1 00:00:00,520 --> 00:00:03,760 Speaker 1: This is Bloomberg Wall Street Week. We turn our attention 2 00:00:03,840 --> 00:00:07,600 Speaker 1: to the markets this week us CPI members reinforcing concerns 3 00:00:07,600 --> 00:00:10,800 Speaker 1: about inflation. The financial stories that chief are worth a 4 00:00:10,840 --> 00:00:13,760 Speaker 1: really different reaction to mark its more indications of just 5 00:00:13,960 --> 00:00:16,360 Speaker 1: how hot the U. S economy really is. Through the 6 00:00:16,400 --> 00:00:19,799 Speaker 1: eyes of the most influential voices Larry Summers, the former 7 00:00:19,800 --> 00:00:22,799 Speaker 1: Treachery Secretary, Katherine Keating, CEO of v n y moin 8 00:00:22,960 --> 00:00:26,239 Speaker 1: Sam's l Sharman and founder of Equatic Group Investment in 9 00:00:26,320 --> 00:00:31,400 Speaker 1: Bloomberg Wall Street Week with David Weston from Bloomberg Radio. Inflation, 10 00:00:31,600 --> 00:00:34,320 Speaker 1: a slowing economy, a climate on the brink, and a 11 00:00:34,320 --> 00:00:36,920 Speaker 1: new world order in the making. But the great and 12 00:00:37,040 --> 00:00:39,880 Speaker 1: the goods still find room for optimism as they gather 13 00:00:40,000 --> 00:00:43,240 Speaker 1: in Switzerland. This is a special Davos edition of Wall 14 00:00:43,240 --> 00:00:46,680 Speaker 1: Street Week. I'm David Weston. This week we talked with 15 00:00:46,760 --> 00:00:50,720 Speaker 1: the leaders of Global Wall Street about the economy. Business 16 00:00:51,520 --> 00:00:54,280 Speaker 1: is clear, evidence inflation has in fact PETE ten is 17 00:00:54,320 --> 00:00:56,639 Speaker 1: coming down. It's a funny thing when people say inflation 18 00:00:56,680 --> 00:01:00,120 Speaker 1: has peaked. Inflation is just going to grow slower, And 19 00:01:00,280 --> 00:01:05,160 Speaker 1: why the big issues like inequality and climate and geopolitics 20 00:01:05,160 --> 00:01:08,120 Speaker 1: matter for both of those. We were trying to address 21 00:01:08,160 --> 00:01:12,920 Speaker 1: the misconceptions a transition has to always be fair and justice. Well, 22 00:01:12,959 --> 00:01:15,839 Speaker 1: it's got a number of major transitions that we're going through. 23 00:01:16,040 --> 00:01:18,280 Speaker 1: Our focus is trying to move the noise out the 24 00:01:18,280 --> 00:01:21,080 Speaker 1: way and actually roll up our leaves and get on 25 00:01:21,319 --> 00:01:24,839 Speaker 1: with the hard work. And we speak to our special 26 00:01:24,840 --> 00:01:29,080 Speaker 1: contribual Larry Summers on the potential for default on the 27 00:01:29,160 --> 00:01:33,720 Speaker 1: US debt. This is potential tragedy is far. It would 28 00:01:33,720 --> 00:01:40,560 Speaker 1: be catastrophic and inconceivable for the United States to default. 29 00:01:54,280 --> 00:01:58,040 Speaker 1: Every winter pandemic permitting. Global Wall Street makes the trek 30 00:01:58,080 --> 00:02:01,240 Speaker 1: to the Swiss Alps for the World Economic Forum, an 31 00:02:01,320 --> 00:02:04,240 Speaker 1: organization started forty two years ago by Swiss engineer and 32 00:02:04,280 --> 00:02:08,280 Speaker 1: economist Claus Schwab to gather leaders of business, government and 33 00:02:08,360 --> 00:02:11,680 Speaker 1: academia to, as he put it, improved the state of 34 00:02:11,720 --> 00:02:14,440 Speaker 1: the world. He spoke at the beginning of the conference 35 00:02:14,480 --> 00:02:19,320 Speaker 1: about some of the thorniest issues today hot spots of 36 00:02:19,440 --> 00:02:29,000 Speaker 1: sicio economically modeling high inflation, inflation, increasing interest lates and 37 00:02:29,240 --> 00:02:38,799 Speaker 1: going national debt. This is particularly hurting low income groups. 38 00:02:39,520 --> 00:02:46,120 Speaker 1: It is ex somebodying societal fugmentation. As Klaus Schwab says, 39 00:02:46,160 --> 00:02:49,400 Speaker 1: we have some global economic issues to deal with, starting 40 00:02:49,440 --> 00:02:52,240 Speaker 1: with at least the possibility of a recession, something that 41 00:02:52,320 --> 00:02:55,840 Speaker 1: City CEO Jane Fraser told us she anticipates, though it 42 00:02:55,919 --> 00:02:58,840 Speaker 1: may not be a bad one. We do have we 43 00:02:58,880 --> 00:03:00,799 Speaker 1: do what we all see as the ferent countries are 44 00:03:00,800 --> 00:03:04,520 Speaker 1: a very different places, so you actually cannot speak in generalities. 45 00:03:04,919 --> 00:03:09,079 Speaker 1: We expect to see a rolling series of country recessions, 46 00:03:09,120 --> 00:03:14,040 Speaker 1: but short of anything crazy happening geopolitically, and this time 47 00:03:14,120 --> 00:03:18,240 Speaker 1: last year we wouldn't have predicted what happened in the Ukraine. Um, 48 00:03:18,360 --> 00:03:20,640 Speaker 1: you've seen the tales come in, so you've seen the 49 00:03:20,840 --> 00:03:25,280 Speaker 1: over optimism from some about soft landings and the economy 50 00:03:25,360 --> 00:03:27,560 Speaker 1: is doing well, but he gree you've seen the down 51 00:03:27,720 --> 00:03:31,520 Speaker 1: the severe case downside also coming in. I think the 52 00:03:31,600 --> 00:03:34,200 Speaker 1: general view in the States, certainly one we hold that 53 00:03:34,320 --> 00:03:38,640 Speaker 1: city is we expect to see a mild recession UM, 54 00:03:38,720 --> 00:03:44,440 Speaker 1: largely driven by the painfully persistent service inflation. UM. It's 55 00:03:44,480 --> 00:03:46,840 Speaker 1: coming off, but it's still pretty high, and we do 56 00:03:46,920 --> 00:03:50,840 Speaker 1: expect to see central banks continue tightening as a result. 57 00:03:52,000 --> 00:03:57,880 Speaker 1: But the vulnerabilities that amplified previous recessions around the world 58 00:03:57,960 --> 00:04:01,320 Speaker 1: are not present. No thanks are in very good shape. 59 00:04:01,360 --> 00:04:04,440 Speaker 1: Consumer balance sheets are in good shape, corporate balance sheets 60 00:04:04,440 --> 00:04:07,800 Speaker 1: are in good shape, and I think that omens well 61 00:04:08,360 --> 00:04:13,880 Speaker 1: for a mild recessions when they come, rather than ones 62 00:04:13,960 --> 00:04:17,320 Speaker 1: that we have to be worried about. Jane Fraser sees 63 00:04:17,320 --> 00:04:19,719 Speaker 1: a rolling recession around the world, but maybe, just maybe 64 00:04:19,720 --> 00:04:23,080 Speaker 1: it won't roll to Europe after all. After German Chancellor 65 00:04:23,120 --> 00:04:25,360 Speaker 1: ol Of Schultz told our editor in chief John michaels 66 00:04:25,360 --> 00:04:28,200 Speaker 1: Wade that he does not anticipate a recession in Germany 67 00:04:28,240 --> 00:04:31,600 Speaker 1: this year, and Gary Cohne, he's now vice chair of IBM, 68 00:04:31,680 --> 00:04:35,160 Speaker 1: agrees with him. I thought that the risk to Germany 69 00:04:35,279 --> 00:04:37,960 Speaker 1: was really the energy situation going into the winter, to 70 00:04:38,040 --> 00:04:40,680 Speaker 1: the extent that we had a very cold winter and 71 00:04:40,720 --> 00:04:43,839 Speaker 1: they had to start rationing energy and they had to 72 00:04:43,839 --> 00:04:47,960 Speaker 1: cut back industrial Germany to keep people warm. I felt 73 00:04:48,000 --> 00:04:51,080 Speaker 1: that that was a really tough situation. Potentially, we're now 74 00:04:51,240 --> 00:04:52,719 Speaker 1: deep enough into the winter and we sort of know 75 00:04:52,760 --> 00:04:55,280 Speaker 1: where we are, we know what's in reserve and storage. 76 00:04:55,320 --> 00:04:57,160 Speaker 1: I think Germany is gonna get through the winter very 77 00:04:57,200 --> 00:04:59,640 Speaker 1: fairly easily with energy, and I think they're going to 78 00:04:59,680 --> 00:05:01,919 Speaker 1: continue to power through this. So I'm in agreement with 79 00:05:01,920 --> 00:05:05,119 Speaker 1: the Chancellor, all of which led to a somewhat more 80 00:05:05,160 --> 00:05:09,360 Speaker 1: positive outlook at the World Economic Forum than some had anticipated. 