WEBVTT - Lots More on the Protests and Financial Crisis in Iran 0:00:02.720 --> 0:00:08.920 Bloomberg Audio Studios, podcasts, radio news. Joe, do you like 0:00:09.000 --> 0:00:09.719 Persian food? 0:00:10.039 --> 0:00:11.799 Yeah, oh yeah, definitely, Yeah. 0:00:12.000 --> 0:00:14.960 I make I'm very proud of this, if I say 0:00:14.960 --> 0:00:19.079 so myself, A mean gourmet SAPSI. I actually don't know 0:00:19.079 --> 0:00:22.800 if I'm pronouncing it wrong, but supposedly it's the Iranian 0:00:22.880 --> 0:00:26.520 national dish, and it's a sort of like beef stew 0:00:26.720 --> 0:00:29.120 with spinach and a bunch of different herbs in it, 0:00:29.200 --> 0:00:33.600 so it's really green, and then with kidney beans. It's delicious. 0:00:33.640 --> 0:00:35.400 And the thing I like about it is you can 0:00:35.440 --> 0:00:37.720 make it and then store it and freeze it and 0:00:37.760 --> 0:00:40.239 it actually gets better over the next week or so. 0:00:40.880 --> 0:00:43.199 This guy is my idea for a restaurant, which is 0:00:43.320 --> 0:00:46.080 just like make food and then put it in the 0:00:46.080 --> 0:00:49.200 fridge for overnight and then cervic cold, because I think 0:00:49.240 --> 0:00:52.280 like everything there, every dish is better like after a 0:00:52.400 --> 0:00:54.279 night in the fridge somehow, like all the flavors come 0:00:54.280 --> 0:00:55.560 out as like, why don't we just make this to 0:00:55.640 --> 0:01:00.000 the default eating I did a dead lae. 0:01:00.200 --> 0:01:03.760 I'm both the most popular trader and most successful trader 0:01:03.960 --> 0:01:07.000 at Citadel. That is going viral. H barges. 0:01:07.080 --> 0:01:09.120 This is an after school special except. 0:01:08.880 --> 0:01:11.400 I've decided I'm going to base my entire personality going 0:01:11.440 --> 0:01:14.440 forward on campaigning for a strategic pork reserve. 0:01:14.120 --> 0:01:15.559 In the US. Black goals. 0:01:15.720 --> 0:01:18.320 These are the important question. Is that robots taking. 0:01:18.160 --> 0:01:18.720 Over the world. 0:01:18.800 --> 0:01:21.640 No, I think that like in a couple of years, 0:01:21.840 --> 0:01:24.119 the AI will do a really good job of making 0:01:24.120 --> 0:01:27.120 the Odd Lots podcast. One day that person will have 0:01:27.160 --> 0:01:28.199 the mandate of heaven. 0:01:28.360 --> 0:01:30.559 How do I get more popular and successful? 0:01:30.880 --> 0:01:31.880 We do have. 0:01:34.080 --> 0:01:36.440 You're listening to lots More where we catch up with 0:01:36.480 --> 0:01:39.200 friends about what's going on right now, because. 0:01:39.000 --> 0:01:42.080 Even when The Odd Lots is over, there's always lots more. 0:01:42.280 --> 0:01:47.480 And we really do have the perfect guest. So I'm 0:01:47.480 --> 0:01:49.320 a big fan of Iranian food. I always wanted to 0:01:49.360 --> 0:01:52.400 go to Iran and I actually try it, yes, and it 0:01:52.440 --> 0:01:55.240 makes me sad that I haven't been able to do it. 0:01:55.400 --> 0:01:59.040 And with you know, recent events, terrible events in Iran. 0:01:59.200 --> 0:02:03.440 We've had anti Islamic Republic protests that have reportedly left 0:02:03.480 --> 0:02:06.120 thousands of people dead. I'm not going to say the 0:02:06.160 --> 0:02:09.440 specific estimate because it's changing all the time, and also 0:02:09.560 --> 0:02:12.320 there's not that much transparency at the moment because the 0:02:12.320 --> 0:02:16.640 government has shut down the entire internet. But it's just sad. 0:02:16.760 --> 0:02:20.400 Look, I know very little about Iran. I also feel 0:02:20.400 --> 0:02:25.400 like in my professional career there are multiple rounds of 0:02:25.440 --> 0:02:29.400 this mm hmm, big protests, etc. Is this the moment 0:02:29.480 --> 0:02:32.280 regime change? And to your point, which you say, like, 0:02:32.720 --> 0:02:35.119 there is very little that I trust when I see 0:02:35.120 --> 0:02:39.600 it reported. Yeah, I am extremely skeptical. Oh, tonight was 0:02:39.639 --> 0:02:42.120 the biggest set of protests we've had in years. There's 0:02:42.160 --> 0:02:44.640 never been a protest. Look at which city this is. 0:02:45.120 --> 0:02:47.600 I'm sure there are well informed people talking about this. 0:02:48.120 --> 0:02:50.600 I don't have the heuristics, So no, generally I don't 0:02:50.639 --> 0:02:53.480 know who is well informed, what is actually signal versus 0:02:53.520 --> 0:02:57.639 what is noised. But obviously yet another sort of extraordinary 0:02:57.680 --> 0:03:01.320 development unfolding here in a mote. 0:03:01.320 --> 0:03:02.239 What have you been hearing? 