1 00:00:00,080 --> 00:00:12,960 Speaker 1: Ye. Welcome to the Bloomberg Surveillance Podcast. I'm term Keene 2 00:00:13,480 --> 00:00:17,560 Speaker 1: jay Leie. We bring you insight from the best in economics, finance, investment, 3 00:00:18,000 --> 00:00:23,520 Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 4 00:00:23,600 --> 00:00:32,880 Speaker 1: Bloomberg dot Com, and of course, on the Bloomberg Let's 5 00:00:32,920 --> 00:00:36,000 Speaker 1: begin with our top story, though, thousands of protesters taking 6 00:00:36,000 --> 00:00:37,920 Speaker 1: to the streets of Hong Kong for the second time 7 00:00:37,960 --> 00:00:41,400 Speaker 1: in less than a week, blocking roads around the financial 8 00:00:41,440 --> 00:00:44,600 Speaker 1: district as lawmakers would you to begin days of debate 9 00:00:44,840 --> 00:00:46,919 Speaker 1: on a controversial law that would for the first time 10 00:00:46,960 --> 00:00:51,240 Speaker 1: allow extraditions to China. Police branding the demonstration a riot 11 00:00:51,520 --> 00:00:54,000 Speaker 1: situation and police to say that. Joining us from Hong 12 00:00:54,080 --> 00:00:57,160 Speaker 1: Kong is Karen Lee, Bloomberg China Government Editor, and she 13 00:00:57,240 --> 00:00:59,040 Speaker 1: joins us on the phone. Hello to you, Karen. I 14 00:00:59,080 --> 00:01:01,560 Speaker 1: just want to start with a re basic question amid 15 00:01:01,640 --> 00:01:04,120 Speaker 1: all of the chaos, Just a word on the process here, 16 00:01:04,360 --> 00:01:07,000 Speaker 1: where this law came from, and how likely it is 17 00:01:07,319 --> 00:01:11,440 Speaker 1: it would pass. Right. So, the government has always and 18 00:01:11,480 --> 00:01:14,120 Speaker 1: it's still defending this as something that is needed to 19 00:01:14,160 --> 00:01:16,640 Speaker 1: close what they call a loophole that would make Hong 20 00:01:16,720 --> 00:01:19,880 Speaker 1: Kong a refuge for fugitives, and this is something that 21 00:01:19,920 --> 00:01:24,319 Speaker 1: would allow extraditions to mainland China and Taiwan, and it 22 00:01:24,360 --> 00:01:27,840 Speaker 1: has people here extremely concerned that it could in a 23 00:01:27,880 --> 00:01:32,720 Speaker 1: major way eradicate what's left of Hong Kong's autonomy. Has 24 00:01:32,720 --> 00:01:36,360 Speaker 1: there been any response from China at all? There has 25 00:01:36,400 --> 00:01:39,000 Speaker 1: I mean this Hong Kong is a Chinese territory. China 26 00:01:39,040 --> 00:01:42,000 Speaker 1: considers it part of China, and it has always backed 27 00:01:42,040 --> 00:01:45,119 Speaker 1: the government here, and it has said over the last 28 00:01:45,160 --> 00:01:47,319 Speaker 1: couple of weeks that it backs the Hong Kong government. 29 00:01:47,360 --> 00:01:49,360 Speaker 1: It continues to support it, and they said that again 30 00:01:49,440 --> 00:01:52,840 Speaker 1: this afternoon. Karry. One of the things that's so important, 31 00:01:52,880 --> 00:01:55,480 Speaker 1: and talking to Jody Schnyders through the morning with their 32 00:01:55,520 --> 00:01:59,280 Speaker 1: decades of experience, is how the hundreds of thousands of 33 00:01:59,320 --> 00:02:04,160 Speaker 1: protests is different than the last time. What is unique 34 00:02:04,280 --> 00:02:08,400 Speaker 1: about this moment for Hong Kong versus other protests we've seen, 35 00:02:09,440 --> 00:02:12,200 Speaker 1: you know, it's more aggressive by all accounts from people 36 00:02:12,240 --> 00:02:14,760 Speaker 1: on the ground in this um, in this early stage, 37 00:02:14,840 --> 00:02:18,160 Speaker 1: there were a lot of clashes today between riot police 38 00:02:18,240 --> 00:02:20,760 Speaker 1: and protesters. There was a lot of tear gas being fired, 39 00:02:20,800 --> 00:02:23,560 Speaker 1: and fired fairly quickly. I mean, they hadn't been there 40 00:02:23,560 --> 00:02:26,160 Speaker 1: all that long, So I think people felt like there 41 00:02:26,200 --> 00:02:28,800 Speaker 1: was a real edge um and less of a sense 42 00:02:28,840 --> 00:02:30,680 Speaker 1: of hope than there had been at the start of 43 00:02:30,680 --> 00:02:34,240 Speaker 1: the occupied protests that were largely peaceful. Currently, thank you 44 00:02:34,280 --> 00:02:51,679 Speaker 1: so much, greatly appreciated Hong Kong government. This morning, let's 45 00:02:51,680 --> 00:02:54,040 Speaker 1: spring in Gideon Rushall. We here in New York was 46 00:02:54,320 --> 00:02:57,160 Speaker 1: really fortunates having great time, like Foreign Affairs magazine and 47 00:02:57,240 --> 00:02:59,480 Speaker 1: it's a good morning to Gideon. Good morning. Your thoughts 48 00:02:59,520 --> 00:03:02,360 Speaker 1: on that quick sent Does Hong Kong still have sufficient 49 00:03:02,400 --> 00:03:06,399 Speaker 1: autonomy under that framework? When it all too comes down 50 00:03:06,400 --> 00:03:09,440 Speaker 1: to whether you how you define sufficient um? I I 51 00:03:09,520 --> 00:03:13,080 Speaker 1: don't think the trends in Hong Kong's autonomy are going 52 00:03:13,080 --> 00:03:15,800 Speaker 1: in the right direction, and I think over time you're 53 00:03:15,840 --> 00:03:19,120 Speaker 1: going to see the natural gravitational pull of Beijing. Because 54 00:03:19,120 --> 00:03:22,000 Speaker 1: what's happening here is not just a Hong Kong story. 55 00:03:22,120 --> 00:03:26,200 Speaker 1: It's a global democratization story. It's the undertow of the 56 00:03:26,280 --> 00:03:31,519 Speaker 1: third wave, the rise of personalized authoritarianism and institutionalized authoritarianism, 57 00:03:31,760 --> 00:03:35,720 Speaker 1: and essentially the loss of the force of vital democracy 58 00:03:35,720 --> 00:03:39,960 Speaker 1: promotion or vital democracy example anywhere in the world. And 59 00:03:40,040 --> 00:03:44,280 Speaker 1: so what you see is authoritarian powers increasing their control 60 00:03:44,720 --> 00:03:47,840 Speaker 1: and people taking to the streets to demand what they want. 61 00:03:48,360 --> 00:03:52,560 Speaker 1: But you don't really have anybody backing the protesters. Who 62 00:03:52,720 --> 00:03:55,240 Speaker 1: is it? Is it the Brits who are themselves and chaos? 