WEBVTT - Bloomberg Businessweek Weekend - May 3rd, 2019 0:00:00.080 --> 0:00:02.360 Hi, I'm Jason Kelly and I'm Carol Masser. Welcome to 0:00:02.400 --> 0:00:05.280 the Bloomberg Business Week Weekend podcast. This week we bring 0:00:05.280 --> 0:00:07.080 you highlights from our trip to the Milk and Institute 0:00:07.080 --> 0:00:10.440 Global Conference in Los Angeles, and it was all about 0:00:10.520 --> 0:00:13.600 driving shared prosperity and folks from all walks of life, 0:00:13.680 --> 0:00:17.360 all different types of industries, having really really smart conversations 0:00:17.400 --> 0:00:20.319 getting into complicated subjects. We also hear from some of 0:00:20.320 --> 0:00:23.440 the biggest names in business, politics and finance. Well and 0:00:23.480 --> 0:00:26.760 where else, apparently are you going to run into Steve 0:00:26.800 --> 0:00:31.920 Schwartzman from Blackstone, Bruce Flatt from Brookfield, Bob Dudley from BP, 0:00:32.400 --> 0:00:37.239 but also the Edge Laura Dern. We talked to all 0:00:37.280 --> 0:00:39.440 of them. It's like the dream cocktail party and we 0:00:39.440 --> 0:00:41.680 were there first. Up, though, Jason, we spoke with oak 0:00:41.680 --> 0:00:45.240 Tree Capital co chairman Howard Marks. You are well known 0:00:45.720 --> 0:00:49.360 in the world as someone who knows just about everything 0:00:49.400 --> 0:00:52.680 about credit and distress. Is there any distress in the 0:00:52.720 --> 0:00:57.000 world right now? There is distress mostly outside the You well, 0:00:57.000 --> 0:01:00.600 there's some in the US. Retail is in distress, some 0:01:00.760 --> 0:01:05.119 energy is in distress with low energy prices. Outside the US, 0:01:06.319 --> 0:01:10.720 it's a more widespread less shotgun. Um. You know there 0:01:10.720 --> 0:01:15.280 are some npls in in the European banks. We we 0:01:15.440 --> 0:01:17.959 buy some of those. And there's a big pile up, 0:01:18.000 --> 0:01:21.920 of course of npls in China. Um and uh, and 0:01:22.160 --> 0:01:24.960 we're we're looking at those. You are looking at them, 0:01:25.000 --> 0:01:28.000 but not buying it. We're investing, We're buying. We have 0:01:29.480 --> 0:01:32.520 close to four years of experience doing it. We we 0:01:32.640 --> 0:01:35.840 concluded four years ago that it was very important to 0:01:36.000 --> 0:01:39.720 start building the experience. You know, you can't go into 0:01:39.720 --> 0:01:44.160 a market when it becomes propitious without some background, So 0:01:44.920 --> 0:01:48.560 clearly you have to build the experience in advance. How 0:01:48.600 --> 0:01:51.240 do you see China, especially with the backdrop of I 0:01:51.240 --> 0:01:53.440 feel like the tensions between the United States and China 0:01:53.560 --> 0:01:56.560 certainly not new, We've seen them through several administrations. But 0:01:56.800 --> 0:02:00.040 how do you view that that political lens for this 0:02:00.200 --> 0:02:04.440 is the investment lens. Well, it's it's not easy, um, 0:02:04.480 --> 0:02:06.440 But you know, the way I think of it, Carol, 0:02:06.800 --> 0:02:12.280 is that Europe and Japan are economic senior citizens. The 0:02:12.400 --> 0:02:16.240 U S is a mature adult, and China's an adolescent. 0:02:17.080 --> 0:02:19.399 And if you've ever had an adolescent in your house 0:02:20.520 --> 0:02:23.320 now and I know Jason has then you know that 0:02:23.360 --> 0:02:29.560 there are it's tempestuous ups and downs, UM chaotic, but 0:02:29.919 --> 0:02:33.480 you also know that the adolescents best decades are ahead. 0:02:34.440 --> 0:02:37.400 And you know over the next twenty years, which is 0:02:37.400 --> 0:02:41.480 going to grow faster, China or the US? Simple question. 0:02:41.720 --> 0:02:45.920 In my opinion, China will have rapid growth. UM. Once 0:02:45.919 --> 0:02:48.160 in a while, there will be You'll have some bad days. 0:02:48.160 --> 0:02:50.600 You might even have some bad years once in a while. 