Surveillance: Don't Expect Much From Fed, Solomon Says

So you've been on a world tour. You just came back from Russia where you had a panel with Putin. What was the big takeaway? What was interesting? You know, it's hard to get good information, and you do these things because my job is to get as much information about the global economy as you can. So there was a lot of takeaways about it, just getting up to speed on on on the Moscow economy and how the

sanctions are affecting you know, what they're doing. UM. So I thought it was good to um put that information in the back of your mind and keep it in mind as your advice companies. Are they the next place for you to be doing the next big deal? No, No, Russia is long. I think it's a while in the future, but look, it's a long life. I've been doing this forty years, and you know, friends last, long time, loyalties, you get to know people, um and and look, it's

a long time. I think before an American company will be Russia will be investable. But someday maybe you are also recently in spending a lot of time in Hong Kong with the Hong Kong Stock Exchange proposed takeover of the London Stock Exchange. What is the tone there right now? Are you worried about what's going on there. I've been around the world a lot. I haven't been to Hong Kong in a while, but look, what's happening in Hong Kong is definitely uh concerning. But again the world it's

gonna be uh. I think would happen with Trump and the China and the trade war calming down will be positive. Um And again, things are long. These there's a lot of issues you go back over. Again. I've been doing this forty years. There's always been major issues, but we tend to get through these. And actually business is one of the key events that keeps peace and things moving

in the world. People in business want to do transactions with each other, want to get to know each other, and it kind of supersedes the cycle of almost politics. By the way, with so much time in Russia and China right now, what does that say about where you think power is shifting in the world. We don't overdue to Rush. I was there for a brief time to

you know, to get some information. Um, look, it's it's there's obviously China is important, but you know it's interestingly just thinking about the United States was twenty three percent of world GDP ten years ago. And if you would have bet that the United States would have been larger or smaller, given the rise of the bricks and all

those economies, I think we're up to. So there's a lot of handwringing in the United States, but we went from twenty three of world g d P. The US has great laws, it's got a great capital markets, it's got innovation. It's still a tremendous place. When you listen to Trump speak this weekend, you know Trump, right, you've worked for Donald Trump before. How our world leaders receiving his message here? And Dave us, Well, look, they receive

it in different ways. But I think the thing that that he did do, that President Trump did when he got here was at least very carefully tell the story. And it's hard to get it sometimes that the U. S. Economy is booming. We do have three percent unemployment. There are so many good things going on. We are deregulating, there are lots of things in the policies that are generating substantial rewards for business and people and and for everybody.

And I know sometimes you can get caught up in the tweets and the presentations, but if you, if you really, and I think he did a good job of just calming that down and saying, look what we're accomplishing. And I do think the policies have been good for business. What do you think his prospects are? Given that you called his last election, what do you think his prospects are for this upcoming one? Look, it's too early to tell.

We don't have a candidate. You know, in order to call a good fight, you have to know who you're who, the who the other side is. So I'm want to wait on that. I think I think there's lots to go in the in the primaries, and lots of stories to be told over the next six or seven months. I'll wait, wait, let's wait and see who it's between. The other thing that everyone's talking about here in Davos,

at least publicly, is sustainability and green initiatives. But three times just today I've had bankers tell me that we're talking about green too much here, and so I'm kind of wondering what you're hearing. What do you think is the opportunity or is it realistic for the financial industry and black Rock, which is leading the charge here to make real change. So that's a complicated question. And let

me say this. Look, we have to advise our clients on how to navigate in an environment where look, E. S. G and all. An environment is going to be part of what they're held accountable for. Now, does sometimes Davos go overboard on some of the requirements things that they're talking about. Sure, people ask me why go to Davis, and I say, sometimes to find out exactly what the consensus is so I know what won't happen and and

do the opposite. Um, because you know it's an extremely consensus atmosphere here and um, but look, people are gonna have to deal with the fact that large institutions like black Rock and and like rating agencies and and government institutions will be monitoring certain environmental social governance checklist and we're gonna have to we're gonna have to help our clients through that. Well, you advised a romco. Where does that fit into the situation here? Look, the world is

going to continue to use and need cheap energy. You know, there's five hundred million Europeans, there's three hundred million Americans, three fifty. There's six or seven billion people in the world who still are are struggling, and the access to cheap fossil feels it. Look, it's it's their life, you know, India, China, Africa, They're not They're not gonna They're not as worried about the environment yet as they are about you know, making

ends meet and and and life. So I think the fact that what worries me about this is the severe pressure on fossil fuels and the severe pressure not to invest in developed countries I think might lead to a shortage sooner than we think. Ken real quick, what do you think the next big market risk is? As we're sitting down us today. Look, I just think markets are priced pretty much for perfection. And you don't have to know. This is on my I've learned over many years people

spend too much time trying to predict the event. All you have to do is know that there probably will be one. I've learned you don't have to know what it is. You just have to know that one will happen this year. You know, maybe this year. But look, I was saying today, if Lehman Brothers had made it through that one market that one year, they'd probably be a hundred fifty billion dollar market cap company today. So

you can't get taken out. You have to know that risk is possible, um and you have to plan for it. And but you don't know exactly what the risk is. You just have to know you can survive it. Ken, thank you so much for joining us. Here's the evident idea. You can talk all you want up a happy valley in Switzerland, you've got to go out there and do it. And if you do it, you've got to move it.

