tv Bloomberg Best Bloomberg September 29, 2018 7:00am-8:00am EDT
♪ >> coming up, highlights from the 2018 bloomberg world global business forum. leaders gather to discuss issues of critical importance. >> the post-brexit britain -- will be in unequivocally pro-britain. >> there is a lot going on in the world and markets don't care. >> competition is the most important driver for innovation. >> globalization has been a win-win in the world. >> they shared exclusive insight on their hopes and concerns. >> we are working very hard to reposition our economies. >> women are likely to be more men with the impact
on the labor markets. >> the metals tariffs took about $1 billion profit from us. >> the market is pricing in a little more risk. >> this is the process of learning by doing. >> it is all straight ahead on this special edition of "bloomberg best." eric: welcome to a special edition of "bloomberg best" featuring the best of the , bloomberg business forum. it was a remarkable day in new york city. on stageg part in panels and private roundtables, focus on some of the world's most difficult and pressing challenges. we interviewed many of them exclusively on the sidelines. the event began with a keynote address by u.k. prime minister theresa may.
she related to britain's efforts to forge new relationships after brexit. ♪ >> today, new challenges, including the rapid pace and threats of technological change are causing some to question their faith in the institution of global corporation and the framework of rules and what brought us to this point. they look at the growth of trade and whether it can be made it to work for everyone. they look at the growth of artificial intelligence and ask whether their children or grandchildren will have the skills to succeed in this new economy and they look at some of the tensions in global trade today. this could be really adapted to reflect the modern world. my answer to all of these
questions is an optimistic yes. my message today is that a post-brexit britain will be a pro business britain and a global partner that will help lead the international response to those challenges. to our strategy at home, we will create one of the most business friendly economies in the world, driving opportunities and spreading benefits of new sectors and technologies to every part of my country. and internationally, as a global britain, we will champion our vision for the future of a global economy, a vision based on openness, competition, high quality and intelligent , regulation. we will be at the forefront to address the challenges facing global trade and build a dynamic and competitive global economy
that can truly work for everyone. i have always been clear what the united kingdom stands for and what we want to achieve as we leave the european union. our relationship with the eu will change with brexit come a -- with brexit, but we will still be neighbors, we will still be a part of the european family of nations, and we will continue to champion. that is why i am confident we can reach a deal about our future relationships that are built in this spirit. we have put forward a plan for a new relationship with frictionless trade at the heart. there is no other plan that protects jobs and livelihoods while respecting how people voted in the largest process in our history. i believe there is much common ground in these objectives.
we know that the other models would face increased border checks. i urge the eu to engage with our proposals so we can move forward. to be clear, we are not seeking partial membership with a single market or in any way trying to undermine it. we are looking to achieve the frictionless trade. the coming weeks will be critical. the price is great with the conclusion of the negotiations over the coming weeks, the certainty of an ample mentation in which to adapt to the new arrangement and the guarantee of frictionless of the future businesses can look forward to , the post-brexit world with confidence. at the same time, looking beyond the eu, we are absolutely committed to delivering continuity in terms of
relationships with existing bilateral partners and we want to forge the most dynamic with old friends and new allies alike. crucially, we also have a plan to deliver an economy that is knowledge-rich, highly and a native, -- highly innovative, highly skilled and high, but with low tax. let me say clearly, whatever your business investing in a post-brexit britain, whatever your business, investing in a post-brexit britain will give you the lowest corporation tax in the g20. you will access service industries and a financial center in london that will be the envy of the world. some of the best universities in the world, strong institutions to publicapproach finance, and a consistent and dependable approach to high standards with intelligent
regulation. eric: theresa may's pledges made headlines around the world and later in the day, bloomberg broke another exclusive brexit story. we sat down with emmanuel macron, where they discussed the complicated states of negotiations between britain and the eu. >> you had theresa may, brexit, and you had for the first time from the labour party, the hand that you could have a referendum. second my question is if the british were to vote to remain , would you have us back? >> for sure. trying toough you are lure these -- this is not about domestic
interests. of britishhe choice voters, so i do not want to interfere in a debate about the second referendum. >> but you would take -- >> i did regret the votes for the rest of europe and for our relationship for friends in the uk. we have to have a discussion following the line of the existing referendum and to find the next phases by the european union in a single market. eric: coming up, we will go back to the 2018 bloomberg global business forum for compelling conversations. leaders and finance shared at
how finance and financial markets have you balled in the decades since the financial crisis. an a jump in with impassioned response. how do we encourage americans and europeans to take more risk? and there is no doubt the metrics have been successful. we are at an all-time record in the issuance of high-yield debt and the lack of confidence, ironically, the 10 year anniversary of the failure of the financial system we are in , this debt fueled bind that is pushing up valuations and laying the seeds for the next crisis. >> just to summarize, the oa crisis was not about lehman brothers, it was about the
collapse of the u.s. housing market. millions of americans lost trillions of dollars. it was a national economic catastrophe, but the post-financial crisis. the change has been the weight all of us have to place on what is going to happen in washington? what is going to happen with the european central bank as compared to the strictly the fundamentals of business assets? that has been a real change and not one for the better. >> we are nine and a half years into a global market. we are, for the most part, 30 years into a bond market. -- bond bull market. yields have only recently began to back up and they have not backed up a whole lot. if you cast your eye on the future, what do you see? what does it look like?
