Speaker 1: Welcome to Bloomberg Opinion. I'm Vonnie Quinn this week. My
Speaker 1: single greatest concern is that we still don't have the
Speaker 1: rates story correct and that people are still betting that
Speaker 1: the FED doesn't really mean it. John Authors takes a
Speaker 1: random walk with me through some concerns for the market
Speaker 1: in three and later Reach had Twitter's future with Bloomberg Opinions.
Speaker 1: Tim Coulten in Tai Pain. A lot of people keep
Speaker 1: saying that they have left Twitter or will be leaving Twitter,
Speaker 1: and they're going into places like Post and master Don
Speaker 1: and even Coup and a few other places. But yet
Speaker 1: those same people have stayed they're leaving Twitter, are still
Speaker 1: staying on Twitter. First though, She's back Bloomberg Opinions. Julie
Speaker 1: Ran finally got to visit home that's Shanghai after three
Speaker 1: years of COVID zero lockdown. She describes her experience, which
Speaker 1: coincided with China's pivot away from COVID zero, also how
Speaker 1: investors should be considering China's new determination to support economic growth.
Speaker 1: So surely you went back to mainland China for the
Speaker 1: first time in more than three years, and you're just
Speaker 1: now back in Hong Kong. It was a huge pivot
Speaker 1: that China did from zero COVID to what looks like,
Speaker 1: you know, let it ripped through the economy. Is that
Speaker 1: what happened? Absolutely I So I went back to my
Speaker 1: hometown Shamhai label Dembora when I came out of quarantine,
Speaker 1: trying to judge retrough this COVID policy. So everything changed
Speaker 1: that before people had to do like daily PCR test
Speaker 1: to be able to access public values. All of that
Speaker 1: gold group that helped app so and so forth. So
Speaker 1: the first week was very nice, it was liberating, right
Speaker 1: like China had their three years of COVID zero policy,
Speaker 1: and the restaurants were full, trendy bars were full. But
Speaker 1: after that, the second week after the reopening, the street
Speaker 1: started to sing out all of a sudden, and my
Speaker 1: own parents, but that was the tested politives with their
Speaker 1: RACTID test eight days after the reopening policy change. So
Speaker 1: basically with two weeks, pretty much seventy percent of Shanghai
Speaker 1: probably got affected by uh COVID based on online surveys
Speaker 1: and my personal observations of the family and friends. So
Speaker 1: we are hearing now some horrific stories, perhaps not like
Speaker 1: it was in New York in the very early days
Speaker 1: of the pandemic. But we are hearing about full crematoriums
Speaker 1: and about people not being able to pay for funerals,
Speaker 1: and we don't quite know what's going on in China.
Speaker 1: Can you give us a better sense? I mean, I
Speaker 1: was fairly lucky. My parents well recovered, but their friends
Speaker 1: both my parents are seventy six year osgod so, so
Speaker 1: they didn't know a lot of old people, right. So
Speaker 1: they were sharing stories friends and friends who passed away
Speaker 1: whose body couldn't be picked up, like one story by
Speaker 1: uncle her. There was that a friend elder system. She
Speaker 1: she was in nineties. Her body was kept at home
Speaker 1: for eight days. They have to keep her in the bathroom.
Speaker 1: So these stories are true like their anisoto, but they
Speaker 1: are true and and truth is just China didn't have
Speaker 1: this kind of a capacity because they lead with true fact.
Speaker 1: Basically within three weeks of shankai were expected. But still
Speaker 1: of course, but you know that there will be casualties
Speaker 1: at the Yeah, it was quite difficult for a lot
Speaker 1: of families. Now, we talked about this on the program
Speaker 1: many times last year, about how there was a lot
Speaker 1: more talk about zero COVID than there was about say,
Speaker 1: vaccine policy, or about, for example, getting more capacity hospital
Speaker 1: wise into the system. It seems like at a certain
Speaker 1: point the leadership decided, well, there are now demonstrations this
Speaker 1: is getting dangerous to us or even more dangerous to
Speaker 1: the economy. We're going to open and we don't really
Speaker 1: have anything else to offer. We didn't up the capacity
Speaker 1: of hospitals. We vaccinated everybody we could, but we didn't
Speaker 1: force vaccinations. Is that a correct interpretation? I think so.