63 00:03:55,280 --> 00:03:58,280 Speaker 1: Is that the Americans in chaos? Is it Europe? More generally? 64 00:03:58,280 --> 00:04:02,280 Speaker 1: Who is there supporting protesters in Hong Kong right now? Nobody? 65 00:04:02,280 --> 00:04:04,600 Speaker 1: They're on their own. It looks like the United States 66 00:04:04,680 --> 00:04:06,640 Speaker 1: is beginning to stand up a little bit, Gideon, how 67 00:04:06,680 --> 00:04:11,080 Speaker 1: speaking Nancy Pelosi discussing whether this has eradicated eroding the 68 00:04:11,120 --> 00:04:14,320 Speaker 1: autonomy of Hong Kong and whether Hong Kong should retain 69 00:04:14,680 --> 00:04:17,520 Speaker 1: special training status, do you think that's something we will 70 00:04:17,560 --> 00:04:20,400 Speaker 1: seriously debate in the coming days in the United States. No, 71 00:04:20,560 --> 00:04:23,159 Speaker 1: I don't think we debate anything seriously United States these days. 72 00:04:23,160 --> 00:04:24,800 Speaker 1: So I don't see why this should be any exception. 73 00:04:24,880 --> 00:04:29,719 Speaker 1: Certainly not a policy issue like this, Gideon. If I 74 00:04:29,760 --> 00:04:32,560 Speaker 1: look at your new issue of Foreign Affairs Magazine on 75 00:04:32,640 --> 00:04:35,800 Speaker 1: the American century, there's got to be a Chinese century 76 00:04:35,880 --> 00:04:39,839 Speaker 1: as well. Elizabeth Economy, affiliated with you with the Council 77 00:04:39,880 --> 00:04:43,320 Speaker 1: on Foreign Relations, has been clear the fragility of President 78 00:04:43,360 --> 00:04:47,480 Speaker 1: Gee's experiment from where you sit with all the context 79 00:04:47,560 --> 00:04:50,760 Speaker 1: you we have, including Mr Nathan, Professor Nathan of Columbia 80 00:04:51,080 --> 00:04:54,000 Speaker 1: writing in your new magazine, how is the state of 81 00:04:54,080 --> 00:04:59,640 Speaker 1: President Gees political strength? Well at all question was good. 82 00:04:59,680 --> 00:05:03,640 Speaker 1: I'll take sixty three thousand, two eight two dollars change. 83 00:05:03,680 --> 00:05:07,600 Speaker 1: I would I would not bet against him. The fascinating 84 00:05:07,720 --> 00:05:11,320 Speaker 1: question of the future of not just Chinese development. As 85 00:05:11,360 --> 00:05:14,719 Speaker 1: I said, no one's ever governed a rise to economic 86 00:05:14,760 --> 00:05:18,159 Speaker 1: power this quick, this large, and kept it going. Uh 87 00:05:18,279 --> 00:05:20,840 Speaker 1: So we're already in uncharted territory, but no one's ever 88 00:05:21,040 --> 00:05:24,279 Speaker 1: no country has ever progressed so much further without becoming 89 00:05:24,320 --> 00:05:27,839 Speaker 1: more liberal. So that might happen too. But the fact 90 00:05:28,120 --> 00:05:33,080 Speaker 1: is that it seems like um that essentially American power 91 00:05:33,240 --> 00:05:35,800 Speaker 1: rose over a century when China was out of the picture, 92 00:05:36,360 --> 00:05:41,240 Speaker 1: and Chinese power rose within the American uh imperium. But 93 00:05:41,320 --> 00:05:44,120 Speaker 1: there's never been a period in world history when the 94 00:05:44,200 --> 00:05:49,600 Speaker 1: United States and China we're both major, big world powers together. Right, 95 00:05:49,640 --> 00:05:52,080 Speaker 1: There have been periods of Chinese power and American power. 96 00:05:52,480 --> 00:05:54,520 Speaker 1: But now we're seeing this interesting thing that it's not 97 00:05:54,520 --> 00:05:56,279 Speaker 1: going to be a replacement, it's going to be a 98 00:05:56,320 --> 00:05:59,600 Speaker 1: living together. But we don't know what that world of 99 00:06:00,080 --> 00:06:03,480 Speaker 1: the United States in the twenty one century and she's 100 00:06:03,600 --> 00:06:06,719 Speaker 1: China in the century will look okay very quickly. Here 101 00:06:07,000 --> 00:06:11,920 Speaker 1: does America want to quote unquote live together? America doesn't want. 102 00:06:11,960 --> 00:06:15,839 Speaker 1: America has always wanted to seceed from the world. That's 103 00:06:15,839 --> 00:06:19,480 Speaker 1: how the country started. But it can't live in splendid 104 00:06:19,520 --> 00:06:23,080 Speaker 1: isolation forever. And as it grew during the nineteenth century 105 00:06:23,120 --> 00:06:25,880 Speaker 1: and got to the twentieth century, it realized it needed 106 00:06:25,880 --> 00:06:28,680 Speaker 1: to take responsibility for its own security. It couldn't rely 107 00:06:28,720 --> 00:06:31,479 Speaker 1: on the British anymore to protect it, it couldn't rely 108 00:06:31,560 --> 00:06:34,960 Speaker 1: on others. So it started to fight world wars late, 109 00:06:35,160 --> 00:06:37,400 Speaker 1: then it fought world wars early, and then in the 110 00:06:37,440 --> 00:06:40,360 Speaker 1: Cold War, it fought a world war preemptively. Instead, we're 111 00:06:40,400 --> 00:06:43,040 Speaker 1: not going to allow another one to happen. And so 112 00:06:43,120 --> 00:06:46,360 Speaker 1: basically it took over a lead. And it has never 113 00:06:46,440 --> 00:06:50,839 Speaker 1: allowed a share of management with another country. It's always 114 00:06:50,839 --> 00:06:53,000 Speaker 1: been the United States doing it itself or nothing. And 115 00:06:53,040 --> 00:06:54,919 Speaker 1: now we're going to have to share power, and we 116 00:06:55,000 --> 00:06:56,799 Speaker 1: don't know how that's going to play out. The Chinese 117 00:06:56,800 --> 00:06:59,120 Speaker 1: aren't used to sharing power either. That's why this is 118 00:06:59,120 --> 00:07:01,520 Speaker 1: going to be so interesting and difficult. Gideon Rose, thank 119 00:07:01,560 --> 00:07:05,440 Speaker 1: you so much. Thank congratulations on another important issue, what 120 00:07:05,640 --> 00:07:09,880 Speaker 1: happened to the American century? Lead essay Zakaria of the 121 00:07:09,920 --> 00:07:13,320 Speaker 1: post American World, And I'd really point out Professor Nathan's 122 00:07:13,600 --> 00:07:31,400 Speaker 1: essay on China as well. It's always good to have 123 00:07:31,440 --> 00:07:34,160 Speaker 1: a guest with us who's hung out at Casbar in 124 00:07:34,280 --> 00:07:41,200 Speaker 1: Coventry at the university. It didn't used to be cast Bar, 125 00:07:41,360 --> 00:07:43,520 Speaker 1: used to be called the Colisseum, and it was and 126 00:07:43,520 --> 00:07:45,240 Speaker 1: it was in a place in commentary that you went 127 00:07:45,320 --> 00:07:49,680 Speaker 1: nowhere near and I and I went near it. How 128 00:07:49,680 --> 00:07:52,000 Speaker 1: did you come across that? I am a fund of 129 00:07:52,120 --> 00:07:54,720 Speaker 1: research as a Spencer Deale knows we do our research 130 00:07:54,760 --> 00:07:57,760 Speaker 1: here at Bloomberg Surveillance. Was it was it the Colisseum 131 00:07:57,800 --> 00:08:01,280 Speaker 1: back in Coventry? And I not commenting on that forever. 