0:03:02.760 --> 0:03:06.520 So I agree that it's difficult really to tell what 0:03:06.639 --> 0:03:10.639 are the actual facts. For sure, there's been a lot 0:03:10.639 --> 0:03:14.119 of deaths and it's horrible that it's tragic, and it's 0:03:14.160 --> 0:03:18.160 definitely thousands of deaths. But at the same time, you 0:03:18.200 --> 0:03:21.600 know there's complete blackout. What works right now is the 0:03:21.639 --> 0:03:26.920 actually outgoing landline calls, but with limited time. So, for example, 0:03:27.000 --> 0:03:30.040 my one of my analysts, who is actually in London. 0:03:30.080 --> 0:03:32.360 At the moment, he's able to speak to his parents 0:03:32.520 --> 0:03:35.360 when they call him, and then the call gets interrupted 0:03:35.440 --> 0:03:37.680 quite quickly, but at least he can hear from them. 0:03:38.000 --> 0:03:40.880 We weren't actually sure for quite some time whether the 0:03:41.080 --> 0:03:43.760 stock market was working or not because of the blackout, 0:03:43.760 --> 0:03:46.200 because it was not possible to even to read any 0:03:46.200 --> 0:03:49.760 news from the official news agencies in Iran. So everything 0:03:49.880 --> 0:03:53.480 was down, including from what I've read, including even like 0:03:53.520 --> 0:03:59.520 the internal domestic like an internet network in Iran that 0:03:59.640 --> 0:04:03.640 is that is very controlled. This was also down. Even 0:04:03.680 --> 0:04:06.560 ATM stopped working for a moment, I think, just like 0:04:06.600 --> 0:04:10.480 a one day brief moment. Cash transfers for working bank transfers. 0:04:10.600 --> 0:04:14.880 Apparently the local you know uber equivalent called snap was 0:04:14.920 --> 0:04:18.040 working all the time. However, GPS was not working for police, 0:04:18.120 --> 0:04:20.040 it was difficult to locate the driver and so on. 0:04:20.520 --> 0:04:24.000 So exactly what you said, it's difficult to understand exactly 0:04:24.000 --> 0:04:24.720 what is going on. 0:04:25.200 --> 0:04:27.560 So this is of course much of Voutel. He is 0:04:27.600 --> 0:04:30.360 the CEO of Amtalon Capital, which is a fund that 0:04:30.480 --> 0:04:34.560 specializes in Iranian equities, and there aren't that many of 0:04:34.600 --> 0:04:35.279 those around. 0:04:35.360 --> 0:04:37.560 I don't even know if there's a second one yeah. 0:04:37.279 --> 0:04:40.120 So we enjoy talking to him, and he has really 0:04:40.120 --> 0:04:43.359 good insights into what is actually happening on the ground 0:04:43.520 --> 0:04:46.400 in Iran. The first question I should ask directly is 0:04:46.720 --> 0:04:50.159 is your team okay? Are they safe and well? The 0:04:50.200 --> 0:04:51.880 people that you actually have in the country. 0:04:52.160 --> 0:04:55.880 Thank you for asking about that, Tracy. Have we have 0:04:55.920 --> 0:04:58.560 a local team in Tehran, part of which is actually 0:04:58.560 --> 0:05:01.360 in London at the moment. Now. Analysts who are in 0:05:01.400 --> 0:05:03.960 Tehrank who were in Iran, they left their round a 0:05:03.960 --> 0:05:06.680 few days ago when the protests were getting more intense 0:05:07.040 --> 0:05:10.000 too smaller cities to their hometowns, So the last time 0:05:10.040 --> 0:05:12.640 we've heard from them was a couple of days ago. 0:05:12.880 --> 0:05:15.520 At that time they were in a safe place. So 0:05:15.680 --> 0:05:17.120 I believe they're all fine. 0:05:17.480 --> 0:05:21.479 I mean, just your intuition. Let's actually set aside the 0:05:21.560 --> 0:05:24.400 question of like, is this a moment where the regime 0:05:24.440 --> 0:05:26.799 would get toppled or something like that. Let's tell it, 0:05:26.880 --> 0:05:32.479 does this feel either quantitatively or qualitatively different from various 0:05:32.480 --> 0:05:35.960 episodes over the last two decades in which suddenly the 0:05:36.240 --> 0:05:40.880 Internet is looking at fairly blurry videos of Iranian protesters 0:05:41.000 --> 0:05:44.120 and asking does this feel different somehow? 