Fareed Zakaria GPS – CNN 03-20-16

Salient to Investors:

Fareed Zakaria said:

Trump’s nomination would transform the Republican party into a blue-collar populist, nationalist movement with a racial element, like many others in the West.

The Federation of American Scientists says Pakistan has the fastest growing nuclear arsenal – up as much as 44% in the last 4 years – and could have 251 warheads by 2025, the 5th largest stockpile in the world ahead of Great Britain.

The IEA says that 90% of new global electrical generation in 2015 came from renewable sources, of which more than 50% came from wind power. China has reduced its coal usage by 10% in just 4 years to under 70% of its total electricity.

Richard Haass at the Council on Foreign Relations said the era of consolidated nation states in the Middle East where governments hold sway over the entire territory is ending.

Thomas Frank said

Both US political parties have abandoned the working class and become the party of elites, and have stopped caring deeply about economic inequality. Inequality has worsened under Obama.

Broadly speaking, the Republican party is becoming a blue-collar populist nationalist party while the Democratic party is becoming the party of urban professionals.

Tom Wainwright at The Economist said:

Incarcerating drug dealers in the US and Europe only reduces supply and pushes up prices, while addictive consumption remains constant, thus inflating the size of the drug market and enriching the drug cartels.

Drugs should be legalized, one by one. Legalized marijuana has greatly reduced the criminal economy in places like Colorado and deals a huge blow to organized crime. Legalized heroin in Switzerland means addicts no longer have to steal or deal.

Piers Sellers said that overshooting the 2-degree global warming is a near certainty because of the momentum of the global economy, and solutions will be implemented later than scientists would like, as usual.

Watch the video at http://globalpublicsquare.blogs.cnn.com/category/gps-episodes/ or read the full transcript at http://transcripts.cnn.com/TRANSCRIPTS/1603/20/fzgps.01.html

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Fareed Zakaria GPS – CNN 03-13-16

Salient to Investors:

Fareed Zakaria said:

The US economy will grow much faster than the eurozone and almost 3x as fast as Japan’s in 2016.

The Financial Times says America’s top 5 investment banks in 2015 made twice as much money as European banks and bettered them on almost every financial measure.

UBS says America ranked 5th of countries best able to take advantage of the fourth industrial revolution.

Lawrence Summers says:

The fundamental US economic problem is the lack of demand, too much savings and too little consumption. The best solution is a major boost in infrastructure spending.

Future generations will be better off owing long-term bonds at low rates in a currency they can print than they would be inheriting a vast, deferred maintenance liability.

Adam Gopnik at the New Yorker said it is important to see Trump as primarily a nationalist and not a fascist.

Gideon Rachman at the Financial Times said the fear of Trump is overdone, a la Reagan, but his temperament, style and extreme touchiness is a concern.

Valentine Pasquali at Global Finance and Aspen Institute said the striking parallels between Trump and Berlusconi go well beyond politics – Berlusconi’s bad legacy has shaken Italians’ trust in their institutions.

Yascha Mounk at Harvard and New America said people no longer trust any politician: and the most dangerous thing about Trump is not his radical policies or dangerous ideology but that his only course is himself, which makes him willing to do anything.

Eric Foner at Columbia University said American politics has always had demagoguery but egotism run amok is a new low in US political debates.

Barry Strauss at Cornell said:

The death of Julius Caesar was a turning point, an opportunity for the ‘America’ of the world at that time, Rome, to reform.

Caesar had more power, money, army than anyone before in Rome, and was a genius, smarter than anyone, and a great general, politician and author – a rarity.

Caesar’s assassination was well planned by top Roman generals, and succeeded partly because he did not believe it; showing politics always trumps military thinking, and you must always have a political plan.

Jonathan Weiler at UNC said:

The American political polarization of the last 30 years is driven at the grass-roots level by differences in personality among voters.

How people answer parenting questions tells us how they see the world politically much better than gender, income, education.

White, working-class voters who are low on authoritarianism dislike Trump, while college-educated voters who are high on authoritarianism like him a lot.

