Ukraine, Markets, And Climate Disclosures

caused a lot of outrage among investors. This is so fascinating. The market shotdown in a way it's never done before. That's gonna have consequences for years to come. The Big Take on Bloomberg Radio. Well night, Paul and I love these Big Take stories every day, but we have an extra special one today because our editor in chief wrote at John Micklethwaite joins us. He wrote this together with Adrian wool Ridge old Ridge, which is the West must

save Globalization. I how they recommend checking it out on ani Big Take on the Bloomburger Checking it out online. John, great to get you on to talk a little bit about this. One of the things that you um to pose it is that there will be a decoupling here, a breakup essentially of two but maybe three different blocks, but that the autocratic block the Russians and the Chinese are going to accelerate. Past are divided democracies. Why do you think that that they all do well after this breakup?

I say, well, go back a bit. I think that the you know that there is already a breakup happening. There is a break you know, there's a straightforward the coupling going on, which I suppose you can argue a mix between China and Donald Trump started, but I think is only going to be um increased by what's happening

in the Ukraine. Because if you are the Chinese, you look and you quite rationally see what has happened to the um Russians in terms of things like foreign reserves and all those things, and your desire to be self sustainable, especially if you're considering anything to do with Taiwan, increases, and by the same token, you also see what the You know, the Americans are also racked up there their desired to decouples. At the moment. The decuping, I think

is is ongoing in that direction. I do think one of the problems on the west is it isn't we're not decoupling into here is China and here is the West. Um it's at the moment there aren't enough ties between the The EU would seem to be one sort of block, and you've got some version of the U S plus NAFTA on the other. So it's the western side of this equation is not well put together. And that's part of the piece is to say, look, this thing is

happening gear strategically. The world is now decuping or sitting up into these dogs, and business people are thinking about the world in that way. I'm intrigued by how many people I've got emails from this morning thing that's exactly what we're thinking about, and that our point about this piece is ready to say to Joe Biden, look, this

is your opportunity. You can go to the American people now and say we have got to cement our relationships with the other democracies around the world, and the best and the best way to do that is through trade deals. I watched Gina Romando going around Asia last year, and you know it was it was so sad she was out there trying to say, we're all democracies, let stick together, let's have a framework, um, And the Asians just looked at her and stuff. Really what we want is a

trade deal, and that's what America was. America wasn't the leader those So that's slightly long winded. So John, you know when President Trump and his administration did the America First strategy that marked seemingly the ender a pause in what had been seventy years of globalization post war. Where was that just an aberration those four years? Because as I look at Brussels today, just for example, I see a fairly united West. I see a fairly united NATO.

I'm actually optimistic. Or has Trump? Was the election of Trump crossing the rubicon? I mean, is that something that Europe can never really forgive us for No? I think, well, you know, but we we also it wasn't two thousand and sixteen. I mean I think two sixteen was one of several dates, Um, that you can say that globalization

went into reverse two thousand and sixteen. Remember you you didn't just have Trump, you also had the British leaving, who in general have been the most free trading nation in history. Type things you had them leaving the biggest free trade pack in the world, which the U. So you also had that. I think you could argue in two thousands, arguing against pall in In back when Lehman Brothers happened, you had a slight meltdown at global capitalism.

Before that, you had been laden in two thousand and one using the you know, the very symbols of globalization jet plane to attack the World Trade Center, and more so we've had COVID. So the way I look at it is, I think there is a real difference, and we have this in the piece. You know, we use the famous example that Domaino Canes have. The Londoner back

in Super nine. He's sitting there very very similar to Matt Miller on an average day of life in Germany or or need a Swiss gentleman, we know, sitting there, lying in bed, ordering the goods of the whole world from his expansive mansions somewhere Frankfurt, and he is ordering every single bit. He's expecting things to show up. He can travel anywhere he likes, this Londoner back in nineteen. He doesn't need a passport, doesn't need capital controls. You

can use gold, sovereigns everywhere. This is a global world for him and and things thanks for things like the telephone. New technology is making it ever ever smaller, and he fails to notice at the bottom of his paper these small headlines about Sara jov I think the difference between that person new Canes was really trying to say, Look, that was the world we lost and us is that I think. I think we've been warned fairly continually in the past twenty years that globalization is in trouble, free

