Speaker 1: Welcome to the Bloomberg Surveillance Podcast hometom Keene. Along with
Speaker 1: Jonathan Ferroll and Lisa A. Brownwitz Jayleie, we bring you
Speaker 1: insight from the best and economics, finance, investment and international relations,
Speaker 1: Fine Bloomberg Surveillance and Apple podcast SoundCloud, Bloomberg dot Com
Speaker 1: and of course, on the Bloomberg termament. Eight years ago,
Speaker 1: Tom and I sat around the table and had a
Speaker 1: big conversation about who would hike first, the Bank of
Speaker 1: England or the Federal Reserve, and who would hike more,
Speaker 1: the Bank of England or the Federal Reserve. In the end,
Speaker 1: the Bank of England waited, waited, and did very little
Speaker 1: the soul. In fact, it was the Federal Reserve that
Speaker 1: was almost flying solo for the big developed markets central banks.
Speaker 1: It will be different this time. Derren Maya, the head
Speaker 1: of America's research and fex strategy at HSBC Securities, joins
Speaker 1: us right now, Darren, how difficult and different will this
Speaker 1: one be compared to what we saw last time around.
Speaker 1: It's it's a really tricky time for central banks. I mean,
Speaker 1: Tom use the word conundrum in the terms of market behavior,
Speaker 1: but for central banks this is it. I mean, you've
Speaker 1: got an inflation problem. So do you respond to that
Speaker 1: you've got a real income squeeze since you take a
Speaker 1: greater account of that. This is really tricky. I mean,
Speaker 1: look as a house where we think the FED errors
Speaker 1: on the side of a fifty basis point move in March,
Speaker 1: whereas for the Bank of England we think they're gonna
Speaker 1: just stake with the twenty five pace that they delivered
Speaker 1: last time around. Clearly the effects takeaway that is it
Speaker 1: should be lower cable um but they are pretty well.
Speaker 1: Certainly the FED call still very finely balanced in our opinion.
Speaker 1: But dare, let's go to the fan distribution. It's personified
Speaker 1: by jump conditions. We have a three point for standard
Speaker 1: deviation move and United Kingdom inflation. Are we going to
Speaker 1: start to see currency markets currency pairs in a jump
Speaker 1: condition where there's big figure opportunity? I think, honestly, I
Speaker 1: think the efex market is struggling to get its head
Speaker 1: around this one because it's facing that same conundrum that
Speaker 1: policymakers they're facing. What will be the spin And you know,
Speaker 1: as as John pointed out in the UK, it's a
Speaker 1: there's gonna be a very transparent income squeeze coming up
Speaker 1: with the energy price hikes that that are legislated for.
Speaker 1: We know they're coming, but that's gonna have a huge
Speaker 1: impact on the consumer consumer sentiment. That said, yesterday we
Speaker 1: had wages data p A y E data which showed
Speaker 1: wages growth at least for that sector growing quicker than inflation,
Speaker 1: so positive real income growth. That's you're not seeing that
Speaker 1: the US, You're not seeing that in the Eurozone. So
Speaker 1: I think that still allows the Bank of England to typen.
Speaker 1: I just don't see that. The five people who voted
Speaker 1: for basis points the last time, why is one of
Speaker 1: them gonna suddenly vote for fifty. I just don't see it.
Speaker 1: Despite that big inflation upside, the market seems to agree
Speaker 1: with some of your concerns about the economy. When you
Speaker 1: look at the two tens yield curve in the United Kingdom,
Speaker 1: it's all the a few basis points way from inversion.
