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tv   Charlie Rose  Bloomberg  February 24, 2015 10:00pm-11:01pm EST

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announcer: from our studios in new york city, this is "charlie rose." charlie: larry fink is here, he is the manager and ceo of blackrock.
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it oversees $4.6 trillion. blackrock owns more shares in more american companies than any other party. for all of those reasons, i am pleased to have larry fink back at this table. interesting to talk to you at this moment. just give me a sense of where you see things today in terms of the global economy, in terms of markets, in terms of what factors are influencing them like the price of oil, like deflation. larry: as you have framed the world, you have framed a divergent world. the world is a very divergent place. we have crosscurrents. we have political issues that are impacting us that we never even dreamed of 10 years ago five years ago, two years ago, and we have an uncertain economy worldwide. we still have a middle-class
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having witnessed huge market movements upward and seeing wealth creation for some. we have seen stagnation in so many parts of the world. this is the part of the equalization of the world. it is hard to talk in one country about equalization, but i talk about this divergent world. we have had the biggest rise in middle-class income worldwide in man's history. a lot of good things are happening. charlie: china? larry: china, brazil. it's mexico. turkey. charlie: emerging markets. larry: yeah. if you listened to the news, you would be confused about the good things going on, because the dominance is this divergence. the divergence is going to be with us. we have to overcome some of the negativity and focus on some of the other things going on at some of the things that are quite strong.
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the world is improving. the u.s. economy is growing little faster than last year probably weaker in the first quarter because of the energy change. charlie: right around 3%? larry: a little lower. 2.8%. europe is going to be incrementally better than last year because they finally fixed their banking crisis. they have benefited by a very weakened euro, and they are benefiting from a very accommodative central bank. then you have economies like india with a new government, with modi, who i happened to visit a few weeks ago. you have an economy that was stagnating around 5%-ish a year ago, and they are going to receive the benefit of this lower oil price. that is going to at least one then percent of gdp to india
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alone. the reforms prime minister modi are focusing on will and 1% or 2%. you can see india going from typing percent to 8% -- 5% to 8%. china is going through a modest reduction in gdp. five years ago, it was growing at 10%. right now, it is growing at 7%. china may grow at 6.8%, a reduction of 2/10, but the upswing of india will overcome all of the weakness in china. charlie: will the lower crude produce demand? larry: just because china and india are both importers of crude, importers of natural gas, the commodity cost is down so much, they are able now to produce more. consumers were buying kerosene and oil, they will be able to benefit and spend more. the most remarkable thing that i think about the world is how
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technology is in front of our faces. the last time i was here, i was talking about the benefits to the united states because of energy. the united states was creating one million barrels incrementally over where we were two years ago. this is in front of us, and yet oil was staying at $100 and was being tested in early 2015 -- 2014. we had isis, uncertainty in iraq, and yet oil did not spike. then we had the imf talking about global growth slowing. and you had the breakage of oil. the reason why i found this to be so remarkable, the change in the oil market is altered in by technology. we talk about technology in so many other areas. we spend too little time focusing on how technology has changed our everyday economy
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like gasoline, how it is changing everything. i look at this as transformational. this new technology and the cost of the new technology is going to create a permanent reduction in the cost of petroleum products. can oil go back from where it is around $50 to $70 for $80, but i don't think we will see it back at $100. mexico is focusing on their reforms. one or two years out, they are going to begin their hydraulic fracking and energy reform. we are going to see more and more oil being produced. unlike all of the other oil shocks we have witnessed in our lifetimes, most oil shocks were demand-driven. this is an oil shock that was supply-driven, and the supply was created by new technology. our theme is about how technology is going to be changing everything we touch whether it's our sharing economy. i believe there is so much focus
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on companies like uber, how it may change the taxi industry. i think uber may change car ownership. if you live in new york city or san francisco, for those people, they don't really need to own a car anymore. when you buy a car, it depreciates the day you bought it. you have to pay maintenance. you have to pay for storage. if you have some form of sharing -- this is a remarkable transformation in society. i think the millenials are not so wrapped up like i was as a young kid to own a car. i think now the whole concept of sharing a car, whether it's uber or something different in five years, this sharing concept -- it started with sharing music on the internet, and then we
