Davos Live: Milei Hails Corporate Heroes, Blinken’s Plane Fails

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(Bloomberg) -- Javier Milei, Argentina’s unconventional new president, preached to the choir at the World Economic Forum, hailing the business elite as “heroes” and telling them to resist politicians who embrace socialism.

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Fiery rhetoric aside, security risks hit close to home when Russia-linked hackers targeted several Swiss government websites in retaliation for the nation hosting Ukrainian President Volodymyr Zelenskiy in Davos on Tuesday. On a positive note for trade, US Secretary of State Antony Blinken signaled there will be more contact between President Joe Biden and Chinese counterpart Xi Jinping before he was forced to switch aircraft due to a technical issue.

Bloomberg’s team of reporters is bringing you the highlights of what’s happening on the ground. You can sign up for our daily newsletter here. And if you’re in Davos, don’t forget to drop by Bloomberg House. Register here.

(Times CET)

Talk of the Town

Stranded Jet (5 p.m.)

After boarding his Boeing 737, Blinken and his party were informed that the plane had been deemed unsafe to fly. A smaller jet was flown to Zurich from Brussels to ferry home the top US diplomat, while many of his aides and members of the press pool had to travel to Washington on commercial flights.

Read More: Blinken Stranded After Boeing 737 Breaks Down on Davos Trip

‘Long Live Freedom!’ (5 p.m.)

Delivering his keynote speech in Spanish, Milei issued a warning to delegates about the dangers facing governments that embrace socialism, barely mentioning the country he was elected to lead last month.

“I’m here to tell you that the Western world is in danger,” the former university professor told political and business leaders, without specifying which countries he was referring to. “And it is in danger because those who are supposed to defend the values of the West are co-opted by a vision of the world that inexorably leads to socialism and therefore to poverty.”

The 53-year-old hailed successful business people, denounced state intervention and railed against taxes, the “radical feminist agenda” and abortion. He ended his 23-minute speech with the catchphrase from his electoral campaign: “Long live freedom, damn it!”

Read More: Milei’s Younger Sister Is Also ‘The Boss’ Directing His Mission

Turning Point (5 p.m.)

French President Emmanuel Macron defended his Covid-era policies, and touted the work Europe has done since then in bouncing back from the pandemic.

“We are at a turning point because we will enter a decisive year,” Macron said in a keynote. “Not only have we delivered but what we delivered is working.”

Read More: Macron Strikes Conservative Stance to Counter the Far Right

His comments come a day after he laid out a conservative vision for the future of France in a bid to counter the rise of the far right, which is currently polling better than his own party.

Net Zero Hurdles (2 p.m.)

Ray Dalio, the founder of Bridgewater Associates, noted that while there’s opportunity to attract investment, those driving efforts to boost climate finance need to keep in mind that private investors still need to see a profit.

“There’s been a tragedy of practicality,” he told a panel. “There’s this notion of ‘we should we should we should,’ but there’s the fact of who has the money, what is the size of it and what are their motivations.”

Former US Vice President Al Gore earlier took on the fossil fuel industry and its facilitators, pointing a finger at the Davos audience and saying: “Pure greed!”

US climate envoy John Kerry told Bloomberg TV that the transition to a zero-carbon economy faces numerous challenges including misinformation campaigns and litigation from local communities who oppose renewable power projects.

Read More: Kerry Says US Election Will Have Major Impact on Climate Fight

“There is no question, we’re going to get there – the only question is if we’re going to get there in time to not be ravaged by the worst consequences of the climate crisis,” Kerry said.

Presidential Prerogatives (1:45 p.m.)

Polish President Andrzej Duda said he’s prepared to negotiate with Prime Minister Donald Tusk to overhaul the judiciary, but the new pro-European government must respect his role.

“I am always open to discussion,” Duda told Bloomberg TV. “But I would like to stress one thing — presidential prerogatives.”

Rate Debate (12:45 p.m.)

Divergent views on interest rates were clear in Davos. Anne Walsh, the chief investment officer of Guggenheim Partners, sees rate cuts coming sooner rather than later, in contrast to the stance of the CEO of State Street Corp. Ron O’Hanley.

The Fed is likely to err on the side of holding rates given the risk of a resurgence in inflation, despite market wagers for a dovish pivot in 2024, O’Hanley said in a Bloomberg TV interview. Walsh later objected and expects central banks to loosen sooner, saying “we see a lot of softness in the economy.”

Christine Lagarde had a clear message: the European Central Bank is likely to cut interest rates in the summer.

Debt Backlash (11:30 a.m.)

Gita Gopinath, the IMF’s No. 2 official, told Bloomberg TV that the fund is on the lookout for potential market liquidity risks as countries refinance debt issued to help address fallout from the pandemic.

“Debt is at extremely high levels,” Gopinath said. “What worries me on top of that is that we have projected fiscal deficits that are going to be higher than they were pre-pandemic.”

US-China Engagement (11 a.m.)

Blinken’s comments on increased interaction between between Biden and Xi suggest a further thawing in relations following agreements in San Francisco last year.

“There’s no substitute for leader-to-leader engagement, especially when you’re dealing with China,” Blinken said. “And I imagine — I know — you’ll see more of that in the year ahead.”

He said the US now approaches relations with China from a position of greater strength due to increased investments at home and improved relationships abroad.

Lives Matter (11 a.m.)

