Global Business Forum. Will be speaking to pierre moscovici, european for economic and funny to affairs, andreas , Allianz Global Investors ceo, and stephen badger, mars inc. Chairman. Lisa deepening some of the concerns about trade come the s p lower. Crude dropping as well as saudi arabia seems it is getting production online faster than expected. The euro losing versus the dollar. The dollar strengthening despite concerns about turmoil amid the leadership in the u. S. Onyear yields going lower this risk off day. David joining me now at the Bloomberg Global Business Forum is andreas utermann, Allianz Global Investors ceo. It is good to have you here. I want to start with why we are here. It is the Climate Finance Leadership Initiative. Explain to us what that is. Andreas it is an initiative that michael bloomberg, on behalf of the u. N. , kicked off about a month ago. It brings together a significant number of affluent to private sector organizations with the aim of cooperating and coming up with solutions to the climate crisis. That is what we are working on over the last nine months. This summit here will bring some tangible evidence of that collaboration. David and you are announcing at allianz the Impact Investment fund. Does that fit within this Climate Finance Leadership Initiative . Andreas absolutely. Impact investing is going to grow a lot. It is meant to target changing, for the better, Carbon Emissions and all of that. We announced to this today for european investors. It will be a blend between equity finance and debt finance that will invest in Sustainable Investment projects. David few people deny that is a good thing to do for the planet and the people who live here. Is it smart as well as an investment . Does it make more money for your holders . Andreas it depends on what you mean by more money. It certainly makes the money that most of our investors want to make. Clearly, it is on the agenda of a lot of organizations. Yesterday at the yuan climate climatethe at the un eommit, the allianze c announced 300 trillion in assets in having an investment portfolio that would have net zero Carbon Emissions by 2050. Strongly andfeel are all convinced that the returns will meet capital costs. David as specific as you can become a what sort of things will you be investing in with your new fund . Andreas it will be things like ,otentially solar farms sanitation projects that will improve peoples sanitary and access to clean water, all those types of things. The badge i am wearing here, u. N. Sustainable to the 11 goals, will be Sustainable Development goals, will be targeted. David are they projects looking for the capital, or is it a matter of getting the capital together and the projects will come . Andreas it is a little bit of both. Risky,erceived as quite thatat it requires is ourselves and others partner with Public Sector entities so that we have a publicprivate sector partnership, where the Public Sector shoulders some of the risk, and that improves the profile for the private sector and makes that capital available for those projects that are dearly needed, particularly in africa. David put this in a larger investment context. We have a very low yield environment. For yield. Ut search talk about what are perceived as riskier investments. Andreas ive always thought you wont get return. It is riskier, especially if you consider developed markets. But the return should be commensurate provided some other inherent risks that some have come of the structural impediment of getting the money to work. This is where the blended finance initiatives early come in. The money is there. There are a lot of private individuals as well who are keen to invest in that. They have a better emotional purelyent than just public equities, for example. David more generally in this world of lower yield, how do you look to invest to get a good return . Where are things mispriced, where you think people are underestimating value . Andreas i think the mispricing topic is a very difficult one to answer. I think the markets are quite efficient. Theres a lot of money chasing the returns that are available, so it is more about identifying the types of risk premiums that you as an investment professional or your clients want to go after. This could be Liquidity Risk premia, term risk premia. It is not so much about mass come eisen about x mies and the return as finding the aboutte return maximizing the return as finding the appropriate return for the portfolio you have. David one of the things investors are concerned about his Global Growth, and the process of Global Growth. That is one of the risks they face. How do you price that right now . Andreas firstly, Global Growth is a concern, and should be a concern because it is the largest peacetime cycle ever. We have record low unemployment in the United States and the u. K. And most of the eu. Profit margins are topping out, so the cycle is really long in the tooth, and Central Banks have used a lot of firepower to keep it going, so people should be concerned. David one of the way they seem to be expressing concern is by going into passive investments. What does that mean for your operation . For an active investor, how big is the rise of passive investing . Andreas it is a rising threat, and we need to keep justifying our existence. This is where more Public Market investing comes in. That cannot be wrecked located that cannot be replicated for passive investment. If the net zero Carbon Emissions alliance wants to achieve its goal, it needs to persuade the companies that it invests in and the issuers it invests in that they should be making available the data that makes it possible for them to assess whether an organization, what sort of carbon an organization produces. That requires engagement, and i think active Asset Managers are best placed to engage in that way in the market place. That is the sort of thing we need to talk about. David you make a really interesting connection between passive investing and the rise of private markets, whether it is debt or equity. Are those two things connected as people go more into index funds and the Public Markets . Noteas i think it is causeandeffect, but there is a link there. As Interest Rates have fallen in Public Investment markets have become relatively expensive, certainly the case of bonds, which are not yielding very much, and of course, equities are yielding low and have quite high p e ratios, investors have looked for other than just beta returns. Beta returns is what passive endedments get, but investors need alpha, and that is where private markets come in. David how much pressure does this put on fees . Andreas it puts a lot of pressure on fees. What it essentially does, as upset on the show many times before, it basically means the price for beta has gone to zero. Therefore, you are only going to be able to charge a fee if you outperform. David thank you so much, andreas. That is andreas utermann, Allianz Global Investors ceo. Coming up, i will speak to pierre moscovici, eu commissioner for economic and Financial Affairs. Live at the Bloomberg Global Business Forum, this is bloomberg. David we are here at the third annual Bloomberg Global Business Forum in new york, and we are very pleased to welcome pierre moscovici, eu commissioner for economic and Financial Affairs. Thank you for joining us. Theres a lot of talk anywhere you go in financial circuits about european growth. Weve got german pmi numbers this week that some people found alarming. The manufacturing numbers were down quite a bit. What is the situation with european growth, specifically in germany . Commr. Moscovici we see growth for the next two years around 1. 2 , 1. 3 , maybe a little bit more next year. But of course, there are two countries which are very slow growth. This is italy, almost flat this year, and germany, Something Like 0. 