tv Bloomberg Surveillance Bloomberg May 25, 2022 8:00am-9:00am EDT
>> we are clearly in a bear market. the question is what is going to form the bottom. >> what you get is a summertime bounce. >> we are coming out of an environment where 2021 is probably going to prove to be a peak year in earnings. >> the second round of tightening has not been priced in. >> i think to say that at this point globally there is a recession is a bit premature. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. lisa: important conversations at a highly uncertain time. from the world a comic forum in davos, switzerland, for our audience worldwide, good morning. this is "bloomberg surveillance, " live on radio, on television. we are here debating some of the top issues of the moment amid a pallor of incredible sadness, both with respect to what is
going on in ukraine, and then in america with the shooting in a school that was one of the deadliest in american history. tom: we need to frame the bloomberg reporting now because these are fast-moving stories. the somber nest across america is equaled by what i think has been underreported. there is severe fighting in what i am going to call far and southeastern ukraine. it is beneath the headlines in america, but there is some real tension into crane right now. -- in ukraine right now. lisa: there's been a constant drumbeat of terror and incredible sadness to the new slope. how much that is affecting the conversation here is tremendous. people are trying to look forward as to how to then pit amid such uncertainty, especially with the backdrop of china coming out today and talking about how the economic situation is worse than what they saw at the height of the pandemic. tom: that is the economics at the moment, but with the president speaking this afternoon, bloomberg will give you coverage. i do want to point out our david westin with "balance of power"
at 12:00 noon will clearly address these topics. but whether it is china or this tragedy in america, it is a debate that has not changed one iota in years. lisa: which is a frustration. i hear it underpinning all of the conversations that i have here at davos. people are self-aware and say, people come with lofty goals and than they check them a year later and they haven't changed. there has been a much more practical tone to a number of conversations being adhere, where there is more of a give-and-take. how do we get this stuff done? i'm hopeful that will be effective. tom: the impatience here varies each year. what i would let you talk about now is the data check. as we ended our broadcast yesterday, it was simple. the markets were in disrepair. the markets come back better today, no question about that. a little bit of an ebb in the last hour or so. i guess i've got a 30 year bond under 3% with a tenure, 2.7 3%.
to me, the key thing with will kennedy was i one dollars -- was a $115 print on brent and hour ago. lisa: you're seeing a change in how people are strategizing. you heard that from -- you heard that earlier. tom: beneath the names you know are really first-order people. one is richard, who is richard, who was with us years ago, expert on russia and security, and folded into that is sustainable investing. karen karmiel tambor -- karen karniol-tambor is at bridgewater
associates. how do you fold in the geopolitics of whatever one wants, some better outcome and climate, with this dead serious analysis of geo security? karen: i think what is happening now is there is sort of a tough realization that to make progress on climate, a lot of the letters we have put out there as the most effective are actually pretty inflationary, and that is more difficult to do at a time when inflation is already rising, and of the same time, we can't really thing about energy without also thinking about energy security, so now we have gone from sort of a one dimensional equation to bring carbon down to now i three divisional equation to handle energy inflation at the same time. tom: coal, you can't even do a standard to be asian analysis on australia.
