WHEN: Today, Tuesday, March 26, 2024
WHERE: CNBC's "Mad Money"
Following is the unofficial transcript of a CNBC interview with BlackRock Chairman & CEO Larry Fink on CNBC's "Mad Money" (M-F, 6PM – 7PM ET) today, Tuesday, March 26. Following is a link to video on CNBC.com: https://www.cnbc.com/video/2024/03/26/blackrock-ceo-larry-fink-on-the-power-of-ai.html.
All references must be sourced to CNBC.
PART I
JIM CRAMER: There are very few things that are truly required reading in this business, Warren Buffett's annual letter to shareholders, the transcript from Jensen Huang's annual GTC keynote address, arguably the alerts we send to the CNBC Investing Club -- biased -- and definitely the annual letter to shareholders from BlackRock's co-founder, chairman and CEO, Larry Fink. From his perch atop BlackRock, which is the world's largest asset manager, Fink has a truly unique perspective on the capital markets. So what's on his mind this year? He's primarily focused on two topics, helping people save for retirement in a world that makes this very difficult, and infrastructure, specifically how the capital markets can help raise money to build and repair everything we need. Given what happened in Baltimore this morning, it's hard not to see the need for new infrastructure. So, read the letter when you have got time. But, first, earlier, we got a chance to speak with Larry Fink, who is possessed about trying to get younger generations to save money and invest it in our capital markets. They just aren't doing it much at all right now. Take a look.
Larry, this was perhaps the most important of your letters, and I have read every one of them. And that's because, frankly, you are laying it out. There is a generation of people that will never, ever catch up unless they read this and understand, understand that, as a nation, we just don't help them.
LARRY FINK: Look, I think -- I write about fear and hope.
CRAMER: Yes.
FINK: I think one of the major components of fear is, for so many people, about, how can they have financial independence? But, more importantly, for so many, how can you live your later years with dignity and decency? And we don't talk about the whole crisis of retirement. And this is not just a U.S. phenomenon. This is a phenomenon worldwide now. Last year, I traveled to 17 different countries, and I have never had more broad conversations about the need to think about retirement, whether it's in a middle-class developing country or it's a very advanced developed country. They're rethinking about, how should we be thinking about retirement? And in the coming years, we're going to be doubling the number of people over 65 years old. And we're not preparing society for that. And one of the big things for me, Jim, was, there's not a day that doesn't go by when we don't talk about the miracles of drug discovery, especially when we talk about the weight loss drugs and the power of what they're doing, the miracles of what they're doing in terms of helping kidney disease and joint diseases and heart diseases and diabetes. There's new miracles coming on related to dementia and the -- slowing down the pathway for dementia. We're extending life. These are miracles. These are blessings.
CRAMER: But these are people, younger people, they don't know how to invest.
FINK: No.
CRAMER: They are scared to invest. They are intimidated.
FINK: Yes.
CRAMER: They don't feel they have a penny to live on. And, worst of all, they do have no hope. And they tell you when you confront them that that's the realistic position, no hope, because our generation had reason to be hopeful, and they don't.
FINK: Well, I don't think, also, the younger generation knows where and who to listen to. Let's -- more of them are listening to some form of social media. They're not reading anything long form anymore. We were blessed that we had actually long form media, where we really learned about issues and more fundamental issues. But even back 30, 40 years ago, we didn't talk about retirement. We never talked about things like retirement before. But now we must. We have no choice.
CRAMER: You know they feel that they can't afford to retire. They will work. This is disjointed. They will work to die because they have no money. They have huge college tuition.
FINK: Yes.
CRAMER: And no one tells them how to put money away. And they would tell you how, what money? Inflation has destroyed me.
FINK: Right.
CRAMER: I'm 23, and inflation has already had the best of me.
FINK: Well, when you and I were young, we actually had worse inflation than the young people did too.
CRAMER: Sure. That's true.
FINK: And we were able to find it out.
CRAMER: We had Jimmy Carter inflation, Nixon inflation.
