1 00:00:00,160 --> 00:00:02,320 Speaker 1: But knowledge to work and grow your business with c 2 00:00:02,520 --> 00:00:06,680 Speaker 1: i T from transportation to healthcare to manufacturing. C i 3 00:00:06,760 --> 00:00:10,520 Speaker 1: T offers commercial lending, leasing, and treasury management services for 4 00:00:10,600 --> 00:00:13,480 Speaker 1: small and middle market businesses. Learn more at c i 5 00:00:13,560 --> 00:00:26,639 Speaker 1: T dot com put Knowledge to Work. Hello and welcome 6 00:00:26,640 --> 00:00:30,000 Speaker 1: to another edition of the Odd Thoughts Podcast. I'm Tracy 7 00:00:30,040 --> 00:00:34,239 Speaker 1: Alloway and I'm Joe Wisenthal. So, Joe, do you know 8 00:00:34,440 --> 00:00:37,680 Speaker 1: It's been almost a year to the day that I've 9 00:00:37,720 --> 00:00:41,320 Speaker 1: been living out in the Middle East. I did the 10 00:00:41,360 --> 00:00:43,840 Speaker 1: time has I'm trying to think. I was gonna say 11 00:00:43,840 --> 00:00:46,519 Speaker 1: time has flown by, but I don't know, but that 12 00:00:46,560 --> 00:00:49,120 Speaker 1: would be the opposite of it's felt so long. It's 13 00:00:49,120 --> 00:00:52,519 Speaker 1: felt like an eternity. I can't believe it's it's I 14 00:00:52,560 --> 00:00:54,600 Speaker 1: can't believe it's only been a year because it just 15 00:00:54,600 --> 00:00:56,760 Speaker 1: seems like an eternity since you were here. Is that 16 00:00:56,920 --> 00:00:58,320 Speaker 1: I'm trying to think of? Which is the way to 17 00:00:58,360 --> 00:01:02,560 Speaker 1: frame it? Yeah? Good, save, I think, Okay, okay, right? 18 00:01:02,840 --> 00:01:05,160 Speaker 1: I mean that actually means that we've been doing Odd 19 00:01:05,160 --> 00:01:08,440 Speaker 1: Thoughts um internationally for longer than we actually did it 20 00:01:08,480 --> 00:01:11,040 Speaker 1: together in the same studio, which is kind of amazing 21 00:01:11,120 --> 00:01:13,920 Speaker 1: when you think about it. That is, uh, that is 22 00:01:13,959 --> 00:01:15,959 Speaker 1: pretty amazing. All right. What's the point though, what's the 23 00:01:15,959 --> 00:01:18,680 Speaker 1: point of this intro? Okay, So when you think about 24 00:01:18,680 --> 00:01:22,399 Speaker 1: the Middle East, obviously a lot of people think about 25 00:01:22,440 --> 00:01:26,640 Speaker 1: it as a rather troubled region. What are some of 26 00:01:26,680 --> 00:01:29,399 Speaker 1: the major issues that spring to mind when you think 27 00:01:29,440 --> 00:01:33,560 Speaker 1: of the Middle East. Well, obviously one of them from 28 00:01:33,560 --> 00:01:37,920 Speaker 1: an economic standpoint is the reliance of many countries on 29 00:01:38,200 --> 00:01:42,840 Speaker 1: oil and the future of the petroleum economy. And then, 30 00:01:42,840 --> 00:01:44,840 Speaker 1: of course, you know what you were saying, is the 31 00:01:44,959 --> 00:01:50,000 Speaker 1: troubled aspects the sort of continued tension regarding you know, 32 00:01:50,000 --> 00:01:53,560 Speaker 1: political systems and stuff like that. I think you want 33 00:01:53,600 --> 00:01:57,320 Speaker 1: to say religion as well, right that as well? Yeah, 34 00:01:57,640 --> 00:01:59,520 Speaker 1: all of that, all of that when I think of 35 00:01:59,560 --> 00:02:02,880 Speaker 1: the Middle all of that seems combined, the tension of 36 00:02:03,080 --> 00:02:08,639 Speaker 1: religious interest, political interest opening up to sort of attempts 37 00:02:08,639 --> 00:02:12,520 Speaker 1: at democracy, and a version of capitalism all seemed to 38 00:02:13,080 --> 00:02:16,120 Speaker 1: um to swirl around when I think of what's going 39 00:02:16,160 --> 00:02:18,120 Speaker 1: on in the