trade is in trouble. We have been laden. We had Trump, we had UM that breaks it, we had financial crash, we've had COVID in many ways. You know, Ukraine is one of those moments where people suddenly take all those things and think this is this is a big new thing. But by the way, I got a listener writing in saying continental Europe has the goal to judge the US. They have single handedly made the Russian situation worse um,

which is a big statement. On the other hand, John, I was there when you interviewed angela miracle, so you've talked to her at least once. What do you think her role? You know, I think I think she she looks, she looks less good and she did. Um. It's quite interesting. That's an old soor of a political stor about all political careers and in failure, and Ang Michael seemed to

be the great exception to that. The fact that this crisis has come so soon after she's left, I think that there are things that that she did that look much more questionable. The whole sort of policy, which I think you're the listener who was complaining was pointing out, was that Europe was sort of doing a bit of both, kind of flirting with Ukraine whilst not actually doing anything really solid to help it, and then building dream too,

and then the other gigantic built lauch Um two. And then she also turned off the nuclear power and so Germany is now completely health hostage to that. So I think she would she I think a great woman, though she was, she looked slightly less great now than she did then. I wonder what you think John about the sanctions on the one hand, seemed to be pushing Beijing even closer to Moscow and not very not very helpful

to the dollar um. As we see, the Saudis asked the Chinese that they can say on them oil and un But on the other hand, we're just destroying the sanctity of private property. Right if you're rich and you happen to be from Russia, we're going to take away all your stuff and there's no due processes that. Yeah, I do that. What two things on that one? I think the on the firstly, on the on the Chinese stuff, I think that China is China seemed to be sort

of pretty okay with what Putin was doing. As the full kind of blood and horror of it is coming through, they seem to be reversing a bit. But I do think whatever happens in the short term, whatever she decides to do about Putin, I think that's still a little bit of an open question. I think there's no doubt that she and the kind of wolf pack around him are going to say, look, this is whether we like it or not, the economy is splitting two different blocks.

If we want to protect live out, we want to we want to grab our bit and stay self sufficient. Whin in that bit, I think that's part one. I think in terms of the oligarchs and what we're doing very property, I am a little bit nervous about that. I'll be honest against that it is this is a Russia. Is that it's not the same as this possessing American billionaires. At different times all of us have been very annoyed with This is a much more hand in glove relationship

with government. Most of these people are rich because they have been given natural resources by the government, and the level of interaction between these people and the Kremlin is much much higher. That's Part one and part two. Whatever the many things UM that we that we accuse American billionaires of, you don't accuse them of going in the factories and shooting people, which restrict me from pointing out

which particular ones fit in that category. But there are you know, there's a number of these oligogus, not by any measure of pleasant people. John, What is the role of the UK going forward? You believe? I think the UK is in a UM. I think in terms of the Russia, they have they have tried to catch up. London Is style is definitely no longer as easy it used to be. Even Chelsea has past the football club

has passed across UM. I think more generally for the UK, this I think begins to make a bit of a sort of mockery out of Brexit, and I'm not I'm one of those people who's trying to move on from Brexit. But if this does push forward the idea of trade blocks developing different zones, well, Britain is rather kind of stuck in the middle. Um. You know we we so far Britain's attempts to try and get a trade deal

with America have almost completely availed. Um. And there's still the rather strange argument, strange policy of paying more attention to arguing with the French about fishery rights brackets revenue of I think it's million dollars a year, seven hundre million pounds. Yeah. Um, it's spending more time on that than the City of London brackets a hundred and sixty eight billion dollars a year. Um. It's coming home to roost that there is no the Bridige have not endeared

themselves to the Europeans. Um. And it was noticeable. I was in Paris the week before last and even there talking to French officials, you know that I wondered whether the general coming together of the West of the Ukraine has extended to that particular relationship, and the answer was the Gray Firm. No, it does seem the music will stop and the UK doesn't necessarily have a chair right now. I wonder, you know, after reading your piece, I was thinking about a great um piece of reporting that be

ended a couple of days ago. I can't remember who else wrote, but Amory Hordon was one of the writers of the of the piece on the Biden administration reaching out again to Mohammed bin Salman. And this is like such an important issue because the whole world reserve currency status is so anchored in oil, you know, barrels priced in dollars and um. They've been such an important foothold

for the US in the Middle East. The saudis UH, but we're not happy with them right now because of UH, the you know, dismantling of Jamaica, Shogi and UM dismembering, I should say, and their actions in Yemen. The question is what do we do. Do they end up with the Autocrat block, do they end up with us where I guess they still are, but that relationship is tenuous. What happens to the saudis my guess, as they end

