Fareed Zakaria GPS – CNN 05-08-16

Salient to Investors:

Fareed Zakaria said:

Trump has formidable marketing skills but commerce is different from government. FDR, LBJ and Reagan achieved the most with virtually no commercial background. George W. Bush and Herbert Hoover, despite commercial backgrounds performed much worse as Presidents.

Robert Rubin said the single overriding objective in business is to make a profit, but government has to deal with many legitimate and often competing objectives. Rubin said not even the president has the kind of authority every CEO does.

Dan Senor said that Trump will lose in November, and that history shows that parties can bounce back.

David Frum at the Atlantic said:

An immense wreck is coming: political and cultural.

Trump has a terrible work ethic, is unfit and dangerous to be President.

Globalization’s losers have to be more fairly compensated by the winners.

Ross Douthat at The New York Times said:

Returning to a conservative normalcy is unlikely given Trump.

Nationalism is resurgent around the world for understandable reasons: dislocation, globalization, terrorism, Successful politicians, especially conservative politicians, have to address that anxiety.

Emily Miller at Washington Times said:

What happened is the people decided the Republican nominee, not Washington, not New York.

The country is unfamiliar with the depth of Trump’s policies.

Trump has the temperament to be president: thoughtful, calm, direct, listens very well.

David Order at MIT found that between 2002 and 2010, congressional districts negatively impacted by trade with China were more likely to elect more ideologically extreme representatives, either left or right of the officials they replaced – benefiting conservatives much more than liberals.

A Gallup poll found that 58% percent of Americans view foreign trade as an opportunity, 34% see it as a threat.

Yanis Varoufakis said:

Europe is in deep crisis and falling apart. The EU is heading for a break up, and new borders are being erected.

Instead of banking union, countries are re-nationalizing debt. The probability of losing your money in an Italian bank is increasing, in a German bank decreasing.

Bassem Youssef said:

The West mistakenly believes that it is better to deal with a military regime than a religious one. Military and religious factions work hand in hand.

All authoritarian regimes need to fall back on a reason for failure.

The IMF predicts:

US GDP to grow 2.4% in 2016.

Venezuelan GDP to contract 8% in 2016, and inflation to rise to 720% in 2016 and to 2,200% in 2017.

Myanmar’s GDP to 8.6% in 2016, the world’s best.

Watch the video at http://globalpublicsquare.blogs.cnn.com/category/gps-episodes/ or read the full transcript at http://transcripts.cnn.com/TRANSCRIPTS/1605/08/fzgps.01.html

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Fareed Zakaria GPS – CNN 12-13-15

Fareed Zakaria said:

Muslims in America are well-assimilated, unlike in Europe.

New America reports that the number of Americans killed by Islamist terrorists on US soil since 9/11 is 45, or 3 people a year, versus 11,000 killed in gun homicides in 2015.

Left-wing populist governments, in power for over a decade in Venezuela, Argentina and Brazil (which total 66% of South America’s population) have all suffered serious setbacks because they have run their economies into the ground as the huge boom in commodities ended.

WSJ expects Argentina to grow less than 1% in 2015. FT expects Brazil to decline 3% in 2015, and which is having its worst recession since the 1930s. Venezuela is expected to decline 10% in 2015 despite sky-high inflation and bare market shelves.

Ian Bremmer at Eurasia Group

The Paris and San Bernardino attacks drew the most divisive responses in a developed state to a national cataclysm that I have ever seen in my 30 year career.

The US will get another more centrist US president in 2017.

The world considers Trump a clown, but clowns have been elected. Trump winning the nomination is very unlikely. The extraordinary antipathy towards the establishment of all stripes is new to America and is not going away.

Berlusconi in Italy and Jeremy Corbin in Britain are not considered serious actors.

The transatlantic relationship that has underpinned the global order for many decades is falling apart.

David Millibrand at Intl Rescue Committee said:

Populism is strong when the center left and right are weak. Centrists Trudeau, Merkell and Cameron are strong, but centrists in France and the US are weak.

