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Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside

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Speaker 1: my co host Matt Miller. Every business day we bring

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Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along

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Speaker 1: with essential market moving news. Find the Bloomberg Markets podcast

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Speaker 1: called Apple Podcast or wherever you listen to podcasts, and

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Speaker 1: at Bloomberg dot com Slash Podcast. Of course, Bernando Valleys

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Speaker 1: are Bloomberg Intelligence oil strategist. Here, Fernando, you are on

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Speaker 1: Bloomberg Television. I want to say, two days ago or

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Speaker 1: so with me, we talked about Jeff Curry's big call

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Speaker 1: about China reopening kind of kick starting this supercycle in commodities.

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Speaker 1: How long is that going to take? It may take

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Speaker 1: longer than expected for a couple of reasons. First, Uh,

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Speaker 1: the just a contagion that we've seen in the rising

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Speaker 1: cases that it's actually limiting the the traffic. So if

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Speaker 1: you look at the ridership, for example, in the Beijing subway,

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Speaker 1: it's still about their usual levels, uh pre lockdown. So

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Speaker 1: we're still far away from a real impact on demand.

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Speaker 1: And then I think what you said about the debt

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Speaker 1: ceiling not to restarting something too that could break it's China,

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Speaker 1: is Japan. Those are all very severe risks in the

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Speaker 1: short term that are headwinds for oil and oil consumption because,

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Speaker 1: as you said, created there is an issue with how

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Speaker 1: we fund our government, and not just in the US

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Speaker 1: but globally, and that if we have an issue there,

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Speaker 1: and that leads to lower demand because we had to

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Speaker 1: either raise rates or or just find a way of

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Speaker 1: containing investments, that will ultimately impact the oil consumption at

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Speaker 1: least in the short term. Wait, so you're saying the

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Speaker 1: debt ceiling has an impact on the oil market and

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Speaker 1: vice versa. I think obviously energy has been a big

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Speaker 1: contributor to inflation and global inflation, and one of the

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Speaker 1: reasons that they're looking to raise rates, and then that

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Speaker 1: impacts interest payments on the debt and so on and

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Speaker 1: so forth. Smart Man Matt Levine calls the debt ceiling

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Speaker 1: the dumbest thing in economics. Why, well, because we do

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Speaker 1: this to ourselves constantly, and it's no good for probably

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Speaker 1: the interest payments that we need to make. But it's

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Speaker 1: you'd hear probably some arguments from Republican congressmen, right, I mean,

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Speaker 1: they love to use it as a tool, true, and

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Speaker 1: they happen for for for years on years. The concept

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Speaker 1: of the ceiling itself is not great, but the fact

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Speaker 1: that we should limit our our spending should be something

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Speaker 1: that we adhere to write that. I mean this way,

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Speaker 1: you have like credit card limits right for the every

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Speaker 1: end of the day exactly. And I think the constant

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Speaker 1: spending in the modern monetary theory has just led us

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Speaker 1: into this cycle of inflation that uh and and and

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Speaker 1: nonproductive investments and uh, the very negative or low interest

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Speaker 1: rates have shied away from creating ascid heavy investments, including

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Speaker 1: an energy that are necessary for as a building block

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Speaker 1: to our economy. I think ultimately, I always think of

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Speaker 1: it as household economics, but in a nation scale, and

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Speaker 1: we're spending everything on the credit card and we haven't

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Speaker 1: we haven't invested on anything that actually makes money. You know.

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Speaker 1: The trend for the past ten years is let's buy

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Speaker 1: companies that don't generate revenues at all and um and

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Speaker 1: shy away from the ones that are generating cash flow.

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Speaker 1: And I think that has to revert in some kind.

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Speaker 1: That's like my household economics. Try spending all your money

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Speaker 1: on cars and motorcycles, depreciating assets um until the pandemic

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Speaker 1: in terms of China. Um, I I still can't get

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Speaker 1: away from Curry's call, and I think it's uh, it's

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Speaker 1: it makes a lot of sense. China is huge and

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Speaker 1: the reopening is going to drive economic growth at some point. Okay,

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Speaker 1: subway ridership be damned. People are going to be driving

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Speaker 1: their cars and filling them up. Um. Europe isn't nearly

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Speaker 1: as bad as had been anticipated, so you could get

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Speaker 1: actual growth there. I mean, Schultz told us they're not

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Speaker 1: gonna have a recession, and obviously he's gonna say that,

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Speaker 1: but it still is reassuring. And I guess the final

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Speaker 1: um point is that the FED maybe done raising rates.

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Speaker 1: How much or how closely have you been watching the

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Speaker 1: FED as an oil analyst for Bloomberg Intelligence? Very closely.

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Speaker 1: In fact, last year in our mid year outlook, we

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Speaker 1: said the FED is the biggest risk for oil prices,

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Speaker 1: and and lo and behold it panned out, and then

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Speaker 1: we said China is the biggest risk. And um, but

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Speaker 1: we think that, as you said, China, the reopening will

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Speaker 1: have an impact. The question is it doesn't solve the

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Speaker 1: Chinese consumer, right, it will improve the their the overall

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Speaker 1: activity versus December, but it doesn't solve that they're massively

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Speaker 1: levered and their real state bubble is still there and

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Speaker 1: hasn't has been pricked, but it hasn't burst. I was

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Speaker 1: just telling Erica, if you think New York is expensive,

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Speaker 1: the average wage to buy an apartment in Beijing is

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Speaker 1: forty seven years forty seven years of medium wage to

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Speaker 1: buy an apartment in Beijing, So good luck affording that.

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Speaker 1: And uh, ultimately in an authocratic government as China, all

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Speaker 1: that debt reverts to the provinces and then ultimately to

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Speaker 1: the central government. So awesome. Fernando Valley knocking it out

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Speaker 1: of the park. Thank you so much for joining us.

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Speaker 1: Really appreciate you coming into the Bloomberg Interactive Broker studio.

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Speaker 1: Fernando Valley, senior analyst at Blueberg Intelligence, talking to us

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Speaker 1: about the oil markets and they are interconnected to say

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Speaker 1: the least. This, Yeah, housing starts a disappointment. Today. We

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Speaker 1: have a perfect guest to comment on that. Patrick Carroll

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Speaker 1: just walked into the studio. He is a CEO and

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Speaker 1: founder of Carol, which is UH UH national leader in

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Speaker 1: UM what multi family UH and residential properties. Patrick um, So,

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Speaker 1: what do you think about the week data, What do

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Speaker 1: you think about the state of the industry right now

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Speaker 1: from your important perspective. So we focus on multi family

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Speaker 1: for rents, so you know, rental properties tend to do

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Speaker 1: well right now when um, when people can't really get mortgages,

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Speaker 1: you know, mortgage rates uh to buy single family homes

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Speaker 1: have doubled, and so it's keeping a lot more people running. Uh.