81 00:05:09,680 --> 00:05:13,440 Speaker 1: As observed by Mary Callahan Urdos, responsible for investing four 82 00:05:13,480 --> 00:05:17,400 Speaker 1: point one trillion dollars at JP Morgan Asset and Wealth Management, 83 00:05:18,440 --> 00:05:20,760 Speaker 1: I would say the tone here, having come here for 84 00:05:20,800 --> 00:05:24,919 Speaker 1: the past decade, is less depressed than it than it 85 00:05:25,000 --> 00:05:27,839 Speaker 1: often is, which is a good sign of hope of 86 00:05:27,880 --> 00:05:31,120 Speaker 1: what's happening out there in the world. Having come off 87 00:05:31,160 --> 00:05:35,159 Speaker 1: of the most difficult year for a balanced portfolio sixty forty, 88 00:05:35,200 --> 00:05:37,479 Speaker 1: whether you were in stocks or bonds or anything in between, 89 00:05:37,800 --> 00:05:40,600 Speaker 1: it was pretty rough sledding, and so I think everyone's 90 00:05:41,560 --> 00:05:44,000 Speaker 1: happy that that's behind us and looking forward. And the 91 00:05:44,560 --> 00:05:46,680 Speaker 1: job of what all of us at JP Morgan do 92 00:05:47,279 --> 00:05:49,479 Speaker 1: is work on advising clients through the cycle. And so 93 00:05:49,520 --> 00:05:51,520 Speaker 1: we're going to have lots of boom and bust cycles, 94 00:05:52,160 --> 00:05:54,480 Speaker 1: and I think the most important thing is to stay 95 00:05:54,480 --> 00:05:58,440 Speaker 1: focused on diversification opportunity, not getting wedded to any one 96 00:05:58,520 --> 00:06:00,080 Speaker 1: thing that looks like it worked in the past that 97 00:06:00,160 --> 00:06:02,400 Speaker 1: may not work in the future, and so we're spending 98 00:06:02,400 --> 00:06:04,040 Speaker 1: we're spending a lot of time on that. I mean, 99 00:06:04,080 --> 00:06:07,919 Speaker 1: one of the things that really manifested itself through COVID 100 00:06:08,160 --> 00:06:11,360 Speaker 1: was the problem of home country bias, which creeps into 101 00:06:11,400 --> 00:06:14,760 Speaker 1: almost everybody's portfolios. Uh, and you have to be very 102 00:06:14,800 --> 00:06:17,279 Speaker 1: aware and conscious of of diversifying out of it. So 103 00:06:17,360 --> 00:06:19,520 Speaker 1: not only home country bias in terms of the stocks 104 00:06:19,520 --> 00:06:21,839 Speaker 1: in the bond you buy, but also the currency. And 105 00:06:21,880 --> 00:06:24,320 Speaker 1: I think it's now a really important time that people 106 00:06:24,360 --> 00:06:27,840 Speaker 1: think about how to get all of that the opportunities 107 00:06:27,839 --> 00:06:29,719 Speaker 1: that they may have missed in other parts of the world, 108 00:06:30,279 --> 00:06:32,880 Speaker 1: especially parts of the world that are reopening and making 109 00:06:32,920 --> 00:06:36,760 Speaker 1: it very interesting. Morgan Stanley is James Gorman agreed that 110 00:06:36,800 --> 00:06:41,359 Speaker 1: there is room for optimism, not least because of China. Well, 111 00:06:41,680 --> 00:06:43,640 Speaker 1: you know, I've seen I've seen a lot of cycles 112 00:06:43,640 --> 00:06:47,599 Speaker 1: in my career, and I've seen some really really dark periods. 113 00:06:47,640 --> 00:06:52,040 Speaker 1: You know, the financial crisis have to September eleven, even 114 00:06:52,080 --> 00:06:54,080 Speaker 1: though you know the early recessions in the US and 115 00:06:55,560 --> 00:06:57,680 Speaker 1: the market bust and seven year I go back up 116 00:06:57,680 --> 00:06:59,840 Speaker 1: a lot, you I go back a long way, and 117 00:07:01,120 --> 00:07:03,719 Speaker 1: you know, I think what we've been through if you 118 00:07:03,800 --> 00:07:06,880 Speaker 1: stack up the negative stuff that happened first lame we're 119 00:07:06,880 --> 00:07:09,720 Speaker 1: in European seventy years, first global pandemic in a century 120 00:07:09,960 --> 00:07:14,680 Speaker 1: and highest rate increase because of inflation in forty years. 121 00:07:14,960 --> 00:07:17,880 Speaker 1: That's a lot to throw up people. And where are 122 00:07:17,920 --> 00:07:20,920 Speaker 1: we now so bad? The debate is will it be 123 00:07:20,920 --> 00:07:23,560 Speaker 1: a recession? Will it be shortened? Show nobody's saying we 124 00:07:23,680 --> 00:07:27,040 Speaker 1: go into depression right, everybody's saying, we can kind of 125 00:07:27,080 --> 00:07:29,320 Speaker 1: deal with this. And two things I think have changed 126 00:07:29,320 --> 00:07:33,240 Speaker 1: in the last month which has caused this echo chamber 127 00:07:33,280 --> 00:07:36,080 Speaker 1: we live in here and dove us where everybody's basically 128 00:07:36,080 --> 00:07:37,920 Speaker 1: repeating back to each other what they've heard from the 129 00:07:38,000 --> 00:07:41,960 Speaker 1: last person. Let's be honest. I'm not hopefully, but most 130 00:07:42,000 --> 00:07:46,680 Speaker 1: people are. Is two things have changed. Number one, the 131 00:07:46,680 --> 00:07:50,040 Speaker 1: inflation numbers are definitely there's clear evidence inflation has in 132 00:07:50,120 --> 00:07:53,800 Speaker 1: fact peaked and is coming down right how quickly? Whether 133 00:07:53,800 --> 00:07:55,480 Speaker 1: the Fed will get us to two percent and when 134 00:07:55,880 --> 00:07:58,960 Speaker 1: remains the debate, but is clearly the slope of the 135 00:07:59,000 --> 00:08:01,800 Speaker 1: line as positive is um to everybody's favorite. And the 136 00:08:01,840 --> 00:08:05,680 Speaker 1: second is not just the opening up of China, but 137 00:08:05,920 --> 00:08:10,640 Speaker 1: China has embraced the rest of the world more aggressively 138 00:08:10,800 --> 00:08:12,960 Speaker 1: in the last few weeks, witnessed by the Vice Premier 139 00:08:13,080 --> 00:08:16,600 Speaker 1: meeting with Treasury Secretary yelling Um in a way that 140 00:08:16,640 --> 00:08:19,320 Speaker 1: we haven't seen for some time. So the big question 141 00:08:19,400 --> 00:08:23,200 Speaker 1: coming out of the Party Congress and President she um 142 00:08:23,320 --> 00:08:27,320 Speaker 1: uh you know, being real reelected by the Congress, was 143 00:08:27,440 --> 00:08:30,160 Speaker 1: way does China go from here? Back of America Chief 144 00:08:30,280 --> 00:08:34,079 Speaker 1: Brian moynihan agreed with others about the likelihood of recession, 145 00:08:34,280 --> 00:08:36,040 Speaker 1: but at the same time and not being too severe 146 00:08:36,280 --> 00:08:39,000 Speaker 1: be based on the strength of the consumer and also 147 00:08:39,120 --> 00:08:43,520 Speaker 1: the strong labor market in the US. Our research team, 148 00:08:43,520 --> 00:08:45,720 Speaker 1: which is the best in the business, has a mild 149 00:08:45,720 --> 00:08:48,440 Speaker 1: recession predicted sort of mid this year. In the next year, 150 00:08:48,760 --> 00:08:50,880 Speaker 1: they pushed that out, and so why they keep pushing 151 00:08:50,920 --> 00:08:52,679 Speaker 1: out it's the strength of the US consumer. They have 152 00:08:52,720 --> 00:08:55,760 Speaker 1: the FED getting over five five five and a quarter. 153 00:08:56,160 --> 00:08:59,160 Speaker 1: Just this week they moved at the three basis point 154 00:08:59,240 --> 00:09:01,760 Speaker 1: rate rises a phoe the fifty, meaning again the Fed 155 00:09:01,840 --> 00:09:03,600 Speaker 1: can slow down a little bit because you see inflation 156 00:09:03,720 --> 00:09:05,920 Speaker 1: go over um and so that's what you have. And 157 00:09:05,960 --> 00:09:07,880 Speaker 1: so this year ends up being positive, next ye ends 158 00:09:07,920 --> 00:09:09,319 Speaker 1: up being positive, but you have a little trough in 159 00:09:09,360 --> 00:09:11,920 Speaker 1: the middle. Employment is still strong, people are working, they're 160 00:09:11,920 --> 00:09:13,959 Speaker 1: getting paid more, but they've got to get to inflation. 