Middle East. All right, well, um, to 40 00:02:18,240 --> 00:02:21,160 Speaker 1: celebrate my one year anniversary, I guess we're going to 41 00:02:21,240 --> 00:02:25,520 Speaker 1: be discussing all these issues with someone in finance who 42 00:02:25,639 --> 00:02:29,080 Speaker 1: is trying to solve pretty much all of them, so 43 00:02:29,360 --> 00:02:32,840 Speaker 1: quite a hefty task, as you might imagine. That does 44 00:02:32,919 --> 00:02:35,960 Speaker 1: sound like that does sound like a hefty task. Alright, 45 00:02:36,360 --> 00:02:38,720 Speaker 1: we're going to have on in Mad most Stack. He 46 00:02:39,000 --> 00:02:42,760 Speaker 1: is the co chief investment officer for Capricorn Fund Managers 47 00:02:42,880 --> 00:02:45,080 Speaker 1: and really I think one of the smartest guys around 48 00:02:45,080 --> 00:02:47,679 Speaker 1: when it comes to emerging markets, and Mad thanks so 49 00:02:47,800 --> 00:02:50,920 Speaker 1: much for coming on. That's my pleasure. Two kind so 50 00:02:51,080 --> 00:02:53,600 Speaker 1: emad uh. We got to it a little bit in 51 00:02:53,639 --> 00:02:56,600 Speaker 1: the intro, but for the past year I've really had 52 00:02:56,639 --> 00:03:00,360 Speaker 1: a front row seat, um to see the impact of 53 00:03:00,480 --> 00:03:03,880 Speaker 1: low oil prices on golf economies and a lot of 54 00:03:03,919 --> 00:03:09,040 Speaker 1: these economies have really built themselves around the energy industry 55 00:03:09,080 --> 00:03:11,480 Speaker 1: and it's really interesting to see them try to wean 56 00:03:11,520 --> 00:03:15,519 Speaker 1: themselves off of it. Now, why is it so or 57 00:03:15,639 --> 00:03:19,680 Speaker 1: seemingly so difficult for them? Well, I think that ultimately, 58 00:03:19,760 --> 00:03:22,359 Speaker 1: what you have is you've had a very established social 59 00:03:22,400 --> 00:03:24,920 Speaker 1: contract for a number of years, and this is something 60 00:03:24,960 --> 00:03:27,400 Speaker 1: we've seen across the world. It's like, what is the 61 00:03:27,480 --> 00:03:31,040 Speaker 1: fundamental basis of your relationship with the governments In the 62 00:03:31,040 --> 00:03:33,560 Speaker 1: Middle East, it was a case of they extracted energy 63 00:03:33,600 --> 00:03:38,640 Speaker 1: rents and they provided almost a jobs guarantee for their citizens, 64 00:03:38,760 --> 00:03:42,600 Speaker 1: and they bought an expatriate labor to actually have productive work. 65 00:03:43,160 --> 00:03:45,320 Speaker 1: That's being rewritten now because it's a question of can 66 00:03:45,360 --> 00:03:47,840 Speaker 1: you keep on with these public sector jobs, in particular 67 00:03:48,120 --> 00:03:50,840 Speaker 1: when the oil prices have collapsed such a degree. Is 68 00:03:50,880 --> 00:03:53,400 Speaker 1: this a cyclical collapse where the all price is going 69 00:03:53,440 --> 00:03:55,480 Speaker 1: to fIF deal, go back to andrew and then you 70 00:03:55,480 --> 00:03:58,240 Speaker 1: know it'll keep on weaving or is it permanently at 71 00:03:58,280 --> 00:04:01,160 Speaker 1: fifty dollars or lower? And that's a that's really concerned 72 00:04:01,200 --> 00:04:04,400 Speaker 1: them because they're like, maybe we can't afford to employ 73 00:04:04,440 --> 00:04:07,000 Speaker 1: these millions of young people who are kind of coming through. 