Fareed Zakaria GPS – CNN 04-24-16

Salient to Investors:

Fareed Zakaria said Saudi Arabia is responsible for the spread of extremist interpretation of Islam and has created a Frankenstein monster that threatens itself as much as the West.

Gregory Gause said Saudi Arabia lost control over the global extremist Islamic movement in the 1980s and has been its target since the 1990s.

David Petraeus said Saudi Arabia switched from a tacit supporter to an aggressive foe of jihadi groups.

Fred Kaplan at Slate said terrorists could not shut down the power grid over the US or an entire region because of decentralization, but could shut down, say, the Eastern Seaboard for some time. Kaplan said 20 countries have cyber units in their military.

Watch the video at http://globalpublicsquare.blogs.cnn.com/category/gps-episodes/ or read the full transcript at http://transcripts.cnn.com/TRANSCRIPTS/1604/17/fzgps.01.html

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Fareed Zakaria GPS – CNN 04-17-16

Salient to Investors:

IEA predicts coal consumption in OECD countries will fall 40% by 2040.

Julia Ioffe at Foreign Policy said:

The Saudi regime is in no danger of collapse and is still a strong US ally.

What is happening in Brazil is a sign of healthy cleansing, unlike Russia, where what the Panama papers revealed is far worse that anything Brazil has done. Russian courts will never go after the corrupt, but instead will pursue the corruption fighters.

Ed Luce at The Financial Times said Islamophobia is not weakening democracy but weakening constitutional liberalism.

Brett Stephens at The Wall Street Journal said:

Saudi Arabia could collapse should low oil prices continue, ISIS expanded into Saudi Arabia, the bad war with Yemen, and especially should the current trio of leaders fails.

Brexit would mean Scotland would try to leave Britain and join Europe.

Islamophobia is part of the poison of low growth. Contrast Germany which was able to absorb huge Muslim immigration during the post-war era of 3%-4% growth.

Brazil is the country of the future and always will be.

Gideon Rose at Foreign Affairs said:

Saudi Arabia has internal legitimacy, relatively good finances, strong control over their territory.

Vice President Temer of Brazil is not a particularly strong replacement if President Dilma goes, so no dramatic change or recovery soon.

Brazil’s problems will not destroy the world economy overall.

Julia Rozovsky at Google said their most effective teams all possess psychological safety, i.e. team members can take a risk without fearing being shot down or ridiculed.

Charles Duhigg at The New York Times said:

Researcher Amy Edmondson found that physiological safety has two components: first, the team has to feel like everyone could speak equality and second, the team exhibits social sensitivity, i.e. listening skills.

Saturday Night Live – a team of egomaniacal comedians and writers who for most of their lives hated other people – succeeded because Lorne Michaels forces everyone in team meetings to say something.

Watch the video at http://globalpublicsquare.blogs.cnn.com/category/gps-episodes/ or read the full transcript at http://transcripts.cnn.com/TRANSCRIPTS/1604/17/fzgps.01.html

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Petrostate Cash Crunch Continues Amid Oil Collapse, Proxy Wars – Zero Hedge 09-07-15

Salient to Investors:

Tyler Durden writes:

  • ZIRP has allowed insolvent US oil producers to stay in business and help keep oil prices low, and now Saudi Arabia and Qatar are also tapping the credit markets.
  • Saudi Arabia needs crude at $100 to finance their budget deficit estimated to be 20% of GDP.
  • Qatar’s budget deficit is only 0.7% of GDP and in the best financial shape relative to its neighbors.
  • Saudi Arabia and Qatar are highly likely to be drawn further into the conflict in Syria.

Read the full article at http://www.zerohedge.com/news/2015-09-07/petrostate-cash-crunch-continues-amid-oil-collapse-proxy-wars

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Fareed Zakaria GPS – CNN 08-23-15

Salient to Investors:

Fareed Zakaria said:

  • The last time oil fell more than 50% in less than a year, in the 1980s, the Soviet Union collapsed.
  • Saudi Arabia wants to put American shale and tight oil producers out of business, but they have survived using technology and smart business practices.
  • Major oil-producing countries everywhere face a fiscal reckoning.
    • Oil is 96% of Venezuela’s exports, so its economy is expected to shrink by 7% in 2015.
    • Russia’s economy is expected to shrink by 3.4% in 2015 as oil and gas revenues are 50% of its budget.
    • Oil is 90% of Iraq’s budget. With limited resources, Iraq’s Shiite government is hard-pressed to pay the Sunnis.
    • The IMF estimates that Iran needs almost $100 oil to balance its budget.
  • Cato Institute says Chile, Canada, Sweden and Germany are all freer than the US, which was 20th versus 17th in 2008.
  • The NOAA says half1, 2015 was the warmest period on record. NASA says July was the hottest ever recorded.
  • In 2015, Gallup found that only 8% of American full-time workers work less than 40 hours a week, 42% work 40 hours, and 50% work more than 40 hours a week.

