WEBVTT - Rosenstein Resignation Would Be Greatest Gift To Trump 0:00:05.800 --> 0:00:08.720 Welcome to the Bloomberg p m L Podcast. I'm Pim Fox. 0:00:08.760 --> 0:00:11.520 Along with my co host Lisa Abramowitz. Each day we 0:00:11.640 --> 0:00:15.120 bring you the most important, noteworthy, and useful interviews for 0:00:15.200 --> 0:00:17.840 you and your money, whether you're at the grocery store 0:00:17.960 --> 0:00:20.720 or the trading floor. Find the Bloomberg p m L 0:00:20.840 --> 0:00:32.120 Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot com. Rob Rosenstein, 0:00:32.200 --> 0:00:35.440 the Deputy Attorney General, is heading to the White House. 0:00:35.840 --> 0:00:39.720 He's been summoned apparently, and they're conflicting reports about whether 0:00:39.760 --> 0:00:43.400 he is going to resign or president. As we speak. 0:00:44.120 --> 0:00:46.720 It's just changing every every second because now there's an 0:00:46.760 --> 0:00:50.520 indication that perhaps he's resisting, which is what we would 0:00:50.520 --> 0:00:53.800 have expected before because he's been through so many of 0:00:53.840 --> 0:00:57.720 these turmoils and has always resisted. So that's why this 0:00:57.840 --> 0:00:59.800 report was so shocking to you when it said that 0:00:59.840 --> 0:01:02.800 he was going to just hanging in. Let's bring into 0:01:02.800 --> 0:01:05.600 Al Hunt's opinion columnist. I want to get your thoughts 0:01:05.600 --> 0:01:08.759 out about how how big of a deal this is. Basically, 0:01:08.840 --> 0:01:10.640 what's the implication. I think that's what markets are trying 0:01:10.640 --> 0:01:13.000 to figure out. That's what a lot of political strategistic 0:01:13.080 --> 0:01:15.959 trying to figure out as well. If I were Joe Biden, 0:01:16.040 --> 0:01:17.920 I would say things I can't say in radio, to 0:01:17.959 --> 0:01:21.480 say there's a big deal, A big blanking deal. I 0:01:21.520 --> 0:01:23.360 mean it really, we got it. I think that I 0:01:23.360 --> 0:01:28.680 think most listeners got at the first time. Um it is. 0:01:28.720 --> 0:01:31.759 And whether he resigns or is fired is also a 0:01:31.880 --> 0:01:34.200 very big deal. And there's a there's an uncertainty at 0:01:34.200 --> 0:01:37.360 this stage if he resigns because he feels he has to. 0:01:37.760 --> 0:01:40.520 That's a that's that's the greatest gift that Donald Trump 0:01:40.560 --> 0:01:43.520 has had, maybe in a year and a half. Because 0:01:43.800 --> 0:01:47.280 whoever takes over this investigation, and there is the law 0:01:47.520 --> 0:01:50.360 spells out who would who would be the next in line? 0:01:50.800 --> 0:01:54.080 It would be the Solicitor General, who would probably recuse 0:01:54.200 --> 0:01:56.480 himself because his law firm is involved in this. And 0:01:56.520 --> 0:01:57.800 then it would probably be the head of O l 0:01:57.840 --> 0:02:00.920 C and Mr Angle. I think it's almost certain they're 0:02:00.960 --> 0:02:03.840 both movement conservatives. It's almost certain that they would not 0:02:03.960 --> 0:02:06.480 want to give Bob Mueller the kind of freedom and 0:02:07.160 --> 0:02:11.320 flexibility and independence the Rosen scene did. So therefore I 0:02:11.440 --> 0:02:14.239 doubt they would fire Mueller, but I think they would 0:02:14.320 --> 0:02:17.160 probably try to undercut the investigation. So it is a 0:02:17.280 --> 0:02:22.200 very big deal. Al hunt. Are there figures and individuals 0:02:22.200 --> 0:02:24.040 that are currently working in the White House that are 0:02:24.080 --> 0:02:29.239 trying to undercut the president? Oh? Yeah, yeah, they really are. 0:02:30.080 --> 0:02:33.520 I mean, you know, every day he commands no loyalty, 0:02:33.720 --> 0:02:36.919 and there there are fights, they're internees, seeing warfarees that 0:02:37.000 --> 0:02:39.280 go on, those going and go have going on in 0:02:39.360 --> 0:02:43.280 other and other administrations. They're probably more in this administration. 