WEBVTT - Lehman II and Remembering Richard Ravitch 0:00:01.280 --> 0:00:05.119 You're listening to the Bloomberg Opinion podcast count Us Saturdays 0:00:05.120 --> 0:00:08.280 at one in seven pm Eastern on Bloomberg dot Com, 0:00:08.320 --> 0:00:11.479 the iHeartRadio app, and the Bloomberg Business App, or listen 0:00:11.520 --> 0:00:13.760 on demand wherever you get your podcasts. 0:00:15.760 --> 0:00:19.599 Welcome to Bloomberg Opinion I Amy Morris. This week we 0:00:19.800 --> 0:00:24.000 bid farewell to the last of the liberal fiscal conservatives. 0:00:24.640 --> 0:00:28.760 We also learn how standard legacy manufacturers can live in 0:00:28.840 --> 0:00:33.159 harmony with new technology like AI, and we take a 0:00:33.159 --> 0:00:36.000 look at how the fight against climate change has shifted 0:00:36.520 --> 0:00:40.519 and why the traditional climate champions are shifting their focus. 0:00:41.280 --> 0:00:44.720 But we begin with what some might call an inventory recession. 0:00:45.159 --> 0:00:49.120 Evercore chairman At Hyman tells Bloomberg News that the Fed 0:00:49.200 --> 0:00:52.400 should consider slowing down the interest rate hikes. 0:00:52.640 --> 0:00:55.160 At this point, the one more is baked in the cake. 0:00:56.240 --> 0:00:59.320 I think anything from now is a mistake. They're just 0:00:59.360 --> 0:01:03.360 creating a for a recession, or the more likelihood of 0:01:03.360 --> 0:01:03.920 a recession. 0:01:04.040 --> 0:01:07.560 But recession may be here for one industry already. It 0:01:07.600 --> 0:01:11.160 looks more and more like the materials and industrial world 0:01:11.640 --> 0:01:15.280 is either in or headed for some kind of slow down. 0:01:15.760 --> 0:01:19.080 And we welcome Bloomberg Opinion columnist Chris Bryant, he covers 0:01:19.160 --> 0:01:22.920 industrial companies in Europe. Chris, always a pleasure. Thank you 0:01:22.920 --> 0:01:26.000 for taking the time with us. The CEO of a 0:01:26.080 --> 0:01:30.120 chemical maker in Germany called the decline in sales volumes 0:01:30.319 --> 0:01:33.840 leman too, wow, what is going on? 0:01:34.880 --> 0:01:35.160 Well? 0:01:35.240 --> 0:01:39.759 I mean, Amy, I thought this was too irresistible to ignore. 0:01:39.840 --> 0:01:42.080 When these comments came a couple of weeks ago, it 0:01:42.160 --> 0:01:44.600 really sent a bit of a shop market around, a 0:01:44.680 --> 0:01:48.520 shock around the stock market because frankly, you know, comparisons 0:01:48.560 --> 0:01:51.360 to two thousand and eight really have people on edge. 0:01:51.680 --> 0:01:55.280 And you know, chemic pals is a very significant industry, 0:01:55.360 --> 0:01:57.320 is not one people like to think about very often 0:01:57.320 --> 0:01:59.840 because the products are quite complicated in the use k 0:02:00.280 --> 0:02:03.080 are so diverse. But that's exactly why it's an important 0:02:03.080 --> 0:02:05.560 indicator to keep an eye on. So when you have 0:02:05.680 --> 0:02:08.760 a chemical maker saying that the outlook you know, sales 0:02:08.880 --> 0:02:10.840 is like, you know, the worst he has seen since 0:02:11.080 --> 0:02:13.320 two thousand and eight, then really we need to sit 0:02:13.440 --> 0:02:16.679 up and listen. And what the ceover of Lanxes was 0:02:16.720 --> 0:02:21.200 basically saying is, yes, volumes are now declining at such 0:02:21.240 --> 0:02:25.440 a rapid pace and the prolonged nature of these sales 0:02:25.480 --> 0:02:28.240 declined as well. It's really stucking to worry him. And 0:02:28.360 --> 0:02:29.560 the SECTIM board. 0:02:30.080 --> 0:02:32.280 Never dawned on me before that this could be kind 0:02:32.320 --> 0:02:34.840 of a canary in the coal mine situation when it 0:02:34.880 --> 0:02:39.440 comes to watching the sales of chemicals. How does that 0:02:39.560 --> 0:02:43.000 chemical industry then help provide that signal for what is 0:02:43.040 --> 0:02:46.040 to come? Why monitor chemicals? Let's get deeper into that. 0:02:46.919 --> 0:02:49.720 Chemicals, of course, are very high up in value change. 