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Science and Attitude Shifts Will Drive Changes in Sugar Consumption — and Adoption of Natural Sweeteners

Sugar, whether from cane, beets, or in the form of high-fructose corn syrup, is under pressure globally from regulators and consumers who don’t like sugar’s negative health effects.  The consensus of scientists and physicians is that rapidly rising global sugar consumption over the past several decades has contributed to dramatically increased incidence of obesity, type II diabetes, and metabolic syndrome.  The more elite consumers are blazing a path that consumers in general will likely follow.  They are moving away from sugar, and also away from artificial sweeteners.  Even though full calorie soft drinks are the poster-child for the evils of sugar, the beverage industry is already adapting its offerings to new consumer tastes, and will continue to do so.  The big winners in the shift will be the discoverers and commercializers of new all-natural sweeteners.


China’s $278 Billion Air Pollution Control Program:  Benefits For Many Actors From Infrastructure Push

After alarming and headline-grabbing reports of elevated pollution levels at the beginning of the year, and the introduction of broad initiatives by Premier Li Keqiang in June, a formal set of policy initiatives — the 2013–2017 “Air Pollution Control Program” —  is nearing approval by the State Council.  China’s National Development and Reform Commission projects that the new policies will involve significant infrastructure spending to reduce reliance on coal for power generation, increase targets for power from natural gas, renewables, and nuclear power, and tighten automotive and industrial emissions standards.  Domestic and international natural gas players are set to benefit, as are European industrial concerns operating in China who are already used to more stringent environmental standards in their European or North American home markets.


Human-Computer Interfaces: Sea Changes Are Still Distant

Touch controls have finally broken the basic monopoly of keyboard input that, with few improvements, has dominated the universe of human-computer interaction for 40+ years.  Even though gaming technology has brought even more advanced controls into the picture, though, it seems likely that in the near-term, growth in this space will still be dominated by refinement and improvement of touch technologies.  Tech gurus are excited about the possibilities of gesture control, in which electronic devices “read” human hand and body gestures contextually and respond.  While thought leaders in the industry believe that this is the wave of the future, the business landscape of gesture control is likely to remain highly fragmented — and challenging for investors — for some time to come.


Mexico: A Lot of Promise, a Long Way to Go

WMexico’s eternal promise is still just around the corner.  Enrique Peña Nieto, the dynamic new president, has laid out his program for reform in many key sectors of Mexican public life and the Mexican economy.  We believe that reforms could allow Mexico to exploit its geographical and economic advantages; it’s proximate to the U.S. market, and China’s labor cost advantage is being eroded by rising Chinese wages.  But the battle is still uphill.  Even if Peña Nieto succeeds in pushing through landmark Constitutional reforms to allow foreign participation in the oil and gas sector, the details of new laws won’t appear until next year, and we won’t know until then if they’ll be enough to draw in the needed investment from foreign majors.  Our message on Mexico is, stay tuned.


Protectionism: Hurting American Consumers and Workers on Behalf of Special Interests

The Wall Street Journal brought a particularly egregious current example of protectionism to our attention — with the Commerce Department slapping punitive tariffs on Chinese hardwood plywood at the behest of American manufacturers.  Consumers will pay higher prices for downstream products (think kitchen and bathroom cabinets) and American companies using plywood as an input will lose market share to Canadian and Mexican rivals — and that means lost American jobs.  We see this as a small but very relevant example of the phenomenon of “rent seeking,” with special interests using government power to funnel money into their own pockets, rather than creating wealth.


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