0:02:43.360 --> 0:02:48.919 The stakes are probably more petty than before, and there 0:02:49.040 --> 0:02:52.840 is almost no loyalty to this president. So every day 0:02:52.960 --> 0:02:55.800 there is a sense, I think among a number of 0:02:55.800 --> 0:02:58.160 people who work there is my god, what is he 0:02:58.240 --> 0:03:01.239 up to? I mean, we've had the quotes attributed to 0:03:01.320 --> 0:03:04.640 Gymatics and attributed to John Kelly and attributed to Gary 0:03:04.720 --> 0:03:07.480 Cone that he's a fifth or sixth grade education, he's 0:03:07.520 --> 0:03:10.320 an idiot. I think there's a widespread weef among a 0:03:10.400 --> 0:03:13.440 number of people who are in the administration that he's 0:03:13.440 --> 0:03:15.640 not up to this job and and and it's dangerous, 0:03:15.639 --> 0:03:17.119 all right. So I want to want to push back 0:03:17.120 --> 0:03:19.959 on you with that, because the economy is doing well, 0:03:20.000 --> 0:03:22.680 and I'm looking at markets, and frankly, markets have not 0:03:22.760 --> 0:03:24.519 been taking that big of a hit from this. I 0:03:24.520 --> 0:03:27.040 mean Initially there was a spike down, but otherwise it's 0:03:27.040 --> 0:03:29.200 steady as she goes. We're down a little bit today, 0:03:29.280 --> 0:03:32.440 but that's to be expected in between earning season and 0:03:32.360 --> 0:03:33.960 then they're There are a bunch of other reasons, in 0:03:34.040 --> 0:03:36.320 particular trade, the idea that the US and trying to 0:03:36.360 --> 0:03:40.240 trade discussions are not going that well. I'm just wondering, 0:03:40.560 --> 0:03:43.240 do you think that people are too sanguine about what's 0:03:43.280 --> 0:03:45.520 happening and that it will affect things, just not in 0:03:45.520 --> 0:03:47.600 the near term, or do you think that this is 0:03:47.640 --> 0:03:50.440 just you know, the political and economic are two totally 0:03:50.480 --> 0:03:54.360 separate universes that aren't intersecting right now. You know probably 0:03:54.360 --> 0:03:56.720 better than I do, that it's impossible to separate the 0:03:56.760 --> 0:03:59.720 two um But I do think that there is a 0:03:59.720 --> 0:04:04.280 sense the economy is doing well, the underlying fundamentals are strong. 0:04:04.560 --> 0:04:06.360 There's not a sense there's going to be a problem 0:04:06.360 --> 0:04:09.400 in the foreseeable future, and there's a feeling that whatever 0:04:09.440 --> 0:04:12.480 the political instability in Washington is, that that's not going 0:04:12.520 --> 0:04:14.360 to affect it much. Whether that's right or not, I'm 0:04:14.360 --> 0:04:16.680 not sure, uh, And I'd have to go back and 0:04:16.760 --> 0:04:18.919 check all the data during the next years, but my 0:04:19.040 --> 0:04:22.840 impression is that that that the the economy at least 0:04:22.839 --> 0:04:26.120 didn't tank because of the perception that there was a 0:04:26.240 --> 0:04:28.680 lack of stability in Washington back in seventy three and 0:04:28.720 --> 0:04:32.000 seventy four. So I'm not really surprised by that. L 0:04:32.279 --> 0:04:35.760 This is June. Um. What do you think will happen 0:04:35.880 --> 0:04:39.080 if it turns out that Rod Rosenstein is retiring? How 0:04:39.120 --> 0:04:42.200 do you think Democrats will react? Well, you put it, 0:04:43.120 --> 0:04:45.080 you put it very diplomatically, retiring. Is he going to 0:04:45.120 --> 0:04:48.160 resign or resign? Sorry, resigning? I keep on saying retiring, 0:04:48.160 --> 0:04:49.760 because I think he's had a tough go of it. 0:04:50.279 --> 0:04:53.440 He sure has. Um. Look, he was appointed in the 0:04:53.440 --> 0:04:55.960 first place by Jeff Sessions in order to run the 0:04:56.000 --> 0:04:59.440 Department of Justice manage U S attorneys, and then only 0:04:59.480 --> 0:05:02.400 after he was appointed did it come out that Sessions 0:05:02.440 --> 0:05:05.400 had his own conflict of interest with the Russians, so 0:05:05.480 --> 0:05:07.839 he was he was It was almost an accident that 0:05:07.839 --> 0:05:09.520 he was put in charge of this, which is what 0:05:09.640 --> 0:05:12.440 drives Trump so crazy. So if he is fired, I 0:05:12.440 --> 0:05:14.520 think the Democrats will go ballistic. I think they will 0:05:14.520 --> 0:05:18.360 