WEBVTT - Bloomberg Businessweek Weekend - September 28th, 2019 0:00:02.560 --> 0:00:06.360 This is Bloomberg Business Week from Bloomberg Radio. Hi am 0:00:06.440 --> 0:00:08.720 Jason Kelley and I'm Carol Master. Welcome to the weekend 0:00:08.840 --> 0:00:11.520 edition of Bloomberg Business Week. This week it's all about 0:00:11.560 --> 0:00:15.040 the Bloomberg Global Business Forum. This is a gathering of 0:00:15.320 --> 0:00:18.360 high level individuals from both the public and private sector. 0:00:18.440 --> 0:00:21.080 So we're talking about world leaders, we're talking about leaders 0:00:21.079 --> 0:00:25.200 of corporations, and it's all about working together, collaborations. It's 0:00:25.239 --> 0:00:29.200 big conversations, but it's also not just talk. It's action. 0:00:29.840 --> 0:00:34.120 People really sort of presenting their bona fides about what 0:00:34.159 --> 0:00:37.960 they're doing to change the world, whether it's around social responsibility, 0:00:38.000 --> 0:00:40.919 whether it's about the climate, or whether it's about just 0:00:41.080 --> 0:00:44.120 trying to figure out what's next in the world. Among 0:00:44.159 --> 0:00:47.360 the interviews you will hear over the next couple hours 0:00:47.520 --> 0:00:50.559 from the GBF as we call it, John Gray, the 0:00:50.680 --> 0:00:55.240 president of Blackstone, Bruce Flatt, the CEO of Brookfield. Together Carol, 0:00:55.360 --> 0:00:58.400 they've got a trillion dollars in assets under management, and 0:00:58.600 --> 0:01:00.520 we've even talked to a queen. We did it, indeed. 0:01:00.560 --> 0:01:02.840 But first up, we're gonna bring you a wide ranging 0:01:02.880 --> 0:01:06.199 panel discussion with the CEO and chairman of Blackstone Group 0:01:06.280 --> 0:01:08.520 Steve Schwartzman. Of course, he's also a co founder of 0:01:08.520 --> 0:01:12.120 that firm, CEO and chairman of Bank of America Brian moynihan, 0:01:12.400 --> 0:01:16.080 and a non Mahindra chairman of Mahindra Group. Steve Schwartzman 0:01:16.160 --> 0:01:21.160 kicked off the conversation talking about what he's most worried about. Jeez, 0:01:22.400 --> 0:01:26.080 there's a lot to worry about, you know, because you know, 0:01:26.360 --> 0:01:29.920 first of all, just stepping back from it, uh, you know, 0:01:30.040 --> 0:01:33.440 the social media and the Internet are making it very 0:01:33.440 --> 0:01:38.440 difficult for almost any government to function. Uh if you 0:01:38.560 --> 0:01:43.360 come out with a plan, you have instant uh mobilization 0:01:43.440 --> 0:01:47.400 of opposition to anything you're doing. Even makes it difficult 0:01:47.440 --> 0:01:52.520 for companies uh sometime with sort of this roving band 0:01:52.680 --> 0:01:59.160 of opposition. Um. And and you know, financially, um, you know, 0:01:59.240 --> 0:02:04.200 sort of the you have a few weaknesses in the system. 0:02:04.280 --> 0:02:08.760 I think that European banking system isn't is uh strong 0:02:09.000 --> 0:02:12.720 certainly as the US, which is in great shape. You 0:02:12.840 --> 0:02:18.840 have um, private investments in the technology area which that 0:02:18.960 --> 0:02:22.680 we work uh. Um, you know, sort of non public 0:02:22.760 --> 0:02:27.160 offering has exposed as as being uh you know, really 0:02:27.400 --> 0:02:30.600 uh pretty inflated. When when you when you have an 0:02:30.639 --> 0:02:34.640 industry that more or less marks up its positions, uh, 0:02:34.919 --> 0:02:39.400 you know, in a closed circle among itself, and then 0:02:39.440 --> 0:02:42.760 it pops out into the real world. The real world says, 0:02:42.800 --> 0:02:46.480 what are you thinking that? That's usually, um, you know, 0:02:46.639 --> 0:02:48.920 sort of a wake up call, but it's you know 0:02:49.000 --> 0:02:51.880 that that part of the world isn't big. That's that's 0:02:51.880 --> 0:02:56.720 a relatively small uh set um And I guess any 0:02:56.760 --> 0:02:59.440 of us on the stage, and then I'll finish, because 0:02:59.480 --> 0:03:02.560 I don't want to dominating anything. When you have thirteen 0:03:02.560 --> 0:03:07.040 trillion dollars of negative interest rates, I don't even know 0:03:07.080 --> 0:03:09.880 what a negative interest rate is. And in other words, 0:03:09.880 --> 0:03:12.040 why would I take my money and give it to 0:03:12.120 --> 0:03:15.440 somebody and for the privilege of them holding it, I 0:03:15.520 --> 0:03:20.040 have to pay them like it's a storage unit. Um. 0:03:20.160 --> 0:03:25.480 And I'm supposed to get interest when I give people money. 