it is such a moonshot right now. are you amending the bridgewater esg view, or are you pausing it, waiting for a place to restart the present esg view? karen: for us there's two types of esg views. one is just you can't really analyze any markets anymore without thinking about environmental, social and governance issues. it is almost silly to imagine you can think about what is going on in the world without talking about what people are going to do about climate change, his government going to work for us, what is going to happen with inequalities. these are critical issues. then people increasingly come to us and say i don't just care about risk and return. i do want to think about the impact my money is having, and cold is a great exhibit because you might do great fun into analysis and say maybe i could make a lot of money investing in coal and get the answer back of actually, i want my money to be supporting the transition. i don't what my money benefiting off of that. so that is really a paradigm shift in our view and what we are seeing in global investors. lisa: this also been a lot of
discussion about greenwashing this year. elon musk really challenged some of the legitimacy of the esg criteria. what is your response to that, especially given the fact that brian moynihan of a mac of america seems to support what elon musk was saying? karen: it is splitting what is the point in time picture in the forward-looking pitcher. for point in time, we should just have good answers. the same way we know if a comedy is profitable, we should have good answers about if a company is a meeting -- is emitting come what they are doing today. then forward-looking, there's always been this agreement. why do we have equity analysts? one analysts will tell you this product is going to work, what is going to tell you this product is going to fail. that is how it should be. this is no different. investors are paid to predict the future. if you are looking at a company and saying how are they going to do over the next 10 years, are they going to succeed in transitioning what they are doing, if a company is promising you i am going to get out of the regular vehicle is this and make all dvds, you've got to decide
if you trust that. that is no different than assessing other things about the future that are uncertain lisa: you were talking about the inflationary aspect of having a greener energy system. it is not just energy. it is broadly across the entire ecosystem, and people are talking about how you make things more sustainable if you have to look and see it is sustainable and china. all of a sudden you might have to paperboy a lot more and do it somewhere else. how much have we actually factored in the inflationary aspects of some of the shift in est types of investing? karen: these are some of the secular forces underpinning the shift from deflation to inflation. every investment we made abroad for 40 years was extremely efficiency producing. got cheaper things out of it. now if we want to invest because we need to turn over our energy system, by definition rebuilding what we have, and we need to do that, if we want to rebuild so we don't want certain providers or we just want to have resilience in the supply chain,
that is proactive new spending that does not create savings way that old ones did. these are secular reasons why you will get inflationary spending. tom: our coverage on green, a newsletter called net zero which is read worldwide. his religion off of his chemistry work is it is science-based. are the corporations bridgewater is talking to, are they science-based, or are they almost prn policy-based? is there science underneath -- pr and policy-based? is there science underneath? karen: two years ago the average investor was saying it is great, you guys are sustainably, but that is not part of what i do. that is different today. so companies are getting increasing pressures from investors, asking tougher questions, they have better data. so what was sufficient even six months or a year ago i be something glossy that does not mean much. tom: are you in big oil right
now? karen: i would say that in a strategy where you care about the impact of your money alongside risk and return, no big oil company as yet has reached that bar, but it can because honestly, they have a lot of expertise that could meaningfully contribute. so we could easily see in the next year or less a big oil company saying this is how we are going to use our expertise. lisa: how much does this moment challenge the move to green, considering that everyone is rushing head over heels into commodities to protect against inflation, including big oil? karen: i think commodities are a very important inflation hedge and the idea that you would not own commodities if you care about the transition is totally wrong. do you know how much we need to get out of the ground of things that are not oil, whether it is copper, lithium, iron, you name it, in order to have a transition? there's no tradition without commodities. to be green, there are definitely bad practices, but responsible investors should try to shift those practices because
there's no future without getting more of those things out. the reality is these are long apply-demand -- supply-demand dynamics. for an investor that is seeing supply and demand pressures and saying i need inflation or protection, these are great inflation protection assets. tom: karen, thank you. a topic some years is front and center. i will be blunt, it is distracted this year at distracted davos. lisa: to the extent that the conversations are happening, they are much more realistic. is it fair for me to say that? they are much more tangible on how we do with the current needs of actually using fossil fuels to transition to something that looks different in the future. tom: but critically, that is based on price. price has changed. because price has changed, the dialogue has changed. lisa: but how much are people shifting away from saying price solves all if you let oil prices
go, because it affects people in a different way? it is a nuanced davos. how about that? tom: i look distracted davos. they are distracted by a lot going on. we got the president of the united states this afternoon on bloomberg. again, david westin and "balance of power" with a difficult show at 12:00 noon. coming up, the gentleman from cisco, an annual visit with chuck robbins. stay with us. from davos, on radio and television, this is bloomberg. ritika: keeping you up to date with news from around the world, with the first word, i'm ritika gupta. it is the deadliest shooting in almost a decade and a school. a teenage gunman opened fire at an elementary school in uvalde, texas, killing at least 19 children and two adults. a number of others were wounded. law enforcement later killed the 18-year-old attacker. investigators are examining whether he made statements online alluding to the attack
hours before it began. china's military has sent a warning to taiwan and the u.s. it conducted aerial and naval exercises around the island after president biden said the u.s. would intervene the military to defend taiwan from any attack from china. the chinese military says u.s. actions regarding taiwan will lead to a dangerous situation. in the u.k., prime minister boris johnson says he bears full response of the libby for illegal left on -- illegal lockdown parties at downing street. johnson told parliament he was only briefly at the parties in question and did not know about the bad behavior that happened later. in georgia, governor brian kemp won the public and primary, dealing a blow to donald trump. he defeated the former president's hand-picked choice, former u.s. senator david perdue. the trump camp incessantly criticized camp for refusing -- criticized kemp for refusing to turn over the state's 2020 election results.