74 00:04:07,760 --> 00:04:10,160 Speaker 1: You know, when you think about there's a sort of 75 00:04:10,160 --> 00:04:13,760 Speaker 1: a famous fact that economies that are highly dependent on 76 00:04:13,960 --> 00:04:18,440 Speaker 1: natural resources they get trapped. They get these overvalued currencies, 77 00:04:18,680 --> 00:04:24,239 Speaker 1: they get overly dependent on that specific resource. The rest 78 00:04:24,279 --> 00:04:27,240 Speaker 1: of the economy kind of atrophies. If you're not in 79 00:04:27,320 --> 00:04:32,159 Speaker 1: that resource, then you really have nothing going for you. Um, 80 00:04:32,279 --> 00:04:37,400 Speaker 1: you know, this idea of transitioning away from oil dependency, 81 00:04:37,560 --> 00:04:39,880 Speaker 1: is it really plausible. I mean, it's a great thing 82 00:04:39,920 --> 00:04:43,239 Speaker 1: to talk about diversifying the economy, but is it something 83 00:04:43,279 --> 00:04:46,719 Speaker 1: that can actually be done. Well, you know, necessity is 84 00:04:46,720 --> 00:04:50,080 Speaker 1: the mother of invention. Um. I think all economies, when 85 00:04:50,160 --> 00:04:53,880 Speaker 1: then the core driver starts to come away, the question 86 00:04:53,920 --> 00:04:56,400 Speaker 1: marks always can it rebalance? I mean China has been 87 00:04:56,440 --> 00:05:01,480 Speaker 1: reliant upon debt plus obviously the base growth effect. These 88 00:05:01,520 --> 00:05:04,400 Speaker 1: ones have been reliant upon the resource curse. Can they 89 00:05:04,520 --> 00:05:06,960 Speaker 1: move away? And I think you need two things. First 90 00:05:06,960 --> 00:05:08,720 Speaker 1: of all, you need to have that like impetus and 91 00:05:08,760 --> 00:05:11,159 Speaker 1: then you need someone with a very strong hand to 92 00:05:11,279 --> 00:05:13,480 Speaker 1: push it through. If you look at country like Abu 93 00:05:13,560 --> 00:05:16,280 Speaker 1: Dabbi and Kuwait, they have so much cash that for 94 00:05:16,320 --> 00:05:18,960 Speaker 1: the moment, the impetus isn't really there. You look at 95 00:05:18,960 --> 00:05:21,760 Speaker 1: someone like Saudi Arabia. It's coming from a very low base, 96 00:05:21,880 --> 00:05:25,040 Speaker 1: but there's tremendous potential for reformation there. And you have 97 00:05:25,160 --> 00:05:28,920 Speaker 1: this millennial Deputy Crown Prince Mohammad been Salman really trying 98 00:05:28,960 --> 00:05:32,560 Speaker 1: to push through everything possible in terms of societal economic, 99 00:05:33,080 --> 00:05:36,080 Speaker 1: kind of corporate reformation there around COO I, p O 100 00:05:36,160 --> 00:05:39,000 Speaker 1: S and things like that. Will they be successful, Well, 101 00:05:39,040 --> 00:05:41,839 Speaker 1: they're not going to achieve vision because it's just far 102 00:05:41,920 --> 00:05:45,039 Speaker 1: too aggressive, but definitely you will have improvement from where 103 00:05:45,040 --> 00:05:47,200 Speaker 1: we are now, because you have to have improvement from 104 00:05:47,200 --> 00:05:49,880 Speaker 1: where we are now or you're going to have increasing 105 00:05:49,920 --> 00:05:53,680 Speaker 1: social tension. I'm glad you brought up Saudi Aramco. This 106 00:05:53,760 --> 00:05:57,880 Speaker 1: is a huge story both in golf markets and internationally. 107 00:05:58,080 --> 00:06:01,039 Speaker 1: It's the listing of Saudi Arabia be as state owned 108 00:06:01,040 --> 00:06:04,280 Speaker 1: oil company, and I'm glad you brought it up because 109 00:06:04,320 --> 00:06:07,080 Speaker 1: I wanted to pick up on your point earlier. Do 110 00:06:07,120 --> 00:06:10,240 Speaker 1: you think the downturn in oil prices is cyclical or 111 00:06:10,360 --> 00:06:13,440 Speaker 1: is it something more structural, because there are some analysts 112 00:06:13,440 --> 00:06:17,919 Speaker 1: who have talked about Saudi Arabia listing Aramco because the 113 00:06:17,960 --> 00:06:24,080 Speaker 1: country basically thinks that oil demand is eventually going to peak. Well, 114 00:06:24,080 --> 00:06:26,400 Speaker 