0:03:25.600 --> 0:03:30.120 And as as interest rates go down, uh, most of 0:03:30.160 --> 0:03:34.040 those places that have those negative interest rates, it's not stimulative. 0:03:34.320 --> 0:03:37.640 Does this negative rate environment that we increasingly see around 0:03:37.680 --> 0:03:41.160 the globe tell you that there's some underlying weakness that 0:03:41.200 --> 0:03:44.560 maybe we're missing. We know the obvious problems that are 0:03:44.560 --> 0:03:47.440 out there, but is there something more substantial? Well, I 0:03:47.440 --> 0:03:52.120 think Steve's point is right. There's the monetary policy decision 0:03:52.160 --> 0:03:54.760 to take rates as low as possible to h to 0:03:55.280 --> 0:03:57.800 accommodate the economy, accommodate growth. And they're lower in this 0:03:57.880 --> 0:04:00.440 country than I've been historically, but they're still positive and 0:04:00.440 --> 0:04:03.640 other places are negative, and there's a significant amount of it. 0:04:03.880 --> 0:04:06.080 I think there's a debate whether it actually transmits the 0:04:06.080 --> 0:04:08.920 economy because if you look in some of the countries 0:04:08.960 --> 0:04:11.480 where the rate structure has been negative for five years, 0:04:12.120 --> 0:04:15.200 the banks still have to pay consumer depositors interest because 0:04:15.840 --> 0:04:17.479 to these point, they're not gonna give us a hundred 0:04:17.480 --> 0:04:19.159 dollars and get ninety five back and think it's a 0:04:19.160 --> 0:04:21.720 great thing. And so I think there's a great debate. 0:04:21.760 --> 0:04:23.720 The economists will hack out, but the reality is its 0:04:23.720 --> 0:04:27.200 showing a weakness and economies and armies. Probably more fiscal 0:04:27.480 --> 0:04:31.120 work done and more reform work done to stimulate those economies, 0:04:31.160 --> 0:04:33.240 and well, good luck with that, and good luck with that. 0:04:33.400 --> 0:04:35.520 The good news is in the US you already have 0:04:35.520 --> 0:04:39.560 an economy which is pretty flexible and work talent people, uh, 0:04:39.800 --> 0:04:42.960 lots of capital, deep capital markets, the banking system that 0:04:43.080 --> 0:04:47.040 restructured a set of rules that you can understand one 0:04:47.120 --> 0:04:49.560 law that covers an economy. It's the largest in the 0:04:49.600 --> 0:04:53.320 world as opposed to multiple laws. And so you're seeing 0:04:53.320 --> 0:04:56.839 the US continue to grow, unemployments low and consumers continue 0:04:56.880 --> 0:04:59.200 to spend well, and so and on. I put that 0:04:59.240 --> 0:05:02.719 to you, or we had a breaking point where we 0:05:02.800 --> 0:05:07.200 may see something snap here? Or can we continue on, 0:05:07.880 --> 0:05:13.000 especially from a consumer perspective, in a nice upward, gentle trajectory. 0:05:13.360 --> 0:05:15.719 Let me start in a lighter note first, because when 0:05:15.760 --> 0:05:18.479 you asked Steve this question, but what's on your mind? 0:05:19.400 --> 0:05:22.360 I do have a very weighty global problem on my 0:05:22.400 --> 0:05:24.800 mind right now, and that is I have a two 0:05:24.880 --> 0:05:28.239 year old grandson who lives in New York, whose father's 0:05:28.320 --> 0:05:31.440 Mexican American and speaks to him only in Spanish. So 0:05:31.600 --> 0:05:34.279 right now my major preoccupation is how to improve my 0:05:34.320 --> 0:05:37.800 Spanish so I can communicate with my grandchild. But if 0:05:37.800 --> 0:05:39.880 you look at it, that's a lighter note. But frankly, 0:05:39.960 --> 0:05:42.039 that to me is the real thing, that what is 0:05:42.040 --> 0:05:43.800 me about the world. You look at it from a 0:05:43.880 --> 0:05:46.719 human centered point. When you try to operate in a 0:05:46.800 --> 0:05:52.840 hundred countries language communication, keeping the core of your business 0:05:52.880 --> 0:05:55.680 and the governance and the values of people is a 0:05:55.720 --> 0:05:59.320 major problem. So I'm looking at more as a I'm 0:05:59.360 --> 0:06:02.520 not really wanted about growth. I think we have enough 0:06:02.800 --> 0:06:05.800 locuses of growth to come up. I'm really not worried 0:06:05.839 --> 0:06:09.559 about consumer demand coming in from different parts of the world. 