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Speaker 2: Joining us Michael Mullen.
Speaker 3: He will always be Adam Mullin's seventeenth Chairman of the
Speaker 3: Joint Chiefs of Staff and someone that pioneered all sorts
Speaker 3: of transition in a Pentagon. This will be a good,
Speaker 3: lengthy conversation and we're privileged by that today. How did
Speaker 3: you find Lloyd Austin, the former Secretary of Defense? You
Speaker 3: brought him up through the ranks. How did you find
Speaker 3: someone like Lloyd Austin? Process?
Speaker 4: He was a three star when I met him, so
Speaker 4: he'd already along.
Speaker 5: With the ranks at that point.
Speaker 4: But actually he was the ground commander in Iraq when
Speaker 4: I was Chairman on a visit, and I would go
Speaker 4: into theater about once every quarter, and that's where I
Speaker 4: met him and spent the better part of a day
Speaker 4: in an evening with him, and of all of the
Speaker 4: ground commanders that I had run into, I just found
Speaker 4: him to have a more comprehensive view of ground, the
Speaker 4: ground warfare, and the requirements and the execution all the
Speaker 4: way from northern Iraq down to.
Speaker 5: Basra, southern Iraq.
Speaker 4: And when I returned to Washington, I good friend of
Speaker 4: mine was the chief of Staff of the Army, George Casey.
Speaker 4: And I asked Casey, I said, is Austin on your list?
Speaker 4: And he said no. I said, put him.
Speaker 6: On the list.
Speaker 2: And that was a command.
Speaker 5: And to give George credit, he did.
Speaker 4: And then I but then I brought him in to
Speaker 4: work for me Lloyd, because one thing to sort of
Speaker 4: spend a day and understand that. But and so he
Speaker 4: was the senior officer three star on the Joint Staff,
Speaker 4: the director of the Joint.
Speaker 5: Staff, and he was extraordinary there. And then obviously from there.
Speaker 3: Erymull and I've got to ask a question, I'd say
Speaker 3: to other friends of surveillance. I think of General Kimmitt,
Speaker 3: General Ben Hodges, obviously Stravet assistant. So much for us
Speaker 3: and for the nation, is well the state of our
Speaker 3: Pentagon today? What can you report about our officers and
Speaker 3: gentlemen and gentlewomen.
Speaker 4: I should well, is a what's the state appen It's
Speaker 4: a time of great change. Obviously there's a there is
Speaker 4: a with a new administration and a new secretary, you know,
Speaker 4: a significant change in focus. I still think it's relatively
Speaker 4: early days. I think with that kind of change there
Speaker 4: there comes a great deal of uncertainty. There certainly has
Speaker 4: been concern with a number of officers who have senior
Speaker 4: officers who've been either retired or retired on their own volition,
Speaker 4: or have actually been fired. And the uncertainty that comes
Speaker 4: with that is something that's that's I would say normal,
Speaker 4: not that the firings are, but normal and you know,
Speaker 4: where do we go from here kind of thing. It's
Speaker 4: very clear, and I think the operations there are recent
Speaker 4: strike operations in the Caribbean or an example that there
Speaker 4: is there is more of a local focus in terms
Speaker 4: of the capability. I mean when I was there, and
Speaker 4: it's been a while now, but this was the most
Speaker 4: extraordinary military in the history of the world.
Speaker 5: It still is.
Speaker 4: But I would say more than anything else right now,
Speaker 4: there's just a lot of uncertainty about about where we're headed.
Speaker 7: So that probably starts from the very top with this president.
Speaker 7: This president seemed to be making America great again. America first,
Speaker 7: that suggests that perhaps the US is or will be
Speaker 7: or has withdrawn from some of its commitments. How do
Speaker 7: you view our commitments to Natar, commitments to our friends
Speaker 7: around the world, our allies, our historic allies around the world.
Speaker 4: I'd almost reverse the question in terms of those we
Speaker 4: have been committed to. How do they see us in
Speaker 4: the future, And it's the same, I'd answer it with
Speaker 4: the same word. There's a lot of uncertainty about our commitments,
Speaker 4: a lot of uncertainty about where we're headed. I think
Speaker 4: clearly there is a or there will be. It looks like,
Speaker 4: you know, a significant reduction in those commitments around the world. Listen,
Speaker 4: when I was chairman, I was one, and I spent
Speaker 4: a lot of time in NATO, and I was one
Speaker 4: of those individuals that argued strongly for significantly increasing the
Speaker 4: commitments of our NATO partners, and they didn't do that.
Speaker 4: You know, I'd give President Trump a lot of credit.
Speaker 4: He clearly has their attention. They clearly are committed at
Speaker 4: a time also where particularly in Europe, you know, it's
Speaker 4: quote unquote war on the continent, which we've feared for decades.
Speaker 2: Let's go there right now.