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started sharing our hard drive calling it the cloud. we are just expanding this whole concept of sharing, and now it is touching the consumer really importantly. these are transformational items, and one of the dynamics is, why i remain bullish on the united states, these technologies are helping this -- are all being created in this country. charlie: how are they effective in manufacturing? some worry about -- larry: displacement of jobs? we are seeing a displacement of jobs because so many mechanized jobs -- or jobs are becoming mechanized. for educated economies like the united states, we are going to be a big beneficiary of that. my worry about jobs in the next 10 years is going to have a
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bigger impact in these rising population economies that are just beginning to find a route towards the middle class. these economies have been based -- if you talk about the emerging market, most of the emerging markets, their economy growth was based on cheap labor. even in china today, china was the largest purchaser of robotics of any country in the world. china's wages have gone up considerably. their middle class has grown dramatically. china, to remain competitive now, has to start having more efficient factories, which means less even labor, which means more mechanized processes. i believe the manufacturing process worldwide is going to change, but the engine of this ingenuity in the united states and over a long cycle will have displacement -- in the long cycle, we are going to be creating men and women who will be able to deal with this
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technology, to deal with -- charlie: more leisure time? larry: we have an aging population. we are going to need more people helping the aged. over a long cycle, i'm not worried about the short-term displacement that technology does. in this country, i'm more worried about displacement than other countries. for those men and women being displaced, it is a very worrisome, troublesome period. in some instances, it is difficult to get another job. if you look at the labor statistics in the last two announcements related to our unemployment rate, actually unemployment rates for the high school graduate only has come down over 2%. the unemployment rate is still too high at 8.5%, but in 2008, 2009, we were hovering at 12
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%. we have seen a dramatic decline in unemployment for the high school graduate. even if you look at breaking up by ethnic group, we are seeing a dramatic decline in unemployment for african-americans and hispanics. charlie: lots of presidential candidates make their way to your doorstep in order to seek your advice as well as ask for your support. most of those candidates are trying to articulate a theory of the case about the middle class, income inequality, about how to make the economy more robust. what do you tell them? what is your own theory of what ought to be the best prescription for america that resonates to those questions? larry: unfortunately, it is time and education. time and education are long-term solutions.
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short-term solutions? it's creating a more dynamic -- also, time. there were many people more unemployed two years ago then we have now. i think we are going to see wage inflation later this year. the statistics tell me it is harder to find educated young workers in the job market today. that is why it is filtering down. we are reaching lower and training. that is with the markets tell me today. i think that is going to start showing up possibly later this year, definitely next year, and we are going to start seeing wage inflation. that is going to start lifting everybody up. we have already seen what 23 states that raised minimum wage -- i don't know if that number is correct, but i think that is approximately right. you are starting to see companies volunteer to raise minimum wage. i think it is happening. the statistics do bear out the
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top 1% have benefited mightily more than the other parts of our society. charlie: you just described things that are happening as a matter of course in terms of wage inflation, dipping down deeper in terms of people and retraining them. what does the government need to do, what does the private sector need to do? do we need tax reform? larry: president obama's proposed free education in the community schools, there is a start. if that is approved, that is a powerful beginning. that is a long-term trend to reeducate and retool. i'm a big believer in tax reform. i believe we need to make sure this is a nation where everybody wants to come. getting back to my statement about the mechanization of
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manufacturing, we have fewer workers today. the positive side about what's going on now, labor represents a smaller component of unit cost on the manufacturing side. we are now seeing more companies bringing back manufacturing and onshoring than we've seen in tens of years. charlie: what is causing that? they don't have the same labor costs as they had before? larry: labor represents a smaller cost of the overall many -- cost of manufacturing. we have mechanized it so much that we have fewer workers on the factory lines. could we afford to spend five dollars, $10 more in our on our labor? that would be a little higher in
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the component, but we won't have the transportation cost of shipping something from china or korea or indonesia here. secondarily, you have one advantage in the united states that no other western economy has -- we have the cheapest natural gas of any nation in the world. if you are a manufacturer that depends on all the forms of natural gas from plastics to fertilizers, these are all derivatives of natural gas. our component costs are cheaper than what it would cost to manufacture the same item in germany or even japan or china. we have this big structural advantage over every other manufacturer today. charlie: oil prices, $52 today. larry: it may go down to $30 before it goes back up to $70. charlie: what will decide that? saudi arabia? larry: no. the markets, demand. saudi arabia -- opec has less control over the oil markets than they've ever had. they represent 30% of the overall market. you have to understand the market is priced to the last 2 million barrels, the last one million barrels.
