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Speaker 1: Hello, and welcome to another episode of the Odd Lots podcast.

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Speaker 1: I'm Tracy Alloway and.

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Speaker 2: I'm Joe Wisenthal.

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Speaker 1: Joe, do you remember the episode we did. I think

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Speaker 1: it was just a couple months ago with the core

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Speaker 1: BOO strategist Samuel Rhines about companies are telling us the

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Speaker 1: real reason they're raising prices.

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Speaker 3: Yeah, there was great episode that sort of helped me

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Speaker 3: like analyze like corporate earnings calls from then on and

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Speaker 3: really like think about particularly in the consumer space, where

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Speaker 3: he had this thesis that companies are like very explicitly

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Speaker 3: willing to sacrifice volume expansion in favor of higher prices

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Speaker 3: and higher margin.

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Speaker 1: Right, he called it price over volume. And since that episode,

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Speaker 1: so we actually wrote an article based on that episode

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Speaker 1: and we had a lot of quotes from Sam. We

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Speaker 1: also cited a research paper from an Odd Lot's favorite,

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Speaker 1: Isabella Weber, and we talked about this phenomenon. We called

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Speaker 1: it excuse flation. So this idea that companies are using

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Speaker 1: all these one off emergencies as an excuse to raise prices.

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Speaker 1: But since then, this whole idea has exploded into the

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Speaker 1: public consciousness in various ways under different umbrella terms. So

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Speaker 1: Isabella used the term seller's inflation. I've seen like profit

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Speaker 1: led inflation, creedflation, although I think that's a bad term

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Speaker 1: for it personally, but it's everywhere now, right.

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Speaker 3: And it's funny because it's one of these things where

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Speaker 3: you know, economists are sort of like scandalized by sort

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Speaker 3: of alternative ideas about inflation. And it's like they have

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Speaker 3: certain things like some people say money, so they say

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Speaker 3: like labor costs and wages, but like it feels like

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Speaker 3: on Wall Street there's kind of less mystery. It's like, no,

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Speaker 3: they're like, at least you know, according to people read

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Speaker 3: the calls. It's like, no, they're telling us they're willing

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Speaker 3: to push price, and I guess the question is like,

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Speaker 3: you know, well, there's lots of follow on questions, but

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Speaker 3: I think there's some really interesting policy ramifications from some

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Speaker 3: of this identification.

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Speaker 1: Totally, And it is funny. It's not PEPSI isn't talking

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Speaker 1: about like, oh, the money supply is increasing, therefore we're

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Speaker 1: raising our prices. They're talking very explicitly about, well, we

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Speaker 1: have these one off reasons maybe to raise our prices,

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Speaker 1: and so we're going to see how far we can

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Speaker 1: take it to the consumer so anyway, everyone is talking

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Speaker 1: about this, whether you call it gre inflation, excuse flation,

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Speaker 1: profit led inflation, seller's inflation. We need to go back

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Speaker 1: to one of our favorite guests, Yes, who's done a

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Speaker 1: lot of academic work on this topic. We specifically cited

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Speaker 1: her work in the piece that we did. We're going

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Speaker 1: to be speaking with Isabella Weber.

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Speaker 2: I'm psyched on set all.

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Speaker 1: Right, Isabella Weber, economics professor at University of Massachusetts Amherst.

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Speaker 1: Thank you so much for coming back.

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Speaker 4: On Thanks so much for having me back. And it's

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Speaker 4: a true passion to be in person.

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Speaker 2: Yeah, this is this is a tree.

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Speaker 3: I didn't realize up until like five minutes ago that

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Speaker 3: you were gonna be outset. I think we're going to

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Speaker 3: look at the.

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Speaker 1: First time we're actually meeting in person. Have you been

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Speaker 1: surprised at all by how quickly this seems to have become.

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Speaker 1: I hesitate to call it mainstream because people are still

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Speaker 1: debating it, but it's in the Wall Street Journal, it's

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Speaker 1: in New York Times, certainly in Bloomberg coverage.

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Speaker 4: Yeah.

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Speaker 5: I think it has been very surprising, especially since some

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Speaker 5: of the key data on the profit margins actually already

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Speaker 5: came out in the fourth quarter of twenty twenty one.

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Speaker 5: So and you guys have actually been covering that at

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Speaker 5: the time. You were covering the profit margin explosion that

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Speaker 5: happened at the same time as inflation started to take off.

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Speaker 5: And in this by now probably infamous Guardian piece that

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Speaker 5: I wrote, I actually started by saying, there is so

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Speaker 5: far pretty much undiscussed phenomenon, which is an explosion of

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Speaker 5: profit margins that coincides with inflation, and we should take

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Speaker 5: a closer look at that. So I think in many ways,

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Speaker 5: when our paper came out at the beginning of this year,

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Speaker 5: it has kind of been something that had been going

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Speaker 5: on for a long time, and companies have been saying

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Speaker 5: this on earnings calls for a long time. The groundwork

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Speaker 5: folks have been calling this out for a long time time,

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Speaker 5: but now it really took off.

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Speaker 3: So I guess one of my questions and have many,

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Speaker 3: is you know, there are different factors that people talk

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Speaker 3: about driving inflation, and obviously the tight labor market, fest

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Speaker 3: wage growth, high levels of consumer demand, a lot of

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Speaker 3: the supply chain bottlenecks that we've talked about over the

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Speaker 3: years on the show, the supply side factors.

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Speaker 2: Why is it important.

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Speaker 3: That's sort of it to sort of like think about

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Speaker 3: correct identification of different causes.

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Speaker 5: Yeah, I mean when economists talk about causation, they have

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Speaker 5: very high standards, right, So I'm not yet there to

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Speaker 5: say like what I did. It's like a cause analysis.

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Speaker 5: Just to put this out there, it's kind of a disclaimer.

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Speaker 5: But I think this is kind of part of the

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Speaker 5: challenge that we face because we are in a really

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Speaker 5: unprecedented moment in the world, in the economy, in the

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Speaker 5: global economy, right, and inflation is kind of part of

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Speaker 5: that whole unprecedented moment. So you are getting these pieces

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Speaker 5: of data that are coming out and you kind of

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Speaker 5: have to reason on them. However incomplete the data might be.

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Speaker 5: And if you just look at it from the perspective

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Speaker 5: of your standard inflation paradigm, then you basically just look

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Speaker 5: at money supply, aggregate demand, and maybe wages, and you

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Speaker 5: don't look at all these other stuff that you guys

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Speaker 5: have been reporting about four months and months and months, right,

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Speaker 5: But if you sit in a corporate boardroom, then you

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Speaker 5: are actually looking at all this other stuff. So then

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Speaker 5: from your perspective, prices present themselves as something very different.

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Speaker 5: So what we are doing with this research, I think,

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Speaker 5: is to kind of say, let's take the information that

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Speaker 5: we have, however incomplete it still may be, and try

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Speaker 5: to make sense why we are seeing what we are seeing.

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Speaker 5: What we are seeing is that on earnings calls time

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Speaker 5: and again, corporate leaders are saying that they can take

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Speaker 5: pricing and that they can increase prices in ways that

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Speaker 5: they might not even have expected, and that they can

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Speaker 5: increase prices even when volumes are going down, which is

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Speaker 5: just against the logic of basic supply demand right where

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Speaker 5: we would expect that demand going up the prices going up,

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Speaker 5: and not the other way around. Now you might say, well,

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Speaker 5: it's about the bottleneck, and then demand is strong, so

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Speaker 5: therefore it's still a demand kind of story. But then

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Speaker 5: I would say, well, if I look at their earnings

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Speaker 5: calls in the latest quorder right where clearly the bottlenecks

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Speaker 5: for the most part have ceased and taking price when

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Speaker 5: volumes are going down, then ka, this is also not

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Speaker 5: a pure kind of bottleneck type of story.

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Speaker 1: Well, maybe just to step back for a second, talk

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Speaker 1: to us about what seller's inflation this is the term

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Speaker 1: that you use actually is, and how maybe it differs

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Speaker 1: to traditional conceptions of greedflation, because this is one reason

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Speaker 1: I remember when we were writing that piece shoe, this

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Speaker 1: is one reason why I wanted to call it something

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Speaker 1: other than greed flation, because it's not like everyone woke

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Speaker 1: up in March twenty twenty and suddenly decided to become

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Speaker 1: more greed.

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Speaker 2: Which is a common critique of like that, yeah, right.

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Speaker 5: Yeah, and quite frankly, I think that everybody agrees on that. Like,

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Speaker 5: no one is saying that there has been this sudden

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Speaker 5: grady impulse where firm leaders just became more greedy than

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Speaker 5: they used to be, right, that is just not a

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Speaker 5: good theory.

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Speaker 4: So the question is, how.

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Speaker 5: Can it be that in incredibly concentrated industries we had

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Speaker 5: decades of surprising price stability, right, even like deflation in

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Speaker 5: some periods, and now in the same highly concentrated kind

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Speaker 5: of setup, we suddenly get this price of a volume

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Speaker 5: type of pricing behavior.

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Speaker 4: Right.

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Speaker 5: And what we are arguing in our paper is that

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Speaker 5: there's basically different components that coordinate price hikes in ways

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Speaker 5: in which they could not be coordinated without these emergencies happening.

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Speaker 4: So one prominent thing is a cost shock.

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Speaker 5: I mean, we have had gigantic cost shocks coming out

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Speaker 5: of energy, right, that kind of stand a signal to firms, Okay,

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Speaker 5: now is the time to increase prices, which means that

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Speaker 5: they can be fairly sure that their competitors are also

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Speaker 5: increasing prices, because the way that they are pricing is

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Speaker 5: to protect their profit margins. So the first goal is

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Speaker 5: to make sure that they profit margins are not going

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Speaker 5: to collapse, which means that if costs go up, they

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Speaker 5: are going to.

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Speaker 4: Increase their prices.