0:02:49.760 --> 0:02:52.679 You know, basic peture chemical products that then get put 0:02:52.760 --> 0:02:55.680 into other products and before you know that product reaches 0:02:55.720 --> 0:02:58.960 the consumer, and therefore they're exposed to a very high 0:02:59.040 --> 0:03:04.679 number of markets, anything from say the construction industry through 0:03:04.720 --> 0:03:09.320 to consumer products. And therefore, you know, when chemical makers 0:03:09.320 --> 0:03:12.560 start to sound alarm about demand, that can be an 0:03:12.560 --> 0:03:16.160 indicator that you know, overall global demand is poor, but 0:03:16.280 --> 0:03:19.440 there's a particular thing that's going on in chemicals, and 0:03:19.160 --> 0:03:23.040 it also reflects on broader the broader economy, and it's 0:03:23.080 --> 0:03:26.720 this These chemical makers are talking a lot about de stocking, 0:03:27.280 --> 0:03:29.919 and this, of course is a result of the pandemic 0:03:30.000 --> 0:03:34.280 that we had. These supply chain difficulties and it forced 0:03:34.280 --> 0:03:38.320 a lot of businesses to order huge amounts of stock 0:03:38.360 --> 0:03:40.560 because they worried they were worried they wouldn't get any 0:03:40.960 --> 0:03:44.240 and so that what that's led to is businesses around 0:03:44.240 --> 0:03:46.400 the world are sitting on a lot of inventory. 0:03:46.600 --> 0:03:49.920 Therefore, when they start to worry that the economy is flowing. 0:03:50.080 --> 0:03:51.960 Naturally, the first thing they will do is say, well, 0:03:51.960 --> 0:03:54.200 we're not going to order any more just yet, because 0:03:54.200 --> 0:03:56.720 we've already got a lot and what we'd rather do 0:03:56.840 --> 0:03:59.640 is just run down those inventories and then we'll see 0:03:59.720 --> 0:04:01.840 later in the year whether we needed to order some more. 0:04:02.160 --> 0:04:04.200 And that's a normal thing in the economy. You get 0:04:04.320 --> 0:04:07.920 restocking phases and de stocking phases. What's strange, though, is 0:04:07.960 --> 0:04:09.920 that this de stocking phase has been going on for 0:04:09.960 --> 0:04:12.800 a while now. Chemical makers started talking about de stocking, 0:04:12.880 --> 0:04:15.000 you know, late last year, and they're still talking about 0:04:15.000 --> 0:04:16.680 it now, and they're saying it's going to continue for 0:04:16.720 --> 0:04:19.799 the rest of the year, which to me suggests that actually, 0:04:19.839 --> 0:04:22.200 really the problem is that the you know, underlying demand 0:04:22.240 --> 0:04:24.360 is not very good, and in fact we're seeing now 0:04:24.400 --> 0:04:27.880 you know, if you look at the manufacturing data, services 0:04:27.960 --> 0:04:31.240 remain very strong, but manufacturing is essentially already in session. 0:04:31.720 --> 0:04:37.120 Does this mean then that this particular faction would be 0:04:37.800 --> 0:04:40.279 different from just your plane old, run of the mill, 0:04:40.360 --> 0:04:41.800 everyday recession. 0:04:42.440 --> 0:04:45.440 You know, you can slice up the global economy in 0:04:45.560 --> 0:04:49.400 different ways, and clearly right now consumers are continuing to 0:04:49.480 --> 0:04:53.719 spand on services. They want to travel, they want to 0:04:53.720 --> 0:04:55.560 go through events, they want to socialize. 0:04:55.720 --> 0:04:58.120 What they're not doing as much, though, is buying stuff. 0:04:58.640 --> 0:05:01.839 Everybody ordered everything they wanted during the early part of 0:05:01.880 --> 0:05:04.520 the pandemic. Homes are full now of all the things 0:05:04.520 --> 0:05:08.440 everybody ever dreamed of having. And of course, therefore you're 0:05:08.480 --> 0:05:11.160 seeing this slowdown down in the in the manufacturing part 0:05:11.200 --> 0:05:15.600 of the economy. And so while you know, the employment 0:05:15.680 --> 0:05:18.080 levels remain very good and people are spending, they're not 0:05:18.160 --> 0:05:21.320 spending on the kind of stuff that chemical products go into, 0:05:21.400 --> 0:05:23.360 and all they spending on the kind of things that 0:05:23.400 --> 0:05:25.080 you know, manufacturers are producing. 