up with us. But I think you have put your finger on the problems at the moment um that they you know that there is very obviously it's the monarchy, their elements of autocracy there but one and secondly they have on the issue of natural resources, they often get pushed back towards the with the Russians, or it has to be said, a lot of recent Opeic history has been arguments between the Saudis and the Russians, so it's

not an easy relationship. I mean, I do, yes, I do think they are one of those those powers out there and it does cause I think, um problems for Saudis. It gives them a short term bonus. The price spoilers

rocketed up, and that's given them a chance. But it has also I think greatly accentuated the desire of other places around the world to wean themselves off oil and gas or oil particularly um and that you can see that already America has a much freer hand than than other parts of the world because America doesn't have to rely on oil from other places. So that is all, you know, that's that's been a useful and very kind of UM and I think other people will follow that.

If you compare whether United States is because of what's happened in Ukraine and where Germany is for all the reasons you just pointed out, America has much greater freedom to act. I think America relies on one percent Russian oil. Germany relies on an enormous amount of Russian gas. As just point out, it's not just the Germans, places like Poland which historically and think rather much more aggressive attitude recent history, much more aggressive attitude to the Russians and

the Germans have done. They are even more dependent on the on Russian gas. All right, John, that is great stuff. Thank you very much for taking the time. John Michael Waite, editor in chief of Bloomberg News, joining us with this Big Take story today along with the Adrian Woodridge. You can find that at Bloomberg dot com slash Big Take

in the NI space Big Take go. All right, let's check in with Loreen Gilbert loren Is, founder and CEO of wealth Wise Financial Services, joining us from Sunny California. I believe Loreen, what are you telling your clients here who may be concerned about rising interest rates, inflation, geo politics? What do you tell them these days? Good morning? Well, I say, I certainly understand everybody's feeling pain at the pump.

Everybody feels the pain at the grocery store, and so the consumer is starting to feel it, and that means investors are feeling it as well. So it's a it's a time when there's so much uncertainty that being a little bit risk off and much more defensive makes sense. That doesn't mean putting everything in cash, but it certainly means pulling in maybe a little bit of cash and leaning towards the more conservative areas of the market. So do investors get uh, do they lean towards preserving capital

here rather than looking for returns? I think what we're talking to our clients about is looking for areas of the market that are value oriented that you know, no matter what happens. You know, certainly with inflation still being an issue and rising rates being an issue, um, you don't want an overweight and fixed income where you know you're not going to keep up with inflation. And of course we see the ag is quite negative year today.

So we still like stocks like equities in the portfolios, but like I said, leaning more conservatively towards the value tilt is what I would say, dividend paying stocks that can keep investors comfortable that they are receiving those dividends. Loreen. A lot of folks these days are saying it is

a stock pickers market. What does that mean to you? Yeah, so you know, the markets go in swings from passive investing to active investing, and we've been saying for a while that it's going to be a stock pickers market, which we've seen that certainly year today where active managers have outperformed the SMP five D to the highest that it's been since to the INN eight as far as

out performance, and we expect that to continue. Um. So you know, that's where we can help investors looking for those opportunities and seeing the areas that we do see an opportunity. He's, like I said, in the value part um more so than the growth part of the market. A lot of people have been saying, I've been using

the acronym tina to describe stocks. There's no alternative. And I keep looking back at this chart on the Bloomberg at six Paul, if you want to check it out, g hashtag b TV six five zero six, and it shows fixed income performance globally over this quarter. It's been horrendous and the Bloomberg Treasuries index has been the worst

perform had the worst performing quarter of my lifetime. And I'm not young, and it's made it difficult for investors who are in you know, let's say a moderate portfolio equities fixing exactly what I wanted to ask you about, especially people who are retiring are getting close, you know, I mean, how hard has it been and what do

they do now? It's been very difficult, and so we're investors were talking a lot about, uh, looking at areas in the market, like I said, value stocks that to pay dividends, and then municiple bonds, which has not also not been stellar year to day. However, we know that those cubone payments are coming and um, you know, when it comes to being conservative, first their treasuries and there's muties. So municipal bonds and value stocks right now are still

areas that we like quite a bit. Your clients call you up, Lorine and see and say I need an exposure to crypto? Does that happen? Is that happening to you? We certainly get asked the question quite a bit. And I'll tell you right now, with the with the Federal Reserve, we with treasury, with our with the United States of

America looking at digital currency. I think that the weight and see is absolutely important because it could be a zero sum game where digital currencies are established by central banks all over the world China, United States and others. And I think that that is going to become a standard. Uh. And so I would say to investors to to look to the central banks because I don't see central banks allowing truly other currencies that are in the private sector.

