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tv   Bloomberg Markets Asia  Bloomberg  June 1, 2017 9:00pm-9:56pm EDT

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♪ it is 9:00 a.m. in hong kong. i am haidi lun. rishaad: i am rishaad salamat coming to you from bloomberg's asia headquarters in hong kong. this is "bloomberg markets: asia." ♪ haidi: optimism surging through asian markets as u.s. hiring data altering the global economy, japan hitting levels not seen for 18 months. rishaad: however, clouds building over washington as trump pulls out of paris,
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corporate america lashing out in response. haidi: australia remains committed to the climate deal, telling bloomberg that if you sign a deal, you stick with it. rishaad: the shipping industry plotting a course out of oversupply, a look from the chief executive of c-span. accord,t that climate donald trump at 3:00 a.m. hong kong time, making that statement he promised 18 hours before hand , indeed to pull out of this paris climate change agreement. let's have a look at the chart capitathe top shows per how much higher u.s. emissions are per person than chinese ones. 2006, we saw china overtake united states in terms of
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overall emissions. where does that bring us to? bring up the next chart, there we go. coa is the s&p 500 versus l and solar. since for about a year or thereabouts. al index has moved higher on this climate change agreement being consigned to the wastepaper basket. there we go. haidi: that's right. the other side is what does this mean for global leadership, the sense that the u.s. is vacating its leadership mantle globally and china is ready to step in. the china and the eu working towards this climate change deal. take a look at this pie chart. total solar investment across the world divided by region,
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asian making up the lion's share , over 60%. china is a massive part of that as well. the question is the opportunities that will be gained when it comes to this, china's leadership when it comes to tackling climate change and in conjunction with the hundreds of billions of dollars being poured into infrastructure investment avaya one rolled, one belt. road, one l. despite in the market politics taking front and center when it comes to washington, d.c., equities hitting more fresh highs overnight. japan looking at highs we have not seen since 2015. let's get it over to sophie to take a look at this mood on friday. sophie: happy friday. it looks like that is the case for asian markets, trump pulling the u.s. out of the paris climate pact not raining on the
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parade. the focus on the jobs report out of the united states, the private number better than forecast ahead of the official data on friday. the nikkei 225 topping 20,000 for the first time since heading 2015, the topix for its best weekend five. the rally and global stocks unabated, up 10% year to date. we morgan stanley ceo said should not be surprised by these fresh records. we did have first quarter, the final read on first quarter gdp out of south korea, revised fastest1.1 percent, the pace of growth since the third quarter in 2015, so the kospi up .9%. led byussie shares up
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i.t. and telcos stocks. in the currencies base, the ofus is on the yuan ahead the daily fix by the pboc, the offshore rate looking weaker after rising. funding costs remain elevated, , the hibor will behind on the radar today. the yen around session highs as the greenback is holding onto gains, and the aussie edging higher, up point 8% off of a three-week low for a weekly loss of 1% after falling for six of the last seven weeks. the move in aussie matching what we are seeing in iron ore. base metals continue to be under pressure. .9%, the 47 handle here. we are seeing it set for a weekly loss of 3.5%.
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u.s. stockpiles falling for an eighth straight week, but still above that five-year seasonal high missiles to putting pressure on the oil patch. rishaad: right, let's head over to sydney and get first word news headlines with paul allen. paul: thanks. as suspectedilled gunman in the philippines after reports of shooting in manila. police now say all guests have been accounted for with 25 injured, but not from gunshots. the incident comes after the president imposed martial law on the southern island. police a robbery was the most likely motive. the u.s. imposing new sanctions on individuals and companies with links to north korea following its latest missile launch. the treasury department adding that are said to have worked with north korea on making weapons of mass destruction.
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washington is urging china to rein in its ally and says there are behind the scenes moves underway. fbi director james comey will testify to congress next thursday has the russia investigation moves on to the public stage. he will be question about what president trump said to him about russia before he was fired in early may. the memo comey wrote is said to have claimed the president as kim to drop checks on mike flynn. prime minister modi has taken his campaign to russia, meeting president putin at the st. petersburg economic forum. the two leaders discussed two-way ties and discussed cooperation in areas of defense. prime minster modi met angela merkel as he seeks stronger relations to counter china's influence in asia and beyond. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. i am paul allen. thanks for that.
