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Mnuchin Tells Thunberg to Go Study Economics: Davos Update


By Iain Rogers and Chris Reiter

(Bloomberg)

The rich and powerful are in Davos, Switzerland, for the World Economic Forum’s 50th annual meeting, and the gathering is being closely watched to see how the global elite aims to tackle problems they helped create, above all climate change.

Germany’s Angela Merkel will speak this afternoon as the Group of Seven’s longest-serving leader runs out of time to reset Europe’s biggest economy before her era as chancellor draws to a close.

U.S. Treasury Secretary Steven Mnuchin had some words of advice for Greta Thunberg, questioning whether the 17-year-old Swedish activist is qualified to talk about economic issues linked to climate change and telling her to go and study the subject in college.

U.S., China Must Adjust for Stable World: Singapore PM (1:30 p.m.)

Both the U.S. and China must make adjustments if they are going to reach a lasting phase-two trade deal that benefits the rest of the world, according to Singapore Prime Minister Lee Hsien Loong.

The U.S. must decide whether to create rules that allow “the best man” to win or only let America come out on top, Lee said in an interview with Bloomberg’s Editor-in-Chief John Micklethwait.

“America First means you do the best for the United States,” Lee added. “So do you do the best by prospering in the world, and there are other countries who are doing well, or do your best by being a big country in a troubled world? And I’m not sure that the second is a very good answer.”

Maersk Sees Flat Global Trade Growth in 2020 (1:24 p.m.)

Global trade will likely expand in line with 2019’s growth of “slightly less than 2%,” A.P. Moeller-Maersk A/S Chief Executive Officer Soren Skou said in a Bloomberg TV interview.

The reason why freight rates have “gone up quite substantially” since October is mainly the introduction of new more environmentally friendly fuel. “Many of our customers recognize that it’s good for everybody that we go to a cleaner fuel,” Skou said.

Trump Policies Good for Business, Moelis Says (1:21 p.m.)

U.S. President Donald Trump’s policies and deregulation moves have been good for business and generated “substantial rewards,” Moelis & Co. founder Ken Moelis said in a Bloomberg TV interview.

Trump has done a good job of telling the story of how the U.S. economy is booming, with low unemployment, Moelis said, adding that despite “a lot of hand-wringing” in the U.S., the country remains a “tremendous place” with great laws, great capital markets and innovation.

Men’s Hiring Bias Slammed by Finnish PM (1:04 p.m.)

Finnish Prime Minister Sanna Marin said it’s now clear that women need laws to protect them from discrimination in the work place and the issue can’t be left in the hands of the private sector.

“You need laws and structures that lead the way to gender equality,” 34-year-old Marin said during a panel debate. “It doesn’t just happen by itself.” The concern is that an unconscious bias kicks in, steering men in a position to hire toward “similar-minded and similar-looking people” who are deemed to be “more qualified.”

Dutch Finance Minister Says Brexit Risks EU Power (1 p.m.)

After Brexit, the EU risks becoming a weak player in global politics, because the U.K.’s departure offsets the bloc’s balance, according to Dutch Finance Minister Wopke Hoekstra.

“When there is a balance between France, Germany, and the U.K., we in the Netherlands are at ease,” Hoekstra said in a Bloomberg TV interview. “That balance is now gone, and for the European Union, both in economic terms, but also in geopolitical terms, Brexit is very bad news.”

Le Maire Urges Germany to Spend (12:40 p.m.)

French Finance Minister Bruno Le Maire renewed his call for Germany to spend more to bolster the euro-area economy and prevent countries with stretched finances from plunging further into debt.

Speaking on a panel discussing global growth, Le Maire said France is delivering on its promise to overhaul the economy with changes to taxation, labor laws and pensions, but others in the currency region need to “do their homework.”

“We are waiting for Germany and the Netherlands and all the countries that have the necessary fiscal space to use that fiscal space to feed growth in their own country and everywhere within the euro zone,” Le Maire said.

It’s all the more urgent for Germany to act because the European Central Bank has little room left to stimulate the economy, he added. “The margin for maneuver for monetary policy is right now a very limited one, a very thin one.”

Saudi Arabia Must Act on Emissions: Minister (12:30 p.m.)

Saudi Arabia must advocate for solutions to tackle climate change as one of the world’s largest energy producers, according to Energy Minister Abdulaziz Bin Salman.

“We cannot sit on our hands as a producer without advocating for something that brings a solution to the emissions issue,” he said during a panel discussion. “We can’t see all components of sustainability and market stability without also being involved in the other debate which has to do with climate change.”

Facebook Says Bezos Hack May Highlight Phone Vulnerabilities (12:13 p.m.)