Speaker 3: We'll with us Michael Mullen with us an extended conversation
Speaker 3: here at the Bloomberg Global Forum. Paul Smenia and Tom
Speaker 3: Keen across this nation, across Canada, thank you for listening.
Speaker 3: Good Morning ninety nine one FM at the Pentagon in Washington,
Speaker 3: and good Morning on YouTube across the nation.
Speaker 7: Paul Admiral talk to us about how you think we
Speaker 7: should What do you think the policy should be as
Speaker 7: a relates to Ukraine. I mean, it seems like an
Speaker 7: intractable situation there, but the policy seems to be shifting
Speaker 7: almost on a daily basis here and I guess that's
Speaker 7: more uncertainty for all those involved as well.
Speaker 4: Yeah, I mean the way I've looked at this, and
Speaker 4: this is really since the Ukraine, since Putin invaded. I
Speaker 4: think Putin's the most dangerous guy on the planet. Have
Speaker 4: thought that for a long time. He has actually overseen
Speaker 4: a Russian resurgence that many of us thought could not
Speaker 4: take place. And my friends in Europe in particular consider
Speaker 4: this an existential threat because it's not just going to
Speaker 4: stop with Ukraine. Putin isn't going to stop with Ukraine.
Speaker 4: My friends historically and the Baltics that are always nervous
Speaker 4: on the best day, on their best day, they were
Speaker 4: nervous that Russia would soon be coming their way, in
Speaker 4: addition to some of the larger countries like Poland for example,
Speaker 4: So there's huge concern over there, and I think it's
Speaker 4: a you know, we're at a really important inflection point
Speaker 4: about are we going to support our European friends and
Speaker 4: in particular Ukraine, or are we going to let Putin
Speaker 4: march on? And I think he without the US, he
Speaker 4: will continue to march on.
Speaker 2: Edroll I would suggest.
Speaker 3: I mentioned this yesterday with Jen's Nordvigan, who's expert on
Speaker 3: foreign exchange. He's from Copenhagen in Denmark, and I informed
Speaker 3: that that I think most Americans would know the Baltic
Speaker 3: Sea if you know, they got a map out, including
Speaker 3: the President of the United States. If you were back
Speaker 3: running a gasoline tanker the USS Naxibi. Did I pronounce
Speaker 3: it right? Would you take it into the Baltic Sea
Speaker 3: right now?
Speaker 5: Yeah, I'd be comfortable with that.
Speaker 3: What is our of about a sea we don't even
Speaker 3: know about, other than it's somewhere near a good dinner
Speaker 3: in Coconhata.
Speaker 4: Well, there's a lot of people actually in the military
Speaker 4: and certainly the Navy that we know a lot about,
Speaker 4: but Americans still understand that. And I think back to
Speaker 4: the challenge in Europe. There's no better indication of the response,
Speaker 4: the fear and the response than Finland and Sweden literally
Speaker 4: joining NATO overnight.
Speaker 5: I know those countries.
Speaker 4: Well, they are historically very neutral, did not want to
Speaker 4: join NATO and just overnight particularly, and obviously they live
Speaker 4: in the Baltic area and that's the concern, and so
Speaker 4: I think Europe's going to have to come together more
Speaker 4: with respect to that space, and they do not. The
Speaker 4: Nordics have always handled Russia pretty well, but that change
Speaker 4: was a sea change from my perspective, and an indication
Speaker 4: of how serious this threat is.
Speaker 6: China.
Speaker 7: What should the policy be here, How should we think
Speaker 7: about China over the next several years.
Speaker 4: Our relationship with China has been deteriorating over the last
Speaker 4: ten years, twelve years, and the way I've felt about
Speaker 4: this is unless our president and the president of China
Speaker 4: tend to this relationship, we will continue to come apart
Speaker 4: across the board. I'm hugely concerned about it. It is
Speaker 4: the one existential threat to the United States of America
Speaker 4: and to the western world, China and where Shishinping goes,
Speaker 4: and what he does matters greatly. I'm somewhat comforted by
Speaker 4: the interaction of our economies, the interdependence of our economies,
Speaker 4: which I think can bound how strongly we would react
Speaker 4: in terms of whether there would be conflict or not.
Speaker 4: But those two individuals need to manage this relationship, and
Speaker 4: if they do, I think it get better. If they don't,
Speaker 4: it's going to get worse.
Speaker 7: What do you think, presidents she's I guess global ambitions
Speaker 7: are are they regional too?
Speaker 5: I think he starts regionally.
Speaker 4: I think that part of the world, but clearly he's
Speaker 4: invested globally, you know, around the world. And in many
Speaker 4: ways he's copied us. You know, he's copied what the
Speaker 4: United States has done since the early nineteen hundreds, including
Speaker 4: the South China Sea in the early nineteen hundreds, we
Speaker 4: wanted to figure out how to take care of our
Speaker 4: home waters in the Caribbean. So he continues to copy us.