0:05:25.680 --> 0:05:28.000 And therefore you do have this kind of two speed. 0:05:27.680 --> 0:05:29.480 Economy at the moment where you know, if you look 0:05:29.480 --> 0:05:34.640 at the data purchasing managers, data manufacturing is a prolonged slump. 0:05:35.560 --> 0:05:38.360 Services remain to be buoyant. So you can have these 0:05:38.360 --> 0:05:39.920 two things going on at the same time. 0:05:39.960 --> 0:05:42.240 I guess the question is whether you know one is 0:05:42.279 --> 0:05:45.520 going to pull down the other eventually, And my feeling 0:05:45.600 --> 0:05:49.440 is that, yes, when the chemical makers are saying the 0:05:49.520 --> 0:05:52.360 things are as bad as they were in two thousand 0:05:52.400 --> 0:05:54.520 and eight, and it probably does mean some kind of 0:05:54.520 --> 0:05:56.440 recession is on the way. 0:05:56.680 --> 0:05:58.919 This is an indication not just that there is a 0:05:58.960 --> 0:06:02.200 slowdown in the careical industry, but because of that, it 0:06:02.279 --> 0:06:05.320 may hint that there is a slowdown in manufacturing as 0:06:05.320 --> 0:06:07.960 a whole. Fewer things are being made because there's less 0:06:07.960 --> 0:06:11.800 of a demand for those things. What kind of things, well, I. 0:06:11.720 --> 0:06:15.479 Think we're talking about, you know, durable goods essentially, so 0:06:15.600 --> 0:06:17.880 anything from a sort of watery machine in your home 0:06:18.000 --> 0:06:21.719 to you know, a barbecue for your for your deck outside, 0:06:21.720 --> 0:06:24.640 and those kind of consumer products we're talking about on 0:06:24.680 --> 0:06:27.400 that side. But you know, we're you know, this is 0:06:27.440 --> 0:06:30.599 a bit broader than just chemicals, of course. And you know, 0:06:30.640 --> 0:06:32.640 if you look at that site that the number of 0:06:32.680 --> 0:06:35.880 these examples and the piece of people have been talking 0:06:35.960 --> 0:06:36.760 for example, about a. 0:06:36.760 --> 0:06:39.280 Freight recession now for many months. 0:06:39.600 --> 0:06:41.240 And what that means is if you look at, you know, 0:06:41.560 --> 0:06:45.719 the volumes that the trucking companies are carrying, or the 0:06:45.800 --> 0:06:49.800 volume of containers imported into the United States, those numbers 0:06:49.800 --> 0:06:52.240 have been falling up the cliff and you know, trucking 0:06:52.240 --> 0:06:54.520 companies have been sound in the alarm about the recession 0:06:54.560 --> 0:06:58.360 for Wana, and the container company, the container shipping companies, 0:06:58.360 --> 0:07:00.719 you know, the rates that they're able to are really 0:07:00.760 --> 0:07:03.560 starting to slump. And I think that's the issue here too, 0:07:03.920 --> 0:07:06.000 is that for a long time, you know, a lot 0:07:06.000 --> 0:07:09.800 of these chemical makers and other companies, they were suffering 0:07:09.840 --> 0:07:12.080 weak volumes, but they were able to you know, sort 0:07:12.120 --> 0:07:15.000 of cover up for that with high pricing. Of course, 0:07:15.000 --> 0:07:17.960 we've seen companies across the economy being able to raise 0:07:18.040 --> 0:07:21.800 prices and that's supported corporate profits and indeed, some people 0:07:21.800 --> 0:07:24.800 are saying, you know, corporate profits are driving inflation. The 0:07:24.920 --> 0:07:27.560 problem is that if you start to get these very 0:07:27.560 --> 0:07:30.920 big volume declients, then the pricing patterns of these companies 0:07:31.040 --> 0:07:33.640 had is going to go away. And that's what we've 0:07:33.640 --> 0:07:35.920 seen now some of the chemical makerss you know, talking 0:07:35.960 --> 0:07:39.160 also about pricing pressure coming in. It's just something new, 0:07:39.200 --> 0:07:41.280 of course, because until now, you know, when we had 0:07:41.320 --> 0:07:45.280 the supply chain crisis, you know, they were not only 0:07:45.360 --> 0:07:47.640 able to book really strong orders because people were just 0:07:47.680 --> 0:07:50.360 trying to order whatever they could, they were also able 0:07:50.400 --> 0:07:51.960 to do so at very high prices. 