>> people who have invested in equities, you need to do a health check. you do a health check on your own body hopefully at least once a year. every day you are working on it. you do not do the same thing. most individuals don't do the same thing with their financial portfolio. they don't look at it. there equities are probably way outside. ir fixed income portfolio probably has far to much credit risk and duration, and it hasn't gone down, so why touch it? there is no money in cash. they would charge you if you had ,t, so you do not have any cash see do not have cash for the liquidity issues, and if you do not have that, you will have the powder to take advantage of the opportunities. >> no neon lights says we are about to have a crash tomorrow, so you need to figure out how do
you have your portfolio position today before the event happens. now that i have given the gloom of doom, we are in a period great growth in the united states. was a giant a gentle and shock to corporate america. up by atushed growth least 1% or 2%, we are creating inflation on the back of this for the first time in nine years. the economy is running hot right now and the trump policies are certainly pushing corporate america to go, go, go. and sopeople and so on forth, so we probably have another 18 to 24 months minimum in this cycle just on the back of the adrenaline rush from
trump's policies as he has tried to reignite growth of america. >> is mary is advocating a health check, you are advocating a tail risk. we don't have a lot of liquidity. alpha,f all, our -- not beta. there are times where we are worried about the risk. we are trying to buy companies in sector data. which is a change in consumer behavior. generally, we are leading to growth in disruption which is counterintuitive. you want to go back to the cash flow companies. if multiples are going to come in, i want something that will grow into that multiple degradation. generally, we are holding back
and moving towards alpha plays in a situation where we think there is sector growth that will overcome the inevitable correction whenever that may be. eric: the next session brought together blackrock's larry fink, and anothern, guest. they spoke with francine lacqua about cyberattacks. >> the number one thing i think about what can go wrong, i just -- is cyber. i just look at our own experience. we have grounded all that is going on. it is a big issue and probably doesn't get as much attention. by getting as much attention as it deserves, i do not think that internalizinglly
what the first, second, or third derivative impact of what is occurring from the cyber perspective. francine: do you all have to work together? do you need to share information? >> i think the financial institutions are probably more prepared. >> i am talking broader -- >> i believe there will be cyberattacks on organizations that have under spent on technology and my first candidates would be state governments who thus -- who possess social security numbers, so to me the problem could become organizations that are not in focus. the financial sector has been scrutiny that i would say it is one of the sectors doing as much as it can.
i'm not trying to suggest there may not be an attack, but the worry has to be in these other industries. let's -- francine: does a cyberattack change the market? could it be a catalyst of a market correction? >> one of the reasons and this is always correlated to positive .nd negatives, is confidence at the moment, it is hard. there is a lot going on in the world and at the moment, markets do not really care. they have been less sensitive to some of the things that might create shifts. >> i would argue right now that despite the big run, equities are cheaper today than they were in january. earnings have been so powerful and appear to be even more powerful that we witness out to
multiple decrease. the market is, despite the rallies, pricing in more risk. >> as opposed to a view of the isket being cheaper, cyber an example of something that can change behavior and have an effect on confidence and how people deploy capital. >> up next, bank of england governor mark carney discusses another global threat. climate change and the importance of getting businesses to disclose climate information. >> you get the cycle of better and to better disclosure, better application, and drill progress. eric: this is bloomberg. ♪
eric: you are watching "bloomberg best." a special recap of the 2018 bloomberg business forum. mark carney was one of the financial leaders who attended the event. --spoke his clue civi exclusively on financial disclosures -- the focus of the conversation is leadership on climate related financial disclosures. carney says there is increasing demand for companies to disclose climate related information. >> there was $25 trillion in assets under management. the task force comes out and says this is not what we should do and now it is $100 trillion. three quarters of the globally systemic banks, the sovereign wealth funds and insurers looking for this type of information.