Speaker 4: His military continues to grow. He's got a lot of
Speaker 4: churn in the military. He has fired a lot of
Speaker 4: his senior officers, so I don't know how much he
Speaker 4: trusts his military leadership. But I back to what I said,
Speaker 4: I think it's got to be our president and their
Speaker 4: president that make sure nothing bad really happened.
Speaker 2: Michael Mullin with us here.
Speaker 3: The Admiral of course, in the seventeenth Chairman of the
Speaker 3: Joint Chiefs of Staff, Robert T. Kaplan the number of
Speaker 3: years ago. I throw it at kids, I say, shut
Speaker 3: up and read this. It's Asia's cauldron and the South
Speaker 3: China Sea. What is our submarine capability with that island
Speaker 3: off China where they they're building subs and building up.
Speaker 5: What is their capability?
Speaker 2: What is our capability in the South China Sea?
Speaker 4: Right now most important weapons system in the United States
Speaker 4: military with respect to China as our submarine force, and
Speaker 4: we need to continue to build it. China is obviously
Speaker 4: understands a lot of that. But I mean, when the
Speaker 4: Wall came down in the late eighties, it turns out
Speaker 4: the Soviets were not ten feet tall. The Chinese are
Speaker 4: not ten feet tall. So they've got huge challenges. We
Speaker 4: know that, but that capability, that underwater capability, threatens them.
Speaker 3: Back to Lloyd Austin, to General Austin, the basic idea
Speaker 3: of the Americans considering four bases in the Philippines with
Speaker 3: young Marcos, what does that sea change on the Pacific
Speaker 3: rim of our showing the flag in the Philippines.
Speaker 4: It's huge and it sends a very strong signal to China.
Speaker 4: And when you talk to I talked to my Chinese counterparts,
Speaker 4: they're concerned.
Speaker 5: We are.
Speaker 4: Our strategy is containing them, surrounding them, and it's hard
Speaker 4: to even though we say we don't do that, when
Speaker 4: you're looking at it from Beijing, it sort of looks
Speaker 4: like that. But that's a really important relationship and a
Speaker 4: very very strong shift in terms of our strategy with
Speaker 4: respect to China and all.
Speaker 7: Can you give us a sense of how are men
Speaker 7: and women in uniform today, how do they feel, how
Speaker 7: do they feel about their calling, what they're doing, their missions?
Speaker 6: Can you characterize it a little bit?
Speaker 4: Yeah, I mean these young people and so this from
Speaker 4: e goes back obviously a long time, but during the Wars,
Speaker 4: I was so taken by this younger generation and who
Speaker 4: they were and where they came from and what they
Speaker 4: were committed to. That has continued. So there's a lot
Speaker 4: of churn at the top. I get that, but my
Speaker 4: own experience over many decades. Is for the most part,
Speaker 4: the troops ignore that they've got a mission. They care
Speaker 4: about the country. They're very patriotic and they want to
Speaker 4: do well by the country and represent the United States,
Speaker 4: and they do so and their extraordinary.
Speaker 6: How is our ability to attract and retain?
Speaker 7: You talk to any CEO we put in your seat,
Speaker 7: and they will say one of the biggest challenges is
Speaker 7: attracting and retaining good personnel.
Speaker 6: How is it with the military?
Speaker 5: Well, I mean we historically we've gone up and down.
Speaker 4: We had two or three years ago we had a
Speaker 4: pretty significant downturn. The services have all recognized that, and
Speaker 4: from what I understand now, that's been turned around, and
Speaker 4: so it continues to be very, very attractive from a
Speaker 4: recruiting standpoint, and we recruit. My own view is we
Speaker 4: need to recruit from all over the country from every
Speaker 4: background because of the military, and I states military needs
Speaker 4: to represent America.
Speaker 5: And that's really a key two questions.
Speaker 3: I don't want to spend a lot of time in this,
Speaker 3: but it's certainly germane to Bloomberg news Our editor in
Speaker 3: chief John Micklethwaite, and that is the Pentagon has decided
Speaker 3: to curtail the reporting of the media on our military affairs.
Speaker 3: It just seems across the span of America back to
Speaker 3: the Civil War, even farther back, just outrageous. Your thoughts
Speaker 3: on a limitation of journalism at the Pentagon.
Speaker 4: I think it's, first of all, almost can't do it.
Speaker 4: The reporting is going to continue to happen no matter
Speaker 4: paper well, I mean it's it's I mean that's I
Speaker 4: grew up in that world and feel very strongly about that.
