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Ukraine, Markets, And Climate Disclosures · Bloomberg Intelligence

0:00
Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside
0:04
Speaker 1: my co host Matt Miller. Every business day we bring
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Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along
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Speaker 1: with essential market moving news. Find the Bloomberg Markets podcast
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Speaker 1: called Apple Podcasts or wherever you listen to podcasts, and
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Speaker 1: at Bloomberg dot com slash podcast. This is the Big Take,
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Speaker 1: the best of Bloomberg's in depth original reporting from around
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Speaker 1: the globe. This is a really fast moving story that's
0:30
Speaker 1: caused a lot of outrage among investors. This is so fascinating.
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Speaker 1: The market shotdown in a way it's never done before.
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Speaker 1: That's gonna have consequences for years to come. The Big
0:39
Speaker 1: Take on Bloomberg Radio. Well night, Paul and I love
0:45
Speaker 1: these Big Take stories every day, but we have an
0:47
Speaker 1: extra special one today because our editor in chief wrote
0:51
Speaker 1: at John Micklethwaite joins us. He wrote this together with
0:54
Speaker 1: Adrian wool Ridge old Ridge, which is the West must
0:58
Speaker 1: save Globalization. I how they recommend checking it out on
1:01
Speaker 1: ani Big Take on the Bloomburger Checking it out online. John,
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Speaker 1: great to get you on to talk a little bit
1:06
Speaker 1: about this. One of the things that you um to
1:09
Speaker 1: pose it is that there will be a decoupling here,
1:15
Speaker 1: a breakup essentially of two but maybe three different blocks,
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Speaker 1: but that the autocratic block the Russians and the Chinese
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Speaker 1: are going to accelerate. Past are divided democracies. Why do
1:27
Speaker 1: you think that that they all do well after this breakup?
1:33
Speaker 1: I say, well, go back a bit. I think that
1:36
Speaker 1: the you know that there is already a breakup happening.
1:40
Speaker 1: There is a break you know, there's a straightforward the
1:42
Speaker 1: coupling going on, which I suppose you can argue a
1:45
Speaker 1: mix between China and Donald Trump started, but I think
1:50
Speaker 1: is only going to be um increased by what's happening
1:53
Speaker 1: in the Ukraine. Because if you are the Chinese, you
1:55
Speaker 1: look and you quite rationally see what has happened to
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Speaker 1: the um Russians in terms of things like foreign reserves
2:03
Speaker 1: and all those things, and your desire to be self sustainable,
2:07
Speaker 1: especially if you're considering anything to do with Taiwan, increases,
2:11
Speaker 1: and by the same token, you also see what the
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Speaker 1: You know, the Americans are also racked up there their
2:16
Speaker 1: desired to decouples. At the moment. The decuping, I think
2:19
Speaker 1: is is ongoing in that direction. I do think one
2:23
Speaker 1: of the problems on the west is it isn't we're
2:26
Speaker 1: not decoupling into here is China and here is the West.
2:30
Speaker 1: Um it's at the moment there aren't enough ties between
2:34
Speaker 1: the The EU would seem to be one sort of block,
2:37
Speaker 1: and you've got some version of the U S plus
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Speaker 1: NAFTA on the other. So it's the western side of
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Speaker 1: this equation is not well put together. And that's part
2:45
Speaker 1: of the piece is to say, look, this thing is
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Speaker 1: happening gear strategically. The world is now decuping or sitting
2:53
Speaker 1: up into these dogs, and business people are thinking about
2:56
Speaker 1: the world in that way. I'm intrigued by how many
2:58
Speaker 1: people I've got emails from this morning thing that's exactly
3:00
Speaker 1: what we're thinking about, and that our point about this
3:04
Speaker 1: piece is ready to say to Joe Biden, look, this
3:06
Speaker 1: is your opportunity. You can go to the American people
3:09
Speaker 1: now and say we have got to cement our relationships
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Speaker 1: with the other democracies around the world, and the best
3:17
Speaker 1: and the best way to do that is through trade deals.
3:19
Speaker 1: I watched Gina Romando going around Asia last year, and
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Speaker 1: you know it was it was so sad she was
3:26
Speaker 1: out there trying to say, we're all democracies, let stick together,
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Speaker 1: let's have a framework, um, And the Asians just looked
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Speaker 1: at her and stuff. Really what we want is a
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Speaker 1: trade deal, and that's what America was. America wasn't the
3:39
Speaker 1: leader those So that's slightly long winded. So John, you
3:44
Speaker 1: know when President Trump and his administration did the America
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Speaker 1: First strategy that marked seemingly the ender a pause in
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Speaker 1: what had been seventy years of globalization post war. Where
3:56
Speaker 1: was that just an aberration those four years? Because as
3:58
Speaker 1: I look at Brussels today, just for example, I see
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Speaker 1: a fairly united West. I see a fairly united NATO.
