WEBVTT - Surveillance: We Have Reached Peak Globalization, Bremmer Says 0:00:09.840 --> 0:00:13.800 Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane. Daily 0:00:13.960 --> 0:00:17.560 we bring you insight from the best in economics, finance, investment, 0:00:18.000 --> 0:00:23.480 and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 0:00:23.640 --> 0:00:27.200 Bloomberg dot Com, and of course on the Bloomberg When 0:00:27.200 --> 0:00:30.480 we start strong with Ian Bremer of Eurasia Group. His 0:00:30.640 --> 0:00:35.280 TOMP Risk just released always timely, and he releases it 0:00:35.360 --> 0:00:38.640 this year with America front and center, and of course 0:00:38.640 --> 0:00:40.760 part of that is our coverage of the president. And 0:00:40.800 --> 0:00:43.720 then we we'll hear from the Senate impeachment trial. That 0:00:43.760 --> 0:00:46.879 will be twelve pm New York time, tenderly scheduled for 0:00:46.920 --> 0:00:50.639 their We're thrilled that Dr Bremmer begins our Tuesday here 0:00:50.880 --> 0:00:53.480 in Dabba's Ian. Wonderful to have you here today. Why 0:00:53.520 --> 0:00:57.680 did you make the US a top risk for this year? Well, size, 0:00:57.720 --> 0:01:01.520 the market's massive, and the precedented nature of the election 0:01:01.560 --> 0:01:03.640 coming up, where half of the population is going to 0:01:03.720 --> 0:01:06.120 think that it is rigged, is going to think it's delegitimized. 0:01:06.160 --> 0:01:08.319 I mean that is important. You're gonna have, you know, 0:01:08.360 --> 0:01:10.839 a period of time, whether it's weeks and months when 0:01:11.000 --> 0:01:13.679 we've had the election, but all likelihood, we haven't agreed 0:01:13.720 --> 0:01:15.840 on who the next president is. I haven't had that 0:01:16.319 --> 0:01:19.800 since Bush Gore and Bush Core. At least both sides 0:01:19.840 --> 0:01:21.559 were prepared to see what the Supreme Court was gonna 0:01:21.600 --> 0:01:24.000 rule that this is more unprecedented. People are prepared to 0:01:24.280 --> 0:01:26.520 Who was the president going to speak to here roughly 0:01:26.640 --> 0:01:29.160 thirty thirty five minutes. Who's he talking to as he 0:01:29.200 --> 0:01:31.360 comes to Davos? Oh no, he Look, he loves it 0:01:31.400 --> 0:01:33.480 here right when he Remember he was here three years 0:01:33.480 --> 0:01:35.120 ago and everyone thought it was going to be a 0:01:35.120 --> 0:01:37.280 disaster and he had a great time and the c 0:01:37.360 --> 0:01:39.840 e O s were extremely nice to him. And the 0:01:40.240 --> 0:01:42.600 lunch remember the lunch were absolutely And I mean, so 0:01:42.640 --> 0:01:44.360 did you go to the ch I did it, But 0:01:44.400 --> 0:01:46.560 actually I remember, like you know, billionaires trying to fight 0:01:46.600 --> 0:01:48.480 to go and listen to the president. Absolutely. Look, I 0:01:48.480 --> 0:01:51.720 mean you gotta understand, first of all, the delegates here 0:01:52.000 --> 0:01:55.080 may not like Trump. They like his policies, um, they 0:01:55.120 --> 0:01:58.760 like the regulatory rollback, they like his cabinet, um, they 0:01:58.800 --> 0:02:01.640 like his tax policy. I did informal poll last night 0:02:02.000 --> 0:02:05.600 about delegates on balance. I would say they think he's 0:02:05.600 --> 0:02:07.800 gonna win a second term. And there was a zero 0:02:07.920 --> 0:02:10.600 panic about the prospect that might happen. So, I mean, 0:02:10.639 --> 0:02:12.359 you can have Greta here, and you can have a 0:02:12.400 --> 0:02:15.280 bunch of people talking about climate sustainability. But the reality 0:02:15.520 --> 0:02:18.720 is that Trump doesn't drive people crazy at Davos the 0:02:18.760 --> 0:02:20.720 way he does in the United States. And people should 0:02:20.720 --> 0:02:23.400 hear that, they should know what the power brokers in 0:02:23.440 --> 0:02:26.720 the room in the closed door actually thinking. And in 0:02:26.840 --> 0:02:29.799 President Trump does his you know, the inaugural address for 0:02:29.840 --> 0:02:32.399 the World Economic from on the day where his impeachment 0:02:32.480 --> 0:02:35.560 trial starts. Is he going to be fighting and he's 0:02:35.600 --> 0:02:37.720 he going to say, look, Europeans, you're not doing enough. 