Trump’s clownish behavior is dangerous because it feeds the narrative of the clash of civilization and aggrandizes those who would threaten society’s religious. Trump still has only one-third of the 20% of Republican voters: the majority of the minority does not make a majority.

The only way to fight anger is with answers, which all politicians seeking power need. To run in the slip stream of extremism only feeds it.

Bernard-Henri Levy said:

The French National Front’s big result on the first round will not be consolidated in the second round. The reactionary trend (to the attacks) is not as strong as people say.

Trump does not embody the Republican Party, the American dream, the shining city upon the hill in any way. Jihadists, Putin, Iran, all enemies of America all pray for Trump winning the primary and the presidential election.

Watch the video at http://globalpublicsquare.blogs.cnn.com/category/gps-episodes/ or read the full transcript at http://transcripts.cnn.com/TRANSCRIPTS/1512/13/fzgps.01.html

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Fareed Zakaria GPS – CNN 01-18-15

Salient to Investors:

Fareed Zakaria said:

  • The theory that “we fight them there so we don’t have to fight them here” is still wrong and would commit the US to a fool’s errand for decades. Cherif Kouachi, one of the Paris terrorists, testified that it was American intervention in the Middle East that caused him to become a jihadi. Robert Pape and James Feldman found that the vast majority of the terrorists behind suicide bombings from 1980 to 2009 were acting in response to American intervention and involvement in the Middle East rather than out of a religious or ideological motivation – the two spectacular Western plots after 9/11, the Madrid and London bombings, were specifically inspired by the invasion of Iraq.
  • The chance of a global recession in 2015 is greater than people think.
  • US economic prospects look good – PricewaterhouseCoopers predicts over 3% growth in 2015, the fastest since 2005, led by continuing falls in unemployment.
  • India looks good thanks in part to reform minded Modi and a large population of consumers. PricewaterhouseCoopers predicts a growth rate in 2015 that could rival China.
  • Indonesia looks good and has a large population of consumers.
  • Europe will continue to lag without needed reforms.
  • Japan is still in a bind despite Abenomics.
  • The big oil producers, especially those with large populations like Venezuela, Iran, Nigeria and Russia, will be the big losers.
  • The big wild card is will the price of oil continue to stay low?
  • Twice as many Jews left France for Israel in 2014 than in 2013.

Andrew Bacevich said that before Syria, the US launched interventions in 13 countries in the Islamic world since 1980.

Leon Panetta at the Panetta Institute said:

  • We are entering a more threatening and more dangerous period in the war on terrorism.
  • Paris was a French intelligence failure because they had these individuals on watch lists.
  • Europe is less aggressiveness than the US at going after these individuals when they return.
  • The presidency is not just about policy and substance, but also about the optics of leadership.

Ruchir Sharma at Morgan Stanley said:

  • The world was perilously close to recession in 2014 – only 2.6% growth versus the recession benchmark of under 2% growth.
  • Global recessions happen regularly – in the early 80s, two in the 90s, in the early 2000s, and the one that began in 2007.
  • We are due a global recession. The catalyst could be China, which contributed 38% of global growth in 2014, versus 20% from the US, and 13% from the EU. In 1994, the proportions were 8%, 33% and 26% respectively.
  • Persistent low oil prices can signal weak demand and could be a leading indicator of the next global recession.

Doug Saunders at The Globe and Mail said:

  • Muslim minorities in European countries have grown during the last 20 years to between 1%-5%. In places like France for over 50 years, to almost 8% percent of the population.
  • Muslims could peak around 10% in a couple of countries in Europe within the next 20 or 30 years, so there is no chance of a Muslim population takeover.
  • Immigrants are extremely loyal to the countries they live in and their institutions, even Muslim populations that are not integrating well in terms of their beliefs.  The Pakistanis of northern England have done very poor economically yet are by some measures more loyal to Britain and its institutions, including the military, than the Anglican population of Britain. The percentage of Muslims who value their religion above their country is about the same as for Christians in those countries.
  • Muslim communities in Europe, despite being marginalized economically and educationally, tend to be among the most contented with their lives of any minority group, often more so than the general population.
  • No-go zones are a fiction. I have never seen a prayer mat in any of the hundreds of hotels in Europe that I have stayed at.