All right, thanks so much for joining us. Lauren, great to get some time with you, and I really appreciate your insight. Laurien Gilbert there, founder and CEO of wealth Wise Financial Services, talking to us out of Laguna Beach, California. R E s G Environmental social governance. It is a big factor, a growing factor in investors minds these days. One of the challenges is incorporating E s G analysis into your securities analysis. Is the data ain't that great?

And we bring in West Bricker, vice chair US Trust Solutions co leader at p WC. West. Thanks so much for joining us here again. You know when people do their financial analysis and they go to the f A page on the Bloomberg terminal, there's lots of income statement, balance sheets, cash flow statements and stuff like that. And we do have an e s G tab there where Bloomberg brings together a lot of E s G data

for uh our users. But a lot of folks are saying, just generally speaking, there's not enough good data to do E s G analysis. What's going on there? Well, thank you very much for the opportunity to be with you, Matt and faulse Um. Here's here's what we see. The SEC has focused on um what's happening in the marketplace and eight and investors are asking for more information, more segmentation of important information about the risks I call them

pre financial risks. Whether it's carbon, whether it's how my workforce is coming together and innovating and collaborating. Maybe that's how I'm providing access to customers or potential customers into my platform. All of that comes together ahead of the

financial effects. And so as you look at the financial content, the SEC just recently this week looked at the element of carbon and the climate and proposed new rules which require more information in the financial statements in the footnotes about the effect of climate on the financials so that investors can find more relevant information in order to conduct their analysis. Kind of isn't this kind of a moving target? Um?

In a sense where because you know, last year in front of Congress, all the Wall Street UM CEOs were land bastard for lending money to oil producers, as if you know, they were just unbelievable sinners, just this close to breaking the law by supporting oil producers. And now um as the price of crude goes to one forty, everybody's like, why aren't they producing more? Uh? Even the Biden administration is like, damn it, we gave them nine

thousand leases. They need to use them. So, you know, all of a sudden, it's like their national duty to be pulling more oil out of the ground. How does that jibe with an E s G world that is at all you know static? Sure, it's a great question. It's clear we need energy. Any any developed economy needs energy, needs a diversified set of energy sources. What this proposal is out is how do you really assess the impact

of something like climate which is also changing? Um, what's the impact on the financials and and so the way they the information is proposed to be presented here is it takes something like a climate risk and then model it through the business that you're in, the prospects that you have, the performance over time, and the milestones. What would be the financial impact on a growth basis before you start offsetting or or figuring in the management actions

that that might be relevant. Maybe maybe you'll buy carbon oufsets, Maybe you'll change a business process, maybe you'll alter a

product mix. All of that analysis today it is provided in bits and pieces, some of it sitting on corporate websites in a sustainability report, maybe some of it in an investor survey on a biolateral basis between a company and their capital providers, with the SEC is saying, well, let's set a mandatory bar for all companies that enables the marketplace to see more consistent, comparable, and decision useful information to help investors really understand where companies are and

the nature of risks that impact performance over time. What do you think of the pushback that there is out there that some folks are saying that the SEC is overreaching here they're trying to dictate climate policy. Um, what about that kind of pushback? What's your sense there's, uh, there's there's really a robust dialogue about a couple of big concepts of the economy, social policy that's traditionally Congress, right,

That's that's an important place for Congress. The S you see is focused on disclosure policy of consistent with his mission, which is getting good information into the markets to protect investors, so the investors understand the nature of their investment, the risks, the opportunities of it. UH, companies get the capital that they need in order to operate, grow, compete, and in

the middle we have fair inefficient markets. So of course there's there is a continuum between the point where UH economic policy social policy hands off into business and and the way they source capital and convey information through disclosures. I'd expect that debate to continue. But but I guess what what I would say is, UH, the the SEC, I think has has very rightly been focused on the voluntary reporting of climate information. They've been focus on concerns

about greenwashing, so a lack of confidence in that information. UH. They've they've put a proposal on the table that that business industry groups should rightly read, consider and provide input where at the final stage, and I think it, I think the SEC got it well, important to do that, all right? What's good stuff there? West Bricker, vice chair US Trust Solutions co leader at p WC talking about e s G, the need for more data, the need for better data again the f a function on the