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Speaker 1: That's said, our costs are up, so you know a

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Speaker 1: lot of a lot of you know, loans, A lot

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Speaker 1: of people that have bought heavily in our sector are

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Speaker 1: on you know, floating rate loans and they're seeing you know,

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Speaker 1: their interest rates double as well. So it's it's a

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Speaker 1: tricky time. Um. A lot of people are concerned about

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Speaker 1: the FED just because of the uncertainty. Nobody really knows

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Speaker 1: which direction they're going in. What does that then mean

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Speaker 1: for the divergences you're seeing in different parts of the country.

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Speaker 1: I imagine Seattle is probably reacting differently than Miami. Yes,

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Speaker 1: so you know, for twenty years we focused on the

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Speaker 1: Sun Belt, which are you know, categorically business friendly states, uh,

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Speaker 1: you know, lower costs, living, high quality of life, so

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Speaker 1: you know, you know, especially after COVID a lot of

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Speaker 1: people moved out of Seattle's Los Angeles, New York and

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Speaker 1: they moved south. You know, Florida's booming. I live in Miami,

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Speaker 1: it's booming. Uh, Georgia, Texas. All these areas continue to

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Speaker 1: really attract people. So the fundamentals are strong. It's just,

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Speaker 1: you know, from a capital market standpoint, a lending standpoint,

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Speaker 1: it's very, very difficult right now. So, but we've been

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Speaker 1: hearing from a lot of market participants they don't believe

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Speaker 1: the Fed is going to go much over five even

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Speaker 1: though the FET itself says yeah, five five and a

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Speaker 1: quarters where we're headed. Um, what's your view? And I mean,

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Speaker 1: floating rate debt seems like the perfect solution at this point, right. Well,

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Speaker 1: I mean it's it's good when it was low. I

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Speaker 1: mean when the Treasury was in the one Yeah, I

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Speaker 1: mean it's it was a beautiful thing. Um, you know

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Speaker 1: what's happened is the Fed. It's not really where it

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Speaker 1: ends up. It's just the pace that they've moved rates.

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Speaker 1: They've moved it so fast it's it's freaked people out.

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Speaker 1: And you've seen valuations really good hit too. Uh. Commercial

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Speaker 1: real estate is directly tied to tenure treasury, you know,

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Speaker 1: the higher if the tenure goes to five per cent,

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Speaker 1: technically gap rates should be six and a half to seven,

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Speaker 1: you know, six months ago cap rates three. So I

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Speaker 1: mean that's a fifty to client in values potentially if

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Speaker 1: rates continue to go like that, but if they stay

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Speaker 1: I mean, I was thinking about this when we're talking

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Speaker 1: with our mortgage backed securities analysts Eric Heidelberg. Yesterday we

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Speaker 1: saw mortgage rates at one point go well over seven

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Speaker 1: percent um, you know, the bank rate UH numbers, and

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Speaker 1: now they've come down to basically six if we hold here,

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Speaker 1: is that okay? You're concerned about the pace of the move,

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Speaker 1: not about the absolute level. I think it's okay, But

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Speaker 1: it just you know, if if you're borrowing at six

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Speaker 1: and a year ago, you can borrow it, you know,

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Speaker 1: in the threes, technically you can afford less less house.

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Speaker 1: So I've heard of stat somebody that qualified for a

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Speaker 1: three I mean for a seven hundred loan a year ago,

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Speaker 1: because now you can only afford a you know, three loan.

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Speaker 1: So I think it's gonna it's gonna hurt valuations, you know,

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Speaker 1: in the housing market, in the single family housing market,

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Speaker 1: and in commercial real estate, you know, the higher rates

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Speaker 1: are and even if they stay there, that's what they've doubled,

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Speaker 1: So valuations are gonna have to you know. Come all right,

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Speaker 1: So let me ask you this. I mean, you've done

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Speaker 1: well because of this conundrum that a lot of consumers

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Speaker 1: find themselves in. Um, people can't buy a house, so

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Speaker 1: they rent a property instead. You've been a beneficiary of that.

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Speaker 1: What happens when or if the FED actually pivots and

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Speaker 1: starts to come down. Um, are you concerned that those

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Speaker 1: people are gonna move out of your rental properties? Um? No,

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Speaker 1: you know, look, when the economy does well and people

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Speaker 1: are spending money and things like that and buying homes

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Speaker 1: or whatever, you know, we tend to do well. Um.

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Speaker 1: You know, no business really thrives off a bad economy.

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Speaker 1: So you know, I would love to see you know,

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Speaker 1: interest rates come in and and things get back to,

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Speaker 1: you know, closer to where they were. Um that said,

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Speaker 1: yes right now. Yeah, But the problem with that is

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Speaker 1: they're only gonna cut if the economy does poorly. Right,

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Speaker 1: So you're in a position where you probably don't want

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Speaker 1: to see the FED pivot because that means we're in

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Speaker 1: a recession. That's right, you know, and that's not good.

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Speaker 1: You know, we're still depending on our residents having jobs

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Speaker 1: being able to pay the rent um. So in one hand,

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Speaker 1: it's great, you know, you have a record high occupancies.

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Speaker 1: People are not able to move out, and you know

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Speaker 1: we've we've maintained great occupancies. On the other hand, you know,

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Speaker 1: I'm still concerned about the overall economy. There's a lot

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Speaker 1: of you know, potential bad things that could happen, and

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Speaker 1: that just affects everyone. You done, Matt asked all these questions.

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Speaker 1: I want to ask about commercial real estate with reads

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Speaker 1: specifically because you were talking about how reads that gets

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Speaker 1: like so I just find it fascinated, and I just

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Speaker 1: think it's such an interesting business because this is the

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Speaker 1: kind of thing that you know, we talk all day

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Speaker 1: about high finance, but at the end of the day,

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Speaker 1: this is really what matters to the people. So yeah, No,

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Speaker 1: Matt loves the stuff. He loves housing. He was building stuff.

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Speaker 1: We just kind of let him roll with it when

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Speaker 1: he when hes fire trucks and bulldozers, wrestling, you know, all,

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Speaker 1: he's a guy's guy. But we got to hip about

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Speaker 1: these commercial real estates because you look at the reeds

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Speaker 1: market specifically real estate actually from a market perspective, underperformed

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Speaker 1: last year, which almost feels counterintuitive given the inflation story

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Speaker 1: that you're talking about. Can you make sense of that? Yeah,

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Speaker 1: I mean the reds are way ahead of evaluation. Stand

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Speaker 1: would have been way ahead of the private markets. So

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Speaker 1: you know, they've baked in you know, the you know,

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Speaker 1: raising the rising interest rates, so literally their valuations are

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Speaker 1: down thirties something percent. You know that it ties directly

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Speaker 1: to what I was saying about cap rates, So you know,

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Speaker 1: the the stock market is pricing that in if you sell.

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Speaker 1: Blackstone came out with their you know, private read and

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Speaker 1: they haven't marked on their book. In fact, they've marked

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Speaker 1: it up last year. So there is a little bit

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Speaker 1: of confusion on who's right who's wrong. And you know,

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Speaker 1: I think the public markets tend to get right before

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Speaker 1: the private markets, and so you know, but it's all

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Speaker 1: tied to interest rates. Like the fundamentals and in our

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Speaker 1: sector and multi family are still very very strong. It's

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Speaker 1: entirely tied to capital markets, and you know, no one

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Speaker 1: knows how high interest rates are going on. All right, Pat,

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Speaker 1: great having in the studio, Thanks so much for coming in.