Speaker 1: I think that the leadership is pretty savvy. They understand
Speaker 1: that if they continue our coverage or it will be
Speaker 1: politically dangerous, right like basically a week this or that,
Speaker 1: the opening shift, like there were protests across Trainer, So
Speaker 1: they so they knew that, you know, that was inevitable.
Speaker 1: And I think they're pretty fairly they know that, at
Speaker 1: least on the ground that I can sense that the
Speaker 1: people this time, they feel resigned. They feel like COVID
Speaker 1: going to come to them, you know later, But they
Speaker 1: don't feel this kind of anger that they had during
Speaker 1: the stay, the two months locktow Big Shanhai or or
Speaker 1: all the daily PCR texts. I think people are so
Speaker 1: sick of COVID zero. They're rather be sick at this point.
Speaker 1: So so that's why they do was like, Okay, we're
Speaker 1: just going to let it with because if we keep
Speaker 1: COVID zeros, these people are going to revolt and that
Speaker 1: they're ruling there were become on. Now. There are other
Speaker 1: auncillary problems to the actual disease itself and contracting the
Speaker 1: disease that other countries, including the United States, have had
Speaker 1: to deal with, including things like absence from work, returned
Speaker 1: to work long COVID. Are Chinese people talking about any
Speaker 1: of these things. It's so funny trying to letting it with,
Speaker 1: writing so fast that the government says that, oh, you
Speaker 1: can actually return to work before you even turn negatives
Speaker 1: well right now like a record test that are skilled
Speaker 1: commodities anyhow, So basically they're encouraging people to to come
Speaker 1: back to work even if they're positives as long as
Speaker 1: the fever is got um. I think they're trying to
Speaker 1: the Chinese government priority has shifted completely to economic growth,
Speaker 1: so they actually want people to come back to work
Speaker 1: at a set and truly is there work for them
Speaker 1: to go back to? Now, how did the pandemic affect jobs?
Speaker 1: We know that youth unemployment was that at one point.
Speaker 1: It's too early to say. I think are China is
Speaker 1: still going through this massive waves of infections, but the
Speaker 1: certain jobs are quite there, are quite available. For instance,
Speaker 1: the food delivery right like the Chinese people are doing
Speaker 1: a lot of online delivery and ecomers, and I do
Speaker 1: see that part of the economy coming back. The consumer
Speaker 1: tech parts. Well, that's really fascinating because as much as
Speaker 1: we know that Chinese people like to save, they also
Speaker 1: haven't really been earning perhaps as much as they would
Speaker 1: have because of the pandemic. That do they have cash
Speaker 1: to spend online. It's interesting. I think trainer is going
Speaker 1: to be a very it's becoming very segmented. It's predicting
Speaker 1: whether the Chinese economy can be founded very quickly. It's
Speaker 1: going to be as controversial as predicting whether the US
Speaker 1: is going to a recession this year. On the one hand,
Speaker 1: that a lot of people have their jobs, they're struggling
Speaker 1: because of cold. On the other hand, I saw first
Speaker 1: hand that people perhaps middle or upper middle class, have
Speaker 1: a lot of spending power. For instance, on Christmas Eve,
Speaker 1: I saw two dozen young people lining up in front
Speaker 1: the versionels, So I think they just want to buy
Speaker 1: last DA they get and that was when you know,
Speaker 1: Chaka had a huge outbreak and there was a peeple
Speaker 1: of the outbreak. So I think there is money to
Speaker 1: be said. And I have friends who are buying brand
Speaker 1: new sets because they think, oh, you know, because twenty
Speaker 1: three they can do road trips again. So there are
Speaker 1: pockets of the economy where you can find very strong
Speaker 1: demands and perhaps jobs. It's so fascinating. Will she have
Speaker 1: to enact fiscal stimulus like we talked about last year
Speaker 1: in order to get the economy back on track, particularly
Speaker 1: the property sector. Obviously consumer text seems to be okay,
Speaker 1: but maybe there's need there as well. And does he
Speaker 1: have the capacity to do Socially, there is going to
Speaker 1: be less capacity than the previous years because of the
Speaker 1: covidual or the Chinese government has spent a lot of
Speaker 1: money on covido. But this year's talk is that the
Speaker 1: government will have to put down a little bit more
Speaker 1: set and right now, this cod stimulates makes more set,
Speaker 1: right because the biggest hurdles are kind of past us.