0:07:52.200 --> 0:07:56.239 Is this yet another quirk from the pandemic. You mentioned 0:07:56.280 --> 0:07:59.120 the pandemic and the supply chain issue and how that 0:07:59.360 --> 0:08:01.440 sort of fell off a cliffs edge. I'm wondering how 0:08:01.480 --> 0:08:05.120 long this particular u faction has been coming. 0:08:05.400 --> 0:08:07.240 I think it has been coming while. And of course 0:08:07.240 --> 0:08:10.800 it's a staggered effect across the economy. So the first 0:08:10.920 --> 0:08:13.680 companies to warn about this the stock you phenomenon with 0:08:14.000 --> 0:08:16.040 you know, the big box retailers in the United States 0:08:16.160 --> 0:08:18.800 last year were forced to say, yeah that, well, now 0:08:18.800 --> 0:08:20.480 we've got too much stuff. People don't want to buy 0:08:20.480 --> 0:08:22.880 it anymore. But you know, there to be some notes 0:08:22.920 --> 0:08:26.480 out from analysts recently pointing to the fact that raised inventory. 0:08:26.560 --> 0:08:29.440 So we're talking about the supplies that stops are a 0:08:29.440 --> 0:08:32.760 problem sort of across many sectors in the economy, and 0:08:32.800 --> 0:08:35.320 so you could get that effect start to happen in 0:08:35.440 --> 0:08:39.280 other sectors going forward. And and why because you know, obviously, 0:08:39.400 --> 0:08:41.280 you know companies at the moment they are looking very 0:08:41.320 --> 0:08:44.360 carefully at their cash flow and they're seeing interest rates 0:08:44.400 --> 0:08:47.440 start to rise, perhaps their death costs go up, and 0:08:47.480 --> 0:08:49.480 therefore they need to save every penny they can. And 0:08:49.520 --> 0:08:50.959 one way you can do that, of course, is to 0:08:51.000 --> 0:08:53.520 optimize your working capital, which means you know, essentially but 0:08:53.800 --> 0:08:57.800 sit on less inventory because of course that you know, 0:08:57.840 --> 0:08:59.840 the more stock you're holding, the more cash is tied 0:08:59.880 --> 0:09:02.280 up in that in that stock. As you start to 0:09:02.360 --> 0:09:04.120 run down those paths, and of course you know that 0:09:04.160 --> 0:09:06.839 does put you know, pressure on the economy and it 0:09:06.840 --> 0:09:07.360 will tend. 0:09:07.240 --> 0:09:08.400 To show up in the g defeat. 0:09:08.840 --> 0:09:12.480 GDP figures that people report inventories are a key point 0:09:12.520 --> 0:09:16.079 of that. Who my expectation in the coming months is 0:09:16.120 --> 0:09:17.000 that would be negative. 0:09:17.080 --> 0:09:19.200 But for growth, where's the rebound? 0:09:19.240 --> 0:09:22.160 Then normally you would say that, you know, this is 0:09:22.200 --> 0:09:24.800 a natural cycle in the economy. You get you know, 0:09:24.800 --> 0:09:28.120 as I said, de stocking phases, restocking phases, and I 0:09:28.120 --> 0:09:31.360 hope is that as soon as eventually a company will 0:09:31.400 --> 0:09:34.480 simply run out of stock, need to order some more, 0:09:34.559 --> 0:09:36.880 and off you I'll go to the races again. 0:09:37.480 --> 0:09:38.000 As I said. 0:09:38.520 --> 0:09:40.440 The issue I think here is that this is becoming 0:09:40.520 --> 0:09:43.560 quite a prolonged thing, and of course there's no real 0:09:44.679 --> 0:09:46.360 what's the you know, what's going to be the driver 0:09:46.520 --> 0:09:48.880 of that new restocking phase. And you know, many of 0:09:48.920 --> 0:09:52.400 the companies are warned on profits. And I'm talking here 0:09:52.440 --> 0:09:55.840 not just about Europe and the United States to you know, 0:09:55.880 --> 0:09:56.760 talked about China. 