Transcripts For BLOOMBERG Bloomberg BusinessWeek 20170715 :

BLOOMBERG Bloomberg BusinessWeek July 15, 2017

Peak oil which is usually focused on supply. What the story talks about his oil demand is peaking sooner than a lot of governments, a lot of executives may have thought. That is down to several factors. Electric cars are really gaining in popularity. Chinas growth has slowed and there is pushback on a mission for cleaning up the environment. That has led to a quicker slowdown in demand for oil, obviously coupled with extraordinarily low prices. That is pressing on the demand side of the equation. Oliver what i thought was interesting is that when you think about potential peak demand for oil, there is a lot of cataclysmic theories you can come up with because so much of the worlds biggest powers rely on that for income. In the story none of these institutions really seem too alarmed about it yet. Megan i think it will get more alarmed. The number one example of a place that is reinventing what is doing is saudi arabia with aramco and how they are trying to reinvent their economy Going Forward to deal with what is going to be the decline over time of oil, which has always been predicted, just not this rapidly. This has the biggest ramifications for the middle east. In the u. S. , we remember in the late last decade is talking about Oil Independence for the u. S. We had fracking and the rise of natural gas, etc. , and how we as a country regarded our dependency on foreign oil is a key foreignpolicy objective. This is a big economic development, but also a huge economic and larger Political Development in how it reshapes these power structures between the u. S. , china, and the middle east. Carol we dont have enough oil, we need more oil, we need to drill. All of a sudden maybe we have enough. Megan some areas will never get drilled. The battle we have had over alaska and offshore areas where fishermen and protected waters. That is changing rapidly. Mobile be so interesting is how these companies diversify this the bps, royal dutch shell, how they deal with the rise of solar and exploit those as well in terms of petrochemicals. Oliver lets move to the cover story, the profile of someone Everybody Knows and that is Lloyd Blankfein. Megan they should know. This is a project close to my heart. As a former banking reported during the crisis. I think people forget if you look across the entire group of bank ceos in europe and the u. S. , lloyd and jamie dimon are the only two left standing. What is great about this story is lloyd has sort of been behind the spotlight. Jamie has taken a more senior role at j. P. Morgan chase and putting himself out there, but lloyd has gone to the place where so many of us go to air our Public Opinions on twitter. He has emerged on twitter. His first was critiquing Donald Trumps decision to take us out of the paris climate accord. He is trying to shake up with the future will be in terms of trading, fixed income, and where he is repositioning the bank and doing a soup to nuts look at the business. He has come back from a cancer scare and he is playing an essential role in the new goldman. I want to call it lloyd 8. 0, but it is lloyd 3. 0. Dakin we are seeing this as lloyds third act. If you think that from 2006 when he became Ceo Goldman Sachs until the crisis, that was the first act. That act was very successful for them. They avoided the fate of some of their chief rivals. They turned up incredible profits for wall street. The second act was after that, the reputational damage, the senate in congressional testimony lloyd had to do. Now we are calling this the third act, the idea of after he has come back from cancer about 18 months ago. Now he is sort of reinvigorated. It is at a time when goldman has some of the Biggest Challenges they have faced in quite some time. Oliver does he see it that will . You set down with him and had a conversation. Does he view it as a new beginning as well . Dakin he laughs at my construction of the third act and wonders what happened at the end of the third act. Carol tragedy, comedy . Dakin exactly. He recognizes there is a challenge and a lot of people are questioning the Business Model that goldman is wedded to. Carol i feel the big banks have gone through a comeuppance since the financial crisis and a rethinking some other strategies. What is different about goldman from some of the other big banks . Dakin going into the crisis goldman was about Investment Banking and trading. They had a smaller Asset Management arm and a principal investing arm. Other banks did to. Too. Her banks did, what other banks have done is they changed the mix substantially. Morgan stanley is one good example. In their sales and trading business they cut 25 of their people. They look at the new environment and said, hey, the trading we used to know and love in the early days are not coming back. When he the right side our business. Lloyd has taken a look at the same environment and said, a lot of this is probably cyclical. If we wait it out, we will be the big winners because of the Morgan Stanleys of the world pullback and reduce their commitment to certain markets, when those markets come roaring back to life goldman will be there. They have always been there and they will be rewarded for that. Oliver when you talk about the core of the business and what its Going Forward, there is a bifurcated approach. There are a lot of new things happening at goldman that you address in the story, the Consumer Lending and focusing on Asset Management. But on the other hand, there is a sort of going against the grain. Sticking with some of the higher risk stuff. Is that