0:02:37.760 --> 0:02:40.839 I'm going to post Harroffs because he needs an adversary 0:02:40.919 --> 0:02:43.160 to distract. Or is he going to try and keep 0:02:43.160 --> 0:02:46.040 everyone on side. I'd be very surprised, Um, if he's 0:02:46.080 --> 0:02:49.000 adversarial with this group. I expect this is gonna be 0:02:49.080 --> 0:02:53.760 Trump saying victory lap I'm the greatest ever. My economy 0:02:53.800 --> 0:02:56.120 is doing well, my markets are taking off. Look how 0:02:56.200 --> 0:02:59.040 much money I'm making you guys. I got rid of Sulimani, 0:02:59.080 --> 0:03:01.679 I'm killing ice in al Quaeda. He may go off 0:03:01.680 --> 0:03:04.120 script and talk about how bad and how unfair the 0:03:04.160 --> 0:03:07.000 impeachment is but this is going to be a triumphal 0:03:07.000 --> 0:03:10.600 list unilateralist president. Do people in the state's care? So 0:03:10.680 --> 0:03:13.440 does the voter care about what President Trump says in donals? 0:03:13.600 --> 0:03:16.160 I mean they care for a day, sure, and then 0:03:16.160 --> 0:03:17.760 they move on to the next thing. I mean, did 0:03:17.760 --> 0:03:20.160 we care when neuron crisis hit? We did? You're not 0:03:20.200 --> 0:03:22.440 asking me about it now. I mean, these these cycles 0:03:22.480 --> 0:03:26.600 are incredibly short, but it's interesting to see how the 0:03:26.680 --> 0:03:30.200 global markets, in the global investor community actually orient. You've 0:03:30.200 --> 0:03:33.160 got Steve Schwartzman coming up. You know how close he's 0:03:33.200 --> 0:03:35.120 been to Trump over the course of the last couple 0:03:35.120 --> 0:03:37.120 of years. I mean generally speaking as a group that 0:03:37.160 --> 0:03:40.000 wants access, they pay for access, and please when that happened, 0:03:40.000 --> 0:03:42.240 And we'll talk to Steven Schwartzman about that, about the 0:03:42.280 --> 0:03:44.720 fundraisers and all his support of the president, which just 0:03:44.800 --> 0:03:47.920 been somewhat controversial. Say I, and you've been studying this 0:03:48.000 --> 0:03:51.640 for decades. How alone is America right now because of 0:03:51.760 --> 0:03:55.400 this president and this president's policies? Is it an America 0:03:55.560 --> 0:03:58.480 or not only a Davos, but just generally worldwide in 0:03:58.520 --> 0:04:01.480 the Eurasian world? How alone are we? It's more alone 0:04:01.880 --> 0:04:05.080 because of this president. Certainly he doesn't care as much 0:04:05.240 --> 0:04:08.720 for traditional alliances or multilateral institutions the Americans have created. 0:04:08.880 --> 0:04:11.960 But let's be clear, the United States is in decline 0:04:12.400 --> 0:04:14.920 visa East China. The Chinese are spending a lot of 0:04:14.960 --> 0:04:18.760 money internet China on a per capita basis, and they've 0:04:18.800 --> 0:04:21.799 got what is one, They've got a major health scare 0:04:21.839 --> 0:04:25.440 going on in China. Worldly it is very clear that 0:04:25.600 --> 0:04:29.000 Belton Road is a bigger event than Dabos. It attracts 0:04:29.040 --> 0:04:33.360 more heads of state, it dispenses more cash. But America's 0:04:33.400 --> 0:04:36.800 relationship visa these American allies, the US is not only 0:04:36.839 --> 0:04:40.360 not in decline, it's increasing in power in the role 0:04:40.400 --> 0:04:43.719 of the dollar in military expenditure and its strength in 0:04:43.880 --> 0:04:47.440 production of oil and gas and food. And and if 0:04:47.440 --> 0:04:50.640 Trump's not president next year, that's still gonna be true. 0:04:50.920 --> 0:04:53.240 And allies don't want to deal with that reality. But 0:04:53.279 --> 0:04:55.400 it is the case. And He's figured out what kind 0:04:55.440 --> 0:05:00.280 of capitalism China will have in five ten years from now. Uh. 0:05:00.440 --> 0:05:03.039 The fact that the Chinese are not in any way 0:05:03.040 --> 0:05:06.760 aligning with or integrating with Western style capitalism is something 0:05:06.800 --> 0:05:09.400 that these CEOs are having a hard time coming to terms. 