0:09:56.920 --> 0:09:58.880 There was this hope that China was. 0:09:58.880 --> 0:10:01.920 Going to drive the rebound, and unfortunately that's not been 0:10:01.960 --> 0:10:06.240 the case normally in previous you know, down phases. You know, 0:10:06.360 --> 0:10:08.560 China has you know, sort of applied some kind of 0:10:08.800 --> 0:10:11.520 massive stimulus and not we've gone again and you know, 0:10:11.720 --> 0:10:15.160 had a decade or more an hour of China, the 0:10:15.240 --> 0:10:18.600 Chinese real estate boom and massive you know flows into 0:10:18.640 --> 0:10:20.880 that sector, and of course that's now all come to 0:10:20.920 --> 0:10:22.480 a bit of a holt and well, you know, China 0:10:22.520 --> 0:10:25.040 has rebounded as it's reopened its economy. You know, it's 0:10:25.040 --> 0:10:28.160 been very disappointing compared to what I think the global 0:10:28.160 --> 0:10:32.640 manufacturing sector had hoped. And while that you know, remains absolently, 0:10:32.640 --> 0:10:34.840 I think it's very difficult to see what the catalyst 0:10:35.000 --> 0:10:37.560 might be because clearly, you know, it's difficult to know 0:10:37.600 --> 0:10:39.880 what's going to provide that that turnaround that lifts the 0:10:39.880 --> 0:10:42.040 manufacturing sector out of the recession. 0:10:42.240 --> 0:10:43.360 It clearly seems to be in. 0:10:43.559 --> 0:10:46.439 Thank you so much, Chris Bryan, a Bloomberg opinion columnist 0:10:46.520 --> 0:10:49.880 who covers industrial companies in Europe, and coming up a 0:10:49.920 --> 0:10:53.520 farewell to Dick Ravitch. A New York legend who passed 0:10:53.520 --> 0:10:55.840 away last week at the age of eighty nine. He's 0:10:55.840 --> 0:10:58.120 known for saving both New York City and the Metro 0:10:58.200 --> 0:11:01.680 Transportation Authority from financial ruined back in the nineteen seventies. 0:11:02.040 --> 0:11:04.120 We're going to learn all about him. You're listening to 0:11:04.120 --> 0:11:05.079 Bloomberg Opinion. 0:11:06.800 --> 0:11:10.599 You're listening to the Bloomberg Opinion podcast. Catch hast Saturdays 0:11:10.640 --> 0:11:13.800 at one and seven pm Eastern on Bloomberg dot Com, 0:11:13.840 --> 0:11:16.960 the iHeartRadio app and the Bloomberg Business app, or listen 0:11:17.040 --> 0:11:19.240 on demand wherever you get your podcasts. 0:11:21.080 --> 0:11:24.240 You're listening to Bloomberg Opinion. I'm Amy Morris. There was 0:11:24.280 --> 0:11:28.080 a time when the UK was a climate champion, setting 0:11:28.160 --> 0:11:31.840 the pace for tackling the climate change crisis. Prime Minister 0:11:31.920 --> 0:11:34.640 Rishi Sudnak made a pledge to the twenty twenty two 0:11:35.000 --> 0:11:38.080 United Nations Climate Change Conference just last fall. 0:11:38.240 --> 0:11:41.840 Our part the UK, which was the first major economy 0:11:41.840 --> 0:11:45.000 in the world to legislate for that zero, will fulfill 0:11:45.160 --> 0:11:49.040 our ambitious commitment to reduce emissions by at least sixty 0:11:49.080 --> 0:11:50.840 eight percent by twenty thirty. 0:11:51.040 --> 0:11:54.400 But now they seem to be falling behind, putting Britain's 0:11:54.559 --> 0:11:58.040 global standing at risk as other nations move ahead with 0:11:58.160 --> 0:12:02.840 bold new climate policies. Bloomberg opinion columnist Laura Williams covers 0:12:02.880 --> 0:12:06.200 climate change and she joins me now to talk about this. 0:12:06.600 --> 0:12:09.800 How has the UK helped drive change? 0:12:10.080 --> 0:12:12.600 Yeah? So, you know, there are plenty of past successes 0:12:12.640 --> 0:12:15.040 to be proud of. The Climate Change Acts. In two 0:12:15.040 --> 0:12:17.920 thousand and eight was the first time a leadlely binding 0:12:18.080 --> 0:12:21.080 mistigations target had been set by a country, and in 0:12:21.080 --> 0:12:24.280 twenty nineteen we were the first country to you know, 0:12:24.360 --> 0:12:26.680 enshrine and net a zero emissions to moment in law 0:12:26.720 --> 0:12:29.480 as well. And you know, we've really kind of led 0:12:29.520 --> 0:12:32.439 the pack and inspired other countries to make these kinds 0:12:32.440 --> 0:12:36.080 of commitments. But unfortunately those you know, that kind of 0:12:36.200 --> 0:12:38.600 period of climate leadership seems to be over. 0:12:39.040 --> 0:12:42.120 So what happened? Why is the UK lagging behind other countries? 