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if we had incremental more demand or incremental more supply, that is going to change the overall price for the entire market. that is what is going on. we have a supply imbalance. w\ have a supply imbalance. the supply imbalance the six-month -- first six months of the year is greater than it was last year. all the wells we started to build out last year are now producing. we are not producing as many wells going forward, and that is going to impact prices in two years. canada already spent huge sums of money on their oilsands. they have 500,000 more barrels of oil this year than they did last year. then you have mexico, which a year or two years down the road, will see a real surge in production. we see more supply. now the key is if we have more global demand for carbon, we will find an equalization. that equalization, from our long-term statistics, is
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probably $70-$80. that doesn't mean it doesn't touch $30 for a moment. we believe long-term value is $20 or $30 lower than it was last five years. larry: do you believe the keystone pipeline is necessary? larry: it is more of a simple today. the fact that we did not do keystone -- i was not against doing keystone when it was proposed, with the fact that we did not do keystone, we became more active in north dakota in producing more oil. we actually became more self-reliant because we did not do keystone. charlie: not doing keystone had a positive impact. larry: yes. it had a very positive impact to the companies that transport like the trains. charlie: why build it? larry: the question i would raise, we have witnessed over
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the last few years some very horrific accidents with trains transporting oil. if you want to talk about the risk of these oil tankers going through towns, don't you think a pipeline is safer? i'm not going to get into a political debate. i did not understand why we vetoed it originally. it to me, it is now more political. do we need it, today? no. my strong view is that north america is the best place to be in the world today. xcode, canada, and the united states, the fact that we cannot create a regional, cooperative energy system is a shame. keystone became a symbol more than a fact. mexico is going to produce a huge amount of pipelines.
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i don't hear any backlash on their proposed pipeline. texas has many pipelines now because they are piping oil and natural gas to mexico. this became a political symbol more than a fact. charlie: u.s. growth. what would help u.s. growth? the first question is, if we see it at 2.8%, could you imagine gdp growth in the u.s. over the next 10 years reaching 4%? larry: sure. easily. charlie: can i tell you how many people three years ago, four years ago would sit at this table, smart people, and say, i can't imagine u.s. gdp growth at 4%. larry: those same people couldn't imagine is becoming energy independent. charlie: people talk about deflation. what do they mean? i realize it's the opposite of inflation, but what does it mean in terms of our economy? larry: inflation means stagnation more than anything else. let's separate stagnation.
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i believe we use too broad of a word in deflation. it means everything. i actually believe there is good deflation. you can't tell me that oil prices at $52 versus $100 is not good deflation. to me, what deflation represents for me -- i don't want to talk about other people -- it may mean stagnation, that we can't get out of this global poor-performing economy. we look to japan as a great example of 20 years of gdp plus or minus 1%. that is the stagnation. charlie: in their last quarter didn't they come out of recession? larry: the economy fell over 5%. last quarter, it grew 2.3%.