0:02:51.160 --> 0:02:55.840 There may be issues over uh macro factors. But I 0:02:55.880 --> 0:02:59.440 think that uh, you know, one of the largest economies 0:02:59.440 --> 0:03:03.080 in the world. UH, you can't ignore it, and so 0:03:03.480 --> 0:03:07.720 do you invest differently. They're going forward in a more 0:03:07.840 --> 0:03:12.280 meaningful way, especially given now the place where you're going 0:03:12.360 --> 0:03:16.359 to have oak Tree housed within UH Brookfield. You guys 0:03:16.400 --> 0:03:19.320 are combining operations there. What is the opportunity? How big 0:03:19.360 --> 0:03:22.600 does the opportunity get in China? The numbers are very big. 0:03:23.280 --> 0:03:27.120 Everything in China is really big in terms of numbers. UH. 0:03:27.240 --> 0:03:30.040 We have been moving in cautiously. We will continue to 0:03:30.080 --> 0:03:33.040 do so, but we are amping up at this time. 0:03:33.720 --> 0:03:37.400 I feel like there is such Howard animosity. Certainly, I 0:03:37.400 --> 0:03:41.320 think there's a U S perspective of thinking. China's the enemy. Uh. 0:03:41.360 --> 0:03:43.840 And they're certainly got their long term you know, planning 0:03:43.880 --> 0:03:45.640 in terms of industries and how they want to be 0:03:45.760 --> 0:03:48.240 much more sophisticated, whether it's technology and AI and so 0:03:48.320 --> 0:03:49.640 on and so forth. And we look at that as 0:03:49.640 --> 0:03:52.720 a bad thing and we want to stop them from 0:03:52.720 --> 0:03:55.040 doing that. How do we get a better understanding of 0:03:55.080 --> 0:03:57.560 what's going on from China? You've I'm assuming, been there, 0:03:57.840 --> 0:04:01.080 You've talked to various companies and investors. What what are 0:04:01.120 --> 0:04:05.000 we missing and not understanding? Maybe? Is there such animosity? Well, 0:04:05.040 --> 0:04:07.520 I've never felt any animosity. I've been going there for 0:04:07.560 --> 0:04:11.360 about ten years or so and more. I guess is 0:04:11.400 --> 0:04:13.720 it competitive? Though? Does China look at the US as 0:04:13.760 --> 0:04:18.280 competitive and vice versa? Certainly on a geopolitical stage, uh? 0:04:18.320 --> 0:04:22.880 And within specific industries, I think, Um, that's the nature 0:04:22.920 --> 0:04:27.359 of business. Uh. You know, Uh, everybody competes. It brings 0:04:27.360 --> 0:04:31.320 out the best of us. And uh uh you know, 0:04:31.400 --> 0:04:34.240 it's really interesting to be in China and look at 0:04:34.320 --> 0:04:39.120 China and think about how they integrate a essentially controlled 0:04:39.160 --> 0:04:42.040 economy with free enterprise, which they have a lot of. 0:04:42.520 --> 0:04:46.279 And how did the two call exist? Um? But Uh, 0:04:46.720 --> 0:04:51.800 my latest memo talked about UM some reforms that took 0:04:51.800 --> 0:04:56.240 place in China UH forty years ago. UH, and it 0:04:56.920 --> 0:05:03.400 created much more emphasis on rewards and incentives. UM and UH. 0:05:03.440 --> 0:05:09.279 I think that I think that China is highly incentivized 0:05:09.320 --> 0:05:13.080 to work towards those rewards, even if not the whole 0:05:13.120 --> 0:05:16.920 economy is characterized by free enterprise. I want to ask 0:05:16.960 --> 0:05:19.760 you about this notion that's out there that maybe the 0:05:20.920 --> 0:05:23.680 markets are in what people are terming sort of a 0:05:23.760 --> 0:05:25.960 melt up. You know, that we're just sort of going 0:05:26.000 --> 0:05:28.960 and going and going along because there's nothing stopping it 0:05:29.040 --> 0:05:31.039 and valuations are getting out of control. What do you 0:05:31.080 --> 0:05:33.799 make of that argument. I've been in this business fifty years, Jason, 0:05:33.839 --> 0:05:38.000 I've heard it several times in the past. UM. You know, UH. 0:05:38.120 --> 0:05:41.239 I think that the the best way to think about 0:05:41.279 --> 0:05:44.679 it is by understanding what I call the three stages 0:05:44.680 --> 0:05:47.200 of a bull market. The first stage, when only a 0:05:47.240 --> 0:05:50.240 few far sided people understand that there could be improvement, 0:05:50.760 --> 0:05:54.039 the second stage, when most people see that there is improvement, 0:05:54.240 --> 0:05:56.640 and the third stage, when everybody and his brother thinks 0:05:56.680 --> 0:05:59.080 things will get better forever. If you buy in the 0:05:59.080 --> 0:06:02.200 first stage, you pay bargain prices and you tend to 0:06:02.200 --> 0:06:04.279 make a lot of money. If you're buying the last stage, 0:06:04.480 --> 0:06:07.280 it's much more tricky. I think that when I hear 0:06:07.640 --> 0:06:11.880 the UH stories about perpetual prosperity and trees growing to 0:06:11.920 --> 0:06:14.680 the sky, I tend to think we're in the last stage. 