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Speaker 5: Now, this is like kind of the most benign form

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Speaker 5: of coordination, but they can also be bottlenecks that can

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Speaker 5: then coordinate pricing behavior, and that can coordinate this pricing

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Speaker 5: behavior even when the actual bottleneck might already start to cease,

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Speaker 5: because there's still this signal to the whole sector that

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Speaker 5: something different is going on. And then there is I guess,

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Speaker 5: the component that the excuse flation label is getting at,

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Speaker 5: or from the perspective of the consumers, it's also more

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Speaker 5: legitimate to see prices going up when there are clear

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Speaker 5: reasons why they're going up. But if you imagine you

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Speaker 5: go to your favorite coffee shop every day, and then

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Speaker 5: from one day to the next, the coffee costs twice

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Speaker 5: as much. Then you would probably say like, oh, somehow

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Speaker 5: the guy who's running the coffee shop went nuts.

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Speaker 4: Right.

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Speaker 5: If this guys has been telling you over and over

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Speaker 5: again that they are expecting a rent increase, and then

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Speaker 5: you come back and the price of coffee goes up,

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Speaker 5: you'll probably go like, oh, yeah, of course makes sense, right,

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Speaker 5: something like this. But on a sectoral, global level, I

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Speaker 5: think has been going on, for example, in the food

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Speaker 5: sector where no one can judge. I mean, you had

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Speaker 5: this amazing episode on grain prices and prices of food

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Speaker 5: items that use grain, right, And I mean as a consumer,

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Speaker 5: I don't know how much is the cost component of

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Speaker 5: grain in my pasta, right or my bread? But if

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Speaker 5: I hear on the news in the radio on TV

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Speaker 5: that grain prices are exploding and I see pasta price

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Speaker 5: going up, it kind of makes sense. So there is,

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Speaker 5: in other words, also a component of legitimacy in pricing behavior.

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Speaker 4: Right.

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Speaker 5: It's something that in economic theory we have a very

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Speaker 5: hard time capturing. It's not like people walk around with

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Speaker 5: a budget constraint and a given set of preferences on

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Speaker 5: their mind, and like robots, they react in the price

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Speaker 5: that they see, But they look at the context. Right,

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Speaker 5: So if in normal times or if normal times, there

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Speaker 5: are basically two things that would constrain firms in their

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Speaker 5: pricing behavior. On the one hand, competition, that is, fear

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Speaker 5: of losing market shares to their competitors, right, which would

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Speaker 5: happen they start hiking prices and kind of a unilateral action.

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Speaker 5: Then that fear is kind of gone once these price

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Speaker 5: hikes start to be more or less coordinated due to

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Speaker 5: these emergency situations.

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Speaker 4: And the second constraint would be fearing that customers are

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Speaker 4: just not.

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Speaker 5: Willing to pay these prices, right, like, whether they actually

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Speaker 5: can pay these prices or not, they might just be

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Speaker 5: deterred if prices suddenly go up for no obvious reason. Now,

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Speaker 5: if there are obvious reasons, they seem to be more

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Speaker 5: willing to accept these price increases. So therefore, both of

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Speaker 5: these constraints quite dramatically softened in this emergency situation that

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Speaker 5: we have been living through.

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Speaker 3: So some economists might listen to the story and now

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Speaker 3: they're head say, yeah, this makes sense. But for whatever reason,

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Speaker 3: prices are going up and workers are going to demand

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Speaker 3: higher wages to compensate for the higher prices, And you

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Speaker 3: get this self sustaining you know, increase more demand, and

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Speaker 3: they're like, okay, I can fit this into the typical

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Speaker 3: inflation expectation story, and therefore defense should be hiking rates regardless,

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Speaker 3: Like why could this fit into a typical inflation expectation story?

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Speaker 2: This is how it becomes entrenched.

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Speaker 3: Yeah, maybe it's like a different thing than like nineteen

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Speaker 3: seventies inflation, but it's still the thing, and ultimately the

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Speaker 3: fittest to respond the same way.

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Speaker 4: Yeah.

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Speaker 5: I mean, first, on the wage part of that story,

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Speaker 5: what we are seeing is basically, eventually labor is trying

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Speaker 5: to fight back against collapsing real wages as workers are

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Speaker 5: basically losing purchasing power.

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Speaker 4: Right. But this is a very different story. If you

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Speaker 4: have an initial.

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Speaker 5: Cost shock that comes from the energy market, that comes

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Speaker 5: from commodity markets, comes from shipping and so on, basically

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Speaker 5: comes from upstream stuff, and then you have a propagation

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Speaker 5: amplification of that shock as firms react by.

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Speaker 4: Pricing over volume type of behavior, right, and.

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Speaker 5: Then eventually labor goes like wait a minute, like my

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Speaker 5: purchasing power has collapsed and I'm trying to fight back

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Speaker 5: to regain some.

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Speaker 4: Of this lost territory.

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Speaker 5: Then this is a reaction to inflation rather than the

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Speaker 5: origin of inflation. This really matters for how we think

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Speaker 5: about what to do against inflation. But secondly, also, I

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Speaker 5: mean when we talk about expectations and expectation anchoring and

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Speaker 5: so on, we somehow think that firms look at the

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Speaker 5: fat and they kind of like reread these signals from

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Speaker 5: the fat to anchor or de anchor the inflation expectations.

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Speaker 5: I'm not saying none of this is going on, but

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Speaker 5: when I am reading the earnings calls, I don't see

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Speaker 5: them talk about the fat a lot. I see them

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Speaker 5: talk about what their competitors are doing. I see them

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Speaker 5: talk about rational pricing environments. I see them say things

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Speaker 5: like this new force measure, like the winter storm, Alliot,

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Speaker 5: this has made our pricing environment even more conducive. So

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Speaker 5: they are looking at their immediate environment. They are looking

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Speaker 5: at our customers accepting of these price increases, which is

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Speaker 5: a completely different set of expectations than what we think

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Speaker 5: of when we talk about expectations in this kind of

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Speaker 5: central bank center type of factory.

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Speaker 1: So throughout economic history, I mean, the classic worry about

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Speaker 1: inflation has always been this wage price spiral that you

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Speaker 1: kind of just outline. But if that's not what's happening here,

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Speaker 1: or if it's not the actual cause of higher prices,

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Speaker 1: if instead we have, like I guess, a profit price

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Speaker 1: spiral of some sort, what should we do, like what

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Speaker 1: actually arrests this behavior, Because again, if you listen to

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Speaker 1: the company earnings calls, you can see the executives talking

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Speaker 1: about how surprised they've been, about how strong customer demand

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Speaker 1: has been, how far they've been able to push up prices,

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Speaker 1: and also you see the share price reactions they're getting

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Speaker 1: rewarded for raising prices. So it seems like there's very

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Speaker 1: little incentive or a catalyst for this to actually stop.

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Speaker 5: Absolutely, And I would actually say that the investors expectations

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Speaker 5: and is another set of expectations that's probably more immediate

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Speaker 5: from the perspective of people taking pricing decisions.

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Speaker 4: Right.

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Speaker 5: When representatives of let's say Morgan Stanley, just to pick

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Speaker 5: a random example here are asking questions on earning scores

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Speaker 5: about pricing, they are also asking on behalf of a

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Speaker 5: player that is actually going to invest quite substantial amounts

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Speaker 5: of money, right, So there's that.

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Speaker 4: Layer to the expectations story too.

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Speaker 5: But to actually go to your question, I think, first

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Speaker 5: of all, we need to stop these impulses, right, I

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Speaker 5: mean these like gigantic cost shocks.

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Speaker 4: That then coordinate these kind of price hikes.

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Speaker 5: If they can be arrested kind of in the onset,

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Speaker 5: that I think would have made a huge difference. I

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Speaker 5: think something like the strategic Pictronum Reserve, which of course

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Speaker 5: eventually was mobilized in twenty twenty two. If that had

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Speaker 5: been mobilized sooner, because there was a mindset on the

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Speaker 5: part of policymakers to say oil prices going up as

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Speaker 5: they started going up in twenty twenty one is a

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Speaker 5: problem and has the potential to undermine price stability and

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Speaker 5: economic stability, then they might have acted sooner, and they

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Speaker 5: might have acted more decisively. Now it's of course not

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Speaker 5: only about oil. It's also about gas are the sources

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Speaker 5: of energy. It's about other forms of raw materials, and

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Speaker 5: importantly about grain. I think for grain, actually we ideally

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Speaker 5: would need some sort of a coordinated international buffer stock,

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Speaker 5: which is an idea that Keane's had for the Bretton

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Speaker 5: Woods Institutions, something that he wanted to see as one

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Speaker 5: of the breton Was institutions, but that did not materialize,

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Speaker 5: and there have been proposers like this in the seventies,

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Speaker 5: when I mean, obviously they were also very major commodity

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Speaker 5: price cycles.

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Speaker 4: Going on at the time.

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Speaker 5: So I think these type of ideas are pretty important.

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Speaker 5: And they are important not only like looking back and saying, oh, yeah,

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Speaker 5: the last three years, somehow we'ren't great, but now we

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Speaker 5: are back to normal life.

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Speaker 4: So this is a nicet for.

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Speaker 5: Editor of Anicdotter or something like this, but they're important

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Speaker 5: because we are living in an age of overlapping emergency

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Speaker 5: and as far as I understand, people in the grain

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Speaker 5: market are saying things like we are basically one major

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Speaker 5: weather event away from another price bike in grain, right,

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Speaker 5: and if there are bad harvests that are related to

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Speaker 5: climate change happening much faster than many of us might

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Speaker 5: have thought, tipping points being reached much sooner than climate

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Speaker 5: scientists to stay projected not that long ago, or then

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Speaker 5: I think this is something that is quite likely to happen.

