1 00:00:09,840 --> 00:00:13,800 Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane. Daily 2 00:00:13,960 --> 00:00:17,560 Speaker 1: we bring you insight from the best in economics, finance, investment, 3 00:00:18,000 --> 00:00:23,480 Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 4 00:00:23,640 --> 00:00:27,200 Speaker 1: Bloomberg dot Com, and of course on the Bloomberg When 5 00:00:27,200 --> 00:00:30,480 Speaker 1: we start strong with Ian Bremer of Eurasia Group. His 6 00:00:30,640 --> 00:00:35,280 Speaker 1: TOMP Risk just released always timely, and he releases it 7 00:00:35,360 --> 00:00:38,640 Speaker 1: this year with America front and center, and of course 8 00:00:38,640 --> 00:00:40,760 Speaker 1: part of that is our coverage of the president. And 9 00:00:40,800 --> 00:00:43,720 Speaker 1: then we we'll hear from the Senate impeachment trial. That 10 00:00:43,760 --> 00:00:46,879 Speaker 1: will be twelve pm New York time, tenderly scheduled for 11 00:00:46,920 --> 00:00:50,639 Speaker 1: their We're thrilled that Dr Bremmer begins our Tuesday here 12 00:00:50,880 --> 00:00:53,480 Speaker 1: in Dabba's Ian. Wonderful to have you here today. Why 13 00:00:53,520 --> 00:00:57,680 Speaker 1: did you make the US a top risk for this year? Well, size, 14 00:00:57,720 --> 00:01:01,520 Speaker 1: the market's massive, and the precedented nature of the election 15 00:01:01,560 --> 00:01:03,640 Speaker 1: coming up, where half of the population is going to 16 00:01:03,720 --> 00:01:06,120 Speaker 1: think that it is rigged, is going to think it's delegitimized. 17 00:01:06,160 --> 00:01:08,319 Speaker 1: I mean that is important. You're gonna have, you know, 18 00:01:08,360 --> 00:01:10,839 Speaker 1: a period of time, whether it's weeks and months when 19 00:01:11,000 --> 00:01:13,679 Speaker 1: we've had the election, but all likelihood, we haven't agreed 20 00:01:13,720 --> 00:01:15,840 Speaker 1: on who the next president is. I haven't had that 21 00:01:16,319 --> 00:01:19,800 Speaker 1: since Bush Gore and Bush Core. At least both sides 22 00:01:19,840 --> 00:01:21,559 Speaker 1: were prepared to see what the Supreme Court was gonna 23 00:01:21,600 --> 00:01:24,000 Speaker 1: rule that this is more unprecedented. People are prepared to 24 00:01:24,280 --> 00:01:26,520 Speaker 1: Who was the president going to speak to here roughly 25 00:01:26,640 --> 00:01:29,160 Speaker 1: thirty thirty five minutes. Who's he talking to as he 26 00:01:29,200 --> 00:01:31,360 Speaker 1: comes to Davos? Oh no, he Look, he loves it 27 00:01:31,400 --> 00:01:33,480 Speaker 1: here right when he Remember he was here three years 28 00:01:33,480 --> 00:01:35,120 Speaker 1: ago and everyone thought it was going to be a 29 00:01:35,120 --> 00:01:37,280 Speaker 1: disaster and he had a great time and the c 30 00:01:37,360 --> 00:01:39,840 Speaker 1: e O s were extremely nice to him. And the 31 00:01:40,240 --> 00:01:42,600 Speaker 1: lunch remember the lunch were absolutely And I mean, so 32 00:01:42,640 --> 00:01:44,360 Speaker 1: did you go to the ch I did it, But 33 00:01:44,400 --> 00:01:46,560 Speaker 1: actually I remember, like you know, billionaires trying to fight 34 00:01:46,600 --> 00:01:48,480 Speaker 1: to go and listen to the president. Absolutely. Look, I 35 00:01:48,480 --> 00:01:51,720 Speaker 1: mean you gotta understand, first of all, the delegates here 36 00:01:52,000 --> 00:01:55,080 Speaker 1: may not like Trump. They like his policies, um, they 37 00:01:55,120 --> 00:01:58,760 Speaker 1: like the regulatory rollback, they like his cabinet, um, they 38 00:01:58,800 --> 00:02:01,640 Speaker 1: like his tax policy. I did informal poll last night 39 00:02:02,000 --> 00:02:05,600 Speaker 1: about delegates on balance. I would say they think he's 40 00:02:05,600 --> 00:02:07,800 Speaker 1: gonna win a second term. And there was a zero 41 00:02:07,920 --> 00:02:10,600 Speaker 1: panic about the prospect that might happen. So, I mean, 42 00:02:10,639 --> 00:02:12,359 Speaker 1: you can have Greta here, and you can have a 43 00:02:12,400 --> 00:02:15,280 Speaker 1: bunch of people talking about climate sustainability. But the reality 44 00:02:15,520 --> 00:02:18,720 Speaker 1: is that Trump doesn't drive people crazy at Davos the 45 00:02:18,760 --> 00:02:20,720 Speaker 1: way he does in the United States. And people should 46 00:02:20,720 --> 00:02:23,400 Speaker 1: hear that, they should know what the power brokers in 47 00:02:23,440 --> 00:02:26,720 Speaker 1: the room in the closed door actually thinking. And in 48 00:02:26,840 --> 00:02:29,799 Speaker 1: President Trump does his you know, the inaugural address for 49 00:02:29,840 --> 00:02:32,399 Speaker 1: the World Economic from on the day where his impeachment 50 00:02:32,480 --> 00:02:35,560 Speaker 1: trial starts. Is he going to be fighting and he's 51 00:02:35,600 --> 00:02:37,720 Speaker 1: he going to say, look, Europeans, you're not doing enough. 52 00:02:37,760 --> 00:02:40,839 Speaker 1: I'm going to post Harroffs because he needs an adversary 53 00:02:40,919 --> 00:02:43,160 Speaker 1: to distract. Or is he going to try and keep 54 00:02:43,160 --> 00:02:46,040 Speaker 1: everyone on side. I'd be very surprised, Um, if he's 55 00:02:46,080 --> 00:02:49,000 Speaker 1: adversarial with this group. I expect this is gonna be 56 00:02:49,080 --> 00:02:53,760 Speaker 1: Trump saying victory lap I'm the greatest ever. My economy 57 00:02:53,800 --> 00:02:56,120 Speaker 1: is doing well, my markets are taking off. Look how 58 00:02:56,200 --> 00:02:59,040 Speaker 1: much money I'm making you guys. I got rid of Sulimani, 59 00:02:59,080 --> 00:03:01,679 Speaker 1: I'm killing ice in al Quaeda. He may go off 60 00:03:01,680 --> 00:03:04,120 Speaker 1: script and talk about how bad and how unfair the 61 00:03:04,160 --> 00:03:07,000 Speaker 1: impeachment is but this is going to be a triumphal 62 00:03:07,000 --> 00:03:10,600 Speaker 1: list unilateralist president. Do people in the state's care? So 63 00:03:10,680 --> 00:03:13,440 Speaker 1: does the voter care about what President Trump says in donals? 64 00:03:13,600 --> 00:03:16,160 Speaker 1: I mean they care for a day, sure, and then 65 00:03:16,160 --> 00:03:17,760 Speaker 1: they move on to the next thing. I mean, did 66 00:03:17,760 --> 00:03:20,160 Speaker 1: we care when neuron crisis hit? We did? You're not 67 00:03:20,200 --> 00:03:22,440 Speaker 1: asking me about it now. I mean, these these cycles 68 00:03:22,480 --> 00:03:26,600 Speaker 1: are incredibly short, but it's interesting to see how the 69 00:03:26,680 --> 00:03:30,200 Speaker 1: global markets, in the global investor community actually orient. You've 70 00:03:30,200 --> 00:03:33,160 Speaker 1: got Steve Schwartzman coming up. You know how close he's 71 00:03:33,200 --> 00:03:35,120 Speaker 1: been to Trump over the course of the last couple 72 00:03:35,120 --> 00:03:37,120 Speaker 1: of years. I mean generally speaking as a group that 73 00:03:37,160 --> 00:03:40,000 Speaker 1: wants access, they pay for access, and please when that happened, 74 00:03:40,000 --> 00:03:42,240 Speaker 1: And we'll talk to Steven Schwartzman about that, about the 75 00:03:42,280 --> 00:03:44,720 Speaker 1: fundraisers and all his support of the president, which just 76 00:03:44,800 --> 00:03:47,920 Speaker 1: been somewhat controversial. Say I, and you've been studying this 77 00:03:48,000 --> 00:03:51,640 Speaker 1: for decades. How alone is America right now because of 78 00:03:51,760 --> 00:03:55,400 Speaker 1: this president and this president's policies? Is it an America 79 00:03:55,560 --> 00:03:58,480 Speaker 1: or not only a Davos, but just generally worldwide in 80 00:03:58,520 --> 00:04:01,480 Speaker 1: the Eurasian world? How alone are we? It's more alone 81 00:04:01,880 --> 00:04:05,080 Speaker 1: because of this president. Certainly he doesn't care as much 82 00:04:05,240 --> 00:04:08,720 Speaker 1: for traditional alliances or multilateral institutions the Americans have created. 83 00:04:08,880 --> 00:04:11,960 Speaker 1: But let's be clear, the United States is in decline 84 00:04:12,400 --> 00:04:14,920 Speaker 1: visa East China. The Chinese are spending a lot of 85 00:04:14,960 --> 00:04:18,760 Speaker 1: money internet China on a per capita basis, and they've 86 00:04:18,800 --> 00:04:21,799 Speaker 1: got what is one, They've got a major health scare 87 00:04:21,839 --> 00:04:25,440 Speaker 1: going on in China. Worldly it is very clear that 88 00:04:25,600 --> 00:04:29,000 Speaker 1: Belton Road is a bigger event than Dabos. It attracts 89 00:04:29,040 --> 00:04:33,360 Speaker 1: more heads of state, it dispenses more cash. But America's 90 00:04:33,400 --> 00:04:36,800 Speaker 1: relationship visa these American allies, the US is not only 91 00:04:36,839 --> 00:04:40,360 Speaker 1: not in decline, it's increasing in power in the role 92 00:04:40,400 --> 00:04:43,719 Speaker 1: of the dollar in military expenditure and its strength in 93 00:04:43,880 --> 00:04:47,440 Speaker 1: production of oil and gas and food. And and if 94 00:04:47,440 --> 00:04:50,640 Speaker 1: Trump's not president next year, that's still gonna be true. 95 00:04:50,920 --> 00:04:53,240 Speaker 1: And allies don't want to deal with that reality. But 96 00:04:53,279 --> 00:04:55,400 Speaker 1: it is the case. And He's figured out what kind 97 00:04:55,440 --> 00:05:00,280 Speaker 1: of capitalism China will have in five ten years from now. Uh. 98 00:05:00,440 --> 00:05:03,039 Speaker 1: The fact that the Chinese are not in any way 99 00:05:03,040 --> 00:05:06,760 Speaker 1: aligning with or integrating with Western style capitalism is something 100 00:05:06,800 --> 00:05:09,400 Speaker 1: that these CEOs are having a hard time coming to terms. 101 00:05:09,400 --> 00:05:12,320 Speaker 1: With This is the fiftieth year anniversary of Davos, and 102 00:05:12,360 --> 00:05:15,000 Speaker 1: for fifty years the message that has come from this 103 00:05:15,040 --> 00:05:19,599 Speaker 1: platform has been winning globally globalization and free market capitalism. 104 00:05:19,640 --> 00:05:22,800 Speaker 1: It's not anymore, and the reason for that is because 105 00:05:22,800 --> 00:05:25,760 Speaker 1: the Chinese are not aligned with that. What are we 106 00:05:25,800 --> 00:05:29,360 Speaker 1: peak globalization? So it's just going to be declined from now. 107 00:05:29,760 --> 00:05:32,599 Speaker 1: It's not the end of globalization, but we're peak globalization. 108 00:05:32,640 --> 00:05:35,039 Speaker 1: I mean the decision of the United States and the 109 00:05:35,120 --> 00:05:38,240 Speaker 1: Chinese to decouple from each other in terms of technology. 110 00:05:38,400 --> 00:05:41,279 Speaker 1: It's the single biggest step away from globalization we've seen 111 00:05:41,320 --> 00:05:44,240 Speaker 1: in the fifty years since Davos has been created. Absolutely, 112 00:05:44,279 --> 00:05:47,120 Speaker 1: the Edleman Trust Barometer on Richard Edelman's schedule to join us, 113 00:05:47,120 --> 00:05:49,920 Speaker 1: I can't say enough about this important document, the Edelman 114 00:05:49,960 --> 00:05:55,160 Speaker 1: Trust Barometer. I was stunned at the separateness on capitalism 115 00:05:55,240 --> 00:05:59,640 Speaker 1: of general society and the elites. Does that surprise you 116 00:05:59,800 --> 00:06:04,240 Speaker 1: in what's the solution for the anointed up this happy valley? 