0:05:09.400 --> 0:05:12.320 With This is the fiftieth year anniversary of Davos, and 0:05:12.360 --> 0:05:15.000 for fifty years the message that has come from this 0:05:15.040 --> 0:05:19.599 platform has been winning globally globalization and free market capitalism. 0:05:19.640 --> 0:05:22.800 It's not anymore, and the reason for that is because 0:05:22.800 --> 0:05:25.760 the Chinese are not aligned with that. What are we 0:05:25.800 --> 0:05:29.360 peak globalization? So it's just going to be declined from now. 0:05:29.760 --> 0:05:32.599 It's not the end of globalization, but we're peak globalization. 0:05:32.640 --> 0:05:35.039 I mean the decision of the United States and the 0:05:35.120 --> 0:05:38.240 Chinese to decouple from each other in terms of technology. 0:05:38.400 --> 0:05:41.279 It's the single biggest step away from globalization we've seen 0:05:41.320 --> 0:05:44.240 in the fifty years since Davos has been created. Absolutely, 0:05:44.279 --> 0:05:47.120 the Edleman Trust Barometer on Richard Edelman's schedule to join us, 0:05:47.120 --> 0:05:49.920 I can't say enough about this important document, the Edelman 0:05:49.960 --> 0:05:55.160 Trust Barometer. I was stunned at the separateness on capitalism 0:05:55.240 --> 0:05:59.640 of general society and the elites. Does that surprise you 0:05:59.800 --> 0:06:04.240 in what's the solution for the anointed up this happy valley? 0:06:04.279 --> 0:06:07.400 To reattach to the rest of American frankly, to the 0:06:07.440 --> 0:06:09.960 rest of the developed economies. It's hard to claim that 0:06:10.000 --> 0:06:13.360 the average American as capitalists when the average American doesn't 0:06:13.360 --> 0:06:16.880 have capital I mean, certainly that's the way I was raised, right, 0:06:16.880 --> 0:06:19.360 I mean, my my mom said, they're not taking care 0:06:19.400 --> 0:06:22.479 of you. Only they're all gonna lie and they being 0:06:22.560 --> 0:06:25.280 governed a single sense for Richard Edelman, where he says 0:06:25.320 --> 0:06:29.480 CEOs have to become much more activist about explaining how 0:06:29.560 --> 0:06:33.520 everybody gets inclusive. Do we need Jamie Diamond, Michael Corbett, 0:06:33.560 --> 0:06:38.200 and the others to be more assertive about distributing the 0:06:38.240 --> 0:06:41.200 benefits of capitalism to American No, no, we don't. We 0:06:41.240 --> 0:06:44.200 don't need them to explain. We need the problem to 0:06:44.200 --> 0:06:47.960 start being resolved. We need less inequality in the United States. 0:06:48.000 --> 0:06:50.080 We need people that are being left behind and feel 0:06:50.120 --> 0:06:52.080 the system is riged to feel less that way. And 0:06:52.080 --> 0:06:55.600 there's nothing that CEOs can say. There is no document 0:06:55.640 --> 0:06:58.120 they can sign, there is no advertisement they can take 0:06:58.120 --> 0:07:00.240 out in the paper that is going to change that 0:07:00.360 --> 0:07:03.320 reality if the reality doesn't change. And let's keep in mind, 0:07:03.360 --> 0:07:06.600 not only is global inequality and American inequality increased over 0:07:06.600 --> 0:07:09.720 the last several years, but also now we have an 0:07:09.720 --> 0:07:12.320 economy that's starting to soften globally. The i m F 0:07:12.400 --> 0:07:17.320 just yesterday exactly. So, I mean, one has to think 0:07:17.560 --> 0:07:19.400 that in that environment, ceo is are gonna be more 0:07:19.440 --> 0:07:22.480 laser like focused on returns irrespective of what they're saying. 0:07:25.000 --> 0:07:27.080 Agree with that. I know, I know that a loss 0:07:27.080 --> 0:07:29.480 can happen from now until November in the U S election. 