Watch the video at http://globalpublicsquare.blogs.cnn.com/category/gps-episodes/ or read the full transcript at http://transcripts.cnn.com/TRANSCRIPTS/1603/13/fzgps.01.html

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Fareed Zakaria GPS – CNN 03-06-16

Salient to Investors:

Fareed Zakaria said:

A main cause of the rise of Islamic extremism is the cowardice of Muslim moderates.

The cyber war arms race is exploding, potentially more destructive than anything before.

Paul Krugman at the New York Times said:

We don’t know why economic recovery has been slow since the end of the Clinton boom.

Since saving the banks, everything has been moving in the wrong direction.

Vigorous public spending would work even better than tax cuts, which might not be spent, and we already have too much saving and too few private investment opportunities. The federal government can borrow for 30 years at 3 percent: adjusted for inflation, practically nothing.

Since 2007, construction spending has collapsed because states and municipalities have been financially strapped and because of the anti-public spending ideology, which is insane fundamentally.

Many advanced countries including the US have had higher debt ratios without anything terrible happening.

 

Phil Mudd says America’s civilian infrastructure is disturbingly vulnerable to cyber-terrorism.

Vali Nasr at Johns Hopkins said:

Iran’s election result was a humiliation for conservatives, not a victory for liberals but for Rouhani’s centrists who support engagement with the outside world and the nuclear deal.

Anti-Americanism is a pillar of Iran’s official state ideology so will take a very long time to go away.

Thomas Erdbrink at the New York Times said the Iranian election result was a big win for reformist, moderate, centrists over the hard-liners who have been in power for at least for the past decade.

Watch the video at http://globalpublicsquare.blogs.cnn.com/category/gps-episodes/ or read the full transcript at http://transcripts.cnn.com/TRANSCRIPTS/1603/06/fzgps.01.html

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Fareed Zakaria GPS – CNN 02-28-16

Salient to Investors:

Fareed Zakaria said:

David Miliband says both left- and right-wing revolts stem from globalization: the right has no answer to globalization eroding people’s identities, while the left has no answer to globalization exacerbating inequality.

The US will not build a wall nor deport 11 million people nor ban all Muslims entering it, nor will Britain leave the EU.

Mother Jones said in 2014 that the average gun homicide costs taxpayers nearly $400,000.

Michael Hayden said America is safer with unbreakable end-to-end encryption.

 

 

 

Bill Gates said global warming is real, man-made and an urgent problem.

 

Watch the video at http://globalpublicsquare.blogs.cnn.com/category/gps-episodes/ or read the full transcript at http://transcripts.cnn.com/TRANSCRIPTS/1602/28/fzgps.01.html

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Fareed Zakaria GPS – CNN 02-21-16

Salient to Investors:

Fareed Zakaria said that in the next few years, 1 billion Indians will get access to the Internet, most for the first time.

Tom Friedman at the New York Times said:

A EU fracture would be a negative strategic trend for the US.

Putin looks for sugar highs to distract from the radically shrinking Russian economy.

When the price of oil is low, freedom eventually flourishes.

James Fallows at the Atlantic said:

America is basically a big forest in the east, a big farm in the middle, and a big desert and mountain range in the west.

The seeds of a second reform age are being sown around the US, just as the first Gilded Age led to reforms.

Watch the video at http://globalpublicsquare.blogs.cnn.com/category/gps-episodes/ or read the full transcript at http://transcripts.cnn.com/TRANSCRIPTS/1602/21/fzgps.01.html

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Fareed Zakaria GPS – CNN 02-14-16

Fareed Zakaria said:

The Heritage Foundation ranks America 11th in Economic Freedom, behind Canada, Australia, Ireland, New Zealand, Chile, Switzerland and Singapore.

American exceptionalism from the start was based on ideas open to all. Gordon Wood said Americans lack a nationality like other countries, and is why it can more easily absorb immigrants.

Rand Corp says that were Russia to attack the Baltic States, it would win fast because it has far more firepower and manpower in the region.

Michael Chertoff at Chertoff Group said radical violent jihadism has metastasized from South Asia and the Middle East to North and East Africa and Europe.