Speaker 1: And George Saravellis was talking about this concern with the
Speaker 1: market even pricing in rate cuts by the Bank of
Speaker 1: England next year. What do you think is sort of
Speaker 1: the consequence for the pound if there is that type
Speaker 1: of backdrop. Look, it is very peculiar, isn't it. And
Speaker 1: I look at the four do I S market, so
Speaker 1: that has you know, all the tightening coming in the
Speaker 1: next twelve months um, and then has a hundred basis
Speaker 1: points lower for five years out. So in other words,
Speaker 1: the market is saying, hey, yeah, we think you're going
Speaker 1: to tighten, but we think it's a mistake or at
Speaker 1: least it won't stick um. And that reflects what we're
Speaker 1: seeing in inflation. As you say, in terms of the economy,
Speaker 1: there's a squeeze and consumers, but there's also squeeze on
Speaker 1: businesses UM. So it's all a pretty toxic mix, I
Speaker 1: would say for sterling. And thankfully none of us that
Speaker 1: you mentioned brexit, so that's great we can get to
Speaker 1: the lower sterling with that. I'm so pleased we don't
Speaker 1: talk about that anymore, Dara. That's the framework for thinking
Speaker 1: about the central banks, the respect of economies, the UK, Europe,
Speaker 1: the United States. What's the in fiction trade in foreign
Speaker 1: exchange for you. Look, I do like lower sterling. I
Speaker 1: think even this morning we were recommending buying you buying
Speaker 1: yours sterling as one way to play that. I think
Speaker 1: lower cable as well. There there for me, the more
Speaker 1: straightforward trades. You've got seventy five basis points of tightening
Speaker 1: priced into the bank amongland over the next two meetings,
Speaker 1: in the words, you have to deliver fifty at one
Speaker 1: of them. I just don't see that. I think we
Speaker 1: get twenty five and twenty five, so that that's one
Speaker 1: and generally conviction still there in terms of our modest
Speaker 1: dollar strengthening. It's not glamorous. It will be a modest
Speaker 1: trand but I think it'll be pretty relentless, so dolerable. Darma,
Speaker 1: thank you, sir of HSP Security is looking for a
Speaker 1: little bit of weakness through sterling. There are as always,
Speaker 1: thank you very much. Let's get to Mandy's to the
Speaker 1: chief equity derivative strategist at Credit Swate, Mandy, should I
Speaker 1: be pricing in great hikes or the cuts that might
Speaker 1: be in our future? Both? So what's interesting, Even as
Speaker 1: traders are pricing in more aggressive rate hikes for this
Speaker 1: year currently just under seven total hikes being priced for
Speaker 1: the year UM, they're also pricing in rate cuts further out,
Speaker 1: So starting in the curve is actually inverted, with about
Speaker 1: seventy percent probability being priced in currently that the FED
Speaker 1: will have to cut rates very soon, right, and that
Speaker 1: what that's held you that there's a real risk that
Speaker 1: the FED is about to embark on a policy state,
Speaker 1: meaning overtaking now and killing out the economic growth and
Speaker 1: having to cut rates very very quickly soon after, Mandy,
Speaker 1: there are four cross moments here the pros like you follow,
Speaker 1: and one of them is this odd thing called scool. Scool.
Speaker 1: We don't do scool, we don't do derivative math on Wednesdays.
Speaker 1: But all we can say, Mandy is it has to
Speaker 1: do with the fear that's out there. And when you
Speaker 1: are a feared folks in global Wall Street, you hedge.