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Speaker 5: So what I'm thinking about here is really a form

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Speaker 5: of economic disaster preparedness, so that we have shock absorbers

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Speaker 5: where shocks to these systemically important things like grain, like

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Speaker 5: energy can be absorbed locally so that we don't even

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Speaker 5: get this gigantic impulse in the first place. Now for

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Speaker 5: this propagation and amplification that comes as firms react to

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Speaker 5: these shocks, I think what we basically need is some

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Speaker 5: sort of a binfall profits tax that would kick in

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Speaker 5: whenever there is a major emergency, because we have now

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Speaker 5: learned that in these emergencies, these pretexts that happen can

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Speaker 5: present situations where prices can go up very quickly. And

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Speaker 5: I think that if corporate leaders had to learn this

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Speaker 5: this time, then next time around they have a playbook

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Speaker 5: in hand, right, they know how price over volume works,

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Speaker 5: they know what to look for, they know what they

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Speaker 5: did last time. And if this is a coordination issue

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Speaker 5: in the sense that it depends on what your competitors

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Speaker 5: are doing, and last time it worked out really well

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Speaker 5: because everybody kind of implicitly agreed to be doing exactly that,

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Speaker 5: then next time around they just have to look back

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Speaker 5: at what they did last time.

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Speaker 2: Winfall profits tax. How does that fight inflation?

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Speaker 3: Because some people would hear that it's like, oh, you're

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Speaker 3: going to add taxes, You're going to add cost Maybe

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Speaker 3: there's some like redistribution element or punishing the ranch or

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Speaker 3: punishing the success.

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Speaker 4: What does the.

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Speaker 2: Mechanism via which this is an inflation fighting tool.

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Speaker 5: Well, it's a mechanism that basically takes away the incentive

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Speaker 5: to do a price over volume strategy, right because price

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Speaker 5: over volume makes if you can't increase prices so much,

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Speaker 5: then even when you are selling less, you still end

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Speaker 5: up making more money because you have hike prices so much.

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Speaker 5: Right now, of course, there can be situations where price

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Speaker 5: over volume happens to just protect profit margins, so a

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Speaker 5: winfo profit sex would not have with that, But we

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Speaker 5: have seen situations where firms actually have managed to quite

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Speaker 5: dramatically increase their margins with this kind of pricing behavior.

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Speaker 5: So it would kind of cut off the edge of

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Speaker 5: that process, right, would cut off what we are calling

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Speaker 5: in our paper amplification. So you have this initial shock,

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Speaker 5: and then this shock is actually not just propagated through

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Speaker 5: your system, but it's amplified as as it coordinates these

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Speaker 5: additional profit increasing price hikes.

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Speaker 1: So what do traditional ways of fighting inflation? How do

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Speaker 1: they actually play out in a seller's inflation world? So,

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Speaker 1: for instance, the FED hikes interest rates in theory, that's

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Speaker 1: supposed to curb demand and therefore prices start going down.

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Speaker 1: But what's instinct on how that actually plays out in

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Speaker 1: a world where companies are the driving force behind prices.

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Speaker 5: Yeah, I mean, at best in a very roundabout way.

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Speaker 5: I mean, in any cases, it's always a very roundabout instrument. Right,

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Speaker 5: we have to keep in mind that this is a

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Speaker 5: very very indirect tool of fighting inflation, which, by the way,

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Speaker 5: if we are in a situation where we are already

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Speaker 5: at the edge of a recession, where we are already

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Speaker 5: at the edge of a banking crisis, where we have

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Speaker 5: had a pandemic, and we have a war, and now

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Speaker 5: let's say we have another major climate shock, and let's

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Speaker 5: say we have already hiked interest rates to a point

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Speaker 5: where even hawkish people feel like, okay, really shouldn't go higher.

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Speaker 5: I mean, what are you going to do, right if

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Speaker 5: you have another shock that unleashes this kind of process.

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Speaker 4: So, first of all, I would say.

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Speaker 5: It's too blunt of a tool to deal with frequent,

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Speaker 5: extremely sectorial shocks, as I think they have become more likely.

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Speaker 5: Of course, no one hopes that they will happen. I

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Speaker 5: don't hope they are happening, but I think they have

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Speaker 5: become more likely, So I don't think we are prepared

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Speaker 5: to actually achieve price stability with the tools that we

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Speaker 5: have in terms of just relying on the center bank.

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Speaker 5: I also think that if it is the case that

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Speaker 5: there is such a big energy shock, which then center

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Speaker 5: banks would say, oh, we are actually looking through this, right,

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Speaker 5: then your mindset is like, oh, yeah, this is something

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Speaker 5: that is not part of the core inflation. I'm just

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Speaker 5: looking through this like la la la, that's not happening, right.

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Speaker 5: I think this is not the right mindset that we

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Speaker 5: need because this is like a very very dangerous impult.

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Speaker 5: So it's kind of leading us in the wrong direction.

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Speaker 5: But also, at the end of the day, what happens

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Speaker 5: with interest rate hikes is that it's designed to cool

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Speaker 5: down the labor market. Right now, if it is a

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Speaker 5: case that inflation erases purchasing power and rage increases, we're

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Speaker 5: not the origin of this inflation. This means that the

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Speaker 5: majority of page dependent people are actually being hurt by inflation,

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Speaker 5: and then then I kind of punished a second time

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Speaker 5: by cooling down the labor market.

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Speaker 4: Right.

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Speaker 5: So, I think, even from a kind of justice perspective,

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Speaker 5: that is mutually problematic, but it's also not very effective

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Speaker 5: because it's kind of getting it the wrong thing.

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Speaker 3: So I take your point about things like the strategic

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Speaker 3: petroleum Reserve and how the logic of these sort of

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Speaker 3: buffer stocks, particularly of commodities could be used in like

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Speaker 3: future shocks as buffers in both directions. But how do

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Speaker 3: you think about this idea with respect to services, because

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Speaker 3: it's hard to believe. Okay, maybe we keep a lot

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Speaker 3: of oil that we don't use in tankers. Hard to

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Speaker 3: believe we would say, like, you know, we're not going

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Speaker 3: to underbook, you know, have all flights be eighty percent

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Speaker 3: booked or all hotels be eighty percent book they're all

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Speaker 3: veterinarians like carve twenty percent of their time and services

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Speaker 3: in terms of right now, even like you know, in

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Speaker 3: spring twenty twenty three, like services inflation is particularly what

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Speaker 3: the FED is like focused on. So how do you

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Speaker 3: like think about some of these things outside of the

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Speaker 3: sort of pure goods commodity realm, like applying some of

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Speaker 3: the same insight and logic.

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Speaker 5: Yeah, so I think if we look at services, shipping

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Speaker 5: has probably been the most important service that had a

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Speaker 5: very large price explosion that I would see as part

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Speaker 5: of the impulse stage. And I think what we saw

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00:22:05,760 --> 00:22:08,400
Speaker 5: there is that basically you had I mean a literal

442
00:22:08,440 --> 00:22:10,880
Speaker 5: butter deck, right, Like if you think back to how

443
00:22:10,920 --> 00:22:13,919
Speaker 5: the Port of la looked, I mean, this is the

444
00:22:14,040 --> 00:22:18,120
Speaker 5: image of a bottle deck, right, And shipping companies could

445
00:22:18,160 --> 00:22:22,920
Speaker 5: increase their freight rates several times over, so prices went up,

446
00:22:23,000 --> 00:22:27,200
Speaker 5: and they had actually the largest profits in years and years, right,

447
00:22:27,400 --> 00:22:30,800
Speaker 5: So they were in a situation where as I mean,

448
00:22:30,800 --> 00:22:32,440
Speaker 5: if I was a leader of one of these large

449
00:22:32,440 --> 00:22:34,600
Speaker 5: shipping companies, I was in no rush to get out

450
00:22:34,640 --> 00:22:37,200
Speaker 5: of this buttle deck because it's the best of times

451
00:22:37,240 --> 00:22:37,480
Speaker 5: for me.

452
00:22:37,600 --> 00:22:37,840
Speaker 4: Right.

453
00:22:38,320 --> 00:22:41,760
Speaker 5: So for example, for shipping, I think a we need

454
00:22:41,760 --> 00:22:44,520
Speaker 5: protocols like I mean, how do you unblock a port

455
00:22:44,600 --> 00:22:47,800
Speaker 5: and be some sort of a price couching legislation of

456
00:22:47,840 --> 00:22:50,399
Speaker 5: the type that the New York State Attorney General is

457
00:22:50,400 --> 00:22:54,320
Speaker 5: currently introducing. Also for essential stuff that is further up

458
00:22:54,320 --> 00:22:58,000
Speaker 5: the value chain rather than just the essential consumer facing stuff,

459
00:22:58,160 --> 00:23:00,639
Speaker 5: I think could be really helpful. Because this is not

460
00:23:00,680 --> 00:23:02,640
Speaker 5: to say that prices cannot go up at all if

461
00:23:02,680 --> 00:23:05,080
Speaker 5: this kind of emergency happens, and shipping companies have higher

462
00:23:05,080 --> 00:23:08,840
Speaker 5: costs because things get complicated, But it's to say that

463
00:23:08,920 --> 00:23:12,879
Speaker 5: they don't get these perverted incentives of having freight rates

464
00:23:12,880 --> 00:23:16,160
Speaker 5: that increase multiple times over which I think would actually

465
00:23:16,160 --> 00:23:18,679
Speaker 5: also give them more incentive to get out of the

466
00:23:18,680 --> 00:23:22,960
Speaker 5: blockage as opposed to basically profit from the situation. So

467
00:23:23,040 --> 00:23:25,359
Speaker 5: this is an example of a very specific service industry,

468
00:23:25,400 --> 00:23:28,040
Speaker 5: but I think one that matters quite largely.