117 00:06:04,279 --> 00:06:07,400 Speaker 1: To reattach to the rest of American frankly, to the 118 00:06:07,440 --> 00:06:09,960 Speaker 1: rest of the developed economies. It's hard to claim that 119 00:06:10,000 --> 00:06:13,360 Speaker 1: the average American as capitalists when the average American doesn't 120 00:06:13,360 --> 00:06:16,880 Speaker 1: have capital I mean, certainly that's the way I was raised, right, 121 00:06:16,880 --> 00:06:19,360 Speaker 1: I mean, my my mom said, they're not taking care 122 00:06:19,400 --> 00:06:22,479 Speaker 1: of you. Only they're all gonna lie and they being 123 00:06:22,560 --> 00:06:25,280 Speaker 1: governed a single sense for Richard Edelman, where he says 124 00:06:25,320 --> 00:06:29,480 Speaker 1: CEOs have to become much more activist about explaining how 125 00:06:29,560 --> 00:06:33,520 Speaker 1: everybody gets inclusive. Do we need Jamie Diamond, Michael Corbett, 126 00:06:33,560 --> 00:06:38,200 Speaker 1: and the others to be more assertive about distributing the 127 00:06:38,240 --> 00:06:41,200 Speaker 1: benefits of capitalism to American No, no, we don't. We 128 00:06:41,240 --> 00:06:44,200 Speaker 1: don't need them to explain. We need the problem to 129 00:06:44,200 --> 00:06:47,960 Speaker 1: start being resolved. We need less inequality in the United States. 130 00:06:48,000 --> 00:06:50,080 Speaker 1: We need people that are being left behind and feel 131 00:06:50,120 --> 00:06:52,080 Speaker 1: the system is riged to feel less that way. And 132 00:06:52,080 --> 00:06:55,600 Speaker 1: there's nothing that CEOs can say. There is no document 133 00:06:55,640 --> 00:06:58,120 Speaker 1: they can sign, there is no advertisement they can take 134 00:06:58,120 --> 00:07:00,240 Speaker 1: out in the paper that is going to change that 135 00:07:00,360 --> 00:07:03,320 Speaker 1: reality if the reality doesn't change. And let's keep in mind, 136 00:07:03,360 --> 00:07:06,600 Speaker 1: not only is global inequality and American inequality increased over 137 00:07:06,600 --> 00:07:09,720 Speaker 1: the last several years, but also now we have an 138 00:07:09,720 --> 00:07:12,320 Speaker 1: economy that's starting to soften globally. The i m F 139 00:07:12,400 --> 00:07:17,320 Speaker 1: just yesterday exactly. So, I mean, one has to think 140 00:07:17,560 --> 00:07:19,400 Speaker 1: that in that environment, ceo is are gonna be more 141 00:07:19,440 --> 00:07:22,480 Speaker 1: laser like focused on returns irrespective of what they're saying. 142 00:07:25,000 --> 00:07:27,080 Speaker 1: Agree with that. I know, I know that a loss 143 00:07:27,080 --> 00:07:29,480 Speaker 1: can happen from now until November in the U S election. 144 00:07:29,640 --> 00:07:32,160 Speaker 1: But the popularity of President Trump, I think is plateauing 145 00:07:32,200 --> 00:07:37,000 Speaker 1: at it's not there it is that Is that enough 146 00:07:37,200 --> 00:07:40,200 Speaker 1: to to win? I mean it's first of all, depends 147 00:07:40,200 --> 00:07:43,320 Speaker 1: on who the Democratic nominee is That Bernie Sanders worth 148 00:07:43,320 --> 00:07:45,280 Speaker 1: the nominee. I don't think that's gonna happen. I think 149 00:07:45,280 --> 00:07:48,240 Speaker 1: it's enough to win. UM, if it's you know, Joe Biden, 150 00:07:48,320 --> 00:07:50,680 Speaker 1: it it might not be. But let's keep in mind 151 00:07:50,680 --> 00:07:54,080 Speaker 1: this is an unprecedented election, not only because it's about 152 00:07:54,120 --> 00:07:56,920 Speaker 1: Trump and turnout is likely to be very high, also 153 00:07:57,000 --> 00:08:00,080 Speaker 1: because there's massive amounts of money that Bloomberg is planning 154 00:08:00,120 --> 00:08:02,720 Speaker 1: on spending irrespective of who the Democratic nominee is. Apt 155 00:08:02,720 --> 00:08:06,120 Speaker 1: to say that um, And because the role that Trump 156 00:08:06,240 --> 00:08:08,880 Speaker 1: is likely to play in terms of his willingness to 157 00:08:08,920 --> 00:08:12,440 Speaker 1: abuse power when impeachment has been broken, is also going 158 00:08:12,480 --> 00:08:14,160 Speaker 1: to be new. So it's hard to make that call. 159 00:08:14,320 --> 00:08:16,960 Speaker 1: One more questionnaire with Dr Breimer before we move on. 160 00:08:17,040 --> 00:08:20,760 Speaker 1: Through this important Now in the president Michael Bloomberg is 161 00:08:21,360 --> 00:08:23,280 Speaker 1: for a president. We're fighting over who's going to do 162 00:08:23,320 --> 00:08:27,560 Speaker 1: the disclaimer. Well, I want to do it. No, I 163 00:08:27,600 --> 00:08:31,800 Speaker 1: could do it. Michael Bloomberg is running for president. There's 164 00:08:31,800 --> 00:08:33,960 Speaker 1: a undertime we should be. He's a founder of Bloomberg 165 00:08:34,360 --> 00:08:39,200 Speaker 1: LP and also uh this TV and radio operation as well. Bremer, 166 00:08:39,280 --> 00:08:42,400 Speaker 1: this is so important. You say, CEOs cannot affect an 167 00:08:42,400 --> 00:08:46,520 Speaker 1: attachment to the American public with words and with lip service. 168 00:08:46,800 --> 00:08:50,599 Speaker 1: What is the prescriptive policy that is going to reattach 169 00:08:51,120 --> 00:08:55,360 Speaker 1: America to capitalism. What's the to do list for Washington 170 00:08:55,600 --> 00:08:58,280 Speaker 1: to get this done? Well, I mean I would say 171 00:08:58,320 --> 00:09:02,160 Speaker 1: that almost every American CEO I know tells me in 172 00:09:02,200 --> 00:09:04,160 Speaker 1: the next five ten years that they can make more 173 00:09:04,160 --> 00:09:08,520 Speaker 1: money with fewer people. Um, that reality somehow is going 174 00:09:08,600 --> 00:09:12,760 Speaker 1: to need to be changed by coming up with jobs 175 00:09:12,760 --> 00:09:14,760 Speaker 1: for more people. They're going to have to invest much 176 00:09:14,840 --> 00:09:17,440 Speaker 1: more in training. They're going to have to hire more, 177 00:09:17,600 --> 00:09:20,400 Speaker 1: not less. They're gonna have to raise wages for the 178 00:09:20,480 --> 00:09:22,360 Speaker 1: working in the middle class. They have to do that 179 00:09:22,440 --> 00:09:25,200 Speaker 1: as a reality when the government is not stepping in, 180 00:09:25,520 --> 00:09:28,040 Speaker 1: and it doesn't again, it doesn't really matter what they say, 181 00:09:28,480 --> 00:09:30,920 Speaker 1: and they're they're gonna be fighting upstream member the fourth 182 00:09:30,960 --> 00:09:33,800 Speaker 1: Industrial Revolution that has come up with here by claud 183 00:09:33,800 --> 00:09:36,200 Speaker 1: Schwab a few years ago. But for the average worker 184 00:09:36,240 --> 00:09:38,720 Speaker 1: that says capitalism doesn't work, it's not fourth Industrial Revolution, 185 00:09:38,840 --> 00:09:41,960 Speaker 1: it's a post industrial revolution because they are not part 186 00:09:42,000 --> 00:09:44,000 Speaker 1: of it. Ian Bremer, thank you so much for starting 187 00:09:44,040 --> 00:09:46,160 Speaker 1: us off in this important hour. Here's with Eraser group. 188 00:09:46,240 --> 00:09:50,880 Speaker 1: I can't say enough about their top ross. Dr Bremer 189 00:09:50,920 --> 00:10:08,360 Speaker 1: here where this all this week as well? Steve Schwartzman 190 00:10:08,720 --> 00:10:12,480 Speaker 1: of Blackstone, who was that speech too? Was it for 191 00:10:13,000 --> 00:10:15,000 Speaker 1: the U. S Citizens back home so they get him 192 00:10:15,040 --> 00:10:18,200 Speaker 1: reelected or was it for the participants of devils? I 193 00:10:18,200 --> 00:10:21,960 Speaker 1: think it was for several different constituencies. I think here 194 00:10:22,040 --> 00:10:27,560 Speaker 1: here's somebody who is having the impeachment process start with 195 00:10:27,600 --> 00:10:31,120 Speaker 1: the trial today. And I think this was a speech 196 00:10:31,880 --> 00:10:35,960 Speaker 1: to basically say, I think we need some perspective, uh, 197 00:10:36,000 --> 00:10:40,280 Speaker 1: and let's look at what's happened under this administration. And 198 00:10:40,400 --> 00:10:46,080 Speaker 1: I think that's not just for domestic consumption. I think 199 00:10:46,120 --> 00:10:50,199 Speaker 1: it's it's it's meant to be heard in a broader context. 200 00:10:50,679 --> 00:10:53,960 Speaker 1: Could the US China Phase one deal have been signed 201 00:10:54,120 --> 00:10:57,800 Speaker 1: twelve months ago. Um, it would have been if it 202 00:10:57,800 --> 00:11:02,320 Speaker 1: could have been, but that it couldn't have been done. Uh. 203 00:11:02,440 --> 00:11:06,120 Speaker 1: And you know, part of the issue on the trade 204 00:11:06,160 --> 00:11:10,600 Speaker 1: agreement Fran saying is is that you know, you need 205 00:11:10,600 --> 00:11:14,400 Speaker 1: two countries, and each country has its own politics and 206 00:11:14,400 --> 00:11:20,160 Speaker 1: and China is not a monolithic country in that sense. 207 00:11:20,720 --> 00:11:24,760 Speaker 1: They have their hardliners, they have their reformers, and and 208 00:11:24,880 --> 00:11:28,120 Speaker 1: what's happened over the last it's actually been three years 209 00:11:28,880 --> 00:11:32,240 Speaker 1: that the the US and China have been discussing changes 210 00:11:32,800 --> 00:11:37,160 Speaker 1: uh in trade. That it takes a while, uh for 211 00:11:37,240 --> 00:11:41,600 Speaker 1: a country that's got a very particular system like China 212 00:11:42,000 --> 00:11:46,320 Speaker 1: to basically make a decision to start changing the system 213 00:11:46,360 --> 00:11:49,960 Speaker 1: that's been very successful for them. So so I think 214 00:11:50,040 --> 00:11:53,280 Speaker 1: that the fact that a phase one deal was done 215 00:11:54,040 --> 00:11:58,520 Speaker 1: meant that both parts in China have come together, along 216 00:11:58,559 --> 00:12:03,600 Speaker 1: with the U. S side itself had ambitions uh that 217 00:12:03,760 --> 00:12:10,000 Speaker 1: ranged from from exceptionally comprehensive uh to not so much 218 00:12:10,000 --> 00:12:13,679 Speaker 1: so uh. And so everybody met in the middle. C 219 00:12:13,840 --> 00:12:16,560 Speaker 1: Shrunkesman with us with Blackstone, our chief executive officer. And 220 00:12:16,559 --> 00:12:19,240 Speaker 1: I might point out author the Belvedere Hotel was the 221 00:12:19,320 --> 00:12:22,360 Speaker 1: ancient hotel here. It's where you came years ago, if 222 00:12:22,360 --> 00:12:25,640 Speaker 1: you were to have for the tuperculosis treatment and all, 223 00:12:25,679 --> 00:12:28,760 Speaker 1: there's a wonderful photograph of Robert Louis Stevenson in the 224 00:12:28,800 --> 00:12:31,400 Speaker 1: background of that. And to get to the rub the 225 00:12:32,160 --> 00:12:34,679 Speaker 1: Magic mount the Thomas Man, the Magic Mountain, and to 226 00:12:34,800 --> 00:12:38,560 Speaker 1: get to uh, those photographs of Robert Louis Stevenson, you've 227 00:12:38,559 --> 00:12:41,040 Speaker 1: got to walk through the lobby and the bookstore. Notice 228 00:12:41,080 --> 00:12:44,240 Speaker 1: the Steven Schwartzman bookstore is well, how are book sales 229 00:12:44,280 --> 00:12:47,880 Speaker 1: here in Davos. Well, you know, actually, uh, we're giving 230 00:12:47,920 --> 00:12:53,520 Speaker 1: them away. That sounds like private equity is just your 231 00:12:53,600 --> 00:12:56,680 Speaker 1: idea over here. You let him give away books. There 232 00:12:56,720 --> 00:12:59,560 Speaker 1: goes a profit margin, is what they wouldn't let us 233 00:12:59,559 --> 00:13:02,760 Speaker 1: sell them, And I wanted people to read them. So 234 00:13:02,840 --> 00:13:05,200 Speaker 1: it's interesting Tom. This morning I always said something. At 235 00:13:05,240 --> 00:13:08,360 Speaker 1: seven o'clock, four or five people walked up, said could 236 00:13:08,400 --> 00:13:11,000 Speaker 1: you please sign my book? Uh, you know, I just 237 00:13:11,240 --> 00:13:13,640 Speaker 1: picked it up. I'm excited to read it. Just Tim 238 00:13:13,640 --> 00:13:16,960 Speaker 1: Cooker's Bezos read your book. If you're run into Tim 239 00:13:17,000 --> 00:13:21,680 Speaker 1: Cooker Jeff Bezos about the Schwartzman theme, Well, it's interesting. Um. 240 00:13:21,720 --> 00:13:25,720 Speaker 1: I saw Jeff before the book was published, and I said, 241 00:13:26,000 --> 00:13:30,120 Speaker 1: Jeff here's what I'm doing, here's the theme. Could you 242 00:13:30,160 --> 00:13:34,240 Speaker 1: be helpful with Amazon? And he said, sure, send it 243 00:13:34,280 --> 00:13:36,360 Speaker 1: to me h and we'll take care of it. This 244 00:13:36,440 --> 00:13:38,280 Speaker 1: is so important, Steven, I want to make this point. 