1: I mean, I think that if you are a sensible 115 00:06:26,480 --> 00:06:29,000 Speaker 1: leader of a country that's so reliant on oil with 116 00:06:30,000 --> 00:06:33,200 Speaker 1: revenues coming from it, you do need to diversify. I 117 00:06:33,200 --> 00:06:36,080 Speaker 1: think realistically, the Southies don't know. Nobody knows if this 118 00:06:36,160 --> 00:06:39,280 Speaker 1: is cyclical or secular um, but you have to be 119 00:06:39,320 --> 00:06:42,040 Speaker 1: prepared for these eventualities. And what South Arabia is effectually 120 00:06:42,080 --> 00:06:44,360 Speaker 1: doing if you read between the Lions for their kind 121 00:06:44,360 --> 00:06:47,920 Speaker 1: of pension fund, putting two trillion dollars offshore, kind of 122 00:06:47,920 --> 00:06:50,560 Speaker 1: trying to get FDI to come in and stabilize the 123 00:06:50,600 --> 00:06:53,560 Speaker 1: real because all receipts aren't there is. They're trying to 124 00:06:53,600 --> 00:06:58,000 Speaker 1: shift from basically having oil rents to having rents extracted 125 00:06:58,040 --> 00:07:01,440 Speaker 1: from dividends and you know, from the creativity of others abroad. 126 00:07:01,560 --> 00:07:03,359 Speaker 1: I mean, this is why they're investing in things like 127 00:07:03,480 --> 00:07:06,479 Speaker 1: Uber with three billion dollars. They will eventually invest in 128 00:07:06,520 --> 00:07:09,680 Speaker 1: companies like Tesla. I'm sure they're gonna do massive investment 129 00:07:09,680 --> 00:07:12,520 Speaker 1: into US infrastructure. I mean, there was a hundred billion 130 00:07:12,520 --> 00:07:15,120 Speaker 1: dollar fund with soft Bank. Half of that of which 131 00:07:15,120 --> 00:07:17,520 Speaker 1: they're providing, forty five billion dollars is going to go 132 00:07:17,600 --> 00:07:19,680 Speaker 1: into the US. So I think it's they're just trying 133 00:07:19,680 --> 00:07:23,239 Speaker 1: to swap some cash flows now just in case, because 134 00:07:23,280 --> 00:07:24,920 Speaker 1: they don't want to be caught out, just as they've 135 00:07:24,920 --> 00:07:26,960 Speaker 1: been caught out over the last few years, and now 136 00:07:27,040 --> 00:07:28,960 Speaker 1: is the time to do it when the pressure is on, 137 00:07:29,400 --> 00:07:31,920 Speaker 1: so they can make these social changes as well as 138 00:07:31,920 --> 00:07:35,400 Speaker 1: economic changes. I get that idea that they have all 139 00:07:35,480 --> 00:07:38,320 Speaker 1: this cash and what they want to do is have 140 00:07:38,480 --> 00:07:42,560 Speaker 1: all these investments abroad and then hopefully those investments pay 141 00:07:42,560 --> 00:07:44,880 Speaker 1: off and they pay a recurring dividend and that sort 142 00:07:44,880 --> 00:07:49,080 Speaker 1: of replaces the you know, the month the money they 143 00:07:49,080 --> 00:07:51,800 Speaker 1: get all the time from oil, But what about long 144 00:07:51,920 --> 00:07:54,840 Speaker 1: term in terms of the domestic economy, in terms of 145 00:07:54,880 --> 00:07:58,080 Speaker 1: all these people, uh, in terms of jobs and stuff 146 00:07:58,080 --> 00:08:01,520 Speaker 1: like that. New industry, it's just there any thought or 147 00:08:01,560 --> 00:08:05,400 Speaker 1: is there any progress being made to uh new domestic 148 00:08:05,440 --> 00:08:08,440 Speaker 1: industries that will replace oil if the eventually sort of 149 00:08:08,440 --> 00:08:13,320 Speaker 1: fades away. I mean, definitely, there's obviously massive plans and 150 00:08:13,400 --> 00:08:15,160 Speaker 1: things like that, But the bottom line is you've got 151 00:08:15,240 --> 00:08:19,240 Speaker 1: six d seven hundred thousand young Saudis coming