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Speaker 1: We've got a really cool reporter in studio here, Shanelli,

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Speaker 1: pathic is here to talk to us about a little

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Speaker 1: bit of everything. I think. We are, of course going

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Speaker 1: to hear from Brian moynihan over in Davos, Switzerland in

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Speaker 1: just a few minutes, but until then, talked to us

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Speaker 1: a little bit about the narrative that we're hearing. I mean,

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Speaker 1: you're obviously here in studio, but in Davos, which really

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Speaker 1: seems to be uh, the Wall Street death sailing story.

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Speaker 1: What do you think what's really interesting about that crity is,

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Speaker 1: you know, there's a Wall Street death story. We've been

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Speaker 1: talking about the det limit since last year. Honestly, we've

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Speaker 1: been talking about it for a good age twelve months.

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Speaker 1: There was a real concern that this would become an

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Speaker 1: issue this year or so. Of course, if you're a banker,

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Speaker 1: it's a problem because you deal in treasuries. So that's

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Speaker 1: kind of the simplest way to say the story. As

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Speaker 1: far as Davos goes, I think Mary Urdos, in her

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Speaker 1: conversation with David Weston put it well. He asked her

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Speaker 1: if she was surprised by anything, and she goes, I'm

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Speaker 1: surprised by the lack of conversation about COVID. I'm surprised

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Speaker 1: by the lack of conversation about crypto and by the way,

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Speaker 1: you know, I think for Davos in particular, that's where

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Speaker 1: the frustration lies. One year you go and there's a

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Speaker 1: big hot topic, and the next year you go and

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Speaker 1: maybe there's no follow up. And similarly, climate and E

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Speaker 1: s G issues have taken a similar pivot, where obviously

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Speaker 1: the questions around investing in climate have gotten a lot

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Speaker 1: more complicated for bank executives that are under fire of

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Speaker 1: between every pension fund in America. Well, and to be honest,

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Speaker 1: it's probably the last thing they care about right now,

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Speaker 1: right I mean, we have stories about every bank trying

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Speaker 1: to control costs. Goldman Sacks was down seven per cent

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Speaker 1: the other day, biggest drop in over a year for

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Speaker 1: Goldman Sachs. Right now, Bank America is talking about a

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Speaker 1: hiring freeze. All of a sudden, it looks like these

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Speaker 1: banks are coming under fire because they can't stop spending. Listen,

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Speaker 1: they're expected to spend an aggregate the big six banks

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Speaker 1: a record amount of money this year, and two thirds

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Speaker 1: of those costs are expected to come from personnel expenses.

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Speaker 1: That's how much headcount is not only ballooned, but wages

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Speaker 1: have also risen. Interestingly at a place at Bank of America.

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Speaker 1: Remember they have a lot of branches across the country,

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Speaker 1: so does JP Morgan. One thing I know I'll be

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Speaker 1: looking out for in the proxy season and a couple

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Speaker 1: of months here, which is where kind of the annual

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Speaker 1: filings come out, is a few things. One is CEO

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Speaker 1: to worker pay. We talked about this every time. There

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Speaker 1: are a lot of nuances, but listen at the top

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Speaker 1: end you had bank CEOs also come off of record pay.

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Speaker 1: You're starting to see a certain amount of firing. You

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Speaker 1: are seeing some wage appreciation at some banks, Bank of

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Speaker 1: America having not only reason they are minimum wages, but

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Speaker 1: risen them for a lot of their suppliers, requiring their

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Speaker 1: suppliers to pay their employees more as well. You didn't

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Speaker 1: see that at JPMorgan. So they are handling the question

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Speaker 1: of pay very very differently. And remember in Wall Street,

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Speaker 1: like it or not, there's a bit of a pecking

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Speaker 1: order here and sometimes very often the investment bankers who

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Speaker 1: are highly paid get paid more first, but they're also

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Speaker 1: getting fired first. Two well, speaking of the packing order.

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Speaker 1: We are obviously just coming off of a run of

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Speaker 1: bank earnings as well. And I think you said that

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Speaker 1: Goldman sets the industry standard when it comes to hiring

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Speaker 1: and firing as well. Um, what did we learned this

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Speaker 1: time around? Did Goldman set the standard or was it

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Speaker 1: more of a JPMorgan Morgan Stanley story on on pay

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Speaker 1: and talent? They certainly set a standard here. You have

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Speaker 1: to watch. Remember a lot of these firms are facing

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Speaker 1: less attrition because people are, like you know, just as

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Speaker 1: banks are worried about recessions over their employees, so they're

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Speaker 1: less likely, according to their CEO, to move, which means

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Speaker 1: the banks themselves are also hiring less. So you have

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Speaker 1: to wonder by mid year, after bonus season, after the

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Speaker 1: Musical Chairs act that happens on Wall Street, after everyone

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Speaker 1: gets their bonuses and decides whether they like it or

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Speaker 1: not or doesn't and leaves to go to the bank

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Speaker 1: across the street exactly, this is this is the part

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Speaker 1: where we're watching where people choose to move with their feet.

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Speaker 1: Do all those pandemic era lovely ideas of work from

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Speaker 1: home matter anymore or does it come down to the

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Speaker 1: bottom line for individual employee? I think this is where

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Speaker 1: the rubber really hits the road on how we determined.

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Speaker 1: I think it's going to come down to money, because

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Speaker 1: guess what, Inflation is still running hot. People have bills

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Speaker 1: to pay. So I think it's a really tough calculus

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Speaker 1: here to sit there and say hey, hello, hello to

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Speaker 1: my boss, and can I work from home today when

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Speaker 1: everyone else is coming in. Yeah, it's a it's a

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Speaker 1: very it's a pivotal moment for a lot of these

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Speaker 1: workforce changes that we've seen start to kind of materialize.

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Speaker 1: You had James Gorman just say today that he doesn't

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Speaker 1: think people are going to come in five days a week.

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Speaker 1: But you see a lot of people. Remember James Gorman,

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Speaker 1: Morgan Stanley is actually in Purchase, New York, so it's

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Speaker 1: a little more They have a very suburban base. You

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Speaker 1: see a lot of these companies building more suburban bases

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Speaker 1: to meet their employees. But it's so nice and Purchase.

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Speaker 1: I think they're building a new pickleball facility there. If

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Speaker 1: I didn't love doing is it with radio and TV

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Speaker 1: so much, I'd move upstate with you, Matt. I mean

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Speaker 1: I do a lot of radio and TV as well,

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Speaker 1: but I managed to live up there. It's it's not

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Speaker 1: really upstate, right, It's like thirty minutes north to me.