469
00:23:28,720 --> 00:23:30,320
Speaker 1: So just on this point, can you talk to us

470
00:23:30,359 --> 00:23:35,280
Speaker 1: a little bit about investment, because the classic argument against

471
00:23:35,440 --> 00:23:39,360
Speaker 1: some sort of windfall tax or price control would be, well,

472
00:23:39,480 --> 00:23:42,000
Speaker 1: you don't want to artificially bring down the prices. You

473
00:23:42,119 --> 00:23:44,680
Speaker 1: want people to make a ton of money, and that

474
00:23:44,720 --> 00:23:48,120
Speaker 1: way they'll invest more in their business and build out capacity,

475
00:23:48,240 --> 00:23:50,639
Speaker 1: and eventually the additional production is going to be the

476
00:23:50,680 --> 00:23:53,840
Speaker 1: thing that maybe starts to resolve the bottleneck and bring

477
00:23:53,880 --> 00:23:57,040
Speaker 1: down prices. How does that work? And is that a

478
00:23:57,119 --> 00:24:00,440
Speaker 1: viable critique of some of the measures that you're talking about.

479
00:24:01,359 --> 00:24:03,800
Speaker 5: Well, I mean, first of all, I would say that

480
00:24:04,040 --> 00:24:07,840
Speaker 5: hiking interest rates is a recipe designed to bring down investment. Right,

481
00:24:07,880 --> 00:24:10,240
Speaker 5: So if we are talking about different ways of fighting inflation,

482
00:24:10,400 --> 00:24:12,960
Speaker 5: that I am more worried about the interest rate hiking

483
00:24:13,000 --> 00:24:16,040
Speaker 5: policy than I am about an emergency price couching law

484
00:24:16,160 --> 00:24:18,560
Speaker 5: or a a national emergency win.

485
00:24:18,520 --> 00:24:19,800
Speaker 4: For a profit tax or something like that.

486
00:24:20,119 --> 00:24:21,680
Speaker 5: But also we have to see that if we are

487
00:24:21,720 --> 00:24:24,640
Speaker 5: talking about price over volume, then were in a situation

488
00:24:24,680 --> 00:24:27,679
Speaker 5: where with lower volumes firms can make more money, right,

489
00:24:27,720 --> 00:24:31,359
Speaker 5: which means that they are basically contracting their capacity. And

490
00:24:31,400 --> 00:24:34,240
Speaker 5: I think that if we look at the oil sector,

491
00:24:34,320 --> 00:24:37,159
Speaker 5: which on my mind has been a very important element

492
00:24:37,160 --> 00:24:41,119
Speaker 5: in this inflation story, that it's quite clear that they

493
00:24:41,160 --> 00:24:44,000
Speaker 5: are saying very explicitly on the earning scolles that they

494
00:24:44,000 --> 00:24:47,399
Speaker 5: are taking a discipline approach to investment because they are

495
00:24:47,480 --> 00:24:51,320
Speaker 5: reaping record profits as they have reduced capacity.

496
00:24:51,440 --> 00:24:54,800
Speaker 1: Everyone remembers twenty thirteen and the big expansion, and they

497
00:24:54,800 --> 00:24:56,200
Speaker 1: don't want to repeat.

498
00:24:55,840 --> 00:24:57,400
Speaker 4: That exactly exactly.

499
00:24:57,440 --> 00:24:59,959
Speaker 5: So it's not necessarily the case that if you can

500
00:25:00,080 --> 00:25:01,960
Speaker 5: and I mean if you have learned that you can

501
00:25:02,080 --> 00:25:06,120
Speaker 5: actually re record profits when your supply is constrained, that

502
00:25:06,280 --> 00:25:09,000
Speaker 5: this then encouragters you to have a lot of redundant

503
00:25:09,119 --> 00:25:12,600
Speaker 5: extra capacity or to hugely expand your capacity and therefore

504
00:25:13,040 --> 00:25:16,199
Speaker 5: go for big investments. Where there are areas where we

505
00:25:16,240 --> 00:25:20,560
Speaker 5: are particularly worried about curtailing investments. With these kind of

506
00:25:20,720 --> 00:25:24,359
Speaker 5: policy measures, I think you could have a policy that

507
00:25:24,440 --> 00:25:28,880
Speaker 5: basically stipulates that if you're investing in, like let's say,

508
00:25:29,040 --> 00:25:32,120
Speaker 5: green technologies, Like let's say you are using the crisis

509
00:25:32,119 --> 00:25:36,040
Speaker 5: a moment to upgrade your technology to become a low

510
00:25:36,119 --> 00:25:39,040
Speaker 5: carb and manufacturer or something this, that you could have

511
00:25:39,080 --> 00:25:42,000
Speaker 5: a tax right off for these kind of investments that

512
00:25:42,040 --> 00:25:44,280
Speaker 5: we really want, that we want for a green transition,

513
00:25:44,760 --> 00:25:46,840
Speaker 5: which that would not count towards the ways in which

514
00:25:46,880 --> 00:25:50,199
Speaker 5: your mindful profits tax is calculated, so that in this

515
00:25:50,280 --> 00:25:53,200
Speaker 5: kind of situation, these firms might still have an incentive

516
00:25:53,200 --> 00:25:54,680
Speaker 5: to do a price or a volume, but at least

517
00:25:54,720 --> 00:25:57,439
Speaker 5: they would use the money that they get to invest

518
00:25:57,480 --> 00:25:59,359
Speaker 5: in the stuff that we really need to make our

519
00:25:59,400 --> 00:26:03,720
Speaker 5: economy more resilient rather than to Buybeck shares or do

520
00:26:03,880 --> 00:26:04,480
Speaker 5: these kind of things.

521
00:26:04,520 --> 00:26:07,320
Speaker 3: You know, it's interesting in going back to this point

522
00:26:07,400 --> 00:26:09,760
Speaker 3: that part of the impulse or part of the expectation

523
00:26:09,880 --> 00:26:13,359
Speaker 3: comes from investors themselves, and these sort of expectations you're.

524
00:26:13,200 --> 00:26:15,080
Speaker 2: Going to push price too. You're going to push price too.

525
00:26:15,760 --> 00:26:19,760
Speaker 3: Do you think there's any element here where corporations themselves

526
00:26:19,760 --> 00:26:21,520
Speaker 3: would like to get out of this game that you

527
00:26:22,400 --> 00:26:25,479
Speaker 3: that a sort of like third party administrator of supply

528
00:26:25,720 --> 00:26:28,920
Speaker 3: of price of investment comes in and actually like solves

529
00:26:28,920 --> 00:26:31,600
Speaker 3: the problem for corporation so that they get off this treadmill.

530
00:26:31,600 --> 00:26:34,359
Speaker 3: Because one thing that I think about sometimes is any

531
00:26:34,359 --> 00:26:38,640
Speaker 3: individual company may benefit from higher prices and higher margins,

532
00:26:38,920 --> 00:26:41,760
Speaker 3: but on the whole, a series of like fed rate

533
00:26:41,840 --> 00:26:44,720
Speaker 3: hikes to high inflation is not great for stocks, which

534
00:26:44,760 --> 00:26:45,280
Speaker 3: is how most.

535
00:26:45,119 --> 00:26:47,320
Speaker 2: Of these you know, a lot of executives get paid.

536
00:26:47,960 --> 00:26:50,160
Speaker 5: Yeah, absolutely, I think there is like, on the one hand,

537
00:26:50,200 --> 00:26:52,520
Speaker 5: a lot of coordination, right, But these price hikes, on

538
00:26:52,520 --> 00:26:54,760
Speaker 5: the other hand, there's a lot of coordination fail if

539
00:26:54,760 --> 00:26:58,160
Speaker 5: you want so, because there are outcomes of this process

540
00:26:58,160 --> 00:27:01,639
Speaker 5: that in sometimes not sustainable, right. And actually, if we

541
00:27:01,720 --> 00:27:04,320
Speaker 5: look at what happened after World War One, when you

542
00:27:04,440 --> 00:27:07,160
Speaker 5: had like kind of price hikes coming out of a

543
00:27:07,200 --> 00:27:10,840
Speaker 5: bottleneck kind of transition from ward to post war economy,

544
00:27:11,160 --> 00:27:14,760
Speaker 5: you had a very short lived boom that was very inflationary,

545
00:27:14,760 --> 00:27:18,199
Speaker 5: and then a sharp turn into a deflationary recession. I

546
00:27:18,200 --> 00:27:20,439
Speaker 5: don't think that such a sharp turn is in the

547
00:27:20,520 --> 00:27:24,280
Speaker 5: cards because now we have these very concentrated sectors for

548
00:27:24,440 --> 00:27:27,800
Speaker 5: most of the economy, which means that in these sectors

549
00:27:28,080 --> 00:27:31,919
Speaker 5: firms are pricemakers, and they tend to not lower prices

550
00:27:31,960 --> 00:27:34,000
Speaker 5: in these kind of sudden ways in which we would

551
00:27:34,000 --> 00:27:36,679
Speaker 5: see it in commodity markets or price taking markets. So

552
00:27:36,680 --> 00:27:38,560
Speaker 5: I'm not so worried about this sudden turn as I

553
00:27:38,560 --> 00:27:42,080
Speaker 5: would have been in a different setup. But nevertheless, yes,

554
00:27:42,119 --> 00:27:45,480
Speaker 5: it does trigger. It does trigger rate hikes. It does

555
00:27:45,720 --> 00:27:48,480
Speaker 5: create a situation where I think a lot of corporate

556
00:27:48,520 --> 00:27:50,840
Speaker 5: leaders are also nerve. It's like, how hard can we

557
00:27:50,920 --> 00:27:51,280
Speaker 5: take this?

558
00:27:51,520 --> 00:27:51,720
Speaker 4: Right?

559
00:27:51,760 --> 00:27:54,119
Speaker 5: It's like it's a bit like you're in this gambling

560
00:27:54,200 --> 00:27:57,440
Speaker 5: game where you keep winning, but you kind of don't trust.

561
00:27:57,320 --> 00:28:00,760
Speaker 1: And everyone seems surprised that it's actually paid off much

562
00:28:00,960 --> 00:28:01,680
Speaker 1: for so long.