5 this year, and probably a slight recovery next year. The German Economy is very open and suffers a lot from trade tensions. Also to adapt to a new model, which is greener, especially for the Automotive Industry. But this economy is very resilient, and it has also full employment, so all in all, i think europe is solid. But of course, the risks are moved to the downside. We are sensitive to what happens in the world. We are sensitive to trade tensions. We are sensitive to geopolitical issues such as iran and the consequences for oil, for example. Of course, we had our own inner problems. Italy is now on the right track after a change of government, but brexit is a big question mark. David with respect to germany, it is largely export driven. A you suggest, trade has been boon for germany. Can it move beyond the trade dispute and become more resilient . Commr. Moscovici there is question about germany. Is this slow down a matter of time, that it will be temporary . Or are there more structural adjustments to be made in the next years . Probably a bit of both, and that is why i think one needs to reflect also about the socalled german model. It has to be adapted, and we are also considering in europe if there is a slowdown to a more , franceted approach also has a more coordinated debt, and more solid situation. On the other hand, there are countries like the netherlands with very important surpluses, in trade as well as public finances. That could help boosting eu and euros on growth. David we had overnight the head of the bdi, the largest german business lobby, saying that germany should be willing to forgo or sidestep the constitutional limit on borrowing money to have fiscal stimulus, something the bdi had been in favor of before. Do you subscribe to that you . Commr. Moscovici yes, of course. I am not a german stakeholder, but i think the time has come to adjust the model itself. David you dont have a fiscal union in europe. At the same time, are there things you can do as the commissioner of economic and Financial Affairs to encourage germany to have the fiscal stimulus it doesnt have today . Have comingvici we rules, and it is my job to make sure they are respected. And they are respected. But obviously, when Monetary Policy shows modest limits, but it has done a lot, we need also to correct fiscal policy. I think that goes through fiscal stimulus for the countries who are in the capacity to do that, germany and netherlands, but of course, maintain efforts for those who still have to reduce the deficits and control their debt. We must think about that. The commission is not capable of imposing that, but i think the eu Member States, especially in the council and especially those for countries i mentioned, i need to discuss about that. There is no urgency now because we have growth in europe, growth in 2019 and 2020, but it will slow down but if a slowdown occur, a core were to then we would have to consider this. Fiscal policy has to be considered. David you talked about increased coordination among some of the Member States on fiscal issues. What about coordination between fiscal and the monetary . We have the likes of ray dalio saying we should consider the possibility of fiscal stimulus through borrowing with the Central Banks and buying the debt to really take care of the financing. Does that make sense to you . Commr. Moscovici in europe, weve got a very strong tradition of real independence from the ecb, and i respect the governance. I think mario draghi has been doing a tremendous job and has rededicated to the integrity of the eurozone. But we all know that now, Monetary Policy has no more tools, but the eu has a lot of tools. That is why we need to add a response which is now fiscal. Again, fiscal doesnt mean general stimulus. I think our deficit must be under control. But a balanced approach, reducing the imbalances between those who have deficits and those who have the capacity to invest for themselves, but also for the others. That is the case for germany, but also the netherlands. David the British Parliament is back in session today after having been suspended, with Prime Minister Boris Johnson again. He says there is going to be brexit by the end of october. Do you anticipate that . If so, what will that mean for the european economy . Commr. Moscovici a no deal would be a very serious matter of concern. Prepared foru is this eventuality, but we dont wish it, and we should try to avoid it. But what happens in the u. K. , every day is a new dream. But still, it shows that there are institutions in this country , the oldest parliamentary. Emocracy in the world there was a suspension of parliament. The Supreme Court said it was a legitimate. I think that mr. Johnson needs to listen to that. You cannot have a kind of fight between the institutions. I think that still, a new extension is possible, but at the end, what we need is to have a policy solution there because we see the system is blocked. The government cannot impose its views. On the other hand, the parliament always says what it doesnt want, but is not capable of defining a plan on its own. That is a personal view that will need to be returned to the people, either through elections or a referendum. David which is a decided possibility, but take the other alternative. As i understand it, you being response before customs, you are prepared on october 31 if there is a new deal brexit to impose the restrictions you need to impose. Commr. Moscovici no restrictions, but sibley controls. David tariffs . Commr. Moscovici tariffs, yes. Controls. I think the other countries are prepared. France has the chunnel with the u. K. I went to calais, the entry of the tunnel in france. They have the right people. They have trained them. They are equipped. They have those controls. The intelligence border is controlled. Im not sure if it is the case on the other side of the channel. Thats why whatever happens, we need to be prepared. I think the commission are seriously prepared, and this can be damage control, but again, lets avoid that because we must think also about supply chains, the consequences for industry, as well as the Automotive Industry or aircraft industry, for example. Againtry to avoid it, but , it is up to them to decide where they want to go. That u. K. Might be out of the eu. It is up to them to decide. But it will always be a european country, and our interest is to have a very solid, close relationship. David thank you very much for being with us. That is pierre moscovici, eu commissioner for economic and Financial Affairs. Lisa thank you so much, david. We are going to be sticking with europe, coming up. Prime minister johnson back to the United Kingdom and into a political storm as parliament returns to work. We will of more on that next. This is bloomberg. Lisa this is bloomberg daybreak. Bain capital preparing a fresh bid for german lighting maker osram licht. Carlisle will not be part of the new deal. Debate is expected to come in higher than the rival ams offer. Saudi aramco getting closer to kicking off its huge initial public offering. Bloomberg has learned the oil giant will announce its plan next month, and could be listed on the Saudi Exchange as soon as november. Aramco is continuing to recover from the biggest attacks in its history, and say production is back above 11 Million Barrels a day. Toaiming for a valuation up 1 trillion. U. K. Prime minister Boris Johnson flying back into a huge political storm today. The u. K. Parliament returning to work after the Supreme Court ruled johnson broke the law by suspending it. Joining us with more from westminster is anna edwards, coanchor of Bloomberg Markets european open. How will Prime Minister Boris Johnson respond to this verdict . Anna good to see you, lisa. We had a little bit of response from him already, and we will get more later on today. Sometime around 5 00 u. K. Time to lunchtime in new york, we should hear from Boris Johnson. A bit of guesswork as to when he will actually appear because parliament was supposed to be suspended, but that was the verdict of the Supreme Court yesterday, that the prorogation was illegal and should have never happened. So it is busy in the house of commons behind me. It is pretty feisty, listening into the debate right now. Boris johnson has already said he wont resign, and seems to think the government wants to try to push on with the Brexit Strategy of leaving on october 31, even though there is legislation that will stop them doing that with no deal, probably. Interesting words coming through from the attorney general in the last few minutes. Hes refused, when asked, to rule out another prorogation, something the opposition is watching carefully. , tryso says one way around to get a general election. Thats what this government has one. The parliament has said it is a disgrace. Make use of the pole advantage they currently have. He says maybe they will introduce a one line bill to get around that parliament act, which means they wont meet opposition support to call an election. May be that as a glimpse into the government strategy. They are trying to find ways to get a general election at this point. Lisa thank you so much. Coming up, more from the Global Business forum hosted by bloomberg. Stephen badger, chair of mars, the tonic candy the iconic candy company, is next. This is bloomberg. Devices are like doorways that could allow hackers into your home. And like all doors, theyre safer when locked. Thats why you need xfinity xfi. With the xfi gateway, devices connected to your homes wifi are protected. Which helps keep people outside from accessing your passwords, credit cards and cameras. And people inside from accidentally visiting sites that arent secure. And if someone trys well let you know. Xfi advanced security. If its connected, its protected. Call, click, or visit a store today. Lisa this is bloomberg daybreak. Im Lisa Abramowicz. We are looking at a lower set up ahead of the u. S. Open here. Futures broadly down. The nasdaq and the dow maintaining their losses ahead of the open. Well. Se down as meanwhile, crude headed lower. Saudi arabia says is getting production back online faster than expected. 10 year yield is lower. The pound losing amid political turmoil. 