tv The David Rubenstein Show Peer to Peer Conversations Bloomberg April 30, 2018 7:00pm-7:30pm EDT
>> it is 7:00 a.m. in hong kong account a.m. in sydney. wall street opened, a busy week on a down note. stocks lower by tech and industrials. the s&p 500 index finished monday at session lows led downward by stocks including boeing and microsoft while the nasdaq sank beneath the weight of broad bassd tech clients. apple was the bright spot ahead of its earnings report on tuesday the dollar seeing its best month since november, 2016. the trump administration is to announce later on tuesday which friendly nations are to be exempt from tariffs on steel and aluminum. the commerce secretary wilbur ross has said some allies will be spared but not all. shinzo abe has pleaded japan's
case while president macron and chancellor merkel made separate requests for the e.u. while in washington last week. north and south korea take their first steps toward a new relationship today, dismantling a banks and speakers in probe over recent years. the move was announced at the end of last week's historic takes between president moon and kim jong un. seoul is also calling for a three way summit with the north nd the u.s. in june or july. well, most markets are closed for the may 1 labor day holiday including key markets that usually trade in hong kong. mainland china, south korea, as well as singapore shattered as well. it is looking like a muted session given the fact we have the shut markets across the region. looking at new zealand this is what we're seeing so far when session. o the kiwi
pretty much unchanged. a little down with the kiwi stocks, u.s. dollar extending those gains in the overnight session. trading in australia starting in about an hour's time. the aussie dollar largely unchanged. r.b.a. will keep rates on hold for a 20th consecutive meeting. futures going into the sydney open a little weaker as well 0.3 taking the tail winds from the u.s. session there. also looking at some head winds when it comes to u.s. futures as well when it comes to trading in japan coming back from the holiday, chicago futures last traded pretty much flat there. a little bit of support at 0.7 higher. this is bloomberg. ♪ >> when you have problems with wh do you ever communicate directly with god? >> all the time. we used to say it is a local call but the internet changed all that.
>> the ironian deal. what is the pleasure of being prime minister? mr. netanhahu: oh, investigation.
david: the israeli economy is doing quite well. mr. netanhahu: if you're not investing in israel, anyone here not investing in israel? invest in israel. >> would you fix your tie, please? >> people wouldn't recognize me if my tie was fixed but ok. just leave it this way. all right. xxx i don't consider myself a journalist. nobody else would consider myself a journalist. i began to take on the life of being an interviewer even though i have a day job of running a private equity firm. how do you define leadership? what is it that makes somebody tick? thank you very much for coming,
m prime minister. i know you have a busy schedule and you're flying to new york afterwards. the weather is not good. when
you have problems with weather, do you ever communicate directly with god about the weather or how do you deal with that? mr. netanhahu: all the time. and we used to say it's a local call but the internet changed all that. [laughter] david: all right. no doubt. ok. so the israeli economy is doing quite well by almost any standards. why is that when you have so many people around you who are threatening your existence? why do people want to invest in israel and why should people invest in israel? mr. netanhahu: because it's a combination of free markets and incredible technology. technology without free markets doesn't take you very far. and free markets without technology do take you quite a distance, but israel has the combination because we deliberately -- i deliberately moved it that way. and so that withstands lot of stuff. also, it gives you the technology to maintain your
security. so israel may be living in a very tough neighborhood, but we protect the country very, very well. and we enable the markets, the innovation, the genius of our people to flourish in thousands and thousands of start-ups. if you're not investing in israel, anyone here not investing in israel? [laughter] invest in israel. you should. david: you were the first israeli prime minister to be born in israel. but you moved to the united states when you were 8 years old, right? mr. netanhahu: yes. i came for a year. david: then you didn't like it and went back? mr. netanhahu: i was 8 years old. i was an independent kid but not that independent. david: then you came back to the united states a a teenager? mr. netanyahu: yeah. david: you it won't m.i.t. and majored in architecture. did you want to be an architect? mr. netanyahu: yeah at the time i did. i got an under degree in architecture and did four years in two years.