And the obvious most visible thing out there to move it is something for Liverpool football fields long and what is it truly a football field? Why are you speaking of the MAXX tripling. This would be the boat, the boats, the ships that move all this stuff around. To me, the most articulate voice on this and shipping and serious idea of climate change and the logistics and trade of the world, as Mr School of Marri's the chief executive officers Sore and School joins us. Uh. Now we talked

often in London, thrilled they have you here. How do you respond to the visible lads are climate change who don't realize you've got to get the boxes in Asia from point A to point B. Well, first, I always say that the shipping is actually the most environmentally free in my mentorly way of moving any any type of good. So the c U two emission that we have any ton of good move this is quite low compared to road and rail and air. But we still take on

the channels. Are wanting to reduce our CU two footprint, and we have articulated more than a year ago an ambusites to get to zero c U two by by twenty fifty, and we have solid plans for how to get How do you plan to do that? Talk to us about those plans. Well, we want to find it. I mean, the obviously is we need to find it a different kind of fuel, and we believe that we we have fuels that are probable, alcohols, ammonia, bio method that can be used on eternative sources. It's important because

it's about the field and not about a ship. Because you're in a really, really tough spot. You have to plan a decade multi multi decades ahead from where you are right now. So it's not a simplest thaying we're going to build a whole load of new ships. Won't me throw the strategic thinking around issues like that? Well, we we believe first of all that we're having a responsibility as a leader in the industry to drive the agenda. Secondly, as you say, you know we we we we own

assets that have a twenty five year lifespan. I cannot be caught up by a regulation that tells me to do something completely different when i'm when I'm when when we operate sim more than seven hunted ships. So so we need to we need to think ahead. You are a front and center in this new world. Someone suggested President Trump has moved aggressively from a multilateral, merisk world where trade gets done to some form of bilateral world.

Are almost Americ until system. How is your business changed with not the trade war, but the many trades were the new trade Daniel mccows have changed well. Clearly growth is down up to the financial crisis twenty five years. Leading up to the financial crisis ten years ago, trade was growing seven eight per year, trade liberalization and so on. And since then we've seen much lower levels of growth. And then last year we believe probably in the numbers when they all said and done, will come in a

slightly less than two percent growth. It's a very low number. You expect that to pick up. You seeing improving business in the new year. I I don't think that we will see much higher trade growths. It's just going to stay the same, despite the fact that we have some kind of trade trade between the United States and China and China, what we see in our numbers, based on the commodities that are being shipped, is that actually all of the consumer goods are holding up quite fine across

the world. It's the capital goods that are not moving. And that's because business leaders like myself are worried about the future and we invest list in your Denmark and folks, I want to make clear Denmark is the space of economics, of geography in the world. It's the best academics and is that there is there is the geography of the South China, see of Singapore, of Indonesia, and that romantic straight that you're You've got to get your boats through

that straight at night at any time. That must be extraordinary. Give us an update on the ability to move mayor's ships from point A to point B in the South China see in the Pacific. Today we are seeing no no, no impediments or any restrictions or anything that we need to be concerned about. You're right, the Malaga Strate between single point Indonesia is a very narrow channel, but as as of today, we don't see any problems there. You've said trade is basically where it was last year done

when he said improving. Let's talk about rates. Contain a rate you speaking to your big clients, what have they said so far, what a race look like, and how things going to evolve in a year ahead. Freight rates have gone up quite substantially since the first of October last year, mainly because we have switched over to a cleaner fuel on the first of January and we're passing that onto the through the customers. Well, well, let's cut to the chase and we have to make some news here.

How do your customers receive the new invoice? Well, uh, you know, it's always a procurement discussion. But at the end of the day, I believe that many, many, many of our customers recognized that it's good for everybody that we go to a cleaner, cleaner fuel. Quick final question just before we let you go, if we can get the mess stock out there for people to just to have a look at and for our listeners on radio, I'm going to tell you it is several digits long.

Some people always ask me, when are they going to do a stock split? What will Mess do a stock split? This is getting ridiculous. Now we're gonna do a stock split. I could just say we don't have any plans to do a stock split. Okay, we'll leave it there. So let's go of MESQ the CEO. Look at the numbers for our listeners on on radio. Several digits long and Danish kronaw we can do digits on the radio that

works about his plans for the future. The President of the the United States just pulling a pin and loving a grenade into this conference yesterday and it was a total one eighty from what we thought we heard from the administration the day before. We can get real reaction from Europe now with Mark Rutter, the Dutch Prime minister. Primarister, great to see your annual visit, Tom and myself is great to see you. How do you respond to the

President of the United States? Positively because he also had a fair successful meeting Urgin Vonderlay as he's a new Your Your Commission president. They agreed that it was a good meeting that he will continue to dialogue as soon as possible. I've had myself many conversations with Trump on trade and always found him very pragmatic and very practical. He has his irritations about Europe. We have some issues with the US, but that is not a problem. That's

why you have to negotiate. I think we can get a deal done. I wonder if you're more annoyed with France than you are the United States at the moment, because it's the policies of France that are causing much of the problems. Secretary Manuchin said the following this week, if people want to just arbitrarily put taxes on our digital companies. We will consider arbitrarily putting taxes on car companies. Yeah,