Nick Butler at Kings College says we are in for a longer and more sustained period of low oil prices than occurred in the late 1980s; because of the perfect storm of substantially increased supplies. Revenues of Gazprom, which finances Putin’s clique, is estimated to fall by almost 30% in 2015.

Leonardo Maugeri at Harvard says there is no way to stop falling oil prices to possibly $35 in 2016, largely because Saudi Arabia will keep pumping in the hope it hurts everyone else more than itself.

General Wesley Clark said:

  • Putin wants less US pressure on Ukraine in exchange for cooperation on Iran.
  • The territorial integrity of Ukraine is non-negotiable.
  • NATO bases should be in the east. The US created NATO and has always been its leader.

Radek Sikorski said:

  • Putin has largely misspent the oil boom’s money, but has invested heavily in his armed forces.
  • Putin should be told that the NATO area is out-of-bounds for Russian military adventurism.
  • NATO bases should be where they are needed, in the east.

Larry Cohler-Esses at The Forward said:

  • Iranian hard-liners rigidly compartmentalize Jews who they consider people of the book under Islam from Zionists.
  • Iran has between 9,000 and 20,000 Jews versus 80,000 to 100,000 before the revolution in 1979.

Derek Thompson at the Atlantic said:

  • The grand narrative of technological change in economics is creative destruction. 200 years ago we were an agrarian economy, 60 years ago a manufacturing economy, and now a services economy. Youngstown, Ohio experienced something very much like the end of work when an enormous steel mill shut down in September 1977. People are still leaving.
  • Many jobs can be replaced by technologies right on the horizon.
    • Driving is the most common occupation among American men, so self-driving automobiles are a serious threat to employment in the US.
    • The four most common occupations in the US economy are retail salesperson, cashier, food and beverage worker, and office clerk, all of which, according to Oxford university, are extremely automatable.
  • Government today could not enact universe basic income – a government check for everybody – which is absolutely essential for people to use technological change and technological unemployment to push toward a better future.

Zeynep Ton at MIT said:

  • Corporate America should not be cutting staff, salaries and benefits to improve the balance sheet, just the opposite. The trade-off between low prices and good jobs is actually forced trade-offs.
  • Most retail companies see labor as a cost so try to have as few people as possible on the selling floor. Under-staffing creates lots of problems: long checkout lines, products are in the wrong place, inaccurate prices, all of which increase costs and lower service. By investing in people, Toyota lowered costs and increased quality at the same time.
  • Investing in workers and making smart decisions drive great value for companies and their investors.
  • A good jobs strategy requires a long-term view, and people are wired to emphasize the short-term at the expense of the long-term; like smoking and not exercising.
  • Many companies do not see the whole picture and are stuck in silos and therefore mediocrity; they can still make money that way.

Watch the video at http://globalpublicsquare.blogs.cnn.com/category/gps-episodes/ or read the full transcript at http://www.cnn.com/TRANSCRIPTS/1508/23/fzgps.01.html

 

Fareed Zakaria GPS – CNN 08-02-15

Salient to Investors:

Fareed Zakaria said:

  • New America reports that, since 9-11, 74 people have been killed in America by terrorists vs. over 150,000 killed in gun homicides. ShootingTracker.com says that in the first 207 days of 2015 America had 207 mass shootings. Gunpolicy.org says America’s gun homicide rate is 50 times higher than Germany’s. The US does not have 50 times as many mentally disturbed people as Germany does, but does have very many more guns.
  • ISIS’ neighbors are letting the US fight their battles. The US has carried out over 2,000 air strikes against ISIS in Syria vs. just over 100 by US’ Arab allies.
  • Saudi Arabia is the US’ largest defense customer – 1 out of every 7 defense import dollars. Saudi Arabia and the UAE imported more defense equipment than all of Western Europe.

Anne Applebum at the Washington Post said:

  • The world sees American elections as insane. They are the longest in any democracy and by far the most expensive. There is neither the enormous hope nor the enormous fear attached to the presidency that there has been over the last decade or two. The sense that the world and our lives will all be different depending on who is the next US president is fading away.

Timothy Stanley at the Daily Telegraph said:

  • Lunatics with money are never mad, only eccentric in America.
  • Brits see Donald Trump, Herman Cain, Ross Perot as snake oil salesman who promise everything and then burn up.
  • Europeans see American politics as about money, about buying attention, about personality, but most of all about anger.