Malcolm Gladwell said the cause of the dramatic long time reduction in NYC crime is more complicated than simply an attention to visible signs of disorder: one very successful policy is based on police establishing real ties with their communities, to win the trust of families.

Bernard Harcourt  at Columbia Law School said the huge drop in NYC crime is due to reversion to the mean – what goes up a lot goes down a lot. San Diego had a very different policing approach yet exhibited similar drops in crime rates. Harcourt said Times Square has changed not because of broken windows policing, but because of real estate redevelopment that was planned in the 1970s.

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

at http://transcripts.cnn.com/TRANSCRIPTS/1501/18/fzgps.01.html

WTI Oil Advances as Jobs Data Bolsters U.S. Economy – Boomberg 03-07-13

Salient to Investors:

Stephen Schork at Schork Group said WTI climbed strongly for the first 6 weeks of 2013, then gave it all back in 2 weeks. Schork said there was no traction to the downside below $90, and $100 is too high to justify, so short-term expects near $95.

Stefan Wieler at Goldman Sachs said weakness in US oil demand may be overstated because of disruptions at pipelines and terminals from Hurricane Sandy in October that made it difficult for refiners to ship products. Goldman Sachs said the death of Chavez should have a limited impact on Venezuela’s oil production short-term, while new leadership may foster longer-term investment and boost output.

Tim Evans at Citi Futures Perspective said WTI is the flavor of the day despite the highly visible abundance of oil in the US. Evans said refineries are running at very low rates, so supplies should climb further, which makes the rally in WTI vulnerable.

Read the full article at http://www.bloomberg.com/news/2013-03-07/wti-oil-advances-as-jobs-data-bolsters-u-s-economy.html

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Chavez’s 681% Returns Mean Socialism Buoys Goldman: Andes Credit – Bloomberg 01-30-13

Salient to Investors:

Venezuela bondholders have returned 14.7 percent annually, double the emerging-market average, enriching investors from OppenheimerFunds to Goldman Sachs.

Sara Zervos at OppenheimerFunds said Chavez has done little good for Venezuela, but has serviced the bonds, and the Venezuelan securities are more attractive than Brazilian bonds, which offers little upside. Zervos said there’s still significant cushion and ability to pay, so spreads can compress more.

Russell Dallen at Caracas Capital Markets said Venezuela’s benchmark bonds are unlikely to replicate the gains of the past decade once the rally drives yields down closer in line with regional peers.

Standard & Poor’s said Venezuela’s net government debt is 22 percent of GDP, lower than the median 36 percent among similar-rated countries.

Sam Finkelstein at Goldman Sachs Asset Mgmt said the story has been deteriorating, but Venezuela will continue to pay their debt – the situation has to be much tighter, more fragile to trigger a default. Finkelstein is modestly overweight in Venezuelan bonds as the economy will improve after Chavez relinquishes power, and should the opposition win presidential elections, the extra yield of Venezuela bonds over Treasuries will narrow to 5 percent, levels similar to Ukraine. Finkelstein said investors are expecting a regime change to a more pragmatic and less idealist government.

Venezuelan bonds accounted for 6.7 percent of the Goldman Sachs Growth & Emerging Markets Debt Fund, its third-biggest investment.

Simon Nocera at Lumen Advisors said Chavez paid off the debt because non-payment would lead creditors to seize Venezuelan oil shipments, half of government revenues, and freeze Venezuelan assets overseas, including refineries and gas stations of Citgo.

JPMorgan Chase say the average yields on Venezuelan bonds are the lowest since January 2008, but at 9.04 percent are still double the emerging-market average of 4.49 percent. Venezuela’s 5-yr credit-default swaps indicate a 35 percent chance it will default by 2018.

Latin American countries including Brazil, Panama and Peru rewarded bondholders with gains fueled by economic growth, slowing inflation and surging foreign reserves.

Read the full article at http://www.bloomberg.com/news/2013-01-30/chavez-s-681-bond-returns-buoy-goldman-andes-credit-correct-.html

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