0:06:14.880 --> 0:06:17.800 That's Howard Marks, the co chairman of oak Tree Capital 0:06:17.920 --> 0:06:22.120 and of course one of the most followed names in finance. 0:06:22.240 --> 0:06:26.240 His memos that he sents to his investors there must reads. 0:06:26.240 --> 0:06:29.280 He's in the news of course with his combination with 0:06:29.520 --> 0:06:32.680 brook Field that is one of the biggest deals from 0:06:32.720 --> 0:06:35.080 some of the biggest dealmakers in the world. Plays into 0:06:35.080 --> 0:06:38.200 asset managers getting bigger. We're seeing consolidation. But I always 0:06:38.200 --> 0:06:40.279 love to talk to somebody like Howard who has seen 0:06:40.360 --> 0:06:42.680 lots of market cycles and really looks at things from 0:06:42.680 --> 0:06:45.039 a very smart and deep perspective. And I thought his 0:06:45.240 --> 0:06:48.160 comments about China where especially timely. I was really glad 0:06:48.160 --> 0:06:50.160 we got into that as well. So Carol next up 0:06:50.320 --> 0:06:52.159 from Milk and I had a chance to sit down 0:06:52.160 --> 0:06:55.279 with the CEO VP. That's Bob Dudley. He was coming 0:06:55.279 --> 0:06:57.480 off of earnings, who talked a little bit about that. 0:06:57.520 --> 0:07:00.280 We talked about continuing volatility in the oil mark get 0:07:00.279 --> 0:07:03.320 and of course, you can't talk about just about anything 0:07:03.480 --> 0:07:05.960 in the world, not talking about how a tweet can 0:07:06.040 --> 0:07:08.600 change your business. But rightfully so, Jason, you started by 0:07:08.600 --> 0:07:11.520 asking him about this quarter's earnings. What was the key 0:07:11.560 --> 0:07:14.520 takeaway for you from earnings this quarter? So this was 0:07:14.560 --> 0:07:16.720 our first quarter. Oil prices a little bit down. I 0:07:16.720 --> 0:07:21.280 think resilience in the earning, bang on expectations. Operations work 0:07:21.400 --> 0:07:23.360 very smoothly around the world. We have things that were 0:07:23.400 --> 0:07:26.040 down and off in long plan. So very very pleased 0:07:26.040 --> 0:07:31.480 with the earnings and no real big surprises. But one 0:07:31.480 --> 0:07:33.800 of the things that people are always interested in is 0:07:33.840 --> 0:07:37.120 your trading business. Uh. You get some details here and there. 0:07:37.160 --> 0:07:39.760 We got a little bit of details about natural gas. 0:07:39.800 --> 0:07:42.800 Tell us what was moving there? Well, there was. We 0:07:42.840 --> 0:07:44.600 did have a good quarter in the trading, both in 0:07:44.960 --> 0:07:48.960 global oil trading and natural gas. Uh l G prices 0:07:48.960 --> 0:07:52.160 were moving a bit. Of course, the oil prices very volatile. 0:07:52.280 --> 0:07:54.800 Uh you know, they've been three or four days down 0:07:54.960 --> 0:07:57.600 just on a tweet. We'll see. There is a lot 0:07:57.600 --> 0:08:00.320 of volatility in the oil markets right now. Every one's 0:08:00.320 --> 0:08:03.240 waiting to see about the either extension or no extension 0:08:03.240 --> 0:08:06.480 of Iran waivers. I think the market isn't really sure, 0:08:06.480 --> 0:08:08.520 even though they said they won't be extended. If they 0:08:08.520 --> 0:08:10.920 are extended, I think you'll see the price of oil 0:08:10.960 --> 0:08:12.800 dip a bit. If they're not. You can see a 0:08:12.880 --> 0:08:15.240 drift up here and help us understand a little bit. 0:08:15.280 --> 0:08:18.960 I know it's pretty closely guarded how the trading operation works, um. 0:08:19.000 --> 0:08:21.800 But what was driving especially the the success