10 year yields in germany going way lower then nearterm yields. The yield curve contracting to the lowest since 2008. David. David thanks so much, lisa. Joining me here at the Bloomberg Global Business Forum is stephen badger, chairman of mars, the sixth largest rightly held company in the United States, and owner of some of the iconic brands in confectionery, foods, nutrition. Welcome. Good to have you here. Since we are here for climate, i want to ask about the mars initiative. As i understand, it is a sustainable generation plan. Tell us what that is meant to do. Stephen it as a plan weve been enacting for many years now. It is a 1 billion commitment to addressing everything from Climate Change to our supply chain, and really seeking to uplift farmers around the world. We have a commitment to improve one million farmers lives. As a food company, we rely on farms for our business. I met climate week because it is the epicenter of the conversation. It is a conversation that is serious, that is significant. It is a threat, and we are seeking to drive systemic, transformational change in relationship to an issue has been important, but not been taken seriously at the level that it needs to be to enable the future that we want and need. Some examples specifically of how sustainability interacts with mars. He mentioned farmers. There has been issues around where coco gets raised, where cocoa gets raised, for example, as well as packaging. Stephen when it comes to some been like cocoa, grown by very small farms around the world, it really means rolling up our sleeves, getting on the ground, trying to understand what are the challenges that they face to driving a sustainable income for themselves, not to mention producing what they are growing in a sustainable fashion. It really takes a partnership across a multiplicity of actors to drive change. That is what we are endeavoring , i wouldd essentially say that yes, i would leave it at that. David how do you measure progress . How do you get in a reports to say we are on target, or we have to make adjustments . Stephen the science now exists to essentially look into what is transpiring on the ground. We are committed to doing that, and take, for example, the forestation. We can put geolocators on the ground to make sure our cocoa is not contributing to deforestation. David the pets business is growing substantially, isnt it . Stephen yes indeed. David is it more than food . Stephen it is a larger segment, yes. David which one is growing faster . Stephen the two are very strong businesses. We branched from pet food into pitch care into pet care. We are now the largest employer of thats around the world of vets around the world. Strong, and there is growth to be had around the world. Theres a move towards more local, artisanal brands. Do you see that, or do your brands hold up pretty well . Stephen certainly, there is a large disruption in the food industry, and all industries in terms of small players coming into the marketplace, but we find ourselves positioned very strongly with the portfolio we have, with the price points we play across, and the innovation we are bringing to market. David when you mention disruption, what about technology . What example is online buying of foodstuffs. How has that affected mars business . Stephen digital is a huge opportunity. It is something we are investing a significant amount of resources in, and growing very dramatically online around the world. It is about pivoting, investing, bringing in new talent, evolving new business models, and testing those and scaling them when they work. Particularly, how is the Consumer Holding up in the United States . Stephen i think you were alluding to the ambiguity that perhaps exists around the world, driven by various issues like the chineseamerican trade war, like brexit, etc. Ambiguity is not good for business, but we see Consumer Confidence being strong. But is it challenged . I think it would be fair to say it is. David that ambiguity is affecting ceos in their Investment Decisions. You are a private company, so you may be in a somewhat different position, but is it affecting your Investment Decisions . Stephen no, i would say not. We are able to think in generations as opposed to quarters, so we really look to the long game, and no, we continue to absolutely invest in to absolutely invest in our business, putting money into capital, money into new geographies, money to new innovations. David what do you make of some of the plans President Trump has had and some democrats have about promoting growth in this country . We had the tax cuts at the end of the 17. Was that a good thing for business overall . Stephen particularly in the case of ourselves, we are able to reinvest that money in the business. Thats what we have done, and thats what we focus that benefit on, reinvesting in our business and just positioning stronger for the future. Stephen we are well into this growth cycle. There concern just that it is so long. What using the prospects for future growth in the United States is, and to take the flip side, recession . Stephen i would say that ending the trade war is one of the top imperatives to ensure that growth does not slow down. We are a big believer in free trade. We have a Global Business. We operate in 80 countries around the world, and free trade is something that we firmly believe in and have seen the benefits of, both for ourselves as a business, as well as for consumers, and for people around the world in general. David thank you so much for joining us today. Really appreciate the time. That is stephen badger, mars chairman. Lisa thank you so much. We got some bricking news. Phillip morris and all tria have have scrapped plans for a merger after regulatory pressure on ecigarettes. The companies have agreed to focus on launching iqos in the u. S. As part of their mutual interest to achieve a smokefree future. The iqos is the Electronic Device used to heat tobacco, but without using smoke. This comes after the 200 billion merger had been announced between altria and phillip morris. This comes as we get a lot of pushback from regulators as doctors start to raise alerts about potential health problems. We are also getting some news on juul ceo said to step down from his position. This comes after a number of cutbacks were also announced following a tumultuous time in the business of smokeless products. We will bring you more on that later, but lets get an update on what is king headlines outside the Business World. The you in general a similar make its their day the Un General Assembly makes it to its third day. Afternoon,e President Trump will meet with the president of ukraine. This comes as House Speaker nancy pelosi launches an impeachment inquiry into the present over his conversations with the ukrainian leader. David westin sits down with film maker ken burns to discuss his latest project, country music. About Leadership Qualities in filmmaking. Sometimes the art of leadership is not making a decision. It is permitting people to own that decision or postponing the decision. Of course, that is the time when you absolutely have to say, no, we are doing it this way. Lisa tune into bloomberg tonight for the full interview by david westin with ken burns, 9 30 p. M. Eastern time. It looks like a fascinating interview from a legend in the film making industry. David yeah, this was a fun one. Hes a remarkable documentarian. One of the things that struck me , a lot of the things he had to say, he runs these major projects. This latest, country music, was 30 million in the making. You have to have a narrative, you want to be in front of the people but not too far in front. It was a really fun one to sit down and do with him. Lisa cant wait to watch. David coming up here, im going to speak with the president of georgia, salome zourabichvili, here at the Bloomberg Global Business Forum. Live from new york, this is bloomberg. Kailey this is bloomberg daybreak. Coming up from the Bloomberg Global Business Forum, roger ferguson, tiaa president and ceo. Now to your Bloomberg Business flash. Facebook has defied and how trust warnings with a new start appeal. The social media giant purchased apps, continuing its promise of snapping up startups in newmarket. He deal will undergo heightened regulatory review over concerns that Big Tech Companies are shutting down smaller companies. Refinery, which manufactures highoctane gasoline, shut down over the weekend. Thyssenkrupp loses another ceo. To current executive has been under pressure from the Supervisory Board for moving too slowly on the Company Turnaround plan. He has been on the job for about a year. Im kailey leinz. That is your Bloomberg Business flash. David. David thanks so much. Yesterday was a big day in washington. Speaker of the house nancy pelosi announced House Democrats would launch an official impeachment inquiry into President Trump. This is what Speaker Pelosi said, and what her counterpart on a relator her counterpart minority leader Kevin Mccarthy had to say. Rep. Pelosi details revealed president s betrayal of our National Security and the betrayal of the integrity of our elections. Therefore, today i am announcing the house of representatives is moving forward with an official impeachment inquiry. Rep. Mccarthy speaker policy happens to be the