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Speaker 1: I live fifteen minutes from Bloomberg's offices, so the side

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Speaker 1: feels upstate to me. But so, you know, I wonder, Um,

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Speaker 1: it's really just the masters of the universe that matter, right,

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Speaker 1: in terms of costs, it's not the tellers you talk

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Speaker 1: about Bank America. They have branches all over the place,

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Speaker 1: and I'm sure, um, they're going to be demanding as

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Speaker 1: much as they can to get a pay raise to

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Speaker 1: match or beat inflation. Uh, it's unlikely that they're gonna

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Speaker 1: be able to do that, right. What's interesting about it

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Speaker 1: is that think about it this way. How much do

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Speaker 1: they actually want people to come into a branch and

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Speaker 1: put in more deposits in the bank after bloating up

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Speaker 1: their deposit base after so long? Um, I think something

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Speaker 1: in the mortgage businesses are also under pressure. Bank branches

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Speaker 1: broadly across America, across the larger banking system have declined.

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Speaker 1: Real estate costs, also tied to those branches, are also high,

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Speaker 1: So consolidation among bank branches are important to watch out for.

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Speaker 1: There's a shift, a meaningful shift in the workforce where

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Speaker 1: a lot of these banks are doubling down on their

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Speaker 1: wealth businesses. By the way, what did Morgan Stanley do

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Speaker 1: right the other day? You know, because when Goldman was

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Speaker 1: down seven percent, they were up seven percent both our

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Speaker 1: earnings in the same day. I mean, it's a very

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Speaker 1: simple thing. It's and it's funny. It's not a one

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Speaker 1: day trend. If you look, when David Solomon took over

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Speaker 1: at Goldman's acts, Goldman Sachses market cap was more than

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Speaker 1: five billion dollars over Morgan Stanley's. Today there's more than

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Speaker 1: twenty billion dollar difference. I would say forty billion dollar differences.

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Speaker 1: I forget where we are. It's Vollo at all, but

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Speaker 1: Morgan Stanley is way ahead and that has only increased

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Speaker 1: over time. When I started the job, that was unheard of.

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Speaker 1: Morgan Stanley was a little sister. But James Gorman's pivot

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Speaker 1: to the wealth business is paying off. And it's also

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Speaker 1: showing you that the margins in a tough environment are

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Speaker 1: meeting that of an investment banking business, which typically had

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Speaker 1: been you know, pridate on having higher margins because all

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Speaker 1: you're really paying for is the banker. Well, because of

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Speaker 1: this trend, do you then see other banks following suit. Yes,

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Speaker 1: and you see it at scale Bank of America, of course,

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Speaker 1: JP Morgan. Their biggest acquisitions have been in wealth management.

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Speaker 1: Morgan Stanley has doubled down on wealth management. You know. Uh,

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Speaker 1: the changes at credits we will be interesting across the globe.

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Speaker 1: UBS wants to hire more the huge wealth manager. Our

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Speaker 1: City Group wants to pay it more to wealth. I

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Speaker 1: name me a bank that doesn't want to double down

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Speaker 1: on wealth. And you know what it is. It's as

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Speaker 1: folks grow up, as as new people enter the workforce,

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Speaker 1: they want to catch them quickly. They want you to

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Speaker 1: say with them, They want you to invest with them,

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Speaker 1: they want you to borrow with them. And so for

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Speaker 1: Morgan Stanley, they don't believe their net interest income has

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Speaker 1: peaked because they think that their clients, which tend to

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Speaker 1: be wealthier clients, will still be borrowing more in this environment.

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Speaker 1: What do you want to hear most importantly from the

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Speaker 1: CEO is at Davos. You know, I think the talent

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Speaker 1: story is hard not to pay attention to because it's

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Speaker 1: what really people are paying attention to day to day. Uh,

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Speaker 1: you know, I talked to David Weston and Lisa bron

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Speaker 1: was before they talk to James Gorman. I'm glad they

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Speaker 1: addressed this question of succession. It's just about to ask

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Speaker 1: you there's kind of another hot potato in the room here,

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Speaker 1: and you know, somebody, Matt max Abelson was like, make

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Speaker 1: this the lead of your newsletter on Friday, max Abelson

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Speaker 1: the reporter, because we cover this a lot together. It's

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Speaker 1: not that very top rank of the bank at the

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Speaker 1: CEO level, it's everybody under them, because folks like James Gorman,

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Speaker 1: Brian moynihan, Jamie Diamond, they've been a lot around for

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Speaker 1: a while, so there's a lot of questions about how

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Speaker 1: they manage the staff at the highest levels below them.

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Speaker 1: And at Morgan Stanley, the three successors in place the

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Speaker 1: potential successors. Out of all of them, none of them

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Speaker 1: are women, and so you start to wonder about the

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Speaker 1: d n I story. Jane Fraser is still the only

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Speaker 1: woman leading a big six bank. Denis diversity inclusion. Diversity

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Speaker 1: and inclusion, I mean when I kind of go out

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Speaker 1: there and talk to folks in the market, there's a

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Speaker 1: concern that in a downtime as usual, that UM will

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Speaker 1: start to fade as a priority. All Right, Channelly Bassik

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Speaker 1: talking to us about what's going on in terms of

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Speaker 1: the banks. We've finished with the Big six in terms

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Speaker 1: of earning earnings, and i' let's get to a story

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Speaker 1: after the bell or coming up after the bell, I

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Speaker 1: should say, Netflix reporting some of their earnings as well,

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Speaker 1: and who better to get a little bit of a

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Speaker 1: preview and d of a really shifting story, geta wrong

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Speaker 1: enough in our US media analysts. Bloomberg Intelligence joins us,

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Speaker 1: geta thank you as always for taking the time to me.

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Speaker 1: Something that is so striking when it comes to these

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Speaker 1: Netflix earnings is that it started with a focus on

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Speaker 1: subscriber count, then went to a focus with how quickly

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Speaker 1: and what quality are some of these streaming giants kind

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Speaker 1: of ushering out new content. Squid Games is the one

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Speaker 1: that comes to mind. Never saw it onto the next

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Speaker 1: unfortunately washed my thing of squid games and now I

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Speaker 1: think I'm scarred for life. Actually hurt my psyche. We're

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Speaker 1: gonna circle back to that regardless, Githa, it feels like

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Speaker 1: the focus on ad spend now, Oh absolutely, I mean

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Speaker 1: you're absolutely right that the narrative has clearly shifted away

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Speaker 1: from just this being in this land grab phase for subscribers,

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Speaker 1: and we're kind of moving to more oh, you know,

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Speaker 1: revenue acceleration. And one of the catalysts for accelerating revenue

427
00:21:58,920 --> 00:22:03,119
Speaker 1: group is definitely the introduction of advertising on the platform.

428
00:22:03,800 --> 00:22:07,040
Speaker 1: And it's telling because Rehastings just recently said, we should

429
00:22:07,119 --> 00:22:09,520
Speaker 1: have done this sooner. We should have lost you know,

430
00:22:09,600 --> 00:22:13,240
Speaker 1: religion on advertising much sooner. Um. So I think this

431
00:22:13,240 --> 00:22:17,720
Speaker 1: this then kind of becomes such a key um. You know,

432
00:22:17,760 --> 00:22:20,399
Speaker 1: I think advertising just positions them so much as a

433
00:22:20,440 --> 00:22:24,760
Speaker 1: good recession play, especially if macro conditions worsen, because you know,

434
00:22:24,920 --> 00:22:29,000
Speaker 1: the ad tear becomes so attractive for for value conscious customers.