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>> for the last three months the focus has been ukraine, but of course, the confrontation is also between russia and nato. it is not just a cold war between russia and nato, but there are elements of a hot war. so of course, people are rather disconcerted by that. tom: ian bremmer on the new book, "the power of crisis." he's front and center here on a
multiple set of crises. i think the number one thing from ian bremmer, it is his focus on europe from finland on down to mr. erdogan of turkey. lisa: this is a continent most roiled by the ukrainian conflict. how do you think energy policy, how do you rethink the continent with a new threat and a new eminence? tom: some of the present zeitgeist really focused on putin. he made very clear he's not writing of a short-term for mr. putin, that this could be lengthy and changing for the world. we welcome all of you to the world economic forum at davos for you we are following the markets, of course, following the tragedy in the united states as well. david westin with coverage at 12:00 noon. annmarie hordern is at the white house. of note in the markets today is oil at $115. it is a very different visit as he has recovered, chuck robbins, chief executive officer at cisco, over what the tar heels did in basketball last year. how did that go down? chuck: i was very proud of them,
don't you think? tom: i think so. chuck: i actually went to the game in new orleans and cheered them on, and they did a great job. they had a wonderful season. tom: you were there in mathematics. you go in your freshman year, calculus of one or two or three levels, and the talk about the first derivative and the second derivative or get i would say this to john chambers as well. you are leading the third directive -- the third derivative at cisco right now. what is your day like, trying to figure out where the stuff is coming from and where it is leaving from cisco to your valued clients? chuck: first of all, thanks for having me. it is good to be here. we have an incredible team on the supply chain side. before this crisis we are currently facing in the components world, the endless firm that rated our supply chain number one in the world two years in a row, my team thinks that was the kiss of death because the last year has been very unfortunate, but they do a great job.