0:05:44.680 --> 0:05:48.360 Yes, it definitely does. Okay, So First of all, obviously 0:05:48.400 --> 0:05:51.200 looking at the history it teaches you not to get 0:05:51.279 --> 0:05:56.719 excited or to I don't know, hopeful for any meaningful changes. However, 0:05:56.760 --> 0:05:59.479 it does feel different and maybe maybe two things could 0:05:59.520 --> 0:06:02.159 be interesting here. First of all, as you said Joe 0:06:02.160 --> 0:06:05.479 at the beginning, it's not the first protest, it's you know, 0:06:05.560 --> 0:06:09.760 another protest over the years. And if you look at 0:06:10.120 --> 0:06:14.159 comparable situations, for example, Poland police is always close to 0:06:14.240 --> 0:06:18.000 my heart. I'm Polish originally, and Poland when we were 0:06:18.040 --> 0:06:20.240 trying to get rid of the Soviet Union, it took 0:06:20.360 --> 0:06:23.960 nine years and every year there was a massive protest. 0:06:24.520 --> 0:06:27.520 This protest you know, died and then you know, with 0:06:27.760 --> 0:06:31.520 very brutal reaction from the government. Then the next year 0:06:31.560 --> 0:06:34.520 there was another protest. In the meantime there was martial 0:06:34.600 --> 0:06:37.280 law with you know, military on the streets and so on. 0:06:37.680 --> 0:06:41.359 But finally many things came together and there was a 0:06:41.400 --> 0:06:44.920 tipping point at which everything collapsed, although it didn't collapse 0:06:44.960 --> 0:06:49.520 actually was it was a negotiated transition to a different regime. 0:06:49.600 --> 0:06:52.040 So you know, the establishment got an off rount to 0:06:52.120 --> 0:06:55.120 move on and it was a peaceful, negotiated transition. Similar 0:06:55.160 --> 0:06:57.000 in South Africa, based on what I know. I mean 0:06:57.200 --> 0:06:59.520 it was you know, happening in the eighties and then 0:06:59.560 --> 0:07:03.520 in the nineth these they were actual changes in Iran. 0:07:03.760 --> 0:07:08.279 The situation is different because for many reasons, demographics have changed. 0:07:08.279 --> 0:07:12.200 So now you have I believe, around ninety three million people, 0:07:12.640 --> 0:07:15.400 out of which fifty million is between you know, fifteen 0:07:15.440 --> 0:07:18.280 and forty nine years old, like the active part of 0:07:18.280 --> 0:07:22.080 the population, and there are many more young people who 0:07:22.560 --> 0:07:26.240 are educated, who have you know, access to internet, have 0:07:26.280 --> 0:07:30.600 their own aspirations and they don't believe they can achieve 0:07:30.640 --> 0:07:34.520 those aspirations in the current environment. And they also look 0:07:34.560 --> 0:07:38.000 at their parents and they think that they just wasted 0:07:38.200 --> 0:07:41.200 the whole generation, you know, waiting and doing nothing. So 0:07:41.440 --> 0:07:45.240 this makes them more angry and also like more decisive 0:07:45.280 --> 0:07:48.800 and confrontational. That's why I think it's you know, the 0:07:48.880 --> 0:07:53.600 protests were so intense and so widespread. Another reason another 0:07:53.640 --> 0:07:56.720 thing that's changed is like you remember a few years 0:07:56.720 --> 0:08:01.280 ago three twenty twenty two, there were twenty three there 0:08:01.320 --> 0:08:06.280 were protests around social freedoms after an I random girl, 0:08:06.360 --> 0:08:11.040 Mazamini died and this was driven by basically by social 0:08:11.080 --> 0:08:15.080 freedoms and mainly involved young people. Right now is driven 0:08:15.120 --> 0:08:19.720 by economic difficulties. And this is this touches every every 0:08:19.720 --> 0:08:20.840 single household in Iran. 0:08:21.160 --> 0:08:24.240 Yeah, I wanted to ask you about precisely this because 0:08:24.720 --> 0:08:27.080 the I don't want to say the cause of the 0:08:27.120 --> 0:08:29.680 recent unrest, but certainly one of the sparks seems to 0:08:29.720 --> 0:08:34.240 have been a further collapse in the currency, even higher inflation. 