companies are starting to disclose. they throw away the stuff that is not useful in been you get the better disclosure and real progress. >> what are the kinds of frictions that you are feeling -- banks who do not want to disclose? >> i think the best companies, part of what came out is the survey of the 2000 top companies around the world and you see all of those companies are disclosing at least some aspect in their main report. they are moving. this is a process of learning by doing. what is material and what is decision useful? what is the $100 trillion to make their capital allocations?
i think the key thing that we are seeing now on top of static disclosure is that you are giving more of the management involved and how this affects thetegy and if i could use awkward term, strategic resilience. >> how difficult is it to measure data when it comes to air pollution, water? >> what i think is relatively straightforward to measure is the carbon footprint. what is your footprint in the so-called scope one, in terms of your production? it is relatively easy to go and say, my energy use, what is the carbon footprint of that. the thing that is tough is to look at the supply chains. downstream, the footprint of the product after it has started,
and the components that come in. but you move to the first bits, that tells you an awful lot, and the more and more the market is --closing, you can fit upstream and downstream because you have the information. >> some people in the trump administration have said that climate change is a hoax and there are rules that protect climate change does that help? >> i would take a neutral view around disclosure. there will be people who are climate change skeptics and others who say this is the absolute top priority and companies need to act. there will be a lot of people in between and the people in between i think will react to, policy around the world. remember that countries are putting it into action. what you need to make a market between a denier and a true
believer is the information. what you are seeing today is assets looking for that information. we have companies providing that information and a comprehensive sense and once we look more broadly, they are starting to do it in a virtuous cycle learning by doing, providing the information and focusing on what , is relevant. what is interesting as well at the g20 summit, prime minister abe wrote which mentioned disclosure and they are looking to give a real status report of that summit in june to see where the private sector should be. eric: still ahead, we review the 2018 bloomberg global business form, christine on ai's impact on jobs and the economy, h, andting big tec reviews of top governments. presidents and prime ministers speak with us. >> my goal is by the end of the
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♪ eric welcome back to this : special edition of "bloomberg best." i am erik schatzker. we are focused on the global business forum. one of the day's liveliest panels gathered four past and present heads of state on stage. former u.s. president bill clinton moderated. >> we all live in the world, we want to work together. you have to figure out what creative cooperation means in terms of how you are going to
get the economy going. how you are going to reduce inequality. how the you redeem the promise of land reform without screwing up the investment climate and making people trust you. >> apartheid was once seen as the most on a tractable -- intractable problem in the world. that could not be solved. under the leadership and guidance of nelson mandela we , were able to resolve it. similarly, now, his spirit, his values and his principles and his vision is guiding us. we are not going to have land grabs. that is never going to be allowed. we're going to make sure if we embark on land reform, it becomes all-inclusive. it leads to nation building, social cohesion, economic development which will benefit all the people of south africa. >> it is one thing to say you are for peace and inclusion and
another thing to achieve it when there is an unlimited number of money coming from narco trafficking to undermine the future you want to build. >> i built my agenda for colombia based on three pillars. law and order. and entrepreneurship. because we want to be a country open for business. the third thing, if we have legality, and entrepreneurship, the consequence is equality. that means closing the gaps. gender gaps, income gaps. i feel very proud to be the first colombian president to have a cabinet that is 50% men and 50% women. i feel proud that we are mobilizing investment to technology, agricultural development. my goal is by the end of the term, we will be very close to putting an end to extreme
poverty. >> what is your take in terms of where we are in the world today? how can we get other people who think like you to continue to be committed to global trade? global development? how is your country dealing with the upheaval caused in europe by the massive influx of refugees, mostly from violence in the middle east? >> i think globalization has been a win-win situation the -- in the world. especially for developing countries. the fact that we are lifting so many people out of poverty. you have the space in between what happens inside those countries that were usually part of the global society, people with no income, no education. -- thatl now feel self
is important to make sure you have an open economy. trade. that you step forward on globalization. technology will drive this globalization, whatever politicians are going to say because the technology will move that. eric: land reform is one of the difficult issues the president of south africa must address. he went in-depth on issues facing his country with francine lacqua. francine: investors were concerned about a number of things. do you feel they are expecting you to go too fast in reforms, too fast in cracking down against corruption? were do you think you are part of the turmoil affecting emerging markets? >> investors have been concerned about south africa in terms of our policy constructs on a number of issues. land has been one of those. we are giving a cogent explanation of the process. on other issues, corruption, we are dealing with corruption
quite effectively. the other issue is dealing with miningicy on the industry, we are addressing bad. telecommunications, we are addressing that. visa regime, we are addressing that. many of the issues that have been raised by investors are the policy fronts we are addressing. we are addressing those in a proactive and positive way. the future is that we are including them in the discussion. we are collaborating with all role players in south africa. the unions. civil society as well as business. you could not have a better outcome out of the process like that. francine: you also said that in your economic stimulus and recovery plan, you said you would redirect around 50 billion rand. where are you taking it from and
putting it in? what ministries? >> we are going to reprioritize our budget. we are looking at where we can reprioritize and aware -- and where we can get this 50 billion. where are we going to put it? we are to put a lot of it in small and medium enterprises. we are going to put a lot of it in agriculture. agricultural production. we are going to promote businesses in the townships and rural areas. we are going to focus on youth and women so a number of entrepreneurs can benefit and become very economically benefited. 400 billion will also be available for infrastructure. we are going to create a mega fund for infrastructure to agglomerate a number of funds and moneys we have in our economy.
