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