0:07:29.640 --> 0:07:32.160 But the popularity of President Trump, I think is plateauing 0:07:32.200 --> 0:07:37.000 at it's not there it is that Is that enough 0:07:37.200 --> 0:07:40.200 to to win? I mean it's first of all, depends 0:07:40.200 --> 0:07:43.320 on who the Democratic nominee is That Bernie Sanders worth 0:07:43.320 --> 0:07:45.280 the nominee. I don't think that's gonna happen. I think 0:07:45.280 --> 0:07:48.240 it's enough to win. UM, if it's you know, Joe Biden, 0:07:48.320 --> 0:07:50.680 it it might not be. But let's keep in mind 0:07:50.680 --> 0:07:54.080 this is an unprecedented election, not only because it's about 0:07:54.120 --> 0:07:56.920 Trump and turnout is likely to be very high, also 0:07:57.000 --> 0:08:00.080 because there's massive amounts of money that Bloomberg is planning 0:08:00.120 --> 0:08:02.720 on spending irrespective of who the Democratic nominee is. Apt 0:08:02.720 --> 0:08:06.120 to say that um, And because the role that Trump 0:08:06.240 --> 0:08:08.880 is likely to play in terms of his willingness to 0:08:08.920 --> 0:08:12.440 abuse power when impeachment has been broken, is also going 0:08:12.480 --> 0:08:14.160 to be new. So it's hard to make that call. 0:08:14.320 --> 0:08:16.960 One more questionnaire with Dr Breimer before we move on. 0:08:17.040 --> 0:08:20.760 Through this important Now in the president Michael Bloomberg is 0:08:21.360 --> 0:08:23.280 for a president. We're fighting over who's going to do 0:08:23.320 --> 0:08:27.560 the disclaimer. Well, I want to do it. No, I 0:08:27.600 --> 0:08:31.800 could do it. Michael Bloomberg is running for president. There's 0:08:31.800 --> 0:08:33.960 a undertime we should be. He's a founder of Bloomberg 0:08:34.360 --> 0:08:39.200 LP and also uh this TV and radio operation as well. Bremer, 0:08:39.280 --> 0:08:42.400 this is so important. You say, CEOs cannot affect an 0:08:42.400 --> 0:08:46.520 attachment to the American public with words and with lip service. 0:08:46.800 --> 0:08:50.599 What is the prescriptive policy that is going to reattach 0:08:51.120 --> 0:08:55.360 America to capitalism. What's the to do list for Washington 0:08:55.600 --> 0:08:58.280 to get this done? Well, I mean I would say 0:08:58.320 --> 0:09:02.160 that almost every American CEO I know tells me in 0:09:02.200 --> 0:09:04.160 the next five ten years that they can make more 0:09:04.160 --> 0:09:08.520 money with fewer people. Um, that reality somehow is going 0:09:08.600 --> 0:09:12.760 to need to be changed by coming up with jobs 0:09:12.760 --> 0:09:14.760 for more people. They're going to have to invest much 0:09:14.840 --> 0:09:17.440 more in training. They're going to have to hire more, 0:09:17.600 --> 0:09:20.400 not less. They're gonna have to raise wages for the 0:09:20.480 --> 0:09:22.360 working in the middle class. They have to do that 0:09:22.440 --> 0:09:25.200 as a reality when the government is not stepping in, 0:09:25.520 --> 0:09:28.040 and it doesn't again, it doesn't really matter what they say, 0:09:28.480 --> 0:09:30.920 and they're they're gonna be fighting upstream member the fourth 0:09:30.960 --> 0:09:33.800 Industrial Revolution that has come up with here by claud 0:09:33.800 --> 0:09:36.200 Schwab a few years ago. But for the average worker 0:09:36.240 --> 0:09:38.720 that says capitalism doesn't work, it's not fourth Industrial Revolution, 0:09:38.840 --> 0:09:41.960 it's a post industrial revolution because they are not part 0:09:42.000 --> 0:09:44.000 of it. Ian Bremer, thank you so much for starting 0:09:44.040 --> 0:09:46.160 us off in this important hour. Here's with Eraser group. 0:09:46.240 --> 0:09:50.880 I can't say enough about their top ross. Dr Bremer 0:09:50.920 --> 0:10:08.360 here where this all this week as well? Steve Schwartzman 0:10:08.720 --> 0:10:12.480 of Blackstone, who was that speech too? Was it for 0:10:13.000 --> 0:10:15.000 the U. S Citizens back home so they get him 0:10:15.040 --> 0:10:18.200 reelected or was it for the participants of devils? I 0:10:18.200 --> 0:10:21.960 think it was for several different constituencies. I think here 0:10:22.040 --> 0:10:27.560 here's somebody who is having the impeachment process start with 0:10:27.600 --> 0:10:31.120 the trial today. And I think this was a speech 0:10:31.880 --> 0:10:35.960 to basically say, I think we need some perspective, uh, 0:10:36.000 --> 0:10:40.280 and let's look at what's happened under this administration. And 0:10:40.400 --> 0:10:46.080 I think that's not just for domestic consumption. I think 0:10:46.120 --> 0:10:50.199 it's it's it's meant to be heard in a broader context. 