after two years i got my under graduate degree and then i decided i'd go to the saloon school and got my -- the sloon school and got my m.b.a. from sloan school. david: then you went to b.c.g. you are in a business career with a great firm. what propelled you to get out of that, possibly getting into private equity even and going to something else? why did you abandon that go and back to israel? what happened? mr. netanyahu: man's greatest calling. david: private equity yes. mr. netanyahu: i was derailed. i was derailed into a different direction. what changed my life was that out a month after i got into b.c.g. my brother fell leading the rescue force. david: your oldest brother. he was the only israeli soldier killed. that was july 4 of 1976, right? mr. netanyahu: right. david: so you decided to go
back and honor him in some way? mr. netanyahu: his death steered me ultimately into politics in an unintended way, really. but the short time that i spent in b.c.g. is the place where i really understood the fundamentals of competition and competitive advantage. and once you understand that, you know, it's like a secret that was shared, i mean, i had the opportunity to see the competitive -- the question of competition across industries and across countries. and i understood that you have to let the private sector earn, compete, succeed, and fail. that's the only way that economies grow. and that's where i got there. david: so you moved back to israel and got involved in politics and obviously rose up and became the youngest prime minister in israel's history. i think at 47 or so. and now you've been the longest serving prime minister since david bengurian is the only one
who served longer than you. is this job as exciting as you once thought and what is the pleasure of being prime minister? mr. netanyahu: oh, investigation. [laughter] david: has the job changed in 10 years? mr. netanyahu: israel is a tough country to govern in a tough neighborhood but the position you have to understand is you cannot gripe about the political system, which i tried to change, by the way. you just do what you can. and the important thing is, if you want reforms, do them right after air elected. that is rule number one. do them right after you're elected. that is rule number one. i've been elected four times so that is a lot of reforms. do them right after you're elected. press them through. don't do them one by one. you know? when i came into the finance
ministry i was prime minister, lost, came back as finance minister. then to prime minister. when i was finance minister, you know, they told me, don't take this job. you'll never be prime minister, they said. i said, well why is it that i want to be prime minister? well, one of the two reasons is that i want to reform the israeli economy. that's why i want to, you know, be there in the first place. you know, so if we achieve that, that's good enough. and that's what iened up doing. david: so --. mr. netanyahu: when i came into the finance ministry, this is just a tip for any of you who want to be israeli finance minister, something i don't recommend, but when i came in, you know, i said, well we're going to do this, do that, you know, make all of these reforms. and the staff at the finance ministry were very able people. they said, mr. minister, you can't do that. i said why not?
they said because this reform will get you a three months general strike and that reform will get you a three months general strike and so on. i said, could you say that again? every one of these reforms will get you a three-month general strike. i said, good. we can maximize the number of reforms for strike. and that is exactly what we did. we did them in basms. as a result, israel grew after that, basically since then has grown between 4% and 5% a year. i think it'll take us a couple years. we'll catch up to japan in per capita income. did you know that? david: so -- mr. netanyahu: you should invest in israel. david: any specific tips? mr. netanyahu: somebody asked me that. right after i came into the finance ministry. we were in a big crisis because of the intefadeh. we had violence. you know, obviously it hurt. our economy was actually shrinking. this is 2003. and i certainly thought that was the contributing factor but
i didn't think it was the factor because i thought it was the bureaucratic centralized control of our economy preventing its growth. so i met with a group of investors. and this was about two weeks into my term. as finance minister. that's all i could get was six or seven investors first in jerusalem and then london. they said, why should we invest here? everything is shrinking, collapsing. and i said, well, here's what i'm going to do. and i described to them all of these reforms basically. cutting the public sector, reducing tax rates, reducing the hurdles of the competition and so on. just everything. reforming welfare. and to hear this, in about 10 minutes into my discussion they
said, well maybe this guy is crazy enough to do this. and so they said, what we should, if you will really do this what should we invest in? and i said to them, i'm not a stock broker. but if you want a tip, i'll give you a tip. invest in anything. invest in a parking space in tel aviv. it's going to be worth a lot more. david: president trump, he obviously is skeptical about the iranian agreement. you are skeptical of that agreement. mr. netanyahu: you don't want the preeminent terrorist sponsoring regime in the world to have nuclear weapons and the means to deliver them to washington, d.c. don't let it happen. ♪
but i had disagreements with them. i had agreements and disagreements with them. for example with president obama we signed an m.o.u., member um of understanding for -- memorandum of understanding for a 10-year military aid package to israel which i deeply appreciate. i think it's great. it follows the 10-year package we signed with the earlier -- with the president george bush. w. and people probably don't know that. but it is important. but i had this agreement. i had disagreements. the important thing was we were quite clear about that. i didn't hide it. i'd say with president trump, i have fewer disagreements. so, in fact, i haven't found yet any disagreements. i don't expect there to be. david: with president trump, he obviously has -- is skeptical about the iranian agreement. you are i think it is fair to say skeptical of that agreement. mr. netanyahu: now you're a diplomat. david: right. if he says the united states is going to pull out of that agreement would you be pleased or would you be upset if he
says we're going to stay in? mr. netanyahu: well, he asked me that question. i said, look, you either fully fix this deal or you fully knicks it because right now it is a highway -- or you fully nix it because right now it is a highway with international approval for iran to get to massive, unlimited enrichment within a few years. because what the deal says is that the constraints, the limb tagss on iran's nuke -- limitations on iran's nuclear program are automatically removed by a change of date. i argued before the u.s. congress those constraints should be lifted only by change of behavior. and iran since the deal has been signed has been like a tiger unleashed from its cage. the deal emboldened it, enriched it, and instead of joining the community of nations they're just devouring the nations one after another. iran, iraq, syria, lebanon, gaza, yemen, the straits.