The hack of Amazon.com Inc. billionaire Jeff Bezos’s phone, allegedly via a WhatsApp message, brings to light potential security weaknesses in smartphone operating systems, according to Facebook Inc. Vice President Nicola Mendelsohn.

The company would take allegations that its service was used in a hack very seriously and would look into it, Mendelsohn, who helps run Facebook’s Europe, Middle East and Africa business, said in a Bloomberg TV interview.

The Idea of a Waste-Free Global Economy Is Catching On (11:50 a.m.)

When British yachtswoman Ellen MacArthur was promoting the idea of the circular economy on the sidelines of Davos in 2012, the big attraction was curiosity about what she was up to after her sailing career.

Eight years on, firms such as Adidas AG, Unilever NV, and BlackRock Inc. are embracing MacArthur’s vision. Her foundation is pushing an economic system where product lifespans are extended and components used repeatedly. The idea is to replace the “linear” model of growth — extraction, production and disposal — and reduce the strain on the planet’s limited resources.

“We had our own event in one of the hotels, and to be honest most people came because they were intrigued about what I might be doing,” said MacArthur, who once held the world record for the fastest solo circumnavigation of the globe. “Things have changed enormously since then.”

Swiss Re Says Big Questions Remain on China Virus Risks (11:40 a.m.)

The extent of risk posed by China’s deadly virus outbreak is difficult to assess, because many details are still unknown, such as how fatal it may be, how easily it will spread and whether it can be contained, according to Swiss Re AG Chief Executive Officer Christian Mumenthaler.

Last year marked a return to normality for disaster payouts, Mumenthaler said in an interview. Climate change is increasing disaster risks, and that’s going to effect insurance prices, but its very hard to break down what the impact will be over 20 years, he added.

Novartis Keeping Generics Unit for Now (11:21 a.m.)

Novartis AG is “very committed” to keeping its Sandoz generics unit despite efforts to sharpen company’s focus on next-generation treatments including cell and gene therapies, Chief Executive Officer Vas Narasimhan told Bloomberg TV in an interview.

Generics unit is growing and profitable, and there are opportunities in countries that have struggled to obtain high-quality generic medicines, Narasimhan said. Having a position in generics “matters” for now, though that may not still be the case in five or 10 years, he added.

Deutsche Bank Expects ECB Review to Be ‘Constructive’ (11:07 a.m.)

Deutsche Bank AG Chief Executive Officer Christian Sewing is “hopeful” that the planned strategy review by the European Central Bank will lead to change.

The ECB’s decision to cut interest rates below zero was right at the time, but “we missed the exit,” he said on a panel. Negative rates are leading to a widening gap between winners and losers as only a small share of the population benefits, Sewing said, adding that monetary policy is “reaching its limits.”

U.S.-Europe Risk Trade Flare-Up Over Cars, Digital Tax (10:43 a.m.)

The U.S. and Europe looked set for a renewed clash over everything from car tariffs to digital taxes in a sign that a new American focus was emerging following President Donald Trump’s trade truce with China.

Commerce Secretary Wilbur Ross said the U.S. was still considering slapping levies on European auto imports even as it hopes for a “peaceful resolution” of differences. Mnuchin declined to say if he was still pushing for an optional digital tax after an agreement for a global framework was reached with France on Wednesday.

Mnuchin Tells Thunberg to Go to School (10:35 a.m.)

Mnuchin questioned whether 17-year-old Swedish activist Greta Thunberg is qualified to talk about economic issues linked to global warming.

Asked at a press conference to comment on the debate over the economics of climate change spurred by the teenager, Mnuchin quipped: “Is she the chief economist?” He then said: “After she goes and studies economics in college, she can go back and explain that to us.”

Mnuchin has repeatedly clarified the U.S.’s climate stance after Trump took a swipe at environmental “alarmists” in his speech Tuesday. “There’s a misinterpretation as to what our view is,” Mnuchin said. “The U.S. administration very clearly believes in clean air and clean water.”

Canada in Strong Fiscal Position: Morneau (10:30 a.m.)

Canadian Finance Minister Bill Morneau said low interest rates mean central banks have less room to maneuver and suggested fiscal policy needs to play a greater role in addressing economic challenges.

“I think we have to be realistic” about expectations of central banks, Morneau said in an interview with Bloomberg TV. “Their ability to be effective in the case of challenges is different than it was in the last real challenge.”

Canada is managing its “fiscal framework very well,” which makes it “resilient in the face of challenges,” Morneau added.

“What we see is that Canada has taken a very responsible approach,” he added. “Whether you’re a rating agency or someone looking at our ability to deal with financial issues or concerns, we’re in a particularly strong position. Probably the strongest position among G-7 countries because of our very strong balance sheet to start with.”

