YouSaid · the spoken record

Mark Haefele

lines on the record: 29
first: 2019-03-18
most recent: 2019-03-18
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“Physical stuff, to be honest, I find just sitting at a desk actually quite hard work, so I like to be active. So Jim play tennis, occasionally actually even go my motorbike, stuff that is active, that gets your mind thinking about other things other than work things.”
2019-03-18 · Goldman Sachs Exchanges · With Brexit Uncertainty and Sluggish Growth, Where Are European Investors Seeking Value? · IDENTIFIED FROM THE TRANSCRIPT
“Broadly on the inclusive and diversity committee again, enjoy being part of that. We've got a lot of work to do. We're making progress, but frankly, there's a lot more work to do. And we want to attract the best talent from around the world. We want to attract that talent so that those people come here and feel able to be themselves and can give the most and not be uncomfortable in the environment, not create an environment that is uncomfortable for any part, whether it's because of your gender, your religious beliefs, your sexual orientation, none of those things should have any impact on how you're able to operate in a work environment and to help us do a better job with all of our clients. That's the aim of the diversity committee and that's the focus it can think. It's important work and we need to make more progress.”
2019-03-18 · Goldman Sachs Exchanges · With Brexit Uncertainty and Sluggish Growth, Where Are European Investors Seeking Value? · IDENTIFIED FROM THE TRANSCRIPT
“I guess I'm a firm believer in diversity. Maybe if I start with a disability interest forum, sadly in the latter part of my mother's life, she had Parkinson's. She herself was pretty disabled and I saw that happen from sort of being pretty able to physical disabled and that ended up being difficult even for her to speak. So I guess when we thought about disability, you know, it was something that resonated me because I'd seen it and dealt with it personally amazingly. Department of Work and Pensions have done studies and 19% of the UK workforce is disabled in some way or other. Sometimes that's physical, sometimes that's some mental disability, so they're not always obvious, these disabilities. I guess I was very passionate about how we treat that part of the community and making sure consistent with our diversity aims is that we are recruiting the best people wherever they may happen to be in a wheelchair. It doesn't mean we don't want to recruit them. So the focus for me around the disability interest thing was the personal one.”
2019-03-18 · Goldman Sachs Exchanges · With Brexit Uncertainty and Sluggish Growth, Where Are European Investors Seeking Value? · IDENTIFIED FROM THE TRANSCRIPT
“Let's move away a little bit from markets, talk about some of the roles you play here at the firm beyond your day job. You're a sponsor the disability interest forum in EMEA and a member of the Inclusity and Diversity Committee here. What drew you to those roles and what are you trying to accomplish?”
2019-03-18 · Goldman Sachs Exchanges · With Brexit Uncertainty and Sluggish Growth, Where Are European Investors Seeking Value? · IDENTIFIED FROM THE TRANSCRIPT
“Look, it's an interesting question because, of course, there's a lot of discussion in the US about the recession and talk about how long the cycle has gone for. Surprisingly, there's relatively little talk about recession in Europe. It does seem to us that that risk is being underplayed a little bit, as I was talking about before. Growth is anemic. It doesn't take much of a slowdown for us to start to flirt with recession. So I think we would still say that's a pretty low probability, frankly. We would say it's a low probability in the US as well.”
2019-03-18 · Goldman Sachs Exchanges · With Brexit Uncertainty and Sluggish Growth, Where Are European Investors Seeking Value? · IDENTIFIED FROM THE TRANSCRIPT
“Europe has dealt with sluggish growth before and could deal with it again, but a recession might be a different matter. How are investors thinking about the possibility of a recession and are they willing to take on risk given that prospect or playing it very safe?”