Blinken was also asked if Jewish lives matter more than Palestinian and Muslim lives. Eliciting a flash of emotion, his answer: “No, period.”

“I think for so many of us what we’re seeing every single day in Gaza is gut wrenching,” he said, adding that the US has pushed Israel to protect civilians in the conflict.

Hostage Families (9 a.m.)

Isaac Herzog headed to Davos with family members of Israeli hostages held by Hamas in Gaza to step up pressure for their release. The president’s office said he will “continue to reveal to world leaders in a clear and in-depth manner details of the atrocities committed by Hamas terrorists.”

The hostage event will be hosted by Peter Thiel’s Palantir Technologies Inc. Its chief executive, Alex Karp, will speak.

Hiring Push (8:30 a.m.)

Despite all the talk of job cuts on Wall Street, there’s one bank that’s not feeling the pain. JPMorgan President and COO Daniel Pinto said the lender is planning to add headcount this year as it sees opportunities to expand its presence in US wealth management, boost its international retail arm and exploit a dealmaking revival.

“All the components are for a strong year,” Pinto told Bloomberg TV. “When I look at our plans, we will increase our staff this year for sure.”

In Case You Missed It

  • There’s a repeated refrain from bankers in Davos this week, including the likes of JPMorgan’s Daniel Pinto and Standard Chartered’s Bill Winters: rein in your rate cut expectations.

  • Too much debt — and the danger that global economies could take on even more of it — is troubling Davos participants confronting dangers posed by the year ahead.

  • The US won’t quit NATO regardless of the outcome of this year’s election and despite Trump’s threats to exit the military alliance, the organization’s chief told Bloomberg TV.

  • Zelenskiy spent 24 hours pitching the Wall Street elite for investment and patching up ties with old allies as part of a push to shore up Ukraine’s faltering effort to fend off Russia’s attacks.

In the House

Shadow Risks (9:30 a.m.)

UBS Chairman Colm Kelleher took a moment with Bloomberg’s Stephanie Flanders to reflect on culture in banking — and how it’s impossible to regulate for. It’s no accident that the firms that survived the 2008 financial crisis were the ones who could repair themselves and move forward, he said.

Kelleher also took a swipe at regulators who are pushing for much more capital in the banking system, arguing that that’s not where the next crisis will come from. Private credit and the non-bank sector has less strict oversight and risks are building, he warned.

Read More: UBS’s Kelleher Sees Potential Upside to Profitability Goal

“Since that sector is not sufficiently regulated by definition, that is where you will probably see crises coming out,” he said at an event at Bloomberg House. “Looking to over-regulate the banks, looking for more capital in the banking system is the wrong issue.”

Coffee First (9 a.m.)

The ECB president was also asked the question that has been on many minds in Davos this week: what would a second Donald Trump presidency mean for Europe and the world.

“Let me have some coffee” was her immediate response as she reached for her cup, drawing laughter from the audience. She went on to say that it’s natural to be concerned about the election considering that the US is the world’s biggest economy and has the most powerful armed forces.

“We have to be strong as Europeans and not assume that we can rely on whoever our friends are around the world because these things change over the course of time, as we have seen,” she added.

Tech Buzz

Crytpo’s Vibe Shift (8 a.m.)

The previous Davos gathering happened in the immediate aftermath of Sam Bankman-Fried’s arrest and the collapse of FTX. The handwringing that followed certainly dampened the mood at the various “crypto houses” that lined the main street last year.

This year, AI is the belle of the ball and the only Sam anyone is talking about is OpenAI’s Altman. That vibe shift doesn’t mean crypto is entirely absent, however. Several prominent crypto executives, including Grayscale’s Michael Sonnenshein, Circle’s Jeremy Allaire and Alesia Haas of Coinbase all made the trek. Travel budgets seem to reflect crypto’s relatively strong start to the year.

Insider’s Guide

Parties and Polarization (12:30 p.m.)

Away from the networking and panel discussions, Wyclef Jean performed a couple of his Fugees hits at one of the numerous parties last night. But even such diversions weren’t enough to distract from concerns about geopolitical risk.

During a separate Blackrock soiree, a senior European banker was concerned about the trends propelling Trump’s presidential campaign. Frustration over inequality — also at the heart of the rise of European populism — is fueling his bid for a second term, the executive said, amid an abundance of drinks and canapes for the Davos elite.

‘Ridiculous’ Crowds (11:30 a.m.)

Even for luminaries like Sir Martin Sorrell, it was a struggle to find a seat in the main lounge yesterday. The knighted British ad man asked three people for a seat before he secured a spot.

It’s “ridiculous” how busy it was, considering how much money he spent on his ticket, he said, adding it “didn’t used to be” a trade fair. “It used to be something where you could sit down with a really good group of people and talk about what you were concerned about.

ABB Chairman Peter Voser seems to agree. While he still values the opportunity to focus on big ideas, “I question the size of it. It’s a circus at the end,” he said during a conversation at Bloomberg House.

--With assistance from Alessandro Speciale, Sanne Wass, Sabah Meddings, Jessica Loudis, Jenny Surane, Ben Priechenfried, Chiara Albanese, Viktoria Dendrinou, Jeff Black, Natasha White, Laura Millan, Liza Tetley, Courtney McBride, Manuela Tobias, Richard Bravo and Sarah Muller.

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