0:06:09.600 --> 0:06:11.919 We just have to look around the world. All the 0:06:11.960 --> 0:06:14.920 focus has been on America, rightfully, but I think you're 0:06:14.960 --> 0:06:17.160 going to see an uptake and a lot of other 0:06:17.200 --> 0:06:19.400 parts of the world. And that's the CEO and chairman 0:06:19.440 --> 0:06:22.000 of the Blackstone Group, Steve Schwartzman, the CEO and chairman 0:06:22.040 --> 0:06:26.200 of Bank of America, Brian moynihan, and Mahindra Group chairman 0:06:26.320 --> 0:06:29.120 A Non Mahindra. And what's really interesting, Jason, about these 0:06:29.120 --> 0:06:32.599 three collectively, We're talking about three hundred billion dollars in 0:06:32.720 --> 0:06:35.640 market cap and they employ some nine hundred thousand people 0:06:35.680 --> 0:06:37.600 around the globe. So when you want to really know 0:06:37.720 --> 0:06:41.480 what's going on in the world, these folks together it's 0:06:41.520 --> 0:06:45.080 a huge global footprint. So let's continue our conversation with Blackstone, 0:06:45.120 --> 0:06:48.680 Steve Schwartzman, Bank of America's Brian moynihan, and Mahindra Groups 0:06:48.760 --> 0:06:51.159 A Non Mahindro. One of the things we wanted to 0:06:51.240 --> 0:06:55.040 know are we headed for a recession. Brian Mornihan waiting, First, 0:06:55.480 --> 0:06:57.719 if you look at all the consensus, you know, the 0:06:57.839 --> 0:06:59.960 thirty economists, and I talked to David. I said, look, 0:07:00.200 --> 0:07:02.280 there's nobody has a negative sign in front of any 0:07:02.320 --> 0:07:05.239 of their estimates. And so in the bottom five probably average, 0:07:05.680 --> 0:07:09.039 and the it's you know five point five for GDP 0:07:09.200 --> 0:07:11.560 US next year and stuff. So even though people saying 0:07:11.560 --> 0:07:13.520 the probability is going up, because that's the uncertain the 0:07:13.760 --> 0:07:15.520 question is no ways predicting it is going to happen. 0:07:15.880 --> 0:07:18.080 The fear you have is going to your point, it's 0:07:18.120 --> 0:07:20.960 only ones day and what's going on? Will you get 0:07:21.040 --> 0:07:25.200 the consumer confidence to to deteriorate right now? It's it's 0:07:25.240 --> 0:07:26.920 come up, it's come down a little bit, and we 0:07:27.040 --> 0:07:29.640 get deteriorate if that starts to happen, that's the word. 0:07:29.720 --> 0:07:32.320 You do not see that in your activity every day. Um, 0:07:32.560 --> 0:07:35.880 the the combination of housing price is still being constructive, 0:07:36.160 --> 0:07:38.160 which that part of the wealth is constructive, the stock 0:07:38.200 --> 0:07:40.600 market still being up, that part of their wealth is constructive. 0:07:40.880 --> 0:07:43.560 Their wages growing faster now than they have really since 0:07:43.600 --> 0:07:46.880 any any point of last eight nine years, the employment 0:07:46.960 --> 0:07:48.840 levels being high, so that's always the good news. The 0:07:48.920 --> 0:07:51.080 question is what breaks that? And that's what I worry about. 0:07:51.120 --> 0:07:56.240 The the psychology of business deteriorating somewhat again high high, 0:07:56.360 --> 0:07:59.080 still very high, but tipped over a little bit. One 0:07:59.120 --> 0:08:02.200 do the one does a business owner convey to their 0:08:02.480 --> 0:08:05.240 teammates that it might not be as good for you 0:08:05.280 --> 0:08:08.600 this next year by higher wages, a bigger bonus, you 0:08:08.960 --> 0:08:12.160 more incentive plans, whatever, or you get to keep your job. 0:08:12.400 --> 0:08:14.679 We don't not see that in our our middle market. 