563
00:28:01,840 --> 00:28:04,560
Speaker 4: Right, Yeah, everybody seems to be really surprised that that.

564
00:28:04,680 --> 00:28:07,679
Speaker 5: I mean that, yeah, so the degree of coordination on

565
00:28:07,720 --> 00:28:09,800
Speaker 5: that front has been totally surprising. But then you can

566
00:28:09,840 --> 00:28:11,800
Speaker 5: also not chicken out, right. I mean we saw in

567
00:28:11,920 --> 00:28:15,720
Speaker 5: Walmart and for very short blips of time was making

568
00:28:15,720 --> 00:28:18,280
Speaker 5: announcement that they are Discounter and that they are not

569
00:28:18,359 --> 00:28:20,640
Speaker 5: going to play this price hiking game, and then they

570
00:28:20,960 --> 00:28:23,480
Speaker 5: had this share sell off, right, So I mean there's

571
00:28:23,480 --> 00:28:25,960
Speaker 5: also like kind of a discipline from financial markets to

572
00:28:26,040 --> 00:28:27,920
Speaker 5: keep doing this, But at the same time it's kind

573
00:28:27,920 --> 00:28:31,200
Speaker 5: of clear that maybe it cannot keep going. But also

574
00:28:31,200 --> 00:28:33,679
Speaker 5: we have to see that if we look at the

575
00:28:33,880 --> 00:28:38,560
Speaker 5: data of changes in profit margins, it's very roughly speaking,

576
00:28:38,600 --> 00:28:43,040
Speaker 5: about two thirds of sectors that benefited and one third

577
00:28:43,160 --> 00:28:45,160
Speaker 5: or so that did not benefit. I don't have a

578
00:28:45,240 --> 00:28:48,440
Speaker 5: very clear picture yet like how this distribution works, but

579
00:28:48,480 --> 00:28:51,160
Speaker 5: in any case, we know that there are that there

580
00:28:51,160 --> 00:28:54,880
Speaker 5: are also sectors, and that they are firms that are suffering.

581
00:28:54,400 --> 00:28:55,800
Speaker 4: Pretty badly from this. Right.

582
00:28:55,880 --> 00:28:59,000
Speaker 5: And if we think of a capitalist economy as being

583
00:28:59,160 --> 00:29:04,480
Speaker 5: coordinated by the profitability of different things, right as the

584
00:29:04,520 --> 00:29:09,440
Speaker 5: most important signal for capital allocation, and this profitability gets

585
00:29:10,000 --> 00:29:13,440
Speaker 5: kind of random because in some sectors firms can play

586
00:29:13,440 --> 00:29:15,520
Speaker 5: this price of a volume game, and then some other

587
00:29:15,560 --> 00:29:17,840
Speaker 5: sectors it might be more difficult to pour this off.

588
00:29:18,240 --> 00:29:23,360
Speaker 5: And this doesn't have reasons that necessarily tied into the

589
00:29:23,640 --> 00:29:28,040
Speaker 5: entrepreneurial genius of one firm versus the other, or the

590
00:29:28,120 --> 00:29:30,800
Speaker 5: necessity for society for production of.

591
00:29:30,760 --> 00:29:31,720
Speaker 4: One thing over the other.

592
00:29:31,800 --> 00:29:35,000
Speaker 5: But it just has to do with whatever specific constellation

593
00:29:35,120 --> 00:29:36,920
Speaker 5: enabled these kind of price hikes. And I think we

594
00:29:37,480 --> 00:29:40,760
Speaker 5: us really have a problem, right if profitability becomes random.

595
00:29:41,120 --> 00:29:44,400
Speaker 1: Right, So, maybe like the egg companies do really well

596
00:29:44,480 --> 00:29:47,720
Speaker 1: for some reason because everyone's heard about bird flu for instance,

597
00:29:47,760 --> 00:29:50,000
Speaker 1: we did a whole episode on it. And so all

598
00:29:50,040 --> 00:29:52,280
Speaker 1: the egg companies raise their prices at the same time

599
00:29:52,320 --> 00:29:54,960
Speaker 1: and make a lot of money. But meanwhile, there's some

600
00:29:55,040 --> 00:29:58,280
Speaker 1: I don't know, software startup doing something really cool, but

601
00:29:58,360 --> 00:30:02,080
Speaker 1: they can't push through the same kind of price increases.

602
00:30:01,960 --> 00:30:06,560
Speaker 5: Absolutely, and even like between product lines in individual firms.

603
00:30:06,560 --> 00:30:07,360
Speaker 4: Like if you look at what.

604
00:30:07,360 --> 00:30:11,440
Speaker 5: Happened in the car sector, right, were suddenly because I

605
00:30:11,440 --> 00:30:14,240
Speaker 5: mean there you actually had a real physical bottleneck, and

606
00:30:14,440 --> 00:30:17,160
Speaker 5: car companies decided to only, i mean not only, but

607
00:30:17,280 --> 00:30:22,280
Speaker 5: predominantly produce higher end models that then recited a situation

608
00:30:22,320 --> 00:30:25,760
Speaker 5: where all these cars that normal people are driving became

609
00:30:25,960 --> 00:30:28,200
Speaker 5: basically not available on the market, right, which is an

610
00:30:28,240 --> 00:30:31,360
Speaker 5: outcome that is in many ways undesirable because then maybe

611
00:30:31,400 --> 00:30:33,680
Speaker 5: people can't make it to work because they can't afford

612
00:30:33,680 --> 00:30:35,920
Speaker 5: a car, which then like kind of makes the labor

613
00:30:35,920 --> 00:30:38,400
Speaker 5: market less fluid in a situation where we already have

614
00:30:38,600 --> 00:30:40,120
Speaker 5: labor shortages in a certain areas.

615
00:30:40,160 --> 00:30:58,920
Speaker 1: So but yeah, so since we're on the topic of

616
00:30:59,080 --> 00:31:03,520
Speaker 1: capital allocation and capitalist economies and how it's supposed to work,

617
00:31:03,760 --> 00:31:07,720
Speaker 1: can we maybe talk about slightly less capitalist country. But

618
00:31:07,920 --> 00:31:09,560
Speaker 1: the first time we ever had you on the show,

619
00:31:09,600 --> 00:31:12,760
Speaker 1: it was to talk about China, and I'm wondering, if

620
00:31:12,760 --> 00:31:16,800
Speaker 1: you contrast and compare inflation in the West, in Europe

621
00:31:16,840 --> 00:31:18,840
Speaker 1: and the US with what's going on in China, it

622
00:31:18,880 --> 00:31:21,600
Speaker 1: does seem like, although there are some pockets of high

623
00:31:21,680 --> 00:31:24,800
Speaker 1: prices in the East, it does feel like on the

624
00:31:24,840 --> 00:31:30,400
Speaker 1: whole it's less of an inflation story. So what are

625
00:31:30,440 --> 00:31:32,480
Speaker 1: you thinking about in terms of that comparison.

626
00:31:33,160 --> 00:31:37,080
Speaker 5: Yeah, I think it's really an important thing to look at.

627
00:31:37,240 --> 00:31:40,000
Speaker 5: I think we haven't discussed this like generally enough that

628
00:31:40,080 --> 00:31:43,960
Speaker 5: there has been really this pretty dramatic divergence between Europe

629
00:31:44,000 --> 00:31:46,560
Speaker 5: and the US with this high inflation in China, with

630
00:31:46,640 --> 00:31:48,840
Speaker 5: almost a deflation kind of problem.

631
00:31:48,640 --> 00:31:49,440
Speaker 4: In some stretches.

632
00:31:49,520 --> 00:31:51,360
Speaker 5: I think, of course, it has to do a bit

633
00:31:51,400 --> 00:31:52,840
Speaker 5: the different timeline of COVID.

634
00:31:52,960 --> 00:31:55,040
Speaker 4: I mean, no question about that, right.

635
00:31:55,080 --> 00:31:58,000
Speaker 5: I mean they have had shutdowns when we were not

636
00:31:58,080 --> 00:32:00,520
Speaker 5: in shutdown, and they were open when we were in

637
00:32:00,560 --> 00:32:03,960
Speaker 5: shutdown and so on, right, So clearly, microeconomically speaking, they

638
00:32:04,000 --> 00:32:06,440
Speaker 5: are at a different point. They also did not have

639
00:32:06,800 --> 00:32:08,920
Speaker 5: the kind of similars packages that they had in the

640
00:32:08,960 --> 00:32:12,120
Speaker 5: global financial crisis and so on, So certainly the macro

641
00:32:12,200 --> 00:32:15,320
Speaker 5: environment is different. But I think there's still the question

642
00:32:15,560 --> 00:32:19,720
Speaker 5: of how did the global food and energy price shock

643
00:32:19,920 --> 00:32:23,640
Speaker 5: arrive in China, right, and why did this shock not

644
00:32:23,840 --> 00:32:26,440
Speaker 5: unleash similar kind of dynamics, right.

645
00:32:26,320 --> 00:32:29,200
Speaker 1: It didn't seem to get propagated as much as it

646
00:32:29,240 --> 00:32:30,000
Speaker 1: did elsewhere.

647
00:32:30,280 --> 00:32:32,400
Speaker 5: Yeah, so I think that like different layers. So first

648
00:32:32,440 --> 00:32:34,360
Speaker 5: of all, I mean for grain, which I think is

649
00:32:34,360 --> 00:32:36,720
Speaker 5: an important one. For food, they have, of course a

650
00:32:36,800 --> 00:32:41,040
Speaker 5: gigantic national reserve system, right, and they basically have to

651
00:32:41,440 --> 00:32:45,480
Speaker 5: a certain degree buffer their domestic prices against international prices.