but that's a discussion about digital text. I think still be to deal with the issue digital text in the context of the O E c D. It can also be part of the talks between the US and Europe. But don't forget the US is the number one economy the world and the most powerful country. But in terms of overall economic science is Europe is bigger. We have one a half times the science of the US. So when they deal with China, it's not about first places

about second. But Prime Minister, you bring up a key point. Montana has the same voice in President Trump is Mississippi. There are many voices of your Europe. What is the most efficacious way for Europe to speak to the President of the United States and trade directly? And fourth ride

with Trump? You have to be clear the Strasbourg. I mean, who's the voice that's going to set across the table from the President that is pressident Jupean Commission, because this is a European theme and we are united in the European Union on trades. We always have one of one

of the few very successful things we're doing. I mean, we have very many issues in climate change, migration, but one of the consistently successful things we're dealing with this European Union is trade, and we have to work in with bon Force if you're doing that, also with the UK when they're leaving from the end from next week onwards,

we have to create a new day deal. So impossible optimistic about it because we know what is important for Trump, we know what's important for it for Europe, and we are both pragmatical. The retoric in the run up is always part of the There are amazing things to do. One of them is just look at the tariston autos. If you import a car out of the United States

into Europe ten percent. If you import a passenger car out of Europe into the United States, the tariff is two and a half percent, but one which goes back deckhead. Can we address this? Can we just equalize the whole thing? Well, I discussed it the stream myself, and and and on average it is about nine percent from a car coming out of out of Europe, the two and a half twenty five who together is about nine percent, and a car coming out of the US is ten percent. So

it is already almost the same. This is not a big issue. I think we can do with this is before this morning. I want you to identify what the new capitalism will be for Europe. The Dutch of letter on capitalism for well in access of four hundred years as well. Do you sense with the solution of Brexit, do you sense with some form of trade agreement with the United States a less multilateral approach, that there has to be a new capitalism out of Europe and not

an attitude, not a new capitalists. But we have so learned from the past. Dutch companies like Shell you don leave Phillips. Actually they're always We're both successful internationally oriented companies, but also very much rooted in the local communities in the countries which they were serving. There still are. I'm

still very proud of these companies. Some of the companies recently coming into place have less of a connection to the local communities, do not fully realize that next to making a nice profit, there's also sociential impact as a company and the good you can do in terms of making sure that and the changes the environment are not taking place in a role you can play there and I believe you shouldn't put more emphasised on emphasis on that.

John mentions the French and the challenges Mr McCraw has domestically or the transition of power after the miracle era in Germany. What part can the Netherlands play to provide a center to Europe and more co co more coalessing capitalism. Well, we believe that with the UK leaving, be one of the countries with the most international outlook, the most trade oriented,

the most free enterprise oriented countries. We've worked very closely together with the can Scandinavian EU countries, with the Baltic country Stovenia, with Ireland, but also with Belgian and Luxembourg. Within the Benelucks. That is a powerful group of countries who all share this outlook on capitalism, on international trade. At the same time, we have a strong political relationship

with Germany, which France was last week. In Italy, we are building a strong relationship with the Italian government, a violet relationship within the EU because this is needed to maintain that that outlook on the world with the UK leaving. We'll pushed for time, let's get the UK leaving into the conversation. You're very pragmatic in fact, respectful of the US administration, and that's encouraging about ultimately coming to a

positive outcome with the United States. Are you equally the same with the UK At the moment, well, I have pune warrior, and that is the time we have available because they will leave formally next week, but basically they won't leave at all. They will only leave the political structures. They will still be part of everything else in the EU till the end of the year. And in the meantime we have to solve this trade deal. But for this trade deal to be solved, we need to agree

on level playing field all the other issues. It's an awfully short amount of time. So I hope that coming next summer June July, that Boris Johnson will at least contemplate extending, if necessary, this transition face. At the moment he is not. At the moment, it's not. But also here I would say, let's take this step by step, and you just think it's inconceivable that you can come

to the trade but it's very difficult. So and then you and there's there's still the risk in the worst case that you have a cliff at scenario like we had experienced last year. This is a nightmare scenario because what we're gonna end up with the Heathrow is Virgil van Dyke is not gonna be able to go through customs exactly like he can. Now, let's bring it the Gentleman for Britain Grandigan. He's got to get up to Liverpool and there he is stuck at Heathrow in the

new unacceptable. He will return us audience, can we explain? Well? I know who he is because I've been lecture greatest center bank if football at the one of the great players teams, the reason why we will win the European champions You think you've got to absolutely not, really, no doubt. A couple of injuries. This is a part of it and they hopefully will be back in time. This goes to the we're gonna have to talk about this later on the Dutch Prime Minister's next visit to New York

and London. I just left. We have the Dutch Prime stay with us and we end up talking about your favorite topic. I love watching. It's like Aaron Judge of the New York Game. He's not a body fantastic is something else. Margaret's great to catch up with you once again, the Dutch Prime Minister and damaged economic for minister does not wait in line when he goes through special Privately,

I wait in line. When I would travel to Jos official capacity, I would be well hovered around, But in the private capacity I have to wait in the same lineage pharaoh with us for a good conversation of the international finance but also strength of the emerging markets and some of the weaknesses. Is the chief executive of Standard Charged, He's Bill Winters. As always, thank you so much for

joining us. We every time quisy on Hong Kong and whether you've seen money flows, wealthy clients wanting to move their bank accounts out, give us an update of First of all, it nice to be here. Uh. Hong Kong's in good shape, right, I mean, it was a horrific six months uh and culminating in a really horrific period

of violence in December. Uh. But while the issues are are as yet unresults and we know that so so the idea that this is behind us would would be hopeful, but night but pieces prevailing in Hong Kong, and that's very encouraging. So what we saw through the through the worst of the of the period was some people, frank very few on a percentage basis, made some provisions to move their money someways else opening an account in some plays UH, but virtually none of them actually moved their money.