0:08:14.720 --> 0:08:16.320 Loans are growing on a faster clip now and they 0:08:16.360 --> 0:08:18.400 were in the last few years. So it's all okay. 0:08:18.680 --> 0:08:20.760 And that's the question that we said. And I think 0:08:20.800 --> 0:08:23.160 the fear could cause us to back up before the 0:08:23.240 --> 0:08:26.080 data will show you're there. So some of that fear 0:08:26.200 --> 0:08:30.200 and caution, Steve, comes from this dispute between the U. 0:08:30.280 --> 0:08:32.680 S and China. There are a few people who have 0:08:33.080 --> 0:08:36.000 done as much dare I say, shuttle diplomacy than you 0:08:36.080 --> 0:08:39.079 have between the leaders leaders of those two countries. You 0:08:39.160 --> 0:08:41.720 write about it in your book. Steve's book, by the way, 0:08:41.760 --> 0:08:44.120 is on sale now. I don't know if anybody has 0:08:44.160 --> 0:08:48.280 heard about what it takes um, but we'll have that 0:08:48.360 --> 0:08:53.520 commercial in a moment. But you do write extensively about 0:08:53.559 --> 0:08:56.600 China in the book Your experience there the Schwartzman Scholars, 0:08:56.600 --> 0:09:00.840 your relationship with President she How does this get resolved 0:09:01.000 --> 0:09:04.679 at least to the satisfaction that the CEO s that 0:09:04.679 --> 0:09:09.080 that Brian is talking about specifically feel good enough to 0:09:09.200 --> 0:09:12.520 start spending money again. Yeah, I'll talk about that in 0:09:12.520 --> 0:09:15.720 one second. But but just in terms of risk, Uh, 0:09:16.000 --> 0:09:19.880 I've always felt that, you know, the cycle when it 0:09:19.920 --> 0:09:23.040 comes to an end, won't do it uh from from 0:09:23.120 --> 0:09:27.640 normal you know, business cycle issues, because because that seems 0:09:27.679 --> 0:09:31.079 to be managed pretty well. Uh, it'll be some type 0:09:31.080 --> 0:09:38.199 of geopolitical uh type of incident or circumstance which which 0:09:38.760 --> 0:09:45.120 uh hits the confidence of consumers. It won't be over 0:09:45.200 --> 0:09:48.280 production of goods and things like that. I could be wrong, 0:09:48.800 --> 0:09:51.840 but I've been thinking about this for a few years, 0:09:52.320 --> 0:09:55.400 and we've got enough of these major things that that 0:09:55.600 --> 0:10:02.040 could change people's attitudes. You know, where full employment uh 0:10:02.240 --> 0:10:06.040 you know, so people have a good situation, but their 0:10:06.080 --> 0:10:10.640 behavior may change if they're scared of something. Uh. As 0:10:10.720 --> 0:10:15.480 as to China us um uh that's as it's an 0:10:15.520 --> 0:10:21.840 interesting situation because uh, basically driven but by the fact 0:10:21.880 --> 0:10:25.840 that you know, in the last presidential election, we discovered 0:10:26.480 --> 0:10:31.720 that that of Americans couldn't write a four check in 0:10:31.800 --> 0:10:36.439 an emergency. So so if you think about that, these 0:10:36.480 --> 0:10:40.719 are people who fundamentally don't have savings uh. And they 0:10:40.760 --> 0:10:45.760 don't earn much money. Uh. And their their education American 0:10:45.920 --> 0:10:50.760 education has really slipped dramatically over the last thirty to 0:10:50.880 --> 0:10:55.160 forty years. And those those people are very unhappy. Uh. 0:10:55.200 --> 0:11:00.319 And and they they in effect are demanding some type 0:11:00.360 --> 0:11:04.839 of change. And part of that change happens when they 0:11:04.840 --> 0:11:09.840 don't when they don't get satisfied with domestic solutions. Historically, 0:11:09.920 --> 0:11:15.360 with populism, um, you get angry at some foreign entity. 