on the 0:08:21.800 --> 0:08:24.360 oil side. Well, I think on the oil side is 0:08:24.400 --> 0:08:27.920 a position that was taken really by by BB coming 0:08:27.920 --> 0:08:30.600 out of the New Year's season, that we thought that 0:08:30.680 --> 0:08:33.199 all presses were going to tighten. All the data look 0:08:33.280 --> 0:08:35.680 like that. If you remember, they remarkably dropped to about 0:08:35.800 --> 0:08:38.800 fifty dollars a barrel and then come back stronger throughout 0:08:38.840 --> 0:08:41.040 the quarter, And I think that was part of the strength. No, 0:08:41.200 --> 0:08:44.240 no special magic trade. It was just we believe the 0:08:44.240 --> 0:08:46.960 prices we're gonna type. And so let's talk about oil 0:08:47.000 --> 0:08:49.280 prices a little bit. As you say, they are highly 0:08:49.280 --> 0:08:54.920 susceptible to politics, they're highly susceptible to social media platforms 0:08:54.960 --> 0:08:58.880 and and sentiment. How do you manage that? Well, you can't. 0:08:58.960 --> 0:09:01.160 You can't always get right. I mean, you take it. 0:09:01.200 --> 0:09:03.400 We try to do it on the fundamentals. Long term 0:09:03.480 --> 0:09:05.840 rather than very short term reactions to things. We think 0:09:05.840 --> 0:09:08.520 fundamentally the markets are type this year. You sit and 0:09:08.600 --> 0:09:12.000 look at you know, what is unfolding, this Venezuela defying 0:09:12.040 --> 0:09:15.800 economic gravity, and reports of more violence in Libya, and 0:09:15.960 --> 0:09:19.440 these things approach the fundamentals, and you look at the 0:09:19.440 --> 0:09:22.920 production growth of the Permian, but it's still bottleneck that 0:09:22.960 --> 0:09:25.360 won't be there forever. So it feels to us a 0:09:25.520 --> 0:09:28.440 kind of tight right now. And what's your biggest worry 0:09:28.440 --> 0:09:30.319 about oil prices as we go through the rest of 0:09:30.400 --> 0:09:33.839 nineteen nineteen. Well, for for us, we planned the company 0:09:33.920 --> 0:09:36.120 on fifty five dollars a barrow or a very narrow 0:09:36.160 --> 0:09:40.080 fairway for BP. I think if I worry about it 0:09:40.200 --> 0:09:43.120 longer term, not short term. Longer term is we end 0:09:43.200 --> 0:09:45.520 up either with a spike or a drop, and that's 0:09:45.520 --> 0:09:47.360 not good for the world. It's not good for planning. 0:09:47.559 --> 0:09:49.200 But right now I think we will be in this 0:09:49.320 --> 0:09:54.280 fair way of it looks like for En, talk to 0:09:54.280 --> 0:09:56.839 me about the integration of the b HP assets. What 0:09:56.880 --> 0:09:59.200 are you learning there, especially about the the U S 0:09:59.200 --> 0:10:03.120 shail market. But so b HPS a great company, great assets, 0:10:03.160 --> 0:10:05.440 great people. We only took over the operations on the 0:10:05.440 --> 0:10:08.400 first of March after the closing, so we're really early 0:10:08.440 --> 0:10:13.040 into it. We've got, you know, synergies that that will happen. 0:10:13.080 --> 0:10:15.400 They will happen very fast. We like the assets a lot. 0:10:15.800 --> 0:10:18.160 We're part of that checkerboarding and the in the Permian 0:10:18.480 --> 0:10:22.600 you've ever seen the old historical reason why UH leases 0:10:22.640 --> 0:10:24.959 are are actually shaped like a checkerboard. And so we've 0:10:25.000 --> 0:10:27.439 got people in between us. I think down the road 0:10:27.520 --> 0:10:30.040 they'll likely be some consolidation or swapping to make that 0:10:30.080 --> 0:10:32.400 a little bit more efficient. But we like the rocks. 