0:12:42.160 --> 0:12:42.400 Now? 0:12:42.920 --> 0:12:45.120 I would say that it comes down to, you know, 0:12:45.280 --> 0:12:47.600 a chape. We've had several changes in leadership and the 0:12:47.640 --> 0:12:50.640 current leadership is not for saying that climate change as 0:12:50.679 --> 0:12:51.400 a priority. 0:12:51.960 --> 0:12:54.280 When you refer to leadership, are you talking about the 0:12:54.280 --> 0:12:57.440 Prime Minister? Because it seemed to be a priority last 0:12:57.520 --> 0:12:59.880 fall when he was talking to cop twenty seven, or 0:13:00.400 --> 0:13:04.200 also known as the UN Climate Change Conference. Has something 0:13:04.280 --> 0:13:05.480 changed since last fall? 0:13:06.120 --> 0:13:09.360 Well, I suppose the cost of living crisis has you 0:13:09.360 --> 0:13:11.360 know made a big difference. We've got lots of other 0:13:11.400 --> 0:13:15.160 things to pay for in the Ukraine War as well, 0:13:16.240 --> 0:13:19.720 might have you know, sort of shifted priorities. But other 0:13:19.760 --> 0:13:22.600 countries have really used the war as a way to 0:13:22.760 --> 0:13:26.720 kind of spark bold commitments on climate. We have the 0:13:26.760 --> 0:13:29.959 Inflation Reduction Act in the US, and the EU also 0:13:30.080 --> 0:13:33.440 has you know, bid bold you know, agenda setting plans 0:13:33.520 --> 0:13:38.280 to make you know, climate change the heart of the economy, 0:13:38.640 --> 0:13:41.000 and the UK just hasn't really done that. 0:13:42.120 --> 0:13:45.440 Why is it important to be the leader on the surface? 0:13:46.040 --> 0:13:49.960 Would it matter as long as everybody does their part. 0:13:50.080 --> 0:13:51.320 Who is out front? 0:13:52.840 --> 0:13:57.400 Well, you know, of course, any reductions anywhere is a 0:13:57.440 --> 0:14:03.160 reduction in carbon emissions, and that's great, But the UK is, 0:14:03.760 --> 0:14:06.839 you know, we it's just it's sad that we've lost 0:14:06.880 --> 0:14:10.560 our place in the world and you know, we were 0:14:10.800 --> 0:14:15.640 a global leader and we're gonna miss out on opportunities 0:14:15.720 --> 0:14:19.800 if we're not getting in now, if we're if we're 0:14:19.800 --> 0:14:22.560 not you know, pushing ourselves out, there is a good 0:14:22.640 --> 0:14:26.640 place to invest we're going to lose that investment and 0:14:27.120 --> 0:14:30.640 we'll will fall behind and we'll lose you know, global influence. 0:14:31.000 --> 0:14:35.240 Oh, let's talk about that, the investment opportunities and how 0:14:35.480 --> 0:14:38.480 that could be lost if if they are no longer 0:14:38.720 --> 0:14:40.640 out in front or at least near the front of 0:14:40.680 --> 0:14:42.200 the pack on this give me it. 0:14:42.240 --> 0:14:46.080 For instance, you know, other countries are you know leading 0:14:46.120 --> 0:14:49.560 the pack on. So take for instance, the US and 0:14:49.600 --> 0:14:53.400 carbon removal. The US is pushing a lot of money 0:14:53.480 --> 0:14:58.160 into helping drive you know, these new technologies which will 0:14:58.160 --> 0:15:02.520 be important in you know, removing those last stubborn bits 0:15:02.520 --> 0:15:05.920 of you know CO two emissions from industries like aviation 0:15:07.280 --> 0:15:11.640 and industry, agriculture, things like that, And so the US 0:15:11.680 --> 0:15:15.040 is really making it lucrative to invest, is really helping 0:15:15.160 --> 0:15:21.720 startups develop and become trustworthy, reliable, you know sources of 0:15:21.760 --> 0:15:24.960 carbon removal. The UK is good on the you know, 0:15:25.120 --> 0:15:28.040 the science side. We have a lot of research and development. 