the whole thing is going in a very, very bad direction. you should not enable this aggressive regime out to conquer the middle east, out to impose its shiite version of militant islam on the world to have nuclear weapons. you think you have a problem with one country now in asia. i'm telling you, that is a family business. peculiar one but a family business. this is different. this is as kissinger said, an ideology. it's a cause not a country. and the cause is a bad one. we're the small satan. you are the great satan. you don't want the preeminent terrorist sponsoring regime in the world to have nuclear weapons and the means to deliver them to washington, d.c. don't let it happen. david: president trump agreed mo move the american embassy to jerusalem. many presidents have promised that and candidates have
promised that for 40 years. this is the first president that has taken steps to do that. did you urge him to do this or did he do it more or less on his own and did you talk about the complications of that? mr. netanyahu: i spoke to him -- i spoke to every president and urged every president to move the u.s. embassy to jerusalem. the difference is, you know, they all said they'd do it. he did it. he did ask me at one time what did i think, i mean whether there would be outbreaks of violence and massive, a massive collapse. i said, look. i can't tell you with 100% certainty but that's not what i'm seeing. i don't think it's going to happen. but if it does, we are willing to shoulder the risk. and it didn't happen. david: one of the debates has been whether israel should have a one state solution, two state solution to the palestinian issue. if you have a one state solution, it is said by some people because of demographics that israel wouldn't be
necessarily a democracy or wouldn't be a jewish state. do you favor a one state solution or a two state solution? mr. netanyahu: well, i think most israelis would favor a situation where we could separate from the palestinians. i want a solution where they have all the powers they need to govern themselves but none of the powers that would threaten us. what that means is that whatever the solution is, the area west of the jordan, that includes theman areas, would be -- the palestinian areas would be militarily under israel. the security of the overriding security responsibility would be israel. i'll give you an example. how many of you have been to israel? that's it? that's half. maybe a little more. ok. the other half will come. when you come in, and you fly in, ok? you go to the airport, you cross the mediterranean. you land in the airport. that will take you about 45 seconds. ben guerin airport is about 10 seconds away from the west
bank. so obviously if you say, well, israel's air space stops there at ben guerin airport, you know we're dead. we need bigger air space. that is going to go across the palestinian air. the same thing is true, what is above ground in the air is on the ground -- underground, too, as it turns out because of terror tunnels below the ground too. israel must have the over riding security responsibility for the area west of the jordan river. does that comport with full sovereignty? i don't know. but it's what we need to live. nan this area of the middle east full of failed states, states have collapsed, it is very important that israel be the power responsible for security because otherwise everyone collapses. the palestinians collapse. every area that he we left militarily, militant islam came in. we left lebanon. iran came in with hezbollah.