the private sector is going to be invited to participate. in equity joint ventures. and professional propositions, loans. and also promoting private partnerships with the target sector. all of this is going to lead to invigorating our infrastructure space. francine: do you worry about the affectingn the rand your infrastructure and being able to repay your external debt? >> the position of the rand is a function of the market. it also has to do with a lot of what we need to do ourselves to put our economy on a better footing. when the rand is weak, we are concerned. at the same time, it works both ways. with a weak rand, it feels like
others benefit. we want the rand to be well-balanced to support the economic trajectory of our country. we are working very hard to reposition our economy, to transform our economy. to make our economy more attractive to investors. eric: much more to come from the 2018 bloomberg global business forum. interviews with leading corporate executives. a conversation with the eu path composition minister and christine lagarde debates the impact of ai with baidu ceo robin lee. will continue to enhance human activities. >> you don't want to replace us. >> no. >> this is bloomberg. ♪
♪ -- best." is is "bloomberg the 2018 bloomberg global business forum brought together hundreds of top executives. many spoke to bloomberg television over the course of the day. let's go to the ceo of ford motor company, jim hackett. he talked about trade with my colleague david westin. : trade is a function of equilibrium. people can make decisions because, sadly, a hurricane or some sort of fire can hit you. you are used to dealing with
that. trade is policy. i have two beliefs. it has to be updated. it has to be modernized, so many things have changed. it has to be resolved fairly quickly. what we are urging our administration to do and when we are in china and europe, we say, you need to come to agreement quickly. david: from ford's perspective, the metals tariffs took about $1 billion from us. jim: we source most of that in the u.s. anyways. we are in a good place. but if it goes on longer, there will be more damage. david: are you making changes in the way you produce vehicles? really not. the trade did not change our thinking. we are more of an exporter and -- in that regard. lincoln is a hot product in china.
we make that in louisville, kentucky. the 25% tariff has made the price of our lincoln not as attractive. we have had to move people in that factory to other operations because of that trade problem. >> with all that is happening in the world today, there is a lot of support for the price of oil. lack of supply, i would say. this option of supply. -- disruption of supply. venezuela, libya. on the fx side, they have agreed -- you have strong support for oil prices. demand remains quite high. yes, i announced that in june. i'm not sure it is good news to have prices too high. when prices are too high, you open the door to competitors.
competition. n.e demand will fall agai i am not so supportive of it. >> will opec and opec allies, will they be able to make up for the production lost in iran? read russia, they were y to increase the production to replace part of the production which is not there. they pushed production up. saudi arabia, went up to 10.6% but was then dropped. we discovered the margins are not so high. and probably it pushes the price up. >> you are here during united nations week. so many world leaders. who has been on your list to make sure you speak to which countries are most important that are gathered here?
>> we have business around the world. the u.s., very important for us. mexico, brazil, south africa, china -- those of the countries for us. >> what are the messages you are hearing? >> they want to hear about our commitment in terms of investment. in terms of environmental consciousness. sustainability. they want to know what else they can do to be more competitive. in terms of being more of a decimation for investors. that is very important. i was this morning with the south african president in a round table. south africa, for example, is very committed to reforms. even more inviting for investors. we have been in south africa for more than 100 years, but the last two years, we have invested north of $300 million. we continue to be very welcome. they are talking to investors
and asking us what else we can do. they are very open to businesses. >> we hear stories about public pensions, and unfunded or underfunded ventures. where are we in the private sector? >> statistics suggest american society might be short of retirement savings by $7 trillion. it is clear to me we have what i am describing as a retirement challenge we must confront. otherwise it could become a retirement crisis. it has not done that, but it is time for all of us to take the right actions to forestall a crisis. us in thatis the statement? whose responsibility is that?