So so so so that the business activity has stayed very strong in Hong Kong. So as Hong Kong is a as a trading hub, Hong Kong is a financial center, and we see it from the I p O calendars and is very strong. And if they haven't missed a beat in that regard, the hospitality of the retail sectors, tourism have been severely impacted. It was a big chunk of the tourism came from mainland China. It will take

a while for for them to come back. They had a bad experience when they were in Hong Kong and UH and the rest of the world has has stayed away while things were unsettled. Now that that pieces is breaking out, as it persists, as as we hope it does, I think Hong Kong will get back to normal. And over the course of this year. Moments ago, China has taken steps to actually cancel some of the festivities, lunar festivities because of the coronavirle is as a big chief

executive in the region. How do you monitor and and how do you prepare for Well, it's concerning. I mean we we first start by by making sure that that our on colleagues are taking the proper precautions and safe So you can imagine the level of anxiety is very very high. If somebody gets a cold, now it's that there's a question whether whether it's something much worse, and that can cause the whole office to to lock down.

So that's uh, we start started home. Uh, we're trying to stay very close to our clients, help them understand what their exposures are. Obviously, people in the transportation and and tourism industry themselves are at some risk within China, especially coming into Chinese New Year, so trying to help identify working capital needs or challenges. It will come up if things progress as they have for the past twenty

four hours. Other than that, we were watching with the rest of the world and hoping do you have operations that could be directly affected. We do. My I was intending to be in Uhan next week. I mean that was we have we have a very substantial operation in Muhan and Johan Chang and Jian you know, all through Western China, and yes, or they're directly affected that. So are you speaking with with health officials on the ground there or my colleagues, my colleagues in China are speaking

with health officials continuously. But as as you've seen and as you've reported, it's a very fast moving set of facts. Even even today, we've we've had material new pieces of news. But but we we we have our own intelligence on the ground as well, from our clients and from our people, and it's it's very consistent with what we're hearing from the government. So I'm encouraged by this commitment to transparency.

I could only encourage it to continue. Are you encouraged by US China Phase one deal or actually Phase one nothing, because it's it's simply an understanding that you know, things won't escalate. Fun It's encouraging because it's they demonstrated that they can agree on something and it has stopped the cycle of escalation. That's a good thing. There's a bit of of of claw back in terms of tariffs and protection of intellectual properties and opening up the financial services markets.

These are all good things. And does it solve the problem? No, of course, not that the structural issues are still there, but the fact that the two sides have demonstrated willing us to agree on some things we have to take is encouraging. Does it help statur charger when with the tariffs going up there was no particular impact on header chargers,

so coming down there won't be either. What is what's challenging is is the the prospect, the uncertainty around this prospect of of a bifurcated world, with with our customers and our clients not really knowing how much they have to reconfigure their supply chains and which you don't know what you need to do, you tend to prepare for the worst, which usually means a lot of wasted cost and investment. So so the the the increasing uncertainty was a problem. It's come off a little bit, but the

uncertainty hasn't improved too much. President trumpus here yesterday. He spoke to a number of business leaders. I think you learned some of those meetings. What was the message coming from the US administration? I mean, the key message I take away from from the messages was that he's running for president of the United States, so that the message would seem to be quite targeted at the domestic audience. Uh,

it was. You know, I say that the themes in Davos have overwhelmingly been sustainability, to the point that it's probably crowded out some other very important discussions like the challenges around inequality. But the traction on on sustainability has been very impressive. I think, so hardcore commitments in terms of the metrics that will be using to measure progress. Uh. And I say specifically, you know, what does my business contribute to to this climate change dynamic and what can

I do about it? And then specific commitments from corporations and willingness I SNA across the banking industry and sharing a session yesterday where we focused a lot of what the banks could do collectively to address a sustainability question. So, I mean, those are the messages coming out of Davos.

And then there was some noise on the side. Okay, if you look at market, it's what is one thing we had to political concerns, you know regarding Iran and Iraq um us China trade is the forefront to US elections, which you kind of mentioned out of those three, what's the biggest risk for the markets? I think the big structural risk because it's it's very impactful and and as yet unresolved. Although in a peaceful zone right now is the US China tentions, Iraq Iran, US Saudi has the

possibility to explode right now. That's that feels unlikely. I mean, it feels like there's been a dramatic escalation and then quick de escalation. Uh. And certainly that what I can pick up through the hallways, and it's just you know, I think everybody's got their views. Uh there there's a genuine willingness on all sides to try to de escalate at this point. So, but of course have that changed and and an impact it all flos through the through

the straits, then we've been a very different place. Um so I So to me, it still comes back to US China and getting some real progress there. We're moments away from the e CD decision. Are central banks exhausted? Are they running out of ammunition? I think the I don't thin they're running out of ammunition, but I think

the ammunition is is a little bit as effective. So I mean, of course that there's new rounds of quantity of easing, or there's new new types of assets that that central banks could buy to affect credit spreads or even affect equity prices at a point, but it seems

to be an exercise with diminishing returns. So I don't think they're out of tools by any means, but they might have to use more of those tools if they feel the need to use those who's at all right, But we've heard presidents leg out of the e CB trying to put pressure on fiscal If you were to quantify twenty twenty, if we had one, you know, one mondary policy or one fiscal policy, would it be, you know, government spending more. Does that actually give you more business?