Speaker 1: And if you simulate the economy right now, perhaps try
Speaker 1: and I can go into the early stage of a
Speaker 1: business ce cole quite quickly, so I think there is.
Speaker 1: And also regarding the real estate sector, the government is
Speaker 1: going to announce even more stimulus measures based on my sources,
Speaker 1: very soon, even more for the property sector in particular. Yes, interesting,
Speaker 1: surely we've talked about this on the program before as well.
Speaker 1: But I'm curious as to your thoughts now that you've
Speaker 1: been back to the mainland, how will the people perceive
Speaker 1: that the government fared? So are people happier now with
Speaker 1: the government that the government did pivot away from COVID zero.
Speaker 1: I think people are happier with life in general. They
Speaker 1: just had enough of COVID zero. But in terms of
Speaker 1: the government's credibility, it took a huge hit. I mean,
Speaker 1: autocron has been around for one year, right for eleven months,
Speaker 1: and this is large new talking. It's people online talking.
Speaker 1: For eleven months, people were doing sports to do daily
Speaker 1: PCR test, there was steps, neighborhoods, they lockdom and then
Speaker 1: for the twelfth but December of the year everybody ended
Speaker 1: up with COVID anyhow, and there was no basic madaicine,
Speaker 1: not even pilot nor in shots. So they felt that
Speaker 1: that you know that the government lost a lot of credibility,
Speaker 1: and then the so called medical experts they were talking
Speaker 1: about COVID being a very very deadly disease, to covid
Speaker 1: is best by being nothing more than the flu, and
Speaker 1: the poor just started to mistrust the government more after
Speaker 1: this Hope year, of course, Yeah, it's really fascinating. And Suley,
Speaker 1: how did the vaccines end up faring because she didn't
Speaker 1: want other types of vaccines, wouldn't allow the m R
Speaker 1: and A vaccines. It's interesting when I went in Chanhaire,
Speaker 1: I noticed before even the reopening, I noticed that Vaccine
Speaker 1: Pact is just not a big deal in China. They
Speaker 1: focused more on PCR testing results then whether you have
Speaker 1: vaccinated or not. And then I started to notice a
Speaker 1: lot of elderly they just refused to be vaccinated. It's
Speaker 1: I guess right after the opening there was some progress,
Speaker 1: but it kind of dropped the ball again. And then
Speaker 1: the truth of that is most people have been expected,
Speaker 1: so the relevance of vaccines becomes not so much a
Speaker 1: big deal at this point. Surely is there a danger
Speaker 1: that more rural areas and other parts of China than
Speaker 1: the major cities haven't seen the wave of COVID infections
Speaker 1: yet will see it and then will suddenly slow the
Speaker 1: whole economy down as well. I think, you know it
Speaker 1: has to be very very low. Are year is even
Speaker 1: more less to be second third year cities around the
Speaker 1: East coast based on my so sated cities, they probably
Speaker 1: had heard immunity already. I mean, this spread is very
Speaker 1: very fast. I think China what has gotten over this
Speaker 1: before Tchines Do Year, which is coming up in what
Speaker 1: three weeks? So surely what tends to happen around the
Speaker 1: Chinese New Year with Chinese markets? And will it be
Speaker 1: different this year because of COVID. Uh, It's a very
Speaker 1: good question. I think this year it will all difference
Speaker 1: of how fast China can get past COVID and know
Speaker 1: whether people see economics reepout. So people are going to
Speaker 1: look at travel data without consumption data subway to see
Speaker 1: if there is consumption demand because sumer confident. If that's good,
Speaker 1: then the market that can be found as part of it.
Speaker 1: Bloomberg Opinions Shuli Ran stay tuned. John Author is next
Speaker 1: on some of the market's main concerns for twenty three.