0:08:34.679 --> 0:08:38.400 And wasn't there something about a bank as well, a 0:08:38.440 --> 0:08:41.840 bank that was going bust supposedly with ties to the regime. 0:08:42.160 --> 0:08:45.720 How much did financial stress play into the current round 0:08:45.880 --> 0:08:47.680 of civil unrest, Well. 0:08:47.559 --> 0:08:50.000 One hundred percent, this was the main cost. Look, the 0:08:50.000 --> 0:08:54.440 protests started on the Grand Bazaar in Tehrans. So these bazaris, 0:08:54.480 --> 0:08:57.679 I mean people who operate the bazaars, many of them 0:08:57.800 --> 0:09:02.120 run like multimillion dollar revenue companies. There are actually it's 0:09:02.120 --> 0:09:05.400 like this massive shopping made with tens of thousands of 0:09:05.559 --> 0:09:08.800 you know, smaller or bigger traders there, and they need 0:09:08.840 --> 0:09:12.120 stability to just you know, do business, right, so protesting 0:09:12.320 --> 0:09:14.360 revolution like if this is the last thing they would 0:09:14.400 --> 0:09:16.920 think about. But they are in a situation you know 0:09:16.960 --> 0:09:19.880 where many of them are importers. To import, you need 0:09:20.320 --> 0:09:22.360 to be able to obtain a hard currency to just 0:09:22.400 --> 0:09:27.240 pay your supplier from via town China. Whoever, it's impossible 0:09:27.720 --> 0:09:31.560 to obtain to access heart currency or there's not enough 0:09:31.559 --> 0:09:35.479 of it, and that's obviously because of sanctions. Because of sanctions, 0:09:35.720 --> 0:09:39.079 exports of Iran just went down. Iran is exporting oil 0:09:39.200 --> 0:09:42.880 only to China, so Chinese dictating all the terms, including 0:09:43.200 --> 0:09:45.600 big discounts in the price that they're paying, but also 0:09:45.679 --> 0:09:47.520 the terms of the payment. You know, the China is 0:09:47.559 --> 0:09:50.199 paying A big part of their payments are in yu 0:09:50.240 --> 0:09:52.800 one and they and they arrive in bank accounts in 0:09:52.840 --> 0:09:55.440 some Chinese bands, so we run, you know, the only 0:09:55.480 --> 0:09:57.440 thing that Iran can do with it is to buy 0:09:57.559 --> 0:10:00.760 some Chinese goods. And what you run needs is to 0:10:00.800 --> 0:10:03.480 pay for essential goods like you know, some food products 0:10:03.559 --> 0:10:06.400 or some medical products that they need to import it 0:10:06.600 --> 0:10:09.280 at any cost. And once they allocate all their hard 0:10:09.320 --> 0:10:12.160 currency reserves to those essential products, there is not much 0:10:12.240 --> 0:10:14.640 left for other businesses. So this is one thing that 0:10:14.800 --> 0:10:17.680 is difficult to run a business. When you cannot obtain currency. 0:10:17.720 --> 0:10:20.840 You have you know, inflation running wild. But on the 0:10:20.880 --> 0:10:25.800 other hand, your consumers are losing their purchasing power at 0:10:25.840 --> 0:10:29.520 an extraordinary pace, so no one is buying. Basically, right, 0:10:29.559 --> 0:10:32.800 you have to spend on you know, eggs, milk and 0:10:32.880 --> 0:10:35.480 bread probably you know, more than ten percent of your 0:10:35.520 --> 0:10:39.640 average monthly salary. So it looks really difficult on the 0:10:39.679 --> 0:10:40.480 economic side. 0:10:40.640 --> 0:10:42.840 Can I ask very quickly, do you have a sense 0:10:42.880 --> 0:10:45.960 of what the current exchangery actually is, because you know, 0:10:46.240 --> 0:10:48.000 this is one of the few currencies in the world 0:10:48.000 --> 0:10:50.560 that we cannot look up on a Bloomberg terminal. 