435
00:22:29,000 --> 00:22:32,560
Speaker 1: So what's the future look like for Netflix? So we're

436
00:22:32,600 --> 00:22:36,120
Speaker 1: gonna start seeing um ads pop up there. I guess

437
00:22:36,160 --> 00:22:39,199
Speaker 1: you can choose in which basket you want to fall, right,

438
00:22:39,280 --> 00:22:42,080
Speaker 1: ad lists or with ads? Are they going to start

439
00:22:42,119 --> 00:22:46,760
Speaker 1: capping costs? You know, Paul Sweeney, who covered media for years,

440
00:22:47,560 --> 00:22:50,919
Speaker 1: always says the costs are the big problem. Yeah, the

441
00:22:50,960 --> 00:22:53,719
Speaker 1: costs are the big problem. They were a huge problem

442
00:22:53,760 --> 00:22:58,680
Speaker 1: for Netflix, but not anymore because they are tightening their belts.

443
00:22:59,080 --> 00:23:02,080
Speaker 1: So they have kind of capped content costs now at

444
00:23:02,080 --> 00:23:05,439
Speaker 1: about seventeen billion dollars. That's how much they're going to

445
00:23:05,440 --> 00:23:08,520
Speaker 1: spend on an annual basis um. And this is when

446
00:23:08,680 --> 00:23:12,520
Speaker 1: other you know, rivals like Disney and Warner Brothers and

447
00:23:12,520 --> 00:23:15,840
Speaker 1: and Paramount and Peacock are all still spending. They're all

448
00:23:15,920 --> 00:23:18,720
Speaker 1: still in a very very heavy spending phase, and they're

449
00:23:18,760 --> 00:23:23,200
Speaker 1: all still seeing huge losses. Meanwhile, you have Netflix that

450
00:23:23,200 --> 00:23:25,919
Speaker 1: that is turning around a profit and that is looking

451
00:23:25,960 --> 00:23:31,480
Speaker 1: to actually expand uh it's margins and drive free cash flows. Well,

452
00:23:32,080 --> 00:23:34,840
Speaker 1: how much of the story, though, is turning into a

453
00:23:34,920 --> 00:23:39,160
Speaker 1: US versus international story for Netflix. So on the subscriber front,

454
00:23:39,160 --> 00:23:41,320
Speaker 1: I mean, if there has to be growth, it does

455
00:23:41,400 --> 00:23:43,639
Speaker 1: have to come from international markets. It does have to

456
00:23:43,680 --> 00:23:46,440
Speaker 1: come from emerging markets, whether it's Latin America, whether it's

457
00:23:46,440 --> 00:23:50,119
Speaker 1: the Eastern European markets, whether it's India, other regions of

458
00:23:50,119 --> 00:23:53,040
Speaker 1: the Asia Pacific. So a lot of you know, the

459
00:23:53,080 --> 00:23:55,520
Speaker 1: subscriber growth is still going to come there. It's going

460
00:23:55,560 --> 00:23:58,040
Speaker 1: to come from there. But when you look at you know,

461
00:23:58,080 --> 00:24:02,119
Speaker 1: the revenue growth in an acceleration in the a RPU metric,

462
00:24:02,400 --> 00:24:04,800
Speaker 1: that is going to come from a lot of the

463
00:24:04,920 --> 00:24:08,479
Speaker 1: developed markets. So whether it's the US, UH you know,

464
00:24:08,520 --> 00:24:11,119
Speaker 1: the UK, so many of the other European markets. That

465
00:24:11,240 --> 00:24:14,160
Speaker 1: is where you see Netflix really having a lot more

466
00:24:14,280 --> 00:24:17,240
Speaker 1: kind of pricing power and a lot more flexibility to

467
00:24:17,240 --> 00:24:19,600
Speaker 1: to raise prices as well as you know, with their

468
00:24:19,600 --> 00:24:22,920
Speaker 1: new initiatives, whether it's advertising or password crackdown again, they

469
00:24:22,920 --> 00:24:25,840
Speaker 1: get to really kind of tweak that metric, especially in

470
00:24:25,880 --> 00:24:28,919
Speaker 1: the developed economies. We'll get the focus in on a

471
00:24:28,960 --> 00:24:31,040
Speaker 1: little bit about the India piece of it. And of

472
00:24:31,080 --> 00:24:33,080
Speaker 1: course I am Indian, so I'm very biased about this,

473
00:24:33,119 --> 00:24:37,000
Speaker 1: as are you. Um but I was on American well both,

474
00:24:37,040 --> 00:24:41,159
Speaker 1: I was born Indian American Indian American fair um Gita.

475
00:24:41,600 --> 00:24:43,440
Speaker 1: I was on Netflix the other day and I saw

476
00:24:43,640 --> 00:24:46,280
Speaker 1: Rumber Kapoor and All Your Butt movies, which are by

477
00:24:46,280 --> 00:24:49,399
Speaker 1: the way, for international audience Bollywood like mega stars and

478
00:24:49,440 --> 00:24:53,520
Speaker 1: to see they're amazing and they're married and just had child.

479
00:24:53,840 --> 00:24:57,399
Speaker 1: Irrelevant but like cute and adorable and I follow it

480
00:24:57,480 --> 00:25:01,320
Speaker 1: very closely. Anyways, um kia to see them on the

481
00:25:01,359 --> 00:25:05,160
Speaker 1: main page of Netflix as a viewing option from an

482
00:25:05,160 --> 00:25:07,399
Speaker 1: international perspective. And then you go to the company like

483
00:25:07,440 --> 00:25:10,920
Speaker 1: Disney for example, which is pot partnering with hot Star,

484
00:25:11,240 --> 00:25:14,120
Speaker 1: which once again showing the same offerings. How does Netflix

485
00:25:14,160 --> 00:25:17,359
Speaker 1: compete in an environment like that in India. So it

486
00:25:17,480 --> 00:25:19,680
Speaker 1: is it is definitely going to be a tough road

487
00:25:19,800 --> 00:25:22,359
Speaker 1: for them to kind of up their subscriber games, but

488
00:25:22,400 --> 00:25:24,639
Speaker 1: they are trying and they you know, you bring up

489
00:25:24,640 --> 00:25:26,679
Speaker 1: a really really good point with Disney, because I think

490
00:25:26,720 --> 00:25:29,720
Speaker 1: the competition there has been absolutely fierce. In many ways,

491
00:25:29,760 --> 00:25:33,080
Speaker 1: you can say that Disney has got many many legs

492
00:25:33,160 --> 00:25:37,000
Speaker 1: legs up in that race, especially in India, just because

493
00:25:37,000 --> 00:25:41,080
Speaker 1: they have they just inherited such a great asset uh

494
00:25:41,119 --> 00:25:43,080
Speaker 1: in hot Star when they when they did that Fox

495
00:25:43,119 --> 00:25:45,840
Speaker 1: acquisition and one of the key things with hot Star

496
00:25:45,960 --> 00:25:48,320
Speaker 1: was of course i PL Cricket and so many of