speaker of this house, but she does not speak for america on this issue. She cannot decide unilaterally what happens here. David joining me now here at the Global Business forum is marty schenker, bloomberg chief content officer. So you heard Kevin Mccarthy say it. She doesnt get to decide, which is certainly true. There are many steps between here and impeachment. Marty the democrats have shown a were markable ability to look disorganized in this whole process, so i wouldnt have High Expectations that this is going to be a riveting, day by day, organized event. David one question i had watching nancy pelosi, because she had resisted the impeachment move all along, is she leading or following right now . Marty i think she is leading, but where they are going, where exactly they are going to wind up, is the question. She faced a real revolt within her ranks when he moderate democrats crossed a line towards impeachment. She could have elevated it a lot more by going the route of the select committee. She didnt do that. So i do think she is still in control, but it is tenuous. David you make a really important point. People not familiar with washington should know a select committee would have been taking it all away. That is what they did was richard nixon. She said there are six committees looking over it, and they are all working. Maybe it is a way of moderating it just a bit. Arty it is, but it is also unique structure. Ive looked through three impeachments. David both of us have. Marty and this is unusual one. Thatreally strikes me is this may move so slowly, it will be in the courts when people refuse to show up to testify. Where is the evidence coming from . It may well go into the campaign season, and when that happens, i think donald trump has a very combative narrative. David donald trump right now, as far as we know, knows exact what is in the transcript. We dont. He says he is going to reveal them today. Hes going to have a News Conference this afternoon at 4 00. What are the odds that the president may be drawing them off side on some thing that is not that objectionable . Marty that could very well be true. There is this narrative that trump talks in a very freewheeling, unstructured style, so there may not be any kind of smoking gun in this transcript, and he knows that. What is more telling is that there was Unanimous Senate vote yesterday that the inspector generals report be turned over to the intelligence committees and the senate. So that, i think, that report is going to be much more of a test. David this is a critical point for whatever is said or not said. Theres a statute that says buy a certain time, this report has to be turned over to the intel filled to the intelligence committee, and that was not done. It is pretty clear that is in violation. Marty it is. It is going to be hard for the administration to resist that. This transcript may be interesting, but i do think there is a narrative that goes beyond just that phone conversation. There are reports that involves rudy giuliani. We need to see that report. David and it looks like we will, sooner or later. Thanks so much to marty schenker, chief content officer. Coming up, i am going to speak with the president of georgia, salome zourabichvili, here at the Bloomberg Global Business Forum. Live from new york, this is bloomberg. David we are back now at the Bloomberg Global Business Forum, and we welcome the president of georgia, salome zourabichvili. She is the first fema president of georgia, having served as its foreign minister after a distinguished first female president of georgia, having served as its foreign minister after a distant was career. Lets talk about why we are all gathered here, and it is Climate Change. How does Climate Change affect georgia . Pres. Zourabichvili Climate Change affects the whole world. We are a small country. We are a country that is located close to the caucasus mountains, a beautiful range of very high mountains. It is affecting already. We see the snow and ice melting on those extraordinary mountains. We see the floods of the rivers. On the 27,000 rivers small territory. Until we see the effect and so we see the effect. At the same time, we are a country of extreme biodiversity on a small territory. We have all the climates. We have an incredible amount of [indiscernible] same with corn, with wheat. Fauna and flora is very diversified. We are affected, and we have to take care of that because we are a Small Reservoir of what extends in different countries, located in one little place. So we are very conscious of what that represents. Georgians are very attached to their nature, so we are reductionthe climate declarations. We are a morgue agricultural country, a more agricultural country, but that is a concern. David what drives the georgian economy . To what extent is it dependent on climate . Pres. Zourabichvili it is everything today dependent on climate. We are an agricultural country, with wine being the leading source. Have continued. It is a continuous history of winemaking, which is linked to everything. To religion, to our traditions, so wine is everywhere. Tourism is also a very important segment, and it is growing. We are attracting more and more werists, and there, too, need to preserve the nature that we have. Important is to preserve the extreme riches we have a nature. David tell us about your relationship with the eu. There is a move to sort of integrate with the eu. How has that been coming . There were disruptions, even demonstrations, back in june. Is that getting in the way . Pres. Zourabichvili not really. Demonstrationbig that was a very natural, spontaneous reaction to the frustration that the georgian people have after 11 years that have occupied territories and that is very clear. And i am here to plead for looking for solutions because it cannot continue like that. Political,ed into trying to enter the parliament and things. So we are moving towards europe on a very continuous pace. We have, from one to the other, gone from neighbor to associate member. We have a freetrade agreement. All of that has been a continuous move towards the european union, so today we have im not going to tell you what we have. You can look at the u. K. We are a small country, so we have to be realists. We know that the political decision about our membership will not be taken tomorrow morning. But what we need absolutely, and that is my second message here at the u. N. , we need movement. We need to see that we continue to get closer and closer, and that one day somebody will discover that in fact, we are europeans. We are already europe. Are very convinced inside that they are completely european. Because of wine, because they are one of the oldest christian states. The state was converted in the fourth century. Sometimes we say we are more europeans than europeans before the europeans. We will continue that move. David it is a fascinating country. A pivotal country, in many respects. Stephen we want to see pres. Zourabichvili we want to see you more. We want to see more documents about georgia. David is a truly beautiful country. Pres. Zourabichvili take it as an invitation by the president. David i will accept that. Thank you very much. Salome zourabichvili is president of georgia. Thank you very much, madam president. Still to come from bloombergs Global Business forum, roger ferguson, the president and ceo of tiaa. That is coming up next. This is bloomberg, from new york. Beyond the routine checkups. Beyond the notsoroutine cases. Comcast business is helping doctors provide care in whole new ways. All working with a new generation of technologies powered by our gigspeed network. Because beyond technology. There is human ingenuity. Every day, comcast business is helping businesses go beyond the expected. To do the extraordinary. Take your business beyond. Rep. Pelosi the president must be held accountable. No one is above the law. Speaker pelosi announces a formal inquiry into the impeachment of the president. President trump responds that it is only a matter of president ial harassment. Baby steps. China reportedly getting ready in the United States. World leaders and ceos talk Climate Change at the Bloomberg Global Business Forum. We hear from indian Prime Minister modi this hour. Welcome to bloomberg daybreak on this wednesday, august when he fifth. Im david westin august 25. Im david westin at the Bloomberg Global Business Forum in new york. Lisa abramowicz joins me across town. Alix steel is off. Lisa a big focus on Global Warming in combating Climate Change in business. David theres a lot of talk about climate. Everyone seems to agree it is the big problem. The question is, what can they do . We will hear from Prime Minister Narendra Modi of india. We are looking for to that. Lisa in markets, you are seeing u. S. Futures indicated lower. Crude also declining as it becomes clear saudi arabia is getting production back up to speed faster than previously expected. The euro declining, weakening versus the dollar. The dollar strengthening, even amid a bunch of political turmoil in the United States. Meanwhile, twoyear yield headed lower. David