so my days are really about how do i help them. they identify where i can get involved in be helpful. lots of ceo to ceo discussions with our suppliers. approving extra dollars to be spent to try to solve some of these problems. tom: i want you to give us one vignette of one discussion. you don't need to name names. but are you talking to ceo's about delivery or manufacture or flying something from point a to point b? i think a large part of our audience does not understand the actual sweat that is going on in this world crisis. chuck: our products have anywhere from 5000 to 30,000 individual components, so when you get all of those parts together, we call it squaring a set. you have to get all 30,000 to sell the product, to ship the product. so we have lots of final assembly and test plans, so what we have been doing lately is
find ourselves with inventory in one place that we need in another place and we got private jets flying all over the place trying to get this stuff going. tom: this is the new just-in-time. lisa: exactly, just in time, try to get the thing manufactured. how much are we just-in-time in terms of transforming a supply chain and is size the key determined? do you have to get bigger in order to have a good supply chain? chuck: scale helps, for sure. we have designed for efficiency and cost forever because we have never experienced this before. we built our products for speed of market, simplicity of design, so we built them, we will manufacture it for a certain component and build around it. the whole industry has done that. lisa: i guess i ask this because broadcom is buying vmware. vmware was thought of as a possible acquisition target for you. would you think about a competing bid or possibly having a similar type of acquisition? chuck: that went sideways from
supply chain in a hurry, didn't it? [laughter] let's talk about the component shortage. the reality of the supply chain situation is that every company, every electronics company is having a redesign free geographic resiliency, resiliency within the design of your product, redundancy, security. that's what we are going to be embarking on, and it is going to take another year or two. tom: i'm not going to let you off on vmware. i remember and esteemed ceo saying when we make an acquisition, we are acquiring engineers. in the new trauma, yes in retail, but in the new economy that we are in, are we going to see transactions and combinations to coalesce the thing you need most, which is engineering? chuck: from an m&a perspective, the question that people are asking is, given evaluations have finally come down, they have been extorting their for the last couple of years, does that change our m&a strategy. i said no, it does not change
our m&a strategy, but it might change a target's willingness to discuss, to talk. you've got a lot of these startups that have been running for 5, 6, 7, 8, 9, 10 years, they have never seen a downturn. so they are trying to get their head around is this real, was i worth that or am i worth this. we are always looking. we always have a list of anywhere from 10 to 30 targets that we could be looking at at any given time. so obviously if we find something that they are more willing come of the challenge we had over the past couple of years is competing with ipo's. lisa: what you say is fascinating, and it was reflected in a "wall street journal" article about big tech, saying they see this as an opportunity. they are using that cash to possibly make these acquisitions. do you think it is because of
the willingness of some of these startups to really be acquired that will really drive that? chuck: i'm sure some of them are still trying to figure out if this is a new reality or not, but there are some of them that will say, given the uncertainty in the world, if we are looking at our strategic options, this one may be a lot better than it was six months ago. when they thought that every ipo made you a alien or. you could see more, for sure. we have a strong balance sheet. tom: your balance sheet is exquisite. does the financing change with a lift in interest rates here? has enough medics changed? -- the mathematics changed? chuck: we build that into our models. tom: could you give us a few names? chuck: sure. [laughter] tom: chuck robbins. lisa: i was like, is he going to do it? absolutely not. tom: you are as rude as you
were at those five parties last night. chuck robbins, thank you so much for the lack of news. chuck: my team is going to appreciate the fact that i did not make any news. tom: that is true. lisa: i think it is actually important to note that the valuations have changed for the founders of some of these companies, and yet the idea of a changed reality for financing paving the way for some of these acquisitions. tom: if we get to january, i wonder with the bond adjustment is going to be like for people. lisa: who knows? i wonder with the acquisition is going to be like because there finally might be some that are willing to sell. tom: coming up, the swedish finance minister. there will be more news then there was with chuck robbins. this is bloomberg. good morning. [laughter] ♪