2019-03-18 · Goldman Sachs Exchanges · With Brexit Uncertainty and Sluggish Growth, Where Are European Investors Seeking Value? · IDENTIFIED FROM THE TRANSCRIPT
“The whole story is somewhat compounded, of course, by the change of ECB Governor, and so Mario Draghi's term expires at the end of October. It's not clear that he will want to lock his successor into a policy action, so we suspect the announcement will actually be pretty broad and say that they continue to want to support the economy and imagine conditions remain very accommodative. He's a better wordsmith than I am for sure. But I think they're going to be giving some guidance towards that. Our own view is it's going to be pretty hard for the ECB to find a justification to raise interest rates, certainly to do it before Draghi hands over, I think, will be quite tricky. Certainly if we're right about inflation, it's going to be running, as I said before, about a percent below their own target. So what we're looking for is the guidance on that policy bearing in mind that Draghi is going to have to Bob and weave a little bit given the changeovers happening later in the year. As I said, he doesn't want to connect.”
2019-03-18 · Goldman Sachs Exchanges · With Brexit Uncertainty and Sluggish Growth, Where Are European Investors Seeking Value? · IDENTIFIED FROM THE TRANSCRIPT
“Well, I'm not sure what the clients are looking for, but I know what we're looking for, and there's some sort of guidance, extended guidance around keeping rates low. I think the market itself is expecting some extension of the financing, these Teltros, these long-term refinancing operations, some commencement of that as a way to stimulate and get growth into the economy. For us, the big question is, what is the basis on which the ECB is going to raise interest rates? We know they would like to, but without inflation being generated, are they going to be able to do that? So I think any guidance they give as to how much longer they see the sort of very accommodative policy they have in place, I think, will be critical.”
2019-03-18 · Goldman Sachs Exchanges · With Brexit Uncertainty and Sluggish Growth, Where Are European Investors Seeking Value? · IDENTIFIED FROM THE TRANSCRIPT
“Talk about the uncertain backdrop and how it relates to monetary policy and inflation. As we tape this on March 5th, the ECB is set to meet in a couple days, and there's talk of need for a new stimulus. The ECB's been trying to normalize, but it's proven more difficult maybe than it should be. What are your clients looking for out of the central bank and monetary policy?”
2019-03-18 · Goldman Sachs Exchanges · With Brexit Uncertainty and Sluggish Growth, Where Are European Investors Seeking Value? · IDENTIFIED FROM THE TRANSCRIPT
“Not just for US China, but actually for the emerging market complex more broadly. And that's where we're sort of skewing our portfolios in terms of generating returns and finding opportunities. It's very much in the emerging market world.”
2019-03-18 · Goldman Sachs Exchanges · With Brexit Uncertainty and Sluggish Growth, Where Are European Investors Seeking Value? · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, well, it impacts the broader emerging market complex, right? And you see that, that if you see a slowdown in China, then all of the emerging market countries slow down. A good number of Asia, because they depend enormously on Chinese growth. So it has real economic consequences more broadly across the EM complex. And it equally plays a big part in sentiment. That's what's caused a lot of the concern around EM is that sentiment against emerging markets and how do these trade tariffs, how do these trade wars play in terms of slowing down growth more broadly? And the emerging market economies tend to benefit the most from strong growing economies. So anything that causes a slowdown is generally bad news for the EM world. We'd like to think, and certainly the latest discussions between the US and China feel more constructive, long way to go, and we know these things can change pretty quickly. If we do get some resolution of that, we think that's actually pretty positive.”
2019-03-18 · Goldman Sachs Exchanges · With Brexit Uncertainty and Sluggish Growth, Where Are European Investors Seeking Value? · IDENTIFIED FROM THE TRANSCRIPT
“So, you mentioned earlier trade tension between the US and China, which isn't isolated, has some spillover impact. What has been the impact of that trade tension over the past year or so on the portfolios you manage?”
2019-03-18 · Goldman Sachs Exchanges · With Brexit Uncertainty and Sluggish Growth, Where Are European Investors Seeking Value? · IDENTIFIED FROM THE TRANSCRIPT
“Growth nor a lot of inflationary pressures coming across Europe. Now, of course, Japan had a decade of deflation. We certainly don't see deflation taking place in Europe, but we could certainly imagine a world where you had really subdued growth, really subdued inflation for the next one to two years. And again, so that's where those comparisons, I think, with Japan actually resonate with us.”