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one of the big things about abenomics, they have for the first time in 20-something years, wages are up 2.5% year -- this year. it is patriotic to raise peoples' salaries in japan. deflation is overly used. it means we are going to have a stagnant economy. if we really had true deflation, that is really bad for financial markets, very bad for financial assets. deflation is truly one of the worst outcomes of any economy, because it really just shows that we are regressing. this concept that we are trying to have our children have a better life than we will, that can never happen in a deflationary environment. charlie: do you have a theory of
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the market, so that you just look at companies, individual companies, or do you primarily look at a macro economy, or do you primarily look at what? larry: i'm not an investor. i manage investors. i spend all my time focusing on the macro economies. i allow my investors to find out what is the best stock. i believe focusing on the big macro pictures and translating that into individual stocks or asset allocations. one of the big reasons why ats are the fastest-growing component of the capital markets, you don't have to be a stock picker, but you can have exposure. if you believe that india is the place to be, you could buy an etf just for indian stocks. if you believe that pharmaceuticals are going to be
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the best place to invest, you could buy an etf just for pharmaceutical stocks. you are buying the index. you are buying the whole index. if you really understand the markets, which very few people do, but asset allocation probably represents 80% of performance. unless you have a long-term horizon -- look at what warren buffett has done -- warren buffett has had a 40-plus-year horizon of looking at companies, picking good leadership, companies in a good position. he is using top-down analysis of where to go.
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i think one of the most brilliant moves warren buffett data, he believed the u.s. economy was always strong. during the height of the financial recession in 2009, he buys burlington northern. he possibly could have said, i think oil products should be translated -- transported in cars, too. if you don't have a long horizon like warren buffett, i do believe you need to focus on investing more in indexes. to me, it is a bearish view on the oil markets. charlie: that they are going to go down? china's economy is slowing.
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what you were just saying -- is it all because of modi? larry: good leadership. great leadership re-energizes hope. we know psychology is how we live our lives. charlie: open confidence. larry: modi has really given new hope to india. india is 148th in terms of being competitive, in terms of ease of doing business. when i saw the prime minister
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two weeks ago, he said my hope is to get it to 50. we would not think being 50 is so good. if he can get it to 75, that's big. india has so much opportunity, but we have seen this story many times. we have had many of times -- many times when we've believed in india and have been disappointed. this prime minister who was very successful as a governor of a state of india has organized an incredible leadership team around him. he brought in some of the smartest minds in india. he brought in people from the u.s. who were born and raised in india, coming back. i came away with a group of people very confident in this government, and at blackrock, we expect to be providing our clients opportunities to invest in india. charlie: let's talk about europe
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and greece. larry: well, the markets are pretty calm, and a lot of people are asking, why are the markets calm about greece? this is a big macro issue. i haven't seen much. greece is not a private sector problem. in 2010, if greece failed them the private sector owned most of the greek debt. today, 70%-ish of greek debt is held by the ecb, greek banks and then you have the imf who has a huge loan outstanding to greece. it is not a private sector problem. as you think about what has transpired over the last five years since the great recession, we have had a transformation of debt being held by the private sector to an expansion of debt in the public sector. the federal reserve owns $4 trillion in bonds. you have the bank of japan buying all of this. you have ecb doing qe. charlie: do you approve of all of those moves by all of those central banks? larry: i think we would be in a much worse position today, but i do believe those moves made people in the stock market wealthier.
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those are the 1%ers. quantitative easing was powerful for the wealthy. getting back to greece for a second, it is a game of kabuki. greece, in my mind, is part of the international grid. if you want to remain in the grid, you are going to have to ultimately conform. if they don't conform, they are going to become argentina. argentina was in the grid. they did things that the global economy said was wrong, and now they have no access to capital. charlie: argentina can't borrow. larry: they can't borrow. if greece walked away today, their banks would be bankrupt. greece experience a 26% decline in gdp from 2008 until now. that is almost equivalent to what we experience in the 1930's.
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charlie: from what to what? larry: 2008 to 2013. if they walked away now, they would see another ungodly decline. charlie: when would they be out of the eurozone? larry: immediately if they walked away. i think this is a game of kabuki. i think greece has a hard time meeting the obligations. they haven't missed a debt payment yet. this is all being prepared. charlie: this is all just negotiating talk? larry: i would think they are going to try to find a way to extend their debt payments extend their maturities, so it looks like a win with a new government, but the europeans can say, we held steadfast. i don't worry about this type of noise because i do believe this, in most circumstances, will work out. i do believe common sense would
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mean, if you are a government and you want to make sure the future of your country is better, walking away from the euro would not produce that outcome in the short run. maybe in 10 years, it would, but it would create a huge amount of pain for greek citizens. at the moment, i believe there's more than one billion -- it is certainly more than $1 billion in money leaving greece every day. the wealthy people are taking their money out of there. the country becomes poorer and poorer. charlie: you like mario draghi? larry: i do. i think he has one of the hardest jobs of any politician or regulator in the world. charlie: he came through at the time they needed it. larry: he has proven to be quite resilient in terms of going against consensus, and even with -- there were some politicians against his positioning.