245 00:13:38,320 --> 00:13:40,600 Speaker 1: I went down to the offices of Jeff wins LinkedIn 246 00:13:40,960 --> 00:13:43,000 Speaker 1: the other day at the Empire State Building and you're 247 00:13:43,000 --> 00:13:45,480 Speaker 1: stuck in traffic and you look over and you're right 248 00:13:45,520 --> 00:13:47,960 Speaker 1: as you go down Fifth Avenue is a Schwartzman Library, 249 00:13:48,000 --> 00:13:50,960 Speaker 1: the New York Public Library. You, more than anybody in 250 00:13:50,960 --> 00:13:55,679 Speaker 1: America know the new technology of cook in Bezos versus 251 00:13:55,720 --> 00:13:59,360 Speaker 1: the old technology of what you've donated millions of dollars to. 252 00:14:00,040 --> 00:14:02,960 Speaker 1: What is what is the focus of technology that you 253 00:14:03,080 --> 00:14:06,760 Speaker 1: see right now? Is it a benefit to Americans or 254 00:14:06,920 --> 00:14:09,360 Speaker 1: all of the tension of the selection and all. Is 255 00:14:09,440 --> 00:14:12,480 Speaker 1: it because they're technological halves and there are too many 256 00:14:12,600 --> 00:14:15,280 Speaker 1: technological have nots. Well, we've got to get everybody to 257 00:14:15,320 --> 00:14:21,480 Speaker 1: be a technological have. Technologies is benefiting American enormous number 258 00:14:21,600 --> 00:14:24,320 Speaker 1: of ways. For example, you know, you take your smartphone. 259 00:14:24,680 --> 00:14:27,440 Speaker 1: You know YouTube would be lost without that, as would I, 260 00:14:28,040 --> 00:14:31,400 Speaker 1: uh and uh we're also lost with it. But that's 261 00:14:31,480 --> 00:14:33,640 Speaker 1: the whole of your state you want to go back. 262 00:14:33,720 --> 00:14:36,200 Speaker 1: There's that track photo of you running around doing a 263 00:14:36,240 --> 00:14:38,760 Speaker 1: three minute mile a few years ago. I want to 264 00:14:38,800 --> 00:14:42,600 Speaker 1: go back long agoing far away. You supported this president 265 00:14:42,840 --> 00:14:46,080 Speaker 1: because the Republicans had the vision with Democrats to build 266 00:14:46,080 --> 00:14:49,360 Speaker 1: the interstate highway system in the fifties. Can't you help 267 00:14:49,440 --> 00:14:54,440 Speaker 1: the president support an interstate highway of technology in America 268 00:14:54,800 --> 00:14:57,440 Speaker 1: where we take the whole country and get all this fixed. 269 00:14:58,160 --> 00:15:04,000 Speaker 1: I think that they're is enormous need and it's bipartisan, uh, 270 00:15:04,200 --> 00:15:08,720 Speaker 1: Tom that you know, Chuck Schumer, for example, along with 271 00:15:08,840 --> 00:15:12,480 Speaker 1: many people in Congress, want to make a major step forward, 272 00:15:13,080 --> 00:15:17,240 Speaker 1: as does the administration UM in terms of providing money 273 00:15:18,040 --> 00:15:21,920 Speaker 1: for AI UH and UH what made me even more 274 00:15:22,040 --> 00:15:26,560 Speaker 1: consequential quantum UH in the future. UH. And and you know, 275 00:15:27,120 --> 00:15:32,240 Speaker 1: the universities that are doing this advanced research, the companies 276 00:15:32,880 --> 00:15:36,200 Speaker 1: who are who are sort of the American flagship carriers 277 00:15:36,720 --> 00:15:42,160 Speaker 1: UH in technology all want more research funds UH to 278 00:15:42,480 --> 00:15:48,320 Speaker 1: increase competitiveness. Now, this really will end up benefiting regular people, 279 00:15:48,800 --> 00:15:55,080 Speaker 1: whether it's with diagnoses of illnesses with much more reliability, UH, 280 00:15:55,400 --> 00:15:58,840 Speaker 1: development of drugs which could end up being half the 281 00:15:58,920 --> 00:16:04,680 Speaker 1: cost as a result of it. UH. Huge breakthroughs in 282 00:16:04,920 --> 00:16:09,560 Speaker 1: education where you'll be able to to instruct students of 283 00:16:09,640 --> 00:16:16,000 Speaker 1: all different types of backgrounds. So so technology uh has 284 00:16:16,040 --> 00:16:21,160 Speaker 1: gotten some enormous benefits. What's the biggest unknown for the markets? 285 00:16:21,280 --> 00:16:23,600 Speaker 1: Is it the U S election? Is it global growth 286 00:16:23,720 --> 00:16:26,280 Speaker 1: or is it geopolitics? Well, it's not global growth. I 287 00:16:26,280 --> 00:16:30,800 Speaker 1: think global growth will continue. The biggest risk uh. You know, 288 00:16:30,960 --> 00:16:34,400 Speaker 1: for for markets are are two types of things. One 289 00:16:34,480 --> 00:16:37,680 Speaker 1: is US domestic politics and the second is the black 290 00:16:37,760 --> 00:16:41,320 Speaker 1: swan effects that can happen. I mean, we just had 291 00:16:41,320 --> 00:16:46,480 Speaker 1: an incident for example, Uh in in Iraq, I was 292 00:16:46,520 --> 00:16:51,760 Speaker 1: watching television. Almost everyone who's declaring World War three starting. 293 00:16:52,320 --> 00:16:55,720 Speaker 1: They all happened to be wrong. But if they were right, uh, 294 00:16:55,760 --> 00:16:59,280 Speaker 1: and the straits of hormones were closed, and we ended 295 00:16:59,360 --> 00:17:03,400 Speaker 1: up uh. You know, with a huge dislocation. You could 296 00:17:03,440 --> 00:17:08,879 Speaker 1: get thrown accidentally into a slow growth to recession. But 297 00:17:08,920 --> 00:17:12,080 Speaker 1: it's quite amazing how the market quickly discounted once there 298 00:17:12,080 --> 00:17:15,080 Speaker 1: there was no immediate threat of war. They kind of 299 00:17:15,119 --> 00:17:18,440 Speaker 1: moved on. We have asset prises really priced to perfection. 300 00:17:18,480 --> 00:17:21,440 Speaker 1: So how do the two kind of match up? Well, 301 00:17:21,520 --> 00:17:25,840 Speaker 1: usually perfection doesn't last. Uh. And you know this has 302 00:17:25,880 --> 00:17:32,000 Speaker 1: been an amazing run. Usually you expect some type of adjustment. Uh. 303 00:17:32,240 --> 00:17:35,560 Speaker 1: But but if if, if, if we don't have a 304 00:17:35,640 --> 00:17:41,920 Speaker 1: really um discontinuest event with US politics and we avoid 305 00:17:42,720 --> 00:17:49,040 Speaker 1: um the kinds of major international type of of risks, 306 00:17:49,960 --> 00:17:55,560 Speaker 1: geopolitical risks. I think we'll go on with variability up 307 00:17:55,600 --> 00:17:57,760 Speaker 1: and down over today's levels. Do you think out what 308 00:17:57,840 --> 00:17:59,800 Speaker 1: time for one more question? Because I know you're going 309 00:17:59,840 --> 00:18:03,320 Speaker 1: off to go skiing on this perfect day, and I'm 310 00:18:03,320 --> 00:18:05,080 Speaker 1: going to ask you the same question I would ask 311 00:18:05,160 --> 00:18:08,520 Speaker 1: Mr Rubinstein and the others. Richard Edelman's come out with 312 00:18:08,560 --> 00:18:12,040 Speaker 1: a study that that would be the president leading right now. 313 00:18:12,040 --> 00:18:15,439 Speaker 1: Those sirens you here in the background. Richard Edelman's come 314 00:18:15,440 --> 00:18:19,640 Speaker 1: out with a study of how capitalism is removed from 315 00:18:19,680 --> 00:18:24,640 Speaker 1: so many people in America. Is it time for private equity, 316 00:18:24,840 --> 00:18:29,560 Speaker 1: Time for private equity to change its text treatment that's 317 00:18:29,600 --> 00:18:33,080 Speaker 1: been in place over the years. Like I leave that 318 00:18:33,119 --> 00:18:38,879 Speaker 1: one tom to uh uh to to the political people, uh, 319 00:18:39,040 --> 00:18:42,800 Speaker 1: every one of whom has their own unique solution uh 320 00:18:43,040 --> 00:18:46,399 Speaker 1: for the ills of the world. What I'd say is 321 00:18:46,560 --> 00:18:49,879 Speaker 1: part of the Edelman's study also had to do with 322 00:18:49,960 --> 00:18:55,000 Speaker 1: overall trust in institutions, And I think there's a real 323 00:18:55,080 --> 00:19:01,560 Speaker 1: need to address what's going wrong with our society where 324 00:19:01,600 --> 00:19:07,200 Speaker 1: so many people question almost every every institution in society. 325 00:19:07,720 --> 00:19:09,960 Speaker 1: How much pressure are you feeling? One final question, because 326 00:19:09,960 --> 00:19:12,000 Speaker 1: we couldn't hear Tom's questions, it was the last question. 327 00:19:12,040 --> 00:19:14,640 Speaker 1: It doesn't count. How much pressure are you feeling from 328 00:19:14,640 --> 00:19:18,879 Speaker 1: investors to put cash to use? We don't have that 329 00:19:18,960 --> 00:19:22,119 Speaker 1: kind of pressure. They don't They don't want to go 330 00:19:22,160 --> 00:19:25,360 Speaker 1: in now. We've We've invested a lot of money over 331 00:19:25,400 --> 00:19:28,760 Speaker 1: the years. When when when prices are high, you're trying 332 00:19:28,840 --> 00:19:32,520 Speaker 1: and invest less um, when they're low, you try to 333 00:19:32,520 --> 00:19:36,520 Speaker 1: invest more. We we sell a lot of things. When 334 00:19:36,800 --> 00:19:40,240 Speaker 1: prices are high, we try and find things. It's harder. 335 00:19:41,000 --> 00:19:43,000 Speaker 1: So I got to make some sty Are you buying 336 00:19:43,080 --> 00:19:47,119 Speaker 1: or selling right now? I mean the market watch we 337 00:19:47,480 --> 00:19:49,520 Speaker 1: got we gotta go. The ski lift is waiting for 338 00:19:49,640 --> 00:19:52,840 Speaker 1: Mr Schwartzman, But quickly, are you buying or selling? We 339 00:19:52,960 --> 00:19:56,000 Speaker 1: do both, Tom, we do Bothett have the stage. I'm 340 00:19:58,720 --> 00:20:01,560 Speaker 1: unplugged him and throwing a money right now. What is 341 00:20:01,600 --> 00:20:05,239 Speaker 1: the an economist on the one hand and on the 342 00:20:05,240 --> 00:20:08,840 Speaker 1: other hand, ste thank you so much. We'll go sell 343 00:20:08,880 --> 00:20:28,240 Speaker 1: a book with Blackstone. This morning City Group at the 344 00:20:28,320 --> 00:20:32,919 Speaker 1: most original path is arguably our most international bank. We 345 00:20:33,000 --> 00:20:36,240 Speaker 1: begin our banking coverage here, John and I of Michael Corbett. 