If there's If there's a lesson that we've learned from developing markets through the years, it's that that aggressive fiscal programs targeted at things that really improve the quality of an economy, so infrastructure, education, healthcare, those things are typically a really good use of money, especially when you're funding it with very low cost debt, which is what we

have right now. Fiscal deficits that are that are being used to drive consumption give you a sugar high, but don't don't structurally improve the ability of the economy to grow and strengthened. So I think to the extent that the US and Germany, so the two guys with the biggest fiscal firepower right now, step up their fiscal spending, but focus on on these these structural value creators that

can be a very important complement to monitory policy. But there's a little noise that actually Germany is ready to spend what what a lot of people ask of them. They're under a lot of pressure. I don't know if they've they've internalized that yet. Okay, the negative rates, how how much of I mean every bank is complaining about negative rates? But actually do policy makers understand that that this could not only lead to to really testing the

banking models even further, but actually social like unrest. I think policy makers have to be very careful about what they say. But I can't imagine that they don't know that it's not just bad for the banking systems, it's very bad in terms of creating imbalances in the economy and imbalances and capital markets that when they unwind, it would be quite dangerous. And since it's clearly part of

the central banks mandate is financial stability. They know that this this is another kind of drug, that it's also having diminishing returns, and that that is piling up quite a substantial problem for the future. Very quickly on your turn around planned? Is it too? Is it? You know, time to say mission accomplished? You never say, MISSI accomplished, and it's not accomplished. But but what I can say is that that that our bank is super strong at

this point. We have all the foundations that we need. We have all the growth momentum in the key areas of our our cross border corporate business, our affluent client business, and then then more recently our massive investments in digital banking. All those things are working extremely well. We just have to to to see them through to to fruition bills. As always, thank you so much for joining us. He's a protective of standard charge. Stacy cunning and joins us.

She's gone a little bit better than internship as president of the New York Stack. Were thrilled here. Thanks because the American dream when you were a kid in a financial family, that was like Because what was it like the first day when you were in turned on the floor. I actually before I walked onto the Stock exchange floor. I never thought about finance. It wasn't something I wanted to do. But those first minutes, the first fifteen minutes, I knew it was what I wanted to do with

my life. I loved it. I love the pace and I love the energy, and you know, I love what capitalism delivers for this country. And I think that's what we should be talking about, because I think that that's where we need. Do you think anyone is defending capitalism at this conference, Well, no, no, And that's the point. I think what I'm hearing at this conference is we have to tell our stories better, and I think capitalism

does not is not immune from that. Right, Capitalism has been the engine that has been the growth of the you know, really fueling the growth of the United States, but it needs a tune up. We need to make sure that the American dream is a story of shared success. And so we gotta get companies out private, from private to public sooner so that others can share in their wealth creation. And we need to talk about the good that those companies are doing by creating jobs and giving

back to their community. One of the great voices of the n Y s as a guy named Kempoll Curry. He's been great, loyal, visible, smart on the markets. Great. He and I remember another time is that New York Stock has change of today anything like what you knew was an intern and where's it going to be in five years? Yeah. We kept the best parts of New York Stock Exchange, and we brought together modernization where we could automate the parts that that really just should be automated.

And so we really believe strongly that the combination of people and technology is so much more powerful. Are you keeping at happy with best price? Yes? Explain that for our audience that folks on radio and television, this is wicked important. You here Arthur love At, the former chairman of the SEC with us on Bloomberg Surveillance, and he's always talking about the execution. Explain why the execution now is different than before ken Ball carry had a beard.

One of the things that you want to make sure is that when somebody wants to buy ourselves stock, they can go out and see what is the value. And nothing values a company better than the public markets. But price is an important part of that, and so the

exchanges are the ones that set that price. And even though market trading has changed and of the market is trading in dark and not contributing that price, they're actually taking those prices that you the exchange is set to determine where to trade, and those are the same exact prices that a retail investor logging into their Fidelity each trade and merrit trade. You just slipped through trading in

the dark. Yeah, you tried in the dark. What is trading in the so so what that is is if you are showing your prices to the world to see, so that when someone logs into their online trading account, calls they're broker on their Bloomberg terminal and they get their prices. Their Bloomberg terminal is showing the best price in the market. Stacey, you're making the argument that companies should stop staying in private markets for so long income public.