Allow Venezuela to Unleash Its Potential: Guaido (10 a.m.)

Juan Guaido, Venezuela’s opposition leader, called for a return to democracy in the South American nation so that it can fully exploit its oil reserves and “unleash” its potential.

“What we want is a free Venezuela, a democratic Venezuela which respects human rights, where you can invest, where we can also make the most of our oil reserves and so that we can really unleash the potential that we have,” Guaido said in a speech. “We want to mobilize people despite the terror unleashed by the dictatorship.”

Nigeria Says OPEC Ready to Cut Further (9:49 a.m.)

OPEC’s production cuts are enough for now to avoid an oversupply, but ministers will convene again in March and will be ready to make further cuts if necessary, Nigerian Minister of State for Petroleum Resources Timipre Sylva said in a Bloomberg TV interview, adding that the country would like to see oil prices between $60 and $70 a barrel.

“We see a lot of optimism in the market” amid easing of trade tensions between U.S. and China,” Sylva said. “If the U.S. and China are able to consummate a good deal at the end of the day, we expect that there’ll be demand growth.”

Cantor’s Jain Concerned by Negative Rates (9:38 a.m.)

Cantor Fitzgerald LP President Anshu Jain said there are long-term adverse consequences linked to investing in trillions of dollars of negative yielding debt.

“If you wind up investing at negative yields in effect locking in a loss, that will have repercussions,” Jain said in an interview. “Of greater concern for me is repercussions for insurers and pension funds, and these will be felt for years to come.”

Italian Coalition is Stable, Gualtieri Says (9:20 a.m.)

The stability of Italy’s ruling coalition will not be affected by Foreign Minister Luigi Di Maio stepping down as head of his party, according to Finance Minister Roberto Gualtieri.

“Di Maio will remain the foreign affairs minister and the parties have said they are strongly committed to the stability of the government. So nothing will change,” Gualtieri told Bloomberg TV.

“What we can have is a continuation of this alliance or a strengthening of this alliance, these are the only two options,” he added. “We have very strong numbers in the parliament in both chambers and the government will continue until the end of the legislative term.”

U.S. Isn’t Abandoning Car Tariffs, Ross Says (9:15 a.m.)

U.S. Commerce Secretary Ross said the U.S. isn’t abandoning car tariffs but is hoping for a peaceful resolution of the matter with Europe.

“We have not abandoned the tariffs,” Ross told reporters. “The auto tariff decision was to negotiate in hopes of a peaceful resolution” with individual car companies and countries, he added.

Treasury Secretary Mnuchin said he met with Volkswagen AG Chief Executive Officer Herbert Diess in Davos.

Europe Vows to Tax Polluting Imports, Tech (9 a.m.)

The European Union will go ahead with plans to impose new taxes on pollution and technology companies, despite a pushback from China and the U.S. that could exacerbate global trade tensions, the bloc’s economy chief said.

“I will be clear: if there is no global agreement we will have an EU proposal at the end of this year,” European Commissioner for Economic Affairs Paolo Gentiloni told Bloomberg TV. Gentiloni was asked about the EU’s controversial plans to impose a levy on the digital services revenue of the likes of Facebook Inc. and Alphabet Inc.’s Google.

Kaeser’s Wish for Trump: Listen to the Kids (8:45 a.m.)

At a Tuesday dinner that Donald Trump held with business executives, Siemens AG Chief Executive Officer Joe Kaeser said he told the U.S. president he had three things to say: a compliment, a request, and a wish.

The compliment was on how Trump has spurred U.S. Economic growth. The request was for Siemens to be treated like a U.S. company on government projects because of its 50,000 American workers. His request was to urge the president to listen to young people’s demand to protect the climate.

“They may not be able to help us. They’re young people — they have a problem and they don’t know how to solve it, but shouldn’t we bring them to the table,” Kaeser said he told Trump, adding that his daughter Ivanka Trump responded that it was something that they might look into.

Merkel Succession Team to Be Decided This Year (8:42 a.m.)

Germany’s Christian Democrats want to assemble their team to succeed Chancellor Merkel by the end of this year, the party’s chairwoman said in a Bloomberg TV interview.

Annegret Kramp-Karrenbauer, who is also Merkel’s defense minister, said that now isn’t the time for a cabinet reshuffle as proposed by a party ally earlier in the month.

“For 2021, the CDU needs a new team for the future, with new faces, and we’ll put that in place this year. For me, that’s a more important perspective than a short-term change,” she said.

Debt Buildup Reaching Danger Point: Georgieva (8:40 a.m.)