346 00:20:36,280 --> 00:20:39,040 Speaker 1: He's the chief executive officer of City Group, and we 347 00:20:39,080 --> 00:20:42,879 Speaker 1: need a most timely update. Now give me an international 348 00:20:43,000 --> 00:20:47,119 Speaker 1: view from our most international bank. What is the state 349 00:20:47,280 --> 00:20:51,240 Speaker 1: of City Group globally? Stated? City Group, Tom, is that 350 00:20:51,440 --> 00:20:53,760 Speaker 1: you know, we're coming off of a strong year and 351 00:20:53,840 --> 00:20:56,480 Speaker 1: a strong close to the year. And if you look 352 00:20:56,520 --> 00:20:59,520 Speaker 1: at both at a product level, at a geography level, 353 00:21:00,000 --> 00:21:03,919 Speaker 1: solid performance across our consumer and institutional businesses. And as 354 00:21:03,960 --> 00:21:06,400 Speaker 1: you go to Latin America, as you go to Europe, Asia, 355 00:21:07,040 --> 00:21:10,879 Speaker 1: around the globe, strong uniform performance. The happy talk of 356 00:21:10,960 --> 00:21:14,800 Speaker 1: Davos is best practices. What is the worst practice you're 357 00:21:14,840 --> 00:21:17,600 Speaker 1: trying to avoid? Now as you look back at the 358 00:21:17,760 --> 00:21:21,879 Speaker 1: heritage of OH seven from a Davos perspective or from 359 00:21:21,920 --> 00:21:24,720 Speaker 1: a city from a City Group perspective, what's the worst 360 00:21:24,760 --> 00:21:27,719 Speaker 1: practice you're trying to avoid each and every day is 361 00:21:27,760 --> 00:21:29,399 Speaker 1: to we You know, we don't come to work. We 362 00:21:29,480 --> 00:21:32,200 Speaker 1: can't be No one can be everything to everybody. So 363 00:21:32,240 --> 00:21:36,560 Speaker 1: the financial supermarket mentality, I think that permeated the first 364 00:21:36,640 --> 00:21:40,680 Speaker 1: part of the two thousand to two thousand seven era, 365 00:21:41,200 --> 00:21:43,000 Speaker 1: and to come to work to do the things that 366 00:21:43,040 --> 00:21:45,240 Speaker 1: we can do best. And as you say, we are 367 00:21:45,280 --> 00:21:48,000 Speaker 1: the most international, certainly of the U S. And we're 368 00:21:48,000 --> 00:21:51,160 Speaker 1: in fact probably the most international of really any list 369 00:21:51,200 --> 00:21:53,600 Speaker 1: of banks in the world. And as we think about 370 00:21:53,640 --> 00:21:57,080 Speaker 1: the fact that today, around the things the President discussed, 371 00:21:57,240 --> 00:21:59,400 Speaker 1: the trade deals and things that have gone on, our 372 00:21:59,440 --> 00:22:01,800 Speaker 1: clients need just more than every well, let's talk about that. 373 00:22:01,880 --> 00:22:05,400 Speaker 1: You hear it from the President this morning through the afternoon, optimism, 374 00:22:05,440 --> 00:22:08,879 Speaker 1: I hear it from you Upbate optimism. I don't feel 375 00:22:08,920 --> 00:22:11,600 Speaker 1: that walking around the wholes of this particular event at 376 00:22:11,600 --> 00:22:13,879 Speaker 1: the moment, there is some real pessimism that despite the 377 00:22:13,880 --> 00:22:16,720 Speaker 1: fact unemployments of multi decade lowest, despite the fact we 378 00:22:16,760 --> 00:22:19,359 Speaker 1: have the longest recovery on record, why not, what are 379 00:22:19,359 --> 00:22:21,080 Speaker 1: we missing here? Well, if we were here, and we 380 00:22:21,080 --> 00:22:23,760 Speaker 1: were here a year ago, there was pessimists of them. 381 00:22:23,800 --> 00:22:27,680 Speaker 1: If you remember the way that ended. I talked about 382 00:22:27,680 --> 00:22:32,000 Speaker 1: a real fundamental disconnect between what the consumers behaviors were 383 00:22:32,040 --> 00:22:35,160 Speaker 1: saying and what the markets were saying. The markets as 384 00:22:35,200 --> 00:22:39,760 Speaker 1: we were here, we're giving pretty strong shigns of forthcoming downturn, 385 00:22:40,119 --> 00:22:41,800 Speaker 1: and in fact we didn't see it. We're here a 386 00:22:41,840 --> 00:22:46,960 Speaker 1: year later, UM, the smps up, city stocks up, the 387 00:22:47,040 --> 00:22:50,399 Speaker 1: markets had pretty broad based good performance, and by the way, 388 00:22:50,640 --> 00:22:53,320 Speaker 1: the consumers still in good shape. The consumer has been 389 00:22:53,600 --> 00:22:56,760 Speaker 1: the backbone of this recovery. He's standing up for capitalism 390 00:22:56,920 --> 00:23:01,080 Speaker 1: this week. I think, I think all the firms, do 391 00:23:01,119 --> 00:23:02,520 Speaker 1: you get that sense? I don't get that sense at 392 00:23:02,520 --> 00:23:04,639 Speaker 1: the moment. I get a sense that things are changing, 393 00:23:05,280 --> 00:23:07,359 Speaker 1: that the guardians of the States has quite realized they 394 00:23:07,400 --> 00:23:09,440 Speaker 1: can't protect it anymore and they need to change before 395 00:23:09,680 --> 00:23:12,480 Speaker 1: someone changes them. Do you not get that feeling? Mike, Well, 396 00:23:12,640 --> 00:23:14,639 Speaker 1: you know again, I think we get we were We 397 00:23:14,720 --> 00:23:19,879 Speaker 1: get in this nuance between capitalism and what's responsible. And 398 00:23:19,960 --> 00:23:23,679 Speaker 1: I think today what you're hearing from companies around stakeholders 399 00:23:24,040 --> 00:23:26,000 Speaker 1: right is something I think in many cases that's been 400 00:23:26,000 --> 00:23:29,159 Speaker 1: embraced for years. It just wasn't necessarily talked about. You 401 00:23:29,200 --> 00:23:32,520 Speaker 1: think in today's age is coming to work as a company, UM, 402 00:23:32,680 --> 00:23:35,359 Speaker 1: one of your stakeholders, your employees. If your employees don't 403 00:23:35,400 --> 00:23:38,040 Speaker 1: feel good about who you are and what you do, 404 00:23:38,480 --> 00:23:40,440 Speaker 1: you're not going to keep him. If your customers and 405 00:23:40,560 --> 00:23:42,919 Speaker 1: clients don't feel good about what you do, you're not 406 00:23:42,960 --> 00:23:44,359 Speaker 1: gonna come, Michael. I want to go back to a 407 00:23:44,359 --> 00:23:46,920 Speaker 1: Harvard discussion your folks, and I've been told Corbette will 408 00:23:46,920 --> 00:23:49,320 Speaker 1: walk off the set if I bring up Harvard Yale football, 409 00:23:49,359 --> 00:23:52,920 Speaker 1: which is beyond ugly, uh this past November. I want 410 00:23:52,960 --> 00:23:55,080 Speaker 1: to go back to Michael Porter one on one. I'm 411 00:23:55,119 --> 00:23:58,600 Speaker 1: sure you've been in many classrooms of the wonderful Michael 412 00:23:58,600 --> 00:24:02,400 Speaker 1: Porter over the years, and that is too many Americans 413 00:24:02,920 --> 00:24:06,119 Speaker 1: feel a barrier to entry to prosperity. They feel a 414 00:24:06,160 --> 00:24:10,040 Speaker 1: barrier of entry to society. People are looking. Richard Edelman 415 00:24:10,119 --> 00:24:12,920 Speaker 1: clearly sees that people are looking to elites and are 416 00:24:12,960 --> 00:24:15,639 Speaker 1: too big to fail banks to assist those people to 417 00:24:15,760 --> 00:24:19,000 Speaker 1: get through those barriers. How do you affect that, Well, 418 00:24:19,480 --> 00:24:22,600 Speaker 1: it's a real problem and in there when you think 419 00:24:22,640 --> 00:24:26,520 Speaker 1: of the fact that we're eleven twelve years into quantitative easing, 420 00:24:26,640 --> 00:24:32,600 Speaker 1: quantitative easing adds to queie is for the elite. Ben 421 00:24:32,640 --> 00:24:35,040 Speaker 1: Bernanke said, we had to save the banks. We saved 422 00:24:35,040 --> 00:24:37,840 Speaker 1: the banks. You were advantaged by that. Every bank was different. 423 00:24:37,880 --> 00:24:40,000 Speaker 1: I get that. What do we do for the people 424 00:24:40,040 --> 00:24:43,520 Speaker 1: out there that there's at City Group retail they're worried 425 00:24:43,520 --> 00:24:45,520 Speaker 1: about fees and that what do we do to help 426 00:24:45,560 --> 00:24:49,280 Speaker 1: them get to within society Now, well, I think all 427 00:24:49,280 --> 00:24:51,800 Speaker 1: the pieces that not just City but the industry is 428 00:24:51,840 --> 00:24:54,639 Speaker 1: working on in terms of inclusive finance. Right if you 429 00:24:54,680 --> 00:24:56,760 Speaker 1: look at the programs were out there, we're getting ready 430 00:24:56,960 --> 00:25:00,000 Speaker 1: to launch a program probably in the springtime with Google 431 00:25:00,000 --> 00:25:02,399 Speaker 1: goal in terms of being able to bring more people 432 00:25:02,440 --> 00:25:07,520 Speaker 1: in the digitization of banking, compression, removal of fees, frictions 433 00:25:07,520 --> 00:25:10,080 Speaker 1: in people's lives. And by the way, it's the mindset 434 00:25:10,119 --> 00:25:12,760 Speaker 1: in the mantra of being able to create for people 435 00:25:12,800 --> 00:25:15,880 Speaker 1: best in life experiences. And that's not best in banking, 436 00:25:16,119 --> 00:25:17,960 Speaker 1: but that's how do we create that best in life 437 00:25:18,000 --> 00:25:21,160 Speaker 1: experience and bring more people in to have the access. 438 00:25:21,200 --> 00:25:23,320 Speaker 1: And if you look at what's going on at City, 439 00:25:23,800 --> 00:25:26,320 Speaker 1: not just in the US, but around the world, we're 440 00:25:26,320 --> 00:25:29,480 Speaker 1: bringing people, were bringing business, We're bringing small business, we're 441 00:25:29,520 --> 00:25:32,520 Speaker 1: bringing women, were bringing all of those things to bear 442 00:25:32,720 --> 00:25:35,160 Speaker 1: in terms of inclusive finance. I'm gonna ask the question 443 00:25:35,200 --> 00:25:38,120 Speaker 1: that I know really winds up. CEO is on Wall 444 00:25:38,160 --> 00:25:39,920 Speaker 1: Street at the moment, so forgive me for doing it. 445 00:25:40,440 --> 00:25:42,720 Speaker 1: Eighteen billion that's how much was saved by the six 446 00:25:42,760 --> 00:25:45,639 Speaker 1: biggest banks on Wall Street for last year. Because of 447 00:25:45,640 --> 00:25:48,440 Speaker 1: the tax cut, and people keep passing the same question. 448 00:25:48,480 --> 00:25:49,920 Speaker 1: And I'm not sure that big banks on Wall Street 449 00:25:49,920 --> 00:25:51,439 Speaker 1: have done a great job of telling us where the 450 00:25:51,440 --> 00:25:54,800 Speaker 1: money's gone. Where's it gone? Well, one is we are 451 00:25:54,840 --> 00:25:58,560 Speaker 1: a taxpayer, in a significant taxpayer off of our twenty 452 00:25:58,600 --> 00:26:02,360 Speaker 1: billion dollars of net income that we earned in it's 453 00:26:02,400 --> 00:26:05,960 Speaker 1: gone into our infrastructure, it's gone into technology, it's gone 454 00:26:05,960 --> 00:26:10,240 Speaker 1: into people, it's gone into lending. Yep, it's gone into investing. 455 00:26:11,240 --> 00:26:14,720 Speaker 1: We just announced a initiative where we're going to be 456 00:26:14,920 --> 00:26:20,320 Speaker 1: actually investing around clean and green technology. Uh. And you know, 457 00:26:20,400 --> 00:26:22,960 Speaker 1: we just announced launched a hundred and fifty million dollar 458 00:26:23,040 --> 00:26:26,080 Speaker 1: program over the next few years in terms of putting 459 00:26:26,080 --> 00:26:28,560 Speaker 1: some of those money's back returns to shareholders. Last year, 460 00:26:28,560 --> 00:26:31,640 Speaker 1: what were the point three billion. I'm not sitting here 461 00:26:31,640 --> 00:26:33,520 Speaker 1: a post to buy backs. That's not my position. It's 462 00:26:33,520 --> 00:26:35,159 Speaker 1: not my job to have a position. I'm just wondering 463 00:26:35,160 --> 00:26:38,040 Speaker 1: how we reconcile some of the things we hear at 464 00:26:38,040 --> 00:26:41,320 Speaker 1: an event like this from CEOs on Wall Street about 465 00:26:41,400 --> 00:26:45,760 Speaker 1: moving away from shareholder primacy. When we see record profits 466 00:26:46,080 --> 00:26:50,000 Speaker 1: and monster returns to shareholders year after year, how do 467 00:26:50,119 --> 00:26:52,040 Speaker 1: we reconcile those two things in the years to come. 468 00:26:52,400 --> 00:26:54,719 Speaker 1: One as I think the holders accountable for what we do. 469 00:26:54,800 --> 00:26:57,119 Speaker 1: And in there, yes, we did return twenty two billion 470 00:26:57,119 --> 00:27:00,159 Speaker 1: dollars to shareholders, but we also grew our loan at 471 00:27:00,200 --> 00:27:03,480 Speaker 1: four LEO at a pace faster than Global GDP, and 472 00:27:03,560 --> 00:27:06,239 Speaker 1: I think we did it systemically responsible. You know, if 473 00:27:06,280 --> 00:27:08,159 Speaker 1: you were to take that twenty two billion dollars and 474 00:27:08,200 --> 00:27:11,080 Speaker 1: be forced to reinvest it. Tommy asked the question about 475 00:27:11,119 --> 00:27:13,840 Speaker 1: what you do different. You've got to be you've got 476 00:27:13,840 --> 00:27:15,760 Speaker 1: to be scaled to serve your market. And if you're 477 00:27:15,760 --> 00:27:18,480 Speaker 1: putting all those moneys back in, I would argue that 478 00:27:18,560 --> 00:27:21,359 Speaker 1: it's it's tough to keep your responsibility in that. We 479 00:27:21,480 --> 00:27:23,399 Speaker 1: welcome all over your here for the meetings of the 480 00:27:23,400 --> 00:27:26,560 Speaker 1: World Economic Forum. I'm Bloomberg Radio and I'm Bloomberg Television 481 00:27:27,280 --> 00:27:30,159 Speaker 1: or with Michael Corbett. He's the chief executive officer