through, increasing 152 00:08:19,280 --> 00:08:22,160 Speaker 1: amounts of women in the workforce. Need to create jobs 153 00:08:22,200 --> 00:08:23,960 Speaker 1: for them. And what they're trying to do is they're 154 00:08:23,960 --> 00:08:27,120 Speaker 1: trying to cluster around big industries and really encourage Sames 155 00:08:27,160 --> 00:08:29,760 Speaker 1: to come through. Whether or not be successful, I think 156 00:08:29,800 --> 00:08:31,880 Speaker 1: it's going to take time. I mean, you can't change 157 00:08:31,880 --> 00:08:35,840 Speaker 1: the mentality of a country overnight from basically being guaranteed 158 00:08:35,840 --> 00:08:38,280 Speaker 1: a public sector job with six of Saudis in the 159 00:08:38,280 --> 00:08:41,160 Speaker 1: public sector to having to work in the private sector. 160 00:08:41,520 --> 00:08:44,440 Speaker 1: But you know, initiatives such as saying, well, foreigners are 161 00:08:44,440 --> 00:08:46,720 Speaker 1: no longer allowed to work in Mores, it must be 162 00:08:46,760 --> 00:08:49,400 Speaker 1: Saudis and things like that, they're kind of stealth tacks 163 00:08:49,440 --> 00:08:52,640 Speaker 1: on the private center. But they are getting more people 164 00:08:52,800 --> 00:08:55,840 Speaker 1: into the workforce who are Saudies. But like I said, 165 00:08:55,880 --> 00:08:58,240 Speaker 1: this thing is going to take time, and the question 166 00:08:58,280 --> 00:09:00,839 Speaker 1: mark is do they have enough time? UM? I think 167 00:09:00,840 --> 00:09:03,120 Speaker 1: the jury is still out on that. So let's take 168 00:09:03,120 --> 00:09:06,840 Speaker 1: a step back, because of course, diversifying the economy and 169 00:09:06,920 --> 00:09:10,360 Speaker 1: building up domestic industries is something that's going to take time. 170 00:09:10,440 --> 00:09:12,640 Speaker 1: You can't really snap your fingers and have it happen. 171 00:09:13,040 --> 00:09:17,560 Speaker 1: Let's talk about the low oil prices themselves. UM. This 172 00:09:17,640 --> 00:09:21,240 Speaker 1: is obviously a hot topic in markets, and it seems 173 00:09:21,280 --> 00:09:22,840 Speaker 1: like not a day goes by that we don't have 174 00:09:22,880 --> 00:09:26,360 Speaker 1: a headline that says something about OPEC versus the US 175 00:09:26,440 --> 00:09:31,080 Speaker 1: shale industry, and a headline questioning opex ability to actually 176 00:09:31,120 --> 00:09:36,040 Speaker 1: impact prices in the face of rising American production. What 177 00:09:36,200 --> 00:09:41,040 Speaker 1: power do Middle East producers actually have when it comes 178 00:09:41,080 --> 00:09:45,280 Speaker 1: to influencing the price of a barrel of crude? I mean, 179 00:09:46,200 --> 00:09:47,920 Speaker 1: I think, just on one quick final point about the 180 00:09:47,960 --> 00:09:50,439 Speaker 1: previous thing, the template there is Dubai, where it took 181 00:09:50,440 --> 00:09:53,280 Speaker 1: about ten years to rediversify because they ran out of oil. 182 00:09:53,679 --> 00:09:56,240 Speaker 1: Now hopping on to see the question you just asked, Look, 183 00:09:56,760 --> 00:09:58,920 Speaker 1: OPEC is not a cartel. There have been lots of 184 00:09:58,960 --> 00:10:03,839 Speaker 1: studies done. It's just too diversive. There's too many competing interests. 