4:06
Speaker 1: I'm actually optimistic. Or has Trump? Was the election of
4:09
Speaker 1: Trump crossing the rubicon? I mean, is that something that
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Speaker 1: Europe can never really forgive us for No? I think, well,
4:15
Speaker 1: you know, but we we also it wasn't two thousand
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Speaker 1: and sixteen. I mean I think two sixteen was one
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Speaker 1: of several dates, Um, that you can say that globalization
4:24
Speaker 1: went into reverse two thousand and sixteen. Remember you you
4:26
Speaker 1: didn't just have Trump, you also had the British leaving,
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Speaker 1: who in general have been the most free trading nation
4:32
Speaker 1: in history. Type things you had them leaving the biggest
4:36
Speaker 1: free trade pack in the world, which the U. So
4:38
Speaker 1: you also had that. I think you could argue in
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Speaker 1: two thousands, arguing against pall in In back when Lehman
4:45
Speaker 1: Brothers happened, you had a slight meltdown at global capitalism.
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Speaker 1: Before that, you had been laden in two thousand and
4:51
Speaker 1: one using the you know, the very symbols of globalization
4:56
Speaker 1: jet plane to attack the World Trade Center, and more
5:00
Speaker 1: so we've had COVID. So the way I look at
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Speaker 1: it is, I think there is a real difference, and
5:04
Speaker 1: we have this in the piece. You know, we use
5:06
Speaker 1: the famous example that Domaino Canes have. The Londoner back
5:11
Speaker 1: in Super nine. He's sitting there very very similar to
5:15
Speaker 1: Matt Miller on an average day of life in Germany
5:18
Speaker 1: or or need a Swiss gentleman, we know, sitting there,
5:21
Speaker 1: lying in bed, ordering the goods of the whole world
5:24
Speaker 1: from his expansive mansions somewhere Frankfurt, and he is ordering
5:28
Speaker 1: every single bit. He's expecting things to show up. He
5:32
Speaker 1: can travel anywhere he likes, this Londoner back in nineteen.
5:36
Speaker 1: He doesn't need a passport, doesn't need capital controls. You
5:40
Speaker 1: can use gold, sovereigns everywhere. This is a global world
5:44
Speaker 1: for him and and things thanks for things like the telephone.
5:47
Speaker 1: New technology is making it ever ever smaller, and he
5:49
Speaker 1: fails to notice at the bottom of his paper these
5:52
Speaker 1: small headlines about Sara jov I think the difference between
5:55
Speaker 1: that person new Canes was really trying to say, Look,
5:58
Speaker 1: that was the world we lost and us is that
6:01
Speaker 1: I think. I think we've been warned fairly continually in
6:04
Speaker 1: the past twenty years that globalization is in trouble, free
6:08
Speaker 1: trade is in trouble. We have been laden. We had Trump,
6:11
Speaker 1: we had UM that breaks it, we had financial crash,
6:16
Speaker 1: we've had COVID in many ways. You know, Ukraine is
6:18
Speaker 1: one of those moments where people suddenly take all those
6:21
Speaker 1: things and think this is this is a big new thing.
6:25
Speaker 1: But by the way, I got a listener writing in
6:28
Speaker 1: saying continental Europe has the goal to judge the US.
6:32
Speaker 1: They have single handedly made the Russian situation worse um,
6:36
Speaker 1: which is a big statement. On the other hand, John,
6:39
Speaker 1: I was there when you interviewed angela miracle, so you've
6:42
Speaker 1: talked to her at least once. What do you think
6:45
Speaker 1: her role? You know, I think I think she she looks,
6:49
Speaker 1: she looks less good and she did. Um. It's quite interesting.