Speaker 1: What is the demand now, the appetite to hedge? So interestingly,
Speaker 1: to start the year, um, we haven't actually seen much, um,
Speaker 1: significant increase in demand for hedges up until I say,
Speaker 1: over the past week. UM. And that's interesting because you know,
Speaker 1: obviously we had a ten percent pulled back in the
Speaker 1: SMP in January and actually volatility really underperformed on that
Speaker 1: sellop because of this lack of hedges UM, and I
Speaker 1: was a part of that reason. It's because you know,
Speaker 1: if you think of the catalyst driving that correction, it
Speaker 1: was fear of higher rates, and that's really a well
Speaker 1: anticipated um, you know, cattle, it is not really an
Speaker 1: unknown or uncertain you know, unexpected risk. UM. What we're
Speaker 1: seeing over the past couple of days is more demand
Speaker 1: for hedges on the back of the Russia Ukraine news
Speaker 1: and also on the back of you know, a speculation
Speaker 1: of the FED maybe hiking intermeding. I think that has
Speaker 1: driven a lot more hedging activity in recent days. What
Speaker 1: is the leverage exposure wrapped around the hedges and frankly
Speaker 1: the entire market. I mean frankly, folks Credit Suite literally
Speaker 1: invented the monitoring of of leverage. I would suggest, what
Speaker 1: is the depth of leverage there? So I think for
Speaker 1: a lot of institutional investors they have the leveraged quite
Speaker 1: a bit. Especially January was very people for a lot
Speaker 1: of hedge funds UM and this is I would say
Speaker 1: the most pronounced of the sector levels for tech UM
Speaker 1: in terms of kind of the protection buying that we're seeing, um,
Speaker 1: you know, they're not crash protection buying typically, you know,
Speaker 1: the protection bying that we are seeing positioning for more
Speaker 1: modest pullback from here. So I would say, you know,
Speaker 1: given what happened in January, given the the leveraging that
Speaker 1: we have already seen, you know, the protection buying that
Speaker 1: we're seeing right now. Um, it's more modest. It's not
Speaker 1: as you know, bearish, um, as you know, as some
Speaker 1: I think, Mandy, a lot of people will think of
Speaker 1: me as the person who comes up with a negative
Speaker 1: scenario no matter what happens. But there is that kind
Speaker 1: of basince the hedges to. They're the people who are
Speaker 1: hedging for a FED policy error on both sides, not
Speaker 1: only moving too fast, but not moving quickly enough at
Speaker 1: a time when inflation itself is crimping demand or there
Speaker 1: is the fear of that. Perhaps we'll see some of
Speaker 1: that in the retail sales at eight thirty. What's your
Speaker 1: view on why people are hedging and how you can
Speaker 1: determine this from the type of hedge. Sure, um so
Speaker 1: I would say, you know, on on the on the
Speaker 1: risk of the FED being behind the curve, U, I
Speaker 1: would say that's a risk that is I think overblown
Speaker 1: because yes, we're seeing very high inflation right now. But
Speaker 1: the important thing to emphasize is that long term inflation expectations,
Speaker 1: whether or not you're looking at you know, market based expectations,
Speaker 1: looking for example, at the five year five year forward
Speaker 1: break even, or you're looking at consumer surveys, they remain
Speaker 1: remarkably well anchored. And as long as that remains the case,
Speaker 1: I do think that that has more breathing room. UM.
Speaker 1: But in terms of you know, what is what people
Speaker 1: are hedging, I would say looking at you know hedges
Speaker 1: and tech has been very popular. And then the second
Speaker 1: one that has been more popular right now is looking
Speaker 1: at cross asset hedges. Given you some of the moves
Speaker 1: and equities that we have seen people looking across other
Speaker 1: asset classes, for example fixed income vs UM precious metal
Speaker 1: like gold for example, that's been another popular one, Mandy.
Speaker 1: Have you've seen a lot of investors decided to shift
Speaker 1: around their allocations with hedges with derivatives rather than actually
Speaker 1: selling some of those holdings. And I think about tech stacts,
Speaker 1: for a long time, people were worried about getting rid
Speaker 1: of them for fear of not being able to buy
Speaker 1: them back at an appropriate price later. Yeah, I don't
Speaker 1: think that fear is that as a dominant at this
Speaker 1: time regarding tech. But in terms of kind of how
Speaker 1: people are hedging and what they're doing, UM, particularly I
Speaker 1: was on the risk of inflation. It's very notable that, Um,
Speaker 1: what we've seen is in high inflation regimes, UM, the
Speaker 1: correlation between equities and bonds breakdown. Right, that's an imperful fact.