132 00:08:04,920 --> 00:08:08,520 Speaker 1: I have a career here, guys. Sorry VPS chief Economists. 133 00:08:08,840 --> 00:08:10,560 Speaker 1: And of course he used to go to the University 134 00:08:10,560 --> 00:08:12,600 Speaker 1: of warwak has did. I great to see you, Spencer. 135 00:08:12,840 --> 00:08:15,640 Speaker 1: Good morning. Let's talk about the latest release from British 136 00:08:15,600 --> 00:08:19,000 Speaker 1: Propolium Petoleum from BP. You come out with this annual review. 137 00:08:19,240 --> 00:08:21,720 Speaker 1: Walk me through what you've learned. Yes, so this is 138 00:08:21,760 --> 00:08:25,400 Speaker 1: the sixty eight edition of BPS Statistical Review of World Energy, 139 00:08:25,440 --> 00:08:27,240 Speaker 1: and it's sort of for those who don't know it, 140 00:08:27,240 --> 00:08:31,040 Speaker 1: it's a public good. We've been providing statistics to the 141 00:08:31,120 --> 00:08:34,400 Speaker 1: energy system for a long time now. The message from 142 00:08:34,880 --> 00:08:37,720 Speaker 1: last from from yesterday's report, which looked at the data 143 00:08:37,760 --> 00:08:41,400 Speaker 1: for eighteen was then in the headline data paint a 144 00:08:41,440 --> 00:08:45,800 Speaker 1: worrying picture. So at a time when growing societal concerns 145 00:08:45,840 --> 00:08:49,440 Speaker 1: about climate change, growing demands for action on climate change, 146 00:08:49,760 --> 00:08:54,480 Speaker 1: the data for eighteen suggested both energy demand and carbon 147 00:08:54,520 --> 00:08:57,160 Speaker 1: emissions of energy use we're growing at their fastest rate 148 00:08:57,240 --> 00:08:59,920 Speaker 1: for years. So it's sort of a growing mismatch between 149 00:09:00,120 --> 00:09:03,800 Speaker 1: hopes of society for action on climate change and reality 150 00:09:03,800 --> 00:09:06,920 Speaker 1: in terms of the data moving stubbornly in the wrong direction. Spencer. 151 00:09:07,000 --> 00:09:09,880 Speaker 1: Some people will say it's ironic that it is a 152 00:09:09,920 --> 00:09:12,920 Speaker 1: petroleum company and all in gas company like BP that 153 00:09:13,040 --> 00:09:15,560 Speaker 1: is producing this kind of research. What do you think 154 00:09:15,600 --> 00:09:18,520 Speaker 1: back to that, Well, part A, we're just providing the 155 00:09:18,600 --> 00:09:22,800 Speaker 1: data and the statistics. But secondly, company we have been 156 00:09:22,920 --> 00:09:25,760 Speaker 1: very clear, We've written many articles on this. We want 157 00:09:25,800 --> 00:09:28,280 Speaker 1: a rapid transition to a low carbon energy system just 158 00:09:28,360 --> 00:09:31,040 Speaker 1: as much as anybody else it's good for society, but 159 00:09:31,120 --> 00:09:33,720 Speaker 1: for company like us to to how do you run 160 00:09:33,720 --> 00:09:36,480 Speaker 1: a business like ours if you know you're an unstable path. 161 00:09:36,920 --> 00:09:40,880 Speaker 1: We much prefer to to get on that path towards 162 00:09:41,000 --> 00:09:43,520 Speaker 1: moving towards a low carbon energy system and we want 163 00:09:43,559 --> 00:09:47,160 Speaker 1: to be part of that process. The history of studying 164 00:09:47,200 --> 00:09:50,160 Speaker 1: demand and I think you're being far too modest, the 165 00:09:50,240 --> 00:09:54,440 Speaker 1: BP Statistical Review has been the foundation, going back not 166 00:09:54,600 --> 00:09:57,040 Speaker 1: only the sixty eight years, but frankly back to British 167 00:09:57,040 --> 00:10:01,400 Speaker 1: petroleum of before World War One. You guys have been 168 00:10:01,440 --> 00:10:06,720 Speaker 1: studying the trends the longest. Do we really know demand? 169 00:10:07,080 --> 00:10:11,920 Speaker 1: Do we get it all good? And figuring out oil demand? Yeah, 170 00:10:12,000 --> 00:10:14,520 Speaker 1: I think we do have a pretty good idea, not 171 00:10:14,520 --> 00:10:16,600 Speaker 1: not to the nearest hundred thousand barrels, but I think 172 00:10:16,600 --> 00:10:19,600 Speaker 1: we have a pretty strong idea on on on oil demand. 173 00:10:19,800 --> 00:10:22,679 Speaker 1: And the key message on demand is it's it's been 174 00:10:22,679 --> 00:10:25,439 Speaker 1: growing pretty robustly for the last four or five years, 175 00:10:25,480 --> 00:10:29,679 Speaker 1: so above average growth rates for the last partial differentials 176 00:10:29,679 --> 00:10:33,520 Speaker 1: in Asia. Is it growing because Asia is very largely 177 00:10:33,679 --> 00:10:37,720 Speaker 1: through Asia. So in and our most recent review, we 178 00:10:37,880 --> 00:10:40,200 Speaker 1: estimate the global or demand group by about one point 179 00:10:40,240 --> 00:10:43,200 Speaker 1: four million parwars a day. Two thirds of that is 180 00:10:43,200 --> 00:10:49,480 Speaker 1: coming from Asia, China, and India. But interestingly, global US 181 00:10:49,480 --> 00:10:52,160 Speaker 1: oil demand last year grew by half a million bars 182 00:10:52,200 --> 00:10:54,760 Speaker 1: a day. That's his strongest rate for over ten years. 183 00:10:55,000 --> 00:10:58,880 Speaker 1: And the story there isn't putting gasoline in your cars, 184 00:10:59,080 --> 00:11:01,559 Speaker 1: but it was actually or a type of oil product 185 00:11:01,600 --> 00:11:04,920 Speaker 1: called ethane, which is being used in petro chemical sector. 