of 482 00:27:30,640 --> 00:27:34,920 Speaker 1: City Group. Within City Group, and you mentioned earlier technology 483 00:27:35,200 --> 00:27:38,679 Speaker 1: you just brought in dragged in, I should say, a 484 00:27:38,680 --> 00:27:41,760 Speaker 1: new head of retail. What a challenge five and ten 485 00:27:41,840 --> 00:27:45,199 Speaker 1: years forward is you and every other bank, regional banks, 486 00:27:45,200 --> 00:27:50,520 Speaker 1: the small banks survived the technological demands of retail. What's 487 00:27:50,560 --> 00:27:54,200 Speaker 1: the Corbette strategy for retail. What are the marching orders 488 00:27:54,359 --> 00:27:57,120 Speaker 1: to your new guy running retail banking. Well, we've got 489 00:27:57,119 --> 00:28:00,520 Speaker 1: a new gal running retail, excuse me, And the marching 490 00:28:00,640 --> 00:28:04,280 Speaker 1: orders are to make sure that we are pushing ourselves 491 00:28:04,320 --> 00:28:07,320 Speaker 1: to be offering tom that best in life experience. It's 492 00:28:07,359 --> 00:28:10,080 Speaker 1: not about being best in bank, but if you can 493 00:28:10,160 --> 00:28:13,480 Speaker 1: match the ride hailing app, the retail app, whatever is 494 00:28:13,520 --> 00:28:17,480 Speaker 1: exactly take frictions out of people's lives and reimagine what 495 00:28:17,600 --> 00:28:21,359 Speaker 1: banking can bes. Frictions mean job cuts, No, not at all. 496 00:28:21,400 --> 00:28:22,919 Speaker 1: What are you gonna do with all those bodies and 497 00:28:22,960 --> 00:28:26,879 Speaker 1: retraditional retail banking? Um One is that the pace of 498 00:28:27,000 --> 00:28:30,600 Speaker 1: change is probably slower than people think, meaning that we 499 00:28:30,680 --> 00:28:33,879 Speaker 1: cover a continuum of people and we are today running 500 00:28:33,880 --> 00:28:38,400 Speaker 1: an analog any digital bank. That will change over time. 501 00:28:38,760 --> 00:28:41,840 Speaker 1: But um we have a large cohort of people that 502 00:28:41,920 --> 00:28:45,840 Speaker 1: actually want there, I want it now mentality in terms 503 00:28:45,840 --> 00:28:47,960 Speaker 1: of their digital banking on their app. They want to 504 00:28:48,000 --> 00:28:49,960 Speaker 1: come in our branch. They want to speak to people, 505 00:28:50,560 --> 00:28:52,560 Speaker 1: and when you can provide that and segment that in 506 00:28:52,560 --> 00:28:55,520 Speaker 1: the right way, it's very powerful. So it's not necessarily 507 00:28:55,680 --> 00:28:58,680 Speaker 1: using less people, it's being smarter about how and where 508 00:28:58,720 --> 00:29:01,160 Speaker 1: and the ways that you use. How proud would you 509 00:29:01,200 --> 00:29:03,560 Speaker 1: be to hand over the reins to Jane Fraser and 510 00:29:03,640 --> 00:29:05,760 Speaker 1: be the first bank on wall straight to break the 511 00:29:05,800 --> 00:29:07,800 Speaker 1: glass the link? How proud would you be to do that? 512 00:29:08,280 --> 00:29:10,560 Speaker 1: Of course I'd be very proud. But you know two 513 00:29:10,600 --> 00:29:13,440 Speaker 1: things is that you know, One is that that decision 514 00:29:13,600 --> 00:29:15,960 Speaker 1: is not mine. It's the boards, my job and my 515 00:29:16,080 --> 00:29:20,040 Speaker 1: responsibilities to make sure that we're preparing people. And you know, 516 00:29:20,280 --> 00:29:22,320 Speaker 1: you know, Jane has had a phenomenal career with us, 517 00:29:22,320 --> 00:29:25,680 Speaker 1: and you know we continue that that role of making 518 00:29:25,680 --> 00:29:28,120 Speaker 1: sure that if and when the time comes, she's ready 519 00:29:28,160 --> 00:29:31,000 Speaker 1: and and it might be in your hands. Mike, you 520 00:29:31,120 --> 00:29:33,239 Speaker 1: felt good now the five years So we hear from 521 00:29:33,280 --> 00:29:36,200 Speaker 1: Jamie Diamond all the time it's a five year rolling Well, 522 00:29:37,400 --> 00:29:41,160 Speaker 1: isn't it? Just keep just keep going? Mind is mine? 523 00:29:41,240 --> 00:29:43,240 Speaker 1: Is is that I'm a I'm a believer in term 524 00:29:43,280 --> 00:29:46,480 Speaker 1: limits and I did every every horse has its course? 525 00:29:46,680 --> 00:29:48,680 Speaker 1: Is the term limit? Um? What do you think? Again? 526 00:29:48,720 --> 00:29:51,960 Speaker 1: I think that's dictated by the environment and the strengths 527 00:29:51,960 --> 00:29:54,120 Speaker 1: and skill sets of the person in the job and 528 00:29:54,200 --> 00:29:57,200 Speaker 1: the applicability. And at some point my course will have 529 00:29:57,320 --> 00:29:59,240 Speaker 1: run and then it's somebody else's turned to grab the 530 00:29:59,280 --> 00:30:02,560 Speaker 1: Briton and go. This day, we had President Trump speaking. 531 00:30:02,600 --> 00:30:04,520 Speaker 1: You and I did a panel two or three years 532 00:30:04,560 --> 00:30:07,920 Speaker 1: ago here. It was hugely invigorating about global banking and 533 00:30:07,960 --> 00:30:12,960 Speaker 1: global finance. Do you need a Trumpian unilateral America or 534 00:30:13,000 --> 00:30:15,640 Speaker 1: do you need to get back to a more multilateral 535 00:30:16,360 --> 00:30:19,320 Speaker 1: global system? Does that assist you for which way do 536 00:30:19,360 --> 00:30:22,080 Speaker 1: you cut on that? Well, one is I would I 537 00:30:22,120 --> 00:30:24,800 Speaker 1: wouldn't necessarily describe it as Trumpian, But you know, any 538 00:30:24,840 --> 00:30:29,480 Speaker 1: time that we can move towards across the aisle bipartisanship 539 00:30:29,600 --> 00:30:32,720 Speaker 1: to get things done, I think that's healthy because when 540 00:30:32,720 --> 00:30:36,440 Speaker 1: you think of the business community, the business community just 541 00:30:36,480 --> 00:30:40,479 Speaker 1: doesn't want lower rates like certainty, likes clarity, and I 542 00:30:40,520 --> 00:30:43,040 Speaker 1: think the more divide you have, not just in the 543 00:30:43,120 --> 00:30:45,440 Speaker 1: US but around the world and political parties, the more 544 00:30:45,520 --> 00:30:48,560 Speaker 1: uncertainty you have. Just got an email in from New York, John, 545 00:30:48,600 --> 00:30:51,240 Speaker 1: I have to apologize for the brain freeze on Miss Fraser. 546 00:30:51,520 --> 00:30:54,360 Speaker 1: It's sitting room that was Can I explain why that occurred? 547 00:30:54,400 --> 00:30:56,560 Speaker 1: Folks had a little bit to do with the sequence 548 00:30:56,600 --> 00:30:59,440 Speaker 1: of one Am and the piano party, you know, but 549 00:30:59,560 --> 00:31:01,640 Speaker 1: it looks I got a text from Tom Kine last 550 00:31:01,720 --> 00:31:04,400 Speaker 1: night at about one I am I think just said 551 00:31:04,840 --> 00:31:07,720 Speaker 1: Ballavadere and I woke up and I replied, one of 552 00:31:07,800 --> 00:31:11,160 Speaker 1: us is in bed. I've done the reading. You're gonna 553 00:31:11,200 --> 00:31:15,080 Speaker 1: get an early night. No, no, it's exciting. Thank you. 554 00:31:15,280 --> 00:31:17,360 Speaker 1: If you say Tom on the streets, please look after 555 00:31:17,440 --> 00:31:19,120 Speaker 1: it might go about that. And I'm to show you 556 00:31:19,120 --> 00:31:21,920 Speaker 1: know from the Harvard game it was a spectacular fifty 557 00:31:21,960 --> 00:31:25,640 Speaker 1: eight minutes and thirty Was it wonderful? Truly one of 558 00:31:25,640 --> 00:31:28,840 Speaker 1: the greatest games for those of you globally Harvard and 559 00:31:29,160 --> 00:31:33,480 Speaker 1: Yale in November? Was it everything sport needs to be 560 00:31:33,560 --> 00:31:37,520 Speaker 1: about in America? Michael, thank you, Thank you very much. 561 00:31:37,680 --> 00:31:54,400 Speaker 1: As always talking about commercial bankers and central bankers, there's 562 00:31:54,400 --> 00:31:56,200 Speaker 1: other people in investment. Why don't you bring in the 563 00:31:56,240 --> 00:31:58,320 Speaker 1: steam guest any place to say, we can bring in 564 00:31:58,520 --> 00:32:01,800 Speaker 1: Marty Flanagan, the investo. See mighty great to see you. 565 00:32:02,080 --> 00:32:03,520 Speaker 1: I want to read out a quote from you at 566 00:32:03,520 --> 00:32:05,320 Speaker 1: the end of last year because it really jumped out 567 00:32:05,320 --> 00:32:08,200 Speaker 1: to me. We're going through a once in a generation change. 568 00:32:08,280 --> 00:32:10,520 Speaker 1: Every single client we deal with around the world is 569 00:32:10,600 --> 00:32:14,160 Speaker 1: using fewer and fewer money managers. What does that mean 570 00:32:14,200 --> 00:32:18,680 Speaker 1: to you, Well, yeah, I've been in the industry. There's 571 00:32:18,720 --> 00:32:21,760 Speaker 1: been a discussion that is going to consolidate since that period. 572 00:32:21,960 --> 00:32:24,080 Speaker 1: It just hasn't until right now. And I'd say this 573 00:32:24,160 --> 00:32:27,920 Speaker 1: is really a post crisis phenomena driving it. Just the 574 00:32:28,000 --> 00:32:31,280 Speaker 1: cost for money managers through technology regulation is much higher. 575 00:32:31,520 --> 00:32:35,280 Speaker 1: But also clients are demanding much more from their money managers. 576 00:32:35,480 --> 00:32:37,560 Speaker 1: They want a broad range investment, keep it at least, 577 00:32:37,560 --> 00:32:40,320 Speaker 1: but also more, they want thought leadership, they want support 578 00:32:40,320 --> 00:32:42,880 Speaker 1: in anything that they might be doing, and ultimates. A 579 00:32:42,880 --> 00:32:46,600 Speaker 1: good news story for those managers that can deliver that, 580 00:32:46,760 --> 00:32:49,200 Speaker 1: but it's a great news story for the clients. They 581 00:32:49,240 --> 00:32:51,560 Speaker 1: get more, they'll get economies to scale a lot of it. 582 00:32:51,560 --> 00:32:53,239 Speaker 1: It's a win win story. It's been tough for you. 583 00:32:53,440 --> 00:32:56,880 Speaker 1: Last year was tough, stock cut in half, bleeding money, 584 00:32:57,240 --> 00:33:00,520 Speaker 1: a u M sliding. What can you do this year 585 00:33:00,960 --> 00:33:04,280 Speaker 1: to start to stabilize things. Yeah, so we're on that 586 00:33:04,320 --> 00:33:07,200 Speaker 1: track right now. It's early into the year, but we're 587 00:33:07,240 --> 00:33:09,840 Speaker 1: looking forward to a very good year right now. Much 588 00:33:09,840 --> 00:33:11,760 Speaker 1: of that is we talked a minute ago. We went 589 00:33:11,760 --> 00:33:15,400 Speaker 1: through the third largest combination in the industry, and typically 590 00:33:15,440 --> 00:33:17,800 Speaker 1: what happens is that when you're going through that combination 591 00:33:19,240 --> 00:33:23,200 Speaker 1: the the clients. Until the combination is done, they step 592 00:33:23,240 --> 00:33:25,080 Speaker 1: back so mighty for our audience, just so they can 593 00:33:25,080 --> 00:33:28,040 Speaker 1: follow if they're not familiar with the story. Integrated Oppenheimer 594 00:33:28,080 --> 00:33:31,600 Speaker 1: around about two billion dollars of the sets. Traditionally, what 595 00:33:31,680 --> 00:33:34,280 Speaker 1: we see when you start to absorb that size, you 596 00:33:34,320 --> 00:33:36,640 Speaker 1: start to get some money, go out swhere. Things stopped 597 00:33:36,640 --> 00:33:38,440 Speaker 1: for a little while. It's exactly does this remind you 598 00:33:38,440 --> 00:33:40,000 Speaker 1: of what happened with the company at the tournament the 599 00:33:40,040 --> 00:33:42,600 Speaker 1: millennium when you absorb perpetual it took a couple of 600 00:33:42,640 --> 00:33:44,320 Speaker 1: years just to get things going. Will this be the 601 00:33:44,360 --> 00:33:46,760 Speaker 1: same story? There's no question about it. So what's the measure? 