2019-03-18 · Goldman Sachs Exchanges · With Brexit Uncertainty and Sluggish Growth, Where Are European Investors Seeking Value? · IDENTIFIED FROM THE TRANSCRIPT
“If you look at the demographics, Japan around the world is definitely the worst. They've got the most fast aging population, but Europe is not that far behind it. So we have a lot of sympathy for that notion that demographics is playing a big part in this, and I think it's probably underappreciated the impact that that is having across Europe. If you look at birth rates in countries like Italy, again, we're back to where we were 40 or 50 years ago. So we just aren't getting the population growth. Now, the big difference is that there is still immigration, both across Europe. That helps. We're in areas where there isn't good jobs growth. Southern Europe, they can move to Northern Europe. Also, the borders themselves have been open. Now, that's had some political consequences as we know for Angela Merkel, but we have a lot of North African immigrants coming in. So countries are a little more open to immigration than perhaps we see in Japan. But we have to have a lot of sympathy that we don't expect to see really vibrant.”
2019-03-18 · Goldman Sachs Exchanges · With Brexit Uncertainty and Sluggish Growth, Where Are European Investors Seeking Value? · IDENTIFIED FROM THE TRANSCRIPT
“Another factor that gets talked about a bunch is demographics. And Europe has a difficult demographic outlook, low birth rates and an aging workforce. A lot of times people compare that to Japan, which has been in sort of perpetual demographic challenges. Is that a fair comparison?”
2019-03-18 · Goldman Sachs Exchanges · With Brexit Uncertainty and Sluggish Growth, Where Are European Investors Seeking Value? · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, well, some of the slowdown is just because of the rest of the world. So, of course, China, the slowdown we've seen in China, that has an impact. Some of it is the auto sector in particular. Again, I mentioned it before, but it's a very big part of European growth. Auto sector is very significant. Concerns around emission changes, the move away from diesel engines, that's European car manufacturers, slowdown of car sales in China. That's had a big impact. But there is some of it that just is a little bit of a surprise that it's slowed down just as much as it has. So I think some of it is around the general concern around the world of these trade issues. And that is a big thing overhanging, whether it's US, China, whether it's Europe, US, those trade concerns. I think everywhere are just slowing growth down. And Europe is probably being disproportionately hit. Frankly.”
2019-03-18 · Goldman Sachs Exchanges · With Brexit Uncertainty and Sluggish Growth, Where Are European Investors Seeking Value? · IDENTIFIED FROM THE TRANSCRIPT
“What are the main drivers of the slowdown? Do you attribute a portion of it, a small portion of it, to Brexit and the uncertainty around tariffs? But what are the deeper drivers of this sort of slowdown that we're seeing across Europe?”
2019-03-18 · Goldman Sachs Exchanges · With Brexit Uncertainty and Sluggish Growth, Where Are European Investors Seeking Value? · IDENTIFIED FROM THE TRANSCRIPT
“It sounds ironic, but actually, if you look at the corporate market in Europe, we do think there are some opportunities in the European corporate market. European financials have been hit really hard. We're not saying they're outrageously cheap, but we just think there's room for returns to be generated out of those European financials if we got some stability, some pickup in growth, they would be the big beneficiaries. Frankly, we still think US credits look better value than Europe and it comes back to the growth story. So again, we're more optimistic, even though US economy is slowing, the absolute growth level is quite a lot stronger. So we'd be a bit more positive around US credit and emerging markets, again, for European investors that have relatively large emerging market exposures, and we would say, again, that's where the growth is coming from. That's where there is value across Latin America or across parts of Eastern Europe. So we'd be sort of positive on EM. We think that's where you generate returns. Some European credits, but”
2019-03-18 · Goldman Sachs Exchanges · With Brexit Uncertainty and Sluggish Growth, Where Are European Investors Seeking Value? · IDENTIFIED FROM THE TRANSCRIPT
“Prospects in Europe. And where do you get that growth from? There's very limited room to expand fiscally, although fiscal policy will be a little bit additive to growth this year, but there's not a lot more they can do. We need to get unemployment down still further than where it is. It's come down a long way, but we need to see where that growth is coming from. So I think the nervousness is, again, both macro and political, and the politics, whether it's Brexit or Italy, change of leadership in Germany, what does that mean? All of those things, I think, means it's hard to be really confident about where does growth come from in order to drive that investment.”