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our top story, donald trump saying he will pull the u.s. out of the landmark paris climate accord. reaction has been swift and not terribly complementary my political allies and top corporate figures come up business america having their say. we have remy inocencio in new york and tom mackenzie in beijing. we have been talking about some of the reaction that has fed through from everyone from trump's predecessor to keep business leaders in the u.s.. ramy: that's right. the reaction out there has been negative against what donald trump has done, taking the united states out of the paris climate deal, everyone from bob iger to richard branson to tim cook of apple and mark zuckerberg of facebook. in watching approximately 30 minutes, the announcement at the rose garden at the white house
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earlier today, it struck me that clearly donald trump was not speaking to an international audience. he was speaking solely to his domestic audience here. regardless of whether climate change is a domestic or international issue. let's go ahead and listen to that. >> the reality is that withdrawing is in america's economic interest and won't matter much to the climate. the united states under the trump administration will continue to be the cleanest and most environmentally friendly country on earth. senators as well as representatives who did some for donald trump have set the paris climate accord was a raw deal, but under that, mr. trump says he wants to renegotiate this deal, or if they can't come to a new deal, enter into a new one.
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he said he spoke with leaders of france, germany, the u.k., in addition to canada, and many said if donald trump wants to renegotiate coming guess what? he can't. there is no way to renegotiate paris. this also puts climate change dead center -- we just ended the 2016 white house race, but this puts climate change dead center into the 2020 white house race because after all is said and done and the two-year limit in order to pull out of this happens and the one you're , we are now three years into this, november 4, when the u.s. can say we are leaving, but november 4 is one day after the next 2020 white people in ends and the united states go to vote for the next president, so whether that will happen or not is another question. we have a very long-term take on what could actually develop.
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right, well, tom mackenzie in beijing, how my china take advantage of this decision to pull out of the record here? i think first thought that it is worth pointing out that china overall will not be happy with this development, but the chinese government has been adept at taking advantage of the trump administration's retrenchment, whether issues like the tpp trade deal or no climate change. it could be argued that in the first five months of the trump administration, it has done more for china's soft power than china has been able to do on state tv over the last decade. positioning themselves on trade as global flag wavers. he saw that with president xi jinping's speech and davos, the belt and road and initiative, and now on climate change, hearing this european-china
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summit in brussels at the moment that they are expected to put out a document saying that green energy and clean energy will be at the core of the bilateral relationship between china and the eu, so this is a soft power win for china because they are realize thered are compelling economic reasons for them to continue with their investments in renewable energy as well. since 2012, china has been the largest investor in renewable energy, of political, diplomatic, and economic reasons for china to continue with this, and potentially a soft power dividend for them come of the fact that the u.s. is pulling out of this deal. this sort ofose effort china has made to develop green energy as part of the economy is well documented, but they have not always been the most efficient, lots of concerns
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overcapacity and the role of the state and over incentivizing that sector. absolutely. there are legitimate concerns all that, particularly when you look at the solar power industry and subsidies around the that and letting of panels on the european market, but china has compelling environmental case as well in terms of the air, water, and soil pollution, which is task,us, so it is a huge but china is stepping up with the huge investment, spending $88 billion on renewable energy in 2016. planning on spending $360 billion between now and 2020, creating 13 million green jobs. it is the largest market for electric vehicles, so that steps taking are huge. china is the country president trump says is behind the false
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accusation that trump made that this was a chinese hoax, verifiably ludicrous claim. china is taking steps, but it has a long way to go. remyad: i'm going to ask inocencio this, from pope francis to mark zuckerberg and richard branson, there has been quite a corporate backlash. believe it.n one of the first people to come out this against this was elon musk. on one of the advisory councils, but tweeted out that leaving paris is not good for america and the world. bob iger also decided he would leave the white house counsel. in addition, tim cook tried to persuade donald trump to stay with the paris climate deal in a letter to his employees. he also added that he was
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disappointed, but said apple will maintain its own climate sustainability goals, so a lot of negativity and very few positives. , thank you so much. remy inocencio in new york and tom mackenzie in beijing. we will continue with this subject, the global shipping industry, coming out of one of the worst downturns in memory them about what does this turn in trade mean for it? rishaad: next, more on the potential opportunities as the united states steps out of the climate change consensus. this is bloomberg. ♪
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rishaad: i am rishaad salamat in hong kong. this is "bloomberg markets: asia." haidi: a quick check of the business flash headlines. smilingk appears to be
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on macau, the world's biggest gaming have has seen casino revenue with its biggest monthly jump in three years, rising 24% billion, easily beating estimates in a bloomberg survey. china's three biggest exchanges imposing a self-imposed moratorium after bitcoin resumes its record-breaking rally. the exchange suspended withdraws over scrutiny from authorities. optimismas jumped amid on wider acceptance. haidi: reliance communications cut to junk, saying some kind of fall is an "distinct possibility." the cut follows similar decisions by moody's. reliance is battling rising competition and talking to chinese lenders about a waiver
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on september payments of $1 billion. jerome powell has added to the latest voices raising concerns over slowing inflation in the united states, but still seeing a case for rate increases. chief investment officer at deutsche bank wealth management is in the studio with me now. thank you for coming in. payroll report later today will be crucial with regards to this. is it a done deal? ot plot,ring up the d 1.25% by the end of the year or thereabouts. the interest rate hike is priced in for this month. we think there could be 2-3 more rate hikes over the next 12 months. if you look at the fed, although
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you say inflation is not the major issue, which i agree with, rage -- you see wages rising. rishaad: it's not happening at the moment. on thecan see some areas west coast and ease coast where wages are rising, so there is a neutral affect on this in order to not be an a wage price spiral, i think so. a lot ofwe have heard noise from various fed officials. it seems like every day of fed governor is talking. it wasn't like this under greenspan or volcker. off -- tarted >> that is why they are making communicated what they are going to do and there are no surprises and we don't in and a taper tantrum environment.