602 00:33:46,920 --> 00:33:49,000 Speaker 1: So who are you talking to? The clients that we 603 00:33:49,080 --> 00:33:52,400 Speaker 1: talked to, they're very supportive the transaction. They say, what 604 00:33:52,560 --> 00:33:54,640 Speaker 1: you all are doing is exactly what should be happening 605 00:33:54,640 --> 00:33:58,080 Speaker 1: in the industry. And you know, very much supportive of us. 606 00:33:58,120 --> 00:34:01,600 Speaker 1: And we completed in a very short period of time 607 00:34:01,600 --> 00:34:06,600 Speaker 1: with yesterday. We're really on January one. We're off to 608 00:34:06,640 --> 00:34:09,360 Speaker 1: the races. I want to go to those moments in 609 00:34:09,400 --> 00:34:11,080 Speaker 1: a year where you just stop. One of them was, 610 00:34:11,120 --> 00:34:13,759 Speaker 1: of course, the headline of the ECB saying that they're 611 00:34:13,760 --> 00:34:16,839 Speaker 1: gonna stay on hold forever. Another one was sitting on 612 00:34:16,880 --> 00:34:20,840 Speaker 1: the set in New York and opening one newspaper. The 613 00:34:20,920 --> 00:34:23,279 Speaker 1: first ad we're giving it away for free. I turned 614 00:34:23,320 --> 00:34:25,600 Speaker 1: the page. It was another discount broker, we're giving it 615 00:34:25,640 --> 00:34:27,719 Speaker 1: away for free. And then there was a third ad, 616 00:34:27,840 --> 00:34:30,600 Speaker 1: three ads in a row in the in that retail 617 00:34:30,680 --> 00:34:33,239 Speaker 1: space saying we're gonna give it away for free. Is 618 00:34:33,280 --> 00:34:36,759 Speaker 1: a bond house of your great distinction? And frankly with 619 00:34:36,840 --> 00:34:40,840 Speaker 1: the Oppenheimer equity management internationally, how are you going to 620 00:34:40,960 --> 00:34:45,120 Speaker 1: make profit knowing you're gonna give it away for free? Industry? Yeah, 621 00:34:45,160 --> 00:34:48,239 Speaker 1: so nothings for free. First of all, I think that's 622 00:34:48,280 --> 00:34:51,040 Speaker 1: one point to make. But when we look at the 623 00:34:51,160 --> 00:34:53,359 Speaker 1: range of capabilities and we're they were those focuses were 624 00:34:53,360 --> 00:34:57,399 Speaker 1: on were CAPUITD indexes, and uh, they've grown enormously post 625 00:34:57,480 --> 00:34:59,759 Speaker 1: the crisis. And when you look at the spectrum of 626 00:34:59,800 --> 00:35:02,839 Speaker 1: how people build portfolios, cap waited indexcess earn it, they're 627 00:35:03,040 --> 00:35:05,920 Speaker 1: very cheap. But as you keep goin up to factors 628 00:35:06,440 --> 00:35:10,000 Speaker 1: active alternatives, you get better returns, excess returns, you get 629 00:35:10,000 --> 00:35:12,279 Speaker 1: downside protection. You're going to pay more for that. So 630 00:35:12,400 --> 00:35:16,319 Speaker 1: clients are literally using the spectrum of assets classes like 631 00:35:16,360 --> 00:35:19,040 Speaker 1: they've never had before to get the outcome. Are you 632 00:35:19,080 --> 00:35:21,759 Speaker 1: going to affect this with a close approach, we said 633 00:35:21,800 --> 00:35:24,120 Speaker 1: Lawrence Fincon from black Rock. Are you gonna do with 634 00:35:24,239 --> 00:35:26,719 Speaker 1: so called our squared folks, which is a statistic on 635 00:35:26,760 --> 00:35:30,040 Speaker 1: this tight up against what the indexes are doing? Are 636 00:35:30,080 --> 00:35:33,000 Speaker 1: you going to bring that our square down and really differentiate? 637 00:35:33,120 --> 00:35:35,400 Speaker 1: So that's really been what's been going on here, and 638 00:35:35,400 --> 00:35:38,680 Speaker 1: this also was really coming out of i'd say regulation 639 00:35:38,800 --> 00:35:41,719 Speaker 1: and really the focus on there were active managers that 640 00:35:41,840 --> 00:35:44,120 Speaker 1: really index huggers, right, So you're paying an active fee 641 00:35:44,120 --> 00:35:48,080 Speaker 1: for not much I did. That's the surveillance by exclusive folks. 642 00:35:48,080 --> 00:35:50,560 Speaker 1: I did not know that occurred. Okay, there you go. 643 00:35:50,760 --> 00:35:53,040 Speaker 1: So the point is, you know you're seeing a lot 644 00:35:53,160 --> 00:35:55,920 Speaker 1: of you know, this movement of money away from that 645 00:35:55,960 --> 00:35:58,600 Speaker 1: to those people that can generate excess returns and and 646 00:35:58,640 --> 00:36:01,239 Speaker 1: you can, but you really want the full range of 647 00:36:01,239 --> 00:36:03,440 Speaker 1: capabilities when you're building those portfolios. Might we want to 648 00:36:03,440 --> 00:36:05,040 Speaker 1: talk about some of the problems that you have as 649 00:36:05,040 --> 00:36:07,760 Speaker 1: an index provider as well. There's a lot of concern 650 00:36:08,280 --> 00:36:11,080 Speaker 1: that paper start to think there's liquidity and set in 651 00:36:11,080 --> 00:36:14,080 Speaker 1: indexes that the underlying securities that they track aren't very 652 00:36:14,080 --> 00:36:17,399 Speaker 1: liquid at all. Leverage Alliance, big leverage alone house, you've 653 00:36:17,400 --> 00:36:20,480 Speaker 1: got the A t F. Does that not concern you? Yeah, 654 00:36:20,560 --> 00:36:23,040 Speaker 1: so when you talk about at that level, you would. 655 00:36:23,040 --> 00:36:25,000 Speaker 1: But when you have to look into the portfolio, what 656 00:36:25,040 --> 00:36:29,520 Speaker 1: happens in the in the bank loan portfolio, there is 657 00:36:29,800 --> 00:36:33,640 Speaker 1: probably liquidity and there's backstops to it. So it is 658 00:36:33,680 --> 00:36:37,120 Speaker 1: not an illiquid portfolio that is open ended in the market. 659 00:36:37,239 --> 00:36:39,239 Speaker 1: But John went right where I wanted to go. Is 660 00:36:39,239 --> 00:36:41,800 Speaker 1: your true expertise and overslones I should point out, folks 661 00:36:41,800 --> 00:36:43,799 Speaker 1: that the investor has been a huge support of what 662 00:36:43,840 --> 00:36:45,920 Speaker 1: I've done for years and has been a supporter of 663 00:36:45,920 --> 00:36:49,719 Speaker 1: Bloomberg surveillance in the old days. I go back to 664 00:36:49,760 --> 00:36:52,759 Speaker 1: David Gouldan at Bank of America. It wasn't the garbage 665 00:36:52,760 --> 00:36:56,160 Speaker 1: trenches that god us in trouble, it was the quality trunch. 666 00:36:56,280 --> 00:36:59,000 Speaker 1: Just coming from nine two down to an eighty nine 667 00:36:59,040 --> 00:37:01,400 Speaker 1: or an eighty five. Are we setting ourselves up for 668 00:37:01,440 --> 00:37:04,959 Speaker 1: that same risk? Again, it's hard for me to answer 669 00:37:05,040 --> 00:37:07,880 Speaker 1: that question. But again that's the world of the portfolio managers, right, 670 00:37:07,920 --> 00:37:10,440 Speaker 1: And if you have high quality portfolio managers, they're the 671 00:37:10,440 --> 00:37:12,560 Speaker 1: ones that are making that assessment. Don't you worry, though, 672 00:37:12,560 --> 00:37:15,439 Speaker 1: Marty that those portfolio managers at the moment are being 673 00:37:15,480 --> 00:37:18,279 Speaker 1: forced into quite a liquid parts of the markets into 674 00:37:18,360 --> 00:37:21,319 Speaker 1: private markets. Wood Foot former colleague, if your South got 675 00:37:21,360 --> 00:37:26,319 Speaker 1: cota out of early legendary investor pushed into the wrong stuff. So, uh, 676 00:37:27,239 --> 00:37:29,360 Speaker 1: that is probably one of the current concerns. When I 677 00:37:29,400 --> 00:37:32,520 Speaker 1: look at the market, all the money is going into uh, 678 00:37:32,760 --> 00:37:35,120 Speaker 1: private credit at the moment, it is sort of it's 679 00:37:35,200 --> 00:37:38,200 Speaker 1: everybody's answered to the question. And I've been in the 680 00:37:38,200 --> 00:37:41,279 Speaker 1: industry long enough now too. When everybody's going the same way, 681 00:37:41,800 --> 00:37:44,240 Speaker 1: good things don't happen with that. That's a sweeping comment. 682 00:37:44,320 --> 00:37:46,120 Speaker 1: The reality is you have to look at a manager 683 00:37:46,120 --> 00:37:48,960 Speaker 1: by manager, the quality of the managers, their expertise, the 684 00:37:49,000 --> 00:37:50,719 Speaker 1: ones have been doing it for a long time that 685 00:37:50,760 --> 00:37:53,640 Speaker 1: are thoughtful and highly talented, they'll do okay. John and 686 00:37:53,719 --> 00:37:56,800 Speaker 1: I are humbled by the success of our podcast. Folks 687 00:37:56,800 --> 00:38:00,640 Speaker 1: were targeting a million downloads a month. We're not theory trying, 688 00:38:00,960 --> 00:38:02,760 Speaker 1: We're trying to get there. If I look at them, 689 00:38:03,440 --> 00:38:07,200 Speaker 1: invest next do a shameless plugs plug us go to 690 00:38:07,239 --> 00:38:12,600 Speaker 1: sponsor podcast so we can get home. Is it free? 691 00:38:13,120 --> 00:38:15,480 Speaker 1: But it won't be free if you help us. With 692 00:38:17,080 --> 00:38:19,719 Speaker 1: the people that listen to the podcast, there's an intellectual 693 00:38:19,760 --> 00:38:22,359 Speaker 1: group that want to be in your business, but they 694 00:38:22,360 --> 00:38:25,560 Speaker 1: want to know. Is there a future to the cif 695 00:38:25,640 --> 00:38:28,759 Speaker 1: A institute. Is there a future to active managers? Is 696 00:38:28,760 --> 00:38:31,759 Speaker 1: there a future to security research? What do you see? 697 00:38:31,840 --> 00:38:34,359 Speaker 1: Thank you for saying happiness. So all people talk about 698 00:38:34,440 --> 00:38:35,879 Speaker 1: is a change in the industry now and they look 699 00:38:35,880 --> 00:38:40,840 Speaker 1: at the downside, right, So there's no absolutely this industry 700 00:38:40,880 --> 00:38:43,520 Speaker 1: is gonna thrive. What's happening. It continues to grow, It's 701 00:38:43,560 --> 00:38:46,279 Speaker 1: gonna be It's almost a hundred trillion dollar industry right now. 702 00:38:46,400 --> 00:38:49,319 Speaker 1: Who's talked about that. It is not going away. And 703 00:38:49,440 --> 00:38:51,960 Speaker 1: the need for cf as and smart people who do 704 00:38:52,000 --> 00:38:53,959 Speaker 1: the work, it's always going to exist. Okay, it's gonna 705 00:38:53,960 --> 00:38:57,480 Speaker 1: be there with the Nappenheimer combination. How do you meld 706 00:38:57,520 --> 00:39:01,040 Speaker 1: those two cultures together? Because I'm sorry, I remember the 707 00:39:01,040 --> 00:39:04,080 Speaker 1: open I'm a target fund from a few years ago, folks, 708 00:39:04,239 --> 00:39:08,040 Speaker 1: it's like decades old and their international excellence. How do 709 00:39:08,080 --> 00:39:11,600 Speaker 1: you culturally mild all those egos together? Yeah, so that's 710 00:39:11,600 --> 00:39:13,600 Speaker 1: a very good question. So I've been through a number 711 00:39:13,600 --> 00:39:17,280 Speaker 1: of transactions in my career and the first conversation. Everything 712 00:39:17,320 --> 00:39:19,640 Speaker 1: looks good on a piece of paper, that's not what matters. 713 00:39:19,920 --> 00:39:22,360 Speaker 1: It's spending time with the people understanding the culture in 714 00:39:22,400 --> 00:39:24,279 Speaker 1: our you cultural a line, that's the If you don't 715 00:39:24,280 --> 00:39:26,080 Speaker 1: get that right, you have a problem. I don't when 716 00:39:26,120 --> 00:39:29,280 Speaker 1: you do, but you will. Each team is separate and distinct. 