161 00:09:14,000 --> 00:09:15,600 Speaker 1: So they have to keep the rate structure up here 162 00:09:15,600 --> 00:09:17,480 Speaker 1: for a fair amount of time until they get the 163 00:09:17,480 --> 00:09:21,120 Speaker 1: services side inflation down and the market maybe mis reading 164 00:09:21,320 --> 00:09:23,280 Speaker 1: how fast that will take. But on the other hand, 165 00:09:23,559 --> 00:09:24,840 Speaker 1: we're a heck of a lot better shaped than all 166 00:09:24,840 --> 00:09:26,920 Speaker 1: these other economies that I talked about it, that's for sure. 167 00:09:27,000 --> 00:09:29,480 Speaker 1: So pushed out the possible recession your research team did, 168 00:09:30,080 --> 00:09:32,440 Speaker 1: is it also looking shallower because the economy is more 169 00:09:32,480 --> 00:09:35,760 Speaker 1: resilient than we thought it was. Well, the consumer is 170 00:09:35,840 --> 00:09:39,199 Speaker 1: very resilient, and you look new claims from unemployment, we're 171 00:09:39,200 --> 00:09:42,559 Speaker 1: down in the one nine thousand. Before the two thousands 172 00:09:42,960 --> 00:09:47,360 Speaker 1: seven eight UH recession, Great recession, Financial crisis, they ran 173 00:09:47,440 --> 00:09:50,880 Speaker 1: three D thirty thousand each posting. So to think about 174 00:09:50,920 --> 00:09:53,640 Speaker 1: that difference in the workforce about bigger, These are down 175 00:09:53,679 --> 00:09:56,280 Speaker 1: to numbers consistent where they were in you know, fifty 176 00:09:56,360 --> 00:09:58,120 Speaker 1: years ago when the workforce was half as big. So 177 00:09:58,240 --> 00:10:00,839 Speaker 1: the employment still strong. Now. Are all being more careful 178 00:10:00,840 --> 00:10:03,680 Speaker 1: about higher we're all trimming our head count by attrition 179 00:10:03,760 --> 00:10:06,040 Speaker 1: or we're all flatting out in some industries are actually 180 00:10:06,080 --> 00:10:08,080 Speaker 1: taking head count down. So that may change. That hasn't 181 00:10:08,160 --> 00:10:10,319 Speaker 1: changed yet. The money in our counts is still there 182 00:10:10,360 --> 00:10:12,480 Speaker 1: from and it's come down a little bit they're starting 183 00:10:12,520 --> 00:10:14,360 Speaker 1: to spend it. But on the other hand, it's multiples 184 00:10:14,400 --> 00:10:16,280 Speaker 1: where it was pre pandemic. They have lots lots of 185 00:10:16,280 --> 00:10:21,920 Speaker 1: barring capacity. Now what's going quickly stopping. Obviously mortgage has 186 00:10:21,920 --> 00:10:24,960 Speaker 1: got expensive, in house purchases stop. But the dollar value 187 00:10:24,960 --> 00:10:28,880 Speaker 1: of housing that went shot up after the recovery. Yes, 188 00:10:28,920 --> 00:10:30,599 Speaker 1: it's come down, but still way above where it was 189 00:10:30,640 --> 00:10:33,720 Speaker 1: in nineteen and so people have to think about this 190 00:10:33,760 --> 00:10:36,640 Speaker 1: in the perspective long term growth rates that that fell 191 00:10:36,720 --> 00:10:39,080 Speaker 1: and then shot up with all the stimulus, and now 192 00:10:39,080 --> 00:10:41,280 Speaker 1: we're settling in and the ft has to bring inflation 193 00:10:41,320 --> 00:10:43,560 Speaker 1: down because inflation will eat away purchasing power and that's 194 00:10:43,600 --> 00:10:48,400 Speaker 1: really not good for especially media income household going up. 195 00:10:48,480 --> 00:10:51,240 Speaker 1: We moved from the economy to another big topic for 196 00:10:51,280 --> 00:10:55,720 Speaker 1: global Wall Street, geopolitics. That's next on this special edition 197 00:10:55,760 --> 00:11:07,120 Speaker 1: of Bloomberg wall Stree Week from the World Economic Forum. 198 00:11:07,120 --> 00:11:09,200 Speaker 1: This is a special edition of Wall Street Week from 199 00:11:09,200 --> 00:11:13,120 Speaker 1: the World Economic Forum in Switzerland. I'm David Weston. Leaders 200 00:11:13,160 --> 00:11:15,800 Speaker 1: gathered here this week against the backdrop of the largest 201 00:11:15,880 --> 00:11:19,079 Speaker 1: ground war in Europe since World War Two, sanctions opposed 202 00:11:19,080 --> 00:11:21,960 Speaker 1: on Russia for his invasion of Greek Crane prevented any 203 00:11:22,040 --> 00:11:25,079 Speaker 1: Russians from actually attending, and China was represented by its 204 00:11:25,160 --> 00:11:28,319 Speaker 1: Vice Premier to her, not its president. As a year's passed, 205 00:11:28,559 --> 00:11:31,800 Speaker 1: but China nevertheless was very much a topic of conversation 206 00:11:32,000 --> 00:11:35,240 Speaker 1: at the World Economic Forum. Ast Her actually left Davis 207 00:11:35,280 --> 00:11:37,439 Speaker 1: to go over to Zurich to meet with Janet Jill 208 00:11:37,600 --> 00:11:40,640 Speaker 1: and the U. S. Treasury Secretary, raising the prospect of 209 00:11:40,760 --> 00:11:44,000 Speaker 1: maybe better relations between the United States and China. We 210 00:11:44,080 --> 00:11:48,200 Speaker 1: asked US Trade Representative Catherine tie about her take on 211 00:11:48,320 --> 00:11:51,880 Speaker 1: what was accomplished by that meeting with respect to trade. 212 00:11:52,200 --> 00:11:57,760 Speaker 1: I think that expectations for everyone, UM, workers, families, businesses, 213 00:11:57,760 --> 00:12:01,320 Speaker 1: in America, in China, around the world UM should be 214 00:12:01,559 --> 00:12:09,040 Speaker 1: that President Biden is committed to bringing a thoughtful, deliberate, strategic, 215 00:12:09,360 --> 00:12:12,880 Speaker 1: and ultimately effective approach to the challenges that we have 216 00:12:13,280 --> 00:12:15,160 Speaker 1: as well as the opportunities that we have in this 217 00:12:15,520 --> 00:12:19,800 Speaker 1: profoundly consequential trade relationship. W t O director and Gozi 218 00:12:19,920 --> 00:12:24,240 Speaker 1: on koja O Wala is encouraged by possible thawing between 219 00:12:24,240 --> 00:12:27,960 Speaker 1: the United States and China. There's quite a bit of 220 00:12:28,679 --> 00:12:32,240 Speaker 1: optimism that has been attached to the opening up of China, 221 00:12:32,640 --> 00:12:35,440 Speaker 1: and I think the meeting of Vielen and Luther is 222 00:12:35,440 --> 00:12:38,720 Speaker 1: a good sign, but I think we should also keep 223 00:12:38,720 --> 00:12:42,760 Speaker 1: it in check. Mary Callahan Urdos of JP Morgan says 224 00:12:42,800 --> 00:12:46,480 Speaker 1: she's seeing some hopeful signs out of China already, having 225 00:12:46,520 --> 00:12:49,320 Speaker 1: come back from Hong Kong just a few weeks ago. 226 00:12:49,640 --> 00:12:52,800 Speaker 1: You can just see the pent up demand of what's there. 