Jorge Castaneda at NYU said:

  • Most of Trump’s 16 rivals are not pushing back at all against him, specifically about his racist comments about Mexican, Central American, Caribbean or South American migrants to the US.
  • In Mexico, Jeb Bush is expected to become the Republican nominee and is much liked there.

Mina Al-Oraibi at Asharq Al-Awsat and Yale said people in the Middle East and Iraq still see America as very consequential.

Robert Jordan said:

  • Saudi King Salman was considered one of Saudi Arabia’s least corrupt leaders and its hardest working cabinet member.
  • Saudi Arabia’s strategy appears be against Iran at every turn, and to presume she is behind every negative act. Yemen could come back to haunt Saudi Arabia.

Nobel Laureate Kailash Satyarthi said:

  • No child should be born to work at the cost of their childhood and freedom. 168 million children are full-time child laborers – down from 268 million 20 years ago – of which 85 million work in the worst areas of child labor. Officially, 5.5 million are in virtual slavery. Out-of-school children have dropped from 130 million to 58 million.
  • Anger can be a positive power to fight injustice and to convert ideas into action to make a better world.

Watch the video at http://globalpublicsquare.blogs.cnn.com/category/gps-episodes/ or read the full transcript at http://transcripts.cnn.com/TRANSCRIPTS/1508/02/fzgps.01.html

US/Israeli/Saudi ‘Behavior’ Problems – Consortiumnews.com 07-15-15

Salient to Investors:

Robert Parry writes:

  • Iran is not the chief instigator of instability in the Mideast, but Israel, Saudi Arabia and the US. Iran is contributing to the stability of the region and at a minimum helping to avert the worst outcomes. In Iraq and Syria, Iran is supporting internationally recognized governments battling against terrorist groups.
  • Israel has frequently attacked its Arab neighbors and brutally repressing the Palestinians for almost 70 years.
  • Israel is a rogue nuclear state that has been hiding a sophisticated atomic-bomb arsenal.
  • Saudi Arabia has for generations been funding the fundamentalist Wahhabi sect of Sunni Islam, which has inspired terrorist groups from Al Qaeda to the IS. 15 of the 19 hijackers on 9/11 were Saudis and the US is still concealing 28 pages of the congressional 9/11 inquiry regarding Saudi financing of Al Qaeda terrorists. The Saudis have participated directly and indirectly in regional wars.
  • The US has been meddling in the Middle East overtly and covertly for a very long time, including the overthrow of Iran’s elected government in 1953 and the invasion of Iraq in 2003.
  • Turkey, Saudi Arabia, Qatar and Israel have been seeking another regime change in Syria that is being spearheaded by Sunni terrorist groups.
  • The larger issue for Americans is what to do with the insane political-media system that dominates Official Washington and guides the US into terrible decision-making, made ominous by its immense military power.

Read the full article at https://consortiumnews.com/2015/07/15/usisraelisaudi-behavior-problems/

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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 03-29-15

Salient to Investors:

Fareed Zakaria said:

  • The pattern of Yemen’s descent into chaos is likely to repeat, possibly in more significant countries like Egypt. That pattern is repressive, secular regimes backed by the West become illegitimate, become more repressive to survive, and whose opposition becomes more extreme, religious and violent.
  • Learning how to read deeply, write compelling prose, and analyze well are essential skills in order to thrive in the world. The rapid trend away from majors like English and history and philosophy to skill-based ones closer to engineering or computer science is terribly short-sighted. How to think, read, study, write and are much more useful in the long run.
  • The genius of the American system is giving people the broad liberal education that allows people to start new companies, switch careers. The coding learned 10 years ago is obsolete today.
  • US education has never tested well against other countries – in the middle of the pack in 1964 and still in the middle of the pack. Yet the US has dominated innovation, research, new industries over the past five decades.
  • Israel is reported to have more NASDAQ listed companies than any country other than the US and China yet also does very badly on international tests, and worse than the US.
  • Israel and the US share non-hierarchical educational systems where you can challenge the professor, follow your passion, ask questions. Many high-tech people including Zuckerberg and Bezos put a lot in a liberal arts education.

Richard Haass at the Council on Foreign Relations said:

  • We are in for 30 years of religious war in the Middle East, if not more, with the US having to play a modest role managing at the margins.
  • Saudi Arabia is vulnerable because it is only a matter of time before it is challenged by the Islamic State.
  • Iraq is breaking into 3 separate countries – Iranian Shia, Kurdish, and Sunni Arab.
  • We cannot afford to live in a world where Iran has nuclear weapons and several other countries in the region follow suit.