717 00:39:29,440 --> 00:39:31,359 Speaker 1: They continue to do do exactly what they did when they 718 00:39:31,400 --> 00:39:33,920 Speaker 1: came to invest go and that will not change. Our 719 00:39:33,920 --> 00:39:35,759 Speaker 1: whole goal has given greater resources to do what they've 720 00:39:35,760 --> 00:39:37,799 Speaker 1: done in the past, is to make them even better 721 00:39:37,840 --> 00:39:41,560 Speaker 1: than Let's get some targets if we can aum how 722 00:39:41,600 --> 00:39:43,960 Speaker 1: much of that is passive about a quarter? Yeah, it's 723 00:39:43,960 --> 00:39:48,040 Speaker 1: two billion of it in and around any targets to 724 00:39:48,080 --> 00:39:49,920 Speaker 1: get that up to a certain level. What's the ultimate 725 00:39:49,960 --> 00:39:51,880 Speaker 1: balance for an asset manager at the moment? So I 726 00:39:51,920 --> 00:39:57,000 Speaker 1: get asked that all the all the time. So the 727 00:39:57,040 --> 00:39:59,719 Speaker 1: answers clients determine that. Okay. So at the other hand, 728 00:39:59,760 --> 00:40:02,200 Speaker 1: we have amost two hundred billion dollars in alternatives, and 729 00:40:02,239 --> 00:40:04,160 Speaker 1: it really is your expertise and where the clients are 730 00:40:04,239 --> 00:40:05,840 Speaker 1: are moving in. So I feel really good about the 731 00:40:05,840 --> 00:40:09,480 Speaker 1: talent that we have, and it's really us spending time 732 00:40:09,520 --> 00:40:12,320 Speaker 1: with our clients and making that drift different. What about 733 00:40:12,360 --> 00:40:15,040 Speaker 1: the international mix? What are you seeing in flows of 734 00:40:15,080 --> 00:40:19,359 Speaker 1: fun Q four was finally an Oppenheimer and Invesco Oppenheimer quarter. 735 00:40:19,760 --> 00:40:22,520 Speaker 1: Is that from where you sit with your knowledge base, 736 00:40:22,960 --> 00:40:26,080 Speaker 1: is the international joy of the last quarter are going 737 00:40:26,120 --> 00:40:28,279 Speaker 1: to continue? So it's a fundamental strength of the firm 738 00:40:28,360 --> 00:40:31,359 Speaker 1: right now. You talk about emerging markets, are expertise in China, uh, 739 00:40:31,440 --> 00:40:33,920 Speaker 1: you know, staying on China loan. Just the growth in 740 00:40:34,000 --> 00:40:36,560 Speaker 1: China for the money management industry and the interest in 741 00:40:36,640 --> 00:40:39,480 Speaker 1: China is at peak level as you would imagine, and 742 00:40:39,800 --> 00:40:42,160 Speaker 1: we see that. It's again it's early in the year. 743 00:40:42,400 --> 00:40:44,359 Speaker 1: That's what's going on right now. Well, it's gonna going 744 00:40:44,400 --> 00:40:47,680 Speaker 1: on right now. But the strategy forward here to compete 745 00:40:47,760 --> 00:40:50,120 Speaker 1: in you you're you're in Everybody likes to talk about 746 00:40:50,160 --> 00:40:53,799 Speaker 1: scale and we do touchy philia Davos. You're in a 747 00:40:53,840 --> 00:40:58,440 Speaker 1: brutal industry right now. What's gonna be your best practice forward? 748 00:40:58,719 --> 00:41:02,040 Speaker 1: So international pus this one E merchant markets, very very 749 00:41:02,040 --> 00:41:05,080 Speaker 1: talented China for us, you know, just a fundamental strength 750 00:41:05,080 --> 00:41:08,719 Speaker 1: of us. We managed seventy billion dollars in Chinese securities. 751 00:41:09,360 --> 00:41:12,000 Speaker 1: We have fifty billion dollars of money that we managed 752 00:41:12,040 --> 00:41:15,720 Speaker 1: for local Chinese. Uh. The alternative business, the factor business 753 00:41:15,960 --> 00:41:18,200 Speaker 1: where the second largest factor provider in the world. These 754 00:41:18,239 --> 00:41:20,919 Speaker 1: are all areas that are going to continue to grow. 755 00:41:20,960 --> 00:41:24,319 Speaker 1: And you talk to the issue about active management, those 756 00:41:24,360 --> 00:41:26,360 Speaker 1: that generate ALFAR can do very fine and it's going 757 00:41:26,400 --> 00:41:28,880 Speaker 1: to be an asset classes like a merchant markets and global. 758 00:41:29,000 --> 00:41:32,840 Speaker 1: In two thousand and six, everybody was running around trying 759 00:41:32,840 --> 00:41:36,120 Speaker 1: to make fourteen basis points on every transaction. Are we 760 00:41:36,200 --> 00:41:40,400 Speaker 1: back to that right now? Within the traditional investco bunch up? 761 00:41:40,520 --> 00:41:43,120 Speaker 1: Are we back to oh six where everybody's getting stupid 762 00:41:43,360 --> 00:41:47,800 Speaker 1: about fourteen point one four percentage points? Itsy bitsy amounts. 763 00:41:47,800 --> 00:41:50,320 Speaker 1: Oh boy, I succeeded. Are we back to this? I 764 00:41:50,640 --> 00:41:52,880 Speaker 1: hope not? And look, I think you know when you 765 00:41:52,920 --> 00:41:55,800 Speaker 1: put on the business. At first of all, we're legal fiduciaries, 766 00:41:55,800 --> 00:41:57,279 Speaker 1: So you've got to be responsible your clients in the 767 00:41:57,320 --> 00:42:00,439 Speaker 1: first place if you're not game over at some point 768 00:42:00,440 --> 00:42:03,480 Speaker 1: in time. So it's literally making sure that you know 769 00:42:03,640 --> 00:42:05,480 Speaker 1: your your in line with your clients when you have 770 00:42:05,480 --> 00:42:08,359 Speaker 1: those conversations. Flag. Thank you so much for joining us 771 00:42:08,360 --> 00:42:28,479 Speaker 1: today Investco as well. What a perfect time to bring 772 00:42:28,520 --> 00:42:31,800 Speaker 1: in the Director General of the w c O, Robertto 773 00:42:32,200 --> 00:42:34,760 Speaker 1: as a Vedo. Great to see Robetto. It's a pleasure. 774 00:42:34,880 --> 00:42:37,759 Speaker 1: Can we talk about phase one? Absolutely? I want to 775 00:42:37,840 --> 00:42:41,600 Speaker 1: understand whether there's going to be any complaints sent to 776 00:42:41,600 --> 00:42:44,480 Speaker 1: the w t O about the agreement between the United 777 00:42:44,520 --> 00:42:46,560 Speaker 1: States and China that was secured in the last couple 778 00:42:46,600 --> 00:42:49,600 Speaker 1: of weeks. What's your first take on that, Well, there 779 00:42:49,680 --> 00:42:53,000 Speaker 1: is that first take is good. I think it's good 780 00:42:53,040 --> 00:42:57,120 Speaker 1: that you see some degree of they don't between the two. 781 00:42:57,880 --> 00:43:00,560 Speaker 1: It's about time that we see some of those tensions, 782 00:43:02,000 --> 00:43:07,400 Speaker 1: you know, at least contained and hopefully rolled back. I 783 00:43:07,440 --> 00:43:09,359 Speaker 1: think this is a kind of agreement that is going 784 00:43:09,400 --> 00:43:12,280 Speaker 1: to be looked into by all do W two members 785 00:43:12,320 --> 00:43:17,040 Speaker 1: with very very carefully, with magnifying lenses and checking whether 786 00:43:17,080 --> 00:43:23,880 Speaker 1: everything is in accordance with the two disciplines and multilateral agreements. UM. 787 00:43:23,960 --> 00:43:26,400 Speaker 1: They will be watching very closely. So if there's something 788 00:43:26,440 --> 00:43:29,280 Speaker 1: that is a miss, will know, well, you're the DJ, 789 00:43:29,360 --> 00:43:31,000 Speaker 1: So let's talk about it. Some of the content and 790 00:43:31,040 --> 00:43:34,440 Speaker 1: the agreement. The optics might be encouraging that we settle 791 00:43:34,520 --> 00:43:37,000 Speaker 1: some of the issues between the two biggest economies in 792 00:43:37,000 --> 00:43:41,560 Speaker 1: the world. The detail agreeing to increase trade by two 793 00:43:42,000 --> 00:43:47,440 Speaker 1: billions and basically targeting a fixed amount of agricultural product 794 00:43:47,480 --> 00:43:50,560 Speaker 1: imports out of the United States into China at a 795 00:43:50,680 --> 00:43:54,080 Speaker 1: level of forty billions. What's Brazil going to say to that? 796 00:43:54,600 --> 00:43:56,799 Speaker 1: What do what the suppliants of Soy being city, You'll 797 00:43:56,840 --> 00:43:58,759 Speaker 1: have to you have to ask Brazil. But I would 798 00:43:58,840 --> 00:44:02,120 Speaker 1: suppose that to the extent that some of those tariffs 799 00:44:02,120 --> 00:44:05,160 Speaker 1: are rolled back and some of the impedments are taken away, 800 00:44:05,840 --> 00:44:08,320 Speaker 1: it is natural that those imports are going to go on. 801 00:44:08,480 --> 00:44:11,920 Speaker 1: But it's the Director General I'm asking you, how do 802 00:44:11,960 --> 00:44:15,600 Speaker 1: you reconcile everything that w t O stands for and 803 00:44:15,680 --> 00:44:18,439 Speaker 1: a deal between the United States and China that has 804 00:44:18,560 --> 00:44:22,399 Speaker 1: socialist style central planning elements to it between the United 805 00:44:22,440 --> 00:44:25,359 Speaker 1: States and China depends on how you implement that as 806 00:44:25,360 --> 00:44:28,160 Speaker 1: Director General. I'm not going to be pointing fingers, so 807 00:44:28,200 --> 00:44:32,480 Speaker 1: you know that. But I suppose that, for example, if 808 00:44:32,520 --> 00:44:38,280 Speaker 1: you're buying food or products under state contracts, that's okay. 809 00:44:38,320 --> 00:44:42,040 Speaker 1: That's not governed by w t rules. They have a 810 00:44:42,120 --> 00:44:47,240 Speaker 1: special agreement that is valid only to the signatories. China 811 00:44:47,320 --> 00:44:49,319 Speaker 1: is not part of that, but the other double two 812 00:44:49,440 --> 00:44:54,800 Speaker 1: members cannot complain with what happens in terms of government purchases, however, 813 00:44:55,280 --> 00:45:00,120 Speaker 1: UM most Favored Nation UH, tariff supply and nondiscrimination and 814 00:45:00,239 --> 00:45:04,640 Speaker 1: applies UM. So people will be looking at that very carefully. Now, 815 00:45:05,200 --> 00:45:09,319 Speaker 1: the agreement is very general, Uh, it doesn't specify how 816 00:45:09,360 --> 00:45:13,080 Speaker 1: those purchases are going to happen, what mechanisms are going 817 00:45:13,120 --> 00:45:15,440 Speaker 1: to use, what kind of preference is going to be 818 00:45:15,480 --> 00:45:19,480 Speaker 1: granted to US products of US origin vis a vis 819 00:45:19,560 --> 00:45:21,839 Speaker 1: the others. I suppose Brazili and the others are going 820 00:45:21,840 --> 00:45:24,239 Speaker 1: to be looking very closely at all that. But we're 821 00:45:24,280 --> 00:45:27,759 Speaker 1: pretty familiar with the enforcement mechanism. If the Chinese don't 822 00:45:27,760 --> 00:45:32,080 Speaker 1: reached those targets, the tariffs gut back on don Night. Well, 823 00:45:32,160 --> 00:45:38,160 Speaker 1: that's very unusual mechanism actually, because it's normal that in 824 00:45:38,200 --> 00:45:41,120 Speaker 1: these agreements to have some kind of dispute settlement vision, 825 00:45:41,480 --> 00:45:45,600 Speaker 1: something that looks at whether the two sides are complying 826 00:45:45,719 --> 00:45:49,440 Speaker 1: with what has been agreed. This one, however, doesn't have 827 00:45:49,480 --> 00:45:54,160 Speaker 1: any kind of arbitration or any kind of third party oversight. 828 00:45:54,560 --> 00:46:01,640 Speaker 1: It is about, you know, directly dealing with perceived shortcomings. 829 00:46:01,680 --> 00:46:04,440 Speaker 1: So if one side is not happy happy with what 830 00:46:04,480 --> 00:46:07,600 Speaker 1: the other is doing, it will complain, they will have consultations, 831 00:46:07,600 --> 00:46:10,560 Speaker 1: and at the end of the day, unilaterally, the party 832 00:46:10,560 --> 00:46:13,359 Speaker 1: that is complaining if it if it's not satisfied with 833 00:46:13,440 --> 00:46:16,680 Speaker 1: the actions of the other side corrective actions of the 834 00:46:16,680 --> 00:46:21,720 Speaker 1: other side, it may, you know, impose sanctions of whatever 835 00:46:21,760 --> 00:46:26,279 Speaker 1: it is. It's very Um, it's not very usual to 836 00:46:26,360 --> 00:46:28,600 Speaker 1: see something like that. I can see that it hasitant 837 00:46:28,760 --> 00:46:31,200 Speaker 1: taken if you wanted at the moment you did mention 838 00:46:31,239 --> 00:46:34,840 Speaker 1: dispute resolution. Now, let's talk about the dispute resolution mechanism 839 00:46:34,960 --> 00:46:37,400 Speaker 1: at the w t O. For our audience right now, 840 00:46:37,440 --> 00:46:40,759 Speaker 1: who maybe haven't been following this very carefully, walk us 841 00:46:40,760 --> 00:46:43,640 Speaker 1: through what's happened and what's happening with the dispute resolution 842 00:46:43,640 --> 00:46:46,040 Speaker 1: mechanism at the w t R. Well, they're two things 843 00:46:46,080 --> 00:46:49,000 Speaker 1: are separate. I think what's happening between the US and China, 844 00:46:49,480 --> 00:46:54,240 Speaker 1: it's US that doesn't affect the W two dispute settlement 845 00:46:54,520 --> 00:46:57,480 Speaker 1: mechanism at all. Um. What is happening now is that 846 00:46:57,600 --> 00:47:02,120 Speaker 1: clearly the US um that has been complaining for quite 847 00:47:02,120 --> 00:47:04,760 Speaker 1: some time. So this is not a Trump administration complaint. 