0:11:15.800 --> 0:11:19.160 And China's the target. And it was pretty obvious that 0:11:19.240 --> 0:11:21.400 it was going to be. And I talked to the 0:11:21.480 --> 0:11:24.840 Chinese about that right after the election, and they were 0:11:24.840 --> 0:11:28.480 not sensitive to that, and I told them, don't don't 0:11:28.480 --> 0:11:31.800 worry about it. We we didn't understand it either, uh, 0:11:31.880 --> 0:11:33.840 you know, which is why you know, we had a 0:11:33.920 --> 0:11:38.360 president elected that nobody thought would be elected except him. Uh. 0:11:38.400 --> 0:11:41.040 And and so we all learned something. I said, don't 0:11:41.040 --> 0:11:44.720 feel bad. You know, you didn't have bad staff work, 0:11:45.840 --> 0:11:49.640 but now you know, and they they said, Okay, well, 0:11:50.200 --> 0:11:51.960 you know, if that's the case, we're going to have 0:11:52.040 --> 0:11:57.080 to adjust to China for four years has been growing 0:11:57.160 --> 0:12:02.440 faster than any major country in history. Uh. And so 0:12:02.800 --> 0:12:07.559 this is like whatever practices they have which in history 0:12:07.600 --> 0:12:10.040 when you're you know, sort of a we used to 0:12:10.040 --> 0:12:14.080 call them, you know, developing countries or underdeveloped countries. Uh. 0:12:14.200 --> 0:12:17.120 Now we call them emerging markets. Uh. You know they 0:12:17.559 --> 0:12:20.079 in the United States did this in the nineteenth century. 0:12:20.400 --> 0:12:25.240 We hide behind terror falls, you protect your industries. Uh, 0:12:25.840 --> 0:12:29.760 you don't let foreigners in into certain things that you know, 0:12:29.920 --> 0:12:33.680 where they can compete. Uh. And and that world lives 0:12:34.000 --> 0:12:37.800 until you become a more mature country and then you integrate. Well, 0:12:38.200 --> 0:12:39.920 I think I think in China part of part of 0:12:39.920 --> 0:12:43.200 the interesting issue is they still think they're poor and 0:12:43.559 --> 0:12:46.520 we sort of think they're rich. And their their GDP 0:12:46.720 --> 0:12:51.400 per capita is ten thousand dollars ours is roughly sixty. 0:12:51.480 --> 0:12:55.120 But when they started this sprint forty years ago, I 0:12:55.120 --> 0:12:58.520 think it was like four of person. So so it's 0:12:58.559 --> 0:13:02.480 been enormous progress, but they're there's still you know, sort 0:13:02.480 --> 0:13:07.239 of like one six of us. And now we're demanding 0:13:07.360 --> 0:13:12.439 our bottom and effect. Uh. And also European countries don't 0:13:12.480 --> 0:13:16.160 like they have similar problems, uh that that we're asking 0:13:16.280 --> 0:13:20.840 China to like become a more mature country and join 0:13:21.360 --> 0:13:25.280 the rest of the world. Their attitude is we're still poor. 0:13:25.840 --> 0:13:29.480 So so okay, if we have to make adjustments, Um, 0:13:29.520 --> 0:13:33.520 it's it's not our favorite thing to do. What what 0:13:33.559 --> 0:13:36.120 do we do? And so what you've been seeing over 0:13:36.160 --> 0:13:39.320 the last two and a half years is the US 0:13:39.400 --> 0:13:42.440 wanting them, you know, it's sort of the leader of 0:13:42.480 --> 0:13:47.160 the developed world to come pretty far. And on the 0:13:47.240 --> 0:13:51.160 Chinese side, um, they're trying to figure out how far 0:13:51.720 --> 0:13:55.760 and how fast they want to get someplace. So so 0:13:55.760 --> 0:13:59.640 so you know, the two countries got quite close, um 0:13:59.679 --> 0:14:03.400 in a at at which point the Chinese just withdrew 0:14:03.600 --> 0:14:06.000 they you know, they had agreed to a variety of 0:14:06.000 --> 0:14:08.520 things we thought, uh, and then they looked at the 0:14:08.559 --> 0:14:11.760 whole and they said, uh, you know, my goodness, let's 0:14:11.800 --> 0:14:15.359 not do that. And now that's just starting again. And meanwhile, 0:14:16.040 --> 0:14:18.840 what's happened in this two and a half years is 0:14:18.880 --> 0:14:23.720 that the two countries have started um as a result 0:14:23.800 --> 0:14:28.120 of false starts and in a variety of other tactical stuff. 0:14:28.640 --> 0:14:31.400 You know, are are starting to decouple. We continue with 0:14:31.400 --> 0:14:34.680 our panel with CEO and Chairman of Blackstone Group, Steve Schwartzman, 0:14:34.760 --> 0:14:37.440 the CEO and Chairman of Bank of America, Brian moynihan, 0:14:37.720 --> 0:14:41.720 and Anon Mahindra, chairman of Mahindra Group. And Mahindra was 0:14:41.800 --> 0:14:44.760 so interesting because we wanted to talk about the US 0:14:44.920 --> 0:14:49.680 China trade war and he's got operations in a hundred countries, 0:14:49.760 --> 0:14:53.520 but he clearly thinks of the world from an Indian perspective. 