227 00:12:52,840 --> 00:12:54,959 Speaker 1: People wanting to go in country, people wanting to come 228 00:12:55,000 --> 00:12:57,280 Speaker 1: out of country to travel around the world. I think 229 00:12:57,320 --> 00:13:00,199 Speaker 1: the opening up of China, while while we'll have that's 230 00:13:00,280 --> 00:13:02,720 Speaker 1: ups and downs, uh, it will hopefully be a net 231 00:13:02,760 --> 00:13:05,760 Speaker 1: exporter of deflation, which would be good for the world, 232 00:13:06,040 --> 00:13:08,679 Speaker 1: getting all of those kinks out of the system, uh 233 00:13:08,720 --> 00:13:11,640 Speaker 1: and really bringing back growth in a in a positive way. 234 00:13:11,800 --> 00:13:14,640 Speaker 1: So I'm looking forward to that. I just say for 235 00:13:14,720 --> 00:13:17,719 Speaker 1: us at JP Morgan, getting to see our people who 236 00:13:17,760 --> 00:13:19,800 Speaker 1: are on the ground in China and have been working 237 00:13:20,120 --> 00:13:23,240 Speaker 1: so hard throughout these many years um of us not 238 00:13:23,280 --> 00:13:25,559 Speaker 1: being able to travel in We're really excited about that. 239 00:13:25,880 --> 00:13:29,520 Speaker 1: We're looking forward um to lots of good reunions, UM 240 00:13:29,559 --> 00:13:31,680 Speaker 1: and the like. But people are really excited, and I 241 00:13:31,679 --> 00:13:33,720 Speaker 1: think it means a lot of things. The tone that 242 00:13:33,800 --> 00:13:36,960 Speaker 1: you're hearing from many that are that are either going 243 00:13:37,000 --> 00:13:39,840 Speaker 1: in already and or just listening to some of the 244 00:13:39,920 --> 00:13:44,600 Speaker 1: conversations here today are really positive about what could be happening. 245 00:13:45,320 --> 00:13:49,200 Speaker 1: And of course there's all sorts of um negotiations that 246 00:13:49,240 --> 00:13:51,040 Speaker 1: have to happen to make sure that people do things 247 00:13:51,040 --> 00:13:53,800 Speaker 1: in the right way, that people work forward to cooperation 248 00:13:54,480 --> 00:13:57,080 Speaker 1: on a fair and even playing field. And I think 249 00:13:57,120 --> 00:13:59,080 Speaker 1: that those are the important conversations that had to be 250 00:13:59,160 --> 00:14:01,800 Speaker 1: that have to be head But now that we can 251 00:14:01,840 --> 00:14:03,280 Speaker 1: do them in person, it's going to be a hell 252 00:14:03,360 --> 00:14:05,480 Speaker 1: of a lot more fruitful to be able to do 253 00:14:05,520 --> 00:14:07,600 Speaker 1: it that way than to try and do these things 254 00:14:07,880 --> 00:14:09,800 Speaker 1: on some kind of a flat screen where you're not 255 00:14:09,960 --> 00:14:12,600 Speaker 1: you're not able to have those personal connections that are 256 00:14:12,640 --> 00:14:17,359 Speaker 1: so important when you're going through through these negotiations. For years, environmental, 257 00:14:17,440 --> 00:14:21,400 Speaker 1: social and governance investing was all the rage, but it's 258 00:14:21,440 --> 00:14:24,680 Speaker 1: become something of a political hot potato recently, with eighteen 259 00:14:24,720 --> 00:14:28,200 Speaker 1: states now either enacting or proposing legislation to bar state 260 00:14:28,240 --> 00:14:31,280 Speaker 1: governments from dealing with any financial institutions that take e 261 00:14:31,480 --> 00:14:35,200 Speaker 1: s G into account in their investing. We asked Jane Fraser, 262 00:14:35,320 --> 00:14:38,480 Speaker 1: CEO of City, whether her bank has lost any money 263 00:14:38,520 --> 00:14:40,440 Speaker 1: because of E S g and she had a very 264 00:14:40,480 --> 00:14:44,760 Speaker 1: simple direct answer, no, um. But but I think that's 265 00:14:44,800 --> 00:14:47,400 Speaker 1: not really where we're focused. So when we look at it, 266 00:14:47,440 --> 00:14:50,080 Speaker 1: the world's got a number of major transitions that we're 267 00:14:50,080 --> 00:14:52,720 Speaker 1: going through, and to your point, these aren't These aren't 268 00:14:52,720 --> 00:14:56,760 Speaker 1: easy ones. So where we're focused on is helping let's 269 00:14:56,760 --> 00:14:59,520 Speaker 1: take climate, we're trying to make sure that there is 270 00:15:00,040 --> 00:15:04,000 Speaker 1: both the realization of energy security for the world, which 271 00:15:04,080 --> 00:15:07,640 Speaker 1: is critically important for economic growth. At the same time 272 00:15:08,040 --> 00:15:10,680 Speaker 1: is that there is the investment and the innovation required 273 00:15:10,680 --> 00:15:15,720 Speaker 1: in sustainable, green sources of energy and cleaner sources of energy, 274 00:15:15,800 --> 00:15:18,200 Speaker 1: and we've got to solve both of them together. They're 275 00:15:18,240 --> 00:15:22,160 Speaker 1: not mutually exclusive, um. So our focus is trying to 276 00:15:22,200 --> 00:15:24,960 Speaker 1: move the noise out the way and actually roll up 277 00:15:24,960 --> 00:15:28,400 Speaker 1: our sleeves and get on with the hard work of 278 00:15:28,440 --> 00:15:32,200 Speaker 1: how do we um help support our clients who are 279 00:15:32,240 --> 00:15:35,320 Speaker 1: investing in the innovations, get them to scale that we'll 280 00:15:35,360 --> 00:15:38,760 Speaker 1: get those cleaner technologies that we need up and running 281 00:15:39,120 --> 00:15:42,000 Speaker 1: at the same time as supporting clients who are also 282 00:15:42,120 --> 00:15:46,080 Speaker 1: critical sources of energy for the world right now and 283 00:15:46,120 --> 00:15:49,360 Speaker 1: helping them with that transition. But recognizing this takes time. 284 00:15:50,320 --> 00:15:53,520 Speaker 1: Black Ruck, CEO Larry Think went even further to say 285 00:15:53,520 --> 00:15:56,200 Speaker 1: that at least in Europe, if you do not have 286 00:15:56,240 --> 00:15:59,120 Speaker 1: a lens towards a de carbonization, you're not gonna win 287 00:15:59,240 --> 00:16:04,000 Speaker 1: one one year old business. You know, we are one 288 00:16:04,040 --> 00:16:07,800 Speaker 1: of the largest hydrocarbon if not the largest hydrocarbon investor 289 00:16:07,840 --> 00:16:10,760 Speaker 1: in the world, because we're the largest index er and 290 00:16:10,800 --> 00:16:13,040 Speaker 1: we we work with all these different companies. At the 291 00:16:13,080 --> 00:16:15,920 Speaker 1: same time, we're one of the fastest growing companies related 292 00:16:15,960 --> 00:16:19,360 Speaker 1: to de carbonization. And let's be clear, the IRA in 293 00:16:19,360 --> 00:16:22,560 Speaker 1: the United States is a game changer too, whether banks 294 00:16:22,600 --> 00:16:25,120 Speaker 1: are losing money or making money from e s g. 295 00:16:25,360 --> 00:16:27,040 Speaker 1: The one thing everything can agree and we need to 296 00:16:27,040 --> 00:16:28,800 Speaker 1: know what it is and by the way, how to 297 00:16:28,880 --> 00:16:31,440 Speaker 1: measure it. Something that Brian moynihan, the head of Bank 298 00:16:31,440 --> 00:16:34,000 Speaker 1: of America, has been working on in his capacity as 299 00:16:34,120 --> 00:16:38,800 Speaker 1: chair of the International Business Council for the World Economic Forum. 300 00:16:38,840 --> 00:16:42,520 Speaker 1: We started many years ago thinking about how the private 301 00:16:42,560 --> 00:16:46,239 Speaker 1: sector had to make the changes to drive the economies. 302 00:16:46,280 --> 00:16:48,040 Speaker 1: And then, you know, with all going on in the 303 00:16:48,040 --> 00:16:50,560 Speaker 1: public sector, with all going on in debt levels and 304 00:16:50,600 --> 00:16:52,560 Speaker 1: all that stuff, and so we sat there and said, Okay, 305 00:16:52,560 --> 00:16:53,640 Speaker 1: what do you need to do that, and what you 306 00:16:53,640 --> 00:16:55,640 Speaker 1: need to do that was defining a set of standards 307 00:16:55,680 --> 00:16:57,520 Speaker 1: that we believe of the right standards, and then we've 308 00:16:57,520 --> 00:17:00,240 Speaker 1: got to stop from having a proliferation standards. So there's 309 00:17:00,920 --> 00:17:03,560 Speaker 1: at one point there was gonna be six hundred uh 310 00:17:03,600 --> 00:17:05,840 Speaker 1: in two thousand scheduled be I think in North America, 311 00:17:05,920 --> 00:17:09,960 Speaker 1: like six hundred uh seminars on metrics. Yes, you know, 312 00:17:10,320 --> 00:17:12,280 Speaker 1: and we've got stuffed to So we've come up with 313 00:17:12,359 --> 00:17:15,800 Speaker 1: straightforward metrics that match the STGs and these other things 314 00:17:15,800 --> 00:17:18,000 Speaker 1: that people talk about, their straightforward metrics that say, you know, 315 00:17:18,080 --> 00:17:20,480 Speaker 1: are we good for our our customers, yes? Are we 316 00:17:20,520 --> 00:17:23,600 Speaker 1: good for our teammatess, are we good for our shareholders yes? 317 00:17:23,600 --> 00:17:26,160 Speaker 1: And are we good for society? Yes? Yeah. That that's 318 00:17:26,200 --> 00:17:28,080 Speaker 1: how we drive a company. And and so we're saying 319 00:17:28,080 --> 00:17:30,399 Speaker 1: if you disclose those metrics, then people can see what 320 00:17:30,400 --> 00:17:34,000 Speaker 1: you're doing. It is not just investors and financial firms 321 00:17:34,040 --> 00:17:36,480 Speaker 1: that are concerned with climate and what can be done 322 00:17:36,480 --> 00:17:38,760 Speaker 1: about it. Tech is also moving into the area. As 323 00:17:38,800 --> 00:17:42,760 Speaker 1: we talked to Gary Cohen, he's now vice chair of IBM. 324 00:17:42,800 --> 00:17:45,879 Speaker 1: So environment is really important and as a technology company, 325 00:17:45,880 --> 00:17:48,560 Speaker 1: we think about how we can help our clients and 326 00:17:48,600 --> 00:17:50,760 Speaker 1: we look at the We look at climate no different 327 00:17:50,760 --> 00:17:53,320 Speaker 1: than any other sort of business operation. First of all, 328 00:17:53,359 --> 00:17:55,800 Speaker 1: it's a data problem. It's a big data problem. So 329 00:17:55,840 --> 00:17:57,800 Speaker 1: you have to collect the data and you have to 330 00:17:57,840 --> 00:18:00,640 Speaker 1: get it into a usable format. That's something that IBM 331 00:18:00,720 --> 00:18:03,159 Speaker 1: really thrives on is we help people collect data, we 332 00:18:03,240 --> 00:18:06,399 Speaker 1: help getting into usable format. Once you have the data, 333 00:18:06,720 --> 00:18:09,000 Speaker 1: you need the technology, you need the software, you need 334 00:18:09,000 --> 00:18:12,199 Speaker 1: the analytor the tools to start evaluating the data. So 335 00:18:12,200 --> 00:18:15,040 Speaker 1: you've not got a baseline. You're evaluating your data. You 336 00:18:15,080 --> 00:18:18,040 Speaker 1: know how much carbon you're admitting. Now, once you know 337 00:18:18,080 --> 00:18:20,880 Speaker 1: how much carbon you're admitting, you can go through policies 338 00:18:20,880 --> 00:18:23,560 Speaker 1: and procedures to change the way you're running your business, 339 00:18:23,560 --> 00:18:25,960 Speaker 1: how you're running your business, and you can measure success 340 00:18:26,160 --> 00:18:29,080 Speaker 1: so you operationalize it and you become much more efficient 341 00:18:29,119 --> 00:18:31,480 Speaker 1: at running your business. Once you have the technology and 342 00:18:31,480 --> 00:18:33,160 Speaker 1: once you have the data in a in a way 343 00:18:33,160 --> 00:18:36,160 Speaker 1: that's useful to you as a company. As Global, Wall 344 00:18:36,160 --> 00:18:39,080 Speaker 1: Street talked about climate and Davos. One of the main 345 00:18:39,160 --> 00:18:42,639 Speaker 1: topics of conversation where those electric vehicle tax credits in 346 00:18:42,680 --> 00:18:45,280 Speaker 1: the Inflation Reduction Act, which the United States is is 347 00:18:45,320 --> 00:18:48,320 Speaker 1: a big step toward clean energy, but Europe is very 348 00:18:48,359 --> 00:18:51,600 Speaker 1: concerned that it's actually protectionist because the favoral treatment it 349 00:18:51,640 --> 00:18:55,639 Speaker 1: gives for US manufactured batteries. Democratics. Senator Joe Mansion of 350 00:18:55,680 --> 00:18:58,919 Speaker 1: West Virginia came to Davos to talk about energy and 351 00:18:58,920 --> 00:19:02,000 Speaker 1: why he thinks the US approach makes really good sense. 352 00:19:03,040 --> 00:19:04,760 Speaker 1: They've been coming to me for years saying, you've got 353 00:19:04,760 --> 00:19:07,679 Speaker 1: to have a carbon tax, You've got to have a 354 00:19:07,720 --> 00:19:11,880 Speaker 1: carbon fee. And I said, we don't have any any 355 00:19:11,880 --> 00:19:15,040 Speaker 1: other choices except to use fossil right now, because we 356 00:19:15,080 --> 00:19:17,320 Speaker 1: don't have the horse power to run our economy in 357 00:19:17,320 --> 00:19:19,840 Speaker 1: our country. But you want to penallyze people thinking it'll 358 00:19:19,840 --> 00:19:22,880 Speaker 1: make them do it quicker. I never used I never 359 00:19:22,920 --> 00:19:25,560 Speaker 1: thought that would work. I thought incentives work better. And 360 00:19:25,560 --> 00:19:28,200 Speaker 1: guess what, the Europeans have used the carbon tax and 361 00:19:28,240 --> 00:19:30,800 Speaker 1: carbon fees forever. We come along all of a sudden 362 00:19:30,800 --> 00:19:33,040 Speaker 1: and do something, and we says we're gonna incentivize you. 363 00:19:33,600 --> 00:19:35,840 Speaker 1: We're gonna help be your partner and take some of 364 00:19:35,840 --> 00:19:37,959 Speaker 1: the risk out, but you're gonna have to invest. We're 365 00:19:38,000 --> 00:19:39,680 Speaker 1: not send you a check. You've got to have either 366 00:19:39,720 --> 00:19:42,720 Speaker 1: production tax credits or investment investment. Tell me which way 367 00:19:42,760 --> 00:19:44,920 Speaker 1: you're going we're gonna work with you. You're gonna have 368 00:19:44,960 --> 00:19:48,080 Speaker 1: a tenure runway, but that ten uere runway where the 369 00:19:48,080 --> 00:19:50,120 Speaker 1: I ra A and I know the administration has been 370 00:19:50,119 --> 00:19:53,480 Speaker 1: telling this as an environmental bill, environmental bill, This is 371 00:19:53,520 --> 00:19:56,720 Speaker 1: truly an energy security bill, and we need everything, but 372 00:19:56,800 --> 00:19:59,159 Speaker 1: we need a horse power from fossil for ten years 373 00:20:00,160 --> 00:20:02,080 Speaker 1: win I mean not win, but as far as in 374 00:20:02,119 --> 00:20:04,800 Speaker 1: cold gas and all, but do it cleaner than anywhere. 375 00:20:05,320 --> 00:20:10,000 Speaker 1: That's climate, that's helping the climate. Coming up, we turned 376 00:20:10,000 --> 00:20:13,040 Speaker 1: to what we learned to Davos about inclusive growth and 377 00:20:13,080 --> 00:20:17,600 Speaker 1: what Global Wall Street can do for developing countries falling behind. 378 00:20:26,760 --> 00:20:29,360 Speaker 1: This is a special edition of Wall Street Week from 379 00:20:29,600 --> 00:20:32,760 Speaker 1: the World Economic Forum. I'm David weston Global wall Street 380 00:20:32,840 --> 00:20:35,040 Speaker 1: wasn't just focused on the developed world when it came 381 00:20:35,080 --> 00:20:37,560 Speaker 1: to Davos. The developing world also got a fair amount 382 00:20:37,560 --> 00:20:41,520 Speaker 1: of attention, starting with Sub Saharan Africa, which cities Jane 383 00:20:41,520 --> 00:20:45,639 Speaker 1: Fraser says is very much on her client's mind. A 384 00:20:45,680 --> 00:20:49,480 Speaker 1: lot of the discussions we're having, particularly interestingly with a 385 00:20:49,520 --> 00:20:51,879 Speaker 1: lot of our mid least and clients is what are 386 00:20:51,880 --> 00:20:55,600 Speaker 1: they doing about Africa? And I think Africa is one 387 00:20:55,680 --> 00:20:57,800 Speaker 1: that we've all got to keep our mind on because 388 00:20:58,200 --> 00:21:00,200 Speaker 1: that is where the net growth in the world force 389 00:21:00,320 --> 00:21:03,240 Speaker 1: is going to come over the next few decades. UM. 390 00:21:03,280 --> 00:21:06,520 Speaker 1: If we get it right, it's a wonderful opportunity. If 391 00:21:06,560 --> 00:21:08,800 Speaker 1: we don't, it's going to cause a lot of problems, 392 00:21:08,880 --> 00:21:11,440 Speaker 1: both in Africa as well as in Europe as well 393 00:21:11,440 --> 00:21:14,040 Speaker 1: as other parts of the world. And so looking at 394 00:21:14,080 --> 00:21:18,000 Speaker 1: how do we build out transmission networks, greenness, supply chains 395 00:21:18,080 --> 00:21:22,119 Speaker 1: there and the Biden administration echoes what city is hearing 396 00:21:22,119 --> 00:21:25,040 Speaker 1: from its clients. As the United States Trade Representive Catherine 397 00:21:25,080 --> 00:21:29,600 Speaker 1: tied laid out plans to support and engage Africa and 398 00:21:29,680 --> 00:21:34,080 Speaker 1: described the great opportunities for the world economy there. President 399 00:21:34,080 --> 00:21:38,320 Speaker 1: Biden hosted the African leaders at a summit in December 400 00:21:38,359 --> 00:21:41,200 Speaker 1: in Washington, d c. And um, I think it came 401 00:21:41,240 --> 00:21:45,240 Speaker 1: at just the right time. The message that we wanted 402 00:21:45,280 --> 00:21:48,320 Speaker 1: to send across the board, across the administration was that 403 00:21:49,160 --> 00:21:53,800 Speaker 1: America is ready to partner with Africa, to work for 404 00:21:54,480 --> 00:22:00,520 Speaker 1: Africa with Africa on trade. We've got our baseline trade program. 