>> it is a shared responsibility. for individuals, if you have not signed up for workplace retirement plans, do that. max out as best you can. all individuals probably need to save more. for businesses, institutions, make sure you are offering a retirement plan. one that has the right kind of options. both equity investments but importantly annuities, which are , an insurance product. for the government, most importantly, thinking about how we are going to repair the social security system. by 2033, the trustees tell us the system will be under more stress and strain. eric: one of the featured speakers was the commissioner for competition of the european
commission. she sat down with john mickelthwait and they discussed the timely issue of regulating big tech. >> it is a two-sided market. they have dual functions. they host the little guy so we can enter into e-commerce. they provide a number of services which allows smaller businesses to graph active opportunities. guidese also big themselves. bookstore, everything. groceries, movies, the works. they get all the data from the little guy. we want to understand how this data is being used. this is all about competition. when we say innovation, it is the most important driver for innovation. for you to stay ahead of your competitor.
>> do you think the future is a bit like telecom companies or maybe what happened with microsoft many years ago where you have a platform company which is forced to let other people trade and have access? >> i think that is very difficult to say. this is a revolution. things change. we haven't even seen what is coming with quantum computing. blockchain really pulling off. so we have probably had a platform economy. which is why it is important for us to understand, what is the new big? how are companies that benefit from networks affects, huge amounts of data, marginal costs, how do they compete? for us, that is the important thing. >> do you think in some ways, competition law has been left behind by big tech?
you talked about network effects. it is difficult to intervene until after they have created near monopolies. >> i think our principles are fine. they are about human nature. we don't change, unfortunately. with our bad sides and good sides, we remain the same. in the regulation, we need to stay alert. in europe you can be successful. misuse youruld not power. this is the story of the two google finds. findsuccessful, but we they misuse their power. for consumers not to be able to enjoy the benefits of choice, innovation, affordable prices. that is where we have to be very vigilant. >> do you think tech firms have become too big? as such,do not think
you can make that conclusion. i think they can be much more transparent. my colleagues have made good proposals to ensure transparency. that is very much needed. the transparency. the willingness to deal with people. to be much more sort of clear that they respect your privacy, your ownership of your own data, so we as citizens feel we can build trust with technology. ♪
♪ : i am erik schatzker, it is time to wrap up the special edition of "bloomberg best." one of the great debates centers on the long-term impact of artificial intelligence. many say it will revolutionize's -- revolutionize business and others claim it will damage economies by a limiting jobs. managing director christine lagarde and baidu ceo robin lee engaged on this topic. christine revealed results of and i am a study -- of an imf study. thattine: the finding is and we extrapolated from countries to the rest of the world. the conclusion was quite a lot of jobs will be significantly materially affected. when we look at those 30 countries, it will be about 26
million jobs that will probably disappear. the second finding, i thought was interesting. because it applies essentially to those tasks that are repetitive and because there are more women doing those jobs, to be moreikely affected than men by the impact of artificial intelligence. do you think that is true? >> it could be true. that is one side of the coin. there is another side. laboring, you can also say, it is kind of a repetitive. >> you need to apply judgment. yes, relatively simple judgment. it is not that hard. if you try to teach the computer to drive, it is not that hard. most people, when they grow up, they can learn how to drive. it is very hard for computers to learn how to drive. companies like baidu and others
are working on driving. we are quite a few years away from truly self driving. it is highly autonomous vehicles, not completely free from drivers. we will use the computer to enhance human activities. christine: you don't want to replace us. >> no. christine: mi allowed one more question? you have 40,000 employees around the world many of whom are in , china. are you enjoying a regime, and environment, framework that enables you to research, develop, anything you want? yes.etty much,
christine: too much? >> [laughter] yes. china is a big market and we have a lot of engineers. we have tens of millions of users who use our services every day. a lot of data is generated. we can use data to learn how to improve our services. we do have a lot of opportunities to innovate. that being said, there are things, how do you provide , protect privacy? have you make sure this technology does not go out of control? that does bad things to mankind. tore are things that we need worry about, but i do see more opportunities than threats. all for theill be special edition of "bloomberg best." for more information and analysis of the global business forum and important business stories visit bloomberg.com.
♪ carol: welcome to "bloomberg businessweek." jason: we are joining you from bloomberg headquarters in new york. carol: coming up, the metal that started trump's trade war. trump's aluminum tariff opposed. jason: why investors are rolling the dice on cryptocurrencies and cannabis stocks. carol: first up, we need to take a moment to focus on the story of the week.