497
00:25:48,359 --> 00:25:51,560
Speaker 1: the other games that Indians absolutely love. Um. So you know,

498
00:25:52,000 --> 00:25:56,080
Speaker 1: they already have a huge user base there. They'll probably

499
00:25:56,119 --> 00:25:59,800
Speaker 1: get to about sixty to seventy million subscribers in India

500
00:26:00,080 --> 00:26:02,639
Speaker 1: loan in the next two to three years. So that

501
00:26:02,720 --> 00:26:05,600
Speaker 1: is absolutely a critical piece of the pie for for Disney. Sorry,

502
00:26:05,640 --> 00:26:09,040
Speaker 1: how many subscribers in India about sixty seventy million they

503
00:26:09,040 --> 00:26:13,680
Speaker 1: currently have about so it is a huge piece of

504
00:26:13,960 --> 00:26:18,280
Speaker 1: the Disney plus subscriber count not necessarily contributing to them

505
00:26:18,320 --> 00:26:21,840
Speaker 1: from a you know, revenue or profit perspective, but definitely

506
00:26:21,880 --> 00:26:24,959
Speaker 1: helps them kind of juice up those subscriber numbers. For Netflix,

507
00:26:25,000 --> 00:26:27,720
Speaker 1: it's been a little bit of a you know, slow build,

508
00:26:27,800 --> 00:26:31,080
Speaker 1: I would say, but again with this adre, I think

509
00:26:31,160 --> 00:26:32,879
Speaker 1: it could be a game changer. So it's gonna be

510
00:26:32,920 --> 00:26:35,439
Speaker 1: interesting to see how that kind of evolves in a

511
00:26:35,440 --> 00:26:37,960
Speaker 1: lot of these developing countries, especially India, just kind of

512
00:26:38,000 --> 00:26:41,560
Speaker 1: given the massive potential of that market. Just got thirty

513
00:26:41,640 --> 00:26:44,600
Speaker 1: seconds here, but who is the leader in China? Because

514
00:26:44,680 --> 00:26:47,800
Speaker 1: I know India is surpassing China in terms of population

515
00:26:47,840 --> 00:26:51,000
Speaker 1: growth and they're growing rapidly economically, with China still the

516
00:26:51,000 --> 00:26:53,520
Speaker 1: second biggest economy in the world and probably will be

517
00:26:53,560 --> 00:26:57,200
Speaker 1: the first biggest very soon. So China is actually closed

518
00:26:57,240 --> 00:27:00,640
Speaker 1: to a lot of these US based players. For Disney, Netflix,

519
00:27:00,680 --> 00:27:03,000
Speaker 1: none of them really operate in China right now. So

520
00:27:03,000 --> 00:27:05,439
Speaker 1: it's a lot of the local players, uh, you know

521
00:27:05,880 --> 00:27:09,720
Speaker 1: each it's you know, UM the buy Do the Ali Bab,

522
00:27:09,720 --> 00:27:13,160
Speaker 1: but they control all the video streaming services uh in

523
00:27:13,200 --> 00:27:16,399
Speaker 1: that in that country, it's still pretty much closed to

524
00:27:17,119 --> 00:27:21,040
Speaker 1: you know, UM US based services. All right, Keithan, thanks

525
00:27:21,119 --> 00:27:25,520
Speaker 1: very much, keith on there talking to us about Netflix. Um,

526
00:27:25,560 --> 00:27:30,080
Speaker 1: everyone looking forward to see what this company does and

527
00:27:30,119 --> 00:27:33,160
Speaker 1: the streaming wars are such an important, uh, I guess

528
00:27:33,280 --> 00:27:37,040
Speaker 1: issue for the markets. Um, it's big money, folks, it's

529
00:27:37,080 --> 00:27:39,639
Speaker 1: a Netflix is a hundred and forty three billion dollar

530
00:27:39,680 --> 00:27:43,439
Speaker 1: companies still even after the huge drop post pandemic. So

531
00:27:43,480 --> 00:27:45,960
Speaker 1: we will watch um to see what happens with Netflix

532
00:27:46,000 --> 00:27:52,159
Speaker 1: earnings when they come out after the bell. Today. We

533
00:27:52,160 --> 00:27:56,080
Speaker 1: were just talking Critti Gufta about the Indian economy. I said,

534
00:27:56,080 --> 00:27:58,399
Speaker 1: it's the fastest growing economy in the world. I'm not

535
00:27:58,440 --> 00:28:00,760
Speaker 1: sure it might be the fastest growing economy in the

536
00:28:00,760 --> 00:28:05,399
Speaker 1: world this year. And I got that little tidbit from

537
00:28:05,440 --> 00:28:09,359
Speaker 1: a piece I read this morning, India's surging population is

538
00:28:09,440 --> 00:28:13,360
Speaker 1: Economic Virtue, written by Matthew Winkler. He is the editor

539
00:28:13,400 --> 00:28:16,119
Speaker 1: in chief emeritus of Bloomberg News and he joins us

540
00:28:16,240 --> 00:28:19,400
Speaker 1: right now via zoom. Matt, thanks so much for your time, UM,

541
00:28:19,600 --> 00:28:21,520
Speaker 1: great piece on India. It's something that a lot of

542
00:28:21,520 --> 00:28:24,119
Speaker 1: ore the investors that Paul and I talked to on

543
00:28:24,160 --> 00:28:28,720
Speaker 1: a regular basis talked to us about. The growth is phenomenal.

544
00:28:29,320 --> 00:28:30,960
Speaker 1: I mean solely down to the fact that they have

545
00:28:31,040 --> 00:28:35,120
Speaker 1: one point four billion people. They may be larger than

546
00:28:35,240 --> 00:28:39,040
Speaker 1: China soon. UM. And Cretty has said that she absolutely

547
00:28:39,120 --> 00:28:42,720
Speaker 1: loves the movie uh industry as well Bollywood. UM films

548
00:28:42,720 --> 00:28:46,000
Speaker 1: are huge and they're seeping into the US. What do

549
00:28:46,040 --> 00:28:50,000
Speaker 1: you think India has done right that others have gotten wrong? Well,

550
00:28:50,040 --> 00:28:51,719
Speaker 1: first of all, it's great to be with you and

551
00:28:51,800 --> 00:28:56,160
Speaker 1: Cretty and uh, what they've gone right is Uh. First

552
00:28:56,160 --> 00:29:00,240
Speaker 1: of all, they do have the demography, uh, you know,

553
00:29:00,480 --> 00:29:04,800
Speaker 1: in their favor. As you mentioned, they will overtake China

554
00:29:04,960 --> 00:29:09,440
Speaker 1: as the most populous country in the world. And there

555
00:29:09,440 --> 00:29:12,640
Speaker 1: really is no shortage of superlatives when you think about India.