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it would be worse if you see a massive spike in interest rates. i think the fed needs to do some steps, but they are doing everything to telegraph this. haidi: i want to talk about this rally in treasuries. does that make you feel cautious about these record highs after record highs we are seeing? to ae treasury rally down flight to safety or more about this this inflationary structural shift we are seeing? we are right so far to advise our clients to not be too cautious on the bond side. we don't expect yields to massively shoot up. at they, if you look equity side, i think very positive surprises in the first quarter, a nice earnings season globally to be honest, so you could say the markets are somehow priced to perfection. a lot of soft data is priced in. the second half is about to deliver on this.
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we will talk more about that on the other side of this break. stay with us. deutsche bank wealth management cio there for us. plenty more ahead. this is bloomberg. ♪
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rishaad: you are back with bloomberg markets as we continue our conversation. , thatecurity millennials is one of your place. tell us about it. >> it is important because markets are price for perfection, so where to invest now at these levels? i think there is still room for investment they are pure we have identified four major themes, ,ybersecurity, millennials health care, and infrastructure.
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performance has already been nice this year. within those realms, you have geographic preferences? the themesy lots of are coming from the u.s., no themes arethese global. if you look at cybersecurity for example, we were reminded that this is a global team with global impact, so there are global companies around this and there is much more to come on investment if you look at company levels, private levels, there is much more that needs to be done. the same is true for health care in therastructure emerging markets space, and i think if it comes to health care s, they are taking over as the largest consumption group and show completely different behavior than all the generation x, baby boomers, so a massive change,
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s around thellennial world, so a global investment case. haidi: you are seeing the rotation from infrastructure linked stocks, if it does come through, we will see a return to that? certainly there is more room to go. we don't call for massive inflation, but in the u.s., i think it is a major topic and not a major topic in other countries come mainly driven by the energy side, so we don't expect domestic prices to shoot up because there is a lot of domestic supply. that is why there is room for that space to still invest in. itdi: we have to leave there, but some interesting calls there. o of deutsche
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bank wealth management. coming up, our exclusive interview with malcolm turnbull is next. this is bloomberg. ♪ these days families want to be connected 24/7.
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rishaad: i am rishaad salamat coming to you from bloomberg's asia headquarters. haidi: we are seeing a positive reaction when it comes to asian markets, tracking the gains overnight from wall street. i guess shrugging off in terms of the broader market reaction to the turmoil from washington with president trump as largely expected with a drawing from the paris accord. we are watching energy stocks in this part of the world. absolutely.