Speaker 1: This is Bloomberg Opinion. You're listening to Bloomberg Opinion. I'm
Speaker 1: Vonnie Quinn. The risk of on anchoring and inflation expectations
Speaker 1: is still there. So I do think you know you
Speaker 1: again today, which we've been seeing really for the past
Speaker 1: maybe month or two, a little more recognition of those lags,
Speaker 1: that there are two sided risks now. But nonetheless, you know,
Speaker 1: I think the message you got here today is more
Speaker 1: hikes are coming, some thoughts they are following the publication
Speaker 1: this week of the latest f O MC minutes. Of course,
Speaker 1: the FED is one of the market's concerns earlier this
Speaker 1: new year Bloomberg Opinions. John Author has joined me to
Speaker 1: talk concerns overall for US investors as we kick off
Speaker 1: three So, John, your main concerns for US markets? The
Speaker 1: US investors, let's put it that way. My single greatest
Speaker 1: concern is that we still don't have the rates story
Speaker 1: correct and that people are still betting that the FED
Speaker 1: doesn't really mean it. They might be right, but on
Speaker 1: balance probabilities, I don't think they are. And the fact
Speaker 1: that they are still prepared to make quite such a
Speaker 1: confident bet that the FED will be cutting by the
Speaker 1: end of this year worries me. It means that there
Speaker 1: are there are more banana skins potentially ahead of us,
Speaker 1: and that's why the third had to come out and
Speaker 1: basically shoved and investor's faces again with the f O
Speaker 1: MC emnutes, which bear in mind, were December is meeting,
Speaker 1: not January's meeting. Yes, which is exactly what they did
Speaker 1: twelve months ago, coming up with rather clearer declaration of
Speaker 1: hawk ish intent in the minutes than had been obvious
Speaker 1: when the meeting itself happened, and it doesn't seem to
Speaker 1: have had an effect. Will the FIRD have to come
Speaker 1: out now again and say it again? My suspicion is
Speaker 1: that they will. That that we're likely to get some
Speaker 1: fairly aggressive hawk ish FED speak for the next couple
Speaker 1: of weeks leading up to the next meeting, because they
Speaker 1: cannot be happy that the market is positioned assets currently
Speaker 1: is they need financial conditions to tighten to help them
Speaker 1: deal with inflation. That's central to how they think they're
Speaker 1: going to overcome inflation, and wild markets are confidently betting
Speaker 1: that the FIT is actually you know, a dove in
Speaker 1: wolves clothing. That's not going to help, that counteracts what
Speaker 1: the FED is trying to do. Now we're talking rates
Speaker 1: markets here, right, because primarily, yeah, equity markets are really
Speaker 1: not doing all that much of anything at these US
Speaker 1: equity markets who can talk about China and moment, Yes,
Speaker 1: I think that's true. Certainly had a massive rerating last year,
Speaker 1: multiples came down very significantly, but earning his expectations still
Speaker 1: managed to advance a little. I'm inclined to be because
Speaker 1: I have a bearish tendency which I really need to
Speaker 1: do something about to think that that that stocks are
Speaker 1: still somewhat on the overvalued side. But even an in
Speaker 1: veterate bear has to say that the obvious overpricing of
Speaker 1: of twelve months ago has been dealt with. Um, we're
Speaker 1: much closer to some sort of sensible long term trend
Speaker 1: for ship crisis. Now. The concern is that normally on
Speaker 1: the eve of a recession, which if rates are going
Speaker 1: to come down, we have to have. Normally on the
Speaker 1: heap of a recession, stock start falling a lot further,
Speaker 1: you start predicting that earnings will fall. So that is
Speaker 1: that is the contradiction that bothers me at there at
Speaker 1: the heart of the stock and bond markets at the moment.
Speaker 1: But it's kind of fascinating the right because before the
Speaker 1: holidays there did seem to be a lot of pessimism. Yes,
Speaker 1: I mean there there is a sense this does get
Speaker 1: very very confusing, that pessimism is good for the bond
Speaker 1: market and not that bad for the stock market. In
Speaker 1: that an economic slowdown, particularly if it isn't too bad
Speaker 1: that causes rates to come down, might well be pretty
Speaker 1: good for financial assets. Um. And I suppose that that
Speaker 1: does make some ns and a lot of the risks
Speaker 1: that are out there are risks that we have really
Speaker 1: become accustomed to in the last Yeah, we know about
Speaker 1: jing ping, we know about putting. We're not terribly happy
Speaker 1: about it. But I think people feel rightly or wrongly,
Speaker 1: that they've got their arms around what those risks are consequences,
Speaker 1: at least for financial markets. We did see downside surprises
Speaker 1: and things like new orders and prices paid this week
Speaker 1: as well. Is that providing any solace? Again, if you
Speaker 1: want inflation to come down, and your bet is that
Speaker 1: we're having a recession quicker than the FED thinks, and
Speaker 1: so the FED is wrong about predicting such an aggressive
Speaker 1: policy for this year, if you have that persuasion, then yes, certainly,
Speaker 1: the I S M price is paid, which dropped below forty,
Speaker 1: where fifty is the dividing line between recession and contraction.