try to get legislation that some Republicans have sponsored to 0:05:18.400 --> 0:05:21.679 assure Mother's independence. I think there will be a sense 0:05:21.720 --> 0:05:24.040 that it could be very harmful for Republicans in the 0:05:24.080 --> 0:05:27.880 midterm elections if he, however, resigns because he says, I 0:05:27.960 --> 0:05:30.599 just can't, I can't, I can't stay there anymore because 0:05:30.640 --> 0:05:33.480 of the perception. Although all of his people have said 0:05:33.560 --> 0:05:35.840 that whatever he said about wearing a wire and it's 0:05:35.839 --> 0:05:37.720 likely for the men's going for the men were said 0:05:37.720 --> 0:05:39.680 in jest. But if he feels he has to resign, 0:05:39.839 --> 0:05:41.560 I think that takes a lot of the pressure off 0:05:41.600 --> 0:05:48.360 Republicans al Hunt. The ongoing question of whether he resigns 0:05:48.480 --> 0:05:52.560 or whether he will be fired, does it really matter it? 0:05:52.640 --> 0:05:56.760 Does it? Does it matters? Uh? It certainly matters politically 0:05:57.480 --> 0:06:00.760 number one. And secondly it matters and the kind of 0:06:00.839 --> 0:06:04.359 pressure that is brought to bear on whoever takes his 0:06:04.440 --> 0:06:09.240 place overseeing the Mueller investigation. If he is fired, and 0:06:09.440 --> 0:06:11.560 say Mr Engel, who is the head of the OLC, 0:06:11.880 --> 0:06:15.000 becomes in charge of the Mueller investigation, Uh, they're going 0:06:15.040 --> 0:06:18.360 to be whether it's the Congress, whether it's outside groups, 0:06:18.360 --> 0:06:20.479 whether it's the press, They're gonna be watching him like 0:06:20.520 --> 0:06:22.840 a hawk. And I think there'll be a lot more 0:06:22.839 --> 0:06:25.920 pressure on him not to blow out the case. So 0:06:25.960 --> 0:06:29.000 I think it does matter. What do you expect us 0:06:29.000 --> 0:06:31.120 to actually find out what Mueller has been doing aside 0:06:31.120 --> 0:06:33.520 from the cases that currently have been prosecuted. In other words, 0:06:33.680 --> 0:06:35.520 does he have the goods to actually get up to 0:06:35.640 --> 0:06:38.840 the White House or is it just gonna be sort 0:06:38.880 --> 0:06:41.880 of left where we've seen it? Well, I don't think 0:06:41.880 --> 0:06:45.280 we're gonna know for certainly months. Um, you know, on 0:06:45.320 --> 0:06:50.040 the relative uh spectrum of independent councils, this has not 0:06:50.279 --> 0:06:52.520 been in the joint out process. I mean, what can 0:06:52.600 --> 0:06:55.360 start to four years, five years and you know, much 0:06:55.440 --> 0:06:59.920 less serious charges and much less success. So, you know, 0:07:00.200 --> 0:07:02.679 I think we're talking about at least until the early 0:07:02.720 --> 0:07:05.000 part of next year. That assumes that there's not an 0:07:05.080 --> 0:07:07.400 interference in the investigation in the process. I don't think 0:07:07.400 --> 0:07:10.080 he's going to doing between now and November six, and 0:07:10.120 --> 0:07:11.880 then afterwards, I'm not sure what he's gonna do. But 0:07:11.880 --> 0:07:13.800 there's a whole bunch of people, whether it's Michael Cohen 0:07:13.880 --> 0:07:17.720 or Paul Manaford or some of the others who you 0:07:17.760 --> 0:07:20.640 know who, as they say, flipped and they're telling him 0:07:20.640 --> 0:07:22.680 stuff they don't. He doesn't give them that kind of 0:07:22.680 --> 0:07:25.120 a deal unless he thinks they have something to tell, 0:07:25.240 --> 0:07:27.920 something to reveal, and that is almost always about someone 0:07:28.000 --> 0:07:31.440 higher up, and there's a limited number of people who 0:07:31.480 --> 0:07:34.680 were who are higher up. Yeah, Alhan, thank you so 0:07:34.720 --> 0:07:36.880 much for being with us. I hear your phone beeping. 