent growth.

Read the full article at http://www.bloomberg.com/news/2013-01-25/bridgewater-s-dalio-sees-game-changer-as-money-shifts.html


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Bridgewater’s Dalio: Euro Will Survive Region’s Crisis – Bloomberg 09-21-12

Salient to Investors:

Ray Dalio of  Bridgewater Associates said:

  • The euro will survive because austerity measures deterring growth will be balanced by ECB intervention, says southern Europe will suffer a managed depression lasting as long as 15 years.
  • Countries in northern Europe are more likely to leave the euro currency bloc than indebted countries in the south.
  • QE3 shows the Fed can’t lower interest rates to stimulate the economy.
  • All investors should own gold – Warren Buffett is making a big mistake by saying he won’t own gold.
  • The biggest risk is that an economic meltdown will trigger social unrest.

Read the full article at http://www.bloomberg.com/news/2012-09-21/bridgewater-s-dalio-says-euro-will-survive-region-s-debt-crisis.html