2019-03-18 · Goldman Sachs Exchanges · With Brexit Uncertainty and Sluggish Growth, Where Are European Investors Seeking Value? · IDENTIFIED FROM THE TRANSCRIPT
“I think there is a degree of nervousness around Europe. One is just looking at the slowdown that's taking place, and again, it's sort of happening globally, but European growth only running around 1% then a slowdown there really does make a difference. We saw growth weaker last year in Europe by about three-tenths of a percent as a result of Brexit and slowdown in the UK. And so, again, there's the potential if we have a hard Brexit for that to play into softer European growth. Equally, if you look at the auto tariffs and the risk of the US and Europe getting into some trade conflict estimates that we have, as we put a 25% tariff on European car exports, that takes three or four tenths off European growth. Now, again, it doesn't sound that much, but if you're only growing around 1%, you don't have a margin for error. Italy technically is in recession. We had two negative quarters of growth in Q3 and Q4. So I think there is nervousness around the growth.”
2019-03-18 · Goldman Sachs Exchanges · With Brexit Uncertainty and Sluggish Growth, Where Are European Investors Seeking Value? · IDENTIFIED FROM THE TRANSCRIPT
“So let's talk about the continent. Traditionally, investors have been a little bit wary about parts of the continent, certainly, although there have been times when their great value plays there. What would Brexit mean? Do you see nervousness now amongst institutional investors when they look at continental Europe as a place to either do business or to invest?”
2019-03-18 · Goldman Sachs Exchanges · With Brexit Uncertainty and Sluggish Growth, Where Are European Investors Seeking Value? · IDENTIFIED FROM THE TRANSCRIPT
“Details around the trading relationship between the UK and Europe are not contained in that agreement, so we have a transition period that goes through to December 2020 over that 18 month time frame is when those details get worked out. So depending on tariff rates, access to markets, those kind of things will determine the long-term decision by investors to invest in the UK. So I think we're still going to be a little bit on hold, right? Immediate bounce, two or three months of sort of euphoria, and then people come back and say, okay, so now what are the details? So I think we'll still have a period as we go through that negotiation before you see any meaningful investment taking place in the UK.”
2019-03-18 · Goldman Sachs Exchanges · With Brexit Uncertainty and Sluggish Growth, Where Are European Investors Seeking Value? · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, I think in the short term, we definitely get an inflow. You've sort of seen some of the numbers most recently being very soft, the British retail consortium looks at consumer sales that was down last month. If you look at the Chamber of Commerce here, again, the PMI readings are below 50. So there's definitely a slowdown in manufacturing, there's caution around consumption. So I think if we get a resolution, you see some short-term pop and bounce investment. The housing market here has been very weak. So I think there's no doubt about it. Sterling goes up. We have some inflows, some resumption of activity. The harder thing is, frankly, this agreement, if we get May's agreement passed, that remains a pretty big if, frankly, but if we do...”
2019-03-18 · Goldman Sachs Exchanges · With Brexit Uncertainty and Sluggish Growth, Where Are European Investors Seeking Value? · IDENTIFIED FROM THE TRANSCRIPT
“We actually could see the stock market do all right. So it's much more indeterminate. The CLAR thing that people are playing is the currency. That's probably the best barometer of how well these negotiations are going.”