0:10:32.600 --> 0:10:34.840 UH We've got a great team that's been working on 0:10:34.920 --> 0:10:36.880 natural gas in the US and now they can turn 0:10:36.920 --> 0:10:40.000 themselves to crude out which would be great. And does 0:10:40.040 --> 0:10:43.000 that consolidation come sooner rather than later? Is that something 0:10:43.040 --> 0:10:46.040 we see in the near term, like this year, next year? 0:10:46.080 --> 0:10:48.080 When when might that happen? It's a good question. I 0:10:48.120 --> 0:10:50.959 think there's no need to rush it. I think it's 0:10:51.000 --> 0:10:53.120 just one of those things if you look at that 0:10:53.240 --> 0:10:55.480 big piece of geography out there, not just for us, 0:10:55.600 --> 0:10:59.160 that there will be rationaliz station right coming on. So 0:10:59.320 --> 0:11:01.760 Compere you think will be competitive is as you try 0:11:01.760 --> 0:11:04.600 and sort of figure out who's gonna get the upper hand. Well, 0:11:04.640 --> 0:11:06.720 I think I think it'll you know, you could have 0:11:06.840 --> 0:11:10.360 the industrial logic of companies just rationalized. You can do swaps. 0:11:10.400 --> 0:11:12.320 It doesn't even have to be and I can see 0:11:12.320 --> 0:11:14.800 that some people would see pairents of companies will see 0:11:14.800 --> 0:11:17.240 a lot of value in that. And for us, it's 0:11:17.280 --> 0:11:19.880 also what we did with HP with some other assets 0:11:19.920 --> 0:11:22.200 in the Eagle for in the Haynesville right next to 0:11:22.240 --> 0:11:24.960 where we were already producing gas. So it's a really 0:11:25.040 --> 0:11:27.960 nice extra piece of business for BP. And you'll see 0:11:28.000 --> 0:11:30.280 us divesting some of the gas assets that we had 0:11:30.679 --> 0:11:33.679 to make sure we we returned to shareholders. Seeing the 0:11:33.720 --> 0:11:35.920 money that we put out, well, you anticipated my next 0:11:36.000 --> 0:11:39.199 question not surprisingly those divestments, especially here in the US. 0:11:39.440 --> 0:11:42.080 How's that going? Is it the pace you want? What 0:11:42.120 --> 0:11:45.360 happens next? So again no rush where we've had data open, 0:11:45.600 --> 0:11:48.160 data rooms open now this year for a number of 0:11:48.200 --> 0:11:50.840 months now, and I can just say I'm very surprised 0:11:50.840 --> 0:11:53.199 that the number of companies and the interests are going 0:11:53.240 --> 0:11:55.600 through and kicking the tires and looking at the assets 0:11:55.640 --> 0:11:58.280 and the data. So I think it bodes well for 0:11:58.720 --> 0:12:02.000 UM whenever we decide and and what what do you 0:12:02.040 --> 0:12:05.439 owe that surprise too, and where is the interest coming from? 0:12:05.480 --> 0:12:07.760 Help us understand that it's a real wide variety of 0:12:07.760 --> 0:12:10.640 interest in the buying buying set. It's companies we know, 0:12:10.760 --> 0:12:13.679 some of the bigger companies, it's uh, some of the 0:12:13.720 --> 0:12:18.560 independence that we know. And then there's individuals essentially individuals 0:12:18.600 --> 0:12:21.400 who have a lot of backing of cash, so private equity, 0:12:21.440 --> 0:12:24.960 maybe small private equity, So it's the whole spectrum. I 0:12:25.000 --> 0:12:27.280 do wonder about the world at private equity place here 0:12:27.280 --> 0:12:30.319 because it feels like as an industry they've sort of 0:12:30.360 --> 0:12:33.120 been in and out of of the oil business, they 0:12:33.240 --> 0:12:36.760 the energy business. How do you see them both competitively 0:12:36.880 --> 0:12:39.240 and as a partner at this point, Well, we see 0:12:39.240 --> 0:12:41.400 them so not only here in the U s. We 0:12:41.400 --> 0:12:43.920 we see private equity has moved into the North Sea, 0:12:43.960 --> 0:12:47.199 the northern southern North Sea. In some cases they are 0:12:47.240 --> 0:12:50.319 buying established operators. In other cases they buy a percentage 0:12:50.320 --> 0:12:52.880 and our partners. So we've got some very good private 0:12:52.880 --> 0:12:55.760 equity partners in the North Sea here in the US. 0:12:55.920 --> 0:12:57.760 I think it's I think it sort of goes up 0:12:57.760 --> 0:13:00.360 and down a little bit with their sources of money, 0:13:00.440 --> 0:13:03.760 and when it's tight, it's less and when money is easier. 