0:15:28.480 --> 0:15:31.720 But you know, as same stand is not a good 0:15:31.720 --> 0:15:35.880 place to start a company like a carbon removal company, 0:15:36.040 --> 0:15:39.880 and you know, the America and the EU are kind 0:15:39.880 --> 0:15:40.680 of leading there. 0:15:41.000 --> 0:15:43.160 If it's not the UK, then Lara, who is it 0:15:43.200 --> 0:15:46.840 who's taking the lead now and tackling climate change, well. 0:15:46.520 --> 0:15:49.760 I think you know, the European Union and the US 0:15:49.800 --> 0:15:53.280 of you know, bold climate policies aimed at spur and 0:15:53.320 --> 0:15:57.640 green investment. I would say those they're the kind of 0:15:57.680 --> 0:15:58.520 leaders right now. 0:15:58.680 --> 0:16:01.280 We haven't really expressed what it means to be a leader, 0:16:01.600 --> 0:16:04.560 like how do you quantify that? What's the unit of 0:16:04.600 --> 0:16:06.960 measure that you use to say, Oh, these guys are 0:16:07.000 --> 0:16:09.360 out in front on this versus somebody who may be 0:16:09.480 --> 0:16:11.440 lagging behind or completely off the chart. 0:16:11.760 --> 0:16:14.320 So I'm thinking about and I think the you know, 0:16:14.360 --> 0:16:17.840 the Climate Change Committee, who published a report recently which said, 0:16:17.880 --> 0:16:20.040 you know, the UK was lagging behind, would look at 0:16:20.040 --> 0:16:24.720 policy implementation and so they're kind of moving forward with 0:16:25.120 --> 0:16:32.360 really interesting and bold commitments and policies where the UK isn't. 0:16:32.720 --> 0:16:36.200 For instance, you know, a place where the UK could 0:16:36.360 --> 0:16:40.440 lead but is choosing not to, is on the demand side. 0:16:40.480 --> 0:16:43.560 So that's kind of things that make up individuals, trab 0:16:43.640 --> 0:16:47.320 and footprints, you know, switching to from a gashob to 0:16:47.360 --> 0:16:52.520 an induction hob, find an electric car, installing a heat pump, 0:16:52.600 --> 0:16:55.560 and we're really really behind on all of these things. 0:16:55.720 --> 0:16:58.040 And part of the reason for that is that electricity 0:16:58.160 --> 0:17:03.080 has these green taxes which make them makes electricity as expensive, 0:17:03.120 --> 0:17:06.480 if not a little bit more expensive than gas. That 0:17:06.600 --> 0:17:09.000 to be easily ractified by just taking off those green 0:17:09.040 --> 0:17:12.159 taxes and putting them on gas to mate electricity cheaper. 0:17:12.200 --> 0:17:14.119 And so that would make it really really easy for 0:17:14.160 --> 0:17:21.199 people to mate these individual easy choices to you know, 0:17:21.320 --> 0:17:23.719 be more eco friendly in their daily lives. And that 0:17:23.800 --> 0:17:25.600 doesn't get us all the way to net zero, but 0:17:25.680 --> 0:17:29.720 it makes the job easier as we move forward, and 0:17:30.400 --> 0:17:34.480 that you know hasn't been on the agenda necessarily for 0:17:34.520 --> 0:17:34.880 the UK. 0:17:35.520 --> 0:17:40.720 I wonder if there is a psychological risk among countries 0:17:41.040 --> 0:17:44.439 when you see a leader like the UK start to 0:17:44.480 --> 0:17:48.479 sort of slip and fall behind. Does it have a 0:17:48.520 --> 0:17:51.840 residual effect? Is there a risk of their being sort 0:17:51.880 --> 0:17:54.919 of a domino effect? Where are the other countries, instead 0:17:54.960 --> 0:17:57.840 of stepping up and taking the lead, say oh, you know, 0:17:58.040 --> 0:18:00.679 maybe maybe we can just take a minute, you know, 0:18:00.800 --> 0:18:02.959 and not have to worry about this as much, and 0:18:03.000 --> 0:18:06.280 everyone starts to fall behind and become more laco daisical 0:18:06.320 --> 0:18:08.160 when it comes to this topic. Is that a risk? 0:18:08.400 --> 0:18:11.240 I think that's definitely a risk. And you know, once 0:18:11.400 --> 0:18:15.080 the UK was inspiring it was inspiring other countries, you know, 0:18:15.200 --> 0:18:19.040 to follow its lead, and it's looking increasingly and tredible. 