0:10:50.679 --> 0:10:53.960 Could the US China Phase one deal have been signed 0:10:54.120 --> 0:10:57.800 twelve months ago. Um, it would have been if it 0:10:57.800 --> 0:11:02.320 could have been, but that it couldn't have been done. Uh. 0:11:02.440 --> 0:11:06.120 And you know, part of the issue on the trade 0:11:06.160 --> 0:11:10.600 agreement Fran saying is is that you know, you need 0:11:10.600 --> 0:11:14.400 two countries, and each country has its own politics and 0:11:14.400 --> 0:11:20.160 and China is not a monolithic country in that sense. 0:11:20.720 --> 0:11:24.760 They have their hardliners, they have their reformers, and and 0:11:24.880 --> 0:11:28.120 what's happened over the last it's actually been three years 0:11:28.880 --> 0:11:32.240 that the the US and China have been discussing changes 0:11:32.800 --> 0:11:37.160 uh in trade. That it takes a while, uh for 0:11:37.240 --> 0:11:41.600 a country that's got a very particular system like China 0:11:42.000 --> 0:11:46.320 to basically make a decision to start changing the system 0:11:46.360 --> 0:11:49.960 that's been very successful for them. So so I think 0:11:50.040 --> 0:11:53.280 that the fact that a phase one deal was done 0:11:54.040 --> 0:11:58.520 meant that both parts in China have come together, along 0:11:58.559 --> 0:12:03.600 with the U. S side itself had ambitions uh that 0:12:03.760 --> 0:12:10.000 ranged from from exceptionally comprehensive uh to not so much 0:12:10.000 --> 0:12:13.679 so uh. And so everybody met in the middle. C 0:12:13.840 --> 0:12:16.560 Shrunkesman with us with Blackstone, our chief executive officer. And 0:12:16.559 --> 0:12:19.240 I might point out author the Belvedere Hotel was the 0:12:19.320 --> 0:12:22.360 ancient hotel here. It's where you came years ago, if 0:12:22.360 --> 0:12:25.640 you were to have for the tuperculosis treatment and all, 0:12:25.679 --> 0:12:28.760 there's a wonderful photograph of Robert Louis Stevenson in the 0:12:28.800 --> 0:12:31.400 background of that. And to get to the rub the 0:12:32.160 --> 0:12:34.679 Magic mount the Thomas Man, the Magic Mountain, and to 0:12:34.800 --> 0:12:38.560 get to uh, those photographs of Robert Louis Stevenson, you've 0:12:38.559 --> 0:12:41.040 got to walk through the lobby and the bookstore. Notice 0:12:41.080 --> 0:12:44.240 the Steven Schwartzman bookstore is well, how are book sales 0:12:44.280 --> 0:12:47.880 here in Davos. Well, you know, actually, uh, we're giving 0:12:47.920 --> 0:12:53.520 them away. That sounds like private equity is just your 0:12:53.600 --> 0:12:56.680 idea over here. You let him give away books. There 0:12:56.720 --> 0:12:59.560 goes a profit margin, is what they wouldn't let us 0:12:59.559 --> 0:13:02.760 sell them, And I wanted people to read them. So 0:13:02.840 --> 0:13:05.200 it's interesting Tom. This morning I always said something. At 0:13:05.240 --> 0:13:08.360 seven o'clock, four or five people walked up, said could 0:13:08.400 --> 0:13:11.000 you please sign my book? Uh, you know, I just 0:13:11.240 --> 0:13:13.640 picked it up. I'm excited to read it. Just Tim 0:13:13.640 --> 0:13:16.960 Cooker's Bezos read your book. If you're run into Tim 0:13:17.000 --> 0:13:21.680 Cooker Jeff Bezos about the Schwartzman theme, Well, it's interesting. Um. 0:13:21.720 --> 0:13:25.720 I saw Jeff before the book was published, and I said, 0:13:26.000 --> 0:13:30.120 Jeff here's what I'm doing, here's the theme. Could you 0:13:30.160 --> 0:13:34.240 be helpful with Amazon? And he said, sure, send it 0:13:34.280 --> 0:13:36.360 to me h and we'll take care of it. This 0:13:36.440 --> 0:13:38.280 is so important, Steven, I want to make this point. 