186 00:11:05,000 --> 00:11:09,479 Speaker 1: So we're seeing expansion of petro chemical sector in America 187 00:11:09,760 --> 00:11:12,679 Speaker 1: and that's fueling the demand it's using for oil as 188 00:11:12,720 --> 00:11:15,440 Speaker 1: a feedstock. We hear so much about the path towards 189 00:11:15,440 --> 00:11:19,280 Speaker 1: electrification and away from gas guggling tanks here in the 190 00:11:19,360 --> 00:11:21,959 Speaker 1: United States. Do you see that in the data? Is 191 00:11:22,000 --> 00:11:25,600 Speaker 1: it happening? Spencer? Do you see it? Um? Electric cars 192 00:11:25,640 --> 00:11:29,280 Speaker 1: are growing very rapidly. They grew by about two million 193 00:11:30,040 --> 00:11:33,760 Speaker 1: cars last year with a stock about five million cars. 194 00:11:33,960 --> 00:11:36,640 Speaker 1: But just to put that in context, that's out of 195 00:11:36,679 --> 00:11:41,880 Speaker 1: a global car pool of over a billion. So this 196 00:11:42,000 --> 00:11:45,600 Speaker 1: is at the moment electric cars are tiny. And just 197 00:11:45,640 --> 00:11:48,800 Speaker 1: to just to put another number into the mix here, 198 00:11:49,600 --> 00:11:52,360 Speaker 1: the increasing carbon emissions we saw last year from the 199 00:11:52,679 --> 00:11:56,360 Speaker 1: energy system as a whole was roughly equal to increase 200 00:11:56,360 --> 00:11:58,720 Speaker 1: in the number of cars on the planet by a third, 201 00:11:59,240 --> 00:12:02,200 Speaker 1: So something like four hundred million cars was the amount 202 00:12:02,200 --> 00:12:05,640 Speaker 1: of carbon emissions we saw last year number electric cars 203 00:12:05,840 --> 00:12:08,840 Speaker 1: two million. So the scale of the issues we're facing 204 00:12:08,880 --> 00:12:11,880 Speaker 1: here are enormous relative to to the small contribution of 205 00:12:11,960 --> 00:12:14,720 Speaker 1: electric cars. Where are the trends looking good? Are there 206 00:12:14,760 --> 00:12:17,280 Speaker 1: any regions where the trends look good right now? Um? 207 00:12:18,320 --> 00:12:21,760 Speaker 1: Europe continues to make significant progress, so so we are 208 00:12:21,800 --> 00:12:26,760 Speaker 1: seeing falling there. The US had seen falling carbon carbon 209 00:12:26,760 --> 00:12:29,240 Speaker 1: emissions for the last ten years, but again twenty eight 210 00:12:29,280 --> 00:12:32,160 Speaker 1: team was an exception. We saw growth in carbon emissions 211 00:12:32,440 --> 00:12:35,840 Speaker 1: last year. I think the other big, nice encouraging trend 212 00:12:36,120 --> 00:12:39,160 Speaker 1: is rapid growth in renewable energy. Renewable energy grew by 213 00:12:39,200 --> 00:12:42,520 Speaker 1: over fourteen last year. Lord Brown got way out front 214 00:12:42,800 --> 00:12:46,520 Speaker 1: with big oil trying to understand the new environment, the 215 00:12:46,520 --> 00:12:49,439 Speaker 1: new climate. Now it's all the vogue. I mean, Lord Brown, 216 00:12:49,480 --> 00:12:51,679 Speaker 1: was you know I'm going to say fifteen years Helle 217 00:12:51,760 --> 00:12:54,480 Speaker 1: everybody else. Are you gonna tell me Spencer Dale that 218 00:12:54,559 --> 00:12:57,559 Speaker 1: big oil is actually gonna get all sensitive and touchy 219 00:12:57,559 --> 00:13:00,160 Speaker 1: feeling about climate change? Or is it just there you 220 00:13:00,200 --> 00:13:02,240 Speaker 1: are guys seeing you know, this is what you got 221 00:13:02,240 --> 00:13:05,320 Speaker 1: to do right now to mollify everyone I don't think 222 00:13:05,360 --> 00:13:07,960 Speaker 1: werenna get sensitive and touchy feely. I think we're going 223 00:13:08,000 --> 00:13:10,000 Speaker 1: to be hard nosed about this, But I think we'd 224 00:13:10,040 --> 00:13:12,760 Speaker 1: be hard nosed that the world needs to undertake an 225 00:13:12,880 --> 00:13:15,680 Speaker 1: energy transition. It needs to move to a low carbon 226 00:13:15,840 --> 00:13:20,360 Speaker 1: energy system, and companies like BP need to take to 227 00:13:20,400 --> 00:13:24,520 Speaker 1: make that happen. Bottom line, and we need to shift 228 00:13:24,559 --> 00:13:26,720 Speaker 1: from being an an oil and gas company to an 229 00:13:26,840 --> 00:13:29,679 Speaker 1: energy company, and we are very committed to doing that. 230 00:13:30,040 --> 00:13:32,360 Speaker 1: So Spencer, I promise we won't talk about the United Kingdom. 231 00:13:32,400 --> 00:13:34,160 Speaker 1: We will not talk about Brexit, but I do want 232 00:13:34,160 --> 00:13:36,000 Speaker 1: to lean on your time as the chief economist at 233 00:13:36,000 --> 00:13:38,560 Speaker 1: the Bank of England and during the financial crisis, just 234 00:13:38,559 --> 00:13:39,679 Speaker 1: to get a view of one is happening in the 235 00:13:39,679 --> 00:13:42,800 Speaker 1: global economy right now if we can, If that's okay. 236 00:13:42,880 --> 00:13:45,480 Speaker 1: There is some concern at the moment that maybe we're 237 00:13:45,520 --> 00:13:47,520 Speaker 1: moving towards the first rate cut of the FED, that 238 00:13:47,559 --> 00:13:51,040 Speaker 1: maybe global growth is desalrating. What's your view on that 239 00:13:51,800 --> 00:13:54,240 Speaker 1: right now? What is happening in the global economy? So 240 00:13:54,280 --> 00:13:57,240 Speaker 1: it seems clear there's been a loss of economic momentum 241 00:13:57,360 --> 00:14:00,320 Speaker 1: in the global economy. Um much of that I think 242 00:14:00,440 --> 00:14:05,400 Speaker 1: is related to increasing concerns about the trade disputes. UM. 243 00:14:05,520 --> 00:14:07,800 Speaker 1: Much of that sort of the The evidence for that 244 00:14:07,880 --> 00:14:10,960 Speaker 1: is most obvious now in terms of find out some 245 00:14:11,000 --> 00:14:13,800 Speaker 1: of the financial market indicators and in some of these 246 00:14:13,800 --> 00:14:18,559 Speaker 1: sort of sentiment indicators, things like consumer confidence, investment intentions. 247 00:14:18,679 --> 00:14:22,000 Speaker 1: You haven't yet seen it in the hard data. People 248 00:14:22,040 --> 00:14:25,720 Speaker 1: like the IMF are suggesting that global growth this year 249 00:14:25,920 --> 00:14:28,360 Speaker 1: could be something like a half a percentage point weaker 250 00:14:28,440 --> 00:14:30,800 Speaker 1: than what we saw last year. So that's so slowing. 