6:53
Speaker 1: That's an old soor of a political stor about all
6:57
Speaker 1: political careers and in failure, and Ang Michael seemed to
7:00
Speaker 1: be the great exception to that. The fact that this
7:03
Speaker 1: crisis has come so soon after she's left, I think
7:05
Speaker 1: that there are things that that she did that look
7:08
Speaker 1: much more questionable. The whole sort of policy, which I
7:12
Speaker 1: think you're the listener who was complaining was pointing out,
7:15
Speaker 1: was that Europe was sort of doing a bit of both,
7:18
Speaker 1: kind of flirting with Ukraine whilst not actually doing anything
7:21
Speaker 1: really solid to help it, and then building dream too,
7:25
Speaker 1: and then the other gigantic built lauch Um two. And
7:28
Speaker 1: then she also turned off the nuclear power and so
7:31
Speaker 1: Germany is now completely health hostage to that. So I
7:35
Speaker 1: think she would she I think a great woman, though
7:38
Speaker 1: she was, she looked slightly less great now than she
7:41
Speaker 1: did then. I wonder what you think John about the
7:45
Speaker 1: sanctions on the one hand, seemed to be pushing Beijing
7:51
Speaker 1: even closer to Moscow and not very not very helpful
7:56
Speaker 1: to the dollar um. As we see, the Saudis asked
7:59
Speaker 1: the Chinese that they can say on them oil and
8:01
Speaker 1: un But on the other hand, we're just destroying the
8:06
Speaker 1: sanctity of private property. Right if you're rich and you
8:09
Speaker 1: happen to be from Russia, we're going to take away
8:11
Speaker 1: all your stuff and there's no due processes that. Yeah,
8:15
Speaker 1: I do that. What two things on that one? I
8:18
Speaker 1: think the on the firstly, on the on the Chinese stuff,
8:21
Speaker 1: I think that China is China seemed to be sort
8:25
Speaker 1: of pretty okay with what Putin was doing. As the
8:28
Speaker 1: full kind of blood and horror of it is coming through,
8:31
Speaker 1: they seem to be reversing a bit. But I do
8:33
Speaker 1: think whatever happens in the short term, whatever she decides
8:36
Speaker 1: to do about Putin, I think that's still a little
8:39
Speaker 1: bit of an open question. I think there's no doubt
8:42
Speaker 1: that she and the kind of wolf pack around him
8:45
Speaker 1: are going to say, look, this is whether we like
8:47
Speaker 1: it or not, the economy is splitting two different blocks.
8:50
Speaker 1: If we want to protect live out, we want to
8:53
Speaker 1: we want to grab our bit and stay self sufficient.
8:55
Speaker 1: Whin in that bit, I think that's part one. I
8:58
Speaker 1: think in terms of the oligarchs and what we're doing
9:00
Speaker 1: very property, I am a little bit nervous about that.
9:02
Speaker 1: I'll be honest against that it is this is a Russia.
9:08
Speaker 1: Is that it's not the same as this possessing American billionaires.
9:14
Speaker 1: At different times all of us have been very annoyed
9:16
Speaker 1: with This is a much more hand in glove relationship
9:22
Speaker 1: with government. Most of these people are rich because they
9:26
Speaker 1: have been given natural resources by the government, and the
9:30
Speaker 1: level of interaction between these people and the Kremlin is
9:34
Speaker 1: much much higher. That's Part one and part two. Whatever
9:36
Speaker 1: the many things UM that we that we accuse American
9:41
Speaker 1: billionaires of, you don't accuse them of going in the
9:44
Speaker 1: factories and shooting people, which restrict me from pointing out
9:50
Speaker 1: which particular ones fit in that category. But there are
9:52
Speaker 1: you know, there's a number of these oligogus, not by
9:56
Speaker 1: any measure of pleasant people. John, What is the role
9:59
Speaker 1: of the UK going forward? You believe? I think the
10:03
Speaker 1: UK is in a UM. I think in terms of
10:05
Speaker 1: the Russia, they have they have tried to catch up.
10:09
Speaker 1: London Is style is definitely no longer as easy it
10:13
Speaker 1: used to be. Even Chelsea has past the football club
10:16
Speaker 1: has passed across UM. I think more generally for the UK,
10:21
Speaker 1: this I think begins to make a bit of a
10:24
Speaker 1: sort of mockery out of Brexit, and I'm not I'm
10:26
Speaker 1: one of those people who's trying to move on from Brexit.
10:29
Speaker 1: But if this does push forward the idea of trade
10:33
Speaker 1: blocks developing different zones, well, Britain is rather kind of
10:37
Speaker 1: stuck in the middle. Um. You know we we so
10:40
Speaker 1: far Britain's attempts to try and get a trade deal
10:43
Speaker 1: with America have almost completely availed. Um. And there's still
10:47
Speaker 1: the rather strange argument, strange policy of paying more attention
10:51
Speaker 1: to arguing with the French about fishery rights brackets revenue
10:56
Speaker 1: of I think it's million dollars a year, seven hundre
10:59
Speaker 1: million pounds. Yeah. Um, it's spending more time on that
11:02
Speaker 1: than the City of London brackets a hundred and sixty
11:05
Speaker 1: eight billion dollars a year. Um. It's coming home to
11:08
Speaker 1: roost that there is no the Bridige have not endeared
11:12
Speaker 1: themselves to the Europeans. Um. And it was noticeable. I
11:15
Speaker 1: was in Paris the week before last and even there
11:19
Speaker 1: talking to French officials, you know that I wondered whether
11:22
Speaker 1: the general coming together of the West of the Ukraine
11:25
Speaker 1: has extended to that particular relationship, and the answer was
11:28
Speaker 1: the Gray Firm. No, it does seem the music will
11:32
Speaker 1: stop and the UK doesn't necessarily have a chair right now.