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the church behind us, 13th century. go mckee was here in the 14th century at the meetings of the world cannot -- michael mckee was here in the 14th century at the meetings of the world economic forum. with that, we need to go to mike. we miss you come our economics and policy correspondent, with economic news in new york. michael: and when i was there it was not the piano bar, it was the harpsichord bar. [laughter] durable goods orders up 0.4%, down from 1.1% in the month of march. ex-trans rotation, 0.3%. as of those slower than expected. the forecasts are both durable goods and ex-transport was 0.6%. part that economists like to watch because it goes ado gdp, that is a 0.3% gain, down from a 1.3% gain, so we are seeing a bit of weakness there. shipments, which make a difference in terms of what we are looking at for this quarter,
shipments were up 0.8% for capital goods, nondefense, which is good news in the sense that it suggests we are going to have stronger growth this quarter. i might also mention the mortgage applications index fell another 1.2% earlier today. it just goes to show you the fed is beginning to have an impact on the economy here in the united states. tom: what is so important here is to summarize the emotion. there's some good news. there's a lot of bad tea leaves out there. within all that you read, which way does that tilt right now? michael: you are tilting towards a slowing economy, and i think the problem is we get caught in between those on wall street who see the market going down as a disaster of all-time, and people on main street who are seeing things slow down, but they are not losing their jobs yet. so there are things that matter to them more, inflation being
one of them. this is what is supposed to happen. the fed is supposed to tighten and we are supposed to see things slow down so that maybe we see inflation come down. lisa: and that is what we are doing right now, looking at the markets, which is that slow down the people are looking to. just to run you through what we are seeing, following on what we saw yesterday, also weaker than expected data across the board. we are seeing losses continue to accelerate or deepen. s&p futures down 0.5%, 3920. the euro losing a little more versus the dollar. dollar strength today, bursting yesterday's strength in the euro. then 10 year yields going back to the lowest since march as we take a look at a deceleration in growth and possibly inflation longer-term. tom: miketom:, what are the ramifications if we have a five-year real yield that is becoming more negative and also all of a sudden the 10 year real
yield nicely below zero, positive 0.20%? what are the ramifications for our central bank if we returned to negative real yields? michael: let me do a bit of promo for our coverage this afternoon of the fed minutes. people are going to be looking to see what the fed thinks of that and how much they make of financial conditions tightening versus interest rates rising. financial conditions have tightened a lot. this morning, jim vogel was saying it is unusual because bonds are trading along with stocks in this situation. that is going to snap back and rates are going to rise significantly once the market really fear -- really figures out where we are with this. is there going to be a fed put? right now it does not look like there will be. lisa: we also saw downward revisions on a number of different things, including durable goods.
what do you make of the downward revisions? michael: you can't make too much of them because the data are incomplete when they first come in. we will get an update on this when we get the factory orders report. it contains durable goods revisions. but durable goods are one of the more variable economic statistics. they go up and down, and it is kind of hard to tell what is going on. interestingly enough, defense capital goods, orders are up 2.5% after being down 8.6 percent. i was expecting one of these months we were going to see a lot more orders because we are sending so much of our stuff over to ukraine or you would think they would be ordering more to replace it. tom: michael mckee, thanks so much. again, the federal reserve minutes this afternoon, michael mckee true expert insight on the parsing of the word several and some and a few. lisa: how do you feel about it really? tom: i got a lovely email yesterday with the former prime
minister of finland. i tried to mention something most americans don't know about, and that is the winter war of i believe 1939, where 25,000 of finland and so many others of scandinavia gave their lives. this is front and center for the discussion of finland and sweden as they consider a new russia. but kyle don berg -- is the finance minister. however up to this change for sweden knowing the history of world war ii and knowing where we are going now with russia? >> it is a huge decision for us because we have been not aligned for two years, so we have been in peace for the longest time. for us taking the decision after the russian invasion of ukraine