A lot of people would understand the argument coming from you, why and why a direct listening is gonna be such an important part of this process. So the two great questions. The first one is why should they be public sooner? And there are a lot of conversations around why they're staying private longer, and you can talk about that it's capital,

it's it's it's it's regulation, it's all these things. But with the downsides to the fact that they're staying private means there's less discipline governance in companies which are a much larger company that's much more impactful. There is less clarity around valuation. So are these companies worth what the private markets are saying or do you need the wisdom and the disclosures and transparency of the public markets to determine that. And it's creating a bifurcation of wealth. Let's

talk about pressure, the pressure on you guys. At the moment, we had the like of Larry Think of black Rock talk about leaning on the active management world to lean out of some companies. Let's say in cold the pressure really is going to have to be put on the index providers to say to them, you need to get these companies off out of the index. That's going to make the most difference. The pressure is also going to be on the exchanges. Why allow these companies to list

on your exchange? I think it's really important to distinction, to make sure that that investors have access to opportunities and the right to choose. And so by putting them on exchanges and giving them information about their disclosures is helpful for them can make it informed decisions. I think it's really important to recognize, what are the conversations I've been having here in Davas over the past few days

are from many CEOs. We're saying, we've been doing all of the work around d s G already because it's important to our employees. It's an important to our customers that we take a stand on these issues, even more so than their investors. Let me ask you this because I actually it's come up multiple times, not just at this conference, but over the last few months, maybe the last few years as well. You have minimum standards to be listed on the New York Stock Exchange, minimum market cap,

minimum out of shadholder as well. Why not have the s G as part of that. Because our standards are very focused on investor protections, and if those companies stay private, the conversations we're having are really connected. Right. If we put so many standards around requirements for companies to be public, they have alternatives. It's a different dynamic than it was years ago when you actually had to come to the public markets to get money. Because there is money available

in the private market space. We don't want investors to be denied those opportunities entirely. This is not your remit, but I want your opinion on this because it's important. Pharaoh has just recovered from the shock of losing that much money on his eight thousand Listen to this. How do you respond when on your floor they do the song and dance of an I p O or even even a secondary but particularly initial public offerings and they come out and they do the whole modern media dance

and the thing goes down x per set. That's not good for the brand, is it. I think we should keep in mind that in a large, large IPO like that, they sold eight billion dollars worth of stock and it opened at a price and stayed right there. Now, over time, investors were reacting to the valuations of companies and his companies go. Your job is to get it open in the early minute, to make sure that investors have the information. Did they have the information? And you'll see it's a

great example of private valuations versus public valuations. And so we need to actually make sure companies get out and this this this shift because they don't need capital, is actually why the direct listing was innovation, an innovation that we delivered this year because it's actually not about raising money, it's about in those cases you say, so you're nailing, there's a private valuation, they go public and so elected stocks tank whose responsibility is that it's not you, who

is it who's respecting questions that they weren't asking before. And I think that's what you're gonna see is that investor are profitability and valuations. And when you have limited people participating in the private space, you're limning access to opportunity and you're also limiting access to information. Stacey, fantastic conversation one of my work you're looking for work Stacey accounting of nicely President. Thank you very much from Davil,

Switzerland for our audience worldwide. Alongside it's Tom Keane, Jonathan Pharaoh. This is the countdown to the open on bloom Black TV and on Bloomberg Riding Up. I can confirm then in Frankfurt, Germany, there is an absolute snoozer of a news conference. In Christine. Everybody asking questions is asking one to three in a row. I don't know how she does it. If you would like to follow that you can on the Blomberg terminal if you are a Blomberg

subscriber on Life Go. Let's get the price action. Around about twenty minutes out from the opening bout in New York City, we set up as follows the pain. The epicenter of all of it is over an Asia, Chinese equity markets down and down hard, in the United States barely. And he followed through whatsoever SMP five futures coming in just a tenth of one percent in the bottom market yields lullaby three basis points TOM one seventy four is

your yield on a US tenure. What's interesting in all of our discussions here, and you learn this in Davos, and frankly you learn it on the island of Manhattan as well, that each bank is different, each executive and set of executives at the banks are different, of course, all different challenges at Goldman Sachs, of course, the transition. And they've chosen a guy they used to move ice cream at Baskin Robbins. This is important, John, You don't

understand America. The coveted job in high school younger high school, all right, you went to McDonald's, you went to the others. The Glory Job was best and Robbins ice cream and that's how you moved David Selom, a gome sex chairman, to see have you ever had an introduction like that before? I've never. First of all, thank you for having me, but yeah, I've never had What was your favorite flavor? My favorite flavor was Rocky Road. Always your favorite introduction? Okay,

I'm not taking podcast banks the Center. In the conversation today with the CP and Frankfurt for the feder was a real conversation about what is going on with the balance sheet. David would love your insight, just your take, your opinion. Is that QI or is that not QI? What is that? So the monetary policy that's been around and has been in place for a long time obviously has been an enormous stimulus. When we when we sit here today and I kind of think about, you know,

the path forward. I think we're now in a period this year after three mid uh three mid cycle cuts for lack of a better term, that I don't expect a lot from the Fed in the context of this year. Obviously, the balance sheets come down a lot over the course of the last couple of years. UM all of this supports or impacts liquidity in markets, and I think the FED has done a reasonable job managing liquidity and markets

even with a speed bump back. So I'll ask it again, then, is that Q wait as they start to buy tapos and a balance sheet stops to expand again, any time the FED uses its resources to affect liquidity in some way, shape or form, it's having an impact on markets. I'm not going to answer the question that you're looking for me to answer it because I I don't think it's a black and white answer. You tell me what Q

he is? Who ask Bill Dudley. But the answer here is we get a lot of different opinions, including the former member of Golden sexually someone that drove your economics for Mr Dudley of the New York Fed. We get all these different opinions, and what our audience wants to know is what you have learned from your prose on the desk of those reactions, the movements that you've seen in the short term paper market. What have you actually observed in the market that gives you information about these

balance sheet challenges? Well, I I think that everyone observed that the FED had a very very significant balance sheet investment,