11:36
Speaker 1: I wonder, you know, after reading your piece, I was
11:39
Speaker 1: thinking about a great um piece of reporting that be
11:44
Speaker 1: ended a couple of days ago. I can't remember who
11:47
Speaker 1: else wrote, but Amory Hordon was one of the writers
11:49
Speaker 1: of the of the piece on the Biden administration reaching
11:52
Speaker 1: out again to Mohammed bin Salman. And this is like
11:56
Speaker 1: such an important issue because the whole world reserve currency
12:01
Speaker 1: status is so anchored in oil, you know, barrels priced
12:07
Speaker 1: in dollars and um. They've been such an important foothold
12:11
Speaker 1: for the US in the Middle East. The saudis UH,
12:14
Speaker 1: but we're not happy with them right now because of UH,
12:18
Speaker 1: the you know, dismantling of Jamaica, Shogi and UM dismembering,
12:23
Speaker 1: I should say, and their actions in Yemen. The question
12:27
Speaker 1: is what do we do. Do they end up with
12:30
Speaker 1: the Autocrat block, do they end up with us where
12:33
Speaker 1: I guess they still are, but that relationship is tenuous.
12:37
Speaker 1: What happens to the saudis my guess, as they end
12:40
Speaker 1: up with us. But I think you have put your
12:44
Speaker 1: finger on the problems at the moment um that they
12:47
Speaker 1: you know that there is very obviously it's the monarchy,
12:50
Speaker 1: their elements of autocracy there but one and secondly they
12:53
Speaker 1: have on the issue of natural resources, they often get
12:57
Speaker 1: pushed back towards the with the Russians, or it has
13:00
Speaker 1: to be said, a lot of recent Opeic history has
13:02
Speaker 1: been arguments between the Saudis and the Russians, so it's
13:05
Speaker 1: not an easy relationship. I mean, I do, yes, I
13:08
Speaker 1: do think they are one of those those powers out
13:10
Speaker 1: there and it does cause I think, um problems for Saudis.
13:15
Speaker 1: It gives them a short term bonus. The price spoilers
13:18
Speaker 1: rocketed up, and that's given them a chance. But it
13:21
Speaker 1: has also I think greatly accentuated the desire of other
13:26
Speaker 1: places around the world to wean themselves off oil and
13:31
Speaker 1: gas or oil particularly um and that you can see
13:34
Speaker 1: that already America has a much freer hand than than
13:39
Speaker 1: other parts of the world because America doesn't have to
13:41
Speaker 1: rely on oil from other places. So that is all,
13:45
Speaker 1: you know, that's that's been a useful and very kind
13:47
Speaker 1: of UM and I think other people will follow that.
13:50
Speaker 1: If you compare whether United States is because of what's
13:53
Speaker 1: happened in Ukraine and where Germany is for all the
13:55
Speaker 1: reasons you just pointed out, America has much greater freedom
13:58
Speaker 1: to act. I think America relies on one percent Russian oil.
14:02
Speaker 1: Germany relies on an enormous amount of Russian gas. As
14:05
Speaker 1: just point out, it's not just the Germans, places like
14:09
Speaker 1: Poland which historically and think rather much more aggressive attitude
14:15
Speaker 1: recent history, much more aggressive attitude to the Russians and
14:18
Speaker 1: the Germans have done. They are even more dependent on
14:21
Speaker 1: the on Russian gas. All right, John, that is great stuff.
14:25
Speaker 1: Thank you very much for taking the time. John Michael Waite,
14:27
Speaker 1: editor in chief of Bloomberg News, joining us with this
14:30
Speaker 1: Big Take story today along with the Adrian Woodridge. You
14:32
Speaker 1: can find that at Bloomberg dot com slash Big Take
14:35
Speaker 1: in the NI space Big Take go. All right, let's
14:43
Speaker 1: check in with Loreen Gilbert loren Is, founder and CEO
14:46
Speaker 1: of wealth Wise Financial Services, joining us from Sunny California.
14:50
Speaker 1: I believe Loreen, what are you telling your clients here
14:54
Speaker 1: who may be concerned about rising interest rates, inflation, geo politics?
15:01
Speaker 1: What do you tell them these days? Good morning? Well,
15:04
Speaker 1: I say, I certainly understand everybody's feeling pain at the pump.
15:10
Speaker 1: Everybody feels the pain at the grocery store, and so
15:14
Speaker 1: the consumer is starting to feel it, and that means
15:17
Speaker 1: investors are feeling it as well. So it's a it's
15:20
Speaker 1: a time when there's so much uncertainty that being a
15:25
Speaker 1: little bit risk off and much more defensive makes sense.