0:13:38.320 --> 0:13:40.600 I went down to the offices of Jeff wins LinkedIn 0:13:40.960 --> 0:13:43.000 the other day at the Empire State Building and you're 0:13:43.000 --> 0:13:45.480 stuck in traffic and you look over and you're right 0:13:45.520 --> 0:13:47.960 as you go down Fifth Avenue is a Schwartzman Library, 0:13:48.000 --> 0:13:50.960 the New York Public Library. You, more than anybody in 0:13:50.960 --> 0:13:55.679 America know the new technology of cook in Bezos versus 0:13:55.720 --> 0:13:59.360 the old technology of what you've donated millions of dollars to. 0:14:00.040 --> 0:14:02.960 What is what is the focus of technology that you 0:14:03.080 --> 0:14:06.760 see right now? Is it a benefit to Americans or 0:14:06.920 --> 0:14:09.360 all of the tension of the selection and all. Is 0:14:09.440 --> 0:14:12.480 it because they're technological halves and there are too many 0:14:12.600 --> 0:14:15.280 technological have nots. Well, we've got to get everybody to 0:14:15.320 --> 0:14:21.480 be a technological have. Technologies is benefiting American enormous number 0:14:21.600 --> 0:14:24.320 of ways. For example, you know, you take your smartphone. 0:14:24.680 --> 0:14:27.440 You know YouTube would be lost without that, as would I, 0:14:28.040 --> 0:14:31.400 uh and uh we're also lost with it. But that's 0:14:31.480 --> 0:14:33.640 the whole of your state you want to go back. 0:14:33.720 --> 0:14:36.200 There's that track photo of you running around doing a 0:14:36.240 --> 0:14:38.760 three minute mile a few years ago. I want to 0:14:38.800 --> 0:14:42.600 go back long agoing far away. You supported this president 0:14:42.840 --> 0:14:46.080 because the Republicans had the vision with Democrats to build 0:14:46.080 --> 0:14:49.360 the interstate highway system in the fifties. Can't you help 0:14:49.440 --> 0:14:54.440 the president support an interstate highway of technology in America 0:14:54.800 --> 0:14:57.440 where we take the whole country and get all this fixed. 0:14:58.160 --> 0:15:04.000 I think that they're is enormous need and it's bipartisan, uh, 0:15:04.200 --> 0:15:08.720 Tom that you know, Chuck Schumer, for example, along with 0:15:08.840 --> 0:15:12.480 many people in Congress, want to make a major step forward, 0:15:13.080 --> 0:15:17.240 as does the administration UM in terms of providing money 0:15:18.040 --> 0:15:21.920 for AI UH and UH what made me even more 0:15:22.040 --> 0:15:26.560 consequential quantum UH in the future. UH. And and you know, 0:15:27.120 --> 0:15:32.240 the universities that are doing this advanced research, the companies 0:15:32.880 --> 0:15:36.200 who are who are sort of the American flagship carriers 0:15:36.720 --> 0:15:42.160 UH in technology all want more research funds UH to 0:15:42.480 --> 0:15:48.320 increase competitiveness. Now, this really will end up benefiting regular people, 0:15:48.800 --> 0:15:55.080 whether it's with diagnoses of illnesses with much more reliability, UH, 0:15:55.400 --> 0:15:58.840 development of drugs which could end up being half the 0:15:58.920 --> 0:16:04.680 cost as a result of it. UH. Huge breakthroughs in 0:16:04.920 --> 0:16:09.560 education where you'll be able to to instruct students of 0:16:09.640 --> 0:16:16.000 all different types of backgrounds. So so technology uh has 0:16:16.040 --> 0:16:21.160 gotten some enormous benefits. What's the biggest unknown for the markets? 0:16:21.280 --> 0:16:23.600 Is it the U S election? Is it global growth 0:16:23.720 --> 0:16:26.280 or is it geopolitics? Well, it's not global growth. I 0:16:26.280 --> 0:16:30.800 think global growth will continue. The biggest risk uh. You know, 0:16:30.960 --> 0:16:34.400 for for markets are are two types of things. One 0:16:34.480 --> 0:16:37.680 is US domestic politics and the second is the black 0:16:37.760 --> 0:16:41.320 swan effects that can happen. I mean, we just had 0:16:41.320 --> 0:16:46.480 an incident for example, Uh in in Iraq, I was 0:16:46.520 --> 0:16:51.760 watching television. Almost everyone who's declaring World War three starting. 0:16:52.320 --> 0:16:55.720 They all happened to be wrong. But if they were right, uh, 0:16:55.760 --> 0:16:59.280 and the straits of hormones were closed, and we ended 0:16:59.360 --> 0:17:03.400 up uh. You know, with a huge dislocation. You could 0:17:03.440 --> 0:17:08.879 get thrown accidentally into a slow growth to recession. But 0:17:08.920 --> 0:17:12.080 it's quite amazing how the market quickly discounted once there 0:17:12.080 --> 0:17:15.080 there was no immediate threat of war. They kind of 0:17:15.119 --> 0:17:18.440 moved on. We have asset prises really priced to perfection. 