Speaker 1: And that's obviously, you know, not good if you're a
Speaker 1: multi asset portfolio, you know, say a sixty forty traditional
Speaker 1: fixing condequity portfolio, because you know your bonds are no
Speaker 1: longer diversifying your equity risk. UM. So what we have
Speaker 1: seen from a lot of institutional investors is a look
Speaker 1: at more equity specific hedges, so less reliance on fixed
Speaker 1: income to be your hedge. UM. And the second thing
Speaker 1: is looking at commodities, right, adding a commodities allocation, because
Speaker 1: obvious the commodity is a big driver of the current
Speaker 1: infletion that we're seeing and historically always been that case.
Speaker 1: So looking at either adding allocation to the underlying commodity
Speaker 1: or increasing upside exposure to some of the commodity sensitive
Speaker 1: sectors for example energy. Great a catch up, Thank you,
Speaker 1: credit swas, thank you very much. Right now to interpret
Speaker 1: and drive forward, Simona Maccata joins US chief economist State
Speaker 1: Street Global Advisors in Boston. Simona thrilled to have you
Speaker 1: with us today. And my arch question all of the
Speaker 1: Bullard McKey talk I just had, is does this kind
Speaker 1: of data assist you in deciding when inflation breaks? If
Speaker 1: we're at a high level of inflation, the game is
Speaker 1: the guestimate of when it starts to roll over. Does
Speaker 1: retail sales today help with that? I don't think so.
Speaker 1: I think of what I see in the data is
Speaker 1: a lot of month month volatility. And you know, the
Speaker 1: January numbers were very strong, but put those against December
Speaker 1: average the two and you get something much milder. I
Speaker 1: think that's how you gauge what the trend of these economies.
Speaker 1: I don't think the retail sales data and specifically help
Speaker 1: you with the inflation question. Personally, um, I'm I'm of
Speaker 1: a view that around media is when we are going
Speaker 1: to see meaningful signs of inflation deceleration. It's it seems
Speaker 1: as though we're pushing on this string, and you know,
Speaker 1: as time goes by and nothing becomes apparent in the data,
Speaker 1: we lose hope. But it's possible that when the change occurs,
Speaker 1: it occurs quite suddenly, and you know, if you go
Speaker 1: from like nothing's here too, there is plenty of evidence
Speaker 1: of inflation decelerated. What is not today's data that helps?
Speaker 1: What is the linkage between an inflation and then under
Speaker 1: a growth estimate? Well, um, it's very simple. It's a
Speaker 1: basic econ concept. The higher the price, the fewer the
Speaker 1: quantity solves. So this is you know, high inflation, think
Speaker 1: of it as a as a demand headwind. Um. Of
Speaker 1: course you can offset it if you have persistent income
Speaker 1: flow to absorb that inflation. You know, wealth destruction or
Speaker 1: income destruction. Purchasing our destruction. But in and of itself,
Speaker 1: high inflation will lead to lower growth. Are we seeing though,
Speaker 1: that that's not coming to forth the way that a
Speaker 1: lot of people are expecting. I mean, we are talking
Speaker 1: about how you're seeing sentiment deteriorate, but it doesn't seem
Speaker 1: to be dramatically crimping purchases. At what point does that
Speaker 1: start to give you a sense that maybe that narrative
Speaker 1: isn't working this time around? The narrative works, the timing
Speaker 1: doesn't work precisely, And the reason it does not work
Speaker 1: precisely is that you have a consumer that in the
Speaker 1: aggregate still sits on a huge amount of accumulated savings,
Speaker 1: so you don't need to have a demand response immediately.