0:10:51.080 --> 0:10:56.079 Yeah, it's around one point five million real per one dollar, 0:10:56.600 --> 0:11:01.080 which means it went down around n twenty seven ninety 0:11:01.120 --> 0:11:05.080 eight percent over the last decade, and around fifty almost 0:11:05.080 --> 0:11:09.280 fifty percent since before the war with Israel last year, 0:11:09.320 --> 0:11:11.880 so over the last seven months. So it's really it's 0:11:11.920 --> 0:11:14.080 really falling fast. Oh and one more thing you asked 0:11:14.080 --> 0:11:17.200 about the bank. Yes, actually there was a bank collapsing 0:11:17.640 --> 0:11:20.760 in Iran just a few months ago. I mean, they 0:11:20.800 --> 0:11:25.839 formally recognized that it should be nationalized. And it's extraordinary 0:11:25.920 --> 0:11:29.000 because the size of the collapse, it was so big 0:11:29.800 --> 0:11:33.640 that it actually affected the budget of the country, the 0:11:33.679 --> 0:11:36.600 country budget for this year, so they had to reduce 0:11:36.679 --> 0:11:40.000 subsidies and just change you know, the expenditures of the 0:11:40.000 --> 0:11:43.160 budget to make room for the amount that they had 0:11:43.200 --> 0:11:45.520 to think. It was like five billion dollars that they 0:11:45.520 --> 0:11:47.920 had to put into this bank so that it doesn't 0:11:47.960 --> 0:11:50.360 you know, collapse. It was basically, and it's another it's 0:11:50.360 --> 0:11:53.480 another example that you know makes people angry obviously because 0:11:53.480 --> 0:11:56.000 it's it's it was a huge example of corruption. So 0:11:56.240 --> 0:12:00.640 you know, there was a local, well connected entrepreneur who 0:12:00.679 --> 0:12:03.240 was running a few construction companies and it wasn't the 0:12:03.280 --> 0:12:05.600 case that you know, he called a few banks and 0:12:05.720 --> 0:12:08.320 f for some preferential loans. Now he set up a 0:12:08.360 --> 0:12:11.719 bank offered the highest interest rates on the market. So 0:12:11.800 --> 0:12:15.079 many people just put their deposits into this bank, and 0:12:15.120 --> 0:12:18.320 then he was using those deposits to make loans to 0:12:18.360 --> 0:12:21.560 his own companies. I think it was like a majority 0:12:21.600 --> 0:12:23.839 of the loans where to his own companies. He built 0:12:23.840 --> 0:12:26.480 the biggest shopping mall in the in the region, which 0:12:26.520 --> 0:12:28.600 was you know, a crazy idea from the beginning, and 0:12:28.640 --> 0:12:31.640 many things like this, right, so another example of phonism 0:12:31.720 --> 0:12:32.520 and corruption. 0:12:32.840 --> 0:12:34.719 This is the shopping mall that's like as big as 0:12:34.720 --> 0:12:36.040 the Pentagoners, yeah. 0:12:35.840 --> 0:12:39.240 Twice as big. I read the journal article, twice as 0:12:39.240 --> 0:12:43.040 big as the Pentagon. This luxury shopping mall in Iran 0:12:43.280 --> 0:12:47.480 suffering from massive hyperinflation and all sorts. But I have 0:12:47.559 --> 0:12:51.680 to say, starting your own bank to fund your construction 0:12:51.800 --> 0:12:55.560 company a kind of a brilliant idea. B. This is 0:12:55.600 --> 0:13:00.160 why bank supervision and various things is important. Actually, this 0:13:13.400 --> 0:13:17.240 it's surreal to me, the reality of here is a 0:13:17.320 --> 0:13:20.640 country that right now, is it the fact of information 0:13:20.880 --> 0:13:23.960 black hole you mentioned, we don't know if the stock 0:13:24.040 --> 0:13:28.000 market is trading. Here's a country on Earth and right 0:13:28.080 --> 0:13:31.120 now where we are in New York or where you 0:13:31.200 --> 0:13:34.000 are in London, we can't even answer the simple question 0:13:34.120 --> 0:13:35.720 is the stock market functioning right now? 0:13:36.360 --> 0:13:39.360 Yeah? Exactly. So all the stories that I that I 0:13:39.440 --> 0:13:42.559 hear is that the way people were able to communicate 0:13:42.679 --> 0:13:46.560 is because someone had access to a starlink corpor reading 0:13:46.559 --> 0:13:50.520 in Iran, or someone's friend was working at a hospital 0:13:50.600 --> 0:13:54.160 and hospital had some access to either the White Internet 0:13:54.240 --> 0:13:56.480 or some of these local networks. So that's why I also, 0:13:57.120 --> 0:13:59.959 it's not possible for the country to keep the black 0:14:00.080 --> 0:14:03.720 out at this scale and intensity for too not because 0:14:03.880 --> 0:14:06.679 you know, the whole economy stops right Actually, the administration 0:14:06.800 --> 0:14:10.600 of the countries is not possible right without without internet. 