where he is indeed breaking from the pack or is it the other one which is expanding into different areas . Dakin good question. That i took for the story is he is staying more true to his Business Model and perhaps others. Lloyd is a student of history. In his spare time he reads a lot of books about history. The people i talked to in reporting this story, a lot of them rock that up and the idea that he sees a lot of these things as cycles. Whereas others may see them as structural changes. It is his approach the history the Great Depression took a decade to get over. But guess what, you might not have thought it was ever going to end, but it did and things got better. If you look at the cycle from a long enough view or long enough lens, you would realize things do come back. Oliver turning Lloyd Blankfein into a cover model. Rob we were negotiating for a couple of days. It was lastminute. The day we shot him we found out we can move ahead. We got exactly two minutes with him at the goldman offices but we got some great options. Oliver the pictures turned out fantastic. They describe a character a lot of people maybe dont associate with Lloyd Blankfein. Rob you think of ceos and bankers as these austere people, that he had a very positive energy. Without him smiling and laughing. It was great. Oliver and he still has the beard. We are going to talk with john about his story on brussels. Tell us about the international cover. Rob it is largely about the euro, the eurozone and how they are doing well after brexit. All the stories are pretty much holding hand. It is not when you hear about brexit, there is a lot of negativity. But there is an upside. Oliver unison coming out of it at the end of the day. Up next, brussels bureaucrats get a second wind. And how companies are using electronic dancing to reach young consumers in pakistan. This is Bloomberg Businessweek. Oliver welcome back to Bloomberg Businessweek. You can catch is that businessweek. Com. Is leading to a bit of a rebirth in brussels. John they are really two big reasons why brussels is suddenly back. One is brexit that fundamentally rather encouraging people to leave actually persuaded a lot of people to stay. The European Union may have its faults, but god knows it is better than what is happening to the british. The second thing which is very important with the arrival of emanuel macron. If france reforms, maybe mrs. Merkel will be more climate. To some extent brussels seemed dead 18 months ago and now seems strangely alive. The elements of life are partly marcon, partly brexit. Brexit shows how much more power there is left in it. The british are not running into the process of having pontificated and said the stuff about no deal is better than a bad deal. They now have arrived to negotiate in brussels. I was there when they came. They have just encountered what monty python recall the bleeding obvious. The rules of the European Union are simple. When you leave it, most of the advantages are with those that remain rather than those that quit. The british can bluster as much as they want, but basically it is far more essential for the british economy than the other way around. There is a limit the other way. Brussels, i think sometimes gratuitously, has been enjoying explain to the british all the reasons why they have got that wrong, and the fact that the people mrs. May sent to brussels they have some respect for the main negotiator. These people want a painless process. It is not. Oliver it is a Second Chance and a lot of things have to fall into place. John that is right. Everything in a sense is like a lazarus moment. There are other good things happening in europe. The economy is finally growing. You can argue things like the Banking Union or the banking side of it the venetian banks being tied up. Europe was famous for having happening in europe. Failed reform. All the things american businesspeople in particular scorn brussels for. Some are beginning to move a little bit. That is all good, but everything in this narrative work gradually things begin to happen again. The idea in brussels that macron and merkel will combine and get integration in the eurozone. That is the key it. Under the surface nobody expects the European Union to reemerge as this sort of force for a greater union. People are beginning to help, especially in brussels and other parts of europe, that will happen is there is greater integration in the eurozone. There are a lot of economists who would look at that and say that makes sense. It definitely makes sense. It is very hard to have a Currency Union without some kind of Banking Union, which they still dont really have, and risk sharing. All those sorts of things. The fact that mrs. Merkel talked about a European Finance minister, that gives hope to that. If the rest of europe reforms, it is in germanys interest as the main beneficiary of the euro to support them. That is all great, but it depends on macron succeeding and we dont know its going to happen. That is part one. Part two was if you are a german taxpayer, humidity forcing yourself into a position where you might trust marcon a little bit, but any promises you make through the European Union or the eurozone also apply to you. Italy has 120 debt to gdp. Balisconi is not a good be a friend to the euro at the moment. That is a problem people are thinking about now. That is a second later of problems. The fundamental reasons are that europe has to start thinking about how exactly it should be. Not everything the british said was wrong. Oliver up next, the story behind the far right information of donald trump. And donald trump juniors emails and meeting with the russian lawyer. This is Bloomberg Businessweek. Oliver you can catch us on the radio at sirius xm, 106. 