Speaker 1: What you can do you can draw down those accumulated
Speaker 1: savings and still finance consumption in the injury. But if
Speaker 1: that's that's a that works for a while. Eventually, um,
Speaker 1: there will be a demand response. It may not be
Speaker 1: a parent until the second half of the year. And
Speaker 1: let's not forget even in today's data you had a
Speaker 1: very strong help there from all the vehicles. There's still
Speaker 1: a lot of pentap demanding parts of you know, of
Speaker 1: the spectrum, and that will still help. But this is
Speaker 1: the tricky part, you know, trying to dissect you know,
Speaker 1: what is the real message here? I think you cannot
Speaker 1: take any single data point, you know, put too much
Speaker 1: weight on any single data point, and try to take
Speaker 1: a view that takes over the course of the year
Speaker 1: and not just for the next month or two. What
Speaker 1: about the fact that we haven't necessarily seen inflation to
Speaker 1: accelerate to the degree you even start to give signs
Speaker 1: of peaking the way that people have previously expected. How
Speaker 1: high does that mean that inflation could go? How much
Speaker 1: you revising your estimates about the trajectory of this particular cycle. Yeah,
Speaker 1: it's been a tough journey. I have to say, I
Speaker 1: think the inflation revisions are still upwards ums as of
Speaker 1: this point in time. I think what you are starting
Speaker 1: to see is leading indicators of a turning inflation, things
Speaker 1: like um, you know, perhaps things having to do with
Speaker 1: shipping costs, things having to do with expectations of inventory building,
Speaker 1: things having to do with expectations of wage increases. Just
Speaker 1: to give you an example, in the Small Business survey,
Speaker 1: for instance, you had current compensations, so current wage increases
Speaker 1: making a new record, but compensation plans decelerating. So this
Speaker 1: is all you see at the moment. So it's it's
Speaker 1: not even in the inflation data, per say, it's in
Speaker 1: the leading indicators of inflation that you're starting to see
Speaker 1: some some shift. I gotta leave it a Samana, Thank you,
Speaker 1: Samana that of Stay Straight Global Advices, thank you very much.
Speaker 1: Here in America, do you think Ford Motor Company and
Speaker 1: General Motors, which have completely retooled in are retooling their
Speaker 1: factories to build electric Do you think there's suddenly they'll
Speaker 1: say no electrics not the future. Electric is the future
Speaker 1: for automobiles all around the world. The John Carey, the
Speaker 1: former Secretary of State, a most interesting gentleman, and of
Speaker 1: course the US Special Envoy for Climate. I did a
Speaker 1: panel Thank you Bank of America. Mr Mournianne was Secretary
Speaker 1: Carey and Davos on climate and I was thunderstruck. And
Speaker 1: how statistically well informed the Senator was. I still I'm sorry, folks,
Speaker 1: it's Massachusetts. I still call him the Senator. How the
Speaker 1: Senator was informed legitimately on climate. Whatever your beliefs in
Speaker 1: the topic, of course, peer to peer conversations with David
Speaker 1: Rubinstein it will be most interesting as well. I was thunderstruck.
Speaker 1: How this guy did not mail it in on climate?
Speaker 1: Is that what you observed? He knows this stuff colde.
Speaker 1: This is the job he wanted. Most people, when they
Speaker 1: finish being Secretary of State never want to go back
Speaker 1: into government because any position will be less significant than
Speaker 1: the one they had. He's so interested in this subject
Speaker 1: he came back. In effect, is a subordinate to to
Speaker 1: the Secretary State. He's not subordinate, but he's not as
Speaker 1: significant as a Secretary State who used to be his deputy.
Speaker 1: H Tony Lincoln used to be the deputy John Carey,
Speaker 1: now Tony Lincoln Secretary State and John Carey is in
Speaker 1: the State Department, but not as significant in a position
Speaker 1: as he once had. But he wanted to do this
Speaker 1: because he really cares about climate change, David, because of
Speaker 1: news slowly of other topics. But one more question this
Speaker 1: morning on John Carey. He's big time frustrated over where
Speaker 1: we are right now. Headlines today. I think water uh
Speaker 1: water lease is gonna rise two or three feet, Baltimore's
Speaker 1: Camden Yards is going to be flooded. I mean, climate
Speaker 1: change is going the wrong way right now. For John Carey,
Speaker 1: We've had a lot of problems with climate change, and
Speaker 1: I think people recognize that. He said in this interview
Speaker 1: that it's here, it's something we have to do something about.
Speaker 1: But the truth is it's nothing we can do overnight
Speaker 1: that's going to change. The situation is going to take years.