Peter Bergen at CNN said:

The only worse thing to a dictator is anarchy.

Historically, revolutionary movements tend to attract idealistic, mostly young men, who are not terribly impoverished. Becoming radicalized is not for illiterates.

Rana Faroohar at CNN said:

A global recession is coming: historically we get one every 8 years.

The two major economic forces are slowing emerging markets and the end of easy money: the Fed will not pump more into the global economy.

Market jitters will continue for some time.

Martin Wolf at the Financial Times said:

The global economy will grow below potential in 2016 but a recession is very unlikely, not in the major economies and especially not in China. The countries in real difficulty are too small to cause negative global growth.

Business people do not understand the overall economic system.

The Fed tightened too soon. The fundamental problem is the equilibrium rate.

 

Alec Ross said:

The story of the next 20 years is going to build on the story of the last 20 years, namely digitization.

Advances in hardware and material sciences and artificial intelligence will create entirely new trillion-dollar industries. The last trillion-dollar industry was created out of computer code, the next out of genetic code.

We are 3 or 4 years from the revolution in life sciences.

Robots in the cartoons and movies of the 1970s will become reality in the 2020s. The huge breakthroughs in mathematics in the last 18 months are making once complex robotic tasks possible.

Cloud robotics means we do not have to build million-dollar robots to get remarkably sophisticated AI.

In the past, automation and robotics replaced blue-collar labor but AI combined with new automation technologies will replace low-level white-collar work; as with buying and selling a home.

65% of jobs for children entering primary school today don’t presently exist, so the most important job is parenting.

Computer coders have a few decades’ worth of guaranteed employment in front of them.

Watch the video at http://globalpublicsquare.blogs.cnn.com/category/gps-episodes/ , listen at http://podcast.cnn.com/fareed-zakaria-gps/episode/all/TkwD3eujmTzNlz/fzgps-2016-02-14.html or read the full transcript at http://transcripts.cnn.com/TRANSCRIPTS/1602/14/fzgps.01.html

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The World’s Favorite New Tax Haven Is the United States – Bloomberg 01-27-16

Salient to Investors:

The US is emerging as a leading tax and secrecy haven for rich foreigners because it is resisting new global disclosure standards. The US is one of only a few countries left actively promoting accounts that will remain secret from overseas authorities – with Bahrain, Nauru, and Vanuatu.

Andrew Penney at Rothschild said the US is effectively the biggest tax haven in the world.

Confidential accounts that hide wealth protect against kidnappings or extortion in their owners’ home countries.

Gabriel Zucman at Berkeley said Swiss banks hold $1.9 trillion in assets not reported by account holders in their home countries.

The UN estimates at least $1.6 trillion in illicit funds are laundered through the global financial system each year.

Read the full article at http://www.bloomberg.com/news/articles/2016-01-27/the-world-s-favorite-new-tax-haven-is-the-united-states

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Fareed Zakaria GPS – CNN 01-24-16

Fareed Zakaria said:

Lower oil prices are generally good for all countries except the major oil producers, but the size and speed of this drop could produce a credit crisis and deflationary spiral.

In periods like the present, open systems do better than closed ones. America’s transparency forces it to tackle its problems.

Sweden: Euro Monitor says that in 2015, 11% of the value of consumer transactions were made with cash versus 42% worldwide. The KTH Royal Institute of Technology says currency in circulation dropped by 25% in the last 6 years. Credit Suisse said between 2010 and 2012 over 500 Swedish bank branches went cashless and 900 cash machines were removed. The Swedish Bankers Assn says bank robberies in Sweden dropped from 110 in 2008 to 7 in 2015. The New York Times says e-fraud in Sweden more than doubled in 2015 versus 10 years ago.

The IAEA says that Iran has destroyed 98% of its enriched uranium and rendered inoperable its plutonium pathway – far more substantial than most military experts believed would have resulted from military strikes.

The World Economic Forum says that by 2050, the world’s oceans will contain more plastic than fish by weight and says the greatest global risk is the failure of climate change mitigation and adaptation.