FINK: We had just -- we had much larger inflation. So, look it, we're going to get by this, but we need to be thoughtful about, how do we build that process? And, look, I am bullish on the -- on these young people. They are smarter than we were at our age. They have more global understanding of the world. They could be -- they're going to be put to work and have -- finding wonderful opportunities if they put their mind to it, if they have the energy behind that.
CRAMER: But how do we do it? See, it is up to you and I.
FINK: It is.
CRAMER: I mean, actually, it really maybe up to you and I. I mean, I -- they feel disconnected. They don't want to put themselves in our shoes, because they think our shoes are too big and it's ridiculous. They have no bootstraps. They lost their trust in the country.
FINK: I think the lack of trust in our country is one of the huge issues of today because they don't know where and who to listen to. And I really do believe we, as leaders, you in your role, my role, we have a larger responsibility of speaking the truth with facts, with consistency. And I think this is what my letter is doing, talking about some of the big issues that we're afraid to talk about. You know, I'm an optimist. We always talk about how I'm an optimist.
CRAMER: Yes, you and I are both optimists.
FINK: I'm an optimist because we talk about many of the problems. You read a front page every day, and it is full of problems.
CRAMER: Right.
FINK: However, what people don't realize is, if we talk about these problems, we generally mitigate them. In fact, most times, the problems never get as severe as they are. What I worry about is when we never talk about these problems, and the problems get worse. And, to me, that's why I wanted to focus on retirement, because this is something that we don't talk about. We put it under the table, because it's not today's problems. It's not about the moment. It's about the building a nest egg for retirement takes 30, 40 years. And so I understand a lot of young people don't even have the money to live a proper life. But there are many who are going to -- working at fine organizations, fine companies. And we all have that responsibility to help them down that pathway.
CRAMER: Well, one of the reasons that I really love this letter is it's filled with optimism. You genuinely believe, we can grow out of our problem, which people don't think we can, and you actually provide a solution. We have millions of jobs that will be created, literally millions in our country, by being pragmatic about energy. I thought it was terrific.
FINK: Right. Well, this is a phrase that I have heard across the world, that we have to be decarbonizing at the same time and we have to continue to be making sure that we have energy at an affordable level. And so we need to have the hydrocarbons today. And so this energy pragmatism that I heard worldwide, even countries that -- but the one thing that I'm hearing from so many countries, they're aggressively decarbonizing as fast as they can. But, at the same time, if they're growing at 8 percent, like in India, they're still using coal. And they must use coal...
CRAMER: Right.
FINK: ... because they don't want to be dependent on OPEC to buy more and more and more. They're growing their economy. They're growing their economy with more and more investments in energy, with decarbonization. That's the future. This is why we're talking -- I'm talking about infrastructure. We need to do more public-private. We need more private capital to be putting to work, and so then government can be spending more money on other issues.
CRAMER: Now, there is a belief that, with no costs coming down, with food being so expensive...
FINK: Yes.
CRAMER: ... with college tuition leaving a lot of debt...
FINK: Yes. Yes.
CRAMER: ... that it's almost foolish to try to save -- this is their view -- because how are they supposed to pay rent if they're saving?
FINK: Look, life is full of trade-offs. I mean, we all have trade-offs. And if you don't have enough for your rent, obviously, you're not going to save for retirement. But there are many people who are renting and having a role in -- at a job that are -- ultimately, through their work, they're able to build some form of nest egg. And the key is putting that money to work. It's not keeping money in a bank account. It's about the compounding of a return and building a retirement over a long horizon.
CRAMER: But how do we make it so that retirement investing is more automatic in this country?
FINK: Good question. Well, we need to add that 57 million Americans do not even have retirement. And that's what you're talking about.
CRAMER: Now, they're going to work until they die, Larry.
FINK: Unfortunately, they have...
CRAMER: They have no choice.
FINK: They have -- but here's the blessing. I just said we're all going to live longer. That's a massive blessing. We don't have -- most people in this country do not have backbreaking jobs, like we had 50, 100, 200 years ago. What is wrong about working longer, OK? We have to change our psyche.
CRAMER: Yes, we need to.