Speaker 1: That's really a really good data point if you're of
Speaker 1: that persuasion. But again in terms of where the stock
Speaker 1: market goes apart from during the very strange conditions of
Speaker 1: the decade after the crisis, whenever price is paid drops
Speaker 1: that low, there is a recession shortly there are there.
Speaker 1: I think the other thing that has really encouraged people
Speaker 1: in the last couple of days, and I certainly can't
Speaker 1: deny that it's a reason for encouragement, is that a
Speaker 1: lot of European inflation numbers have come in far better
Speaker 1: than expected. Very we did see rallies in European, yes,
Speaker 1: but very high inflation numbers obviously, but sharply lower than
Speaker 1: the month before and sharply lower than expectations. And that
Speaker 1: brings up another point. Oil prices have also dropped prety substantially,
Speaker 1: which if that's warning us about declining demand eight great,
Speaker 1: but it's certainly again does give some strength to the
Speaker 1: people were betting against the FED. The only problem here
Speaker 1: that is jolts the The vacancy rate continues to be
Speaker 1: obdurate LYE stunning lee High suggesting there's a very tight
Speaker 1: labor market and that and that is the big thing
Speaker 1: that the FED is very worried about. There is something
Speaker 1: very strange about the way the labor market is clearing
Speaker 1: at the present, and the data on that front have
Speaker 1: been an unpleasant surprise, even though yes, you're there's been
Speaker 1: some significant pleasant surprises. But that's central, you know, that
Speaker 1: central enigma of what on earth is going on in
Speaker 1: the in the labor market remains as intractable as ever, John,
Speaker 1: does the market care about the speakership chaos? Generally speaking?
Speaker 1: I think it's over that that there's a cliche that
Speaker 1: markets actually like gridlock, because it tends to mean that stupid.
Speaker 1: I mean, this is not even people can't even get
Speaker 1: worn in gridlock. Yes, I am somewhat concerns that the
Speaker 1: market isn't reacting somewhat more negatively to this um. The
Speaker 1: single biggest reason for this is I have a I
Speaker 1: have a horrible feeling. I'm gonna have to write a
Speaker 1: lot about the debt seiling over the next twelve months.
Speaker 1: And one of the big arguments so the debt seeling
Speaker 1: imply if you if if Congress refuses to raise the
Speaker 1: debt seeling, then it's conceptually possible to refuse to give
Speaker 1: the government the money it needs to pay off debts
Speaker 1: it's already incurred and already promised to repay. So Congress
Speaker 1: can theoretically force Uncle Sam to default, which would be
Speaker 1: at least as bad as what happened in two thousand
Speaker 1: and eight, probably worse. Um. The reason people have played
Speaker 1: brinkmanship with this in the past, in the Tea Party era,
Speaker 1: but not gone all the way is because you would
Speaker 1: need to be stupid to do this. Just absolutely plenty
Speaker 1: of good arguments in favor of being fiscally more conservative,
Speaker 1: reigning in the deficit. Doing it that way is literally indefensible,
Speaker 1: just madness. Remember the scare when SMP I think it
Speaker 1: was downgraded the United States and that that was a
Speaker 1: very major market turning point, But it was that that
Speaker 1: was terrifying. That was the last really major tremor of
Speaker 1: the of the of the whole Lehman crisis. And UM,
Speaker 1: it looks to me that if there are really twenty
Speaker 1: people on the Republican Party who are mad enough to
Speaker 1: do this, and you don't seem to be actually having
Speaker 1: any kind of a sensible debate. They're just saying no.
Speaker 1: All of these people are people who are philosophically against
Speaker 1: raising the debt ceiling. So yes, the risks are horrible.
Speaker 1: I mean, the Democrats are going to vote to raise it,
Speaker 1: so you don't need too many Republicans at all to
Speaker 1: vote for it to come in the The issue is
Speaker 1: that you'll have a speaker who's so weak that he
Speaker 1: can't even bring it to a vote. I myself think
Speaker 1: that the risk of a US default is still tiny. Um.
Speaker 1: I also think, however, that it's written in the last
Speaker 1: two days, because it really does look like they might
Speaker 1: be stupid enough to do this. Um. It bothers me
Speaker 1: that that's not clearer in the markets, and we do
Speaker 1: have to watch for tail risks, right, I mean base
Speaker 1: case scenarios or just that they're just base case scenarios,
Speaker 1: the tail risks of the market to be worried about.