0:18:19.160 --> 0:18:21.600 You know, when the UK is saying, oh, you should 0:18:21.680 --> 0:18:23.760 try and ditch coal, but then it opens, you know, 0:18:23.840 --> 0:18:27.040 decides to open a new coal mine in its own country, 0:18:27.520 --> 0:18:30.080 then you know we're not going to be taken seriously 0:18:30.160 --> 0:18:35.160 on the world stage. And it sends a message that 0:18:35.880 --> 0:18:40.399 you know, climate action isn't as important necessarily. 0:18:41.600 --> 0:18:42.399 As it once was. 0:18:42.880 --> 0:18:46.480 And to that end, we just got word this week 0:18:46.800 --> 0:18:50.600 that Monday, the third of July was the hottest day 0:18:50.760 --> 0:18:54.159 ever recorded on Earth. Now, I know that this is 0:18:54.240 --> 0:18:58.480 relatively new information, but you do cover climate and climate 0:18:58.840 --> 0:19:03.359 issues for bl Bloomberg. So how does that factor into 0:19:03.480 --> 0:19:07.400 any decisions that might be made on a local, state, 0:19:07.680 --> 0:19:11.800 or municipal or governmental level When you hear that sort 0:19:11.840 --> 0:19:15.000 of data that Monday was the hottest day ever recorded 0:19:15.040 --> 0:19:15.480 on Earth? 0:19:15.880 --> 0:19:18.480 Yeah, it's I mean, it's really drives at home that 0:19:18.600 --> 0:19:20.760 the fact that climate change is here and action needs 0:19:20.760 --> 0:19:23.120 to be made now. And I think you know, when 0:19:23.119 --> 0:19:26.200 you readet events like this, it really brings it home 0:19:26.240 --> 0:19:30.080 to people, and you know people are starting to care. 0:19:30.520 --> 0:19:34.480 You know, last year when we had the UK reached 0:19:34.520 --> 0:19:37.880 four ced degrees celsius and that has never been seen 0:19:37.920 --> 0:19:40.720 before and I think that was really a way up 0:19:40.760 --> 0:19:43.800 pool for people. And you know, people are now really 0:19:43.880 --> 0:19:45.840 quite concerned about climate change and they would like to 0:19:45.880 --> 0:19:48.399 see climate action and that's becoming important to them. And 0:19:48.440 --> 0:19:52.880 so the more we see these record breaking days, the 0:19:53.119 --> 0:19:55.240 more staid that you know, the general public are going 0:19:55.280 --> 0:19:58.080 to be quite rightfully so, because it is quite scary, 0:19:58.600 --> 0:20:01.400 and you know, the more that seeing the leaders tate 0:20:01.440 --> 0:20:03.399 time action will be important to them. 0:20:03.640 --> 0:20:06.920 Laura Williams is a Bloomberg Opinion columnist who covers climate 0:20:07.000 --> 0:20:11.160 change and coming up how legacy manufacturers can keep up 0:20:11.200 --> 0:20:14.960 in a world that seems dominated by new technology, especially AI, 0:20:15.359 --> 0:20:19.560 can old school industry survive? Don't forget. We're available as 0:20:19.560 --> 0:20:23.560 a podcast on Apple, Spotify or your favorite podcast platform. 0:20:23.960 --> 0:20:25.240 This is Bloomberg Opinion. 0:20:26.680 --> 0:20:30.680 You're listening to the Bloomberg Opinion podcast Contest Saturdays at 0:20:30.680 --> 0:20:33.800 one and seven pm Eastern on Bloomberg dot Com, the 0:20:33.880 --> 0:20:37.000 iHeartRadio app, and the Bloomberg Business App, or listen on 0:20:37.080 --> 0:20:39.160 demand wherever you get your podcasts. 0:20:41.240 --> 0:20:45.439 This is Bloomberg Opinion. I'm Amy Morris. Legacy manufacturers have 0:20:45.480 --> 0:20:48.480 been trying to rebrand themselves as technology companies for twenty 0:20:48.560 --> 0:20:51.560 years or more, but even their own investors don't see 0:20:51.560 --> 0:20:54.560 it that way. They associate them more instead with chunks 0:20:54.560 --> 0:20:57.800 of metal whose sales are dictated by economic twists and turns. 0:20:57.840 --> 0:21:02.480 Bloomberg opinion columnists Brooks Sutherland covers deals and industrial companies, 0:21:02.720 --> 0:21:04.399 and she's going to help clear this up for us, 0:21:04.400 --> 0:21:07.280 she joins us. Now, brook always a pleasure, Thank you 0:21:07.320 --> 0:21:09.399