and it reduced that balot and cheat. There have been a bunch of regulatory inputs the amount of liquidity that banks need to hold as the regulations have changed, and at some point you can reach a supply demand where for a variety of reasons, some of them can be idiosyncratic around a moment time maybe tax payments, that the supply demand of liquidity changes and the price for short term liquidity rises. And we saw that the FED responded appropriately by saying, we want to make sure that there's

enough liquidity in the system. I think all the banks also, I know we did. I can't speak for others. We positioned ourselves so at the end of the year we thought liquidity might be type. We have liquidity to contribute to that felic good question. Are you constrained by the new set of regulations? Are you're happy with them? Or do you just see I need to see amendments so

you do finance better? Now? We we we we are an adapter to the regulatory framework, and so I think as an organization we've adapted very well over the regular over the decade to the regulatory framework. And look, the regulatory framework continues to evolve, and so our job is to make we can serve our clients well, that we have the right resources and we do not see we do not feel constrained to serve our clients well and run our business based on the regulatory framework. We want

your take on the market. So the price action we've seen over the last couple of months, the community, the investment community in the World Economic Forum pretty polarized on what we're seeing at the moment. We've had a hole range of fuse. We had Gougenheim Scott mined to say that it resembles someone we had boot prints of Bridgewater say the boom bus cyclists, we know it is over.

When do you come down those two extreme views? Generally not a man of extremes, so um So I'd say that there will be booms and bus again at some point, although I don't see one anytime, you know, anytime soon.

And you know, as I've been around talking to clients over the last few days, and that's one of the principal things I do while I'm here, you know, i'd see, I'd say, I see and I hear what I call kind of a confident middle of the road view of the current economic environment, US economy is in good shape. Manufacturing sector is a little bit soft. Capital spending been lower than people would like to see, but the consumer

is overcompensating for that. Europe a little bit better. Headwinds of the Phase one deal helps a little, but in the distribution of outcomes overwhelming likely scenario is economy chugs along. That well said, but the distributions of outcome And I remember this and Mr Varney in August of two thousand seven, you get a three standard or even four point one standard deviation moment is golden sas And for that matter,

your view of global Wall Street position better. Now boom bust if we get that jump condition, that abrupt movement as we saw in August of two thousand seven. The banking systems positioned incredibly differently that it was positioned in two thousand and seven. There's been an enormous amount of leverage that's come out of the banking system. There's been a huge amount of equity that's going into the banking system.

I also think the risk management activities of the industry have improved materially, so there will be cycles, there will be events um that stir markets, JE don't really they repeat differently. So the last time there was a significant economic recession, it affected the banks significantly. I think the

banks are in a different position. And when we do have you know, trouble um in the years ahead, which at some point we will the range of things we can see, but I think the banks will be more resilient in the context of that, based on the way they currently talk about how your position in the bank for the years to come best. Today, I believe it's next Wednesday investerdays. Next Wednesday, Investor Day is right now, Let's begin, right now, come on investor Days. Investor Day's

next Wednesday. It's our first investor day ever since we went public in twenty years. Um. I'm a big believer that that you know, our investors and more broadly are stakeholders, you know, deserve transparency around the way we're going to grow the organization, expand our franchise, serve our clients, and

ultimately deriver deliver higher returns for our shareholders. And so we'll lay out a series of initiatives, many of which we've spoken about, you know, individually publicly, but with more information, we'll put out some targets with respect to returns that we can be held accountable to. Targets. So we're gonna put out targets with respect to returns that we can be held accountable to, and we'll talk a little bit about how we intend to run the bank so we

can deliver for shareholders over time. Let me set up a scenario. Let's say a week before you're investigating, a competitor comes out and says on new profitability target is fifty to seventy pace and return on equity step my laugh, A little bit difficult for you next week. I We're focused on running our business. I don't I don't think that that that that the anyone came out and said fifteen to seven pc return at equity. They said fifteent

return a tangible equity. Okay, But we're focused on our business and so our returns and our messages are going to be rooted in what we want to do as an organization so we can deliver competition. Everybody's always benchmarked against competitions. We're gonna we're gonna deliver what we think we can deliver over time for our shareholders to build a better, bigger, stronger organization. Part of the side grilling you on this investor investor Day, and you've got a

whole team on this, and you've been very experiences. This is they're going to talk about strategic vision, and so much of this on investor Day is explaining to investors do you want to expand through acquisition of a bank or just small bolt on acquisitions that advanced golden Sex intellect and technology. What you're feeling on that right now? Given the terrific equity markets of the last twelve months,

are you are you priced out of opportunities globally? Well, I've I've said this repeatedly that I think God and I come to this from my own experience as a banker. I think anyone, any leadership team that's running a big organization always has to be aware of both or of both organic opportunities to grow and also in organic opportunities

to grow. We're always looking and thinking about things that we think can expand our franchise and allow us to serve our clients more effectively and ultimately deliver for shareholders. But the bar for us to ever do something significant and organically is extremely high. But on a strategic basis, is that a geographic choice. Obviously it's a financial choice. But tell me about the Goldman Sex geography right now? Is it a gold division? Goldmen Sex Goldman Sax is

a global firm. I think one of our competitive advantages is we truly are a global platform in the businesses that we operate in. Historically, if you look at our investment banking business, if you look at our sales and trading business, you look at our asset management business, we are a global organization and we have an ability to work anywhere in the strategy and wealth management right now and Golden Sax asset management, what's the strategy right now?