Speaker 1: Now that this is no I mean, a voluntary US
Speaker 1: default is as classical black swan as you can imagine.
Speaker 1: There's there's no precedent for it because people always know
Speaker 1: if there are money prints authority, they can always pay
Speaker 1: their debts if they want to. It would be a
Speaker 1: totally voluntary thing that they did this. UM. It's an
Speaker 1: extremely unlikely, extremely extreme too many extremes there, but extremely
Speaker 1: extreme events, and that's a classic black swan. That's exactly
Speaker 1: what markets find it very difficult to price UM. Obviously,
Speaker 1: at evens out, I would still bet that it doesn't happen.
Speaker 1: Somehow or other sense will prevail UM, but it might.
Speaker 1: I'm surprised that there isn't a little more work trying
Speaker 1: to UM, trying to just trying to deal with that
Speaker 1: tail risk, and also trying to sort of prompt Republican
Speaker 1: refuse nicks that you know, the good market capitalists in
Speaker 1: Wall Street do not want you to do this. Yeah,
Speaker 1: the people with four oh one case really don't want
Speaker 1: you to do this. It doesn't seem to matter though
Speaker 1: to you know, a faction of Republicans. It's it's difficult
Speaker 1: to be polite about them. You're trying to be politically
Speaker 1: as neutral as you can be, and a lot of
Speaker 1: their philosophical points of things that I can find quite sympathetic.
Speaker 1: Their way of going about their job is just beyond
Speaker 1: beyond any defense. It's not it's not a good faith
Speaker 1: way to to go about being an elected representative. Jonathan
Speaker 1: Branston would make the point that they don't actually want anything,
Speaker 1: They just want chaos. That's the part it's it's it's
Speaker 1: a reality TV type approach. It's not even like the
Speaker 1: Tea Party a decade ago really were fanatical about the
Speaker 1: deficit in a way that was perhaps extreme, but that
Speaker 1: you knew what they wanted and they were trying to
Speaker 1: get that, and they did, indeed succeed in getting Barack
Speaker 1: Obama to be much less fiscally generous than he wanted.
Speaker 1: They had an ideology, Yes, they had an ideology. They
Speaker 1: had some policies they wanted to do, and they had
Speaker 1: some success in executing those policies. Um this obviously has
Speaker 1: similarities to the Tea Party a decade ago in terms
Speaker 1: of in terms of the people who are involved, some
Speaker 1: of their motivations, but it's a it's much more diffuse,
Speaker 1: it's much less coherent, and it's much more destructive. I think,
Speaker 1: John a quick word about China. Maybe we'll lend things
Speaker 1: on a positive note by talking about China, because we
Speaker 1: are seeing a rally, We've seen COVID ripped through the economy,
Speaker 1: and it does seem like I mean, we don't know
Speaker 1: what's happening over there. We don't know how many people
Speaker 1: are dying, but it does seem like we will see
Speaker 1: at least some kind of herd immunity or the end
Speaker 1: of at least huge outbreaks at some point soon before
Speaker 1: the Lunar year New Year. I think the issue is
Speaker 1: the Lunar New Year. Chinese people really like going home
Speaker 1: for the Lunar New Year. The last thing epidemiologists would
Speaker 1: like Chinese people to do is embark on large trips
Speaker 1: in public transport in the next few weeks, which is
Speaker 1: what they want to do. So I do think the
Speaker 1: timing of going away from zero COVID and so close
Speaker 1: to the big New Year holiday is potentially dangerous. I'm
Speaker 1: talking about you know, I am not an epidemiologist, so
Speaker 1: many of us have ended up talking about epidemiology. Is
Speaker 1: that we know what we're talking about. Um, well, we
Speaker 1: have seen waves of you know how it goes. Is
Speaker 1: it possible that maybe by Lunar New Year, which is
Speaker 1: another three weeks away, that the damage will have been done,
Speaker 1: that everybody will have had us It would be one
Speaker 1: time I find it from my recollection of previous waves
Speaker 1: of COVID. That's possible but unlikely. But I think it's
Speaker 1: one where you where one has to maintain a certain deference.