0:07:37.040 --> 0:07:39.200 I'm sure it's on fire. I'm sure you're getting calls 0:07:39.240 --> 0:07:42.120 from everyone under the sun, and I would love to 0:07:42.160 --> 0:07:45.080 hear what they have to say. Alhant Bloomberg Opinion columnists 0:07:45.080 --> 0:07:59.600 coming to us from Washington, d C. Just in the 0:07:59.640 --> 0:08:03.160 past a few weeks, leaders from the corporate as well 0:08:03.200 --> 0:08:05.920 as the governmental worlds came together to try to figure 0:08:05.920 --> 0:08:09.320 out how to steve off some of the malefacts of 0:08:09.360 --> 0:08:12.200 global warming. One of them was Berry Parking is Chief 0:08:12.200 --> 0:08:16.200 Sustainability and procubent Officer for Mars Incorporated, and he joins 0:08:16.280 --> 0:08:19.040 us here in our studios. So, Brian and Barry, I 0:08:19.080 --> 0:08:22.240 was talking about the Global Climate Action Summit in San Francisco. 0:08:22.920 --> 0:08:29.440 You have pledged to reduce mars is economic ecological footprint 0:08:29.520 --> 0:08:32.640 carbon footprint by more than sixty percent by the year 0:08:33.400 --> 0:08:35.960 How do you plan to do that? Well, good morning, 0:08:36.400 --> 0:08:40.360 all um. It's an incredibly tough challenge because we plan 0:08:40.480 --> 0:08:43.480 to do that while we continue to grow. So we're 0:08:43.480 --> 0:08:46.079 going to do that by getting to zero carbon from 0:08:46.080 --> 0:08:49.320 our own factories and then transforming what we buy and 0:08:49.360 --> 0:08:51.600 where we buy it. Because most of our greenhouse gas 0:08:51.600 --> 0:08:55.360 footprint is upstream in the raw materials in agriculture, So 0:08:55.440 --> 0:08:58.960 we have to change the way agricultural works today. Bart 0:08:58.960 --> 0:09:01.199 and One, if you could just suscribe a trip that 0:09:01.240 --> 0:09:09.120 you made to a Indonesian coconut supplier, tell that story 0:09:09.200 --> 0:09:11.480 about how that opened your eyes. I mean, you're a 0:09:11.559 --> 0:09:14.280 veteran at Mars. How did this open your eyes to 0:09:14.360 --> 0:09:18.160 this new area for the company. Yeah? Absolutely, you know, 0:09:18.360 --> 0:09:20.959 I think I didn't grow up believing my career was 0:09:21.000 --> 0:09:23.040 going to be in sustainability. So it came to me, 0:09:23.080 --> 0:09:26.600 and it came to me through procurement and buying raw materials. 0:09:26.600 --> 0:09:31.200 So I guess maybe fifteen years ago I visited a 0:09:31.240 --> 0:09:36.720 coconut plantation in Southeast Asia and the scale of this 0:09:36.800 --> 0:09:40.280 thing is incredible. Hundred kilometers by a hundred kilometers if 0:09:40.280 --> 0:09:44.680 you can imagine that, just coconut sixty miles by sixty miles, 0:09:44.880 --> 0:09:46.760 and you can't get to it by road. No, you 0:09:46.840 --> 0:09:48.800 get there by boats, and you get onto a canal 0:09:48.920 --> 0:09:51.720 system and you travel around the whole day and all 0:09:51.760 --> 0:09:54.240 you see is coconut. At the end of the day, 0:09:54.520 --> 0:09:56.440 I got back to the to their ports and they 0:09:56.480 --> 0:09:59.880 have two huge factories where they're processing this coconut and 0:10:00.040 --> 0:10:03.040 a the thing that then it's a big place. And 0:10:03.040 --> 0:10:05.880 then they said, you're our biggest customer and this is 0:10:05.920 --> 0:10:08.160 quite a small ingredient for us. And I suddenly got 0:10:08.160 --> 0:10:10.560 a sense of the amount of land, the amount of 0:10:10.600 --> 0:10:13.840 people that were at that point almost invisible to us 0:10:14.040 --> 0:10:17.240 upstream in our supply chain. And and that's what got 0:10:17.240 --> 0:10:19.839 really really interested in. You know, what's our footprint on 0:10:19.880 --> 0:10:22.520 the planet and what's our footprint on people? And how 0:10:22.520 --> 0:10:25.360 do we bring that into our thinking and into our strategies. 