Watch the video at http://globalpublicsquare.blogs.cnn.com/category/gps-episodes/ , listen at http://podcast.cnn.com/fareed-zakaria-gps/episode/all/TkwD3eujmTzNlz/fzgps-2016-01-17.html or read the full transcript at http://transcripts.cnn.com/TRANSCRIPTS/1601/17/fzgps.01.html

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Fareed Zakaria GPS – CNN 01-17-16

Fareed Zakaria said:

Cass Sunstein wrote in Bloomberg that a study of Facebook analyzing posts between 2010 and 2014 found that people mainly share information that confirms their prejudices, while paying little attention to facts and voracity. The result was the proliferation of biased narratives fomented by unsubstantiated rumors, mistrust and paranoia.

Elizabeth Colbert in the New Yorker cited a 1970 experiment that found that simply by talking to one another, bigoted students became more bigoted and tolerant students became more tolerant.

The hard liners in Iran have always been very powerful.

Iranian sanctions relief will be less dramatic than people realize because Iran needs oil at $145 a barrel to balance its budget.

Joe Cirincione at the Ploughshares Fund said:

Iran does not have the capability to build a nuclear bomb and it would take them at least a year to make the material even for one bomb and are years away from the capability of building a nuclear weapon.

If they had a secret facility, they would need a secret mine to get the uranium, a secret group of scientists, and a secret facility for building the centrifuges. It would be extraordinary if Iran could secretly break out of the nuclear deal without our knowledge.

Brett Stephens at the Wall Street Journal said:

The enthusiasm about the Iran nuclear deal is reminiscent of that for the Yongbyon deal in 1994 when the same promises were made about North Korea’s nuclear program. Historically we have been surprised by nuclear development developments: like India’s surprise bomb test in 1998 which started a nuclear arms race in South Asia, and North Korea in the 2000s. The pathways to proliferation are multiplying and what we don’t know is vast.

The biggest Iranian hostage of all is the nuclear deal itself, as exhibited by US removal of the sanctions for Iran test firing two ballistic missiles.

The US must make sure that its allies understand that we will remain committed allies despite obvious defects in their social and political systems.

Wendy Sherman at Harvard said the US will proceed with sanctions for Iran’s missile violations: it takes time to gather the evidence.

Karim Sadjadpour at the Carnegie Endowment for International Peace said:

The nuclear deal was not signed by the Iranians because of geopolitics but because of economics.

Iranians overwhelmingly want change and we should not underestimate their will for change, but we should not underestimate the will of their hardliners to crush change.

Iranian expectations that their quality of life will significantly improve post-sanctions may be disappointed.

Iran is the largest population isolated from the global economy, so attracts huge interest from Asian and Western businessmen.

The last remaining Iranian-American hostage in Iran is an energy consultant, which sends the message to Western businesses that Iran is not yet ready for change.

Watch the video at http://globalpublicsquare.blogs.cnn.com/category/gps-episodes/ , listen at http://podcast.cnn.com/fareed-zakaria-gps/episode/all/TkwD3eujmTzNlz/fzgps-2016-01-17.html or read the full transcript at http://transcripts.cnn.com/TRANSCRIPTS/1601/17/fzgps.01.html

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Fareed Zakaria GPS – CNN 01-10-16

Fareed Zakaria said:

The most significant trend in the Middle East is Sunnis versus Shiites, which will continue to limit the ability of any outside power to stabilize the region.

Saudi Arabia faces challenges from ISIS to domestic extremists. Plunging oil prices have collapsed government revenues so its generous subsidies to its people will be hard to sustain.

10% to 15% of Saudis are Shiite and live atop the kingdom’s oil fields.

The single greatest threat to America from the Middle East remains radical Sunni jihadists, many of whom draw support from Saudi Arabia.

Americans should root for China to succeed, else feel the pain at home.

The State of the Global Islamic Economy expects Muslims to spend $327 billion on clothing by 2020, versus $230 billion in 2014, ranked third after the US and China. Muslims spent $54 billion on cosmetics in 2014 and that will grow to $80 billion by 2020.

