Jan 21, 2020

Davos: Trump Acclaims His Own Economic Achievements:

By Iain Rogers and Chris Reiter

The world’s rich and powerful are in Davos, Switzerland, for the World Economic Forum’s 50th annual meeting, and the gathering will be closely watched to see how the global elite aims to tackle issues they helped create, above all climate change.
President Donald Trump’s appearance, which comes on the same day his impeachment trial starts in Washington, began with him calling the trial a “hoax” and “disgraceful.” In his speech, he lauded his economic achievements and said the U.S. is “thriving” and “winning again like never before.”

U.S. President Trump At The World Economic Forum (WEF)
Donald Trump delivers a speech on the opening day of the World Economic Forum in Davos, on Jan. 21.
Photographer: Jason Alden/Bloomberg
Meanwhile, Swedish activist Greta Thunberg, who was in the audience for Trump’s speech, stepped up her criticism of governments and companies for not doing enough to tackle climate change.
For in-depth coverage and analysis of Trump’s speech, check out our TOPLive blog on the Bloomberg Terminal. To get all the daily highlights delivered to your inbox, sign up for the Davos Diary newsletter.
Here’s the latest (time-stamps are local time in Davos):

Blackstone’s Schwarzman Reacts to Trump Speech (12:30 p.m.)

“It was for several different constituencies,” Blackstone Group Inc. Chairman Steve Schwarzman said in an interview with Bloomberg TV. “This was a speech to basically say ‘I think we need some perspective and let’s look at what’s happened under this administration.’ That is not just for domestic consumption, it’s meant to be heard in the broader context.”
The billionaire co-founder of the New York-based private equity firm has previously advised Trump and was present in the White House when he announced the first part of the China-U.S. trade deal.

Trump Urges Nations to Join Together (12.15 p.m.)

Trump concluded his speech by calling on world leaders to join together to “make our nations stronger, our countries safer, our culture richer, our people freer, and the world more beautiful than ever before.”
“Above all else, we will forever be loyal to our workers, our citizens and our families, the men and women who are the backbone of our economies, the heart of our communities and the soul of our countries,” Trump said. “Let us bring light to their lives one by one and empower them to light up the world.”

Trump Hails ‘Blue-Collar Boom’ (12 p.m.)

Trump said the economic strength of the U.S. is benefiting ordinary people and “the workers come first” under his administration.
“The U.S. celebrating the dignity of work is a fundamental pillar of our agenda,” he said. “This is a blue-collar boom. The American dream is back, bigger better and stronger than ever before.”

Trump Attacks Fed for Interest-Rates Policy (11:55 a.m.)

Trump renewed his feud with the Federal Reserve, saying the central bank raised interest rates too quickly.

These great numbers are “despite the fact the the Fed has raised rates too fast and lowered them too slowly,” Trump said. “I see such tremendous potential for the future. We have not even started, because the numbers we’re talking about are massive. The time for skepticism is over.”

Trump Trumpets His Economic Achievements (11:50 a.m.)

In his speech, Trump said that the U.S. “is in the midst of economic boom the likes of which the world has never seen before.”
“We’ve regained our stride; we discovered our spirit and reawakened the powerful machinery of American enterprise,” Trump said. “America’s thriving; America is flourishing and, yes, America is winning again like never before.”

Trump Says Impeachment is ‘Just a Hoax’ (11:40 a.m.)

Trump told reporters on the way into his speech that the impeachment trial is “just a hoax” and a “witchhunt that’s been going on for years.”

U.S. President Trump At The World Economic Forum (WEF)
Donald Trump speaks to the media as he arrives to deliver a special address at the World Economic Forum in Davos, on Jan. 21.
Photographer: Simon Dawson/Bloomberg
“Frankly it’s disgraceful,” he added. “We look forward to being here. We’re meeting with the biggest companies in the world, the biggest businesses in the world and world leaders, all for the benefit of the United States.”

Immigrants Key to Growth, Microsoft CEO Says (11:40 a.m.)

Microsoft Corp’s chief executive officer warned that countries that fail to attract immigrants will lose out as the global tech industry continues to grow.
“Every country is rethinking what is in their national interest,” Microsoft’s CEO Satya Nadella said in an interview with Bloomberg Editor-in-Chief John Micklethwait.
Governments need to “maintain that modicum of enlightenment and not think about it very narrowly,” Nadella added. “People will only come when people know you’re an immigrant-friendly country.”

Nokia’s Suri Predicts Productivity Boom (11:35 a.m.)

The next industrial revolution will bring about “massive productivity growth” the likes of which hasn’t been seen in decades, according to Nokia Oyj Chief Executive Officer Rajeev Suri.
Speaking on a panel about manufacturing, Suri estimated that productivity should increase by as much as 35% starting in about 2028. The gains will be seen first in the U.S. and a few years later in China, India and the European Union, he predicted.