405 00:22:00,680 --> 00:22:03,439 Speaker 1: It's a preference program. It's called the African Growth and 406 00:22:03,520 --> 00:22:08,840 Speaker 1: Opportunity Act. It is um set to be um reauthorized 407 00:22:09,520 --> 00:22:13,600 Speaker 1: in now is exactly the right time to be reviewing 408 00:22:14,200 --> 00:22:17,440 Speaker 1: what performance has been, like how effective has this been 409 00:22:17,560 --> 00:22:23,040 Speaker 1: in UM stimulating and fostering development, economic development and investment 410 00:22:23,440 --> 00:22:26,920 Speaker 1: UH in our partner economies, and then also to start 411 00:22:26,960 --> 00:22:29,600 Speaker 1: thinking how do we make this better and more effective. 412 00:22:30,000 --> 00:22:32,879 Speaker 1: It is very clear from all of the engagements that 413 00:22:32,960 --> 00:22:37,199 Speaker 1: we had last December in Washington, d C. Including um 414 00:22:37,280 --> 00:22:40,320 Speaker 1: my trip to Nairobi for President Ruto's inauguration in September 415 00:22:40,680 --> 00:22:44,640 Speaker 1: UM the future really is Africa. The resources in Africa, 416 00:22:45,160 --> 00:22:47,360 Speaker 1: whether they are in the ground or that they are 417 00:22:48,200 --> 00:22:52,760 Speaker 1: the human beings, the people of Africa. The potential is tremendous. 418 00:22:53,280 --> 00:22:58,040 Speaker 1: If we can find the way through trade, economics, investment, 419 00:22:58,240 --> 00:23:03,439 Speaker 1: finance to un lock the potential of Africa and its people, 420 00:23:04,480 --> 00:23:08,320 Speaker 1: Africa could be the engine that drives economic growth and 421 00:23:08,359 --> 00:23:11,720 Speaker 1: prosperity for the next phase of globalization. But it is 422 00:23:11,760 --> 00:23:14,560 Speaker 1: going to require us to think big and to be 423 00:23:14,640 --> 00:23:17,960 Speaker 1: creative because the tools that we have so far UM 424 00:23:18,400 --> 00:23:21,199 Speaker 1: haven't done what we know we need to do in 425 00:23:21,240 --> 00:23:23,960 Speaker 1: this next phase. President but also just recently traveled to 426 00:23:24,000 --> 00:23:28,159 Speaker 1: Mexico City for a North American Summit meeting with the 427 00:23:28,200 --> 00:23:31,000 Speaker 1: head of Canada Mexico as well as President. But there 428 00:23:31,000 --> 00:23:34,520 Speaker 1: are trade issues pending under the UMCS, U S m 429 00:23:34,560 --> 00:23:38,320 Speaker 1: C and other places involving energy. Where did those stand? 430 00:23:38,320 --> 00:23:41,680 Speaker 1: Are they being resolved? What's the timetable? So? UM, there 431 00:23:41,760 --> 00:23:45,040 Speaker 1: is an energy consultation that we are engaged in right now. 432 00:23:45,680 --> 00:23:48,800 Speaker 1: Both the United States and Canada have requested consultations with 433 00:23:49,040 --> 00:23:56,240 Speaker 1: UM with Mexico, those consultations are ongoing. UM. We UH 434 00:23:56,600 --> 00:23:59,920 Speaker 1: have certainly gotten Mexico's attention. They know we cared deep 435 00:24:00,119 --> 00:24:04,800 Speaker 1: about this. Our economies are and have been inextricably linked 436 00:24:05,119 --> 00:24:08,840 Speaker 1: for many decades now, and we are the claim of partners. 437 00:24:09,160 --> 00:24:12,680 Speaker 1: We are neighbors. Geography is never going to change. We're 438 00:24:12,680 --> 00:24:17,159 Speaker 1: going to be neighbors forever. So these are really important conversations. 439 00:24:17,200 --> 00:24:21,840 Speaker 1: They're about energy policy, they're about um our vision for 440 00:24:21,920 --> 00:24:25,919 Speaker 1: a competitive North American future. UH. We are still in 441 00:24:25,960 --> 00:24:30,640 Speaker 1: consultations UM, and we're committed to finding a solution here 442 00:24:31,040 --> 00:24:34,280 Speaker 1: using whatever tools are available, including the ones under the 443 00:24:34,359 --> 00:24:37,320 Speaker 1: U s n C. A. The pandemic drove home so 444 00:24:37,480 --> 00:24:40,800 Speaker 1: the great disparities between the developing and the developed world. 445 00:24:41,480 --> 00:24:45,240 Speaker 1: FISER Chairman and CEO Albert Borla explained how the mRNA 446 00:24:45,359 --> 00:24:48,080 Speaker 1: vaccine that his company developed with Beyond Tech was made 447 00:24:48,119 --> 00:24:51,000 Speaker 1: available for free, and how that has led to a 448 00:24:51,080 --> 00:24:56,320 Speaker 1: much broader initiative the vaccines port, the Gero vaccine, those 449 00:24:56,440 --> 00:25:00,000 Speaker 1: all convers in the world where offered completely free through 450 00:25:00,119 --> 00:25:03,760 Speaker 1: a brave move that the government made. The US government, 451 00:25:03,760 --> 00:25:06,520 Speaker 1: they bought one billion dollars from much at costs and 452 00:25:06,560 --> 00:25:09,000 Speaker 1: they offered it for free to the world. Unfortunately, they 453 00:25:09,040 --> 00:25:12,000 Speaker 1: were not able to observe it because there's no demand 454 00:25:12,560 --> 00:25:14,919 Speaker 1: for those vacans in unfortunately the poorest of the countries. 455 00:25:15,000 --> 00:25:19,879 Speaker 1: But nevertheless that gave us the whole story with with 456 00:25:19,960 --> 00:25:23,960 Speaker 1: COVID sensities even more so. Nine months ago here in Davos, 457 00:25:24,160 --> 00:25:26,840 Speaker 1: we launched an accord where we said that Fighter will 458 00:25:26,920 --> 00:25:30,240 Speaker 1: offer all the pattern protecting products, which makes the products 459 00:25:30,280 --> 00:25:35,880 Speaker 1: that generic manufacturers cannot make chip copies at cost. And 460 00:25:36,080 --> 00:25:39,960 Speaker 1: they say, of course these manufacturer and send no regulatory, 461 00:25:40,320 --> 00:25:44,960 Speaker 1: no compliance, no legal, no administrative, no research. We announced 462 00:25:45,000 --> 00:25:48,240 Speaker 1: not all our pattern protected, but all our products. This 463 00:25:48,280 --> 00:25:52,280 Speaker 1: moves at least from twenty three products to over five hundred. Wow, 464 00:25:52,320 --> 00:25:54,879 Speaker 1: so it's not just always pan pan protected, it everything. 