0:14:53.600 --> 0:14:56.280 Here's his take on the trade war. I see it 0:14:56.440 --> 0:15:00.960 as a situation of enormous opportunity. I have to be mercenary, 0:15:02.960 --> 0:15:07.080 of course, absolutely because to be and I'm I'm just 0:15:07.120 --> 0:15:10.440 being truthful here that for a long time, it wasn't 0:15:10.480 --> 0:15:15.400 kosher for anyone in American policy positions to admit that 0:15:15.440 --> 0:15:19.160 there was a kind of conflict with China and that 0:15:19.320 --> 0:15:23.120 India in fact, could be one of the players in 0:15:23.200 --> 0:15:26.120 this game as a buffer against China. That was just 0:15:26.440 --> 0:15:28.840 no no. If you went to the Council on Foreign Relations, 0:15:28.880 --> 0:15:30.960 nobody would admit that. I think it's now it's in 0:15:31.000 --> 0:15:33.840 the open, and I think President Trump has even made 0:15:33.840 --> 0:15:36.880 it more in the open. I mean, going to Houston 0:15:36.960 --> 0:15:38.880 and listening to our Prime minister, I think made it 0:15:39.000 --> 0:15:42.040 very clear what kind of alliance he had. I think 0:15:42.040 --> 0:15:45.320 there's nothing but opportunity for India in this and we 0:15:45.400 --> 0:15:48.960 have to play our cards right and see that we 0:15:49.080 --> 0:15:54.080 are viewed now as a very very appropriate ally for 0:15:54.120 --> 0:15:57.680 the US as a buffer both in defense terms. Frankly, 0:15:57.720 --> 0:16:00.440 if you look at the number of defense exercises between 0:16:00.760 --> 0:16:05.080 the US and India, they're proliferating dramatically. Defense procurement from 0:16:05.120 --> 0:16:08.920 the from India is already burgeoning. We never used to 0:16:08.960 --> 0:16:12.080 buy the used to buy more from the Russians. And frankly, 0:16:13.360 --> 0:16:16.680 all the all the tenor of the relationship with India's right. 0:16:16.720 --> 0:16:20.440 This is a democratic country, the country that values I 0:16:20.560 --> 0:16:23.720 p R. There's a country that has scale and growth, 0:16:23.760 --> 0:16:27.000 so there is profit for global companies too over there. 0:16:27.360 --> 0:16:30.600 So I think India has nothing but a unique opportunity 0:16:30.800 --> 0:16:32.960 right now, and we have to just play those cards right. 0:16:33.440 --> 0:16:34.840 And I think it would be a win win for 0:16:34.880 --> 0:16:39.120 both the US and for India. So I actually agree. 0:16:39.200 --> 0:16:41.720 And having been with a bunch of CEOs with the 0:16:41.800 --> 0:16:44.320 Prime Minister's morning, all who are talking about their business 0:16:44.360 --> 0:16:47.120 expanding in India, it's been a natural recipient, and I 0:16:47.160 --> 0:16:50.600 think some of the bureocracy and things that were difficult 0:16:50.600 --> 0:16:53.760 to operate, they have been doubt what they can be improved, 0:16:53.760 --> 0:16:57.040 and everybody knows. I think the broader context here though, 0:16:57.160 --> 0:16:59.520 is is you know, global trade in and if you 0:16:59.560 --> 0:17:03.400 go back and say, if the China US situation will 0:17:03.440 --> 0:17:06.560 take longer, the questions what can resolve in the interim, 0:17:06.680 --> 0:17:09.480 And this is where, unfortunately I'm not sure what happens 0:17:09.520 --> 0:17:13.760 given the politics than the situation this week to U S, 0:17:13.880 --> 0:17:15.560 m c A and things like that, which are critical 0:17:15.600 --> 0:17:19.080 to get done. Because as much as India is a beneficiary, 0:17:19.880 --> 0:17:21.800 Mexico and Canada in a in a trade with US 0:17:22.040 --> 0:17:24.719 is a beneficiary in a sense or a way to operate. 