1 fm in boston, 99. 1 and washington, d. C. In london on mux3, and in asia on the radio plus app. Questions remain about the legal ramifications of donald trump jr. S Communications with a russian lawyer. Paul barrett looks into the possibilities. Paul the meeting was advertised to trump jr. As one where he would encounter a kremlin connected lawyer who was ready to convey some kind of derogatory information about Hillary Clinton that was coming from the russian government, and all of this was part of a russian government effort to help donald trump. That is what we know so far. Carol we know that because we see that in these emails . Paul that is correct. Released by donald trump jr. Because he was under pressure with the New York Times threatening to publish a story that wouldve included all the information. It was a like he actually did this out of a real sense of transparency. Oliver and his reasoning changed over the news breaking. What did donald trump jr. Or donald trump senior, the president , have to worry about from this . Will be the investigation that happens here . Paul there are several levels of problems. At the highest level you have the question of credibility. Trumps senior and junior have been denying they had any contact with the russians in connection with the campaign. That now looks like a series of lies. As a political matter, you have the president potentially further weakened by this scandal gaining momentum rather than being sidetracked and resolved. I think it will be at a political level difficult for the president to get anything accomplished in washington while it continues to percolate. Boiling get down to the legal level, i think the potential criminal liability created here is a conspiracy to violate u. S. Election law. That takes a little explanation. The law provides that for nationals are not allowed to make occupations or donations or to provide anything of value, that is the key language, to u. S. Politicians. It is also illegal to solicit from a Foreign National a contribution or anything of value. The theory here, if a prosecutor was so inclined, would be that donald trump jr. Was eager to receive or possibly was solicited information that was a thing of value, information that would hurt Hillary Clinton and help his fathers candidacy. That is not a sort of conservative or safe theory, is an aggressive theory for a prosecutor and rests on how far the definition of thing of value stretches. I think the word stretches is the right word. It stretches the election law some, but it is not something that is laughable. It is something that is serious and robert mueller, the special counsel and his staff are prosecutors will at least consider. Oliver staying focused on the trumps, joshua green out with a new book detailing how the president from running in liberal circles to quitting far right ideals and conservative principles in his run for the white house. We talked with matt phillips. Matt josh green has had a front row seat to trumps evolution from reality tv star into president ial candidate into president. To toll that in a series of interviews with steve bannon,s political strategist. It goes back to the roots of the bannontrump relationship and reminds us even though it was not that long ago about trump was this multicultural pop icon 1012 years ago as the apprentice was getting all kinds of great ratings. It was popular among minority voters and how he kind of burned that to the ground and embraced this birther movement, this nativist populism that bannon has pushed them towards. Carol i watched the apprentice. It was a Diverse Group of contestants. Young and old, black and white, celebrity and noncelebrity, celebrity. I forgot he really did appeal to minorities. How popular was he because of the apprentice among minority groups . Matt the show was seen as this multicultural phenomenon that took everybody by surprise. It debuted in 2004 as nbc friends franchise was going away. And say the thursday night primetime slot and came out with a bang. Corporate america loved it largely because of how well it through minority audiences. He was not only popular, he was more popular among blacks and hispanics that he was among caucasian viewers. Advertisers loved it because you could get a wide swath of the american landscape by advertising on it, and they did a very good job of presenting a picture of minorities to america that really appealed to a lot of blacks and hispanics. Today as we sit here and look back at this 13 years ago, it seems crazy. But that was donald trump. Carol what is interesting, the popularity among minorities was something that advertisers and major brands caught on with. Matt thats right. It is something the Republican Party craved desperately. He had basically in his hands the one thing the Republican Party had been going away from since w. Bush, losing popularity among minorities, especially hispanics. He had the potential to kind of bridge this gap that republicans have been looking for for a long time to bridge. What is interesting is the story that josh green tells is how he basically sacrificed that to embrace this much more populist, nativist narrative. Oliver up next, whether fertility market is booming in china. And a Game Changing court ruling on one of monsantos most popular products. That is next on Bloomberg Businessweek. Oliver welcome back to so we need tablets installed. With the menu app ready to roll. In 12 weeks. Yeah. The world of fast food is being changed by faster networks. 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