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he believed that he was the only -- the ecb was the only entity that could stabilize europe, because the politicians of europe did not have the political will. charlie: that was a huge confidence-building factor. larry: absolutely. do i believe qe in europe is going to be very powerful? no. i believe what he has done is an outright devaluation of the euro from 1.40 to 1.14 today. that has helped competitiveness considerably. this is why i'm going to -- europe is going to start seeing an uptick. charlie: two countries because of oil and sanctions -- iran and russia. larry: once again, russia was part of the grid, and they are losing their connectivity to the world. charlie: does that offer opportunities for investors or not?
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larry: politicians -- i don't believe in investment strategy betting whether a politician performs admirably or performs abhorrently. charlie: you don't bet on the behavior of politicians. larry: i think there are better people suited for that. i don't believe it is a good investment strategy. it is very binary. it is a binary you can't control. i like outcomes where you have some knowledge. you have no knowledge as to how mr. putin will perform. i do believe he miscalculated quite a bit related to the european response to his invasion. charlie: then he got up front and couldn't get back. larry: that's the problem now. i believe what chancellor merkel did was very powerful, immediately flying to the united states last week or the work before -- the week before. if the united states voted on
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bringing, providing weapons to the ukrainians, i think then we just amped up the problem. i think we would respond pretty hostilely if the russians brought weapons close to our sure. i don't think that is our responsibility. i think chancellor merkel -- i believe that is with the conversation was last week.
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♪ charlie: let me move back to the united states. the federal reserve -- we've gotten accustomed to ben bernanke during the financial crisis. then he was succeeded by janet yellen. how is she doing in your judgment? larry: she's done a great job. charlie: essentially the same policies he might have followed? larry: if anything, she might be biased towards a cap more dovishness. i think having stan fisher as the vice chairman , stan might
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be more right of janet. i think the complement of the two is very good. what i've been impressed with with janet yellen, and i've been to a few meetings with her, she is very forthright, unlike most chair people of the fed. she is describing her views of the world, and she is very open about where she thinks the world is going to go. she will say, if my view is right, we are going to do x. the next six months, we are going to look at the data, and if my views are wrong, we may not do that. the federal reserve announced that they are now considering elongating their zero interest rate policy, and to me -- they cited international conditions and they cited the target inflation rate is not being met. the inflation rate is lower than their target, which gives them more time to do things.
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my most important component about what janet yellen is doing, there should not be a surprise interaction. she has much more openness with federal reserve policy. you have a pretty good understanding how she is navigating the federal reserve. charlie: what is necessary to stimulate u.s. growth beyond what the federal reserve might do? larry: a big change -- we haven't spent enough time on it the last two years -- state and local government finances are much improved. you have states like ohio with a $2 billion surplus this year. i don't know why ohio is not spending $2 billion on infrastructure. they have some of the worst bridges in america. they could create some many wonderful jobs in ohio to be additive to its economy. even the state of california had a surplus this year. we are beginning to get our -- we are starting to see the
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transmission of all the federal reserve activity. we are starting to see state and local governments who have very severe austerity programs in 2009 and 2010, and those programs brought down expenses. one of the big drags on the u.s. economy was we had rising employment in the private sector and declining employment in the public sector. that has stabilized, too. many of these macro trends take time to stabilize. i actually believe we will see more elevated growth beyond my concern in the first quarter and we will probably see 3%-three point 5% in the second half. the big issue in the first quarter, the consumer is not spending the savings they are getting on petroleum. charlie: they are saving it? larry: they are saving it. every consumer company i talked
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to says they are not seeing the big impact on sales yet. what i'm hearing is, deposit rates are going up. the american consumer is saving more. it is our view that if the american consumer sees that these savings at the pump persist, and it's not just a $50 savings or $100 savings a month, now they have a hundred dollars savings after six or eight months. i also hope the american consumer, who is no saving each month, is thinking about putting some of this away for their retirement, getting the to our issue about longevity. charlie: what ever happened to all of the concern about debt and deficit? larry: at the federal level? charlie: yes. larry: we have deficit hawks everywhere. charlie: i was guilty of being
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somewhat of a deficit hawk. i'm not totally innocent on that. charlie: meaning the performance of the economy surprise you, and you were wrong about fears. larry: i was probably more of an alarmist in 2010. we really need to address some of this. the federal government did. we had the sequester, which had some negative impacts. we have cut our spending rates dramatically. last year, our federal deficit was down to $470 billion. three years ago, it was $1.23 trillion. we have now a lowering of our annual deficits, and we are having a rising economy. as a percent of gdp, our debt to gdp is much lower than it was before.