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after what we saw in the u.s., we saw moves from solar stocks reacting to that move, but hong kong as well, premarket seeing a move to the upside in the premarket auction period, the hang seng up .5%. right, the start of the trading day. that's what we have at the moment. withdrawing the united states and announcing it come as a nothing has changed nvernight aside announcement itself. rishaad: that is the minutia here. what about the reaction from the likes of beijing and new delhi? >> sure. paris is no longer a question about climate change, but one about international relations. , there ise sentiment an issue about how other countries will react to the united states. we saw the chinese premier in
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brussels this week, making a pretty strong statement about supporting the paris accord and working on climate change with the european union. this is a bit of a gift to china to take leadership for this , cedingnegotiations ground to china and the european union to take action on this, so that part is much more significant come about how that will play out, we will have to see a the course of the next couple weeks and months. i guess the symbolism of creating that power vacuum, if you will, and so many ways is the latest, but in terms of the impact on the energy industry, i want to throw out this pie chart. of new asia in terms solar investment by region taking the lion's share, 60% of that. do you expect this shifting of the focus of where we are expected to see further efforts
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on green energy and green economy, is that going to change the picture when it comes to the industry? >> so the answer is no we don't believe that the u.s. decision on the paris climate accord will have any sort of long-term impact on clean energy investment. clean energy investment is increasing and has been driven by underlying trends out of international agreements. outside of the sentiment, we don't think there will be any impact on this. it might give cover to some other countries such as india or southeast asian countries to stay in the agreement, but dragged their feet in terms of complying with some of the things they have promised, so there will be some negative effects in terms of the optics of it and how committed the countries will be, the remaining countries in the agreement, but the underlying fundamentals within the market will remain strong, and you saw a lot of corporate industry leaders
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actually came out in support of the paris agreement, and their sentiment is unlikely to change nor their investment activities are unlikely to change because of the u.s. government's decision. there a monetary component involved in the u.s. commitment to the paris accord? sure. outside of the sentiment and other things, there is one piece, which is an agreement to commit about $100 billion a year before 2020 to help developing countries meet their obligations here. clearly the u.s. will probably not contribute to this, and without u.s. commitment to this, we are likely to see the funding not materialize for this aid to developing countries to help them meet the paris agreement, so that part of it would definitely suffer as a result of this decision. so many uncertainties and unknowns at the moment.
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austria's prime minister says the country's relationship with the u.s. remain stronger than ever. like other nations, australia faces the challenge of adjusting to president trump's style of leadership. malcolm turnbull sat down with me for an exclusive conversation ahead of asia's most high profile security conference, where he is expected to give a highly anticipated keynote address. i asked him about the threat of north korea and how that should be tackled. >> north korea's conduct is reckless, dangerous, and becoming more so. china has the greatest leverage over north korea, and with the greatest leverage comes the greatest responsibility, so we will do our part, but as we look to beijing to bring the pressure to bear on the regime in pyongyang to bring it to its senses, to bring its to its senses so that it ceases
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threatening the piece of the region with this reckless conduct. to attend g7 seem something of a seismic shift when it comes to global alliances, angela merkel suggesting germany cannot continue to rely on the u.s., the u.k., that europeans must take charge of their own destiny. if that is a shift in tradition, the postwar alliance, friendship looking fractured at the moment, what does that mean for australia? you say the u.s. and australia have shared values and this special relationship, but do we really? >> of course we do. our alliances stronger than ever. the u.s.-austria alliances more important than ever. as president trump and i demonstrated when we were together on the uss intrepid in york a little while ago, our commitment, the commitment of our two nations based on their history, based on our shared
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values, aced on our mutual interests is stronger than ever. haidi: is there a concern though that president trump has proven andelf to be irrational erratic at times when it comes to policy decisions, and at other times track sectional -- times track sessional -- transactional? thehe relationship between united states and australia is as strong as any relationship could be. it is based on history, shared values, common interests, the closest possible engagement at every level. course given of the events of the last few hours, anything to do with the climate and his view of climate change and united states policy? becauset is interesting
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before malcolm turnbull became prime minister that he had strong views when it comes to how to attack climate change, almost holding the position of a climate change talk, but since his leadership, we have not seen a clear stance when it comes to that policy, but he did say without weighing on what the u.s. should do and other countries should do, he did say australia has signed up to the paris accord, and when you sign up to something, you stick with it, reiterating the role australia plays when it comes to the paris agreement, but there are a lot of questions over the sort of strength and the resilience of the australia-u.s. alliance given some of the fractures we saw coming out of the g7 in terms of the u.s. and europe, that traditional postwar alliance looking bit more shaky. coming up, the shipping industry, what lies ahead. it has had a horrible time lately, that is setting a course for recovery.
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can it be sustained and will there be consolidation? we get all next. this is bloomberg. ♪
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rishaad: this is "bloomberg markets: asia." 9:44 here in hong kong and singapore. 11:44 here in sydney. a quick check of the business flash headlines. day and discounts helped auto sales, ford the rose 2.3% wish should men's bringing a rare victory over general motors. also postedonda sales gains, giving the auto industry the first possible increase in total monthly deliveries this year, however, without bulk discounts, ford sales would have dropped in may. rishaad: a comprehensive overhaul as it looks to keep up services -- with services with
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snapchat and facebook. microsoft announces a skype overhaul, seen lagging behind its contemporaries. haidi: the world's biggest plane has made its public debut. o -- islen's strat designed to send rockets into space from high altitude. it is powered by six engines used by boeing 747's. the rockets aiming to be launch will be large enough to support satellites and low earth orbit. the global shipping industry has been suffering one of the worst downturns due to a combination of oversupply and we growth, sending rates plunging
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and plunging one firm into bankruptcy, but are next guest says the tide is turning. great to see you as ever. the last time you are here, we were in an awful place nearly a year ago, and things have improved. not in its heyday, but things are picking up. >> things have really changed. the fair rates, they have stayed firm. the demand-supply to tuition is satisfactory. rishaad: how much is cyclical, and how much is structural change. a lot of ships have been put into dry dock or scrapped. >> i would say a combination of both. structural reforms partly as a result of the hanjin fiasco.
