| Dear Reader, Yesterday was an action-packed day 2 here at the SIC 2017 with five presentations and three expert panels featuring some of the best minds in investment and geopolitics. Day 2 began with a presentation by world-renowned economist David Rosenberg on what is really driving the markets today… hint, it’s not politics. David said that instead of focusing on news out of Washington, investors should be paying attention to what the Fed is doing. Why? Ten of the last thirteen interest rate hiking cycles have ended in a recession. David went on to say that he thinks we are in the very late stages of the cycle and as such, his firm Gluskin Sheff is stepping up quality and de-risking its portfolios to protect against a potential downturn. Next up, Louis Gave discussed why he thinks the US will underperform over the next decade. Louis points out that the prevailing investment theme of the day is often the one to bet against. Whether it’s energy stocks in the 1980s, Japanese stocks in the 1990s, or US tech stocks heading into the new century, these sectors were often the worst performing over the following decade. Today, with five of the ten largest companies in the world being US tech firms, Louis thinks they are likely to decline over the next decade. One of the major reasons he is bullish on emerging markets is the reacceleration of growth in China. Louis is extremely bullish on China because of the growing consumer class, which is now 750 million strong. Then we had our “global macro” panel featuring Lacy Hunt, Raoul Pal, Louis Gave, David Rosenberg, and Martin Barnes. When asked what they thought the endgame was for the massive build-up of debt in the global economy, the panel concluded that some type of default on pension obligations is likely to occur. After lunch, the SIC 2017 headliner Ian Bremmer gave an enthralling speech about the ongoing geopolitical recession and its potential implication. Ian said that he has never thought that geopolitics would be a major driver of markets, but it will be one of the biggest drivers going forward. Bremmer thinks populism will continue to flourish as people in developing countries have stopped believing in their leadership. We finished yesterday's program with a geopolitical panel during which George Friedman confirmed his claim yesterday about North Korea by predicting that "there's a 70% chance the US will attack...” Tune in to the live blog today beginning at 8:00 AM (EST) for highlights from day 3! Sincerely, 
Ed D'Agostino
Publisher
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