Speaker 4: I think we've been through a lot of this discussion,
Speaker 4: and I think it's been pretty healthy in the last
Speaker 4: two weeks tied to that tragedy, that tragic assassination of
Speaker 4: Charlie Kirk. I think one of the core pillars of
Speaker 4: the United States of American art democracy is free speech,
Speaker 4: and we cannot and should not restrict that in any way.
Speaker 3: I have to talk about my seminal book on leadership
Speaker 3: with a hat tip to James Tavetus and his Leader's bookshelf,
Speaker 3: and that is Everardlrab sat down with the admirals of
Speaker 3: World War Two as they're all becoming more agent not
Speaker 3: young spring chickens like Michael Mullen. The Navy, which is
Speaker 3: the arc of generations from Nimics and.
Speaker 2: Sprague over to where we are now.
Speaker 3: Is it a new navy to Michael mullen or is
Speaker 3: there an arc of integrity there within all the turmoil
Speaker 3: of the Pentagon?
Speaker 4: Would there is an arc of integrity? That's who we
Speaker 4: are And it's not just the Navy. I think it's
Speaker 4: the military that is our core value. It is service,
Speaker 4: It is strategically led, and I know a lot of
Speaker 4: the leaders and they're incredibly capable. Obviously the world has
Speaker 4: changed dramatically, but I think this Navy and its leadership
Speaker 4: is very well positioned to focus on the requirements that
Speaker 4: we have right now, which are vastly different from way back,
Speaker 4: way back then. But it takes that kind of focus
Speaker 4: from leaders to bring the Navy and actually the rest
Speaker 4: of the military to meet the needs that we have
Speaker 4: right now, which is I think we're at an inflection point.
Speaker 4: We're probably at the most dangerous time in my life
Speaker 4: in terms of what's changing in the world, and our
Speaker 4: military is obviously a big part of that. It's not
Speaker 4: the only part. We've got other parts of our government,
Speaker 4: particularly from an economic standpoint, from a diplomatic standpoint, that
Speaker 4: must also focus on our own security, and we do
Speaker 4: that together, and the better we do it together, the
Speaker 4: better our security is going to be.
Speaker 7: Again, going back to America first, that is a change
Speaker 7: in doctrine since the end of the Second World War,
Speaker 7: where we found ourselves in a leadership position. Whether we
Speaker 7: wanted to be there or not, we were there, and
Speaker 7: I think that's created NATO and the whole world order
Speaker 7: that we've all grown up with.
Speaker 6: Is that a risk of changing this is?
Speaker 5: Well?
Speaker 4: I mean, if you listen to the discussion, it may be.
Speaker 4: And I think we need to pay attention to what's
Speaker 4: actually happening on the ground. How many forces have actually
Speaker 4: come home not that many. How many commitments have been reduced,
Speaker 4: not that many. We're still in the Gulf, We're still
Speaker 4: in Europe obviously, we're still in the Western Pacific in
Speaker 4: that part of the world. So I would look at
Speaker 4: execution as opposed to just paying attention to what's being said.
Speaker 2: What is ancient heir?
Speaker 3: As a final question, ad well, is America has to
Speaker 3: show the flag?
Speaker 2: How do we do that?
Speaker 4: Well, I mean, I'm a I'm a joint guy, but
Speaker 4: I'm a Navy guy.
Speaker 2: Straveta said, you have to understand he is a Navy guy.
Speaker 4: One of the one of the things you learn when
Speaker 4: you grow up is you're showing the flag and you're
Speaker 4: showing it in places that other people one haven't even
Speaker 4: heard of and two maybe not they the people, the
Speaker 4: locals have not heard of us. And that that flag
Speaker 4: represents so much to so many not just to Americans.
Speaker 4: I've been around the world a lot for decades, and
Speaker 4: that flag means so much to so many people in
Speaker 4: terms of freedom, opportunity, uh and and a better future.
Speaker 4: And that continues to be the case, and we need
Speaker 4: to continue to show it.
Speaker 2: Ederyl, thank you so much. Edylan with us here at the.
Speaker 3: Bloomberg Global Forum. Stay with us. More from Bloomberg Surveillance
Speaker 3: coming up after this.
Speaker 1: You're listening to the Bloomberg Surveillance Podcast. Catch us live
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Speaker 3: Joined us always in forever with the Bank of America
Speaker 3: and of course rivercon Carbon chairwoman. Today here at the
Speaker 3: Bloomberg Global Forum. I'd lead with the Red Sox, but
Speaker 3: I guess I won't it's fun to watch them here
Speaker 3: in September. I'm going to lead with you and I
Speaker 3: shared a stage at Davos a million years ago. Savita
Speaker 3: Supermanian was in the audience, Savia Bloss and all it
Speaker 3: was cop Whatever is COP thirty coming up in Brazil?
Speaker 3: Is it even remotely like what you and I did
Speaker 3: in Davos years ago?
Speaker 8: Well, I think the issues are the same. I think
Speaker 8: that the enthusiasm is, let's say, a bit depleted these days.