15:29
Speaker 1: That doesn't mean putting everything in cash, but it certainly
15:32
Speaker 1: means pulling in maybe a little bit of cash and
15:36
Speaker 1: leaning towards the more conservative areas of the market. So
15:40
Speaker 1: do investors get uh, do they lean towards preserving capital
15:45
Speaker 1: here rather than looking for returns? I think what we're
15:49
Speaker 1: talking to our clients about is looking for areas of
15:51
Speaker 1: the market that are value oriented that you know, no
15:57
Speaker 1: matter what happens. You know, certainly with inflation still being
16:01
Speaker 1: an issue and rising rates being an issue, um, you
16:04
Speaker 1: don't want an overweight and fixed income where you know
16:09
Speaker 1: you're not going to keep up with inflation. And of
16:11
Speaker 1: course we see the ag is quite negative year today.
16:14
Speaker 1: So we still like stocks like equities in the portfolios,
16:19
Speaker 1: but like I said, leaning more conservatively towards the value
16:23
Speaker 1: tilt is what I would say, dividend paying stocks that
16:26
Speaker 1: can keep investors comfortable that they are receiving those dividends. Loreen.
16:31
Speaker 1: A lot of folks these days are saying it is
16:33
Speaker 1: a stock pickers market. What does that mean to you? Yeah,
16:38
Speaker 1: so you know, the markets go in swings from passive
16:43
Speaker 1: investing to active investing, and we've been saying for a
16:46
Speaker 1: while that it's going to be a stock pickers market,
16:50
Speaker 1: which we've seen that certainly year today where active managers
16:54
Speaker 1: have outperformed the SMP five D to the highest that
16:59
Speaker 1: it's been since to the INN eight as far as
17:01
Speaker 1: out performance, and we expect that to continue. Um. So
17:05
Speaker 1: you know, that's where we can help investors looking for
17:08
Speaker 1: those opportunities and seeing the areas that we do see
17:12
Speaker 1: an opportunity. He's, like I said, in the value part
17:16
Speaker 1: um more so than the growth part of the market.
17:19
Speaker 1: A lot of people have been saying, I've been using
17:22
Speaker 1: the acronym tina to describe stocks. There's no alternative. And
17:26
Speaker 1: I keep looking back at this chart on the Bloomberg
17:31
Speaker 1: at six Paul, if you want to check it out,
17:33
Speaker 1: g hashtag b TV six five zero six, and it
17:36
Speaker 1: shows fixed income performance globally over this quarter. It's been
17:41
Speaker 1: horrendous and the Bloomberg Treasuries index has been the worst
17:46
Speaker 1: perform had the worst performing quarter of my lifetime. And
17:49
Speaker 1: I'm not young, and it's made it difficult for investors
17:53
Speaker 1: who are in you know, let's say a moderate portfolio
17:57
Speaker 1: equities fixing exactly what I wanted to ask you about,
18:01
Speaker 1: especially people who are retiring are getting close, you know,
18:04
Speaker 1: I mean, how hard has it been and what do
18:06
Speaker 1: they do now? It's been very difficult, and so we're
18:11
Speaker 1: investors were talking a lot about, uh, looking at areas
18:15
Speaker 1: in the market, like I said, value stocks that to
18:18
Speaker 1: pay dividends, and then municiple bonds, which has not also
18:22
Speaker 1: not been stellar year to day. However, we know that
18:26
Speaker 1: those cubone payments are coming and um, you know, when
18:30
Speaker 1: it comes to being conservative, first their treasuries and there's muties.
18:34
Speaker 1: So municipal bonds and value stocks right now are still
18:39
Speaker 1: areas that we like quite a bit. Your clients call
18:44
Speaker 1: you up, Lorine and see and say I need an
18:46
Speaker 1: exposure to crypto? Does that happen? Is that happening to you?
18:51
Speaker 1: We certainly get asked the question quite a bit. And
18:55
Speaker 1: I'll tell you right now, with the with the Federal Reserve,
18:59
Speaker 1: we with treasury, with our with the United States of
19:02
Speaker 1: America looking at digital currency. I think that the weight
19:06
Speaker 1: and see is absolutely important because it could be a
19:10
Speaker 1: zero sum game where digital currencies are established by central
19:16
Speaker 1: banks all over the world China, United States and others.
19:20
Speaker 1: And I think that that is going to become a standard. Uh.
19:25
Speaker 1: And so I would say to investors to to look
19:29
Speaker 1: to the central banks because I don't see central banks
19:32
Speaker 1: allowing truly other currencies that are in the private sector.