thanks very much. Concerns about Global Economic growth loom large at the Bloomberg Global Business Forum as executives and Business Leaders weigh the size and scope of the slowdown. Is the slowdown a time that will be temporary, or are there more structural adjustments to be made in the next years . Probably a bit of both. Global growth is a concern, and it should be a concern because it is probably the longest peacetime cycle ever. It goes for many, many countries. We have record low unemployment in the United States and the u. K. , and most of the eu. Profit margins are topping out, so the cycle is really long in the tooth. It is not in the baseline to have a recession. Growthid, it is mediocre. It is at risk because of essentially one major threat, which is the trade war that we see. David joining us now from boston is Denise Chisholm, fidelity head of sector strategy. Welcome. Youve heard concerns about Global Growth. How do you access the state of Global Growth right now . Denise theres no doubt that Global Growth has slowed. It has come to the u. S. , with ism manufacturing diffusion index new orders at 47, and you seen Industrial Production down year on year. You could call it a Light Manufacturing recession. We havent seen a big slowdown in the u. S. Consumer, but clearly the manufacturing and to see the many factoring indices are electing that global indication. As much as that slow down might make an investor a bit more cautious and want to get defensive, history as a bit of a guide. Even if you had perfect foresight and knew that Global Growth was going to slow or u. S. Gdp was going to slow, those sector odds or what leadership you would expect actually cluster around 50. And 60 of those slowdowns, we actually dont end up in a recession, and you see some contrary indicators which, even if you slow down, what you actually see is a little bit of a leadership to economically sensitive sectors like technology, Consumer Discretionary, industrials, and financials, even over classically defensive sectors like staples and utilities. So even if you have a pessimistic view on Global Growth, i think those are some cautionary notes to really think as an investor that the market is discounting mechanism, and you have to think about where valuation is. Lisa i do have to wonder how much this means more volatility intersect or Going Forward volatility intersector Going Forward. Listen. Think isnt is what we the next stage of this shift towards the more cyclical areas like financials and energy, and away from utilities, consumer staples, and the like. Essentially, what youve had in september is lots and lots of dramatic movements between sectors, but at the index level, not so much. That could continue. Lisa denise, do you agree . Denise i think theres no doubt that could continue for a time, but a lot of the indicators im seeing suggest strong market returns in that if you are willing to extend your time horizon for the next year, a lot of indicators i am seeing suggest upside in the market. However, it is notable that you could see in a flat market some shift from classically defensive sectors of staples and utilities towards more sector leadership then we have seen, technology and Consumer Discretionary, and maybe financials and industrials, given the fact that events is in the top percentile of its valuation rein on earningsbased metrics since 1970. Theres really only been five times weve actually seen that come about those five times have been fairly decisive at predicting a cyclical rotation back over the coming year. Weve seen a little of that year to date, but history suggests we may have more to come, even in a flat market. Lisa what data do you think is most compelling to you, that is giving you a sense of where you should be investing or allocating when you are shifting sectors, that perhaps people arent looking at . Denise i think there are two things i am looking at. One is your valuation starting point, which is really been the same all year. I just sort of talked about how expensive the defensive sectors are on an equal weighted basis. Riskan measure it also as or beta being cheap as it has been since the financial recession of 2009, and valuation spreads, which we were talking about a little earlier, being wide is an expression of fear. Those three things suggest strong odds at higher market returns, and i think the market is expecting, and i expect a procyclical rotation. As much as we want to talk about headwinds to Global Growth, and there are many, i think it is important to talk about the tailwinds that im looking at as well. We are seeing stimulus now. The ecb and the fed on the same page for the first time in a long time. Actually only happens 10 of the nine since 1999 10 of the time since 1999. History is decisive in terms of those odds. Those 10 occurrences have almost tripled average market returns, with only 18 odds of defensive sectors outperforming. Combine that with the fact that real Interest Rates in the u. S. Are now negative if you look at the 10 year, plus the fact that this isnt just the fed and the ecb. It is a globals and almond on it is a global phenomenon. Stimulus, all that data i just gave you, tends to be predictive in time, coupled with the valuation, are the two things i am watching in terms of the cyclical rotation playing out. David denise, we always love having you on because you have such a sense of history. In your analysis, how do you take into account the possibility that it is different this time . You just mentioned negative returns. We seen were markedly low yields around the world. You also have a real ramp up in passive investing. How do you take into possibility that maybe history has changed a bit . Denise i think it is always different this time. We have to be aware of taking the rhymes from history and not just isolated facts. Global perspective is different, and potentially dragging down u. S. Rates. You cant really forget the stimulus that is in the overall treasury market in the u. S. Federal reserve. Again, i think a lot of that maybe that what is different this time is the defense is actually the most expensive its been since 1970. Four accounting for things that are different this time on the negative side, we also have to account for things that are different this time on the positive side. Lisa so defensive sectors might be pretty expensive historically speaking. What is the most undervalued sector, in your opinion, right now . Stephen it is a question of the way you talk about value denise it is a question of the way you talk about value. There is relative value, which i find more predictive, and then there is relative value that has been predictive in the past. When you ask me how i think about what is undervalued, i think that predict of component on a relative basis. He rising that financials are a unique opportunity. They are back down to the fourth percentile, relative forward pe or relative trailing pe, through the history of looked at since 19 622. That carries with it 70 odds of outperformance. That 70 comes despite the fact that relative earnings might slow down over the last year, despite the fact that oftentimes , that is after a yield curve inversion. It comes despite the fact that loan growth may actually slow. Theres a cautionary note from history to say it is pretty bad out there from a fundamental perspective for financials, but that may very well be priced in. I think the Financial Sector is potentially interesting over the next year. Lisa Denise Chisholm of fidelity, stick with us. Coming up, we will take a look at nike crushing it. Shares of the Athletic Apparel maker trading at record highs after a knockout earnings report. Or on that next. From new york, this is bloomberg. Emma nike shares soar in premarket, up between 5 and 6 . It looks like we will open at 90 a share, a new intraday record for the company. This all on the back of those firstquarter earnings, where we saw earnings and sales beat estimates. Sales growth in the First Quarter came in at 7. 