Speaker 1: That's why when we talk about standards, we're talking about
Speaker 1: things we can do by the year. There's a goal
Speaker 1: by many people to be net zero in terms of
Speaker 1: emissions by but that's gonna take some time to get there.
Speaker 1: Lisa the Secretary Secretary blinkoln speaking with Joe over ad
Speaker 1: MSNBC no evidence of a Russia pullback and I know
Speaker 1: that John Kerry did want to talk about the climate
Speaker 1: change issues. He was, though a former Secretary of State,
Speaker 1: and Tony Blinkin was his disciple, which leads us to
Speaker 1: really understand perhaps some of the framework as to how
Speaker 1: they have grappled with the situation. David, to the degree
Speaker 1: that we've gotten some rhetoric out of Tony Blinkin really
Speaker 1: giving a threat that if this region of Ukraine gets
Speaker 1: recognized as independent by Russia as a game changer and
Speaker 1: necessitates a response, how do you think about that in
Speaker 1: terms of gaming out the potential for an escalation or
Speaker 1: de escalation. I think this is reminiscent of what George
Speaker 1: Herbert Walker Bush did in the Kuwait War. He got
Speaker 1: a coalition together, put together very effectively by Jim Baker,
Speaker 1: his Secretary of State, and in the end the Allies
Speaker 1: were so strong that there was no chance for for
Speaker 1: Saddam Saying to prevail in Kuwait. Right now, the Allies
Speaker 1: are so united, uh that I don't think there's any
Speaker 1: chance that that Putin can move forward and not realize
Speaker 1: there's going to be a big, big problem for him.
Speaker 1: So at this point, my view is he's looking for
Speaker 1: a way out a graceful way out, and diplomacy now
Speaker 1: should focus on two things. How can we give him
Speaker 1: a graceful way out? And how can we not brag
Speaker 1: about what happened. We want to do what George Herbert
Speaker 1: Walker Bush did after the Berlin Wall fell. He didn't
Speaker 1: go over and trumpet what he done. He was very graceful.
Speaker 1: He didn't want to do the kind of things that
Speaker 1: people wanted to do because he gave a face saving
Speaker 1: way out for Gorbitchov. That's what you need to do
Speaker 1: here with putin David Rubenstein. My father told me they
Speaker 1: hid the newspapers from me. During the Cuban missile crisis.
Speaker 1: Dean Rusk and the team they're off of the crisis
Speaker 1: had to allow Khruscheff to save face. What do we
Speaker 1: learn then that we can apply now, Well, we did
Speaker 1: give him a way out because we actually gave him something.
Speaker 1: We gave him missiles in Turkey. We said we pull
Speaker 1: them out, and we didn't really need those missiles anyway,
Speaker 1: so it was a face saving way for him. You also,
Speaker 1: we didn't brag about it in the way that uh
Speaker 1: I think we could. We we have to prevail, we
Speaker 1: have to do it in the future as well. We
Speaker 1: shouldn't be saying two people, we just beat Putin, we
Speaker 1: beat him, we trumpeted. We don't want to do that.
Speaker 1: What you really want to do is to say, look,
Speaker 1: we have an agreement. Now it's good and we're every
Speaker 1: both sides one. That's what he needs to really do
Speaker 1: as President Nited States, and I think that's what Joe
Speaker 1: Biden is doing. From an executive perspective. David, and as
Speaker 1: the co founder of Carlisle, I wonder what your experience
Speaker 1: has been with these rising geopolitical tensions in terms of
Speaker 1: how to prepare for possible sanctions, how to prepare for
Speaker 1: a shift in the regulatory landscape. Well, no one can
Speaker 1: really prepare completely for these kind of things, because sometimes
Speaker 1: the regulatory landscape changes so quickly. In the private equi world,
Speaker 1: you tend to be in a longer term investor, but
Speaker 1: there's no doubt that firms like ours do have shorter
Speaker 1: term investments, and we have publicly traded securities as well.