to change and to see that our security is stronger within nato than outside, it is a historic decision from our part. tom: i have never understood the politics and social humor or seriousness from the distance from oslo to helsinki, in denmark as well, across all of scandinavia. i'm not informed on it. how united is scandinavia, denmark, norway, sweden, finland at this time of crisis? mikael: enormous unity because we share borders, we share history yet as you mentioned, finland and sweden were the same country for hundreds of years, before finland became their own country. they were part of sweden again my grandfather actually died in the winter war in 1939. my mother was four years old when she was sent from helsinki to sweden. tom:tom: so what was mr. putin
thinking that when that history? i don't understand, giving everything i have read about the resiliency of the baltic sea and the people that surround it, frankly including northern germany at the time. what did he misjudge about sweden? mikael: i think he misjudged the situation in ukraine. he thought he could go in, take ukraine, and the people of ukraine and russia would unite. i think that was a great mistake because now they invaded a democratic country, they sent a signal not least finland, with a 130 mile -- mile in english, i don't know the english word -- a very long border to russia. lisa: it is a historic moment for your bid to nato. it is also historic with some of the economic backdrop you're facing is finance minister and the inflationary inputs. i know a lot of european countries are turning to subsidies to offset the burden
particularly for lower income. what are you working toward? what is your next plan? mikael: first of all, sweden is in a different position. we don't have it binance on russian oil or gas. we have 100% fossil free energy system in sweden. but we get affected in a way because of joan to praise his system -- because of the joint pricing system in europe. we actually went in and gave support to households with very high electric bills, and now we also have a scheme that we lower the kind of burden on people that drive cars. sweden is a very long country. you have to have a car to live your life and go to work. lisa: how do you counter the fragmentation of a system unified only by how high the prices are for everyone? mikael: i think europe has shown tremendous unity, and together with the u.s. on sections on russia. just six months or a year ago, people were talking to europe, can europe unite? will europe split up? now we see a more united europe
than ever. so this crisis has actually brought europe together in a tremendous way. tom: swedish economics is acclaimed, the country reasonably central to monetary theory and thinking has been there forever. tell us about the swedish currency with europe. we look at euro-swissie, euro hungarian mortgage proxy as well. tell us how you treat the swedish currency. mikael: it is the central bank that handles the currency. tom: it is davos. no one is listening. [laughter] mikael: i could go into the constitutional committee to have a opinion about the central bank and sweden because it is under the government, not the parliament. they have a plan for it going a bit faster than the european central bank, but a bit after the american fed, so i think that's where sweden usually are, and between u.s. and europe. tom: i don't mean to interrupt,
but do you have swedish central-bank minutes like we do? we report our minutes six weeks after the meetings. mikael: yeah. tom: do you read them? mikael: the central bank always calls me and tells me about their decisions, so i understand it. lisa: really, you are asking for justification for you're not reading the minutes with the swedish finance minister? we all know this, i know. he is looking for justification from the finance minister of sweden for not reading the minutes. you didn't get it. tom: some, several, if you. lisa: i think it is fascinating. tom: you will read them for me. minister, thank you so much. a tumultuous time. really can't say enough about this. that has been the backdrop in davos, these decisions of finland and sweden. we did not even have time today to get to these readily delicate decisions of sweden with turkey. lisa: exactly. how do you win over turkey at a time when that seems to be the biggest sticking point, with the historical reference of how unique this is to actually
engage after being neutral for so many years. it highlights how different this moment is. tom: of course, look to bloomberg u.k. for a lot more coverage on that as well. coming up, with the markets in disrepair after those economic reports that we saw, the global infrastructure chairman at carlyle. from davos, lisa abramowicz and tom keene, on radio and tv. this is bloomberg. ritika: keeping you up to date with news from around the world, with the first word, i'm ritika gupta. in uvalde, texas, all of those killed in an elementary school where in the same fourth-grade classroom. at least 19 were killed, along with two adults. a number of others were wounded. the killer was shot and killed by an agent that rushed to the scene.