0:13:03.920 --> 0:13:05.480 You see more of it, and it feels to be 0:13:05.520 --> 0:13:09.520 easier now. So Mr Buffett plays into the broader conversation 0:13:09.640 --> 0:13:13.000 with his investment there with Anti Darca. Does that change 0:13:13.000 --> 0:13:15.600 your strategy or does it change the landscape? Well, it 0:13:15.600 --> 0:13:18.839 doesn't change our strategy. I think I was surprised because 0:13:19.480 --> 0:13:22.160 you know, a number of years ago Mr Buffett wasn't 0:13:22.360 --> 0:13:25.600 particularly interested in in energy. It shows that he is, 0:13:25.679 --> 0:13:27.480 and I think that it's going to show the the 0:13:27.600 --> 0:13:30.480 energy engine of the US has really growing and support 0:13:30.520 --> 0:13:34.000 for that. Um he stepped in to help Occidental, which 0:13:34.040 --> 0:13:37.040 is a great company. The indoor. Our antidarchical assets are 0:13:37.080 --> 0:13:40.200 really good, whether it's ro Occidental or Chevron's really good. 0:13:40.200 --> 0:13:43.280 So it really doesn't surprise me this competition, right, it's 0:13:43.320 --> 0:13:45.360 great to catch up. The biggest thing just a couple 0:13:45.360 --> 0:13:49.240 of seconds left. You learn from hanging out here at Milkin. Well, 0:13:49.400 --> 0:13:51.320 this is a very different conference than the other ones 0:13:51.360 --> 0:13:53.760 you've got. We have investors from all around the West 0:13:54.000 --> 0:13:56.720 Coast and i'd say the Pacific rim. So for us, 0:13:56.760 --> 0:13:59.560 it's a chance to not only talk to partners existing 0:13:59.600 --> 0:14:03.080 sharehold there's possibly new shareholders and it's got a very 0:14:03.080 --> 0:14:07.120 broad of agreement of subjects here, from health to uh 0:14:07.160 --> 0:14:09.680 you know, the new technologies. I've enjoined it. That's VP 0:14:09.880 --> 0:14:12.800 CEO Bob Dudley and of course one of the most 0:14:13.160 --> 0:14:17.120 followed names in terms of how the oil market is going, 0:14:17.240 --> 0:14:20.680 and it tells us so much about the global economy. 0:14:20.720 --> 0:14:23.480 Investment in politics, Well, if you're at Milkin, you're in 0:14:23.640 --> 0:14:25.920 l A. Makes sense to stop in and talk to 0:14:26.080 --> 0:14:28.880 the mayor of that city, Eric Garcetti. You know, he 0:14:28.920 --> 0:14:32.600 thought about running for president, very well known politician, not 0:14:32.760 --> 0:14:34.640 just there in l A, but around the globe. It 0:14:34.680 --> 0:14:36.720 was great to talk to Mayor Garcetti because, Jason, when 0:14:36.720 --> 0:14:38.640 I think about Los Angeles, I do think about them 0:14:38.640 --> 0:14:41.400 being at the crossroads of so many important issues, whether 0:14:41.400 --> 0:14:44.920 it's infrastructure, whether it's immigration, whether it's politics, whether it's 0:14:44.920 --> 0:14:47.800 food production, and a lot going on in this city. 0:14:47.840 --> 0:14:50.040 And we began by talking with him about a Green 0:14:50.120 --> 0:14:52.640 New Deal for Los Angeles. He talked about what he 0:14:52.640 --> 0:14:55.360 had planned. You've got a big announcement, a green new Deal. 0:14:55.400 --> 0:14:57.200 We talked about at a national level, You've got a 0:14:57.200 --> 0:14:58.880 plan for l A. Tell us about it. Well, my 0:14:58.920 --> 0:15:02.000 simple message for in Washington is, while you're figuring it 0:15:02.000 --> 0:15:04.480 out and looking across the aisle. Don't worry about looking 0:15:04.520 --> 0:15:06.640 across the aisle, look across the country. And here in 0:15:06.800 --> 0:15:08.760 l A. Actually four and a half years ago we 0:15:08.840 --> 0:15:11.720 launched a plan that was about the environment, the economy 0:15:11.800 --> 0:15:14.200 and equity. And now people have talked about a green 0:15:14.240 --> 0:15:17.760 New Deal, so we're updating it, making stretch goals huge 0:15:17.800 --> 0:15:23.040 carbon neutral cities, carbon neutral buildings, trash free cities, recycling 0:15:23.040 --> 0:15:27.120 of our water, and zero carbon electric city grid. That 0:15:27.200 --> 0:15:28.960 now is time and l A I think can be 0:15:29.000 --> 0:15:32.840 the place while creating jobs. So it's economy and environment together, 0:15:32.880 --> 0:15:34.320 all right, So how do you do it? Like, what's 0:15:34.320 --> 0:15:36.880 the first what's the first step? And how soon do 0:15:37.000 --> 0:15:38.920 people really start to see results from this? Well, we 0:15:38.960 --> 0:15:41.160 already held ourselves accountable a few years ago, so we 0:15:41.160 --> 0:15:44.640 we reduced our carbon emissions in ten by eleven percent. 