0:10:25.520 --> 0:10:28.280 So how do you make it more sustainable and how 0:10:28.320 --> 0:10:31.880 do you do it with a cost effectiveness that allows 0:10:31.920 --> 0:10:35.800 your business to grow? Well, you you start by setting 0:10:35.800 --> 0:10:38.640 the right goal, and we've talked about that extremely challenging goal, 0:10:39.120 --> 0:10:42.079 but you have to you have to drive transformation and 0:10:42.080 --> 0:10:44.600 and that means that we have to We have about 0:10:44.600 --> 0:10:48.280 a million smallholder farmers in our supply chain. And you 0:10:48.320 --> 0:10:51.240 know the story about smallholder farmers today is they're they're 0:10:51.280 --> 0:10:54.880 either the victim of climate change, their livelihoods are going 0:10:54.920 --> 0:10:58.280 to get impacted. Although the villains of of climate change 0:10:58.320 --> 0:11:02.280 that they're the ones deforesting UH and an expand expanding 0:11:02.320 --> 0:11:05.120 their land use. So we believe we can move them 0:11:05.160 --> 0:11:08.679 from the victim or or them or the villain to 0:11:08.760 --> 0:11:11.840 the hero. And we can do that by the way 0:11:11.400 --> 0:11:14.880 they grow the crops in the future. They grow diversified crops, 0:11:15.280 --> 0:11:17.840 lots of different plants and trees, and they work on 0:11:17.840 --> 0:11:20.600 the quality of the soil. They can actually pull carbon 0:11:20.679 --> 0:11:23.800 from the atmosphere and and actually be a big part 0:11:23.840 --> 0:11:26.200 of the change that we see. So we have to change. 0:11:26.240 --> 0:11:27.839 We have to go back. So we're you know, we're 0:11:27.840 --> 0:11:29.880 an industrial food business. We have to go back to 0:11:29.960 --> 0:11:33.080 agriculture and go all the way back to those farmers 0:11:33.120 --> 0:11:35.080 at the beginning our supply chain and work with them 0:11:35.080 --> 0:11:37.520 to change what they do. That that's what will make 0:11:37.520 --> 0:11:40.760 the big difference. I just want to bring a headline 0:11:41.200 --> 0:11:44.080 to you that this is coming to to us from 0:11:44.160 --> 0:11:48.520 axios Is. The Deputy Attorney General Rod Rosenstein has verbally 0:11:48.800 --> 0:11:53.120 resigned to the Chief of Staff John Kelly in anticipation 0:11:53.160 --> 0:11:56.040 of being fired by President Donald Trump. This is according 0:11:56.120 --> 0:11:59.080 to a source with direct knowledge of the situation, and 0:11:59.120 --> 0:12:01.720 this of course from Axios. Will be bringing you more 0:12:01.720 --> 0:12:03.920 details as we get them. And just to give you 0:12:03.960 --> 0:12:06.000 a sense of the market reaction, the SMP five hundred 0:12:06.040 --> 0:12:09.720 does is dropping to a session low in response to 0:12:10.120 --> 0:12:11.959 this news, but very you know, I want to pick 0:12:12.080 --> 0:12:14.160 up on what you're talking about, how you have to 0:12:14.200 --> 0:12:17.160 go to the farmers and I just want to go 0:12:17.280 --> 0:12:21.240 more to the corporate leaders. When you were in San Francisco, 0:12:21.600 --> 0:12:24.079 did you feel like there was sort of a ground 0:12:24.120 --> 0:12:26.760 swell of support for this view that you have and 0:12:26.760 --> 0:12:29.880 trying to push companies in this exact direction or is 0:12:29.920 --> 0:12:34.320 there more pushback given the political situation? Talking about politics, uh, 0:12:34.360 --> 0:12:36.840 and sort of a reduction of some of the gas 0:12:36.880 --> 0:12:41.000 emitting regulations. I think everybody gets the size of the 0:12:41.080 --> 0:12:43.840 challenge and the urgency here and and most big companies 0:12:43.840 --> 0:12:46.360 are working on this. I think what we're saying is 0:12:46.400 --> 0:12:50.480 that the level of of disruption that has to happen 0:12:50.679 --> 0:12:54.920 is huge. And you know, we talk about a transparency race. 0:12:55.360 --> 0:12:57.120 You know, we have to know where all of these 0:12:57.160 --> 0:13:00.720 materials come from, because that's what I can sumers expect 0:13:00.800 --> 0:13:03.120 and that's what the activists in our supply change. So 0:13:03.400 --> 0:13:07.160 we're seeing a level of disruption and transformation that perhaps 0:13:07.200 --> 0:13:09.319 others are not yet seeing. I talk about the end 0:13:09.320 --> 0:13:11.680 of the commodity's era. You know, we used to buy 0:13:11.679 --> 0:13:15.360 these raw materials at arm's length, not really knowing where 0:13:15.360 --> 0:13:18.360 they came from and not really knowing what conditions. We 0:13:18.440 --> 0:13:20.920 think that's that era is over. You have to know 0:13:21.360 --> 0:13:24.000 where everything that's going into