FINK: First of all, every human being needs a purpose. And most people find purpose in their job, in their family. And it's a balancing act. Everything is a balancing act. And I – look it, I do really believe that investing allows people that platform, that background to grow and to have the ability to have money when you have stopped working to live with dignity and decency.
CRAMER: How do we convince them, like we were convinced by our parents, that we are going to make more than they did? I knew from day one. My father said, "You will make more than I do, and that's what's going to happen to you." And I had that every Thanksgiving, OK, every -- "Come on. You're going to make more than I do." Why can't -- no kid I know think they are going to make anywhere near what our generation did.
FINK: I'm more bullish than that, Jim. I think that there's going to be -- there's so much room for innovation. At the same time, we were in a lucky part. We were -- we were...
CRAMER: We were in a lucky era.
FINK: We were in a lucky era. And -- but we were in a lucky era because we were the foundation of growth as an economy. And that's why I'm calling for, we need to be thinking about not cutbacks. We need to be talking about, how do we grow, how do we build? If we start really building on our infrastructure in our country, if we start working on digitization and decarbonization, we're going to create a lot of jobs. And wages are going up. This is why, as you know, I have been talking about higher inflation for longer, stickier inflation.
CRAMER: You sure have.
FINK: And I still believe we're going to have higher inflation than most people believe. And much of that is going to help those people who are worried. I mean, wage inflation is continuing.
CRAMER: Right.
FINK: Food inflation has moderated in the last six, 12 months. But we did not account for how much inflation we had in late '22 and early '23. I mean, if you add up food inflation, if you add up all the measures, the way you measure inflation back in the '80s, inflation was close to 12 percent, not what they have said, for the average person. And that's what they felt.
CRAMER: More with BlackRock chairman and CEO Larry Fink when we come back.
PART II
CRAMER: When you get a chance to speak with Larry Fink about some of the most important topics in finance, you have got to stretch that conversation as long as you can. Take a look at the rest of my very wide-ranging and, yes, very optimistic conversation with BlackRock CEO Larry Fink.
Let's go over the social media thing you started with. There are a lot of people who think the system is rigged against them. I never felt the system was rigged. I never thought there was a system.
FINK: I don't think the system is rigged against anybody. It's not personal. I don't think the system is rigged. But I believe the problem is, we don't know who to listen to. We have such extreme views. There's a -- we're not basing everything on facts anymore. We're basing it on opinions.
CRAMER: Yes.
FINK: Even newspapers are more opinion papers now than news. We have to get back to the facts. We have got to build dignity and decency again. We have got to believe in each other again. I mean, one of the things that my parents taught me, and I'm sure your parents taught you, is, you have got to believe in yourself. It starts with you.
CRAMER: Right.
FINK: And, you know, I believed in myself. I believed I had the -- not just that I was going to believe that I could earn more money than my parents. Actually, I never thought about it in that frame. But I believed in myself that I could -- I have a real chance of doing something. And I do believe -- I see more young kids who are joining BlackRock. They believe in themselves. They believe in they have a future. And I don't think it's as stark as how you're framing it. But there is a large component of society that is saying exactly what you said.
CRAMER: Can we teach it? I mean, I felt like I was doing something for 19 years with "Mad Money." I finished your letter. I don't feel like I got through to anybody.
FINK: Look it, I think my letter is really about optimism and a pathway to move forward.
CRAMER: It is. It is. It is.
FINK: And I do believe we need to be -- we all need to be focused on a pathway to make more people have hope. And when more people have hope and less fear, then I think everything you're framing is there's more people who have more fear today. We need to have pathways to create more hope and more certainty.
CRAMER: Right now, people believe that the deficit is too big, so they buy Bitcoin. How about if they bought shares in an infrastructure fund, which is trying to combat the way that our country does business?
FINK: I think there's going to be many great opportunities to invest.
CRAMER: But I like this -- I like this infrastructure.
FINK: You like this. I'm a big believer in infrastructure.
CRAMER: Because I go to our airports, the good ones, and they're obviously public-private partnerships.
FINK: Yes.