IMF Managing Director Kristalina Georgieva warned that debt in some countries is at dangerous levels.

“The buildup of debt is reaching a point where for some borrowers it’s a present danger — for example poorer countries,” Georgieva told Bloomberg TV. “43% of low income countries are already at or close to debt distress.”

Low interest rates “means high, high appetite for yield,” Georgieva said, adding that “high appetite for yield means high appetite for risk.”

The global economy is in a better place than in October, when the IMF published its latest forecasts, and central banks have done what they can to support growth so it’s up to governments to step up, Georgieva said.

Siemens Urges Deeper Globalization (8:28 a.m.)

Globalization needs to advance, as nationalist retrenchment would be a giant step backward for industrial companies, according to Siemens CEO Kaeser.

“We better find a way or the fourth industrial revolution is not happening and we have decoupling instead and go back to the stone age of productivity,” Kaeser said in a Bloomberg TV interview.

The company’s biggest markets are the U.S., China and Germany respectively, which Kaeser said might make it look like he’s stuck in the middle of several trade wars, but the company’s heavy localization has so far protected Siemens.

Time Rapidly Running Out on Climate, Kerry Says (8:20 a.m.)

Former U.S. Senator John Kerry warned that time is very rapidly running out to tackle climate change and blamed both the U.S. and China for a lack of progress.

“We are missing years, and we don’t have years,” Kerry said . “We are not getting the job done.”

Kerry said that scientists have given the world a decade to resolve the problem, urging financiers and business leaders to direct their money toward renewable energy sources.

“China is having it both ways: they are exporting their solar panels industry and at the same time they are the largest coal user,” Kerry said. “China and the U.S. are 45% of emissions.”

Germany Must Spend Cash More Quickly: AKK (8 a.m.)

Germany needs to speed up the process of spending government funds, and surplus cash should be invested “sensibly” in infrastructure and the military, according to German Defense Minister Kramp-Karrenbauer.

“If we look at our budget and our investment right now, then we see that we have no problem with money, we have enough money,” Kramp-Karrenbauer, who is also the head of Chancellor Merkel’s party, said in an interview with Bloomberg TV.

“The problem is that we are too slow and too complicated in the process. Not enough is invested as a result and this is the construction site we need to work on,” she said.

Merkel’s government agrees that surpluses “shouldn’t be tucked away for a rainy day” but instead directed toward “investment in technologies of the future, in our infrastructure,” Kramp-Karrenbauer added.

Coronavirus Only ‘Real Threat’ to Markets: Prince Max (7:45 a.m.)

There is nothing “really threatening” on the horizon for markets, with the possible exception of the coronavirus, according to Prince Max von und zu Liechtenstein, chief executive officer of LGT Group Foundation.

“I think there is a little bit more downside risk than upside chances,” Prince Max said in an interview with Bloomberg TV. “But the market has been resistant so hopefully we will enjoy a good market for a little bit longer.”

LGT is hoping for the long-term trend of negative rates to eventually reverse, Prince Max added. “But realistically our expectations for this year for a significant rate change is not there,” he said. “So we are not too optimistic on that front.”

Turkish Guidance Intact After ‘Deep’ Rate Cuts (7:30 a.m.)

Turkey’s central bank is standing by its promise of a positive real rate of return to investors despite five interest-rate cuts that Governor Murat Uysal conceded “were a bit deep.”

Speaking in interviews with Turkish TV in Davos, Uysal said returns will run above zero based on the projected path of slowing inflation. The governor also downplayed concerns that the lack of a buffer against market sell-offs could now present a threat by saying the country has had negative real rates in the past.

“Our interest rates steps in 2019 were a bit deep,” Uysal said. “I can say that we have entered a period in which we need to fine-tune inflation and monetary policy.

Sanctioned Deripaska Returns to Talk Climate (6 a.m.)

Two years after being sanctioned by the U.S. government, billionaire Oleg Deripaska is back among the global elite.

The tycoon, who used to be regular at Davos and known for throwing extravagant parties, echoed the climate change message from activist Greta Thunberg and said not enough is being done to stop global warming.

“Until payments are imposed for CO2, nothing in the world will change,” he said by phone from Switzerland. “All this talk at Davos about climate change is just words. In reality, nobody’s doing anything.”

Thursday Highlights

  • 2:15 p.m. | German Chancellor Angela Merkel gives special address
  • 2:30 p.m. | Green New Deal panel with Dutch Prime Minister Mark Rutte and Greek Prime Minister Kyriakos Mitsotakis
  • 2:30 p.m. | Future of Energy panel with Saudi Aramco CEO Amin H. Nasser and Siemens CEO Joe Kaeser


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