Goldman Sachs Group Inc (NYSE:GS) President and COO and American International Group Inc (NYSE:AIG) Non-Executive Chairman Steve Miller spoke with Bloomberg Television’s Erik Schatzker and Stephanie Ruhle at the World Economic Forum in Davos, Switzerland today.

Gary Cohn

Gary Cohn downplayed the market reaction on Argentina: “Markets going through some jitters trying to figure out exactly what’s going on, emerging markets, we’re seeing some repricing of assets. This is not extraordinary movements in the market. We have seen movements like this before…These are growth markets, they’re not developed markets.”

Miller also spoke about AIG’s improved reputation: “We were the most disrespected brand name on the planet and now we have come back and fully paid back the U.S. government a year ago, as you know. We built a company with tremendous momentum. We are going back on offense.”

Gary Cohn on market reaction to Argentina:

“We’re getting calls. Markets have been going through some dislocation for the last two or three days. Markets going through some jitters trying to figure out exactly what’s going on, emerging markets, we’re seeing some repricing of assets. This is not extraordinary movements in the market. We have seen movements like this before. Remember back to what we saw when Ben started on the tapering speech middle of last year, we saw 100 basis point movement in 10-year. We have seen the 10-year move about 25 basis points in this move. We have seen flight-to-quality, we’ve seen normal reaction to things that go on in growth markets. These are growth markets, they’re not developed markets.”

Steve Miller on whether we are close to the point where a correction is due, given what we saw play out last year (financial conditions were benign, returns in equity markets were very strong):

“I’ve got to tell you that it is interesting to come to Davos each year. The mood changes, the focus changes. Two years ago, everybody was focused on is Europe going to implode. It is a different attitude every time. This time everyone is saying, the worst is behind us, happy days — and at lunch today, the most terrifying statement I heard, ‘it feels like 2007 again.'”

“[At home] people are concerned, I would say. My problem is that the current stability of the various developed country markets is against an environment where the fiscal situation is not sustainable. At some point, the bills are going to come due and the developed countries do not have the wherewithal to meet the obligations that are piling up. So, I am a near-term optimist, but long-term, deeply concerned.”

Gary Cohn on whether people are too bullish:

“I don’t know if people are too bullish or not. But I’m gonna remind you of had a conversation we had last time I was on the air with you. I said, look, something that I was concerned about – one of my risks – is liquidity. I said one of the things that is coming out of the market as we continue to regulate markets, we continue to increase capital charges — you’ve seen all of the banks withdraw balance sheet, withdraw risk-weighted assets from the market . We need to get used to seeing more and more moves like this. This is just a natural evolution of where markets are headed.”

Gary Cohn on what a ‘consolidation’ means:

“A consolidation is a typical charting pattern. When people talk about consolidation, are talking about charting forms. What you tend to see is you have big movements. Then you need to get used to that level of price. You need price activity around those levels, which is called a consolidation. We had a 30 plus percent move in some of the U.S. indices last year in equities. Then they to get used to those 30% higher prices and then decide does the world like those 30% higher prices? Do they establish those are the right prices? Are those prices too high? Are those prices too cheap? Then the market recalibrates itself based on the consolidation. That’s normal.”

Miller on his biggest takeaway from Davos and AIG’s action steps:

“I would say the buoyant attitude for the people that is so different from what we saw over the last three or four years. You go back four years, Goldman Sachs Group Inc (NYSE:GS) probably wouldn’t have even been sitting with me at AIG. We were in deep trouble then. We were the most disrespected brand name on the planet. Now we have come back and fully paid back the U.S. government a year ago, as you know. We built a company with tremendous momentum. We are going back on offense.”

“I’m going to sit down and write a trip report on the plane on the way back, that’s for sure. Because I’ve had so many interesting interchanges with individuals. I need to add them up. I still think this is a world of opportunity in front of us. Our business is accepting risk and charging for it. That is our business. To the extent people perceive risk and are willing to pay for our protection from it, it is going to be great for our industry around the world.”

On whether they feel popular at Davos and how it feels today compared with a few years ago:

Miller: “Well, I told you I was sitting last night at dinner with Bono….Because of what American International Group Inc (NYSE:AIG) has done and the fact I’m chairman, I do get a lot of people coming to me for my views and my advice. Nobody would have asked that three or four years ago.”

Cohn: “I always seek Steve’s advice as well. He’s a great work out expert. He’s worked out some great companies in the United States, so he has great advice. You should seek his advice. We’ve got a huge client base here in Davos. So when I’m out and around seeing people, I am running into clients all day long whether their Central Bank clients, their CEO clients, whether they are asset management clients. They are all here. This is a large gathering of our client base, so I’m always out talking to people and running into people I know.”

Cohn the theme of innovation and working in an industry that doesn’t feel like it can innovate:

“We’re in industry that’s there to serve our clients. We’re in the same industry that Steve’s in to some extent. We’re risk managers. We’re here to take on risk, we’re here to facilitate our clients’ needs, we’re here to take the other side of their transaction that allows them to grow their business, that allows them to deploy capital, that allows them to hire people.”

Miller on participating in conversations at Davos:

“It’s a two-way street, receiving information and putting it out. For example, right after this show, I’m going to a panel discussion with Anheuser Busch Inbev SA (NYSE:BUD) and PepsiCo, Inc. (NYSE:PEP) and a few other great companies, talking about road safety. What can we do. Road safety. Why? Consider china that 40% of the drivers have less than three years’ experience. There’s 20 million new drivers going on the roads in China every year, and they haven’t quite mastered how to drive safely.”

“It goes

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