So on wealth management or on an asset manage I'll take both. You asked one and then the other. I'll take you for two. Um, let's start with asset man um. On asset management, we run one of the top three global active asset management platforms. It's an advisory red lead business. In other words, we think our clients come to us because, in addition to strong investment performance over a period of time, we package it around advice to help them meet their

long term investment needs. We think advice is differentiated and you can still get paid for advice and that's what our asset management business focuses on. We're also very unique and that when you look at the three largest global asset management businesses, we may be the only one that really in every product category, including alternatives, is really as scale.

And so you know, across liquidity products, across active equity and fixed income, across alternatives were its scale on a global basis, and I think for our institutional customers that's an advantageous position. So when you look at our ability to acquire assets over the last three or five years long term fee based assets, we've outperformed relative to people

we'd be benchmarked against. It. Talk to us about how hard it is to make a strategy, strange strategic decision for the bank that will work out a ten years, not just for now. So ten years ago the right decision, some people might say, would be to beeft Wealth Management and scale back fixed income trading. Ten years later, that might be the right strategic place to be in. But as we sit here now, ten years out, how hot is it to get that strategy right? To look forward

and say what works now might not work in the future. Well, look, I think that's what CEO is always have to do um and I think the right CEO is make investments to ensure that the competitive position of their franchises strengthens over time. And when you get it right, your franchise is strengthened. And if you don't get it right, you know over time, you know the evidence comes forward. So

we are going to grow our asset management business. We are going to grow and expand our wealth management business. And we think over the next decade those are opportunities that take core competencies at Goldman Sachs and we can expand on them. So if I don't want to talk about the sensitivities at the moment and this comes out, I think of William Cohen's book on Goldman Sex, and

there's that a claim scene, a scene. It's Scotty's over Excel and sandwich, and it's Mr Weinberg and others that go down to Scotty's and over lunch they do Golden Sex business. This is a whole new world. Now. Tell us about the shift that you've had as a new chief executive officer, and this is vesterday coming up. Tell us internally at Golden Sex. The mood as you go

to your first investors to day. What's the day to day mix at Goldman Sex right now is you move forward with your strategic plan well, along with the rest of our leadership team were uh, you know, I'm very privileged, were very privileged to lead an organization that's filled with extraordinary people. And I think they're excited about the investor day, but I also think the organization is energized by the momentum.

The firm has to serve our clients holistically through a program we call one Golden Sacks to really make sure we're delivering as much as we can for our clients. Broadly, there's a real client service mindset in the organization that this leadership team is really you know, pushing hard at

making sure we get right. And when they look at the areas where we're investing, whether it's transaction banking, it's uh, it's the alternatives business and asset management, it's the expansion of our wealth management opportunities, or it's our digital consumer banking platform. They're excited about the investments and excited about thinking about a Goldman Sex where more of these businesses make us more more new new. Is that Goldman Sex.

It's not like Scotty's in the romance of Exhale and Sandwiches. I don't remember important I don't. I read, but I don't remember. This is an important scene of how Goldman Sex operated within the mythology and legend of the company. I want the new Goldman Sex look like. I can't speak to how Golden Sex operated historically going back that far, because I wasn't there today today. Look, we have a very very young, vibrant workforce that's very focused on serving

our clients. Um, We're very, very focused on making sure we continue to have the best, the brightest, the most talented, motivated, driven people to serve our clients. Well, I think we're in that position. This management team leads with an open, communicative style. I think that's what the organization wants, and I I feel like the organization is excited about the direction we're moving it. But we have a lot of

work to do. When we have a lot to accomplish, and like any organization, we're focused and committed to getting that done. How do you open up to the consumer at the same time maintaining that Goldman Sacks gold plates

at branding Because I'm not concerned about that. Look, we think a lot about about our brand and our position UM, But at the same point, I think there's lots that we can do for consumers that makes our brand and our approach, especially on the digital platform, aspirational for consumers. And look, when you talk about consumers, there is a wide swath of people that you can deal with and UM and I feel good about the way our brands are.

One of the one of the big one of the big endorsements I think of our brand is that when we partnered with Apple around the credit card, they wanted Goldman Sachs on that credit card. And I think that speaks to how you know our brand you know is viewed by some out in the marketplace that we we want to find ways to use that man effectively to serve individuals for their financial needs. And there's no reason

if we do it well, it's differentiated. We ease their pain points, we give them information and resources that allow them to make any decisions that that can't represent that brand with consumers in a very effective way. Are you going to take technology at this investors and drive it forward? Is there another announcement with Apple or some there there's no There's there's no there's no big review. I got here in my ear. You're not going to You're not going to make a lot of news where we we

will talk about our technology investment. We have some new leaders, you know outside. We'll talk a little bit about some of the technology investments were making, like all financial services firms of making. You're excited about that, um, but but I don't know that I'm gonna help you make some great grand you know, curtain raising news. Um, the investor day, Well, come next Wednesday. Your facing interview is so over all the sacks by to catch How do you thank you?

Thanks for listening to the Bloomberg Surveillance podcast. Subscribe and listen to interviews on Apple Podcasts, SoundCloud, or whichever podcast platform you prefer. I'm on Twitter at Tom Keene before the podcast. You can always catch us worldwide. I'm Bloomberg Radio.