251 00:14:30,840 --> 00:14:33,520 Speaker 1: It's not anything like we saw in the financial crisis, 252 00:14:33,520 --> 00:14:36,000 Speaker 1: but it is a slowing. The extent to which that 253 00:14:36,040 --> 00:14:38,040 Speaker 1: will come through, I think, in part depends on what 254 00:14:38,160 --> 00:14:40,720 Speaker 1: happens with those trade disputes, But it also happens, as 255 00:14:40,720 --> 00:14:43,440 Speaker 1: you suggested, in terms of what's the policy response here 256 00:14:43,640 --> 00:14:46,160 Speaker 1: in the Fed. The Fed here has clearly shifted its 257 00:14:46,200 --> 00:14:48,680 Speaker 1: position from to a more symmetric position in terms of 258 00:14:48,840 --> 00:14:52,760 Speaker 1: rate cuts and rate rate hikes, and in in Asia 259 00:14:52,960 --> 00:14:56,240 Speaker 1: you're seeing China is already loosening its fiscal strings to 260 00:14:56,280 --> 00:14:58,920 Speaker 1: support the economy. One final question to all listening and 261 00:14:59,040 --> 00:15:00,920 Speaker 1: want to go through the EXA get a summary of 262 00:15:00,920 --> 00:15:06,600 Speaker 1: your statistical review. What's a single distinction this this year? UM? 263 00:15:06,640 --> 00:15:09,480 Speaker 1: The carbon emissions are growing at their fastest rate for 264 00:15:09,520 --> 00:15:13,640 Speaker 1: eight to nine years, the first derivatives moving. Yes, if 265 00:15:13,840 --> 00:15:17,400 Speaker 1: absolutely and and that's a worry and we need to 266 00:15:17,480 --> 00:15:20,720 Speaker 1: understand that, and it signals the need for more urgent 267 00:15:20,760 --> 00:15:25,440 Speaker 1: action on climate. Spencer thinks great, Thank you very much. 268 00:15:25,960 --> 00:15:42,080 Speaker 1: Statistical Review Paul Tutor Jones with us today in support 269 00:15:42,160 --> 00:15:44,960 Speaker 1: of Just Capital. We will of course get to him 270 00:15:45,120 --> 00:15:48,120 Speaker 1: on how not to lose money on Wall Street. That 271 00:15:48,280 --> 00:15:50,920 Speaker 1: is something he has been good at over the years. 272 00:15:50,960 --> 00:15:54,320 Speaker 1: I should point out, John, he has basically invented full 273 00:15:54,360 --> 00:15:58,280 Speaker 1: answer me among the hedge fun alternative investment accrew with 274 00:15:58,360 --> 00:16:01,720 Speaker 1: commitment not only to more visible things, but also a 275 00:16:01,800 --> 00:16:05,840 Speaker 1: long term commitment to the Everglades. His team did did 276 00:16:05,920 --> 00:16:08,960 Speaker 1: you finance the victory of the University of Virginia in 277 00:16:09,040 --> 00:16:12,560 Speaker 1: basketball this year? Did you singleheadly write the check to 278 00:16:12,640 --> 00:16:15,480 Speaker 1: make that happen? I'll tell you what I did. Uh 279 00:16:16,080 --> 00:16:19,200 Speaker 1: For the semifinal game, I was at home sick with 280 00:16:19,280 --> 00:16:23,720 Speaker 1: a hundred two degree fever, and the finals were on Monday, 281 00:16:24,520 --> 00:16:27,960 Speaker 1: and I had taken antibiotics and now as well, and 282 00:16:28,080 --> 00:16:30,480 Speaker 1: I was gonna go up and see the finals, not 283 00:16:30,640 --> 00:16:34,440 Speaker 1: knowing who would win, and then I thought, hmmmm, I 284 00:16:34,600 --> 00:16:38,600 Speaker 1: stayed at home in my bathrobe, in front of the 285 00:16:38,720 --> 00:16:42,560 Speaker 1: TV in my bedroom. Can I actually afford to break 286 00:16:42,640 --> 00:16:46,840 Speaker 1: the mojo of that victory, which was breathtaking at the 287 00:16:47,040 --> 00:16:49,960 Speaker 1: end company behind? Or if I go up there, will 288 00:16:50,000 --> 00:16:52,760 Speaker 1: I break the mojo? So I decided not to go 289 00:16:52,880 --> 00:16:57,400 Speaker 1: see the final stayed at home, same exact place, bathrobe, 290 00:16:57,520 --> 00:17:00,200 Speaker 1: And there's no question that that energy force is what 291 00:17:00,360 --> 00:17:04,240 Speaker 1: helped us. When there's no question about that just capital. 292 00:17:04,359 --> 00:17:06,920 Speaker 1: John farre and I have been fourteen times to Davos, 293 00:17:07,280 --> 00:17:11,000 Speaker 1: where you've seen hitters try to make a better capitalism 294 00:17:11,400 --> 00:17:15,240 Speaker 1: and more sensitive capitalism. Why is your support of just 295 00:17:15,600 --> 00:17:19,840 Speaker 1: capital going to be different where business leaders could reattach 296 00:17:20,000 --> 00:17:24,120 Speaker 1: to the American public. I think just capital is something 297 00:17:24,240 --> 00:17:27,840 Speaker 1: that's been a long time coming in the sense that, um, 298 00:17:28,160 --> 00:17:32,600 Speaker 1: what we do is we ask the American public, how 299 00:17:32,680 --> 00:17:36,720 Speaker 1: do you define just noice and a corporation? So every 300 00:17:36,800 --> 00:17:39,520 Speaker 1: year we go out and pull a perfectly demographic sample. 301 00:17:39,960 --> 00:17:43,639 Speaker 1: We asked the American public. They tell us what's important. 302 00:17:44,160 --> 00:17:47,840 Speaker 1: We turn those into metrics. We collect over two thousand 303 00:17:47,920 --> 00:17:51,480 Speaker 1: different data streams from the top one thousand publicly trade 304 00:17:51,480 --> 00:17:55,280 Speaker 1: companies in the United States, we use the American public's 305 00:17:55,640 --> 00:18:00,479 Speaker 1: indications and believes to rank those thousand coups. He's from 306 00:18:00,560 --> 00:18:03,800 Speaker 1: one to a thousand on just NOUE And we put 307 00:18:03,880 --> 00:18:08,760 Speaker 1: that out there so that all the stakeholders, employees, investors, 308 00:18:09,280 --> 00:18:13,720 Speaker 1: customers can have an understanding of who their counterparty is 309 00:18:13,800 --> 00:18:17,359 Speaker 1: in business, how they are doing, and allowing themselves with 310 00:18:17,520 --> 00:18:19,680 Speaker 1: the values they are most important to the public. And 311 00:18:19,760 --> 00:18:24,639 Speaker 1: the great news is that in our rankings, those that 312 00:18:24,840 --> 00:18:28,680 Speaker 1: rank the highest on issues such as worker pay and 313 00:18:28,760 --> 00:18:33,240 Speaker 1: treatment UH products, are they socially beneficial, good quality, good 314 00:18:33,359 --> 00:18:37,879 Speaker 1: cost um customers? How do you treat them? Those that 315 00:18:38,040 --> 00:18:41,359 Speaker 1: rank the highest are also the companies that have the 316 00:18:41,520 --> 00:18:45,920 Speaker 1: highest return on equity and have the best stock price performance. 