19:40
Speaker 1: All right, thanks so much for joining us. Lauren, great
19:42
Speaker 1: to get some time with you, and I really appreciate
19:45
Speaker 1: your insight. Laurien Gilbert there, founder and CEO of wealth
19:49
Speaker 1: Wise Financial Services, talking to us out of Laguna Beach, California.
19:56
Speaker 1: R E s G Environmental social governance. It is a
20:01
Speaker 1: big factor, a growing factor in investors minds these days.
20:06
Speaker 1: One of the challenges is incorporating E s G analysis
20:09
Speaker 1: into your securities analysis. Is the data ain't that great?
20:13
Speaker 1: And we bring in West Bricker, vice chair US Trust
20:16
Speaker 1: Solutions co leader at p WC. West. Thanks so much
20:19
Speaker 1: for joining us here again. You know when people do
20:21
Speaker 1: their financial analysis and they go to the f A
20:23
Speaker 1: page on the Bloomberg terminal, there's lots of income statement,
20:26
Speaker 1: balance sheets, cash flow statements and stuff like that. And
20:29
Speaker 1: we do have an e s G tab there where
20:32
Speaker 1: Bloomberg brings together a lot of E s G data
20:34
Speaker 1: for uh our users. But a lot of folks are saying,
20:38
Speaker 1: just generally speaking, there's not enough good data to do
20:41
Speaker 1: E s G analysis. What's going on there? Well, thank
20:46
Speaker 1: you very much for the opportunity to be with you,
20:49
Speaker 1: Matt and faulse Um. Here's here's what we see. The
20:53
Speaker 1: SEC has focused on um what's happening in the marketplace
20:57
Speaker 1: and eight and investors are asking for more information, more
21:00
Speaker 1: segmentation of important information about the risks I call them
21:06
Speaker 1: pre financial risks. Whether it's carbon, whether it's how my
21:11
Speaker 1: workforce is coming together and innovating and collaborating. Maybe that's
21:15
Speaker 1: how I'm providing access to customers or potential customers into
21:20
Speaker 1: my platform. All of that comes together ahead of the
21:25
Speaker 1: financial effects. And so as you look at the financial content,
21:29
Speaker 1: the SEC just recently this week looked at the element
21:35
Speaker 1: of carbon and the climate and proposed new rules which
21:40
Speaker 1: require more information in the financial statements in the footnotes
21:46
Speaker 1: about the effect of climate on the financials so that
21:49
Speaker 1: investors can find more relevant information in order to conduct
21:53
Speaker 1: their analysis. Kind of isn't this kind of a moving target? Um?
21:59
Speaker 1: In a sense where because you know, last year in
22:02
Speaker 1: front of Congress, all the Wall Street UM CEOs were
22:05
Speaker 1: land bastard for lending money to oil producers, as if
22:11
Speaker 1: you know, they were just unbelievable sinners, just this close
22:15
Speaker 1: to breaking the law by supporting oil producers. And now
22:19
Speaker 1: um as the price of crude goes to one forty,
22:24
Speaker 1: everybody's like, why aren't they producing more? Uh? Even the
22:27
Speaker 1: Biden administration is like, damn it, we gave them nine
22:30
Speaker 1: thousand leases. They need to use them. So, you know,
22:33
Speaker 1: all of a sudden, it's like their national duty to
22:37
Speaker 1: be pulling more oil out of the ground. How does
22:40
Speaker 1: that jibe with an E s G world that is
22:43
Speaker 1: at all you know static? Sure, it's a great question.
22:50
Speaker 1: It's clear we need energy. Any any developed economy needs energy,
22:55
Speaker 1: needs a diversified set of energy sources. What this proposal
22:59
Speaker 1: is out is how do you really assess the impact
23:04
Speaker 1: of something like climate which is also changing? Um, what's
23:10
Speaker 1: the impact on the financials and and so the way
23:14
Speaker 1: they the information is proposed to be presented here is
23:19
Speaker 1: it takes something like a climate risk and then model
23:24
Speaker 1: it through the business that you're in, the prospects that
23:27
Speaker 1: you have, the performance over time, and the milestones. What
23:33
Speaker 1: would be the financial impact on a growth basis before
23:37
Speaker 1: you start offsetting or or figuring in the management actions
23:41
Speaker 1: that that might be relevant. Maybe maybe you'll buy carbon oufsets,
23:45
Speaker 1: Maybe you'll change a business process, maybe you'll alter a
23:49
Speaker 1: product mix. All of that analysis today it is provided
23:55
Speaker 1: in bits and pieces, some of it sitting on corporate
23:58
Speaker 1: websites in a sustainability report, maybe some of it in
24:02
Speaker 1: an investor survey on a biolateral basis between a company
24:06
Speaker 1: and their capital providers, with the SEC is saying, well,
24:09
Speaker 1: let's set a mandatory bar for all companies that enables
24:14
Speaker 1: the marketplace to see more consistent, comparable, and decision useful
24:20
Speaker 1: information to help investors really understand where companies are and
24:25
Speaker 1: the nature of risks that impact performance over time. What
24:30
Speaker 1: do you think of the pushback that there is out
24:33
Speaker 1: there that some folks are saying that the SEC is
24:34
Speaker 1: overreaching here they're trying to dictate climate policy. Um, what
24:39
Speaker 1: about that kind of pushback? What's your sense there's, uh,
24:44
Speaker 1: there's there's really a robust dialogue about a couple of
24:49
Speaker 1: big concepts of the economy, social policy that's traditionally Congress, right,
24:56
Speaker 1: That's that's an important place for Congress. The S you
25:00
Speaker 1: see is focused on disclosure policy of consistent with his mission,
25:05
Speaker 1: which is getting good information into the markets to protect investors,
25:10
Speaker 1: so the investors understand the nature of their investment, the risks,
25:15
Speaker 1: the opportunities of it. UH, companies get the capital that
25:18
Speaker 1: they need in order to operate, grow, compete, and in
25:22
Speaker 1: the middle we have fair inefficient markets. So of course
25:26
Speaker 1: there's there is a continuum between the point where UH
25:31
Speaker 1: economic policy social policy hands off into business and and
25:36
Speaker 1: the way they source capital and convey information through disclosures.