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the problem is, some of the reduction in savings -- reduction in spending we've done in the united states, it will start accelerating in 2020, so we will have the same problem again, accelerator deficits if we don't find a way to navigate some of these long-term issues. charlie: the question is, what worries you? is it the unexpected, or is it something more specific? larry: when you read about -- getting back to my great analogy -- you have organizations like isis not on the grid. that is why they are more frightening. they want to destroy the grid. they don't want society, western society as it is, and they are not funded, they are not linked to western society. as bad as what you may think of russia, russia is linked. their banking system is linked. charlie: russian companies are doing business overseas.
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larry: the same with greece. if you want to persist at being part of the grid, you are going to have to find a way to conform. when you have things like isis that are purposely trying to destroy western society, that is probably the most frightening thing for me than anything i can read today. most of the stuff i read is a little more alarmist, and i don't think we are alarmed enough. charlie: what would that be? larry: we talk about cyber security. you see these things. what happens if they shut down financial markets? these are things that could change how we live our lives. the president last week was that stanford university talking about cyber security in the private sector. i am actually more worried about
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cyber security at the state level. i don't believe our state governments are spending as much money as the private sector protecting the information that they have. keep in mind, most states in this country have a state income tax. most states collect social security numbers. most states collect the information where you live. that is the information people are trying to get so they can find ways of attacking a financial statement of an individual. we need to be rigorous and vigilant and making sure that as we get more connected to the web, whether it is state and local governments, individually, corporations, we need to make sure we have security and protection. we talk about interconnectivity. as a world, we are becoming more interconnected through the internet, and we need to make sure that how we live our lives and how we live our everyday life is being protected.
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charlie: finally this, two things, one about your firm, and my last question about the overall picture -- we on panetta, bob gates, lots of other people of respected intelligence with high positions in government in the national security field have said time after time, the thing that worries me more than any other threat is dysfunction in washington. is that alarming to you? larry: i'm almost numb by how dysfunctional washington is. i'm not alarmed anymore because i am numb. i think this country would be so much better if we had a productive washington. i think our economy would be
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growing at 4% if we had a more productive washington, if we had proper immigration policy. we are educating 800,000 students, and most of whom we kick out. they are going to get educated here, and they have a good history of being a good citizen. why don't we let them stay here? we don't have an infrastructure policy. we have the worst infrastructure policy in the world. i'm focused on infrastructure investing in india. i'm focused on infrastructure investing in mexico and other countries. i just can't focus in the united states because it is so hard to get anything done. it takes years to go through federal, state, local authorities. one of the reasons why our infrastructure is falling apart, we don't have a federal government focus on these things. charlie: because they are gridlocked between republicans and democrats. larry: same thing with immigration policy. if we had tax reform, we would have more companies wanted to come here. charlie: support for science technology. larry: those are all fair statements. we would have at least 1% more
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gdp. charlie: at least 1% more gdp if there was not so much dysfunction? larry: if all of the most obvious things that are necessary to make this country great were done, immigration infrastructure, tax reform -- those three big things alone would be tremendous. charlie: some people step forward and say, it's democracy, and that is what we like. that is the downside of democracy. larry: i believe democracy -- charlie: people go to washington and behave this way. larry: i think there are periods of time when democracy is fabulously productive. we are in the bottom trough right now, and we need to get back at having the men and women representing this country to build a better america. i just don't believe they are focusing on america. i think they are focusing way too much on their jobs, and it really leads to, do we need to have term limits? do we have to have other things?