Speaker 1: There's no perfect way to do it, but anytime you
Speaker 1: do a long term investment or short term investment, you
Speaker 1: now increasingly look at geopolitical risks. In the United States
Speaker 1: as well as abroad, and and this particular risk is
Speaker 1: one that people are taking a strong look at now.
Speaker 1: We not recognize that likely that energy prices will go
Speaker 1: up if Putin were to invade, and the markets have
Speaker 1: reflected that, but energy prices should come down if in
Speaker 1: fact we can come up with a peaceful resolution of this.
Speaker 1: The news flow today has been dramatic, and I do
Speaker 1: want to bring you this headline that the Wall Street
Speaker 1: Journal is report reporting that the Justice Department is pursuing
Speaker 1: a wide ranging probe of short sellers, including with Carson Block,
Speaker 1: a prominent short slower who received a subpoena ahead an
Speaker 1: FBI search warrant. From your perspective, David, with your legal prowess,
Speaker 1: what's your view on some of the regulatory crackdown that
Speaker 1: we're seeing right now from this administration. I wouldn't use
Speaker 1: the word crackdown. I would say the chairman of the SEC,
Speaker 1: Gary Gensler, thinks there should be more disclosure of hedge
Speaker 1: fund fees and and private equity fees, and and no
Speaker 1: doubt they'll be comments about that. No something will will
Speaker 1: move forward. But I think it's important that everybody who
Speaker 1: invest in these kind of funds do have that does
Speaker 1: have very good information and fees should be disclosed. And
Speaker 1: I don't think anybody's against that. The devil is in
Speaker 1: the details, but I think it can be worked out
Speaker 1: to everybody's satisfaction. Let me bring it back to your
Speaker 1: conversation with Secretary Carry. Here's a guy who's devoted years
Speaker 1: and years of public service. Now he's dealing with something
Speaker 1: that appears from all intensi intractable as well. What's the
Speaker 1: Carry agenda to get something done in the coming quarters
Speaker 1: and years. Well, John Carey is somebody who's seventy eight
Speaker 1: years old. He's not somebody who is at the beginning
Speaker 1: of his career. Why at this age does he want
Speaker 1: to go back and work on this issue. It's because
Speaker 1: he really seriously cares about it and thinks he can
Speaker 1: make a difference. Everybody wants to have a legacy when
Speaker 1: they're in public policy, and he thinks his legacy will
Speaker 1: probably be something related to climate change if he can
Speaker 1: get some agreements here that more than we've already had.
Speaker 1: And running out of time, But what can you, with
Speaker 1: all of your advantages and your firm, Carlyle, do to
Speaker 1: assist in water or the broader scope and scale of
Speaker 1: drought management. Do you have meetings on that? At Carlisle
Speaker 1: we have a large E s G program, which means Environmental,
Speaker 1: social and governance, and so all the companies we look at,
Speaker 1: as do other companies in our industry, we care very
Speaker 1: much about this, and thirty years ago in our business,
Speaker 1: we didn't care about E s G very much. Now
Speaker 1: everybody cares about that, and so we buy a company,
Speaker 1: we're very certain to make clear we want to care
Speaker 1: about the environmental policies of that company going forward, and
Speaker 1: we try to do things that will make the environmental
Speaker 1: practice as much better than they were before. It's gonna
Speaker 1: be interesting. David Rubinstein, thank you so much for peer
Speaker 1: to peer conversations with John Carey. Look for that peer
Speaker 1: to peer conversations. This is the Bloomberg Surveillance Podcast. Thanks
Speaker 1: for listening. Join us live week days from seven to
Speaker 1: ten am Eastern on Bloomberg Radio and on Bloomberg Television
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Speaker 1: the best in economics, finance, investment, international relations. And subscribe
Speaker 1: to the Surveillance Podcast on Apple podcast, SoundCloud, Bloomberg dot com,
Speaker 1: and of course on the terminal. I'm Tom keene In.
Speaker 1: This is Bloomberg