your products, whether it's food 0:13:24.000 --> 0:13:26.559 products or electronics or wherever, you have to know where 0:13:26.559 --> 0:13:29.240 it all comes from. I just am struck by coconut 0:13:29.320 --> 0:13:31.760 water that there's an advertisement for it where it says 0:13:31.800 --> 0:13:33.760 feel good about your life and feel good about what 0:13:33.840 --> 0:13:36.240 you've putting your body in a cost about eight dollars 0:13:36.240 --> 0:13:38.400 to buy, you know, twelve ounces, and I just have 0:13:38.520 --> 0:13:40.839 to wonder, you know, is there a cost that people 0:13:40.840 --> 0:13:43.160 are not willing to pay in order to make things 0:13:43.160 --> 0:13:46.200 more sustainable? On the consumer side, yeah, you know, I 0:13:46.200 --> 0:13:50.520 think it's been slower than anybody would expect, but consumers 0:13:50.760 --> 0:13:55.640 are moving towards sustainability. There's always been a few percent 0:13:55.760 --> 0:13:57.920 that really care about this, and I think we're slowly 0:13:57.960 --> 0:14:00.439 seeing that grow. It's not happening as fast there's probably 0:14:00.440 --> 0:14:03.040 any of us predicted, but our view going forward is 0:14:03.080 --> 0:14:07.520 that in five, ten, fifteen years, consumers will make more 0:14:07.559 --> 0:14:11.320 and more conscious choices around more sustainable products. And we 0:14:11.360 --> 0:14:13.120 want to be at the forefront of that. And that 0:14:13.200 --> 0:14:15.480 means one of the things that they have to know 0:14:15.520 --> 0:14:17.520 where everything that's going into the product that they're going 0:14:17.559 --> 0:14:21.000 to eat comes from. And and that's the big change. 0:14:21.040 --> 0:14:24.600 And if you if you do that, then you're inevitably 0:14:24.600 --> 0:14:28.160 into longer term relationships and more direct relationships with those farmers. 0:14:28.200 --> 0:14:32.000 And and that's the big procurement sourcing change that's happening 0:14:32.000 --> 0:14:35.600 in the world at the moment. Barry because of Eminem's, 0:14:35.720 --> 0:14:38.800 because of Mars Bars, because of all the great chocolate 0:14:38.840 --> 0:14:41.640 confectionery products that you make. I want you to talk 0:14:41.680 --> 0:14:44.760 if you can about coco supply because the whole supply 0:14:45.000 --> 0:14:48.400 chain topic that you just described as something that you're 0:14:48.440 --> 0:14:52.480 currently working on with Coco. Indeed, this is part of 0:14:52.520 --> 0:14:54.840 our overall initiative. You're going to be spending what a 0:14:54.880 --> 0:14:58.400 billion dollars over the next decade. Yeah, you know, we 0:14:58.440 --> 0:15:00.880 all love chocolate and the that the truth is you 0:15:00.920 --> 0:15:04.360 can't make chocolate without cocoa. So we have to fix 0:15:04.840 --> 0:15:07.480 the supply chain of cocoa and and it's incredibly hard. 0:15:07.520 --> 0:15:11.520 Coco is grown by hundreds of thousands, millions of smallholder 0:15:11.600 --> 0:15:15.680 farmers and we have to help them become more productive 0:15:16.000 --> 0:15:19.560 and and increase their incomes. That many of them are 0:15:19.560 --> 0:15:23.400 not doing great, and it's been really challenging. We and 0:15:23.440 --> 0:15:25.440 the rest of the instrument working on this for decades. 0:15:25.480 --> 0:15:27.200 So we announced in the last couple of days a 0:15:27.560 --> 0:15:30.120 big new investment, as you say, a billion dollars to 0:15:30.200 --> 0:15:33.800 be spent over the next ten years to to invest 0:15:33.920 --> 0:15:37.480 with farmers to move them from being smallholder farmers that 0:15:37.600 --> 0:15:42.440 just grow coco too larger farms. We think that that 0:15:42.440 --> 0:15:45.040 that will happen over time and they'll grow more things 0:15:45.120 --> 0:15:47.760 than coca. Because it's seventy five thou farmers. You're talking 0:15:47.760 --> 0:15:50.440 about a lot of people right now. Yeah, that's the start. 