Speaker 8: But I think it's more confusion than depletion. If right,
Speaker 8: to be honest.
Speaker 3: Can the world go alone without America and move forward?
Speaker 3: And the debates in the financing of climate change?
Speaker 8: No, but I think the financing of climate change is
Speaker 8: happening anyway, So it is. First of all, it's a
Speaker 8: market opportunity which has been lost along the way. And
Speaker 8: climate change is real. We can debate that, but the
Speaker 8: scientists don't debate it. And honestly, the largest corporations in
Speaker 8: the world aren't debating it. Europe is not debating it.
Speaker 8: Their rules are being implemented as we speak two and
Speaker 8: twenty six, twenty twenty seven. So there'll be a market,
Speaker 8: a cap and trade market that will be real.
Speaker 2: I've got to.
Speaker 3: Enterrupt Paul, this headline that's just out and live. This
Speaker 3: oracle looks to raise fifteen billion dollars on corporate bond sale,
Speaker 3: which is life goes on. You know, if transactions happen,
Speaker 3: you do this, you do that, and you go to
Speaker 3: the bond market with Bank of America and you raise money.
Speaker 2: I mean, life goes on, Paul, Just so, I thought
Speaker 2: that was important.
Speaker 7: I know, we'll talk to some dead people about that.
Speaker 7: So what does it mean? And when the President of
Speaker 7: the United States gets up in front of the United
Speaker 7: Nations General Assembly yesterday and says, effectively climate change is
Speaker 7: a hoax?
Speaker 6: What does that mean to the whole movement?
Speaker 8: I guess globally, Well, I'm sure it's suppressing to the movement,
Speaker 8: but I also think that people largely believe climate change
Speaker 8: is not a hoax and they see very real things
Speaker 8: in front of them. I do think it was a
Speaker 8: mistake in years past to talk about the Arctic or
Speaker 8: coral reefs or icebergs melting, because people don't relate to that.
Speaker 6: What they do relate to is.
Speaker 8: Extreme weather. Insurance prices going up in coastal areas asthma
Speaker 8: on the rise. Very prosaic things, maybe, but they're the
Speaker 8: very real things. The fact that farmland has been degraded,
Speaker 8: forests are degraded, and we have emerging markets that all
Speaker 8: want to industrialize and they'd love to do it more quickly,
Speaker 8: and they could do it more cheaply with clean energy
Speaker 8: than they can do with fossil fuels. This isn't an
Speaker 8: anti fossil fuels dietripe. It is just a matter of
Speaker 8: clean energy is cheaper, and it's what's on the rise,
Speaker 8: and it's what's happening in emerging markets.
Speaker 6: But it has to be financed.
Speaker 7: Talk to us about the financing house. The environment changed
Speaker 7: over the last year, last two or three years.
Speaker 8: Well, there were products like Rubicon is a carbon credits company,
Speaker 8: and that had great promise in twenty twenty one. By
Speaker 8: twenty twenty three it was in a depression. But twenty
Speaker 8: twenty four to twenty twenty five has been better. It
Speaker 8: promises to be many times this size by twenty thirty,
Speaker 8: which is companies figure out what their carbon footprints and
Speaker 8: they buy carbon credits to sort of cover the delta
Speaker 8: between what is today and what they need to do
Speaker 8: in the future, and that money to everything from biodiversity,
Speaker 8: you know, reforesting places in the world or farmland, or
Speaker 8: it can go into industrial kinds of direct air capture,
Speaker 8: or it can be concessionary capital for emerging markets so
Speaker 8: that they can get going.
Speaker 2: And what you.
Speaker 3: Invented at Bank of America with Sevina Supermania of Berkeley,
Speaker 3: it was extraordinary. You brought I mean this seriously, folks,
Speaker 3: an infinite can brought math and Excel spreadsheets to climate machine.
Speaker 3: Everybody else was you know, peace, love, dope, you know,
Speaker 3: candles lit. You know we're going to save the world.
Speaker 3: We are the world. And you said, wait a minute,
Speaker 3: we got to quantify it. What do those Excel spreadsheets
Speaker 3: look like right now?
Speaker 8: Well, what they look like right now is I have
Speaker 8: to tell you huge companies like Microsoft are deeply involved
Speaker 8: in this. They just they did a deal with Rubicon
Speaker 8: just a few months ago for eighteen million tons of
Speaker 8: carbon credits. So companies are evaluating their footprint, they're putting
Speaker 8: money into it. This is trillions of dollars eventually in
Speaker 8: terms of the change in energy use, I think a
Speaker 8: lot of it will happen as emerging markets become industrialized.
Speaker 8: I think some of it will happen in the United States.
Speaker 8: It is demanded in Europe, and another generation will also
Speaker 8: demand it.