2 , but it saw a really big increase in its womenswear sales. The company say they grew by double digits. It really saw the benefits during that quarter. Remember, nike sponsoring three of the teams that made the final four. Nikes ceo talking about the biggest longterm opportunities for the company, and listed womenswear first. This is something Bloomberg Intelligence also agrees with. Womenswear sales made up 20 of total sales last year. Bloomberg intelligence saying that could grow to some 40 over time. It also seems that nike dodged the impacts of the trade war in the last quarter. Sales growth, if we switch of the graphics, grew across all geographic regions, but look at how much it grew in greater china, up some 22 . Are made ingoods china, but many are also sold in china, and the company has been diversifying production away from china in the last decade. It probably also helped that the fiscal First Quarter ended on august 31, just a day before those new tariffs on apparel and footwear were added. Lisa thank you so much to bloombergs emma chandra. Still with us from boston is Denise Chisholm of fidelity. As we look at nikes results in the Retail Sector of the s p 500 , up more than 20 yeartodate, i am just wondering whether people are pricing in the right amount of optimism here, or perhaps are a little bit overenthusiastic. Denise Consumer Discretionary is a really unique sector. We were talking about a global slowdown earlier in terms of maybe, even if you predict a global slowdown or gdp slow down, you actually get this inverse relationship as to what sectors you want to own. Sector, even if you knew gdp was going to slow over the next year, the sector with the highest odds at 80 is Consumer Discretionary. Discretionary. So it has a really big defensive quality, to your point. Is that normal yeartodate . As Earnings Growth slows in the overall s p, relative earnings tend to actually accelerate in the Consumer Discretionary sector. That, combined with really strong fundamentals, meaning any kind operating margins you would like to measure or returns are still at some of the highest levels in history, and have really supported the sector. David how do we know what is coming next . Our retail sales a leading indicator or trailing indicator . We have some Consumer Confidence numbers that are a little disturbing. Denise we saw that contraction in real retail sales in december, and actually, i think i talked about it on your show. I certainly have done the research. I think it is posted on my linkedin account. We seen a bit of what we call bowling recessions what we call rolling recessions. We saw a real retail sales contract in the fourth quarter, and now we are seeing th Industrial Production contract and many factoring. Despite the fact that it was a sharp, quick slowdown, it has happened half the time in recession, half the time out of recessions. And despite the fact, it has given 90 odds of the Consumer Discretionary sector outperforming over the next year. So i think there are some negative indicators we have seen that have given the Consumer Discretionary sector the ability to climb that wall of worry, and from a riskboard perspective, i still see that playing out a riskreward perspective, i still see that playing out over the coming year. Lisa i wonder if the players remaining in retail are the strongest ones. Is that your sense here . Denise i dont know from a fundamental perspective. I really look at the aggregate level perspective of fundamentals, which is dominated by some large cap names. What i do see is valuation spreads are very wide in the sector. To your point, maybe son of it is potentially priced in some of it is potentially priced in. Theres a big difference between, lets say, amazon and retailers. Those valuation spreads are potentially reflecting even that and then some, protecting high odds of the overall sector actually outperforming over the next year. Not just the winners like amazon, but potentially some companiesm that are misvalued at this level. David wrapping this all up, as i understand it, you are saying that if you look at the numbers, Consumer Discretionary is actually a pretty good bet, at least over the next 12 months or so. Denise i think thats right. You always want to keep your eye on the overall economy, and what i think is unique and interesting is the yield curve puts us on watch. What it puts us on watch for is a shock to the u. S. Consumer. Traditionally, those shocks have come from a combination of places. ,he fed raising Interest Rates percentage of disposable income, and commodity price spikes. Those are the places we have watched in the past. An issue, neither are both being at alltime lows. It could potentially be tariffs, but you dont get that 1. 5 to 2 hit on an annualized basis that you have seen, which tips the consumer, historically speaking, into recession. Those are just the things im watching for the overall sector that doesnt have high odds of outperformance into an economic downturn. But i think, given that, if the base case is for an extended cycle, not seeing any shocks to the consumer, the riskreward for the sector is still positive over the next 12 months. Lisa Denise Chisholm of fidelity, thank you. Founderp, we company adam neumann bows down under pressure. We will discuss what that means, as well as future prospects, next. This is bloomberg. Renita this is bloomberg daybreak. Labs ceo decides to step down. Continental ag has announced a sweeping Restructuring Plan set to last a decade that will affect as many as 20,000 jobs worldwide. The plane as part of the car parts makers effort to restore profits. They will invest about 1. 2 billion through 2029. Wework chiefs adam neumann is out. The companys were placing its controversial chief with two Senior Executives in an attempt to salvage the embattled ipo. The Company Plans to go ahead with the listing, but we are told it is unlike you t it is unlikely to take place next month as planned. That is your Bloomberg Business flash. Lisa lets take a look at the wework saga with bloombergs sonali basak. What a story from some any different angles. As we see adam neumann step down, it calls into question the entire lifeblood of this company that has risen up, and now owns a significant portion of real estate in new york and london, and other major markets. What is the future for wework . Sonali that is definitely a big question, not to tension the fact they need to do what they are going to do with their financial situation not to whaton they need to know they are going to do with their financial situation. They are looking at job cuts, thousands of them. They are looking at potentially spinning off noncore operations , according to bloomberg reporting and the journal. Theres definitely a need for a financial part of this operation to continue, but i think what youre asking also is that a lot of these tech companies, they were built off of a vision, and somebody with a very big vision like adam neumann. What happens when a Company Grows up . Gene munster spoke to bloomberg yesterday and said this is a really material risk. Lets see if the new ceos, alone anybody beyond these ceos , can take this company to a new vision. Lisa there are the big discussions, and there is also the wall street angle. What do the bankers do . What is their role in the ipo creation and failure . Sonali jp morgan probably has the most at stake here. They were the top underwriter, and had a lot of relationships with adam neumann in terms of this loan they had given him against the stock in terms of his own home mortgages. They also have a private investment vehicle. They put their own clients in wework stock earlier on. I was speaking to an investor in one of those funds, and he was not thrilled that j. P. Morgan had marked it up to 45 billion in the first place earlier this year. So they have questions to answer to investors who are not only in debt, but also in earlier funds. Lisa are we going to talk a wework ipo again, or has even softbank put the kebab on this put the kibosh on this . Sonali after this year, how are you going to sell this to the Public Market and Retail Investors . What people familiar are saying is that they may get another 3 billiondollar loan with jp morgan and goldman. Other Real Estate Investors might come in. You asked about the future of the company. Dont forget, they have a ton of upstarts competing with them now. Convene the and one of them, which has a religion ship with brookfield and leon back stanley and leon black stanleys office. Have if wework were to trouble, will that competition support the real estate markets . Support the real estate markets . In other word, is wework filling a void that will, if it fails, be filled by others . Sonali i think that is already happening. You already hear others saying we are the more adult option in the room right now. You have a former amazon executive and another as the adults in the room. Can they push forward this vision that we were talking about . Lisa thank you for being with us and driving the conversation forward. Tiaag up, roger ferguson, president and ceo from the Bloomberg Global Business Forum. We are really looking forward to his vision on what retirement looks like in an era of People Living longer. Right now we are looking in markets at a little bit of a decline ahead of the u. S. Open, following a pretty big drop over in europe. From new york, this is bloomberg. Lisa this is bloomberg daybreak. I am Lisa Abramowicz. You are seeing a down mood. In the u. S. , futures plowing back from our earlier losses. The dow barely changed at all. The ftse dropping. The stoxx 600 having its worst day in about five weeks. Brentt a sense dropping as we get a sense saudi arabia is getting production back up to speed faster than expected. Yields dropping. The pound losing amid the political turmoil. German tenyear yields dropping more than normal yields. Leading that yield to narrow the to narrow to the lowest since 2008. Lets get an update on what is making headlines outside the Business World. Renita young is here. Renita the u. N. General assembly enters its third day. Donald trump is expected to have several bilateral meetings with world leaders. He will meet with leaders from venezuela as well as the japanese