652
00:32:45,800 --> 00:32:50,000
Speaker 5: So Chinese prices used to be for important grains like rice,

653
00:32:50,040 --> 00:32:53,920
Speaker 5: sweet used to tend to be higher than the international prices,

654
00:32:53,920 --> 00:32:57,520
Speaker 5: but stable, and when the international prices exploded, they kind

655
00:32:57,560 --> 00:33:01,720
Speaker 5: of stay, broadly speaking, where they wear. And the way

656
00:33:01,760 --> 00:33:05,920
Speaker 5: that they have managed that is that, first of all,

657
00:33:05,920 --> 00:33:08,080
Speaker 5: they have a very high self sufficiency rate. But I

658
00:33:08,120 --> 00:33:10,080
Speaker 5: don't think this is enough because I mean, the US

659
00:33:10,120 --> 00:33:12,600
Speaker 5: has a very high self sufficiency rate, right, It's even

660
00:33:12,640 --> 00:33:15,280
Speaker 5: like a major exporter. Germany for example, also has a

661
00:33:15,360 --> 00:33:17,920
Speaker 5: very high self sufficiency rates, also an exporter. But still,

662
00:33:18,000 --> 00:33:20,680
Speaker 5: these international price movements have a right, right In China,

663
00:33:21,120 --> 00:33:25,960
Speaker 5: they have not because the import quota is very strictly managed,

664
00:33:25,960 --> 00:33:28,640
Speaker 5: and it's basically a situation where most of the imports

665
00:33:28,680 --> 00:33:30,480
Speaker 5: are managed by a very large state.

666
00:33:30,320 --> 00:33:31,440
Speaker 4: Owned company KOVCO.

667
00:33:31,920 --> 00:33:35,240
Speaker 5: And then domestically, so in that sense that the international

668
00:33:35,360 --> 00:33:38,200
Speaker 5: domestic prices are not really as interlinked as they would

669
00:33:38,200 --> 00:33:40,560
Speaker 5: be in other situations. And domestically they still have a

670
00:33:40,560 --> 00:33:44,480
Speaker 5: minimum purchase price so that they basically ensure that wherever

671
00:33:44,560 --> 00:33:48,160
Speaker 5: it's it's reasonable to cultivate with this minimum purchase price, grain.

672
00:33:48,040 --> 00:33:49,000
Speaker 4: Is being cultivated.

673
00:33:49,520 --> 00:33:52,800
Speaker 5: And then they have these grain auctions where they would

674
00:33:52,840 --> 00:33:55,360
Speaker 5: be adding supply to the grain market if there is

675
00:33:55,400 --> 00:33:58,320
Speaker 5: a shortage from basically a state owned reserve system. So

676
00:33:58,320 --> 00:34:01,560
Speaker 5: in some sense they have for grain what the US

677
00:34:01,600 --> 00:34:05,560
Speaker 5: has with the Strategic Petroleum Reserve, just on a probably

678
00:34:06,280 --> 00:34:10,000
Speaker 5: even much more gigantic scale. And I'm saying probably here

679
00:34:10,040 --> 00:34:12,840
Speaker 5: because we don't really know the size of the reserve.

680
00:34:12,880 --> 00:34:13,800
Speaker 4: It's a state secret.

681
00:34:13,840 --> 00:34:16,919
Speaker 1: I think there's a strategic pork reserve as well, right,

682
00:34:17,040 --> 00:34:20,719
Speaker 1: it is my favorite whenever they replenish.

683
00:34:20,200 --> 00:34:24,400
Speaker 5: The Yeah, so there's actually I mean there's actually also

684
00:34:24,440 --> 00:34:28,680
Speaker 5: a live pick reserve. In other words, like state owned

685
00:34:28,840 --> 00:34:31,560
Speaker 5: pork farms a picktort. You can't have a pork farm,

686
00:34:31,600 --> 00:34:35,120
Speaker 5: you only can have a pickform, so state owned pick farms,

687
00:34:35,160 --> 00:34:38,440
Speaker 5: they have frozen pick reserves, and they are also like

688
00:34:38,560 --> 00:34:40,640
Speaker 5: kind of attempts of the state.

689
00:34:40,760 --> 00:34:43,480
Speaker 4: But again, these auctions.

690
00:34:42,840 --> 00:34:46,839
Speaker 5: And I mean purchases and auctions to basically send signals

691
00:34:46,880 --> 00:34:49,520
Speaker 5: into the market. So it's not really just about the

692
00:34:49,600 --> 00:34:53,239
Speaker 5: physical supply, but it's also about like let's say there's

693
00:34:53,280 --> 00:34:57,200
Speaker 5: a price hike for pork and then there's an announcement

694
00:34:57,400 --> 00:35:00,640
Speaker 5: that the state is now doing a major auction of pork.

695
00:35:00,680 --> 00:35:03,160
Speaker 5: Then this is sending a signal to all market players

696
00:35:03,160 --> 00:35:06,440
Speaker 5: that this price hike might not continue, which then should

697
00:35:06,920 --> 00:35:09,360
Speaker 5: encourage people to get rid of the inventories.

698
00:35:08,880 --> 00:35:10,480
Speaker 4: In there by also at supply.

699
00:35:10,840 --> 00:35:13,600
Speaker 3: So it sounds like, I mean, we have our SPR

700
00:35:14,160 --> 00:35:16,960
Speaker 3: and it was never really used as a price stabilizer.

701
00:35:17,040 --> 00:35:19,600
Speaker 3: So in addition to all these vehicles like the strategic

702
00:35:19,680 --> 00:35:22,759
Speaker 3: pork supply and other it seems like they also have

703
00:35:22,840 --> 00:35:26,279
Speaker 3: practice in this that actually like unlike OURSPR, which was

704
00:35:26,320 --> 00:35:28,040
Speaker 3: sort of pivoted or like, oh, we don't have to

705
00:35:28,120 --> 00:35:30,759
Speaker 3: use it just for strategic purposes, that this is like

706
00:35:30,880 --> 00:35:33,320
Speaker 3: part of like a more ingrained in macro management.

707
00:35:33,360 --> 00:35:36,720
Speaker 5: There absolutely and I mean the pork example is actually

708
00:35:36,719 --> 00:35:39,839
Speaker 5: one where it doesn't work that great because hawk cycles

709
00:35:39,880 --> 00:35:42,200
Speaker 5: are a thing, right, and they are I think China too,

710
00:35:42,239 --> 00:35:45,520
Speaker 5: and you have like millions of small holders farming pigs,

711
00:35:45,520 --> 00:35:48,239
Speaker 5: so you have very intense hawk cycles. So you can

712
00:35:48,280 --> 00:35:50,279
Speaker 5: smoothen the cycle, but you never get rid of it.

713
00:35:50,640 --> 00:35:54,399
Speaker 5: But it's technically not at all simple, right, I mean

714
00:35:54,440 --> 00:35:56,960
Speaker 5: you need to have basically a system that can store

715
00:35:57,040 --> 00:35:58,920
Speaker 5: that stuff in a way that the pork that they

716
00:35:58,960 --> 00:36:01,319
Speaker 5: sell is the pork that you want to buy an

717
00:36:01,320 --> 00:36:03,719
Speaker 5: e eat, right. You need to have agents that are

718
00:36:03,760 --> 00:36:07,560
Speaker 5: able to purchase this on a relatively large scale. You

719
00:36:07,640 --> 00:36:10,160
Speaker 5: then have to have these auctions that have to be

720
00:36:10,200 --> 00:36:13,080
Speaker 5: professionally organized. And you also have to understand the market

721
00:36:13,120 --> 00:36:15,840
Speaker 5: really well. I mean, remember when there was an announcement

722
00:36:15,880 --> 00:36:18,520
Speaker 5: earlier this year that the US war was going to

723
00:36:18,560 --> 00:36:21,680
Speaker 5: buy back or to replenish its strategic petronium reserve, and

724
00:36:21,719 --> 00:36:24,040
Speaker 5: then oil prices started spiking, right, So you have to

725
00:36:24,080 --> 00:36:27,520
Speaker 5: have a very good handle on how to communicate with

726
00:36:27,600 --> 00:36:30,399
Speaker 5: the market, like when to say something about what you're

727
00:36:30,400 --> 00:36:32,319
Speaker 5: doing and when not to say something about what you

728
00:36:32,360 --> 00:36:34,800
Speaker 5: are doing. So it's quite demanding and a lot of

729
00:36:34,840 --> 00:36:35,640
Speaker 5: things can go wrong.

730
00:36:35,880 --> 00:36:39,080
Speaker 1: Yeah, and even in China, where they do have practice

731
00:36:39,120 --> 00:36:42,320
Speaker 1: doing this. I mean I remember with pork specifically after

732
00:36:42,440 --> 00:36:45,680
Speaker 1: the African swine fever outbreak, they actually made the cycle

733
00:36:45,840 --> 00:36:49,160
Speaker 1: even worse because they told everyone ramp up production and

734
00:36:49,160 --> 00:36:51,520
Speaker 1: then it was too much, and then prices collapsed and

735
00:36:51,560 --> 00:36:54,120
Speaker 1: everyone got out. And so it's just been going like

736
00:36:54,239 --> 00:36:55,680
Speaker 1: sea sawing ever since then.

737
00:36:55,920 --> 00:36:58,560
Speaker 5: Absolutely, and it's actually been for the first time a

738
00:36:58,560 --> 00:37:02,880
Speaker 5: situation where European pork importers have had difficulty selling in

739
00:37:03,000 --> 00:37:06,799
Speaker 5: China because suddenly the prices collapsed in China and in

740
00:37:06,840 --> 00:37:09,800
Speaker 5: Europe they were going up with the very high grain prices.

741
00:37:09,960 --> 00:37:12,000
Speaker 5: So that Yeah, absolutely.

742
00:37:12,880 --> 00:37:16,239
Speaker 1: I didn't mean to make this a pork discussion, But

743
00:37:16,640 --> 00:37:18,440
Speaker 1: can I can I ask a personal question?

744
00:37:19,080 --> 00:37:22,400
Speaker 4: Oh? Can I say what more? Sorry? That's awkward.