0:17:24.800 --> 0:17:27.520 Let's make it simpler that wage scale in Mexico is 0:17:27.920 --> 0:17:30.920 actually lower than the parts of China. There's they could 0:17:31.000 --> 0:17:32.840 use the jobs. There's a lot of people can move 0:17:32.880 --> 0:17:38.040 to manufacturing there, there's already integrated manufacturing supply chains. Canada's 0:17:38.040 --> 0:17:40.600 a different situation. So I think to keep the US 0:17:40.680 --> 0:17:43.080 kind of moving forward, there are three or four things 0:17:43.080 --> 0:17:48.000 to knock out. Everybody hopes for China US, but there 0:17:48.040 --> 0:17:49.480 are a couple of things to knock out first and 0:17:49.520 --> 0:17:50.679 one of them as a U S M C A. 0:17:50.720 --> 0:17:52.640 I just don't know politically if they can push it through, 0:17:52.920 --> 0:17:54.560 even though I think both sides seem to want it, 0:17:54.560 --> 0:17:56.040 and if they could push that through, that would be 0:17:56.080 --> 0:17:58.720 good and give more time to work I think on China, 0:17:59.000 --> 0:18:00.920 so Bran I want to stick. It's something you said 0:18:00.960 --> 0:18:03.480 in the context of the meaning that you had with 0:18:03.520 --> 0:18:08.600 Prime Minister Modi, which is clearly CEOs are stepping into 0:18:08.880 --> 0:18:14.120 a brighter and maybe higher expectation type spotlight. We hear 0:18:14.119 --> 0:18:17.439 it over and over again. Do you feel a greater 0:18:17.520 --> 0:18:22.560 responsibility now, especially given what's going on in Washington, in 0:18:22.640 --> 0:18:26.520 London and capitals around the world, to speak out both 0:18:26.600 --> 0:18:30.879 on your own issues related to business but also social 0:18:30.880 --> 0:18:34.800 issues in the end of day especially our company has 0:18:34.800 --> 0:18:36.800 been around for two d and thirty plus years and 0:18:36.840 --> 0:18:40.160 so we've been around through all kinds of fun stuff 0:18:40.200 --> 0:18:42.520 if you think about it. But but the rounity is 0:18:42.560 --> 0:18:46.800 our job is to produce profits and make progress. So 0:18:46.880 --> 0:18:49.760 much society needs to do and so the idea of 0:18:49.800 --> 0:18:52.280 the purpose statement by the b r T, the work 0:18:52.320 --> 0:18:54.719 I do that we all do with the National Business 0:18:54.720 --> 0:18:57.760 Council and the world economics form leadership for years. The 0:18:57.800 --> 0:19:00.000 ideas we have to have companies can do both produce 0:19:00.040 --> 0:19:04.280 a great profit and make sustainable to make progress on 0:19:04.320 --> 0:19:07.920 the STGs. And so I think all of CEOs agree 0:19:07.960 --> 0:19:10.680 with that. And I so the attribute where people say 0:19:10.680 --> 0:19:13.560 we're speaking out publicly on an issue generally comes from 0:19:13.600 --> 0:19:16.399 the need on that second, but it also reverberates the first. 0:19:16.480 --> 0:19:18.360 If you have teammates working for you, and you went 0:19:18.400 --> 0:19:20.560 what we went through the last five or six years 0:19:21.000 --> 0:19:26.439 on Post Nightclub Charleston, Vegas, Houston, Parkland, and you had 0:19:26.480 --> 0:19:29.000 teammates in every one of the situations that led our 0:19:29.040 --> 0:19:31.359 team to say we ought to take a stand on something. 0:19:31.440 --> 0:19:32.960 It was not because we need to go out and 0:19:32.960 --> 0:19:35.640 make some policy statement. It was because if you think 0:19:35.640 --> 0:19:38.720 about to have great teammates to make that profit you 0:19:38.760 --> 0:19:42.360 have to make, you have to protect. On HB two, 0:19:42.359 --> 0:19:44.960 which was a North Carolina issue about we had to 0:19:45.040 --> 0:19:46.920 come out because it was our headquarters town are people 0:19:46.920 --> 0:19:49.520 would not travel there and so well, people are thinking 0:19:49.600 --> 0:19:51.600 this is about you know, me or something. It's not. 0:19:51.680 --> 0:19:54.080 It's about we have to represent the two hundred thousand 0:19:54.119 --> 0:19:56.160 teammates that five or six hundred thousand people in their 0:19:56.160 --> 0:19:58.600 families and ensure them well and pay them well. But 0:19:58.680 --> 0:20:00.679 also we need them to be six us well and 0:20:00.760 --> 0:20:05.000 to produce great profit and sustain progress on the STGs. 0:20:05.080 --> 0:20:07.280 And that and is a key. So let's continue our 0:20:07.280 --> 0:20:11.640 conversation with Blackstone Group, Steve Schwartzman, Brian moynihan from Bank 0:20:11.640 --> 0:20:15.119 of America, and Ann Mahindra from the Mahindra