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charlie: finally, there is this -- you have $4.6 trillion in assets, the largest anywhere. how did that happen? what did you guys do right? larry: i surrounded myself with really smart men and women. we had a very simple business model.
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charlie: which was? larry: we are only going to be a fiduciary. we will not be in any business where we compete with our clients. we will not change and eve all into something we are not. we remain what we were 27 years ago. we are only an asset management company. we do not have a balance sheet to compete with our clients. all our business is on behalf of our clients. all our revenues are from our clients. we don't have our own account. we believe that technology is going to be critical in risk management. when we started the company in 1988, 20 5% of the founders had a technology, risk management background. we steadfastly always had a believe that risk management and technology were going to be critical, and today, we've been able to consistently build this platform to what it is today. charlie: what is the biggest mistake you've made in the process? larry: we've let down clients at times. at times, we've been bad
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investors. we are not perfect. the most important thing, we need to admit those problems and there are times -- it was public -- i went to one of the state funds, went to the board and apologize to them. we made a mistake and let you down. charlie: what did they do in response? larry: they thanked me. charlie: did they continue to do business? larry: our business was reduced quite a bit. we were in the penalty box. i did not expect to have the same relationship after that. most importantly, overall, we have lived our responsibilities every day the same way. importantly, we are driven by exceptional client service. i measured the share of my clients' wallet and what percent of that wallet we are earning and managing on their behalf. in the majority of cases, we are enjoying a larger share of our clients' wallets worldwide. we believe in the globalization of the capital markets.
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we believe the world is a great place to invest in, and we are in over 41 countries. charlie: 41 separate countries you have more than $1 billion in assets? larry: yes. charlie: you said, we are maniacal about driving high-performance, but we are also a family. our clarity of purpose is crystal clear. what is the clarity of purpose? larry: to provide a better financial future for our clients, and to help them think about outcomes instead of -- most people are focused too much on the noise in the newspaper, too much about what is happening today, and if you focus on the outcomes -- charlie: andy volatility of the market? larry: if you have a 30-year objective, does it really matter what is happening in greece or india today? no. you need to focus on your objectives.
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you need to focus on what you need. if your focus is to earn enough money and save enough money to have a down payment on a house then that information in the newspaper is a little more important. then you design a strategy for that individual differently. if your purpose or outcome is your child's college education 18 years out, that is a different design. we are spending too little time on the moment, on the trade, not enough time on the solution. i think we have done a very good job at trying to identify to more and more clients a solution. charlie: we live in a political role. define for me what you would consider the character and characteristics of a presidential candidate you would want to support. larry: as we talk about the gridlock in washington, we need a leader who can work the middle and build consensus and build a bipartisan washington again.
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we need a true inspirational leader. we talked about modi. india is a very fragmented political system, but people built the view on this one leader. the same thing in mexico. charlie: the same thing with him -- he is in trouble down there. larry: pena nieto. he is in trouble because of his administration's deafness to security and crime. charlie: the 43 children. a little bit of corruption. larry: that has not been proven, but there are implications of corruption related to home purchases. charlie: family stuff. larry: and yet, the economy grew 2.3% last quarter. charlie: and he has announced significant reforms. larry: some of the most reform-minded leaders in the world simply don't have two
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terms, or their term is truncated. if you look at schroder in germany, george h w bush, one term, but he set up this economy for the great opportunities we had under bill clinton. bill clinton's administration took it even further, but i do believe we can't look at -- look at harry truman. sometimes, the most dynamic leaders and up being unpopular until the history books are written about them. charlie: thank you. great to see you. thank you for joining us. larry, thank you for the hour. see you next time.
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cory: live from your three in san francisco, welcome to "bloomberg west." i'm cory johnson. janet yellen said the fed will not raise rates before it sees more improvement in the economy. in testimony before the senate banking committee today, yellen repeated the pledge to be patient.

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