25:43
Speaker 1: I'd expect that debate to continue. But but I guess
25:46
Speaker 1: what what I would say is, UH, the the SEC,
25:50
Speaker 1: I think has has very rightly been focused on the
25:54
Speaker 1: voluntary reporting of climate information. They've been focus on concerns
26:01
Speaker 1: about greenwashing, so a lack of confidence in that information. UH.
26:07
Speaker 1: They've they've put a proposal on the table that that
26:11
Speaker 1: business industry groups should rightly read, consider and provide input
26:17
Speaker 1: where at the final stage, and I think it, I
26:20
Speaker 1: think the SEC got it well, important to do that,
26:24
Speaker 1: all right? What's good stuff there? West Bricker, vice chair
26:26
Speaker 1: US Trust Solutions co leader at p WC talking about
26:29
Speaker 1: e s G, the need for more data, the need
26:32
Speaker 1: for better data again the f a function on the
26:34
Speaker 1: Bloomber terminal. How's your E s G? All right, let's
26:41
Speaker 1: talk to Barry Ridholtz. He's a founder of rid Hults
26:43
Speaker 1: Wealth Management, Bloomberg opinion columnists and host of Masters in Business. Here, Barry,
26:48
Speaker 1: we've had it, you know, continued wild several days here,
26:52
Speaker 1: several weeks. We've got a hot war in Europe, We've
26:55
Speaker 1: got the rising interest rates, we've got inflation. Where do
26:59
Speaker 1: we begin? What do you do? How do you look
27:01
Speaker 1: for context? How do you put this all together? So
27:04
Speaker 1: you always have to have a plan. You know, you're
27:07
Speaker 1: the old joke, is you you those who failed to plan,
27:10
Speaker 1: plan to fail? And it really is true. If you're
27:14
Speaker 1: relying on your gut instinct, if you're sort of taking
27:18
Speaker 1: it headline by headline, that's a recipe for disaster. So
27:22
Speaker 1: you know, somebody who says my plan is that at
27:26
Speaker 1: the end of two I'm pulling this money out of
27:29
Speaker 1: the market and buying a house or paying for kids college. Hey,
27:33
Speaker 1: those folks should really have been throttling back there um
27:38
Speaker 1: risk exposure. But for the average investor who's got a
27:42
Speaker 1: timeline that's not measured in months but is years off
27:46
Speaker 1: in the future or even decades off in the future,
27:49
Speaker 1: you know, what happens in two isn't relevant to to
27:55
Speaker 1: when they're gonna need the money. So have a plan,
27:57
Speaker 1: stick with it and and stay long term. Uh, don't
28:01
Speaker 1: get distracted by the barrage of news each day. You
28:04
Speaker 1: know the Mike Tyson quote. I think it's Mike Tyson.
28:07
Speaker 1: Sure everybody has a plan until they get punched in
28:09
Speaker 1: the mouth. Yeah, no, that's can I tell you that's
28:12
Speaker 1: absolutely true. And and it's funny because you know the
28:16
Speaker 1: other day I was talking to Tom Keane and and
28:19
Speaker 1: we and and uh, Lisa brom Winson and Kaylee and
28:23
Speaker 1: the conversation was, well, why shouldn't you know you follow
28:27
Speaker 1: Muhammed Alarian's advice and go risk off and and move
28:31
Speaker 1: out and and the answer is, it's an easy decision
28:35
Speaker 1: to hit the cell button, but when do you buy?