745
00:37:22,719 --> 00:37:24,719
Speaker 5: So actually, I mean you're saying you didn't want to

746
00:37:24,719 --> 00:37:26,920
Speaker 5: make this a pork discussion. But the funny thing is,

747
00:37:27,120 --> 00:37:29,239
Speaker 5: while I was in China, I was seeing many interviews

748
00:37:29,239 --> 00:37:32,440
Speaker 5: with people on inflation, including foks from the Word Bank,

749
00:37:32,560 --> 00:37:35,880
Speaker 5: from the IMF, from major banks and so on, And

750
00:37:35,960 --> 00:37:38,719
Speaker 5: eventually every single economist that I talked to started to

751
00:37:38,760 --> 00:37:41,120
Speaker 5: talk about pork. How they even have all these like

752
00:37:41,280 --> 00:37:43,520
Speaker 5: jokes on pork, so they say, like the CPI in

753
00:37:43,600 --> 00:37:48,279
Speaker 5: China actually send for the China.

754
00:37:48,960 --> 00:37:51,239
Speaker 1: That's pretty I love that all the economists are viewing

755
00:37:51,280 --> 00:37:52,680
Speaker 1: inflation through the lens.

756
00:37:52,360 --> 00:37:54,040
Speaker 2: Of pork, like we do with the oil here in

757
00:37:54,120 --> 00:37:54,640
Speaker 2: this country.

758
00:37:54,680 --> 00:37:58,520
Speaker 1: It's true. But can I ask a personal question, which

759
00:37:58,560 --> 00:38:01,360
Speaker 1: is you know you mentioned well, we started off this

760
00:38:01,400 --> 00:38:04,759
Speaker 1: conversation talking about how this idea of seller's inflation has

761
00:38:04,880 --> 00:38:08,680
Speaker 1: really gathered steam in recent weeks, and you mentioned the

762
00:38:08,760 --> 00:38:12,600
Speaker 1: Guardian article where you talked about price controls, and I

763
00:38:12,680 --> 00:38:16,680
Speaker 1: remember when that came out, you got a ton of

764
00:38:16,719 --> 00:38:21,640
Speaker 1: criticism online, lots of Twitter people calling you various names.

765
00:38:21,680 --> 00:38:26,239
Speaker 1: Paul Kirkman said, some not very nice things. But since then,

766
00:38:26,400 --> 00:38:29,719
Speaker 1: we've seen price controls in Europe. We've seen on the

767
00:38:29,719 --> 00:38:32,879
Speaker 1: subject of seller's inflation and maybe windfall taxes. We've seen

768
00:38:33,239 --> 00:38:37,160
Speaker 1: the UK, for instance, talking about capping grocery items and

769
00:38:37,200 --> 00:38:40,239
Speaker 1: things like that. How do you feel about how this

770
00:38:40,320 --> 00:38:42,880
Speaker 1: is sort of seeping into the mainstream.

771
00:38:43,960 --> 00:38:47,600
Speaker 5: Yeah, I mean, maybe to act to your list. We

772
00:38:47,640 --> 00:38:51,000
Speaker 5: have also, of course seen the European gas price cap,

773
00:38:51,040 --> 00:38:54,880
Speaker 5: which is an international i mean transnationally coordinated kind of

774
00:38:54,960 --> 00:38:58,080
Speaker 5: price cap, and the OI price cap against Russian or

775
00:38:58,239 --> 00:39:00,839
Speaker 5: which I mean principle could be for all oil, right,

776
00:39:00,840 --> 00:39:02,840
Speaker 5: I mean just in terms of the technicality of the

777
00:39:02,880 --> 00:39:07,719
Speaker 5: price control mechanism. So yes, absolutely, it's been a totally

778
00:39:07,800 --> 00:39:11,200
Speaker 5: astonishing to me. The reason why I wrote this article

779
00:39:11,320 --> 00:39:15,719
Speaker 5: at the time was because a I felt that the

780
00:39:16,040 --> 00:39:20,759
Speaker 5: debate amongst economists was polarized between those who were saying like, Oh,

781
00:39:20,840 --> 00:39:22,759
Speaker 5: we don't have to worry about inflation too much, it's

782
00:39:22,760 --> 00:39:25,680
Speaker 5: just transitory, and those who were saying, oh, inflation is

783
00:39:25,719 --> 00:39:26,280
Speaker 5: really a problem.

784
00:39:26,320 --> 00:39:28,920
Speaker 4: Therefore we have to hike interest rates yesterday.

785
00:39:29,520 --> 00:39:32,560
Speaker 5: And I felt like there was a position missing there,

786
00:39:32,600 --> 00:39:35,240
Speaker 5: which is like, yeah, we have very large price spikes

787
00:39:35,280 --> 00:39:37,719
Speaker 5: and they are a problem. But if you have a

788
00:39:37,719 --> 00:39:39,919
Speaker 5: fire in the kitchen, you don't set your whole house

789
00:39:40,000 --> 00:39:42,160
Speaker 5: under water, but you try to put out the fire

790
00:39:42,160 --> 00:39:44,799
Speaker 5: in the kitchen. Right, So, not as an apologis of

791
00:39:44,840 --> 00:39:48,280
Speaker 5: price controls, but to say, hey, there is something sector

792
00:39:48,400 --> 00:39:52,000
Speaker 5: that we can do, and direct means of price civilization

793
00:39:52,280 --> 00:39:55,960
Speaker 5: can be an emergency measure to buy time when you

794
00:39:56,040 --> 00:39:59,200
Speaker 5: are faced with these kind of crazy price spikes. Now

795
00:39:59,400 --> 00:40:01,879
Speaker 5: the key word here, I think is emergency measure, and

796
00:40:02,080 --> 00:40:06,880
Speaker 5: my sense is that the more urgent the emergency became

797
00:40:07,600 --> 00:40:10,240
Speaker 5: the more acceptable these kind.

798
00:40:10,040 --> 00:40:12,200
Speaker 4: Of measures ended up being.

799
00:40:12,280 --> 00:40:14,040
Speaker 5: And I think that in Europe you can see this

800
00:40:14,640 --> 00:40:18,600
Speaker 5: very clearly in terms of the reactions to the war.

801
00:40:18,800 --> 00:40:20,839
Speaker 4: But then also like basically, as it.

802
00:40:20,880 --> 00:40:24,440
Speaker 5: Became colder, right, and the fear of winter just became

803
00:40:24,640 --> 00:40:28,840
Speaker 5: very real, the perceived emergency became more intense, and the

804
00:40:28,880 --> 00:40:33,600
Speaker 5: willingness to take these kind of measures became greater. The

805
00:40:34,040 --> 00:40:37,960
Speaker 5: Sellus inflation story, I feel like it's related but also

806
00:40:38,680 --> 00:40:42,800
Speaker 5: kind of slightly separate in the sense that the price

807
00:40:42,840 --> 00:40:45,879
Speaker 5: control debate is really about emergency measures that you take right,

808
00:40:45,920 --> 00:40:49,000
Speaker 5: and the Sellus inflation paper is really about how do

809
00:40:49,080 --> 00:40:52,600
Speaker 5: we understand this kind of inflation? But I think the

810
00:40:52,640 --> 00:40:55,200
Speaker 5: shift that we are seeing now that of course it's

811
00:40:55,239 --> 00:40:57,399
Speaker 5: not complete and so on, but that at least it's

812
00:40:57,400 --> 00:41:02,160
Speaker 5: becoming more acceptable to think about other ways of understanding

813
00:41:02,160 --> 00:41:04,560
Speaker 5: how inflation came about. It's kind of the first step

814
00:41:04,719 --> 00:41:07,560
Speaker 5: that we need to take to move towards a different

815
00:41:07,640 --> 00:41:11,120
Speaker 5: kind of economic stabilization paradigm that I personally think we

816
00:41:11,400 --> 00:41:15,120
Speaker 5: really need in this age of overlapping emergencies. So it's

817
00:41:15,160 --> 00:41:19,080
Speaker 5: been quite a wilde, right, but I guess talking today

818
00:41:19,080 --> 00:41:21,919
Speaker 5: and it has been very wide, so God knows what's

819
00:41:21,960 --> 00:41:22,840
Speaker 5: going to happen next.

820
00:41:23,560 --> 00:41:24,840
Speaker 4: It looks like there has.

821
00:41:24,719 --> 00:41:28,959
Speaker 5: Been some movement in a good direction in the sense

822
00:41:28,960 --> 00:41:31,680
Speaker 5: that the discourse is becoming more open, and I think

823
00:41:31,760 --> 00:41:34,640
Speaker 5: that an open discourse is really what we need if

824
00:41:34,640 --> 00:41:38,640
Speaker 5: we are faced with these unprecedented situations. Because he cannot

825
00:41:38,719 --> 00:41:42,000
Speaker 5: respond to an unprecedented situation by saying we have always

826
00:41:42,040 --> 00:41:43,480
Speaker 5: known how exactly works.

827
00:41:45,080 --> 00:41:47,080
Speaker 1: Isabelle A weavor. Thank you so much for coming back

828
00:41:47,120 --> 00:41:50,439
Speaker 1: on our thoughts. Really appreciated having you in person as well.

829
00:41:51,040 --> 00:41:52,799
Speaker 2: Thank you, Thank you so much.

830
00:42:06,360 --> 00:42:09,080
Speaker 1: So Joe, I always enjoyed talking to Isabella. It is

831
00:42:09,360 --> 00:42:12,600
Speaker 1: crazy to see how quickly things seem to be changing

832
00:42:12,719 --> 00:42:15,000
Speaker 1: in this particular area of discourse.