Naspers CEO Sees Growth in Second-Hand Clothes (11:30 a.m.)

Naspers Ltd., Africa’s biggest company by market value, expects second-hand clothing sales online to pick up as companies around the world look to cut production of new goods to help address climate change.
“We are big investors in trading in second-hand clothes -- we think the world will need more recycling over time,” Chief Executive Officer Bob van Dijk told Bloomberg TV. “In classifieds, we are helping to reduce the production of new goods.”

Bremmer Says Delegates Like Trump’s Policies (11 a.m.)

Ian Bremmer, president of consulting firm Eurasia Group, said Davos delegates may not like Trump but “they like his policies.”
“They like the regulatory rollback, they like his cabinet, they like his tax policy,” Bremmer told Bloomberg TV, adding that an informal poll of about 40 to 50 delegates he conducted showed there is “zero panic” about Trump winning a second term.
“You can have Greta here, you can have a bunch of people talking about climate and sustainability, but the reality is that Trump doesn’t drive people crazy at Davos the way he does in the United States,” Bremmer said.
Trump is likely to show his “triumphalist, unilateralist” side in his speech. “This is going to be Trump saying victory lap, I’m the greatest ever, my economy is doing well, my markets are taking off, look how much money I’m making you guys.”

Huawei CEO Dismisses Threat of U.S. Escalation (10:50 a.m.)

Huawei Technologies Co. founder Ren Zhengfei played down the threat that the U.S. will impose even stricter sanctions against his company, saying he is confident China’s largest tech company can survive further attacks.

WATCH: Huawei Founder and CEO Ren Zhengfei discusses the U.S. ban on the company from buying vital American components.
Source: Bloomberg
“This year, the U.S. might further escalate its campaign against Huawei but I feel the impact on Huawei’s business would not be very significant,” he said during a panel discussion.

Chile’s Palacios Keen to Hear Trump on Trade (10:50 a.m.)

Lucas Palacios, Chile’s economy minister, said he is eagerly awaiting Trump’s speech for any clues on trade relationships. “We’re a big copper exporter to China so the truce between the U.S. and China is very important for us,” Palacios told Bloomberg.

Lajcak Expects ‘Global Message’ From Trump (10:35 a.m.)

Miroslav Lajcak, foreign affairs minister of Slovakia, told Bloomberg: “I expect to hear a global message from the president,” especially on his strategy for the Middle East. “We will see whether he will use this opportunity.”
On impeachment, Lajcak said: “It’s not an easy thing. Whatever one thinks of him, he must be under tremendous pressure.”

IBM Proposes Rules to Counter AI Bias (10 a.m.)

IBM called for rules aimed at eliminating bias in artificial intelligence to ease concerns that the technology relies on data that bakes in discriminatory practices and could harm women, minorities, the disabled and others.
“It seems pretty clear to us that government regulation of artificial intelligence is the next frontier in tech policy regulation,” Chris Padilla, vice president of government and regulatory affairs at International Business Machines Corp., said ahead of a Wednesday panel on AI to be led by Chief Executive Officer Ginni Rometty.

Bjorgolfsson Expects Trump to Address China, Iran (10 a.m.)

Icelandic investor Bjorgolfur Thor Bjorgolfsson has spoken about his expectations for Trump’s speech.
“He’s going to come and talk about the deal with China, and how Iran is on the back foot, the stock market at an all time high and present himself as a statesman,” Bjorgolfsson told Bloomberg on the sidelines of the forum. “All this while the impeachment stuff is going on. This is a PR special.”

Mnuchin Says EU Car Tariffs Not Curently Planned (9:10 a.m.)

Car tariffs on producers in the European Union are not currently planned to enforce Iran sanctions, but they remain in President Trump’s toolbox, U.S. Treasury Secretary Steven Mnuchin said in an interview with the Wall Street Journal.
The U.S. will likely have $1 trillion deficits for a couple more years and the next phase of the China trade deal may not be a “big bang,” Mnuchin told the newspaper.

HKEX CEO Li Shrugs Off Virus Concerns (8:50 a.m.)

Opening Day Of The World Economic Forum (WEF) 2020
Charles Li gestures during an interview at World Economic Forum in Davos on Jan. 21.
Photographer: Simon Dawson/Bloomberg
Charles Li, chief executive officer of Hong Kong Exchanges & Clearing Ltd., shrugged off concerns about the outbreak of a deadly virus originating in central China.
“There are a lot of things that impact investor sentiment but you have to think that structurally the market is very resilient,” Li said in an interview with Bloomberg TV.