Bloomber terminal. How's your E s G? All right, let's talk to Barry Ridholtz. He's a founder of rid Hults Wealth Management, Bloomberg opinion columnists and host of Masters in Business. Here, Barry, we've had it, you know, continued wild several days here, several weeks. We've got a hot war in Europe, We've got the rising interest rates, we've got inflation. Where do we begin? What do you do? How do you look for context? How do you put this all together? So

you always have to have a plan. You know, you're the old joke, is you you those who failed to plan, plan to fail? And it really is true. If you're relying on your gut instinct, if you're sort of taking it headline by headline, that's a recipe for disaster. So you know, somebody who says my plan is that at the end of two I'm pulling this money out of the market and buying a house or paying for kids college. Hey, those folks should really have been throttling back there um

risk exposure. But for the average investor who's got a timeline that's not measured in months but is years off in the future or even decades off in the future, you know, what happens in two isn't relevant to to when they're gonna need the money. So have a plan, stick with it and and stay long term. Uh, don't get distracted by the barrage of news each day. You know the Mike Tyson quote. I think it's Mike Tyson. Sure everybody has a plan until they get punched in

the mouth. Yeah, no, that's can I tell you that's absolutely true. And and it's funny because you know the other day I was talking to Tom Keane and and we and and uh, Lisa brom Winson and Kaylee and the conversation was, well, why shouldn't you know you follow Muhammed Alarian's advice and go risk off and and move out and and the answer is, it's an easy decision to hit the cell button, but when do you buy?

How do you disert time when to buy? And I made the argument that it's really really challenging to get back in and I got an email from an advisor who said, I worked with a lot of clients. I'm sympatica with your view. I only wish there was some data to back it up. So I went out and did some research. There was a re since study. I love this title quote, when do investors freak out? Machine

learning predictions of panic selling? And to me, the most shocking data point in the study is that investors who panic sell thirty one percent of them never reinvest in risky assets. They panic out of equities and they're scared from that. And that is very similar to what we saw following oh eight or nine, people panicked out of the market in the bottom and failed to get back in in any reasonable period of time. Barry, Masters in Business,

you're widely successful podcasts. It our most popular podcast, by the way. I'll go there. I believe so, but you know there are other folks who have podcasts more frequently, and so they might see different numbers. I think it's the most popular long term and the most popular on a weekly basis. But Masters in Business of course and Tracy have Odd Lots which is also very popular, and Joel Weber has trillions. Yeah, who do you got this week?

So this week is Samara Cohen. She is black Rocks Chief Investment Officer for e t f s and index investments. And of the ten trillion and I have to repeat that that's trillion with a t of the ten trillion that black Rock manages, she's responsible for about a third of it. Uh. I think she is in finance the woman woman with the most amount of assets under management. I don't think anyone is even close. Uh. It might be the CEO of UM, Edward Jones, which is about

a trillion dollars and that's a woman. So so she all ETFs, all index funds are under her per view with black Rock, that's a lot of how do you get these people? Barry, you always every week have some really big names. Well, you know for so Rhodes and eight years in it's become a lot easier. The beginning it was my friends and Rollo Decks. But at a certain point, you know, the the I give a lot of credit to Bloomberg Radio and the whole platform we have.

It's not just on Spotify and iTunes, it goes out over Bloomberg Radio, Act, some satellite, all of the affiliates at Bloomberg, so it gets in addition to the downloads, it gets a massive audience, you know, on a m or from radio with the group and and very often, you know, the one thing I hear from the guests more than anything else is we really enjoy the opportunity to have an in depth conversation, not four minutes and then a commercial. A lot of these things are complicated

and nuanced. They don't lend themselves to to the shorter format. Well we listen, yep, good stuff. All right, Batty Hults, thanks so much for joining us. That's your four minutes and now we'll go to a spot. Batty Hults, founder Rod Hult's Wealth Management, Bloomberg Opinion columns and again host of Master's in Bisy this podcast. I recommend you check that out. Thanks for listening to the Bloomberg Markets podcast. You can subscribe and listen to interviews with Apple Podcasts

or whatever podcast platform you prefer. I'm Matt Miller. I'm on Twitter at Matt Miller three on Fall Sweeney, I'm on Twitter at pt Sweeney. Before the podcast, you can always catch us worldwide at Bloomberg Radio