The Violence Policy Center says Alaska had the highest rate of deaths caused by guns in 2014, followed by Louisiana and Mississippi. Gunpolicy.org says Alaska had a higher rate of gun deaths than Mexico. Hawaii and Rhode Island had the lowest gun death rates.

Martin Indyk at Brookings said:

The US went along with the headstrong young leadership in Saudi Arabia into getting stuck in a war in Yemen. 50% of the Gulf states military capability is embroiled in war that is causing humanitarian crisis in Yemen, to the advantage of Iran.

Pulling out of Afghanistan all together is not a good idea because we at least have a leadership there that we can work with.

The US leverage lies in making clear to the Chinese that if they don’t pressure North Kora then we will have no choice but to boost our presence in their region to protect our allies, South Korea and Japan.

Vali Nasr at Johns Hopkins said:

The US invasion of Iraq in 2003 was the tipping point.

The whole geostrategy of the region changed once the US started talking to Iran and decided that it is not as committed to containing Iran as Saudi Arabia expected.

The problem is not containing Iran but the too many Shiites in the region who have to accept to live under a Sunni political order that existed before 2003 Iraq invasion. A Sunni order in which Iran will have absolutely no influence and the Shiites will have absolutely no ability to rely on Iran.

Afghanistan is going sideways and downwards.

Nawaf Obaid at Harvard said:

Saudi Arabia is taking on a much more assertive and aggressive foreign policy to defend themselves from Iran and loss of US presence and leadership in the region. The Saudis will increasingly battle Iranian presence and influence in the Arab world in the next several years.

You cannot have an agreement with a country, Iran, which supports a Syrian dictator who has killed 400,000 people, funds a Shia militia in Iraq guilty of the most atrocious things, and not expect the new deputy crowned prince of Saudi Arabia for irrational decisions. He did not have the luxury to stand still and await guidance from the US which was not coming in the first place.

Robin Wright at The New Yorker, US Institute of Peace and Woodrow Wilson Center said:

The Sunni-Shia schism is turning into one of the biggest divides in Islam in 14 centuries and playing out politically, ideology, strategically, ethnically, and virtually every range.

The crisis has begun to derail Iran’s desire to end its pariah status and restore its stature.

Both Iran and Saudi Arabia are in transition, which limits the influence of the outside world.

Without Chinese help, the prospect of any moderation in North Korea is unlikely. Their leader is 33 years old and very insecure.

Ruchir Sharma at Morgan Stanley said:

A global recession is due. Since the early 1970s, global downturns have struck every 7.5 years on average.

Every country will be affected by China’s policies in 2016. China is now the world’s biggest driver of economic growth. China’s debt levels have risen to 300% of GDP: no developing country in history has ever taken on debt faster than China in recent years. Furiously rising debt levels are the single most reliable predictor of financial crisis.

China’s leadership is so worried about angering its people with slowing growth and rising unemployment that it has been unwilling to stop goosing its economy.

Niall Ferguson at Harvard said the younger Henry Kissinger was not Machiavellian at all, but inept in his attempts for self-advancement and politically slightly naive.

Gary Kasparov said:

Russia is at a very dangerous stage because of Putin and things will get worse before they get better because of collapsing oil prices and the Russian budget. There is no visible positive scenario, only choices for lesser evil.

Putin will continue his aggressive foreign policy because his white knight propaganda needs these victories. Putin is a very capable KGB officer and excellent negotiator and poker player. If not for NATO membership, Putin’s tanks would be in Estonia and Latvia. Putin looks for the weak spot on the map and grabs it if he can.

The fundamental problem of the West is complacency after the collapse of the Soviet Union and the end of the Cold War.

Watch the video at http://globalpublicsquare.blogs.cnn.com/category/gps-episodes/ , listen at http://podcast.cnn.com/fareed-zakaria-gps/episode/all/TkwD3eujmTzNlz/fzgps-2016-01-10.html or read the full transcript at http://transcripts.cnn.com/TRANSCRIPTS/1601/10/fzgps.01.html

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