ukraine's president volodymyr zelenskyy says there are no prospects for diplomacy unless russia pulls back troops to preinvasion positions. he vows that they will fight until moscow returns all of its territory. russia is one step closer to a default after the u.s. treasury let a key sanctions waiver expire. american banks lending are now barred from accepting bond payments from russia's government. that indicates the u.s. would rather force russia into default other than spend its dollars to benefit american investors. chinese premier says the country is facing economic difficulties much worse than at the start of the pandemic. he urged that efforts be taken to ensure reasonable growth in the second quarter. china is all but certain to miss its growth target by a large margin. for the first time ever, much of that is due to covid zero, which is hammer to the economy. bill there -- billionaire nelson peltz's fund manager it says it
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>> inflation is so undercutting of society and builds so much anger, so i think that dealing with inflation, dealing at a time when world energy is disrupted, food, i think it is a troubled period head, and you are going to see social instability as a result in these countries. tom: a visit with the wonderful daniel juergen of s&p global --
daniel yergin of s&p global. i thought it was wonderful to talk to him about the shifts mentioned. lisa: how different it is to have a shift away from one of the worlds powers at one point, russia being basically eggs eyes from the entire fossil fuel system that basically excised -- basically excised from the entire fossil fuel system. tom: right now, this is an important conversation for markets. something that is in davos, but i think in a really clumsy way. in davos, painted on every hotel come on every wall come on every storefront, is a nation or a company bragging about infrastructure. we are going to build this. we are going to build that. infrastructure is misunderstood. infrastructure is easy to talk about and much harder to do. at carlyle, doing it is a
gentleman from quebec hydro of years ago, the global infrastructure chairman. thank you so much for joining us this morning. what is the biggest thing we get wrong about the ginormous infrastructure projects you are looking at? >> i think the reason why you see that everywhere in davos's for a good reason. the world is in dire need of infrastructure. for decades there have been underinvestment across the sector and in social needs when you look at civil info structure, roads and bridges, energy infrastructure, other sectors, digital infrastructures and the more recent years, the economy has been fast digitalized across sectors. that has been accelerated by the pandemic. that creates huge investment requirements in data centers,
and fiber into homes, and the like. tom: what is the holding up of this, if carlyle and others are off to their eyeballs in capital? why is infrastructure delayed? macky: it is delayed by the means of old infrastructure, but also new sectors. the energy transition is requiring huge quantities of investments to be able to meet that climate challenge that earth faces. i think the challenge is the sheer nature of the investment needs. i think governments are doing what they can come but the private sector and private groups like carlyle, private groups have a role to play because we have the capital experts and capability tools to contribute to filling that gap, but it is the size of it. lisa: how difficult is it to
gain out profitability of a company in transition, the sort of bedrock of a transition, particularly with energy? macky: we take as a printable to carefully select our investment to make sure that every investment we make is profitable. we manage money for private people. so we believe that is present everywhere, and particular in the energy transition. the investment opportunity created by the energy transition we think is significant. it is possibly one of the most significant in the investment space. lisa: can you give us a sense of tenable types of investment's and the roi you look at? macky: let's take renewable energy, which is an area that we have been active in, and sectors like wind, solar, emerging sectors like energy storage in the form of batteries. emerging sectors which clearly,
if you have the skill set and capacity to develop these projects, to properly locate a solar project in the right location, close to a load sample or there is a good solar resource, you are able to generate with that capacity robust, double-digit returns. as a result of that development, being able to deliver that approach to customers that have an appetite for clean power. if you invest in existing, already developed renewable projects, then you do not have that development premium, so you are investing into more operating renewable projects. in that case you may be looking at low double-digit, but also the single digit, i would say. tom: do you to see a longer,
higher rate regime before they inch up? macky: we are in an environment where rates are increasing, and whether i would say it is an important point for investors is to face that challenging environment. there is a need for a diversified portfolio. we believe that infrastructure contributes in a robust way to a portfolio that is going to be more resilient in that environment. the reason this infrastructure -- on the revenue. often if you take a renewable project, the revenues are contracted long-term. within the taxation mechanism in the contract, so i don't think you make more money out of either interest rates, but you get the degree of protection because your revenues are annexed to that. tom: please visit us in new
york. there is so much to talk about here. i got one question. to the miracle of la guardia, the world's worst airport, finally with a consortium of investors. there's optimism there that we can refurbish and rebuild. quickly, ken carlyle take on the montreal canadiens and refurbish and rebuild them as canada's infra structure project? [laughter] macky: that is i am sure a project that the challenge might be difficult, but i would remind you that canadians finished last or close to last in the league. lisa: so you would not invest. there you go. [laughter] tom: i'm sorry, there's no internal rate of return this year for the montreal canadiens. macky tall of carlyle with us. we continue another hour here from switzerland. this is bloomberg. ♪