Prime Minister. Later in the afternoon, the president will be meeting with the president of the ukraine. The meeting comes after House Speaker nancy pelosi launches an impeachment inquiry with the president over his conversation with ukraines leader. China is urging the u. S. To look to developing countries and policies of bowling. A spokesman called on President Trump to meet china halfway. Trump criticized chinas trade tactics in his speech to the yuan on tuesday. Are and chinese negotiators scheduled to meet in october for 13th round of talks. Chinese companies are preparing to buy more u. S. Pork as highlevel trade talks are said to restart in washington next month a day after President Trump used his u. N. Speech to hit out at china. The president says beijing has failed to adopt reforms to make the nation more market friendly. Global news 24 hours a day, on air and tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. I am renita young. This is bloomberg. David i am here with roger ferguson, former Federal Reserve chairman. Great to have you here. Roger pleasure to be here. Of the things we talk about and i am interested in is the retirement gap. Where do we stand on this. You monitor this closely. You study it. The fed has estimated somewhere before between 4 trillion and 7 trillion dollars in shortfall in Retirement Savings. We have a coverage gap. Americans have access to retirement plans at work. I have talked about the savings gap. Trillions. And we have a third gap we do not talk about, which is the guarantee gap. We finished a study. It turns out the top thing people want in their Retirement Savings account is guaranteed income. The absence of that is creating instability. There is clearly work to be done to get more people covered, to get to the right savings, and to people what they really want, which is guaranteed income and retirement. David the move has been away from guaranteed income. We went from benefits to contributions. Is there anything that can reverse that . Anything the government or private industry can do to fulfill that gap . Roger the answer is yes and yes. There is on already there already an act passed through the house, 173, waiting for action in the senate. That will create a safe harbor so that businesses can put guaranteed income into their plan. That is what the government can do. Look in the private sector do . They can take up this opportunity by creating and all 401k one cake and all type plan. That would increase the security people feel around the retirement outcomes. Thed how much is disturbing situation exacerbated by lowering yields . Everyone is rushing to the bond market and yields are going down. People do not get as much off the savings. Roger no doubts that makes the challenge greater. The solution is to have a broadly diversified portfolio so you are not whipsawed by Interest Rate risk. Runner we at tiaa general account, which backs up the guaranteed income that we provide, is by having broadly diversified portfolio. You want fixed income, you also want equities, you want alternative, and you want to be globally diversified. That is one of the ways to try to push back against the low Interest Rate environment we have experienced. David where of using the yields go up . Roger look at where the equity markets are. I remind all of my colleagues that other asset are likely to be you see it absolutely inequities broadly defined. There is been good pickup in emerging markets economy. The alternative space, real estate, timber, agriculture infrastructure. There are pockets of good return that are being developed in response in response to the low Interest Rate environment in the fixed income world. David the Federal Reserve has been in the news recently. We have the repo phenomenon with the overnight rate spiking up. Is there a larger issue with respect to liquidity. Off of quantitative easing, do we have a larger liquidity issue . Roger i am glad you nuanced it. There are issues without crises. One of the issues is what is the right direction for Interest Rates . We saw on the most recent fomc decision, three dissents, a couple of folks saying we should move it all, other saying we should move it 50 basis points, and theres also the question of the size and scale of the fed gradually as they have been gradually reducing that, has that been heightening monetary position. You have both of those issues in play. Target,rest rates they and the size of the Balance Sheet and how it is being adjusted and what that implies about liquidity but also the overall state of a final david some people suggest we should be increasing the Balance Sheet. We had Stanley Fischer and ray dalio introducing a situation where the government would borrow money to have fiscal stimulus and the central bank would buy that debt in order to finance it. Does that make sense to you . Roger the individuals involved our friends, respected economist. Super thinkers. One has to be careful to respect the independence of the fed. It might be that we need more fiscal stimulus, perhaps we did earlier. Perhaps in europe, more fiscal stimulus. You do not want to get to the place where it looks like the central bank is monetizing that. They should be separate decisions. Is this the time for fiscal stimulus . I would argue in the u. S. , probably not right now. A separate and independent Monetary Policy that takes the fiscal situation into consideration. David we see in the u. S. And europe a lack of inflation. Is there a danger in that that we get lulled into a sense of complacency . Roger what we are seeing about inflation is an interesting dynamic. Central banks feeling they have not achieved their inflation targets, 2 . They are debating, should we continue to lower rates. The citizenry at large is looking at this world, seeing relatively stable prices, real wages could probably go up some. That could be a good thing. What we are confronting is that interface of central bank targets versus the reality and the fact that none of the Central Banks know how to engineer greater inflation in this world of global labor markets and Global Capital markets. It is becoming difficult to get back to some of those targets. David roger ferguson, ceo of tiaa, please stay with us. We are now waiting for the keynote address at the Bloomberg Global Business Forum. Live from new york, this is bloomberg. Renita this is bloomberg daybreak. Coming up from the Bloomberg Global business florham forum, jamie dimon, j. P. Morgan chase chairman and ceo. Now to your Bloomberg Business flash. The Morris International has ended merger discussions with altira group. Phillip morris is the companies have agreed to focus on launching i. T. Qs in the United States. Ceo comes as the altria takes a new post as the ceo of juul. Mcdonalds is now letting jobseekers start an application using voice command with amazons alexa or googles assistant. Have some Job Companies built voice assistants on amazon and google platform, both Companies Say mcdonalds is the first direct employer to use the technology in this way. Saudi aramco is getting closer to kicking off its huge ipo. Bloomberg has learned the oil giant will announce its plan next month and could be listed on the Saudi Exchange as soon as november. Aramco is continuing to recover from the biggest terror attack in its history. It said today Production Capacity is back above 11 Million Barrels a day. It is aiming for a of 2 trillion. I am renita young. That is your Bloomberg Business flash. David thanks so much. Still with me is roger ferguson, tiaa president and ceo as we wait for the Prime Minister of india to speak in just a few moments. Talk to us generally about emerging markets in this world. Roger emerging markets are still central. One has to go in of risk and reward. Example, can go from solid Investment Grade too much more uncertainty, much more problematic. A well selected portfolio of emergingmarket debt is part of a broadly diversified portfolio. A lot of the new ideas, a lot of the growth has, after emerging markets. We have had success on emergingmarket debt for now. Part of a well diversified portfolio should include emerging markets. In emerginguch market is the underlying investment and how much is the currency play . Roger both. The third thing is governance and the rules of the road. Emerging markets really need to have a Portfolio Manager who understands the underlying investment, how the currency is likely to move, and the governance structure is transparency, all of that up to snuff so we understand what we are getting involved with. That is why emerging markets needs a good portfolio or manager. Invested inu have watched investments in emerging markets, are there certain good bets consistently . Are there things of the top of the list and things you avoid, or does it rotate often . Roger it tends to rotate often. I would observe that specific autonomy seem to be attractive. Those are the ones that have good Corporate Governance standards, good accounting standards, transparency, appropriate legislation appropriate regulation. There are number of constructs around the emergingmarket space that tend to attack attract