0:17:18.480 --> 0:17:21.440 So how do the two kind of match up? Well, 0:17:21.520 --> 0:17:25.840 usually perfection doesn't last. Uh. And you know this has 0:17:25.880 --> 0:17:32.000 been an amazing run. Usually you expect some type of adjustment. Uh. 0:17:32.240 --> 0:17:35.560 But but if if, if, if we don't have a 0:17:35.640 --> 0:17:41.920 really um discontinuest event with US politics and we avoid 0:17:42.720 --> 0:17:49.040 um the kinds of major international type of of risks, 0:17:49.960 --> 0:17:55.560 geopolitical risks. I think we'll go on with variability up 0:17:55.600 --> 0:17:57.760 and down over today's levels. Do you think out what 0:17:57.840 --> 0:17:59.800 time for one more question? Because I know you're going 0:17:59.840 --> 0:18:03.320 off to go skiing on this perfect day, and I'm 0:18:03.320 --> 0:18:05.080 going to ask you the same question I would ask 0:18:05.160 --> 0:18:08.520 Mr Rubinstein and the others. Richard Edelman's come out with 0:18:08.560 --> 0:18:12.040 a study that that would be the president leading right now. 0:18:12.040 --> 0:18:15.439 Those sirens you here in the background. Richard Edelman's come 0:18:15.440 --> 0:18:19.640 out with a study of how capitalism is removed from 0:18:19.680 --> 0:18:24.640 so many people in America. Is it time for private equity, 0:18:24.840 --> 0:18:29.560 Time for private equity to change its text treatment that's 0:18:29.600 --> 0:18:33.080 been in place over the years. Like I leave that 0:18:33.119 --> 0:18:38.879 one tom to uh uh to to the political people, uh, 0:18:39.040 --> 0:18:42.800 every one of whom has their own unique solution uh 0:18:43.040 --> 0:18:46.399 for the ills of the world. What I'd say is 0:18:46.560 --> 0:18:49.879 part of the Edelman's study also had to do with 0:18:49.960 --> 0:18:55.000 overall trust in institutions, And I think there's a real 0:18:55.080 --> 0:19:01.560 need to address what's going wrong with our society where 0:19:01.600 --> 0:19:07.200 so many people question almost every every institution in society. 0:19:07.720 --> 0:19:09.960 How much pressure are you feeling? One final question, because 0:19:09.960 --> 0:19:12.000 we couldn't hear Tom's questions, it was the last question. 0:19:12.040 --> 0:19:14.640 It doesn't count. How much pressure are you feeling from 0:19:14.640 --> 0:19:18.879 investors to put cash to use? We don't have that 0:19:18.960 --> 0:19:22.119 kind of pressure. They don't They don't want to go 0:19:22.160 --> 0:19:25.360 in now. We've We've invested a lot of money over 0:19:25.400 --> 0:19:28.760 the years. When when when prices are high, you're trying 0:19:28.840 --> 0:19:32.520 and invest less um, when they're low, you try to 0:19:32.520 --> 0:19:36.520 invest more. We we sell a lot of things. When 0:19:36.800 --> 0:19:40.240 prices are high, we try and find things. It's harder. 0:19:41.000 --> 0:19:43.000 So I got to make some sty Are you buying 0:19:43.080 --> 0:19:47.119 or selling right now? I mean the market watch we 0:19:47.480 --> 0:19:49.520 got we gotta go. The ski lift is waiting for 0:19:49.640 --> 0:19:52.840 Mr Schwartzman, But quickly, are you buying or selling? We 0:19:52.960 --> 0:19:56.000 do both, Tom, we do Bothett have the stage. I'm 0:19:58.720 --> 0:20:01.560 unplugged him and throwing a money right now. What is 0:20:01.600 --> 0:20:05.239 the an economist on the one hand and on the 0:20:05.240 --> 0:20:08.840 other hand, ste thank you so much. We'll go sell 0:20:08.880 --> 0:20:28.240 a book with Blackstone. This morning City Group at the 0:20:28.320 --> 0:20:32.919 most original path is arguably our most international bank. We 0:20:33.000 --> 0:20:36.240 begin our banking coverage here, John and I of Michael Corbett. 