0:14:10.880 --> 0:14:14.040 So it's it was it was sharp intense, but it 0:14:14.080 --> 0:14:15.960 has to be short term because otherwise, you know, the 0:14:15.960 --> 0:14:17.439 country will just stop. 0:14:17.880 --> 0:14:23.160 What happens to your portfolio in this particular scenario, your investments. 0:14:23.760 --> 0:14:26.240 So the stock market seems to have been stable over 0:14:26.280 --> 0:14:30.200 the last week. I don't see the exact numbers yet 0:14:30.240 --> 0:14:32.560 in terms of, for example, liquidity, and I and I 0:14:32.600 --> 0:14:34.720 suspect that you know, there was not much going on 0:14:34.920 --> 0:14:37.840 because I'm not sure if even local investors had a 0:14:37.920 --> 0:14:42.320 chance to were able to put orders online. Right maybe 0:14:42.360 --> 0:14:44.280 maybe it was all school, you know, calling your broker 0:14:44.400 --> 0:14:46.560 or going to your broker. So it was stable, so 0:14:47.080 --> 0:14:49.640 nothing Actually actually it went up by four percent and 0:14:49.680 --> 0:14:52.720 the currency was stable to the currency is easier to 0:14:53.080 --> 0:14:57.720 manipulate by by the central bank using some reserves, especially 0:14:57.720 --> 0:15:00.240 when when there's low liquidity. So I think, what would 0:15:00.240 --> 0:15:03.200 be more interesting in the next few weeks. So, for example, 0:15:03.240 --> 0:15:05.720 what happened last year after the war when there was 0:15:05.760 --> 0:15:09.800 a war between Iran and Israel in June, the stock 0:15:09.840 --> 0:15:14.640 market was shut down for around two weeks. After it reopened, 0:15:15.440 --> 0:15:19.920 the prices didn't change much, but then local investors, mainly 0:15:19.960 --> 0:15:24.000 retail investors, this retail driven market started selling because they 0:15:24.040 --> 0:15:27.280 didn't have access to their funds, so they started selling 0:15:27.640 --> 0:15:30.680 at any price just to get money out. And there 0:15:30.760 --> 0:15:35.359 was a massive selling pressure that lasted from July until September. 0:15:35.760 --> 0:15:38.400 And when the buyer saw a selling pressure like this, 0:15:38.520 --> 0:15:41.320 so every day you can see the queue of unfilled 0:15:41.440 --> 0:15:44.080 orders building up that will go to the next day 0:15:44.120 --> 0:15:46.320 and the next day and the next day. So people 0:15:46.400 --> 0:15:49.880 just stopped buying as well, obviously, so the market went 0:15:49.960 --> 0:15:53.360 down like irrespective of you know which saws wood quality, 0:15:53.400 --> 0:15:56.880 would valuation whatever, just a massive sell off which lasted 0:15:57.000 --> 0:16:00.560 two three months, and then it rebounded. So it went 0:16:00.640 --> 0:16:05.040 down like in dollar terms from let's say index of 0:16:05.440 --> 0:16:09.760 I don't know, three hundred sixty to two hundred and thirty. Yes, 0:16:09.800 --> 0:16:13.760 I'm if I'm looking at this correctly, so let's say 0:16:13.960 --> 0:16:16.520 thirty six percent in dollar terms in just two and 0:16:16.560 --> 0:16:20.120 a half months. The selling pressure then was exhausted. All 0:16:20.120 --> 0:16:23.560 the sending, all the sales were absorbed. Valuations went down 0:16:24.000 --> 0:16:26.400 to the one of the I think very close levels 0:16:26.440 --> 0:16:28.640 to the like all time lows in the history of 0:16:28.680 --> 0:16:30.920 the of the Iran and stock market, which is around 0:16:30.960 --> 0:16:33.720 twenty years old. So you know, it's always cheap, right, 0:16:33.760 --> 0:16:36.720 but this time it went you know below three times 0:16:37.080 --> 0:16:40.080 net turnings and median media for the market, right, so 0:16:40.120 --> 0:16:43.160 you could probably find stocks, you know, two times earnings. 