556
00:29:12,880 --> 00:29:17,480
Speaker 1: It's the largest mos UM for one thing, and you

557
00:29:17,560 --> 00:29:21,080
Speaker 1: mentioned the film industry, but really the most important is

558
00:29:21,120 --> 00:29:28,480
Speaker 1: that it has a relatively young labor market and um,

559
00:29:28,520 --> 00:29:32,840
Speaker 1: that is really the elixir, if you like, for growth,

560
00:29:33,080 --> 00:29:36,920
Speaker 1: and that's why, as you mentioned, over the last decade,

561
00:29:37,080 --> 00:29:41,600
Speaker 1: India has managed to surpass Canada, Brazil, Italy, Russia, France

562
00:29:41,680 --> 00:29:45,760
Speaker 1: and the UK, rising from number eleven UH in g

563
00:29:45,880 --> 00:29:48,720
Speaker 1: d P in the world to number five. And it

564
00:29:48,840 --> 00:29:52,120
Speaker 1: isn't it isn't stopping there. It's going to have the

565
00:29:52,160 --> 00:29:56,080
Speaker 1: fastest growing economy this year, um, you know, and that

566
00:29:56,200 --> 00:29:58,760
Speaker 1: sort of time when much of the world is teetering

567
00:29:59,080 --> 00:30:02,959
Speaker 1: on the edge of at but India is according to

568
00:30:03,120 --> 00:30:07,320
Speaker 1: forty six economists contribute their forecast to Bloomberg is going

569
00:30:07,400 --> 00:30:14,760
Speaker 1: to expand six UM this year. And uh, that's really

570
00:30:15,360 --> 00:30:18,280
Speaker 1: part of what is the beginning of another decade long

571
00:30:18,880 --> 00:30:21,920
Speaker 1: trajectory higher. I mean, one thing that you you really

572
00:30:21,960 --> 00:30:27,280
Speaker 1: do need to pay attention to is that UM exports

573
00:30:27,760 --> 00:30:31,960
Speaker 1: are at a record India is um you know, making

574
00:30:32,000 --> 00:30:34,960
Speaker 1: a lot of stuff and sending it to the rest

575
00:30:34,960 --> 00:30:37,880
Speaker 1: of the world at a rate that it hasn't in

576
00:30:37,920 --> 00:30:43,280
Speaker 1: the past. And that unprecedented growth really is UM. I

577
00:30:43,320 --> 00:30:46,520
Speaker 1: think a key variable. Total exports were something like nine

578
00:30:46,920 --> 00:30:50,880
Speaker 1: and sixty billion UM in two thousand one, for example.

579
00:30:50,920 --> 00:30:54,720
Speaker 1: The speed of this is really exciting, and anecdotally, I

580
00:30:54,760 --> 00:30:57,480
Speaker 1: can say a lot of this comes down to the

581
00:30:57,560 --> 00:31:02,600
Speaker 1: leadership from Prime Mr Noranda Mode. Before I asked next question,

582
00:31:02,640 --> 00:31:04,760
Speaker 1: I wanted to share with the audience that I anecdotally

583
00:31:05,200 --> 00:31:08,520
Speaker 1: that years ago, Um, you know, my family and I

584
00:31:08,560 --> 00:31:12,960
Speaker 1: would go to Delhi every every summer and the expressway

585
00:31:13,000 --> 00:31:15,960
Speaker 1: between the airport to the outside of New Delhi to

586
00:31:15,960 --> 00:31:20,080
Speaker 1: the suburbs essentially used to take three four hours to

587
00:31:20,400 --> 00:31:23,840
Speaker 1: get there. There is now an expressway that takes you

588
00:31:24,280 --> 00:31:27,720
Speaker 1: thirty minutes max. From from the heart of New Delhi

589
00:31:27,760 --> 00:31:30,400
Speaker 1: to uh the outside or Gazi Bad, which is where

590
00:31:30,440 --> 00:31:32,920
Speaker 1: where I was born. But essentially it has completely changed

591
00:31:32,920 --> 00:31:35,000
Speaker 1: the dynamic and a lot of that comes from infrastructure

592
00:31:35,040 --> 00:31:39,520
Speaker 1: spending UH at the helm of Norandra Modi's budget. But Matt,

593
00:31:39,560 --> 00:31:42,000
Speaker 1: I want to ask you how much of this acceleration

594
00:31:42,640 --> 00:31:45,040
Speaker 1: is really coming down to being able to mobilize this

595
00:31:45,160 --> 00:31:49,640
Speaker 1: population growth as we've seen happen in China as well. Well.

596
00:31:49,680 --> 00:31:54,880
Speaker 1: As you just said, Uh, infrastructure really is a key

597
00:31:54,920 --> 00:31:58,720
Speaker 1: element in all this. And as you also said, UH,

598
00:31:58,760 --> 00:32:05,480
Speaker 1: it's something it's spending that's been encouraged by Modi. UM. Well,

599
00:32:05,840 --> 00:32:10,440
Speaker 1: it's not just roads, it's rail networks, its ports. UM.

600
00:32:10,480 --> 00:32:13,040
Speaker 1: You know, India is the number two consumer of steel

601
00:32:13,160 --> 00:32:20,400
Speaker 1: after China, for example. UM. And UH. You know, electricity

602
00:32:20,440 --> 00:32:26,320
Speaker 1: demand is you know, largely driven by economic activities such

603
00:32:26,360 --> 00:32:30,360
Speaker 1: as manufacturing and the industrial sectors, and that's why last

604
00:32:31,320 --> 00:32:34,440
Speaker 1: year were really over the past three years, you know,

605
00:32:34,480 --> 00:32:38,160
Speaker 1: the power industry has led the market. But because of

606
00:32:38,200 --> 00:32:43,800
Speaker 1: all that, going forward, what we're seeing, at least as

607
00:32:43,880 --> 00:32:49,200
Speaker 1: forecast is that consumers, discretionary companies are going to outperform

608
00:32:49,240 --> 00:32:51,440
Speaker 1: the rest of the market, and that that is a real,

609
00:32:51,720 --> 00:32:55,320
Speaker 1: if you like, leading indicator that demand in Italy is

610
00:32:55,360 --> 00:32:58,400
Speaker 1: going up, and it's going up because this critic says,

611
00:32:58,520 --> 00:33:00,080
Speaker 1: I mean, you can get from here to there a

612
00:33:00,080 --> 00:33:03,400
Speaker 1: lot easier. When we started Bloomberg News, by the way, uh,

613
00:33:03,480 --> 00:33:08,040
Speaker 1: in the early nineties, Um, nobody wanted to, you know,

614
00:33:08,560 --> 00:33:11,600
Speaker 1: get to the Mumbai airport. I mean it was it

615
00:33:11,680 --> 00:33:15,440
Speaker 1: was third world, but it's now first world as an example,

616
00:33:15,680 --> 00:33:19,560
Speaker 1: and so, uh, there's really not anything that's in the

617
00:33:19,600 --> 00:33:22,800
Speaker 1: way of India. Because here's another thing. If you think

618
00:33:22,800 --> 00:33:26,240
Speaker 1: about India, it's got a middle class. Uh. That is

619
00:33:27,080 --> 00:33:31,000
Speaker 1: the size of the entire US population. So just think

620
00:33:31,040 --> 00:33:33,920
Speaker 1: about it that way. Uh, if you have more than