CRAMER: This is what we're talking about. And the money that they can charge is -- to do it is high, and that gives us a chance to invest in something that's more than just a bank account.
FINK: And you witness, when the private hands are owning these airports, the quality of service is better, smaller lines, just a better -- there's more money going into it to fixing it up to make it a great service.
CRAMER: Right. And I'm talking about the Global Infrastructure Partners buy, which I thought was brilliant.
FINK: The BlackRock -- yes, thank you.
CRAMER: Yes, because we all think that you -- that the government doesn't work, and yet here we are in a London airport, and the government didn't work. They gave it to Global Infrastructure Partners.
FINK: They sold it. They sold it to them.
CRAMER: And that was just absolutely terrific.
FINK: Yes.
CRAMER: And this is also part of the energy pragmatism. We can let these companies do carbon capture, but we also let them drill.
FINK: Correct. And that's what we exactly did. That's why we're partners with Occidental Petroleum.
CRAMER: Which I thought was brilliant.
FINK: And I'm very bullish.
CRAMER: The largest one. They're the largest one.
FINK: The largest direct air capture in the world, working with an energy company. I said that in my 2020 letter. We must work with these energy companies, not against. I mean, here we are. BlackRock is becoming one of the largest energy -- one of the largest companies in investing in decarbonization, like direct air capture.
CRAMER: But you also want to focus on energy security.
FINK: We own over $180 billion in traditional energy companies. I mean, we're working with them. We are working with one or two other projects with traditional energy companies, both on nontraditional energy and new opportunities. And I do believe there are going to be really great opportunities for investing in infrastructure.
CRAMER: OK. Well, I have...
FINK: And then you want to just intersect AI. You intersect AI and the power of information and data.
CRAMER: We don't all have to go to Stanford. We don't all have to go to Stanford with AI AI is about not going to Stanford.
FINK: Correct. AI -- well, AI -- coding is in English now. It's not some code.
CRAMER: People should realize that...
FINK: We're going to be democratizing information.
CRAMER: Yes.
FINK: And that's going to empower more people to have more opportunity. But, more importantly, we're going to need huge sums of money to invest in these data centers.
CRAMER: Yes, we do.
FINK: And if we're going to be the leader, if we're going to be the leader -- and I must say, when I talk to every other country, every other country wants to be a leader in AI. And they're going to be investing in this and building data centers. And every data center, people are going to want are going to be with decarbonized technology, wind or solar. And so we're seeing this live.
CRAMER: All optimistic. So, I show my daughter -- she's about to be 30.
FINK: Yes.
CRAMER: She's going through the letter. It was embargoed, but I showed her.
FINK: Yes.
CRAMER: And she takes her phone out and she takes a picture of it.
FINK: Yes.
CRAMER: I said: "What are you taking a picture of?" And she goes: "I'm taking a picture of the total return since BlackRock's IPO versus the S&P."
FINK: Oh, the stock price, yes.
CRAMER: She said: "This is what you need to show people, dad."
FINK: Yes.
CRAMER: "You have got to show people that they can make far more money than they think."
FINK: Well, this is why I have always been against people keeping all their money in a bank account, because you're going to -- in every country, I have done that chart almost in every current -- in almost every country, you -- including Japan, you do better owning equities than keeping your money in a bank account over the last 30, 40 years.
CRAMER: This is just a picture that speaks at $100,000.
FINK: Yes.
CRAMER: You can -- we can get this word out. You, me, others who feel the same way you do about capitalism, we can get the word out.
FINK: Think about if you own the companies that are heavily into AI or if you invested in the companies that are creating these new drugs for weight reduction or companies that touch everybody over the -- since it's beginning, like a Lululemon or Chipotle.
CRAMER: Right. Right. Well, we will get this done.
FINK: I mean, these stocks have done unbelievable.
CRAMER: People must read this letter in order to be optimistic enough to think correctly. I want to thank Larry Fink, who's the chairman and CEO of BlackRock. Larry, your best one.
FINK: Thank you.
CRAMER: Thank you.
FINK: Thank you.