Speaker 3: So I'm gonna get to say, what's a pixie does
Speaker 3: in Texas? Why is Texas different than Massachusetts or any
Speaker 3: other state out there.
Speaker 8: Well, it's wind and solar is actually superior to anywhere else.
Speaker 8: As you know, they may be the land of fossil fuels,
Speaker 8: but they're also the land of solar and wind.
Speaker 3: Okay, we have to go and thank you so much
Speaker 3: for being with dis greatly appreciate infinchcating with us, and
Speaker 3: she is of course with a Rubicon and always forever
Speaker 3: with Bank of America.
Speaker 2: Stay with us.
Speaker 3: More from Bloomberg Surveillance coming up after this.
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Speaker 2: This guest is the oddest guest in New York.
Speaker 3: She has made the circuit of philanthropy not only on
Speaker 3: the island of Manhattan, but to the five Burroughs. I
Speaker 3: want to start with the best playgrounds in the world,
Speaker 3: which are Central Park playgrounds. You were instrumental and saying, hey,
Speaker 3: we need a playground at Fifth Avenue and whatever.
Speaker 2: They're packed all the time, aren't they you?
Speaker 9: Thank you?
Speaker 2: They are they are.
Speaker 3: What was the fight like to get playgrounds on the
Speaker 3: hello turf of Central Park?
Speaker 6: You know, thankfully.
Speaker 9: I think all of the leadership of the city and
Speaker 9: the Central Park Conservancy is always believed in having parks
Speaker 9: and our kids need them.
Speaker 3: David Kelly, I assume a JP Morgan's worried about the
Speaker 3: ten year yield.
Speaker 2: You're not.
Speaker 3: You're worried about fistfights among families. You have arguably the
Speaker 3: most delicate job at JP Morgan. We're just explained to
Speaker 3: the parents that the young brats aren't on page.
Speaker 2: What are we going to do to make wealth more intelligent?
Speaker 3: Describe the biggest challenge right now in dealing with generational
Speaker 3: dynamics among JP.
Speaker 9: Morgan Wealth Well, I'd like to say the clients I
Speaker 9: work with, Yes, they are the ultra high networth and
Speaker 9: high net worth clients that we are supporting in JP
Speaker 9: Morgan Wealth Management and helping them navigate with intention those
Speaker 9: opportunities and the challenges as you mentioned with wealth, and
Speaker 9: what I always say is it's the financial advisors who
Speaker 9: prepare the assets, and we are preparing the family for
Speaker 9: the assets. There's a playbook and research and frameworks about
Speaker 9: this that can help families navigate this well and proven
Speaker 9: methods at help families succeed and carry that well through
Speaker 9: three generations. And that really is at the core of
Speaker 9: the playbook. So for us, it's really meeting those needs
Speaker 9: that the families have and providing also the lifestyle needs
Speaker 9: that they have. So there's an adjacent team too that
Speaker 9: can do everything from home staffing and.
Speaker 6: Bill play and all of that.
Speaker 9: So it's really the products and services that our clients
Speaker 9: need to meet you know, their well.
Speaker 3: I have so many time questions, why don't you save
Speaker 3: an interview and take.
Speaker 7: Over How does philanthropy work into your work with some
Speaker 7: of these high networth folks, because I know a lot
Speaker 7: of folks do have you know, they do have plans
Speaker 7: and how does that work?
Speaker 9: So that's exactly right. So philanthropy is a key piece.
Speaker 9: When I just mentioned that roadmap that we work on
Speaker 9: with families, philanthropy is a key piece of that and
Speaker 9: so there's a number of us on the team that
Speaker 9: serve as philanthropic advisors to our clients. That can be
Speaker 9: everything from working with a patriarch and a matriarch who
Speaker 9: have set up a family foundation. They're very proud of it,
Speaker 9: but then their three children perhaps have moved to other
Speaker 9: cities and have different interests. Maybe they're more in true
Speaker 9: climate change, and the parents were supporting the hospitals in
Speaker 9: the city in which they were born. So there's really
Speaker 9: something there about helping the family to navigate and move
Speaker 9: from that stage of expectations to actual agreements in the family.
Speaker 9: They're also come over to my house and definitely happy too.
Speaker 9: We would be delighted to have as a client. And
Speaker 9: I also think that a very common case study that
Speaker 9: we work with working alongside our bankers, will be working
Speaker 9: with entrepreneurs. Perhaps they've had a sale of a business
Speaker 9: and then they're thinking about their vibrant next chapter. A
Speaker 9: big part of that can be philanthropy, and as we
Speaker 9: have been talking today with the generational wealth transfer that's
Speaker 9: going on, helping to prepare that next gen to accept
Speaker 9: this wealth, you know, with a plan with the skills
Speaker 9: they need, really does take a coach, and as you've intimated, oftentimes,
Speaker 9: what we hear from our client hands is that having
Speaker 9: someone like us that's brought in the kids might tend
Speaker 9: to listen to us a little bit more than their parents.