833
00:42:15,680 --> 00:42:17,399
Speaker 3: Totally and you know, I know we didn't really get

834
00:42:17,440 --> 00:42:19,840
Speaker 3: into it, but I also just think that like the

835
00:42:19,920 --> 00:42:23,319
Speaker 3: Internet and Twitter and like it sort of cuts in

836
00:42:23,320 --> 00:42:25,440
Speaker 3: both directions because you can put out an idea and

837
00:42:25,480 --> 00:42:28,120
Speaker 3: get tons of abuse and backlash, but there's also like

838
00:42:28,160 --> 00:42:31,200
Speaker 3: a really rapid way which ideas proliferate in a way

839
00:42:31,239 --> 00:42:33,359
Speaker 3: I don't think would have happened in like, you know,

840
00:42:33,440 --> 00:42:35,680
Speaker 3: a different era where you like wait like five years

841
00:42:35,719 --> 00:42:38,759
Speaker 3: to get a paper you know, referee in a journal or.

842
00:42:38,760 --> 00:42:39,319
Speaker 2: Something like that.

843
00:42:39,480 --> 00:42:42,080
Speaker 3: But I'm fascinated, as I think we both are, by

844
00:42:42,160 --> 00:42:44,560
Speaker 3: like how ideas like can move so fast and like

845
00:42:44,719 --> 00:42:46,080
Speaker 3: especially in the native crisis.

846
00:42:46,120 --> 00:42:48,400
Speaker 1: Absolutely, And the other things that stood out to me

847
00:42:48,480 --> 00:42:51,920
Speaker 1: are one you mentioned this treadmill idea of like, you know,

848
00:42:51,960 --> 00:42:54,879
Speaker 1: it sounds great companies raising prices in order to pad

849
00:42:54,920 --> 00:42:57,840
Speaker 1: their profit margins, but at some point you have to imagine,

850
00:42:57,880 --> 00:43:00,640
Speaker 1: like there are some executives who get nervous about how

851
00:43:00,719 --> 00:43:01,920
Speaker 1: far they can actually push this.

852
00:43:02,120 --> 00:43:05,080
Speaker 3: Yeah, I like Isabella's a point about like the gamble, right,

853
00:43:05,120 --> 00:43:07,600
Speaker 3: because at some point, like you could imagine where you're

854
00:43:07,600 --> 00:43:10,319
Speaker 3: like going with a pricing strategy and you really miss

855
00:43:10,320 --> 00:43:13,239
Speaker 3: time it and suddenly you really do like lose share

856
00:43:13,280 --> 00:43:16,280
Speaker 3: in like a meaningful way or you damage your brand,

857
00:43:16,400 --> 00:43:19,280
Speaker 3: which seems plausible. It's like, oh, this company is greedy

858
00:43:19,360 --> 00:43:21,520
Speaker 3: at a time, and so it sort of depends on

859
00:43:21,960 --> 00:43:24,839
Speaker 3: the sort of coordination. And I do wonder whether like

860
00:43:24,960 --> 00:43:28,760
Speaker 3: executives whatever like off the treadmill. Yeah in some way.

861
00:43:28,880 --> 00:43:31,240
Speaker 1: Right, they're sort of they're pulling the lever of every

862
00:43:31,320 --> 00:43:34,360
Speaker 1: quarter and so far it's paid out each time, but

863
00:43:34,560 --> 00:43:36,799
Speaker 1: maybe one day it won't. The other thing that really

864
00:43:36,840 --> 00:43:39,520
Speaker 1: stood out to me was, I mean, what we're talking

865
00:43:39,520 --> 00:43:44,600
Speaker 1: about is basically the need potentially for more interventionist government

866
00:43:44,920 --> 00:43:48,279
Speaker 1: in the economy in one way or another, whether it's

867
00:43:48,360 --> 00:43:51,200
Speaker 1: you know, trying to smooth out some of those production cycles,

868
00:43:51,440 --> 00:43:55,400
Speaker 1: trying to smooth out big price spikes. And I feel

869
00:43:55,440 --> 00:43:59,719
Speaker 1: like that's always going to be controversial.

870
00:43:59,280 --> 00:44:00,640
Speaker 2: Particularly political.

871
00:44:00,800 --> 00:44:03,439
Speaker 1: It's always going to be political, particularly in the US,

872
00:44:03,520 --> 00:44:06,040
Speaker 1: but it is you know that said, we have seen

873
00:44:06,080 --> 00:44:09,720
Speaker 1: some inklings of it with for instance, the Strategic Petroleum Reserve.

874
00:44:10,080 --> 00:44:11,840
Speaker 3: Yeah, And I think this is really the key, like

875
00:44:11,880 --> 00:44:14,239
Speaker 3: to my my takeaway from all this is people look

876
00:44:14,239 --> 00:44:17,359
Speaker 3: at this green inflation story whatever, and they're like, yeah,

877
00:44:17,360 --> 00:44:20,080
Speaker 3: but inflation is still really high, right, and so we

878
00:44:20,160 --> 00:44:23,120
Speaker 3: got to do something about it. And I think isabeut

879
00:44:23,120 --> 00:44:27,320
Speaker 3: this point, like it's important by looking at different dimensions

880
00:44:27,320 --> 00:44:29,080
Speaker 3: and not just saying, oh, it's because of wages or

881
00:44:29,160 --> 00:44:31,719
Speaker 3: not just because of like rates or money supply, it

882
00:44:31,760 --> 00:44:33,640
Speaker 3: allows us like the sort of like mental space to

883
00:44:33,680 --> 00:44:35,080
Speaker 3: open up, and some of them like we may not

884
00:44:35,120 --> 00:44:36,840
Speaker 3: have the tools, Like we may not have the tools

885
00:44:36,920 --> 00:44:40,160
Speaker 3: right now to like stabilize keep grand prices stable. We

886
00:44:40,200 --> 00:44:43,080
Speaker 3: don't have the sort of equivalent, but like thinking about like,

887
00:44:43,160 --> 00:44:45,120
Speaker 3: is rate hikes really going to be the best way?

888
00:44:45,160 --> 00:44:45,440
Speaker 2: Here?

889
00:44:45,880 --> 00:44:48,640
Speaker 3: Is the cost in terms of like general welfare and

890
00:44:48,680 --> 00:44:51,719
Speaker 3: employment worth it? If this is really not what the

891
00:44:51,760 --> 00:44:54,280
Speaker 3: story is about, I think it's still like very useful.

892
00:44:54,280 --> 00:44:56,239
Speaker 3: From that perspective, it is like, Okay, how good are

893
00:44:56,239 --> 00:44:58,279
Speaker 3: these tools? And if we're going to use a blunt tool,

894
00:44:58,600 --> 00:45:00,600
Speaker 3: like right, how much damage you're we're gonna do?

895
00:45:00,840 --> 00:45:03,000
Speaker 2: Yeah with this mediocre tool.

896
00:45:03,080 --> 00:45:06,520
Speaker 1: Well, again, going back to the investment point, if the

897
00:45:06,600 --> 00:45:10,239
Speaker 1: issue is a bottleneck in production, then maybe maybe you

898
00:45:10,280 --> 00:45:13,560
Speaker 1: don't want to raise the cost of investment and production.

899
00:45:13,680 --> 00:45:15,560
Speaker 3: You want to raise the cost of a real estate

900
00:45:15,600 --> 00:45:17,160
Speaker 3: developer at a time when rent is one of the

901
00:45:17,239 --> 00:45:18,480
Speaker 3: highest things like that.

902
00:45:18,760 --> 00:45:20,560
Speaker 1: You know what, Joe, I've decided I'm going to base

903
00:45:20,600 --> 00:45:23,920
Speaker 1: my entire personality going forward on campaigning for a strategic

904
00:45:23,960 --> 00:45:25,200
Speaker 1: pork reserve in the US.

905
00:45:25,680 --> 00:45:28,360
Speaker 2: But it's hard, it's hard to I guess even that,

906
00:45:29,040 --> 00:45:30,120
Speaker 2: But yeah, I support that.

907
00:45:30,239 --> 00:45:33,920
Speaker 1: Bringing home the bacon. That's my mind. Shall we leave

908
00:45:33,920 --> 00:45:35,600
Speaker 1: it there, Let's leave it there, all right? This has

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00:45:35,640 --> 00:45:39,000
Speaker 1: been another episode of the Odd Thoughts podcast. I'm Tracy Alloway.

910
00:45:39,040 --> 00:45:41,359
Speaker 1: You can follow me on Twitter at Tracy.

911
00:45:41,000 --> 00:45:43,719
Speaker 3: Alloway, and I'm Joe Wisenthal. You can follow me on

912
00:45:43,760 --> 00:45:47,279
Speaker 3: Twitter at the Stalwart. Follow our guest Isabella Weber on

913
00:45:47,360 --> 00:45:49,080
Speaker 3: Twitter at Isabella M.

914
00:45:49,160 --> 00:45:49,520
Speaker 2: Weber.

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00:45:49,640 --> 00:45:53,200
Speaker 3: Follow our producers Kerman Rodriguez at Kerman Armant and Dashall

916
00:45:53,200 --> 00:45:56,560
Speaker 3: Bennett at Dashbot. And for more odd Lots content, go

917
00:45:56,600 --> 00:45:59,359
Speaker 3: to Bloomberg dot com slash odd Lots, where we have

918
00:45:59,360 --> 00:46:02,279
Speaker 3: a blog, we have transcripts, we have a newsletter that

919
00:46:02,320 --> 00:46:05,640
Speaker 3: comes out Friday. And check out the discord Discord dot

920
00:46:05,680 --> 00:46:08,479
Speaker 3: gg slash odd Lots hang out twenty four to seven

921
00:46:08,520 --> 00:46:10,600
Speaker 3: with other listeners and talking about all these topics.

922
00:46:10,880 --> 00:46:15,960
Speaker 1: And you should stream Bloomberg originals on Samsung TV, Roku, Apple,

923
00:46:16,080 --> 00:46:19,279
Speaker 1: any other of these streaming platforms and make sure to

924
00:46:19,360 --> 00:46:22,640
Speaker 1: tune in on Bloomberg TV at ten pm. Thanks for

925
00:46:22,719 --> 00:46:49,200
Speaker 1: listening and watching