Speaker 1: I mean, this is the kind of thing we've all
Speaker 1: felt since the pandemic came into our lives, right, you
Speaker 1: have to remain retain a certain degree of humility about
Speaker 1: your own human physical fragility and about your knowledge that
Speaker 1: this is something you need to know about and understand,
Speaker 1: but that you don't know much about exactly. It's a
Speaker 1: very good reminder. Actually, yes, the risk, the likelihood, it
Speaker 1: seems to me, is that you could get um a
Speaker 1: situation where the economy gets worse before it gets better,
Speaker 1: because you do get a really nasty wave like say
Speaker 1: the macron wave at the you know, the turn of
Speaker 1: last year, UM, which didn't kill that many people, but
Speaker 1: really snarled up the economy because absolutely everybody had COVID exactly.
Speaker 1: People weren't at work, people can go to work exactly,
Speaker 1: and so that it doesn't matter with what the government
Speaker 1: policy is. It slows down the economy if everybody is
Speaker 1: sick at the same type, even if they're out working,
Speaker 1: and apparently the government policy surely runs as the government
Speaker 1: policy has go back to work, even if you continue
Speaker 1: to do positive as long as your fever is gone,
Speaker 1: which is kind of terrifying to irrest. Again, not the
Speaker 1: diamond epidemiologist, but that's from what I think I've learned
Speaker 1: over the last three years. That doesn't sound like a
Speaker 1: great idea to me. So there is this risk that
Speaker 1: you could get whip sawing when the Chinese market economy
Speaker 1: slows down much more, because it seems reasonable that you
Speaker 1: would get something on the same scale of the omicron
Speaker 1: wave of of a year ago, and that would mean
Speaker 1: in the country the size of China, that means hundreds
Speaker 1: of millions of people being sick with COVID at once.
Speaker 1: Um I can imagine a false further fall for the
Speaker 1: economy followed by a rebound, which gives people. You basically
Speaker 1: need to understand the dynamics of an epidemic to call
Speaker 1: it financially correctly. It's possible because some of the numbers
Speaker 1: don't suggest that COVID isn't really taking off as much
Speaker 1: as people feared that the market rally is right that
Speaker 1: they've just said, on balance, probability, the sumarily I've just
Speaker 1: mentioned probably isn't gonna happen by and that's not a
Speaker 1: stupid thing to do, but it's really possible that that
Speaker 1: will turn out to be wrong and lease a lot
Speaker 1: of money, There'll be a lot of losses. That's another
Speaker 1: tail risky Bloomberg Opinions, John Authors, Stay tuned. Next, we
Speaker 1: talked Twitter's future with Tim Coulpan in Taiwan. This is
Speaker 1: Bloomberg Opinion. You're listening to Bloomberg Opinion. I'm Vanni Quinn.
Speaker 1: Since Elon Musk took over Twitter on October last year,
Speaker 1: the company has seen its head count full by plus.
Speaker 1: It suffered what Musk himself is called a massive drop
Speaker 1: in revenue from brands pausing ad spending. Band accounts have
Speaker 1: been reinstated, other accounts have been frozen or suspended. It's
Speaker 1: just been one thing after another. I spoke with Bloomberg
Speaker 1: Opinions Tim Coulpan about whether Twitter alternatives really exist and
Speaker 1: whether we'll ever see an on mass exodus. Tim. Twitter
Speaker 1: wasn't ever an agnostic platform, even before Mosque's purchased, that's
Speaker 1: for sure. But it's getting harder and harder to see
Speaker 1: it as a non partisan platform given the mercurial nature
Speaker 1: of the CEO. Some people have migrated. Will we see
Speaker 1: a mass exitus. Though a lot of people keep saying
Speaker 1: that they have left Twitter or will be leaving Twitter,
Speaker 1: and they're going to places like Post and master Don
Speaker 1: and even Coup and a few other places, and people
Speaker 1: also ramping up their sub stacks. But yet those same
Speaker 1: people stay they're leaving Twitter, are still staying on Twitter.
Speaker 1: They're a little bit addicted to the side. So this
Speaker 1: mass exodus that people have talked about isn't happening yet.
Speaker 1: But I think the usership and the stickiness of the
Speaker 1: site is dropping. So people are posting a bit less,
Speaker 1: and I think people are using it, logging on or
Speaker 1: opening up a bit less. Now you suggest in a
Speaker 1: column that Twitter had already become this generation's MySpace even
Speaker 1: before Mosque took over. I'm curious, though my Space was
Speaker 1: only around for maybe three years. Twitter has been around
Speaker 1: since two thousand six. How are you comparing the two.