0:16:43.360 --> 0:16:45.920 Then it rebounded, but it's still around, you know, like 0:16:45.960 --> 0:16:48.400 three and a half times earnings. So valuations are very 0:16:48.520 --> 0:16:52.160 much still driven by war. So everything is priced for war, right, 0:16:52.200 --> 0:16:55.720 So that's that's the sentiment hasn't really recovered after the 0:16:55.840 --> 0:16:58.160 last war, and now we had protests, so everything in 0:16:58.200 --> 0:16:59.760 Iran is price for war basically. 0:17:00.240 --> 0:17:04.080 You know, in the news, obviously we hear I think 0:17:04.160 --> 0:17:07.040 we get a better grasp and again I plead a 0:17:07.040 --> 0:17:08.840 lot of ignorance. That's not something I have a lot 0:17:08.840 --> 0:17:12.479 of familiarity with. But what the protesters want and you 0:17:12.520 --> 0:17:16.520 hear about young people and wanting more freedoms, can you 0:17:16.600 --> 0:17:20.679 give a sort of I don't know, political economy breakdown 0:17:20.760 --> 0:17:23.119 of like you know, you don't hear about the people 0:17:23.119 --> 0:17:27.359 who obviously don't want regime change generally speaking, they we 0:17:27.400 --> 0:17:29.800 don't know much about them or who they are, who 0:17:29.800 --> 0:17:35.400 are the sort of different factions socioeconomically that and how 0:17:35.440 --> 0:17:38.160 they allocate to either side sort of I guess a 0:17:38.200 --> 0:17:41.000 class understanding of the tensions. 0:17:42.000 --> 0:17:45.880 So there's a big group of young people and young 0:17:45.920 --> 0:17:51.000 people want freedom and opportunities and like fair rules in 0:17:51.040 --> 0:17:56.679 the economy. Basically there are older people, adults in larger 0:17:56.720 --> 0:18:00.800 cities which are more liberal. Definitely run they run is 0:18:00.800 --> 0:18:04.080 a big city, it's like twelve million people altogether, and 0:18:04.359 --> 0:18:07.400 their run. Life in the run looks different to most 0:18:07.440 --> 0:18:10.080 other cities in Iran, with you know, women no longer 0:18:10.119 --> 0:18:12.840 wearing hg J apps. It's much more open, it's much 0:18:12.880 --> 0:18:16.440 more liberal. But also there's a big group of people 0:18:16.480 --> 0:18:21.119 who are very very religious and they support the government 0:18:21.480 --> 0:18:24.560 that is also there is a religious government. So the 0:18:25.240 --> 0:18:28.479 concept of Islamic Republic is very close close to their 0:18:28.520 --> 0:18:30.920 part and they support it and as part of their 0:18:31.240 --> 0:18:34.240 religion and part of their traditions. So in terms of 0:18:34.280 --> 0:18:38.440 you know, how they observe religious holidays, you know, going 0:18:38.480 --> 0:18:41.280 to mosque, dressing in a certain way and so on. 0:18:41.560 --> 0:18:44.240 And now how does this split, I would say that 0:18:45.280 --> 0:18:50.200 probably between ten and thirty percent is the religious part. 0:18:50.560 --> 0:18:54.879 Ten like very religious and just listening to the to 0:18:54.920 --> 0:18:57.679 the prayer and you know, whatever political advice comes from 0:18:57.720 --> 0:19:00.639 the mosque. And so one of the afard of the 0:19:00.680 --> 0:19:06.199 society just being religious and supporting the Islamic Republic as 0:19:06.240 --> 0:19:09.879 a religious state. Just a small note that it's an 0:19:09.960 --> 0:19:13.440 Islamic republic, but very tolerant of other religions. I mean, 0:19:13.760 --> 0:19:18.200 all the churches work normally there, from Jewish to Christian 0:19:18.240 --> 0:19:21.120 to the Austrian. You know, everyone is doing his own 0:19:21.160 --> 0:19:23.480 thing in terms of religion in Iran and it's okay. 0:19:24.160 --> 0:19:27.120 And the rest are people who want a modern, open 0:19:27.400 --> 0:19:30.160 state with the young, including the young people who want 0:19:30.200 --> 0:19:33.480 it fast basically and want to be able to follow 0:19:33.520 --> 0:19:36.880 their dreams and aspirations. So that would be the breakdown. 