848 00:47:05,000 --> 00:47:07,839 Speaker 1: This has been there before about the appellate body and 849 00:47:07,880 --> 00:47:10,480 Speaker 1: the way that the appelloate body has been conducting itself. 850 00:47:10,880 --> 00:47:13,080 Speaker 1: Whether you agree or not with those complaints, that's a 851 00:47:13,120 --> 00:47:15,680 Speaker 1: different conversation. But they have been complaining for quite some 852 00:47:15,680 --> 00:47:18,600 Speaker 1: time that in this administration that said enough, it's enough, 853 00:47:18,640 --> 00:47:20,719 Speaker 1: we need to change this. I think that's where we 854 00:47:20,719 --> 00:47:24,360 Speaker 1: are now. We are now sitting in Geneva with others 855 00:47:24,360 --> 00:47:26,879 Speaker 1: and say, okay, so we need to change the system. 856 00:47:27,040 --> 00:47:30,120 Speaker 1: How is it doable? Do do the changes that the 857 00:47:30,239 --> 00:47:33,280 Speaker 1: US want to see? Would the others live with it 858 00:47:33,400 --> 00:47:35,279 Speaker 1: or not? I mean, this is this is where we 859 00:47:35,320 --> 00:47:37,319 Speaker 1: are at this point in time. We cannot take too 860 00:47:37,320 --> 00:47:40,600 Speaker 1: long though we talk about some of the issues. They 861 00:47:40,640 --> 00:47:43,160 Speaker 1: think that some of the people on that Dispute Resolution 862 00:47:43,200 --> 00:47:46,120 Speaker 1: Body that WUS have a paid too much there what 863 00:47:46,360 --> 00:47:48,160 Speaker 1: they are paid too much? They are too much money. 864 00:47:48,160 --> 00:47:50,959 Speaker 1: They're incentivized to drag on some of the disputes because 865 00:47:51,000 --> 00:47:53,120 Speaker 1: they can earn more money. That's one of the issues 866 00:47:53,160 --> 00:47:55,440 Speaker 1: out there. And so you're aware if it's an important issue, 867 00:47:55,440 --> 00:47:56,799 Speaker 1: but I think it's a small Do you think they 868 00:47:56,880 --> 00:47:59,440 Speaker 1: paid too much? I think it was agreed by members. 869 00:47:59,600 --> 00:48:03,360 Speaker 1: I mean I didn't decide that the United States pushback 870 00:48:03,360 --> 00:48:06,399 Speaker 1: at the United States agreed to that the United States 871 00:48:06,440 --> 00:48:08,760 Speaker 1: agreed to that. The EU and all the other members 872 00:48:08,800 --> 00:48:11,560 Speaker 1: one and sixty four of them decided these are the 873 00:48:11,680 --> 00:48:15,520 Speaker 1: terms of the payments. But over time inefficiencies were introduced. 874 00:48:15,560 --> 00:48:17,719 Speaker 1: I mean those spots were supposed to be taken care 875 00:48:17,800 --> 00:48:20,719 Speaker 1: of in ninety days. Now the Appealate Body has been 876 00:48:20,719 --> 00:48:26,560 Speaker 1: taking six months sometimes more to to to finalize it's appreciation. 877 00:48:26,640 --> 00:48:29,240 Speaker 1: My understanding is that only ap Palate body at the moment. 878 00:48:29,280 --> 00:48:31,120 Speaker 1: But I don't think they're doing that because of the money. 879 00:48:31,200 --> 00:48:32,960 Speaker 1: I think they're doing the money. The money is a 880 00:48:33,000 --> 00:48:36,840 Speaker 1: feature of this administration. The US administration under President Donald Trump, 881 00:48:36,840 --> 00:48:39,600 Speaker 1: as you know, have been very unhappy about the way 882 00:48:39,719 --> 00:48:42,680 Speaker 1: some of these bodies have been run. And as I 883 00:48:42,760 --> 00:48:45,520 Speaker 1: understand that you can earn north of three thousand Swiss 884 00:48:45,520 --> 00:48:48,200 Speaker 1: Franks sitting on the Appaliate body, you can, can't you 885 00:48:48,760 --> 00:48:51,000 Speaker 1: Now for the US administration, they're looking at that situation 886 00:48:51,120 --> 00:48:54,040 Speaker 1: right now and saying that's too much. We need a 887 00:48:54,120 --> 00:48:57,279 Speaker 1: more efficient mechanism, and we need to incentivize it to 888 00:48:57,280 --> 00:48:59,480 Speaker 1: be more efficient as well. What's your thoughts as the 889 00:48:59,520 --> 00:49:01,920 Speaker 1: director and along that particular issue, what if if that 890 00:49:02,080 --> 00:49:04,280 Speaker 1: were the only issue, we could do it like that 891 00:49:04,280 --> 00:49:07,359 Speaker 1: that's easy, not a problem. That is not a problem. 892 00:49:07,440 --> 00:49:08,920 Speaker 1: What do you think the bigger issue is. The bigger 893 00:49:08,960 --> 00:49:12,080 Speaker 1: issue is how to make it run faster, how to 894 00:49:12,200 --> 00:49:16,799 Speaker 1: make it more efficient, how to make it responsive to 895 00:49:17,000 --> 00:49:20,239 Speaker 1: those disputes in a way that they're not setting precedents 896 00:49:20,320 --> 00:49:23,160 Speaker 1: or they're not according to the US, for example, they 897 00:49:23,160 --> 00:49:25,759 Speaker 1: do not behave as a court where you have five 898 00:49:25,840 --> 00:49:28,319 Speaker 1: or seven seven guys there who believe that they are 899 00:49:28,600 --> 00:49:31,799 Speaker 1: international judges. They're above you know, they above right or wrong, 900 00:49:32,040 --> 00:49:35,279 Speaker 1: whatever they decide, it's it's the divine rule or something 901 00:49:35,400 --> 00:49:38,439 Speaker 1: that that's the way the US sees it um. So 902 00:49:38,480 --> 00:49:40,560 Speaker 1: I think we have to change that kind of perception. 903 00:49:40,640 --> 00:49:43,600 Speaker 1: That's that's for me. Is is the trickiest part. Let's 904 00:49:43,680 --> 00:49:46,319 Speaker 1: run things up by into one of the disputes the 905 00:49:46,400 --> 00:49:50,799 Speaker 1: United States getting together with the European Union, the Japanese 906 00:49:51,560 --> 00:49:55,040 Speaker 1: to complain to you guys that China is subsidizing its 907 00:49:55,080 --> 00:49:59,319 Speaker 1: industries unfairly. Can you deal with these kind of issues? Absolutely? 908 00:49:59,360 --> 00:50:03,160 Speaker 1: How easy make the rules? One of the one of 909 00:50:03,160 --> 00:50:06,160 Speaker 1: the problems we have is that the US and Japan 910 00:50:06,239 --> 00:50:09,920 Speaker 1: and the EU claim, and rightly so, by the way, 911 00:50:09,960 --> 00:50:12,400 Speaker 1: that the rules are not perfect. That for example, the 912 00:50:12,480 --> 00:50:17,200 Speaker 1: exports subsidies or prohibited subsidies rules, they don't capture many 913 00:50:17,239 --> 00:50:19,880 Speaker 1: of the things that are happening out there, and therefore 914 00:50:19,920 --> 00:50:22,000 Speaker 1: we need to update the rules to begin to be 915 00:50:22,080 --> 00:50:26,719 Speaker 1: more responsive to today's reality. Now, the problem with that 916 00:50:27,000 --> 00:50:30,200 Speaker 1: is that why do we not have that. We do 917 00:50:30,320 --> 00:50:33,360 Speaker 1: not have those rules as as perfect as they wish 918 00:50:33,520 --> 00:50:37,440 Speaker 1: they were, because in the past, before China even got 919 00:50:37,440 --> 00:50:42,920 Speaker 1: into the scene, the big powers, the US, the EU, Japan, Canada, 920 00:50:42,960 --> 00:50:45,840 Speaker 1: Australian and the other they could not agree amongst themselves 921 00:50:45,880 --> 00:50:47,520 Speaker 1: on those rules. So they said, you know what, put 922 00:50:47,560 --> 00:50:50,279 Speaker 1: the put that aside for the moment. Let's let's go 923 00:50:50,360 --> 00:50:54,520 Speaker 1: on and do other stuff. China came in the two 924 00:50:54,680 --> 00:50:57,399 Speaker 1: two thousand and one and since then they have been 925 00:50:57,440 --> 00:51:00,560 Speaker 1: doing things that others are saying, well, that's not what 926 00:51:00,560 --> 00:51:04,279 Speaker 1: what the what we were expecting before? We need to 927 00:51:05,040 --> 00:51:07,200 Speaker 1: I think if members are unhappy with that, they have 928 00:51:07,280 --> 00:51:09,640 Speaker 1: to talk about it. And I don't think that China 929 00:51:09,760 --> 00:51:13,640 Speaker 1: is against having this conversation. I think they already told 930 00:51:13,680 --> 00:51:16,680 Speaker 1: me directly that they're fine with negotiations. If the people 931 00:51:16,719 --> 00:51:19,120 Speaker 1: want to change the rules, exchange the rules, but let's 932 00:51:19,120 --> 00:51:21,440 Speaker 1: sit down and have a conversation about that. As your 933 00:51:21,440 --> 00:51:23,920 Speaker 1: experience has been, as many people's experience has been over 934 00:51:23,960 --> 00:51:26,240 Speaker 1: the last twenty years. The Chinese often talk about getting 935 00:51:26,239 --> 00:51:28,160 Speaker 1: around the table to do things. We don't get the 936 00:51:28,200 --> 00:51:30,719 Speaker 1: follow up. Are you really confident that the Chinese would 937 00:51:30,760 --> 00:51:33,000 Speaker 1: agree to the pressure that the US, EU and China 938 00:51:33,080 --> 00:51:35,200 Speaker 1: is putting on them right now to pull back from 939 00:51:35,239 --> 00:51:38,200 Speaker 1: subsidizing their industries when they've been pretty clear over the 940 00:51:38,239 --> 00:51:41,360 Speaker 1: last few years that they've got a plan dominate certain 941 00:51:41,360 --> 00:51:45,920 Speaker 1: interest industries by it doesn't matter to the expense of 942 00:51:45,960 --> 00:51:48,560 Speaker 1: any expense of anyone else, and we're going to subsidize 943 00:51:48,560 --> 00:51:51,400 Speaker 1: those industries until it happens. Why would they sign up 944 00:51:51,440 --> 00:51:52,920 Speaker 1: to any rules at the w t O when we 945 00:51:52,920 --> 00:51:55,279 Speaker 1: know that's their mission. We've got things change, and I 946 00:51:55,360 --> 00:52:02,600 Speaker 1: think that the degree of of rejection that you see today, 947 00:52:03,280 --> 00:52:06,960 Speaker 1: uh in the international community, for you know, against certain 948 00:52:07,000 --> 00:52:10,600 Speaker 1: practices that are happening in China, whether they are true 949 00:52:10,600 --> 00:52:14,040 Speaker 1: accusations or not, that's a different conversation. Uh, those are 950 00:52:14,080 --> 00:52:17,040 Speaker 1: real and I don't think China can close their eyes 951 00:52:17,080 --> 00:52:20,440 Speaker 1: on this, and they realize that it's better to have 952 00:52:20,480 --> 00:52:24,400 Speaker 1: a negotiated solution and deal than to be subject to 953 00:52:24,520 --> 00:52:27,399 Speaker 1: unilateral you know, terroriffs the way that they have been 954 00:52:27,480 --> 00:52:29,799 Speaker 1: in the recent past. It's been great to catch up 955 00:52:29,800 --> 00:52:31,600 Speaker 1: with you. A lot of topics to get fress and 956 00:52:31,600 --> 00:52:33,160 Speaker 1: I know you've got a busy way ahead better. Thank 957 00:52:33,160 --> 00:52:35,400 Speaker 1: you very much. That was Rebetta as a data they 958 00:52:35,440 --> 00:52:39,360 Speaker 1: will Tried Organization director General. Thanks for listening to the 959 00:52:39,360 --> 00:52:45,839 Speaker 1: Bloomberg Surveillance podcast. Subscribe and listen to interviews on Apple Podcasts, SoundCloud, 960 00:52:46,239 --> 00:52:50,440 Speaker 1: or whichever podcast platform you prefer. I'm on Twitter at 961 00:52:50,480 --> 00:52:54,759 Speaker 1: Tom Keane before the podcast. You can always catch us worldwide. 962 00:52:55,200 --> 00:53:02,480 Speaker 1: I'm Bloomberg Radio.