Speaker 1: The thing that really happened with my Space is that
Speaker 1: when it was bought by his corp. Only a few
Speaker 1: years after founding it already looking like it was speaking,
Speaker 1: it didn't peak until a couple of years later. Facebook
Speaker 1: then took over it. But there's a lot of things
Speaker 1: that were going on at my Space, both on the
Speaker 1: front end in terms of the user experience as well
Speaker 1: as the way it was being scaled, and then news
Speaker 1: Corps tried very hard to monetize it, and we're pushing
Speaker 1: ads very heavily, which really upset the whole user experience,
Speaker 1: and so it took a while for my Space to
Speaker 1: descend from there. We're seeing some early signs of that
Speaker 1: happening with what Musk is trying to do with Twitter.
Speaker 1: We shouldn't write him off. It's not like he's committed
Speaker 1: to any specific approach. There's been changes made, but none
Speaker 1: of them things to be permanent that seem to be sticking.
Speaker 1: He's basically experimenting from playing around. But really the similarity
Speaker 1: with my Space, I think is the fact that the
Speaker 1: world is moving on Twitter maybe has had its day.
Speaker 1: Will see and there won't be immediate There won't be
Speaker 1: a sudden drop off of Twitter. It will probably still client.
Speaker 1: But at sometime in the next few years, I think
Speaker 1: we'll find a peak. Right, And there are a lot
Speaker 1: of sites, as you say, and a lot of strategies
Speaker 1: that that are trying out, but none of them really
Speaker 1: seem to be taking off immediately, at least and there's
Speaker 1: obviously TikTok, Instagram and all of the other social media
Speaker 1: sites that have many, many, many more users. But Mustowes
Speaker 1: stand to lose a lot of money here, and the
Speaker 1: more users he loses, in particular, the more money he
Speaker 1: stands to lose. Why is he jeopardizing that? I don't
Speaker 1: think it's deliberate. I think you are not. You know,
Speaker 1: he's paid for it, not all of it from his
Speaker 1: own pocket, but there's also a lot of debt burn
Speaker 1: that he has to services or results of this. He's
Speaker 1: not to liberally burning it down or bringing it to
Speaker 1: the ground. He's rebuilding and or refashioning it. He's trying
Speaker 1: to make a push again advertises back. But the toxicity
Speaker 1: of the platform, I think is what could really bring
Speaker 1: it down. What do media companies do? I mean full disclosure.
Speaker 1: I opened a master on account, but I haven't actually
Speaker 1: used it. I guess the cord Twitter uses, Yes, journalists
Speaker 1: like ourselves, also a lot of people in the tech
Speaker 1: VC area. And then there's people in politics, whether their
Speaker 1: actual politicians, lobbyists so forth, and and there's also a
Speaker 1: lot of corporate accounts. They're part of the reason why
Speaker 1: there's no immediate to a people. I haven't really chosen
Speaker 1: what the next big thing is. There's problems with master
Speaker 1: don it's not that easy to use. People are kind
Speaker 1: of moving the post, but it's it's very it's not
Speaker 1: actually in bet it's really launched, but it feels like
Speaker 1: a beta product right now. Who knows, in a few
Speaker 1: months all of these dates might have a better idea
Speaker 1: of how to run. But I don't think that we
Speaker 1: will see Apple kicking off Twitter because both Apple and
Speaker 1: Google are facing another issue, which is the belief that
Speaker 1: they may be monopoly powers. And if we see someone
Speaker 1: like Apple or Google kicking Twitter off their app stores,
Speaker 1: then that would really hone the point that these are
Speaker 1: very powerful organization. And of course you're on Lusk wouldn't
Speaker 1: go down without a fight, and he's got a lot
Speaker 1: of well heeled and during the easy friends around him,
Speaker 1: So I don't imagine Twitter would kicked off those platforms,
Speaker 1: but it's probably the kind of fight that he wouldn't
Speaker 1: mind trying out anyway. Bloomer Opinions Tim Colburn in taipeid
Speaker 1: that doesn't for this week's opinion. As always, though, please
Speaker 1: do send your results and opinions are away. You can
Speaker 1: email me at the Quinn at Bloomberg dog Net. We're
Speaker 1: produced by Eric mollow Until next time on Blomberg Opinion
Speaker 1: h