317 00:18:46,520 --> 00:18:51,280 Speaker 1: So by being just by aligning yourselves with the values 318 00:18:51,280 --> 00:18:55,119 Speaker 1: of the American public, you make money too. Um. And 319 00:18:55,240 --> 00:18:58,560 Speaker 1: it's a it's a it's just a fantastic thing. It 320 00:18:58,720 --> 00:19:03,000 Speaker 1: was something that when we first started the Just Capital 321 00:19:03,080 --> 00:19:07,119 Speaker 1: we didn't necessarily understand or anticipate this, but it's turned 322 00:19:07,160 --> 00:19:10,399 Speaker 1: out to be a wonderful outcome. Our audience is itching 323 00:19:10,480 --> 00:19:13,040 Speaker 1: for us to get your views of financial markets as well. 324 00:19:13,080 --> 00:19:15,040 Speaker 1: I have one final question here though, whether this works 325 00:19:15,080 --> 00:19:16,800 Speaker 1: both ways whether we need to do a better job 326 00:19:17,160 --> 00:19:19,800 Speaker 1: pool of a really communicunty, the business and markets can 327 00:19:19,840 --> 00:19:21,439 Speaker 1: be a false for good. Do you think we're doing 328 00:19:21,440 --> 00:19:23,119 Speaker 1: a good enough job of that right now? No, I 329 00:19:23,240 --> 00:19:26,879 Speaker 1: think we're failing, which is why hopefully just Capital can 330 00:19:26,920 --> 00:19:30,200 Speaker 1: step in the void. In our rankings, we have a ranking. 331 00:19:30,400 --> 00:19:33,240 Speaker 1: We take the top one companies, we give them a 332 00:19:33,320 --> 00:19:36,240 Speaker 1: seal there. Just now in the last two years, we're 333 00:19:36,280 --> 00:19:38,240 Speaker 1: only five years old, and just in the last two 334 00:19:38,320 --> 00:19:40,320 Speaker 1: years they've started to adopt that seal, put it on 335 00:19:40,400 --> 00:19:43,760 Speaker 1: their products. Hopefully customers will start to see it when 336 00:19:43,800 --> 00:19:46,239 Speaker 1: they go to box a buy a box of UH 337 00:19:46,400 --> 00:19:49,720 Speaker 1: corn flakes, maybe ones from a company that is just 338 00:19:50,240 --> 00:19:53,080 Speaker 1: or that's in the top one ones not Hopefully they'll 339 00:19:53,160 --> 00:19:56,480 Speaker 1: choose and they'll they'll vote with their pocketbooks for justice. 340 00:19:56,640 --> 00:20:00,240 Speaker 1: Two markets rate cup one oh one traits. Do you 341 00:20:00,320 --> 00:20:04,480 Speaker 1: think now is the time? Well, uh, certainly if you 342 00:20:04,560 --> 00:20:08,160 Speaker 1: look at how the markets are pricing UH, now would 343 00:20:08,160 --> 00:20:10,800 Speaker 1: be the time. The question is is are we gonna 344 00:20:10,840 --> 00:20:13,920 Speaker 1: play out like we have uh in history? And I 345 00:20:14,000 --> 00:20:17,520 Speaker 1: think the answer to that is probably yes. So Ray 346 00:20:17,640 --> 00:20:22,040 Speaker 1: cut one oh one is your long treasuries, you're long 347 00:20:22,160 --> 00:20:25,880 Speaker 1: stocks at least initially your long goal. For sure you're 348 00:20:25,920 --> 00:20:28,800 Speaker 1: short the dollar UM and I think that's kind of 349 00:20:29,040 --> 00:20:32,280 Speaker 1: kind of portfolio you wanna have on right now. Paul Tutor, Jones, 350 00:20:32,600 --> 00:20:36,520 Speaker 1: Louis Bacon, Monroe Trout all the rest. Trend trading, the 351 00:20:36,600 --> 00:20:39,159 Speaker 1: idea of getting on a trend and having the mental 352 00:20:39,240 --> 00:20:42,000 Speaker 1: setup to stay on the trend. Does it work now 353 00:20:42,320 --> 00:20:45,679 Speaker 1: like it used to work? Is there too much information now? 354 00:20:46,200 --> 00:20:49,800 Speaker 1: Is the system bols up enough where trend based trading 355 00:20:49,920 --> 00:20:52,600 Speaker 1: doesn't work like it used to well? One of the 356 00:20:52,640 --> 00:20:55,360 Speaker 1: reasons that trend based trading used to work so well, 357 00:20:55,520 --> 00:21:01,120 Speaker 1: if you think about it, um we had we had 358 00:21:01,200 --> 00:21:04,440 Speaker 1: three central banks that had forty five different rate moves 359 00:21:04,600 --> 00:21:08,240 Speaker 1: in one year. So compare that to now when you're 360 00:21:08,240 --> 00:21:12,160 Speaker 1: at zero rates, and I think we had four last year, 361 00:21:12,280 --> 00:21:15,399 Speaker 1: and all those were from the US central banks. So 362 00:21:16,119 --> 00:21:19,200 Speaker 1: trend trading works when central banks are on the move 363 00:21:19,280 --> 00:21:23,159 Speaker 1: and when central banks are stuck at zero brand bound vau. 364 00:21:23,800 --> 00:21:27,200 Speaker 1: The environment's different, right. A great theory of yours, what 365 00:21:27,400 --> 00:21:30,440 Speaker 1: Ed Thorpe would call Andy Martin Gel theory is you're 366 00:21:30,560 --> 00:21:34,159 Speaker 1: in a trade, you're at a loss. In the amateurs 367 00:21:34,280 --> 00:21:36,240 Speaker 1: load the boat on the lost position because of the 368 00:21:36,320 --> 00:21:39,200 Speaker 1: belief it's gonna go up. You don't do that, do 369 00:21:39,400 --> 00:21:42,360 Speaker 1: you know? No, no, no, What do you do when 370 00:21:42,440 --> 00:21:46,520 Speaker 1: you're at a loss? Oh? I cut before you cut? 371 00:21:46,920 --> 00:21:49,560 Speaker 1: What do you do is you observe a loss and 372 00:21:49,720 --> 00:21:52,160 Speaker 1: you need to make a decision. Give us the Paul 373 00:21:52,200 --> 00:21:55,359 Speaker 1: Tutor Jones mechanism of that. Well, the I think it 374 00:21:55,480 --> 00:21:58,800 Speaker 1: starts way before that. Before you ever enter a trade. 