185 00:10:03,880 --> 00:10:06,120 Speaker 1: Everyone's kind of tapped out when all prices are low 186 00:10:06,480 --> 00:10:08,520 Speaker 1: because they overspend when all prices are high for it 187 00:10:08,559 --> 00:10:11,640 Speaker 1: to be a cartel um what it approximates in kind 188 00:10:11,679 --> 00:10:15,080 Speaker 1: of economic terms of the Stackleberg competition and what happens 189 00:10:15,080 --> 00:10:17,719 Speaker 1: there is the leader moves and everyone else follows. But 190 00:10:17,840 --> 00:10:19,920 Speaker 1: the only way that kind of they can punish, in 191 00:10:19,920 --> 00:10:22,400 Speaker 1: this case Saudi Arabia everyone for not following is to 192 00:10:22,480 --> 00:10:25,800 Speaker 1: just increase production and collapse the prices. And that's kind 193 00:10:25,800 --> 00:10:30,280 Speaker 1: of like what you saw when Saudi Arabia wants to 194 00:10:30,280 --> 00:10:33,360 Speaker 1: try and push out shale. But also it played out 195 00:10:33,360 --> 00:10:36,200 Speaker 1: the scenarios if we cut, are we going to get 196 00:10:36,240 --> 00:10:38,200 Speaker 1: into repeat of the nineties when we went from like 197 00:10:38,240 --> 00:10:40,040 Speaker 1: ten million pounds and to two and a half million 198 00:10:40,080 --> 00:10:42,520 Speaker 1: barrels and everyone else will cheat and Shell will just 199 00:10:42,559 --> 00:10:44,320 Speaker 1: come and take the money that we're leaving on the table. 200 00:10:45,040 --> 00:10:48,880 Speaker 1: That was the dynamic in two thousand and fourteen. Right now, 201 00:10:49,720 --> 00:10:51,520 Speaker 1: I don't think anyone is thinking that there won't be 202 00:10:51,559 --> 00:10:54,200 Speaker 1: an extension of the Opeqe cut and it has stabilized 203 00:10:54,240 --> 00:10:58,320 Speaker 1: all prices. Why is that it's because Aman, Saudi everyone 204 00:10:58,360 --> 00:11:00,720 Speaker 1: are starting to cash in on the long term cash 205 00:11:00,720 --> 00:11:05,520 Speaker 1: flows of the oil production through bond issuances and equity issuances, 206 00:11:05,520 --> 00:11:08,440 Speaker 1: So the payoff structure for them is different. You know, 207 00:11:08,920 --> 00:11:11,120 Speaker 1: it costs Satibe a four and a half billion dollars 208 00:11:11,120 --> 00:11:13,320 Speaker 1: a quarter at fifty dollar oil to cut to the 209 00:11:13,320 --> 00:11:15,800 Speaker 1: amount that they have. They're just raised the seventeen billion 210 00:11:15,840 --> 00:11:18,040 Speaker 1: dollar bond, you know, the around co I p O 211 00:11:18,080 --> 00:11:21,520 Speaker 1: of fifty undred billion dollars crystallized. The payoff is very 212 00:11:21,520 --> 00:11:23,400 Speaker 1: different to the extent that I think they can cut 213 00:11:23,440 --> 00:11:26,840 Speaker 1: probably two million barrels by themselves if they really really 214 00:11:26,840 --> 00:11:29,600 Speaker 1: need to and still come out ahead on cash terms. 215 00:11:30,200 --> 00:11:32,320 Speaker 1: That would impact the market because the oil market is 216 00:11:32,360 --> 00:11:35,640 Speaker 1: fascinating because you have ninety six million barrels of production 217 00:11:35,960 --> 00:11:38,720 Speaker 1: but over supplies only one two million barrels in each direction. 218 00:11:39,080 --> 00:11:42,400 Speaker 1: But the price moves, it doubles, it halves. It's incredibly 219 00:11:42,400 --> 00:11:45,880 Speaker 1: sensitive to small shifts in production. It's just that OPEC 220 00:11:45,920 --> 00:11:49,200 Speaker 1: can't get his act together to actually synchronize that usually 221 00:11:49,559 --> 00:11:51,680 Speaker 1: and definitely to over extend from where they are now. 222 00:11:51,920 --> 00:11:54,319 Speaker 1: So moving from one point two million barrels to two 223 00:11:54,720 --> 00:11:56,440 Speaker 1: you'd need to see the op price drop below forty 224 00:11:56,440 --> 00:11:59,080 Speaker 1: again probably as an example. So they're kind of in 225 00:11:59,080 --> 00:12:02,600 Speaker 1: the comfort zone. So just to be clear, going back 226 00:12:02,600 --> 00:12:05,440 