Speaker 9: I'm sure I think we all know that as parents
Speaker 9: ourselves talk to.
Speaker 7: Us about that wealth transfer, it's something that might One
Speaker 7: of my offspring is in the financial services business, and
Speaker 7: I'm telling them you're in a great position because there
Speaker 7: is this wealth a transfer that's taking place. How do
Speaker 7: you guys think about it and size it up for
Speaker 7: your clients?
Speaker 9: It is It is a growth business, right so thoroughly
Speaker 9: Associates said one hundred and five trillion will pass between
Speaker 9: generations exactly, enormous numbers by twenty forty five. What I
Speaker 9: think is interesting about it and what we're focused on
Speaker 9: at JP Morgan Wealth Management there first is this horizontal transfer.
Speaker 9: You know, women have live men on a global average
Speaker 9: by five years, and so the women will get the
Speaker 9: wealth first. I just wrote a paper on this that's
Speaker 9: on our JP Morgan Family Wealth Institute. You know, women
Speaker 9: are taking over sixty one percent our leaders of foundations. Now,
Speaker 9: they tend to be a little bit more collaborative in
Speaker 9: their giving, they participate in giving circles. They want to
Speaker 9: pay forward their learnings in slightly different ways than we
Speaker 9: saw a thirty years ago when I was starting out
Speaker 9: my career. So I think it's that first level, and
Speaker 9: then it's the generational level. So when we're thinking of
Speaker 9: that next gen and you think of your kids, for example,
Speaker 9: to help with the children, we run boot camps for
Speaker 9: our kids that are helping them to be strategic, impactful
Speaker 9: philanthropists and sort of understand the supports and the best
Speaker 9: practices there. And then it sounds a little bit more ephemeral,
Speaker 9: but I can't emphasize enough its importance is having a
Speaker 9: family value statement. And so we'll work with the patriarchs
Speaker 9: matrix and then the family that really gives a family
Speaker 9: a running start, whether it's running a family business, a
Speaker 9: family office, you know, or a family foundation.
Speaker 2: You're going to get this in real quick. It's too important.
Speaker 3: The sterio, the stereotype today is the older generation loaded
Speaker 3: up at well all very philanthropic in medicine and education,
Speaker 3: and the tech brats aren't giving.
Speaker 2: Is that a stereotype or is it true?
Speaker 9: That's a stereotype. That's a stereotype. So the rising generation,
Speaker 9: I mean they are looking for purpose across everything, as
Speaker 9: we all know. They want purpose in their careers, they
Speaker 9: want purpose in their giving.
Speaker 3: So donating fifty million to while Cornell is not purpose.
Speaker 9: You're gonna that is? That is so you're going to
Speaker 9: see what I'm saying is I don't think that will change.
Speaker 3: It is and we have breaking news. You've got to
Speaker 3: go to it. But thank you, so can you please
Speaker 3: come back.
Speaker 9: I would be delighted to come back.
Speaker 3: Thank you very hash is at lexing to them black
Speaker 3: with JP Morgan here on one of the huge, huge
Speaker 3: issues for families.
Speaker 2: Stay with us.
Speaker 3: More from Bloomberg Surveillance coming up after this.
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday
Speaker 1: starting at seven am Eastern on Apple Clock and Android
Speaker 1: Otto with the Bloomberg Business app. You can also watch
Speaker 1: us live every weekday on YouTube and always on the
Speaker 1: Bloomberg terminal.
Speaker 3: Joining us is Henry Fernandez's philanthropy to New York City
Speaker 3: is noted with a Council on Foreign Relations and of
Speaker 3: course with MSCI importantly a former Deputy governor of his
Speaker 3: Dominican Republic as well.
Speaker 2: I have to start with the New.
Speaker 3: York vignette, and it's what the spirit of New York is.
Speaker 3: You've provided major commitment to Memorial slum kettering. And just
Speaker 3: as an example, you had a phone call from someone
Speaker 3: abroad and they said, I'm sick, I need to come
Speaker 3: to New York.
Speaker 2: That happens every day at Memorial Sloan.
Speaker 5: Doesn't it totally?
Speaker 10: And you know that well because of the great surveys
Speaker 10: your wife gave Memorials.
Speaker 2: So it's about It's about.
Speaker 3: Boston's the same way they get any all this negativity.
Speaker 2: Guess what, when they get sick, they go to JFK
Speaker 2: or Logan, don't they?
Speaker 5: And the Anderson in Houston.
Speaker 10: But you know it's long Catoring is by far the
Speaker 10: most attractive one because it's New York City, and we
Speaker 10: see that people calling and wanting to come because this
Speaker 10: is the best cancer research center and treatment in the world.