Group. This 0:20:15.200 --> 0:20:18.040 time around we hear from Steve Schwartzman addressing some of 0:20:18.040 --> 0:20:24.399 the criticisms of private equity. Private equity industry is comprised 0:20:24.400 --> 0:20:27.560 of a lot of different firms and but basically what 0:20:27.600 --> 0:20:33.639 we do is leaving other asset classes like real estate aside. Um, 0:20:34.240 --> 0:20:36.840 we buy companies and we try and make them grow 0:20:36.920 --> 0:20:41.240 faster because when you exit, you get to hire multiple 0:20:41.359 --> 0:20:44.359 for higher growth uh and and to do that, you 0:20:44.440 --> 0:20:47.520 have to invest in these businesses. They just don't grow 0:20:47.600 --> 0:20:51.840 faster because it's in your interest. So you put more 0:20:51.920 --> 0:20:55.200 capital in them. Uh and you come up with good 0:20:55.280 --> 0:20:59.520 strategies uh and you you drive growth. So when you 0:21:00.000 --> 0:21:04.960 own businesses, you typically need more people uh and and 0:21:05.040 --> 0:21:09.920 so um, this is sort of a virtuous circle. Uh 0:21:10.000 --> 0:21:14.560 And you know, from a financial risk perspective. Um, you know, 0:21:14.640 --> 0:21:18.160 we went through the global financial crisis, and private equity 0:21:18.160 --> 0:21:21.560 firms didn't didn't you know, have financial difficulties more than 0:21:21.600 --> 0:21:26.360 other kind of companies. So so so on the downside, Um, 0:21:26.520 --> 0:21:32.359 the industry hasn't really created much difficulties. UM. On the upside, 0:21:32.800 --> 0:21:37.000 you learned typically for your investors who were pension funds, 0:21:37.280 --> 0:21:40.879 the regular people, they're the fireman, the government employees, the 0:21:40.920 --> 0:21:46.240 corporate employees. You may double the stock market indexes. So 0:21:46.240 --> 0:21:50.600 so basically this is a really good model. Uh. In 0:21:50.680 --> 0:21:54.160 the nineteen eighties. Uh, it wasn't so much like that 0:21:54.600 --> 0:21:57.560 in the eighties. There were only a few firms and 0:21:57.800 --> 0:22:01.120 prices were so low in the eighties that you could 0:22:01.520 --> 0:22:05.600 buy something and just cut costs, uh, layoffs some people 0:22:05.760 --> 0:22:11.320 and you were successful. That world is just gone. With 0:22:11.440 --> 0:22:14.320 the kind of higher prices that you have to pay 0:22:14.320 --> 0:22:19.040 to buy anything today, you just can't be successful doing that. 0:22:19.119 --> 0:22:22.479 You you must grow your way out of uh, you know, 0:22:22.520 --> 0:22:25.520 the creation price and and so I think there's some 0:22:25.640 --> 0:22:32.000 leftover perceptions. They are also an occasional high profile type 0:22:32.040 --> 0:22:37.040 of situation, whether it's in the retail business. But but 0:22:37.359 --> 0:22:40.679 you must look at retail generally and Brian would know 0:22:40.720 --> 0:22:43.920 more than I do. But retail has been with the 0:22:44.000 --> 0:22:48.359 disintermediation of the Internet. The number of retail companies that 0:22:48.400 --> 0:22:51.840 have gone busted are huge. The same way, you could 0:22:51.840 --> 0:22:54.639 get a private equity company that owns a newspaper that 0:22:54.800 --> 0:22:58.480 was in this political treatise that one of the candidates 0:22:58.480 --> 0:23:01.600 came up with, what's happened to newspapers? I mean, the 0:23:01.680 --> 0:23:04.679 vast majority of them have gotten into trouble. So you 0:23:04.720 --> 0:23:08.240 can take one example and and make something out of it. 0:23:08.280 --> 0:23:11.800 But but just to give you context, right, there were 0:23:12.520 --> 0:23:15.440 sixty six There were roughly a hundred and fifty one 0:23:15.880 --> 0:23:21.280 million jobs in the United States. Uh. Sixty six million 0:23:21.359 --> 0:23:27.040 people change jobs in a given year. Right. US economy 0:23:27.200 --> 0:23:31.800 is unbelievable dynamic. The number of people who were fired 0:23:32.680 --> 0:23:36.399 in the United States was twenty one million. The number 0:23:36.440 --> 0:23:41.760 of total jobs in the private equity owned companies is 0:23:41.800 --> 0:23:46.480