we left gaza. iran came in with hamas. we leave the west bank militarily or most of it as people stipulate in their various peace plans? you'll have either hamas coming in, that is iran, or you'll have isis coming in. and this is a catastrophe. the answer to your question is most people would agree to an arrangement of the kind that you're talking about. if they thought the palestinians wanted a state next to israel. but they're convinced more and more they want a state instead of israel. that is not a real peace. david: do you see any prospect in the next year or two of a deal getting done? mr. netanyahu: i think there is a new hope on the horizon that i had never seen in my lifetime. it is not related to the palestinians but to the oish world. because of the growing danger of iran, more and more i would say virtually all the oish -- asjha countries no longer --
all of the arab countries no longer see israel as an enemy but a vital ally in countering the threat of militant islam. that we are united in stopping the greatest radical islamic threat of all, which is iran. there has been, out of this curse comes a blessing. the blessing is this extraordinary relationship between us and i think that ultimately we might be able to shift the ground. i don't think it's readily available right now but i don't discount that it could happen. we used to say if we make peace with the palestinians we'll break out and normalize our relations with the arab world. i think that actually may work the other way around. we normalize our relations with the arab world to help change the perception of palestinians. david: the relationship israel has now with the sunni arab world is better than you've ever seen it before, is that fair? mr. netanyahu: unbelievable. and we work on it. david: let me talk about antisemitism. it seems it is rising in
europe. and to some extent in the united states we see some evidence of college campuses of israel not being that popular. does that concern you about the rise of antisemitism? what do you think people can do about it? mr. netanyahu: it is a chronic disease and has been around a long time. as a theory probably 2500 years ago. yes, it concerns me. i think on the campuses we have work to do. the reason antisemitism swept away one-third of the jewish people in the holocaust is because there was no jewish state. now we have a jewish state. the founders of modern zionism especially theodore hertz l, they didn't say necessarily that antisemitism would disappear when the jews would have a state of their own. they said that the jews would be able to fight back. that's the great difference. we're able to resist it. to push it back. david: there are investigations of you now in israel it seems it is a popular sport. mr. netanyahu: i can't say that i like it. i am very, very satisfied with what i do and the public
david: as prime minister as you alluded to earlier there are investigations of you now in israel. seems to be a popular sport. a lot going on there. what can you say about it? is it detracting for your ability to serve as prime minister? mr. netanyahu: well, i can't say that i like it. but no. i can say it doesn't detract because i work my 16-hour days and i just do it. and i'm absolutely committed to defending israel, liberating its economy, and these twin pursuits in seeking what could lead to peace between our neighbors, and my hands are full. i am very, very satisfied with what i do. the public apparently thinks that because you can see what the public says. david: some people in israel say maybe you should call for a so-called snap election and you would be re-elected --. mr. netanyahu: you, too, david? david: well, do you have a view on whether you might call a snap election that you can say
--? mr. netanyahu: i said, and i am talking to, on and off to my coalition partners from here, what i want is to be able to complete the term of this government, which is in about november 19th, and if that, if all parties of this coalition, talk about coalitions agree that is what we do and if not we'll go to elections now. i hope they'll agree. we'll see. david: what would you like to see as your ultimate legacy? mr. netanyahu: defender of israel, liberatore of its economy. david: and is the job as enjoyable as it was before? mr. netanyahu: yes. because we're doing things. very deliberate strategy. it's to develop this modern, free market high tech economy, leverage that into very strong military intelligence and a very strong military period. and since countries need both intelligence against terrorism
and other security questions, and they all need civilian technology, marry the two and create a diplomatic flourishing. we now have 160 countries with whom we have diplomatic relations. en i came to this town to be number two in the embassy it may have been half of that. the countries left out are very few. you talk about isolating israel. countries not with us are being isolated. eric smith laughed when it was said how about the move to boycott israel? he said i'd be boycotting myself. i'd never do that. israel is right in the center of the meeting ground between big data, connectivityy, and artificial intelligence. this allows us to revolutionize all industries where we were quite prominent like agriculture. for example he we do now precision ag kuralt. you know what that is? a drone flies in the sky connected to a data base with
sensors on the ground and we target the irrigation and fertilization down to the ndividual plant. so you understand the productivity gains. we have new industries. we have a car industry. we don't produce, we don't compete on chassis, engines. we don't have the scale. but since cars are basically becoming 85% of a car's value very soon will be software, 15% all the rest, it is basically a computer on wheels, there we compete. so now we have #00 start-ups just on that. -- we have 500 start-ups just on that. israel is a megastory for the new world of big data, artificial intelligence, and connectivity. if you're not in israel you are falling behind. don't -- come over. i'll see you there. i'm telling you. i'll buy you dinner. the economy is strong enough. ♪
>> it is 7:30 a.m. in hong kong and 9:30 in sydney. wall street opened a busy week on a down note. stocks lower by tech and industrials. the s&p 500 finished monday at session lows downward by stocks including boeing and microsoft while the nasdaq sank beneath the weight of broad based tech declines. apple was a bright spot ahead of of its earnings report later on tuesday. the dollar had its best month since november, 2016. president trump is floated the idea of holding his anticipated summit with kim jong un at the d.m.z. where kim met president moon last week. several countries have been suggested as host and the president say