Speaker 10: So therefore, talk about American exceptionalism, there's an example of
Speaker 10: that right there.
Speaker 3: If you were speaking with President Trump right now about
Speaker 3: the virtues of our diverse cities, what would you say
Speaker 3: to him?
Speaker 10: First of all, I'm very proud to be twenty percent
Speaker 10: of the Latino population in America that we're contributing four
Speaker 10: trillion dollars of GDP and twenty three percent of the
Speaker 10: economic growth of the country. And there are a lot
Speaker 10: of other people like that that want to contribute in America.
Speaker 10: So that's number one. I know immigration is an issue,
Speaker 10: but a lot of us have come to this country
Speaker 10: to give our blood, sweat and tear for the economic
Speaker 10: development and the.
Speaker 6: Progress and the success of this country. So that would
Speaker 6: be my first message to it MSCI.
Speaker 7: When we talk about ms CI, we think about emerging
Speaker 7: markets and the growth of emerging markets and how to
Speaker 7: measure the growth of emerging market assets. Talk to us
Speaker 7: about China. I mean, it's such a big part of
Speaker 7: the MSCI in next thirty thirty percent. What's your view
Speaker 7: of China? How you know, it seems like there's a
Speaker 7: cold war economic cold war between China and the West.
Speaker 7: How do you think about that as a global investor?
Speaker 10: Well, China, first of all, the second largest economy in
Speaker 10: the world in PPT terms, purchasing you know, parity terms,
Speaker 10: it's probably even larger, and it's got a very diverse
Speaker 10: secuity market. You know, it's got to lead is a
Speaker 10: leader in many areas of the various industries around the world,
Speaker 10: including climate change industries. So therefore, how could you not
Speaker 10: invest in the country. It's investable, you can be there.
Speaker 10: There are, of course geopolitical issues. There are of course
Speaker 10: potential military issues that could create sanctions and other things,
Speaker 10: and you've got to be mindful of that and careful
Speaker 10: with that risk. Other than that, you know, it's an
Speaker 10: open country. You can invest from anywhere in the world,
Speaker 10: and the more capital that is tied together between two societies, hopefully,
Speaker 10: the lower probability of a conflict.
Speaker 7: Right as a global investor, thinking about emerging markets, we've
Speaker 7: got a US president, US administration, the US view that
Speaker 7: de globalization, maybe making America greater, maybe pulling back from
Speaker 7: some of our economic commitments, some of our geopolitical commitments.
Speaker 6: How's that being viewed by the emerging markets?
Speaker 10: Well, first of all, I don't think we are in
Speaker 10: a deglobalizing world, okay at all.
Speaker 6: Okay, I think we are in a reglobalizing world. Trade
Speaker 6: last year.
Speaker 10: Increased three hundred billion dollars global trade. We do not
Speaker 10: see trade, you know, going down, you know, maybe it
Speaker 10: slows down a little bit. The trade between the big superpowers.
Speaker 10: You know, China, US obviously is slowing down. The trade
Speaker 10: among Southeast Asian countries is increasing dramatically, the trade within
Speaker 10: Europe is increasing dramatically, and the like.
Speaker 5: So you have a.
Speaker 10: Reglobalizing right, and therefore it's going to present new opportunities
Speaker 10: for investment. Companies that are more in the cross hair
Speaker 10: of this are going to not do as well, but
Speaker 10: there are a lot of other companies and economists that
Speaker 10: are going to do well in this reglobalizing environment.
Speaker 3: You tell young to remember the nifty to fifty, I
Speaker 3: unfortunately remember it with the concentration. How does mscies work?
Speaker 3: It's math change because of the concentration in mag seven.
Speaker 10: Well, I happen to look very young, but I do
Speaker 10: remember that period of cigars. I do remember that period
Speaker 10: of time. There are there have been at least three
Speaker 10: periods of time in which the US equity market has
Speaker 10: been about seventy percent of the global you know equity markets.
Speaker 5: That period was one of them.
Speaker 10: The other one, right was right around the Internet bubble,
Speaker 10: and this period again, so there have been periods in
Speaker 10: history like this in the last forty fifty years. So
Speaker 10: we'll say, you know, is in our case right now
Speaker 10: is the big tech firms with AI and all of that.
Speaker 10: But they have good earners, they have good cash flows.
Speaker 10: They have that it's not like air, you know, in air,
Speaker 10: so but they will reverse itself at some point when
Speaker 10: you see other opportunities in other places.
Speaker 3: Now, thank you so much for joining Bloomberg today, Henry
Speaker 3: Fernandez Folks philanthropis of New York City and of course
Speaker 3: with MSCI as their chairman in chief executive officer.
Speaker 1: This is the Bloomberg Surveillance podcast, available on Apple, Spotify,
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Speaker 6: Listen live each.
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