Joseph Cirincione at Ploughshares Fund said:

  • Japan is a threshold power and can build a nuclear bomb within months.
  • US strikes on Iran would have to be weeks of hundreds of sorties, and cause a major war in the Middle East that would make the wars in Afghanistan and Iraq look like warm-up acts.
  • We cannot live in a world where Iran has nuclear weapons and several other countries in the region follow suit.

Ayaan Hirsi Ali said

  • Islam is in crisis and is decidedly not a religion of peace – it needs a reformation on the scale that Christianity had in the 16th century.
  • 70 percent of all fatalities in all conflicts involving Muslims are Muslims.
  • The strategy of let’s not call IS Islamic started in the Muslim world 3 to 5 decades ago and hasn’t worked.
  • To persuade Muslims to give up the 5 core concepts within Islam that are holding them back, the US should ideologically confront Islam with its ideas of life, liberty and the pursuit of happiness as it has done in the past. Theological reformation has to come from within.

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

at http://transcripts.cnn.com/TRANSCRIPTS/1503/29/fzgps.01.html

Fareed Zakaria GPS – CNN 03-22-15

Fareed Zakaria said:

  • The greatest vulnerability for Israel is its legal jurisdiction over 4.5 million Arabs who have neither a state nor a vote – a situation that cannot last in a democratic society.
  • The Stockholm IPRI says Israel’s defense budget is larger than that of Egypt, Jordan, Syria and Lebanon combined.
  • The UN says the US has taken in the equivalent of only .08% of its population in refugees, versus 1% for Sweden and 9% for Jordan.
  • IHS Global Defense Trade Report says the worldwide defense market rose more than 13% to a record $64 billion in 2014; Saudi Arabia overtook India as the world’s top importer and China was third.

Martin Indyk said Netanyahu has alienated just about every world leader including Israel’s closest friends Merkel and Sarkozy, by doing many things which contradict the promises that he has made them.

Elliot Abrams said the situation with Israel is the worst in a very long time because of Obama’s terrible personal attitude toward Netanyahu.

Michael Lewis said:

  • The technology is almost getting rid of Wall Street, but the resulting complexity and opacity still needs gatekeepers.
  • In the 1980s, the kind of young person who went to Wall Street changed from being one who was in the bottom of their class at Yale to one who was at the top and who can cause a lot more trouble – very bright people without a particular ambition except to be a success type.
  • Wall Street women are kept largely separate from the risk taking decisions. However, after the financial crisis, women rose to positions that were sufficiently senior that they could be plausibly blamed when things went wrong and were.

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

at http://transcripts.cnn.com/TRANSCRIPTS/1503/22/fzgps.01.html

Fareed Zakaria GPS – CNN 01-25-15

Salient to Investors:

Fareed Zakaria said:

  • Radical Islam is the default ideology of anger, discontent and violent opposition for a small number of alienated young Muslim men around the world. Only Muslims and particularly Arabs can cure this cancer.
  • In the 12 years between 9/12/01 and 2013, only 42 Americans have died on US soil due to terrorism versus 32,351 who died because of firearms, 33,783 who died in-vehicle accidents in one year.
  • Little has changed in Saudi Arabia – women still cannot drive, there is still segregation by sexes, the religious establishment is still very powerful, and the country still adheres to a very puritanical version of Islam.

Tony Blair said:

  • King Abdullah was a genuine reformer and modernizer. Saudi Arabia is genuinely part of the solution, and in many ways the heart of Islam.
  • Islamist ideology is growing and is the biggest security issue we face – we are at risk of several Afghanistans.

Martin Wolf at The Financial Times said:

  • Saudi Arabia remains is the central oil producer, the biggest exporter, the cheapest producer, and the only swing producer. Saudi Arabia is stable enough so can outlast everybody else at current oil price levels.
  • The oil glut will last for quite a few years.

Oxfam said the 80 richest people had $1.9 trillion while the poorest half had just $1.8 trillion in 2014, versus $1.3 trillion and $2.6 trillion respectively in 2010. The wealthiest 1% owned 48% of the world’s wealth in 2014 versus 44% in 2010.

David Leonhardt at The New York Times said US wages and incomes have gone virtually nowhere in the last 15 years: not paralleled since perhaps the Great Depression.

The Center for American Progress found that the bottom 90% of earners in Canada averaged over 1% annual income growth in the 2000s versus 2.5% annual in Australia and a decline of 1% annual in the US.

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

at http://transcripts.cnn.com/TRANSCRIPTS/1501/25/fzgps.01.html