0:15:44.920 --> 0:15:46.960 I'd be challenged to find a city almost anywhere in 0:15:46.960 --> 0:15:49.240 the developed world that did that, and our unemployment went 0:15:49.280 --> 0:15:52.920 down fourteen percent that year. So it's conscious strategies for jobs. 0:15:52.960 --> 0:15:56.280 So looking for those green sector energy job solar installation, 0:15:56.600 --> 0:16:00.280 water technologies, and at the same time going straight to 0:16:00.360 --> 0:16:02.359 things that I own as a mayor that we collectively 0:16:02.400 --> 0:16:05.200 own and we run the largest municipal utility in the country, 0:16:05.200 --> 0:16:07.480 and we're transferring that not just off of coal, but 0:16:07.560 --> 0:16:09.760 now off of carbon itself. And then of course our 0:16:09.800 --> 0:16:13.520 transportation system in our buildings. Those three things, electricity, transportation 0:16:13.560 --> 0:16:15.320 and buildings account for about eight percent of all of 0:16:15.360 --> 0:16:18.480 our omissions. So what pushback are you getting? Because Green 0:16:18.520 --> 0:16:23.240 New Deal on a national level has drawn some maybe 0:16:23.240 --> 0:16:27.080 eye rolling, maybe some criticism, maybe some skepticism at the 0:16:27.160 --> 0:16:29.480 very least, what are you encountering at the local level. 0:16:29.520 --> 0:16:31.000 We don't really find that, and we want to put 0:16:31.040 --> 0:16:32.720 this out not just for l A, but really is 0:16:32.760 --> 0:16:35.160 a green print for all cities in the country and 0:16:35.200 --> 0:16:37.840 around the world. I chair Climate Mayors, which is four 0:16:38.520 --> 0:16:41.120 two mayors bipartisan group around the country. And I don't 0:16:41.120 --> 0:16:43.720 think we get caught up in those conversations because while 0:16:43.720 --> 0:16:46.440 people talking about universal incomes and things like that, we 0:16:46.480 --> 0:16:49.120 know in l A we created thirty five thousand green jobs. 0:16:49.280 --> 0:16:52.040 That's more than the country lost in coal jobs. So 0:16:52.360 --> 0:16:56.040 we know that we can create sectors in any city 0:16:56.080 --> 0:16:58.880 around this um and that kind of answers that middle 0:16:58.880 --> 0:17:00.600 class question of how do we have a place in 0:17:00.600 --> 0:17:03.160 the economy for our citizens in the future. It's by 0:17:03.160 --> 0:17:06.400 embracing this stuff aggressively. Well, let's talk about that very topic, 0:17:06.480 --> 0:17:08.800 because we think about a lot in New York, certainly 0:17:08.840 --> 0:17:12.000 all over the country, affordability just of of the big 0:17:12.000 --> 0:17:14.040 City's got a lot of people who want to come 0:17:14.080 --> 0:17:17.120 to a place like l A. You see it every day. 0:17:17.160 --> 0:17:19.560 I see it, you know, flying in and driving through 0:17:20.000 --> 0:17:24.200 uh Town yesterday. How do you ensure that this is 0:17:24.240 --> 0:17:27.520 a place where people can actually make a good living 0:17:27.640 --> 0:17:30.320 and live well, You have to find what those jobs are. So, 0:17:30.400 --> 0:17:32.760 for instance, I know New York struggling struggling with keeping 0:17:32.840 --> 0:17:35.159 up the subway and expanding it. We passed a measure 0:17:35.280 --> 0:17:39.440 that will never sunset to build fifteen new rapid transit lines, 0:17:40.000 --> 0:17:42.119 and we make sure those jobs go here locally. That's 0:17:42.119 --> 0:17:45.399 seven seven thousand jobs. You can't export their middle class, 0:17:45.400 --> 0:17:47.760 and you can keep them for an entire career, your lifetime. 