0:15:50.560 --> 0:15:52.520 And I think what we need to do is we 0:15:52.560 --> 0:15:54.920 need to demonstrate at scale as a path to those 0:15:54.920 --> 0:15:59.400 farmers becoming more and more successful, employing other people and 0:15:59.400 --> 0:16:02.240 and you back to what we're talking about earlier, also 0:16:02.280 --> 0:16:05.480 pulling carbon out of the atmosphere into their into their farms. 0:16:05.520 --> 0:16:08.920 We've we've proven this at small scale. The challenge has 0:16:08.960 --> 0:16:11.840 always been to scale this up to tens and hundreds 0:16:11.840 --> 0:16:14.240 of thousands, and that's why we're investing more money. So 0:16:14.320 --> 0:16:18.080 I'm just wondering which countries that are major farm producers 0:16:18.080 --> 0:16:20.360 have been the most eager to work with you and 0:16:20.480 --> 0:16:24.360 the most effective in making some of these changes. Um 0:16:24.480 --> 0:16:27.800 we source from Africa, Asia, all over the world. I think, 0:16:28.160 --> 0:16:31.400 you know, a good example would be on on deforestation 0:16:31.400 --> 0:16:34.800 in West Africa, where we've made a real breakthrough and 0:16:34.800 --> 0:16:37.960 building a public private partnership industry and the governments of 0:16:38.000 --> 0:16:41.080 Code of War a Ghana. We've got a really strong 0:16:41.480 --> 0:16:44.160 Cocoa and Forests Initiative now where it lays up very 0:16:44.160 --> 0:16:46.320 clearly what government going to do and very clearly what 0:16:46.400 --> 0:16:47.800 industry is going to do. And I think that's a 0:16:47.840 --> 0:16:51.000 great example of you know, if you really spend the 0:16:51.080 --> 0:16:53.440 time to work out and get an alignment of interest, 0:16:53.880 --> 0:16:56.600 you can make progress. And and we think we can 0:16:56.640 --> 0:17:00.440 stop deforestation by working together. This is not easy, you know, 0:17:00.520 --> 0:17:03.040 and and many other countries were not yet necessarily on 0:17:03.080 --> 0:17:05.639 the same wavelength. And but that's what we have to do. 0:17:05.680 --> 0:17:08.000 I think we've shown over and over the industry can't 0:17:08.000 --> 0:17:10.680 solve this on their own, and often government can't solve 0:17:10.720 --> 0:17:12.959 this on their own and it's the two together that 0:17:13.000 --> 0:17:15.719 will get this done. Berry Parkin, thank you so much 0:17:15.760 --> 0:17:18.000 for being with us. Truly a pleasure having you. Berry 0:17:18.040 --> 0:17:22.199 Parking his chief sustainability and procurement officer for Mars in 0:17:22.200 --> 0:17:25.160 New York. They have a one billion dollar sustainability investment 0:17:25.720 --> 0:17:28.679 currently to reduce the carbon footprint of its businesses and 0:17:28.760 --> 0:17:44.920 supply chain by more than six A Crisis of Beliefs, 0:17:45.040 --> 0:17:49.560 Investor Psychology and Financial of fragility and is the title 0:17:49.760 --> 0:17:52.919 of a new book written by Professor Andre Schleifer. He 0:17:53.040 --> 0:17:56.439 is a professor of economics at Harvard University. His co 0:17:56.680 --> 0:18:00.920 author with the book is Nicola Genali is the professor 0:18:00.960 --> 0:18:04.520 of finance at the Bocona University in Italy. In Milan, 0:18:04.600 --> 0:18:07.719 and Andre Schleifer joins us now. Professor, thank you very 0:18:07.800 --> 0:18:10.240 much for being here. Talk a little bit about the 0:18:10.320 --> 0:18:17.280 misconceptions that investors, or indeed anyone has about financial crises. Well. Thanks, 0:18:17.320 --> 0:18:19.760 it's a pleasure to be here. Uh. This is a 0:18:19.760 --> 0:18:23.879 book about financial crisis. It uh kind of takes off 0:18:24.560 --> 0:18:29.840 from where Charlie Kindelberger, the great economic historian, has left off, 0:18:30.040 --> 0:18:34.320 maybe forty years ago, and it says that, uh, most 0:18:34.359 --> 0:18:37.159 financial crisis are kind of the same, which is to 0:18:37.280 --> 0:18:41.000 say that they start with a bubble. Uh. This time 0:18:41.040 --> 0:18:43.600 it was a bubble in the housing market sometimes as 0:18:43.640 --> 0:18:47.840 bubble and government bonds. When the bubbles collapse, people lose 0:18:47.880 --> 0:18:50.879 a lot of money, but more importantly, banks lose a 0:18:50.920 --> 0:18:55.760 lot of money. And that's how you get into a crisis. 