465 00:25:55,680 --> 00:25:58,359 Speaker 1: Of course we're hearing when we're we're giving for example, 466 00:25:58,359 --> 00:26:01,560 Speaker 1: would give them maybe the most prescribe rist canster medicine 467 00:26:01,600 --> 00:26:03,919 Speaker 1: in the world, high technology, but they would say, we 468 00:26:03,960 --> 00:26:07,200 Speaker 1: have also needs for antibiotics, you have needs for anti parasitics, 469 00:26:07,240 --> 00:26:13,399 Speaker 1: you have needs for anesthetics or basic chemotherapy, and we 470 00:26:13,520 --> 00:26:15,560 Speaker 1: help them and then we do everything. I would say 471 00:26:15,600 --> 00:26:18,560 Speaker 1: that sounds wonderful. Absolutely, it is wonderful. Why did you 472 00:26:18,600 --> 00:26:21,120 Speaker 1: do it because you ow to do it? I don't 473 00:26:21,160 --> 00:26:24,359 Speaker 1: think it is. There is no reason why the poorest 474 00:26:24,359 --> 00:26:26,600 Speaker 1: cantus in the world right now, who won't have access 475 00:26:26,600 --> 00:26:29,240 Speaker 1: to the same medicines that kids in America or in 476 00:26:29,280 --> 00:26:31,480 Speaker 1: France are heavy. One of the reasons I think FISER 477 00:26:31,520 --> 00:26:33,320 Speaker 1: has been a successful it has been because there's been 478 00:26:33,359 --> 00:26:37,680 Speaker 1: investment in science. Basically, what about larger for the US 479 00:26:37,720 --> 00:26:40,080 Speaker 1: government and other governments. Are we investing enough in basic 480 00:26:40,240 --> 00:26:42,920 Speaker 1: R and D? Could that help you? I think we'd help. 481 00:26:43,160 --> 00:26:45,040 Speaker 1: And I think there is a lot of work happening, 482 00:26:45,080 --> 00:26:47,960 Speaker 1: particularly in the US. And this is why in the 483 00:26:48,040 --> 00:26:51,000 Speaker 1: US has attracted all the research investments of the private sector. 484 00:26:51,040 --> 00:26:54,359 Speaker 1: If you see what's going on, even uh companies that 485 00:26:54,359 --> 00:26:57,640 Speaker 1: there are European companies are doing most of their research 486 00:26:57,720 --> 00:27:00,040 Speaker 1: in the US because this is where things are and 487 00:27:00,240 --> 00:27:03,400 Speaker 1: I think it is the crown zoo of the US 488 00:27:03,520 --> 00:27:06,280 Speaker 1: industry with their life sciences. You know, healthcare so terribly well. 489 00:27:06,359 --> 00:27:07,920 Speaker 1: Dr Borling, let me ask you what you think the 490 00:27:07,920 --> 00:27:11,879 Speaker 1: biggest challenge is actually having the drugs, the pharmaceuticals to 491 00:27:12,000 --> 00:27:14,840 Speaker 1: administer or is it actually the infrastructure Taken a dollar 492 00:27:14,880 --> 00:27:17,520 Speaker 1: you mentioned earlier that you actually couldn't get some of 493 00:27:17,520 --> 00:27:20,080 Speaker 1: the COVID vaccines some countries that needed it. There's no 494 00:27:20,119 --> 00:27:23,600 Speaker 1: doubt in Africa. It is not the availability of the products. 495 00:27:23,680 --> 00:27:25,000 Speaker 1: Of course, you need to have them, and you need 496 00:27:25,040 --> 00:27:27,159 Speaker 1: to have them in prices that you can pay. But 497 00:27:27,320 --> 00:27:30,920 Speaker 1: once you resolve up which with US deep, you're going 498 00:27:30,960 --> 00:27:33,399 Speaker 1: to have very big problems with infrastructure. You don't have 499 00:27:33,480 --> 00:27:37,040 Speaker 1: the right healthcare professionals to ad minister to make the diagnosis. 500 00:27:37,720 --> 00:27:40,000 Speaker 1: This is where we should help. This is where it 501 00:27:40,040 --> 00:27:43,520 Speaker 1: should help us included. One of the ways those in 502 00:27:43,520 --> 00:27:46,320 Speaker 1: the developing world are addressing the needs that they have 503 00:27:46,560 --> 00:27:49,159 Speaker 1: is by migrating, something that has created a crisis the 504 00:27:49,200 --> 00:27:51,880 Speaker 1: United States along the southern border, but back of America 505 00:27:52,119 --> 00:27:55,399 Speaker 1: CEO Brian moynihan says that the biggest challenge ahead for 506 00:27:55,400 --> 00:27:58,399 Speaker 1: the U s economy is not keeping people out, but 507 00:27:58,520 --> 00:28:01,840 Speaker 1: getting more workers in of the country. I think we're 508 00:28:01,840 --> 00:28:05,360 Speaker 1: getting a lesson right now in the fact that America 509 00:28:05,560 --> 00:28:07,720 Speaker 1: is this wonderful place for people to work and live 510 00:28:07,800 --> 00:28:11,800 Speaker 1: and prosper. And you know the problem is we need 511 00:28:11,840 --> 00:28:15,200 Speaker 1: more people. We just need more capacity. And the point 512 00:28:15,240 --> 00:28:17,479 Speaker 1: I always say, when people say this anything, it says, well, 513 00:28:17,480 --> 00:28:20,040 Speaker 1: it takes eighteen year year eighteen years to get an 514 00:28:20,080 --> 00:28:23,320 Speaker 1: eighteen year old. That is science, and nobody can refute. Okay, 515 00:28:23,400 --> 00:28:25,240 Speaker 1: So if we're gonna have enough workers to do all this, 516 00:28:25,400 --> 00:28:27,679 Speaker 1: all this near shore and all this on shoring to 517 00:28:27,880 --> 00:28:30,480 Speaker 1: put up the wind you know, the windmill is all 518 00:28:30,520 --> 00:28:32,879 Speaker 1: over Texas and alcohol in places that are being built 519 00:28:32,880 --> 00:28:35,000 Speaker 1: that put up the solar fields, to build the pipelines. 520 00:28:35,160 --> 00:28:36,840 Speaker 1: We've got to get some people in this country, and 521 00:28:37,200 --> 00:28:39,360 Speaker 1: so we have to forgot a way to do what 522 00:28:39,440 --> 00:28:43,680 Speaker 1: it works. Surprisingly given the tight job market, particularly United States, 523 00:28:43,720 --> 00:28:46,360 Speaker 1: it's the challenge of making sure workers at the bottom 524 00:28:46,360 --> 00:28:50,200 Speaker 1: are making a living wage is not going away. Neila Richardson, 525 00:28:50,240 --> 00:28:53,760 Speaker 1: she's chief economists a DP, came to Switzerland to address 526 00:28:53,880 --> 00:28:58,080 Speaker 1: this very issue. There's a big gap between market wages. 527 00:28:58,680 --> 00:29:02,400 Speaker 1: Minimum wage to is that are instituted by governments and 528 00:29:02,600 --> 00:29:05,160 Speaker 1: what it takes to actually survive in this world in 529 00:29:05,240 --> 00:29:09,400 Speaker 1: terms of housing, basic necessities, food, clothing, shelter, and then 530 00:29:09,400 --> 00:29:13,200 Speaker 1: the context of high inflation. Even as it moderates, it 531 00:29:13,280 --> 00:29:16,320 Speaker 1: doesn't mean that those prices are going down. They've already 532 00:29:16,360 --> 00:29:18,920 Speaker 1: gone up. They're just going to grow more slowly. So 533 00:29:19,000 --> 00:29:22,680 Speaker 1: for the typical worker, their wages haven't kept up with inflation, 534 00:29:22,960 --> 00:29:26,360 Speaker 1: and even before the pandemic, their wages weren't keeping up 535 00:29:26,680 --> 00:29:29,320 Speaker 1: for the lower end of the of the paid workers 536 00:29:29,680 --> 00:29:33,040 Speaker 1: with just basic necessity. So this is a global issue 537 00:29:33,320 --> 00:29:36,200 Speaker 1: and it deserves the world's attention. Okay, so let's assume 538 00:29:36,240 --> 00:29:38,520 Speaker 1: the world actually pays attention. I hope it does. What 539 00:29:38,560 --> 00:29:41,640 Speaker 1: does it do about it? Well, there's actually benefits to 540 00:29:41,720 --> 00:29:45,320 Speaker 1: paying people fairly, believe it or not. It when companies 541 00:29:45,360 --> 00:29:47,880 Speaker 1: and there have been companies that have been very prominent 542 00:29:47,920 --> 00:29:50,400 Speaker 1: on this issue. A deco was on our panel. The 543 00:29:50,440 --> 00:29:55,880 Speaker 1: CEO Unilever made comments on living wages when on his 544 00:29:55,960 --> 00:29:59,280 Speaker 1: panel on the cost of living crisis. And what they've 545 00:29:59,320 --> 00:30:03,080 Speaker 1: identified is there's actually benefits to paying people fairly. It 546 00:30:03,160 --> 00:30:06,680 Speaker 1: leads to more engagement, it leads to more retention, and 547 00:30:06,720 --> 00:30:09,080 Speaker 1: at least to something that the world should really want 548 00:30:09,160 --> 00:30:14,640 Speaker 