Thunberg Says ‘Nothing Been Done’ on Climate (8:45 a.m.)

Speaking on a panel about sustainability, Thunberg said people are more aware about environmental issues now but that “pretty much nothing has been done” to tackle climate change as emissions of carbon dioxide have not declined.

“Without treating this as a real crisis we cannot solve it,” Thunberg said. “It will require much more than this, this is just the very beginning.”
The panel didn’t attract leaders of the fossil fuels companies attending the forum, with most senior oil and gas executives absent.

Trump Wants ‘Hundreds of Billions’ for U.S. (8:30 a.m.)

Trump arrived in Switzerland with ongoing impeachment proceedings on his mind. He tweeted throughout much of the flight, largely about a Senate trial due to get underway there Tuesday. But he said his Davos appearance is all about the economy.
His aim is to “bring Good Policy and additional Hundreds of Billions of Dollars back to the United States of America,” he wrote on Twitter.
“We are now NUMBER ONE in the Universe, by FAR!!,” Trump tweeted ahead of his arrival in Davos just after 9:30 a.m. local time. He also took a swipe at what he called “Fake News Media,” accusing it of hating to talk about the economy and “how incredible it is.”

IEA’s Birol Worried About Situation in Iraq (8:15 a.m.)

Fatih Birol, executive director at the International Energy Agency, told Bloomberg TV’s Francine Lacqua that the situation in Iraq is currently his main concern in the oil markets.

“Recent developments in Iraq are not very comforting,” Birol said. “I see Iraq as a major issue, which is very important for the oil markets but also for the world economy, which is already very fragile. I really hope we all see an Iraq that has some stability and production can go ahead.”

Guggenheim Predicts Collapse to Central Bank-Driven ‘Ponzi Scheme’ (7:49 a.m.)

Scott Minerd has a message for his fellows at Davos who are applauding rallying markets: Things aren’t as good as they seem. The Guggenheim Partners investment chief likened the inflation of asset prices caused by the loose money policies of central banks to a “ponzi scheme” that eventually must collapse.
“We will reach a tipping point when investors will awake to the rising tide of defaults and downgrades,” he wrote in a letter from the World Economic Forum meeting.

German Greens Leader Sides With Trump on Spending Critique (7:40 a.m.)

Robert Habeck, co-leader of Germany’s opposition Greens party, told Bloomberg TV’s Francine Lacqua that the government needs to rethink its balanced-budget policy and spend more in areas like climate-friendly infrastructure.

WATCH: Habeck discusses climate awareness, Germany’s balanced budget policy and the need to increase government spending.
(Source: Bloomberg)
Habeck attacked Chancellor Angela Merkel’s “fetishism” about balancing the budget and said that although he’s not a fan of U.S. President Donald Trump, the criticism in the U.S. about Germany not spending enough is valid.
The Greens, who are currently Germany’s second-most popular party behind Merkel’s bloc, have been out of government for too long and are ready to take on the responsibility of running Europe’s biggest economy, Habeck added.

Natixis Sees Funds Returning to H2O (7:39 a.m.)

Natixis SA is seeing money returning to its H2O Asset Management affiliate after concern over some of the boutique’s thinly traded bonds sent investors fleeing. “There have been flows that have been coming back to H20 and performance has been good,” Jean Raby, chief executive officer of Natixis Investment Managers International SA, said in an interview in Davos.

What’s Happening on Tuesday (7:30 a.m.)

Aside from Trump’s set piece, here’s some other highlights on Tuesday:
  • 1 p.m. - Swedish teen Thunberg, who told Davos attendees last year that “our house is on fire,” is scheduled to speak on a panel.
  • 2:15 p.m. - With the next phase of trade talks with the U.S. pending, China’s Zheng takes center stage with a special address
  • 4 p.m. - Bank of England Governor Mark Carney, Saudi Aramco board member Andrew Liveris and others discuss how economies can grow without compromising the environment
  • 6 p.m. - Bank of America Corp. CEO Brian Moynihan, IBM Corp. CEO Ginni Rometty, Siemens AG Chairman Jim Snabe and others discuss stakeholder capitalism

Tuesday Kickoff

Greta Thunberg’s call in Davos last year that it’s time to panic about climate change might be finally starting to hit home as attendees show more alarm at the Swedish activist’s message. With the usual parade of government chiefs, billionaires and corporate executives attending, global warming is dominating the agenda more than ever. In the WEF’s annual risk survey, environmental dangers elbowed out items such as cyber attacks or terrorism.
And it’s not just teenagers, this 100-year old Briton is urging the global elite to stop burning carbon.

Monday Catchup

— With assistance by Eyk Henning, Sridhar Natarajan, Andrea Dudik, Simon Kennedy, and Shelley Smith

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