621
00:33:33,920 --> 00:33:37,080
Speaker 1: three d million people, all of whom are middle class,

622
00:33:37,120 --> 00:33:40,840
Speaker 1: all of whom are educated. Uh, you're going to see

623
00:33:40,840 --> 00:33:43,000
Speaker 1: the kind of growth that we're seeing right now. By

624
00:33:43,040 --> 00:33:44,960
Speaker 1: the way, how much of this growth is coming at

625
00:33:44,960 --> 00:33:48,360
Speaker 1: the expense of the climate or at the expense of

626
00:33:49,120 --> 00:33:52,720
Speaker 1: U the democratic global order? Because India has not condemned

627
00:33:52,760 --> 00:33:57,120
Speaker 1: Vladimir Putin, they continue to buy Russian oil. And I'm

628
00:33:57,160 --> 00:33:59,840
Speaker 1: assuming that they're still one of the biggest polluters on

629
00:33:59,880 --> 00:34:02,080
Speaker 1: the face of the earth. Not putting a value judgment

630
00:34:02,080 --> 00:34:04,800
Speaker 1: on it, I'm just asking, you know, how much the

631
00:34:04,840 --> 00:34:06,640
Speaker 1: benefit do they have in that case? Yeah, I think

632
00:34:06,680 --> 00:34:09,600
Speaker 1: you've got that right. I think that that is a criticism.

633
00:34:09,600 --> 00:34:14,040
Speaker 1: But why should India be penalized for all of the

634
00:34:14,520 --> 00:34:19,799
Speaker 1: if you like, transgressions that uh colonial and post colonial

635
00:34:20,560 --> 00:34:26,880
Speaker 1: UM countries alike have UM enjoyed up to this point.

636
00:34:26,960 --> 00:34:30,920
Speaker 1: And as to your your point about um Ukraine, for example,

637
00:34:30,960 --> 00:34:33,759
Speaker 1: where India is in fact on the fence and it

638
00:34:33,840 --> 00:34:39,040
Speaker 1: has a longstanding relationship with Russia that goes beyond the

639
00:34:39,080 --> 00:34:43,279
Speaker 1: dissolution of the Soviet Union. But there were Moody and

640
00:34:43,320 --> 00:34:47,440
Speaker 1: his government are pursuing this ultra realist foreign policy that

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Speaker 1: obviously deep prioritizes legal and moral aspects of international affairs,

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00:34:54,360 --> 00:34:58,600
Speaker 1: including climate change and especially including Ukraine. And that's all

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00:34:58,640 --> 00:35:03,120
Speaker 1: about India's nationally triest and so they're doing what a

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00:35:03,160 --> 00:35:09,239
Speaker 1: lot of their oppressors historically have done for centuries. Dare

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00:35:09,280 --> 00:35:12,040
Speaker 1: I say? And so I'm not sure it's fair to

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Speaker 1: criticize India at this point for catching up to the

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Speaker 1: rest of the world. You know, it's interesting that you

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00:35:18,239 --> 00:35:20,880
Speaker 1: mentioned that one of the uh, the statistics from I

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00:35:20,880 --> 00:35:22,480
Speaker 1: want to say, the last couple of months was when

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00:35:22,920 --> 00:35:26,359
Speaker 1: India a crossed the UK in terms of GDP. It's

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00:35:26,400 --> 00:35:29,759
Speaker 1: like the fifth largest economy now, which you mentioned right,

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Speaker 1: and it was I think like weeks after Rishi Sunac

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00:35:32,120 --> 00:35:35,160
Speaker 1: was elected or something. Uh, the Indian community had a

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00:35:35,200 --> 00:35:38,160
Speaker 1: good three weeks in that little span of a mat

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Speaker 1: in the last about minute that we have talked to

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00:35:40,560 --> 00:35:42,800
Speaker 1: us a little bit about the leadership here and remember

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Speaker 1: Mode specifically, who, by the way, from an internal domestic

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00:35:46,560 --> 00:35:49,720
Speaker 1: point of view, is still quite a polarizing figure. Yeah,

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00:35:49,760 --> 00:35:52,200
Speaker 1: there's no quick, there's no doubt about it. Uh. Look,

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00:35:52,560 --> 00:35:59,200
Speaker 1: our friends in our profession of journalism are particularly UM

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00:35:59,360 --> 00:36:05,120
Speaker 1: and understand endably UM concerned. Uh yeah, whilst very concerned

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00:36:05,160 --> 00:36:13,440
Speaker 1: because there is a tendency to oppress and suppress UM

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00:36:13,480 --> 00:36:18,279
Speaker 1: not unlike by the way, other UM rulers who have

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00:36:18,320 --> 00:36:22,600
Speaker 1: become autocrats in formally democratic places like Hungary for example.

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00:36:22,719 --> 00:36:25,880
Speaker 1: So that is very much there. And then there's the

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Speaker 1: other part, which is uh Modi has really catered pandered too, uh,

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00:36:32,800 --> 00:36:39,279
Speaker 1: the the Hindi population and at the expense of the

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00:36:39,360 --> 00:36:42,360
Speaker 1: Muslim population, and there's no question that that is also

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Speaker 1: a great concern because that really goes against the inception

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00:36:45,880 --> 00:36:49,360
Speaker 1: of India was meant to be a very open, secular,

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00:36:50,200 --> 00:36:55,080
Speaker 1: uh internationally minded if you like, society coming out of

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00:36:55,480 --> 00:37:00,160
Speaker 1: the British Empire with independence, and what Modi is doing

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00:37:00,280 --> 00:37:04,279
Speaker 1: is clearly some kind of repudiation if you like, of

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00:37:04,320 --> 00:37:10,640
Speaker 1: what Gandhi Mahatma Gandhi Um you know, started. So it

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Speaker 1: is Casper concerned, there's no question about it. Well, certainly

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00:37:13,600 --> 00:37:15,120
Speaker 1: something we're going to keep an eye on. Folks. You

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00:37:15,120 --> 00:37:18,239
Speaker 1: can check out this column from Matt Winkler, Bloomberg News

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00:37:18,280 --> 00:37:20,560
Speaker 1: under Chief Emeritus, on the Bloomberg Terminal O P I

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00:37:20,680 --> 00:37:24,080
Speaker 1: n go or and of course Bloomberg dot com as well. Matt,

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00:37:24,080 --> 00:37:30,640
Speaker 1: thank you as always for joining us. Thanks for listening

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00:37:30,680 --> 00:37:34,160
Speaker 1: to the Bloomberg Markets podcast. You can subscribe and listen

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00:37:34,200 --> 00:37:38,480
Speaker 1: to interviews of Apple Podcasts or whatever podcast platform you prefer.

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00:37:38,880 --> 00:37:42,839
Speaker 1: I'm Matt Miller. I'm on Twitter at Matt Miller three.

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00:37:43,239 --> 00:37:45,760
Speaker 1: Put on false Sweeney I'm on Twitter at pt Sweeney.

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Speaker 1: Before the podcast. You can always catch us worldwide at

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00:37:48,480 --> 00:37:49,239
Speaker 1: Bloomberg Radio