good investment and drive good returns. The other thing one should look for his emerging markets that cover the gamut. A lot of emergingmarket investments tend to focus on agriculture or commodities. You are also going to find emerging tigers, so to speak, the next generation of industrial or Technology Driven investments coming out of the emergingmarket space. You need to think about emerging markets as part of a global ecosystem and where is the value being added . It will be in many ways forwardlooking. Hightech is an important part of the emergingmarket story. David the u. S. China trade dispute has come up a lot been concerns about Global Growth. Is it actually assisting asian markets. It may benefit Southeast Asian countries . Roger you are absolutely already seen that. As one talks to industry leaders, they are rapidly adjusting their supply chains to going to the philippines and vietnam. I also expect that the u. S. china tensions will benefit india. Well minister modi may talk about that kind of thing because there is no doubt that whatny ways people look at emergingmarket economies are likely to drive wrote, with the tensions around to drive growth. With the tensions around china, a lot of people are looking to india. A big, stable economy. More to do their, but you are seeing changes because of the tensions. David what about Global Governance . You see the United States pull out of multilateral arrangements. Does that increase the risk involved in emergingmarket investments . Roger it might. One of the phrases i am hearing some observers talk about is going to a g0 world. The issue of who is going to set the world set the rules is becoming more problematic. We are seeing that the europeans are stepping up to set some of the rules around Global Capitalism. The chinese, not get in position to do that. I do think the need to have Global Leadership and now the absence of steady Global Leadership could be playing into global insecurities that may play through emerging markets. Since the financial crisis, we have relied on Monetary Policy, particulate on the fed. How different is jay powells job today that it was when you were vice chair of the fed with the uncertainty around trade. That was stable before. Not so much now. Roger there are additions of instability and uncertainty that any fed leader has to confront. The ones now are very visible. Back when Alan Greenspan was the chair, and then ben bernanke, we had uncertainty about what was driving the u. S. Economy. A lot of debates about productivity growth. Chairman greenspan, using his skills, was one of the first recognize we are benefiting from a productivity increase that allowed him to keep Interest Rates stable. Inflation pressures do not emerge. It is always a role that has a , and a risktainty tradeoff role, which is what chairman powell is doing with this. Ferguson, always rate gap you with us. Tia and they have 1 trillion under management. We will have more from the Bloomberg Economic forum. This is Prime Minister modi at the Bloomberg Global Business Forum and he is speaking right now. P. M. Modi mr. Michael bloomberg, distinguished guests, i ams, Global Businesses very pleased to be here among all of the captains of industry in new york, the nerve center of Global Business and the economy. Bloomberg Global Business forum has given me an opportunity to speak to you about sentiments and opportunities. Indias expectations and growth. Indias growth story. Indias future direction. Grateful to you for this opportunity. , today you have the government in india that went to the papers, presenting the work it had done, and came back with an even greater majority than the last time. The people have given us an opportunity once again. , you oftencussions speak about business sentiment. , 1. 3g these elections billion indians not only express their sentiment but gave a judgment as well. The development was their only in biggest priority. There biggest leaders can understand is his strong mandate in favor of development is in reality an announcement of the new opportunities being created in india. Support a of india notrnment that does hesitate to take the biggest and most harsh decisions in order to improve the business environment. Government ins a india that respects the Business World, that respects the creation of wealth. Know thatou perhaps decided toly we have considerably reduced Corporate Tax. This is a very revolutionary ,tep for attracting investment and after we took this decision, all those i have had a chance to meet from the Business World or speak from the Business World, at theonsidered same time, to increase investment, the government has announced several successive decisions. , juste also done away after the formation of the new government, dunaway with 50 old laws that were obstacles for development. I would like to remind you once again that our new government has not been in office for more than three or four months. Today i would like to say to all of you at this forum that this is just the beginning. There is still a long way to go. Opportunity for the Business World to form partnerships with india. To accompany it on this journey. Today india is in a unique position where our rapid growth enables us to cater to diverse demands. Rapidly defeating poverty, moving up the economic ladder with increasing purchasing power. If you want to invest in a market where there is scale, come to india. Our middle class is a huge segment of people who are aspirational and have a global outlook. Thus, if you want to invest in a latest futurese are appreciated, come to india. Are one of the largest users of the app economy. From food to transport, and from delivery,hyper local start ups are acing everything. If youre going to invest in , that huge market, come to india. Infrastructure creation is expanding at an unprecedented pace, from highways to metros. From railways to ports. Rom airports to logistics each sector is seeing massive investment and tremendous potential. Invest in one of the Worlds Largest infrastructure ecosystems, come to india. We are rapidly modernizing our cities and equipping them with the latest technology and citizen friendly infrastructure. Thus, if you want to invest in urbanization, come to india. Defenseopened our sector like never before. India want to make it in for india and the world, come to india. We are building tens of millions of homes for the middle class, for the poor. This is perhaps largest housing effort in the world. Estate, comereal to india. Today the government is investing in Infrastructure Development like never before. Much more than ever done before. , we planxt few years 1. 3vest approximately trillion in modern infrastructure. Spending, we are also trillions on social interest. For a qualitative and quantitative leap in indias growth story has taken a concrete shape. Now, india has set a ambitious , becoming a 5 trillion economy. When we for the government in 2014, the countrys economy was one. Ximately a 2 trillion in the last five years, we have trillion. Now we have roll up our sleeves and are working to achieve a 5 trillion target. Friends, in order to achieve this ambitious target, we have capability, the courage david we have been listening to indias Prime Minister modi speaking at the Bloomberg Global Business Forum. He is talking about the Growth Initiatives he thinks his reelection has endorsed, including a Corporate Income tax. He has talked about that huge middle class in india and what theyve done in the area of technology. I am joined by craig gordon, our expert from washington. Onset across the way in new york is Lisa Abramowicz with bloombergs content officer. Prime minister modi is saying we are open for business and would like you to come do business. This is what he has been known for before he was Prime Minister. Craig i do not know that anyone thinks of india as a major market. He is hanging out the we are open for business sign talking about a Corporate Tax cuts and a growing middle class that once all of those products. For the American Business people listening, he is laying down the welcome mat. David he is lay down the welcome mat. His American Business inclined to go to india . What are the geopolitical concerns . Marty the concerns are the ability to rely on indian contract law and the other protections that the u. S. Is seeking from china. It is no question there is a huge market in india, but government regulation and the ability to do business and rely on policies that are set in stone is the issue for a lot of is this is. Lisa i have to wonder how much of the u. S. Policies are helping visas,n terms of h1b not granting that make sure more people stay at home. Are we getting any sense of that . No question india may be the beneficiary of Donald Trumps attempts to negotiate a deal with china. India is a sphere of influence in that region. China is a sphere of influence, and as donald trump spelled out in his u. N. Speech, he wants people to look inwardly and a is a gorilla show gorilla in that room. David one of the things we saw from President Trump was a trip on the eve of the yuan general assembly. His donald trump