0:17:48.040 --> 0:17:50.480 So I think it's thinking intelligently about these things, not 0:17:50.600 --> 0:17:52.960 just buying a little bit of solar power on the 0:17:53.000 --> 0:17:56.480 marketplace or recycling a little bit more, but really building 0:17:56.520 --> 0:17:58.320 the economy around that. And that's what we're doing here 0:17:58.320 --> 0:18:00.720 in l A and how do you it it into 0:18:01.000 --> 0:18:04.639 the state schools? You've got a new governor. Um, you know, 0:18:05.040 --> 0:18:07.600 you know pretty well. Um, you know he's had a 0:18:07.680 --> 0:18:10.080 job similar to you, a little a little bit further 0:18:10.160 --> 0:18:14.320 up state, smaller town, m But you know, how do 0:18:14.400 --> 0:18:16.240 you what do you need from the state in order 0:18:16.280 --> 0:18:18.760 to get this going into insured success. Well, I think 0:18:18.760 --> 0:18:21.320 cities often inspire the state policy. So we said we 0:18:21.320 --> 0:18:24.480 were going to be renewable, and then the state passed that. 0:18:24.560 --> 0:18:27.480 So that is now the goal for all of California. 0:18:27.960 --> 0:18:30.920 When we started becoming a solar city now we're number 0:18:30.960 --> 0:18:33.480 one solar city in America, the states started to help 0:18:33.480 --> 0:18:37.560 subsidize that electric cars, uh and electrifying our transportation system. 0:18:37.640 --> 0:18:40.119 So usually cities are the laboratories. States are then the 0:18:40.160 --> 0:18:42.200 folks that can give it sort of volume. But a 0:18:42.280 --> 0:18:44.080 city as big as l A is essentially the size 0:18:44.080 --> 0:18:45.760 of a state, And so we hope to not just 0:18:45.800 --> 0:18:48.720 inspire California, but the rest of the country too. And 0:18:49.480 --> 0:18:52.320 what about traffic? Can we just talk about traffics. It's 0:18:52.440 --> 0:18:54.400 it's blowing right now, you're at that late traffic report, 0:18:54.440 --> 0:18:56.760 but it happens to be midday. You know, you know 0:18:56.840 --> 0:19:00.760 three things, One is technology. We have even peak traffic 0:19:00.760 --> 0:19:04.440 in l A. Our streets don't have a car on them. Wow. 0:19:04.600 --> 0:19:08.520 So as we have autonomous vehicles or interconnected vehicles, we 0:19:08.560 --> 0:19:11.240 can much better use that space without having to double 0:19:11.280 --> 0:19:14.959 deck freeways at billions of dollars in decades long. Second 0:19:15.000 --> 0:19:16.959 is the public transportation system that I told you we're 0:19:16.960 --> 0:19:19.560 building out. And third is going to be building better 0:19:19.600 --> 0:19:21.679 communities l A. In the past, you didn't put the 0:19:21.680 --> 0:19:23.480 housing next to the jobs. You didn't put the retail 0:19:23.520 --> 0:19:26.240 near the housing. You didn't, you know, go out and 0:19:26.280 --> 0:19:29.320 worry about hitting five neighborhoods in one afternoon. New York. 0:19:29.359 --> 0:19:31.720 You don't look at crossing three boroughs just to go 0:19:31.800 --> 0:19:34.360 see a friend every day. So it's really about better 0:19:34.440 --> 0:19:37.959 zoning and planning. And we're completely redoing the city, especially 0:19:37.960 --> 0:19:40.560 around our transit corridors, to be more dense and to 0:19:40.600 --> 0:19:43.879 put those jobs, those healthcare needs, everything all close to 0:19:43.920 --> 0:19:46.840 where you live. And that's Eric Garcetti, the mayor of 0:19:46.960 --> 0:19:48.560 Los Angeles. You know, I got to see him in 0:19:48.600 --> 0:19:51.879 action a couple of times during the conference, and man, 0:19:52.040 --> 0:19:55.480 he is smooth. He commands a room. Very impressive guy. 0:19:55.600 --> 0:19:57.280 And it's a city and it's really a state that 0:19:57.320 --> 0:19:59.320 you always want to watch because of its size and 0:19:59.320 --> 0:20:01.720 its impact on the nation overall. So one of the 0:20:01.760 --> 0:20:03.920 biggest names at milk in this year, no doubt about it, 0:20:04.040 --> 0:20:08.200 Jason was Blackstone CEO Steve Schwartzman. Well Schwartzman well known, 0:20:08.320 --> 0:20:10.600 his firm especially well known. They've eclipsed a half a 0:20:10.680 --> 0:20:14.399 trillion dollars in assets under management. It was great to 0:20:14.440 --> 0:20:16.359 sit down with him. I've just seen a couple of 0:20:16.400 --> 0:20:19.760 weeks earlier, actually on earnings day. But in this fast 0:20:19.800 --> 0:20:22.800