Speaker 1: to what you said, what's different now is the ease 227 00:12:05,559 --> 00:12:08,679 Speaker 1: with which the oil producing countries are able to monitor 228 00:12:08,800 --> 00:12:12,320 Speaker 1: his future production via the bond market, which sort of 229 00:12:12,520 --> 00:12:15,959 Speaker 1: makes it a little more economical to hold production down. 230 00:12:16,559 --> 00:12:19,319 Speaker 1: My understanding that right, Yeah, I think that it's a 231 00:12:19,440 --> 00:12:23,040 Speaker 1: change in mentality. Um, you know, they didn't know what 232 00:12:23,120 --> 00:12:26,720 Speaker 1: the elasticity of shale would be. They've got some points 233 00:12:26,720 --> 00:12:28,960 Speaker 1: of that. You start to see us, she'll come back online, 234 00:12:28,960 --> 00:12:31,520 Speaker 1: but obviously the easiest stuff and you're not getting into 235 00:12:31,559 --> 00:12:34,400 Speaker 1: the hardest stuff and oil service companies prices are going 236 00:12:34,520 --> 00:12:37,360 Speaker 1: up and things like that. But they didn't know what 237 00:12:37,400 --> 00:12:40,800 Speaker 1: that response function would be, and the payoff was just different. 238 00:12:40,840 --> 00:12:43,800 Speaker 1: Now they've done all the groundwork, led by Saudi Arabia, 239 00:12:44,200 --> 00:12:47,280 Speaker 1: they can start having these cash flows because really without 240 00:12:47,280 --> 00:12:49,680 Speaker 1: Saudi Arabia you can't have any cuts. So it comes 241 00:12:49,679 --> 00:12:52,480 Speaker 1: down to the South Arabia want cuts or not. That's why, 242 00:12:52,520 --> 00:12:54,920 Speaker 1: like I said, if you model it as a Stackleberg competition, 243 00:12:55,320 --> 00:13:00,000 Speaker 1: which is one where everyone follows the leader as it were, Um, 244 00:13:00,080 --> 00:13:02,520 Speaker 1: because if Sally didn't move, you wouldn't have an ipeck deal. Right, 245 00:13:03,280 --> 00:13:06,760 Speaker 1: let's pause for a second and take a short break 246 00:13:06,800 --> 00:13:09,520 Speaker 1: to hear from our sponsor. But first we want to 247 00:13:09,520 --> 00:13:11,520 Speaker 1: take a quick moment to let you know about something 248 00:13:11,760 --> 00:13:16,600 Speaker 1: really new that's cool from Bloomberg. Starting right now, you 249 00:13:16,640 --> 00:13:19,280 Speaker 1: can use our io s app or Google Chrome extension 250 00:13:19,360 --> 00:13:22,679 Speaker 1: to scan the news, look at any story on any website, 251 00:13:22,720 --> 00:13:27,400 Speaker 1: and instantly bring up news and information from Bloomberg relevant 252 00:13:27,400 --> 00:13:29,640 Speaker 1: to what you're reading about. Yeah, it's pretty cool. So 253 00:13:29,720 --> 00:13:32,280 Speaker 1: it means that no matter where you're reading the news, 254 00:13:32,440 --> 00:13:36,440 Speaker 1: you can basically bring all the data information that's on 255 00:13:36,480 --> 00:13:41,400 Speaker 1: the Bloomberg with you. It's kind of fun to test out, right, Joe. Right, 256 00:13:41,400 --> 00:13:44,080 Speaker 1: So if you're reading a story about Tesla or Microsoft 257 00:13:44,320 --> 00:13:47,960 Speaker 1: or Apple or Facebook, or if you're reading something about 258 00:13:47,960 --> 00:13:52,760 Speaker 1: oil as been related to today's episode, you can immediately 259 00:13:53,040 --> 00:13:55,640 Speaker 1: bring up news and data from Bloomberg. And of course 260 00:13:55,720 --> 00:13:57,760 Speaker 1: we have all the news and data in the world. 