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one thing i want to highlight are the catalysts for the improvement of the container shipping industry, the tremendous volume coming from europe to asia. ,ou look at year-to-year quarter to quarter comparisons, we have seen 40%, 50% surge. that is from europe to asia. rishaad: is that a function of the asian economy getting better, or the europeans are becoming more competitive? >> both. the european currency, the euro is relatively cheap compared to the u.s. dollar, so a stimulus for exports. on the other side, the asian economy, especially china, the consumer, the manufacture, they have come up quite strongly. rishaad: very quickly, last time you were on was in the midst of hanjin in its death throes. you said this was the lehman brothers moment in shipping. it wasn't as bad as that, was
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it? that time, butt things have changed and shown the resilience of the industry, like the american financial industry. , and right nowck the man-supply is in a good place in terms of equilibrium. we are looking very good for the next 3-5 years. you look at the over all new vessels coming for deliveries, up 45%,nd come increasing on an annual basis, so a pretty good situation. we have become much more optimistic, and the turnaround has come faster than we thought and is welcome news. there is also consolidation helping the industry with new alliances being formed. the industry is helpful -- healthier, and customers are getting healthier, so we are quite happy about what is happening right now, and obviously we keep our fingers
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crossed for the next year, and going forward, especially for 2019. hadi: did what happened to njin force you to think about the resilience? how did that bankruptcy impact your business? was a minimum. keep in mind that they are large .essels, efficient we will look at how to take
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.dvantage of the new situation and is goodchanged for the industry, good for us, and good for investors as well. investors have not been feeling that optimistic. when it comes to korean shipbuilders come you can see the index hitting record high after record high, a very .esilient market when do you think investor sentiment when a comes to shipbuilders is going to improve and match the level of optimism that you have expressed? >> it takes time. of are comparing with one the darkest moments in history last year. it is much better today compared
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with 12 months ago. hyundai heavy industry has and search 500% compared with last year. that is a healthy trend. an over they overbuild scrap, it happens all the time. it's like banks over hiring in good times and over firing in bad. overreacting,just and cyclicality is part of the business. hold that thought we have to get a break. ♪
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rishaad: this is "bloomberg markets: asia." we continue our conversation with the chief executive of sespan.
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n. seaspa how difficult is it to make money in shipping in the long term? it is more difficult than other industries. >> it depends on how you look at it. a lot of people have made money. you have to be good. you have to be an insider, have the patience and resilience. shipping is a cyclical business. you should not be panicking when things are bad. you have to be well situated and patient. rishaad: you have to be an insider? >> correct. rishaad: you have to be born into it? >> absolutely. the moments, the sentiment of the cyclicality. thatad: you can be taught
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in other industries, but not shipping. >> you have to feel it yourself. you do with customers, international trade. what makes shipping is demand from international trade. economy,e global political developments, all those things come together, so you have to understand all those things, then you come to the conclusion. rishaad: then you come to gut feeling, don't you? >> correct. rishaad: tell me about your gut feeling now you mentioned 2019 will be the peak. >> you look at the demand and the supply situation, we have new ships coming for delivery in the next couple of years. we will have zero new ships over ordered over the last few years, and you see scrapping. on the supply side, the ships are coming to delivery and will
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be under constraint, then you see a very positive market development. rishaad: and then the building will take place again? >> absolutely. that is part of the cyclicality. you make hay when the sun shines. thinking, youy of have to be position. rishaad: always a pleasure to have you on the program. please come on again soon. chief executive of the world's riggest container ship lease seaspan. we will continue talking about the economics of green energy. can china play a bigger role in tackling global warming? this is bloomberg. ♪
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♪ >> from our studios in new york
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city, this is "charlie rose." charlie: we begin this evening with the trump administration's climate policy. president trump is widely expected to withdraw from the paris climate agreement, according to many. the president tweeted thursday morning he would be announcing his decision over the next few days. the white house will weigh whether to initiate a formal withdrawal or exit from the united nations treaty. backing out would be a major step in unraveling president obama's signature climate achievement. a u.s. withdrawal also risks u.s. leadership beyond the climate arena, weakening president trump on the world stage.
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