28:38
Speaker 1: How do you disert time when to buy? And I
28:43
Speaker 1: made the argument that it's really really challenging to get
28:47
Speaker 1: back in and I got an email from an advisor
28:50
Speaker 1: who said, I worked with a lot of clients. I'm
28:52
Speaker 1: sympatica with your view. I only wish there was some
28:56
Speaker 1: data to back it up. So I went out and
28:58
Speaker 1: did some research. There was a re since study. I
29:01
Speaker 1: love this title quote, when do investors freak out? Machine
29:05
Speaker 1: learning predictions of panic selling? And to me, the most
29:10
Speaker 1: shocking data point in the study is that investors who
29:14
Speaker 1: panic sell thirty one percent of them never reinvest in
29:19
Speaker 1: risky assets. They panic out of equities and they're scared
29:24
Speaker 1: from that. And that is very similar to what we
29:26
Speaker 1: saw following oh eight or nine, people panicked out of
29:29
Speaker 1: the market in the bottom and failed to get back
29:32
Speaker 1: in in any reasonable period of time. Barry, Masters in Business,
29:36
Speaker 1: you're widely successful podcasts. It our most popular podcast, by
29:39
Speaker 1: the way. I'll go there. I believe so, but you
29:43
Speaker 1: know there are other folks who have podcasts more frequently,
29:47
Speaker 1: and so they might see different numbers. I think it's
29:50
Speaker 1: the most popular long term and the most popular on
29:54
Speaker 1: a weekly basis. But Masters in Business of course and
30:00
Speaker 1: Tracy have Odd Lots which is also very popular, and
30:03
Speaker 1: Joel Weber has trillions. Yeah, who do you got this week?
30:08
Speaker 1: So this week is Samara Cohen. She is black Rocks
30:12
Speaker 1: Chief Investment Officer for e t f s and index investments.
30:16
Speaker 1: And of the ten trillion and I have to repeat
30:19
Speaker 1: that that's trillion with a t of the ten trillion
30:23
Speaker 1: that black Rock manages, she's responsible for about a third
30:27
Speaker 1: of it. Uh. I think she is in finance the
30:31
Speaker 1: woman woman with the most amount of assets under management.
30:36
Speaker 1: I don't think anyone is even close. Uh. It might
30:39
Speaker 1: be the CEO of UM, Edward Jones, which is about
30:43
Speaker 1: a trillion dollars and that's a woman. So so she
30:47
Speaker 1: all ETFs, all index funds are under her per view
30:51
Speaker 1: with black Rock, that's a lot of how do you
30:53
Speaker 1: get these people? Barry, you always every week have some
30:56
Speaker 1: really big names. Well, you know for so Rhodes and
31:00
Speaker 1: eight years in it's become a lot easier. The beginning
31:03
Speaker 1: it was my friends and Rollo Decks. But at a
31:06
Speaker 1: certain point, you know, the the I give a lot
31:11
Speaker 1: of credit to Bloomberg Radio and the whole platform we have.
31:14
Speaker 1: It's not just on Spotify and iTunes, it goes out
31:17
Speaker 1: over Bloomberg Radio, Act, some satellite, all of the affiliates
31:21
Speaker 1: at Bloomberg, so it gets in addition to the downloads,
31:25
Speaker 1: it gets a massive audience, you know, on a m
31:28
Speaker 1: or from radio with the group and and very often,
31:32
Speaker 1: you know, the one thing I hear from the guests
31:34
Speaker 1: more than anything else is we really enjoy the opportunity
31:38
Speaker 1: to have an in depth conversation, not four minutes and
31:41
Speaker 1: then a commercial. A lot of these things are complicated
31:44
Speaker 1: and nuanced. They don't lend themselves to to the shorter format.
31:48
Speaker 1: Well we listen, yep, good stuff. All right, Batty Hults,
31:51
Speaker 1: thanks so much for joining us. That's your four minutes
31:53
Speaker 1: and now we'll go to a spot. Batty Hults, founder
31:55
Speaker 1: Rod Hult's Wealth Management, Bloomberg Opinion columns and again host
31:58
Speaker 1: of Master's in Bisy this podcast. I recommend you check
32:01
Speaker 1: that out. Thanks for listening to the Bloomberg Markets podcast.
32:06
Speaker 1: You can subscribe and listen to interviews with Apple Podcasts
32:09
Speaker 1: or whatever podcast platform you prefer. I'm Matt Miller. I'm
32:13
Speaker 1: on Twitter at Matt Miller three on Fall Sweeney, I'm
32:17
Speaker 1: on Twitter at pt Sweeney. Before the podcast, you can
32:20
Speaker 1: always catch us worldwide at Bloomberg Radio