0:19:37.680 --> 0:19:41.080 So I should just say we're recording this on January fifteenth. 0:19:41.200 --> 0:19:45.320 The headlines are coming pretty fast nowadays, so who knows 0:19:45.359 --> 0:19:47.960 what will happen by the time we publish this episode 0:19:48.000 --> 0:19:51.120 in just twenty four hours or so. But the latest 0:19:51.119 --> 0:19:54.679 headline is that tensions seem to have eased a little 0:19:54.680 --> 0:19:57.880 bit with the US because the Iranian government said they're 0:19:57.920 --> 0:20:00.760 not going to kill any more people, told Trump they're 0:20:00.760 --> 0:20:05.000 not going to execute more people. How should we interpret that? 0:20:05.240 --> 0:20:09.200 Is this all over or do you expect some unrest 0:20:09.320 --> 0:20:10.040 to continue? 0:20:10.520 --> 0:20:13.600 Well, it's hard to predict. It's very unpredictable. I mean, 0:20:13.760 --> 0:20:16.560 unrest is difficult to predict. The dynamics around the unrest. 0:20:16.960 --> 0:20:20.320 Then you know, the government of Iran is difficult to predict. 0:20:20.400 --> 0:20:22.320 But you know the government of the US is difficult 0:20:22.359 --> 0:20:25.000 to predict because you know right now, yesterday today, yesterday 0:20:25.000 --> 0:20:27.679 you had news, you had news that President Trump was 0:20:27.680 --> 0:20:31.280 saying that, yes he got information that you know, killing stopped. 0:20:31.600 --> 0:20:33.840 So this is what he was, you know, what he 0:20:33.880 --> 0:20:36.920 wanted to achieve. So it looks better. The day before 0:20:37.520 --> 0:20:39.879 everyone thought that, you know, they are getting ready to 0:20:39.960 --> 0:20:42.800 strike Iran. So I think those things can change in 0:20:42.840 --> 0:20:46.240 twenty four hours. So it's just impossible to predict. The 0:20:46.280 --> 0:20:49.160 only thing I would I would say is that because 0:20:49.520 --> 0:20:53.119 it does feel different this time, the scale of the 0:20:53.160 --> 0:20:56.040 protests and the reasons of the protest, and also the 0:20:56.080 --> 0:20:59.200 government just comes and you know, their way out of 0:20:59.240 --> 0:21:03.600 the problem. It's the financial situation is really tough. But 0:21:03.760 --> 0:21:07.320 some changes are likely. I'm not saying that in the 0:21:07.359 --> 0:21:10.120 next few days or weeks. Maybe it will take months, 0:21:10.720 --> 0:21:13.400 but I think it's just moving this direction. So there 0:21:13.400 --> 0:21:15.840 are some changes that are like here, and many scenarios 0:21:15.840 --> 0:21:18.240 are possible. I mean, look at Venezuela. There was no 0:21:18.359 --> 0:21:21.480 rigion change there, right, I mean, there was a like again, 0:21:22.240 --> 0:21:27.000 negotiated solution with you know, Maduro taken out and the 0:21:27.040 --> 0:21:30.280 rest of the government and establishment just same place, but 0:21:30.920 --> 0:21:33.640 they have to cooperate, right, So there's probably more than 0:21:33.680 --> 0:21:36.639 one scenario possible for the future. 0:21:37.080 --> 0:21:39.679 What a world we live in where civil unrest is 0:21:40.240 --> 0:21:44.040 becoming a major investment theme. Thank you Macha for coming 0:21:44.080 --> 0:21:47.560 on lots More. Really appreciate another update from you. 0:21:47.800 --> 0:21:48.679 Thank you for having me. 0:21:53.359 --> 0:21:56.480 Lots More is produced by Carmen Rodriguez and dash Ol Bennett, 0:21:56.480 --> 0:21:58.680 with help from Moses Onam and kel Brooks. 0:21:59.040 --> 0:22:01.000 Our sound engineer is Blake Maples. 0:22:04.080 --> 0:22:07.439 Please rate, review, and subscribe to Odd, Lots and lots 0:22:07.480 --> 0:22:10.359 More on your favorite podcast platforms. 0:22:10.080 --> 0:22:12.880 And remember that Bloomberg subscribers can listen to all our 0:22:12.920 --> 0:22:17.560 podcasts ad free by connecting through Apple Podcasts. Thanks for listening.