0:20:36.280 --> 0:20:39.040 He's the chief executive officer of City Group, and we 0:20:39.080 --> 0:20:42.879 need a most timely update. Now give me an international 0:20:43.000 --> 0:20:47.119 view from our most international bank. What is the state 0:20:47.280 --> 0:20:51.240 of City Group globally? Stated? City Group, Tom, is that 0:20:51.440 --> 0:20:53.760 you know, we're coming off of a strong year and 0:20:53.840 --> 0:20:56.480 a strong close to the year. And if you look 0:20:56.520 --> 0:20:59.520 at both at a product level, at a geography level, 0:21:00.000 --> 0:21:03.919 solid performance across our consumer and institutional businesses. And as 0:21:03.960 --> 0:21:06.400 you go to Latin America, as you go to Europe, Asia, 0:21:07.040 --> 0:21:10.879 around the globe, strong uniform performance. The happy talk of 0:21:10.960 --> 0:21:14.800 Davos is best practices. What is the worst practice you're 0:21:14.840 --> 0:21:17.600 trying to avoid? Now as you look back at the 0:21:17.760 --> 0:21:21.879 heritage of OH seven from a Davos perspective or from 0:21:21.920 --> 0:21:24.720 a city from a City Group perspective, what's the worst 0:21:24.760 --> 0:21:27.719 practice you're trying to avoid each and every day is 0:21:27.760 --> 0:21:29.399 to we You know, we don't come to work. We 0:21:29.480 --> 0:21:32.200 can't be No one can be everything to everybody. So 0:21:32.240 --> 0:21:36.560 the financial supermarket mentality, I think that permeated the first 0:21:36.640 --> 0:21:40.680 part of the two thousand to two thousand seven era, 0:21:41.200 --> 0:21:43.000 and to come to work to do the things that 0:21:43.040 --> 0:21:45.240 we can do best. And as you say, we are 0:21:45.280 --> 0:21:48.000 the most international, certainly of the U S. And we're 0:21:48.000 --> 0:21:51.160 in fact probably the most international of really any list 0:21:51.200 --> 0:21:53.600 of banks in the world. And as we think about 0:21:53.640 --> 0:21:57.080 the fact that today, around the things the President discussed, 0:21:57.240 --> 0:21:59.400 the trade deals and things that have gone on, our 0:21:59.440 --> 0:22:01.800 clients need just more than every well, let's talk about that. 0:22:01.880 --> 0:22:05.400 You hear it from the President this morning through the afternoon, optimism, 0:22:05.440 --> 0:22:08.879 I hear it from you Upbate optimism. I don't feel 0:22:08.920 --> 0:22:11.600 that walking around the wholes of this particular event at 0:22:11.600 --> 0:22:13.879 the moment, there is some real pessimism that despite the 0:22:13.880 --> 0:22:16.720 fact unemployments of multi decade lowest, despite the fact we 0:22:16.760 --> 0:22:19.359 have the longest recovery on record, why not, what are 0:22:19.359 --> 0:22:21.080 we missing here? Well, if we were here, and we 0:22:21.080 --> 0:22:23.760 were here a year ago, there was pessimists of them. 0:22:23.800 --> 0:22:27.680 If you remember the way that ended. I talked about 0:22:27.680 --> 0:22:32.000 a real fundamental disconnect between what the consumers behaviors were 0:22:32.040 --> 0:22:35.160 saying and what the markets were saying. The markets as 0:22:35.200 --> 0:22:39.760 we were here, we're giving pretty strong shigns of forthcoming downturn, 0:22:40.119 --> 0:22:41.800 and in fact we didn't see it. We're here a 0:22:41.840 --> 0:22:46.960 year later, UM, the smps up, city stocks up, the 0:22:47.040 --> 0:22:50.399 markets had pretty broad based good performance, and by the way, 0:22:50.640 --> 0:22:53.320 the consumers still in good shape. The consumer has been 0:22:53.600 --> 0:22:56.760 the backbone of this recovery. He's standing up for capitalism 0:22:56.920 --> 0:23:01.080 this week. I think, I think all the firms, do 0:23:01.119 --> 0:23:02.520 you get that sense? I don't get that sense at 0:23:02.520 --> 0:23:04.639 the moment. I get a sense that things are changing, 0:23:05.280 --> 0:23:07.359 that the guardians of the States has quite realized they 0:23:07.400 --> 0:23:09.440 can't protect it anymore and they need to change before 0:23:09.680 --> 0:23:12.480 someone changes them. Do you not get that feeling? Mike, Well, 0:23:12.640 --> 0:23:14.639 you know again, I think we get we were We 0:23:14.720 --> 0:23:19.879 get in this nuance between capitalism and what's responsible. And 0:23:19.960 --> 0:23:23.679 I think today what you're hearing from companies around stakeholders 0:23:24.040 --> 0:23:26.000 right is something I think in many cases that's been 0:23:26.000 --> 0:23:29.159 embraced for years. It just wasn't necessarily talked about. You 0:23:29.200 --> 0:23:32.520