1: right now, social stability when workers are secure. Coming up, 549 00:30:14,640 --> 00:30:17,160 Speaker 1: We're here from special contribute to Larry Summers of Harvard 550 00:30:17,440 --> 00:30:21,000 Speaker 1: on the big issues facing global Wall Street and why 551 00:30:21,160 --> 00:30:24,200 Speaker 1: he may just maybe a little bit more optimistic than 552 00:30:24,240 --> 00:30:38,560 Speaker 1: he's been. This is Wall Street Week on Bloomberg. This 553 00:30:38,640 --> 00:30:40,520 Speaker 1: is a special Davos edition of Wall Street Week, and 554 00:30:40,560 --> 00:30:42,960 Speaker 1: I'm David West and Larry Summers, our regular contributor here 555 00:30:43,000 --> 00:30:45,360 Speaker 1: in Wall Street. We came with us to Davos to 556 00:30:45,400 --> 00:30:47,720 Speaker 1: talk about some of the big issues on the agenda, 557 00:30:48,000 --> 00:30:50,640 Speaker 1: and we started with him about that debt ceiling crisis 558 00:30:50,640 --> 00:30:52,600 Speaker 1: back in the United States that is getting so much 559 00:30:52,640 --> 00:30:56,360 Speaker 1: attention right here at the World Economic Forum. This is 560 00:30:56,440 --> 00:31:02,239 Speaker 1: potential tragedy. Is farce. Uh, it would be catastrophic and 561 00:31:02,400 --> 00:31:08,000 Speaker 1: inconceivable for the United States to default. It's not what 562 00:31:08,080 --> 00:31:11,880 Speaker 1: anybody serious does. We have problems that our family or 563 00:31:11,920 --> 00:31:15,160 Speaker 1: discussions about how my kids spend money. Maybe my kids 564 00:31:15,200 --> 00:31:17,720 Speaker 1: will pay off visa, maybe I will pay off visa. 565 00:31:18,040 --> 00:31:20,520 Speaker 1: But the idea that the family should stiff visa because 566 00:31:20,560 --> 00:31:26,000 Speaker 1: we can't agree is absurd. Similarly, UH, the debt limit 567 00:31:26,480 --> 00:31:29,239 Speaker 1: I've been through a lot of these. I think at 568 00:31:29,280 --> 00:31:33,320 Speaker 1: the end of the day, we will meet our obligations 569 00:31:33,480 --> 00:31:38,920 Speaker 1: and not cause substantial disruption. But God, I wish we 570 00:31:38,960 --> 00:31:42,480 Speaker 1: could move past this UH, like Senator McConnell showed real 571 00:31:42,600 --> 00:31:48,480 Speaker 1: leadership in doing UH some time ago, because it would 572 00:31:48,480 --> 00:31:52,240 Speaker 1: be catastrophic for the United States and for our sense 573 00:31:52,400 --> 00:31:55,320 Speaker 1: is a serious country if we were to actually default. 574 00:31:55,560 --> 00:31:58,440 Speaker 1: Another big story here in Dallas, but more globally actually 575 00:31:58,600 --> 00:32:01,160 Speaker 1: is now to her the vice primary premiere of China 576 00:32:01,240 --> 00:32:03,880 Speaker 1: meeting with Jennie Ellen just over in Zurich, not far 577 00:32:03,960 --> 00:32:05,840 Speaker 1: from here, in part because let who was here, as 578 00:32:05,880 --> 00:32:09,040 Speaker 1: I understand it, in Davos to at least start a discussion. 579 00:32:09,040 --> 00:32:11,800 Speaker 1: What do you make of that? I think it's encouraging. 580 00:32:11,880 --> 00:32:15,600 Speaker 1: I had a chance to speak with him UH here 581 00:32:16,760 --> 00:32:21,920 Speaker 1: in uh Davos. Look, I think it's always better to 582 00:32:22,000 --> 00:32:26,360 Speaker 1: be talking, whether you're agreeing, whether you're disagreeing. You get 583 00:32:26,360 --> 00:32:30,800 Speaker 1: to better places with mutual understanding, and so I welcomed 584 00:32:31,000 --> 00:32:34,840 Speaker 1: UH that. I think the right approach is small victories. 585 00:32:35,280 --> 00:32:39,640 Speaker 1: We're not gonna have a broad rappers small or transformation 586 00:32:39,720 --> 00:32:43,440 Speaker 1: of the relationship. But if we have small victories, we 587 00:32:43,520 --> 00:32:49,560 Speaker 1: identify areas of progress, we have specific accomplishments. I'd like 588 00:32:49,640 --> 00:32:53,760 Speaker 1: to see that with respect to the debt problems and 589 00:32:53,840 --> 00:32:57,120 Speaker 1: debt resolution of some of the poorest countries in the world. 590 00:32:57,360 --> 00:33:01,080 Speaker 1: I'd like to see that with respect to climate finance 591 00:33:01,600 --> 00:33:06,880 Speaker 1: UH in UH the developing world. I think we can 592 00:33:07,120 --> 00:33:11,600 Speaker 1: make progress if we set our expectations and aspirations right 593 00:33:11,800 --> 00:33:15,200 Speaker 1: towards small victories. You're a macro economist, You're not a 594 00:33:15,240 --> 00:33:16,680 Speaker 1: politician as far as I know. At the same time, 595 00:33:16,720 --> 00:33:19,720 Speaker 1: you know politics in Washington. Can we make even those 596 00:33:19,720 --> 00:33:23,720 Speaker 1: small steps of progress on either side with maintaining the 597 00:33:23,720 --> 00:33:27,320 Speaker 1: support from President g and Janet Young maintains sport the 598 00:33:27,400 --> 00:33:29,120 Speaker 1: Unit States because there's a lot, as you know, political 599 00:33:29,120 --> 00:33:34,600 Speaker 1: sentiment against China. I think if we're making concessions to China, 600 00:33:35,000 --> 00:33:40,840 Speaker 1: probably not. If we're working with China to work out 601 00:33:40,880 --> 00:33:46,040 Speaker 1: an African debt problem or to support and energy transition, 602 00:33:46,640 --> 00:33:48,880 Speaker 1: then I think we can. I think we need to 603 00:33:48,880 --> 00:33:54,360 Speaker 1: get out of the zero sum UH mindset, and by 604 00:33:54,400 --> 00:33:59,200 Speaker 1: focusing on the issues in third countries, I think we've 605 00:33:59,200 --> 00:34:01,640 Speaker 1: got a much better chance of doing that. I think 606 00:34:01,640 --> 00:34:04,480 Speaker 1: it will be much harder on the direct commercial issues 607 00:34:04,840 --> 00:34:08,160 Speaker 1: between our two countries. You've been warning about the possibily 608 00:34:08,200 --> 00:34:10,920 Speaker 1: recession for some time, even saying it's more likely than not. 609 00:34:11,520 --> 00:34:13,479 Speaker 1: At the same time, things have been getting a little 610 00:34:13,520 --> 00:34:15,560 Speaker 1: better on some of the eco numbers. Where are you 611 00:34:15,640 --> 00:34:20,040 Speaker 1: right now. I'm still cautious, David, but with a little 612 00:34:20,080 --> 00:34:24,040 Speaker 1: bit more hope than I had before soft landing. So 613 00:34:24,160 --> 00:34:27,680 Speaker 1: the triumph of hope over experience. But sometimes hope does 614 00:34:27,760 --> 00:34:34,479 Speaker 1: triumph over experience. And we have seen some slowing of 615 00:34:34,760 --> 00:34:39,400 Speaker 1: inflation indicators at the same time we've seen continued strength, 616 00:34:39,520 --> 00:34:43,040 Speaker 1: and that's got to be what we all UH want 617 00:34:43,719 --> 00:34:46,560 Speaker 1: to see. I still think it's gonna be hard because 618 00:34:46,600 --> 00:34:51,560 Speaker 1: we need a substantial amount of disinflation that goes beyond 619 00:34:52,320 --> 00:34:58,359 Speaker 1: volatile components UH receding. But you have to recognize that 620 00:34:59,080 --> 00:35:01,880 Speaker 1: the figures are better than somebody like me would have 621 00:35:01,960 --> 00:35:06,040 Speaker 1: expected UH three months ago. So it's still a very 622 00:35:06,120 --> 00:35:10,160 Speaker 1: very difficult job for the Fed, but the situation does 623 00:35:10,200 --> 00:35:13,040 Speaker 1: look a bit better. That was special Wall Street Week 624 00:35:13,040 --> 00:35:17,080 Speaker 1: contributor to Larry Summers of Harvard. That concludes this special 625 00:35:17,200 --> 00:35:20,279 Speaker 1: edition of Wall Street Week. I'm David Weston. This is Bloomberg. 626 00:35:20,480 --> 00:35:21,279 Speaker 1: See you next week.