2019-03-18 · Goldman Sachs Exchanges · With Brexit Uncertainty and Sluggish Growth, Where Are European Investors Seeking Value? · IDENTIFIED FROM THE TRANSCRIPT
“More difficult to know exactly which way that plays because, on the one hand, a hard Brexit would lead to a slowdown in the UK economy. That sounds like a good reason to cut interest rates if you're the Bank of England. On the other side of that, a weaker sterling definitely results in inflation repressures. So the bank's going to be balancing. How do we make sure inflation doesn't get out of control? Or how do we worry about a sharp slowdown in the UK? So there's opportunities and investors look at that as how do they position themselves. The equity market's an unusual one, certainly if you look at the FTSE 100, those big companies are really global companies, aren't really UK companies. And so 80% of the earnings for the FTSE 100 come from outside of the UK. So, of course, a weaker sterling means that their earnings go up. So paradoxically, a weak sterling is actually really good for the UK equity market. So a hard Brexit, people might think, well, it'd be terrible. Well, sterling four.”
2019-03-18 · Goldman Sachs Exchanges · With Brexit Uncertainty and Sluggish Growth, Where Are European Investors Seeking Value? · IDENTIFIED FROM THE TRANSCRIPT
“Certainly the number one topic of discussion here in our office, round pubs, wherever you are, people are talking about Brexit. And of course, it's now just a few weeks away and yet still it remains incredibly uncertain. From an investor point of view, I think those who have links through to Europe are thinking just about the practical things. Who am I trading with? What is the entity I'm dealing with? Will I be able to deal with a UK entity? Do I need to have a European entity relationship? So some of these are just practical, but they're important. So repapering of ISDS and those kind of things take time. So that's on the practical side. Secondary side, well, then how do we take advantage of any market moves that may take place around that? We've seen sterling bounce quite a lot in the last few weeks because of optimism over a softer Brexit rather than a hard Brexit. So there's certainly opportunities in the currency markets. Fixed income is much”
2019-03-18 · Goldman Sachs Exchanges · With Brexit Uncertainty and Sluggish Growth, Where Are European Investors Seeking Value? · IDENTIFIED FROM THE TRANSCRIPT
“So let's talk a little bit more about Brexit since we're sitting here in London, and Brexit Day is approaching, currently scheduled for March 29. Our institutional investors preparing for some deal, no deal, soft hard Brexit scenarios.”
2019-03-18 · Goldman Sachs Exchanges · With Brexit Uncertainty and Sluggish Growth, Where Are European Investors Seeking Value? · IDENTIFIED FROM THE TRANSCRIPT
“Worried about the geopolitics. So Brexit plays a part of that. Frankly, when you talk to continental European clients, it's not the top of their list. They worry about Italy and the political concerns there. They worry about trade tensions between the US and Europe, and particularly, of course, of the auto sector, very important for Europe. How does that impact that? So it's a slowdown that is driven either by geopolitics or by other factors that mean that ECB keeps rates on hold, which means bond yields certainly remain very low, equity returns remain very low. So how do they generate returns? That's a number one question.”
2019-03-18 · Goldman Sachs Exchanges · With Brexit Uncertainty and Sluggish Growth, Where Are European Investors Seeking Value? · IDENTIFIED FROM THE TRANSCRIPT
“The number one issue that clients in Europe are facing is how do we get returns? So just remember, central banks still has rates as negative. If you look across things like the German government bond curve, two-year bonds are negative 50 basis points or thereabouts. So most clients are saying, how do we generate positive returns? And I know it sounds like not a very ambitious task, but they've really lived now with a long period of negative returns from the ECB. And the prospects now for the next one or two years do not look very good. So I think there's two threads to that. One is a macro thread, the slowdown we're seeing across the globe is happening in Europe as well. And importantly, the ECB has got no justification to raise interest rates. So inflation rates, core inflation, Europe's around 1%. That's about a percent below their target. If the ECB's not going to raise rates, then how do these investors generate returns? So they're worried about the macro slowdown.”
2019-03-18 · Goldman Sachs Exchanges · With Brexit Uncertainty and Sluggish Growth, Where Are European Investors Seeking Value? · IDENTIFIED FROM THE TRANSCRIPT