0:18:55.760 --> 0:18:58.480 And oh, it was pretty similar. Now you asked about 0:18:58.600 --> 0:19:02.320 misconceptions that are kind of two stories that are often 0:19:02.359 --> 0:19:07.560 floating around that don't square well with this uh uh 0:19:07.960 --> 0:19:10.119 set of facts. The first one is that it's all 0:19:10.160 --> 0:19:13.120 the bank's fault. You probably have heard about two big 0:19:13.200 --> 0:19:18.520 to fail and how banks were speculating, uh and getting 0:19:19.240 --> 0:19:24.320 homeowners to households to buy houses. The truth is everybody 0:19:24.400 --> 0:19:28.120 was in on it. People wanted to buy homes, banks 0:19:28.160 --> 0:19:33.040 wanted to finance homes. Rating agencies wanted to make it simpler. 0:19:33.560 --> 0:19:36.440 When you have a bubble, everybody is speculating. So it's 0:19:36.480 --> 0:19:41.720 not just the banks, Uh, it's everybody. The second misconception, 0:19:41.800 --> 0:19:44.960 which is more dramatic one uh. And it's been a 0:19:45.000 --> 0:19:50.280 misconception that has been kind of um advocated or pursued 0:19:50.840 --> 0:19:54.639 by some of the protagonists, the policymakers in two thousand 0:19:54.680 --> 0:19:58.280 and eight, which is that the crisis is a total surprise, 0:19:58.359 --> 0:20:00.640 which is to say that Lehmann came out of nowhere. 0:20:01.000 --> 0:20:04.280 The fact of the matter is that bubbles move, bubbles 0:20:04.320 --> 0:20:07.640 and crisis move very very slowly, and there was eighteen 0:20:07.720 --> 0:20:11.879 months of banks facing stratospheric losses before we had Lehman. 0:20:12.119 --> 0:20:14.760 That's really a very big misconception. There also is a 0:20:14.800 --> 0:20:19.040 misconception of behavioral economics and how that plays into things. 0:20:19.240 --> 0:20:21.880 People talk about the post two thousand and eight era 0:20:22.320 --> 0:20:25.320 and how millennials, for example, have not been investing in 0:20:25.400 --> 0:20:28.600 stocks as much as their peers, and not to mention 0:20:28.640 --> 0:20:30.520 the fact that, you know, the sort of fervor that 0:20:30.600 --> 0:20:36.600 creates bubbles. How does behavioral economics and psychology plan into this. Well, 0:20:36.600 --> 0:20:41.160 the crucial part about bubbles is twofold. One is that 0:20:41.200 --> 0:20:44.159 people think that trees grow to the sky, which is 0:20:44.200 --> 0:20:46.919 to say, in this case that people felt that they 0:20:46.920 --> 0:20:51.800 would get ten percent a year returns on their homes forever, 0:20:51.920 --> 0:20:53.800 which is what happened for a few years, but it 0:20:53.880 --> 0:20:57.640 can't happen forever. The second part, and this is why 0:20:57.680 --> 0:21:02.160 behavioral economics also comes in, is that people don't see 0:21:02.160 --> 0:21:06.240 the risks of bubbles and in particular of imploding bubbles, 0:21:06.359 --> 0:21:10.640 and that gets them too optimistic. But then just as 0:21:10.680 --> 0:21:14.360 you said, incredibly scared. So when you talk about the millennials, 0:21:14.720 --> 0:21:17.000 the millennials, of course, to the extent that they were 0:21:17.000 --> 0:21:20.200 involved in it, got really terrified and have now stayed 0:21:20.200 --> 0:21:23.000 out of the market. So talking about that balance of 0:21:23.040 --> 0:21:27.399 being overconfident and too overly terrified, where are we right now? 0:21:28.320 --> 0:21:31.640 I think we clearly are in the regime of overconfidence 0:21:31.720 --> 0:21:36.080 and extrapolation. You know, stock market is at very high levels, 0:21:36.160 --> 0:21:43.080 they volatility is very very cheap, credit spreads are very 0:21:43.160 --> 0:21:46.919 very low, expectations are very optimistic. That are all the 0:21:46.960 --> 0:21:52.920 indicators of UH of financial markets being in a bubble. Now, 0:21:52.960 --> 0:21:55.679 the good news, just to finish this thought, is that, 0:21:55.760 --> 0:21:59.439 of course banks are in much better shape today than 0:21:59.520 --> 0:22:01.840 they were in two thou eight. So if this bubble 0:22:01.960 --> 0:22:06.040