375 00:21:59,680 --> 00:22:03,720 Speaker 1: You figure out what do I think my reward is? 376 00:22:03,960 --> 00:22:06,760 Speaker 1: What do I think my risk? Is? My my favorite, 377 00:22:07,440 --> 00:22:11,040 Speaker 1: my favorite metric. Whenever I go back and I go 378 00:22:11,160 --> 00:22:12,879 Speaker 1: back to the University of Virginia every year and a 379 00:22:12,880 --> 00:22:15,320 Speaker 1: half for thirty years, and I sit in in the 380 00:22:15,400 --> 00:22:19,080 Speaker 1: lecture a couple of different finance classes, and I always say, Okay, listen, 381 00:22:19,280 --> 00:22:21,000 Speaker 1: you don't need to go to business school. Here's all 382 00:22:21,040 --> 00:22:23,639 Speaker 1: you need to know five to one? And I look around. 383 00:22:23,800 --> 00:22:25,720 Speaker 1: What does five to one mean? They all look at me. 384 00:22:25,800 --> 00:22:29,000 Speaker 1: It's I guess they think I'm some kind of alien. 385 00:22:29,080 --> 00:22:32,200 Speaker 1: I go five means you're gonna risk a dollar to 386 00:22:32,320 --> 00:22:35,000 Speaker 1: make five so you can have an eighty percent loss rate. 387 00:22:35,240 --> 00:22:38,120 Speaker 1: You can, uh, you can. You can lose four times, 388 00:22:38,640 --> 00:22:40,760 Speaker 1: but as long as that one time you hold on 389 00:22:40,920 --> 00:22:43,000 Speaker 1: you make the five dollars, you end up within that profit. 390 00:22:43,119 --> 00:22:46,360 Speaker 1: So when I ever enter a trade, already know where 391 00:22:46,359 --> 00:22:49,160 Speaker 1: I'm gonna take my loss, and it just becomes nothing 392 00:22:49,240 --> 00:22:52,800 Speaker 1: more than uh, like going shopping. You know that when 393 00:22:52,840 --> 00:22:54,600 Speaker 1: you're gonna go there, what you're gonna get. I know 394 00:22:54,800 --> 00:22:57,280 Speaker 1: where before I ever put a trade on, what my 395 00:22:57,400 --> 00:22:59,920 Speaker 1: stop out point is. So for me, it's not mine training, 396 00:23:00,080 --> 00:23:03,160 Speaker 1: it's just, um, it's really trade construction. It's the most 397 00:23:03,200 --> 00:23:05,680 Speaker 1: important thing, and that starts before you ever execute. So 398 00:23:05,720 --> 00:23:07,359 Speaker 1: I've got to get into some of the traits right now, 399 00:23:07,480 --> 00:23:10,800 Speaker 1: just very quickly. Short the dollar at some point, long stocks, 400 00:23:10,800 --> 00:23:13,760 Speaker 1: at least initially, it's the initially I'm interested in. How 401 00:23:13,800 --> 00:23:15,680 Speaker 1: do you come to the time frame? The initially part 402 00:23:15,720 --> 00:23:18,600 Speaker 1: of it? What's the thinking that goes into that? Um, 403 00:23:19,880 --> 00:23:22,320 Speaker 1: when you mean I don't understand the rake cut one 404 00:23:22,359 --> 00:23:25,760 Speaker 1: on one tracks, you said go long stocks initially, right, 405 00:23:25,920 --> 00:23:28,439 Speaker 1: it's the initially part of interested in. So we're already 406 00:23:28,520 --> 00:23:31,560 Speaker 1: in in the initially phase. Right, The rake cut one 407 00:23:31,600 --> 00:23:38,680 Speaker 1: oh one's been going on since they stopped hiking in December, So, um, 408 00:23:39,359 --> 00:23:41,600 Speaker 1: we're in that phase right now. We should be long 409 00:23:41,680 --> 00:23:43,640 Speaker 1: stocks right now, we're probably gonna go make a new 410 00:23:43,760 --> 00:23:46,880 Speaker 1: high My guess is that we're going to We're gonna 411 00:23:46,920 --> 00:23:50,159 Speaker 1: go into beyond the Rake Cut and continue in the 412 00:23:50,240 --> 00:23:52,440 Speaker 1: new high grounds. How from New Jersey emails and he 413 00:23:52,520 --> 00:23:57,080 Speaker 1: wants to know, did you want to beyond meat? No? No, 414 00:23:57,359 --> 00:24:03,240 Speaker 1: I'm i am. I love my regular beef Hamburg to 415 00:24:03,320 --> 00:24:06,760 Speaker 1: help back. You can come back, Jones with some serious 416 00:24:06,840 --> 00:24:11,479 Speaker 1: investment wisdom there in support of just capital using data 417 00:24:11,800 --> 00:24:15,560 Speaker 1: find out where we are in the continuum of American culture. 418 00:24:28,920 --> 00:24:33,080 Speaker 1: Joining us from Chicago David Harrow Harris associates as well. 419 00:24:33,200 --> 00:24:35,360 Speaker 1: He's agreed to be with us today because the Brewers 420 00:24:35,680 --> 00:24:38,000 Speaker 1: are half a game ahead of the Cubs, which always 421 00:24:38,080 --> 00:24:43,440 Speaker 1: makes for a good uh moment. David Harrow on international investment, 422 00:24:43,600 --> 00:24:47,560 Speaker 1: is there an opportunity in Asia? And given these protests 423 00:24:47,600 --> 00:24:51,440 Speaker 1: in Hong Kong, is there an opportunity in the capitalism 424 00:24:51,680 --> 00:24:57,080 Speaker 1: forward of Hong Kong? Well, not necessarily. I mean we 425 00:24:57,560 --> 00:25:00,119 Speaker 1: look at things again from as you know, time, from 426 00:25:00,160 --> 00:25:05,320 Speaker 1: a very bottom up value oriented approach, and we're kind 427 00:25:05,320 --> 00:25:09,080 Speaker 1: of underweight that area to begin with. Now, if these 428 00:25:09,240 --> 00:25:14,200 Speaker 1: protests and the instability there continues to lead to lower prices, 429 00:25:15,119 --> 00:25:18,880 Speaker 1: perhaps there'll be some more opportunity, but we're watching it closely. 430 00:25:19,640 --> 00:25:21,399 Speaker 1: Hong Kong is a place near and dear to me. 431 00:25:21,440 --> 00:25:23,680 Speaker 1: I've been going there since the nineteen eighties. It's just 432 00:25:23,800 --> 00:25:27,480 Speaker 1: a fabulous place and it's always sad to see this 433 00:25:27,640 --> 00:25:31,200 Speaker 1: type of situation development. It has been rocky in big 434 00:25:31,320 --> 00:25:34,200 Speaker 1: cap international investment. Where's the light at the end of 435 00:25:34,240 --> 00:25:37,479 Speaker 1: the David Harrow tunnel, Well, there will be light at 436 00:25:37,480 --> 00:25:40,600 Speaker 1: the end of the tunnel. Eventually these things get resolved 437 00:25:40,800 --> 00:25:44,320 Speaker 1: and the body heals itself, and you just tend to 438 00:25:44,440 --> 00:25:48,080 Speaker 1: see kind of a return to normalcy. But you're certainly right. 439 00:25:48,240 --> 00:25:50,560 Speaker 1: It's it's been very rocky and volatile, I would say 440 00:25:50,640 --> 00:25:56,359 Speaker 1: since about the second month of eighteen and hitting. Some 441 00:25:56,520 --> 00:25:58,600 Speaker 1: of the international issues have been you know, not just 442 00:25:58,720 --> 00:26:01,200 Speaker 1: what you see with us in China, but don't forget 443 00:26:01,400 --> 00:26:05,200 Speaker 1: the European situation, Bragsait and the Italians. You know, there's 444 00:26:05,280 --> 00:26:09,439 Speaker 1: always something and there's always something that the silver lining 445 00:26:09,560 --> 00:26:13,600 Speaker 1: is provides opportunity is it often moves price in a 446 00:26:13,680 --> 00:26:16,760 Speaker 1: far different production than where values going. David. I look 447 00:26:16,800 --> 00:26:18,920 Speaker 1: at your portfolio and I've just got the recent update. 448 00:26:19,000 --> 00:26:21,560 Speaker 1: Like every other mortal out there, I don't see Fiat Christo. 449 00:26:21,640 --> 00:26:24,240 Speaker 1: I don't see Deutsche Bank, etcetera. But what I do 450 00:26:24,400 --> 00:26:27,760 Speaker 1: see is a set of European companies where I question 451 00:26:27,920 --> 00:26:30,399 Speaker 1: what boards are doing. Now we can look at Deutsche 452 00:26:30,440 --> 00:26:33,920 Speaker 1: Bank at six euros per sharers maybe the arch management 453 00:26:34,000 --> 00:26:38,800 Speaker 1: board issue. Do you actually believe that European multinational boards 454 00:26:38,960 --> 00:26:43,879 Speaker 1: represents shareholders or do they represent something else? Not to 455 00:26:44,000 --> 00:26:48,240 Speaker 1: the degree of which we would hope. It has steadily 456 00:26:48,359 --> 00:26:50,600 Speaker 1: improved since I don't know, I've been doing this since 457 00:26:50,640 --> 00:26:56,480 Speaker 1: at six, It certainly has improved. You've seen better attention 458 00:26:56,640 --> 00:27:00,320 Speaker 1: paid to building shareholder value. But is it where we 459 00:27:00,400 --> 00:27:02,239 Speaker 1: want it? No? And in fact I don't know if 460 00:27:02,320 --> 00:27:05,200 Speaker 1: any place is a hundred percent where we want and 461 00:27:05,240 --> 00:27:08,760 Speaker 1: including the United States. This is a problem, in fact, 462 00:27:08,800 --> 00:27:12,679 Speaker 1: the problem with capitalism. I'm a hundred percent believer in capitalism, 463 00:27:12,760 --> 00:27:16,000 Speaker 1: but when you have a transitory owner base as you 464 00:27:16,119 --> 00:27:20,199 Speaker 1: do and equities, you often have boards that think they 465 00:27:20,240 --> 00:27:24,120 Speaker 1: could get away with not building and not committing themselves 466 00:27:24,720 --> 00:27:28,320 Speaker 1: to building long term shareholder value. You see, we are 467 00:27:28,359 --> 00:27:31,840 Speaker 1: shareholders of Daimler and we've kind of had some issues 468 00:27:32,080 --> 00:27:36,280 Speaker 1: with the pace and the attitude towards value creation. We 469 00:27:36,359 --> 00:27:39,480 Speaker 1: think this is changing there's there's a new CEO, there's 470 00:27:39,520 --> 00:27:42,399 Speaker 1: a new CFO, and we think this will be a 471 00:27:42,600 --> 00:27:47,200 Speaker 1: positive step uh in in one of the big blue 472 00:27:47,320 --> 00:27:51,119 Speaker 1: chip European industrials. So it is slowly changing. We're very 473 00:27:51,200 --> 00:27:54,640 Speaker 1: hopeful that the Dame Lar change in CEO means more 474 00:27:54,800 --> 00:27:58,000 Speaker 1: attention to shareholder value. But you're exactly right, it's not 475 00:27:58,119 --> 00:28:00,639 Speaker 1: where it should be. What's even worse in Europe, by 476 00:28:00,720 --> 00:28:03,480 Speaker 1: the way, is Japan, where you know shareholders are probably 477 00:28:03,560 --> 00:28:06,760 Speaker 1: number eighteen on the pecking list. The Bank Japan is 478 00:28:06,800 --> 00:28:09,400 Speaker 1: trying to support that effort, as you know, David By 479 00:28:09,760 --> 00:28:12,080 Speaker 1: by buying ETFs that trent companies that are doing the 480 00:28:12,160 --> 00:28:16,639 Speaker 1: so called right things. It's not working, No, it's not 481 00:28:16,800 --> 00:28:20,200 Speaker 1: working because their definition of right things is so muted. 482 00:28:20,840 --> 00:28:24,080 Speaker 1: It's it's literally pathetic. I mean there's companies that should, 483 00:28:24,200 --> 00:28:26,680 Speaker 1: for for an example, have an r o E of 484 00:28:26,800 --> 00:28:30,480 Speaker 1: fifteen sixteen seventeen percent, who sit on half their market 485 00:28:30,520 --> 00:28:32,600 Speaker 1: cap in cash and have a return on equity of 486 00:28:32,680 --> 00:28:36,560 Speaker 1: six or seven percent, and you know Bank of Japan 487 00:28:36,720 --> 00:28:39,920 Speaker 1: and the Corporate governance there's pushing for eight percent or 488 00:28:40,040 --> 00:28:45,360 Speaker 1: nine percent. I mean, this is like almost ludicrous. We 489 00:28:45,440 --> 00:28:51,000 Speaker 1: should be looking at trying to really optimize efficiency, financial 490 00:28:51,120 --> 00:28:55,160 Speaker 1: operational efficiency of these companies, and it's not happening. It's 491 00:28:55,240 --> 00:28:58,480 Speaker 1: not happening fast enough, and it's barely moving the needle. 492 00:28:58,920 --> 00:29:02,920 Speaker 1: I think the solution is to be welcome to outside 493 00:29:03,200 --> 00:29:06,040 Speaker 1: M and A. If you did that, you would see 494 00:29:06,080 --> 00:29:07,840 Speaker 1: some changes. David got to leave it there to look 495 00:29:07,840 --> 00:29:10,760 Speaker 1: at Hong Kong quickly, David, Harrow, both and Harrison. So 496 00:29:10,840 --> 00:29:13,400 Speaker 1: he said, thank you so much. Thanks for listening to 497 00:29:13,480 --> 00:29:17,960 Speaker 1: the Bloomberg Surveillance podcast. Subscribe and listen to interviews on 498 00:29:18,040 --> 00:29:23,880 Speaker 1: Apple Podcasts, SoundCloud, or whichever podcast platform you prefer. I'm 499 00:29:23,960 --> 00:29:27,200 Speaker 1: on Twitter at Tom Keane before the podcast. You can 500 00:29:27,280 --> 00:29:30,440 Speaker 1: always catch us worldwide. 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