261 00:13:58,120 --> 00:14:01,240 Speaker 1: It's really awesome. You should go out by downloading the 262 00:14:01,280 --> 00:14:04,679 Speaker 1: iOS app or search the Bloomberg extension on the Chrome 263 00:14:04,720 --> 00:14:07,600 Speaker 1: Store to try it out. Yeah, and it's called lens. 264 00:14:07,640 --> 00:14:10,440 Speaker 1: We should probably say what it's called right, all right, right, 265 00:14:10,559 --> 00:14:14,079 Speaker 1: it's called lens. Learn more at Bloomberg dot com slash land, 266 00:14:17,880 --> 00:14:20,080 Speaker 1: but knowledge to work and grow your business with c 267 00:14:20,240 --> 00:14:24,440 Speaker 1: I T. From transportation to healthcare to manufacturing. C i 268 00:14:24,480 --> 00:14:28,240 Speaker 1: T offers commercial lending, leasing, and treasury management services for 269 00:14:28,360 --> 00:14:31,240 Speaker 1: small and middle market businesses. Learn more at c I 270 00:14:31,280 --> 00:14:39,000 Speaker 1: T dot com. Put knowledge to work, and we are 271 00:14:39,080 --> 00:14:43,560 Speaker 1: back with ammad most ack of Capricorn fund Management. Aman, 272 00:14:43,680 --> 00:14:46,880 Speaker 1: you are just making the point that the price of 273 00:14:47,000 --> 00:14:51,160 Speaker 1: oil or oil prices tend to be very, very affected 274 00:14:51,200 --> 00:14:55,800 Speaker 1: by relatively small swings in production two million barrels. I 275 00:14:55,840 --> 00:14:59,320 Speaker 1: think you said. If that's the case, then how come 276 00:14:59,520 --> 00:15:04,840 Speaker 1: ope can't get its act together and actually control the 277 00:15:04,920 --> 00:15:07,480 Speaker 1: price of oil in the way that some people you 278 00:15:07,480 --> 00:15:10,520 Speaker 1: know used to think that it actually did well. I 279 00:15:10,560 --> 00:15:13,960 Speaker 1: think that if you look historically at proper cartels, diamond 280 00:15:14,120 --> 00:15:19,240 Speaker 1: in etcetera, the cartel members typical control of the market, 281 00:15:19,760 --> 00:15:22,160 Speaker 1: but the dynamics were a bit different. In the case 282 00:15:22,200 --> 00:15:24,760 Speaker 1: of Opeque and oil. What they're really focusing on at 283 00:15:24,760 --> 00:15:27,080 Speaker 1: the moment is the supply side of things, and the 284 00:15:27,280 --> 00:15:31,120 Speaker 1: methodology in terms of OPEC cuts is a very crude methodology. 285 00:15:31,240 --> 00:15:34,200 Speaker 1: You know, we will cut one point two million barrels 286 00:15:34,200 --> 00:15:37,040 Speaker 1: over the next six months. That's the current cut. That's 287 00:15:37,080 --> 00:15:40,000 Speaker 1: cost them ten and a half billion dollars of lost 288 00:15:40,560 --> 00:15:44,000 Speaker 1: income from the barrels they didn't produce and sell. If 289 00:15:44,040 --> 00:15:47,440 Speaker 1: you assume fifty dollar oil, if the market shifts, if 290 00:15:47,640 --> 00:15:49,720 Speaker 1: you know there's too much heavy versus light, where there 291 00:15:49,720 --> 00:15:53,120 Speaker 1: any cutting heavy crude, they can't really adapt for that, 292 00:15:53,480 --> 00:15:56,400 Speaker 1: and you can't really enforce it either. The enforcement this 293 00:15:56,440 --> 00:15:58,360 Speaker 1: time in terms of compliance, so that should been very 294 00:15:58,360 --> 00:16:01,160 Speaker 1: good compared to previous cuts. But then when once party 295 00:16:01,160 --> 00:16:03,760 Speaker 1: starts cheating, historically everyone starts cheating and then it's just 296 00:16:03,800 --> 00:16:06,320 Speaker 1: sadly left by themselves at two and a half million 297 00:16:06,360 --> 00:16:08,720 Speaker 1: barrels while they were on kind of makes merry with 298 00:16:08,760 --> 00:16:11,520 Speaker 1: lots and lots of cash because you don't find out. 299 00:16:11,560 --> 00:16:13,320 Speaker 1: I mean, we've seen all these discussions about the OPEC 300 00:16:13,400 --> 00:16:15,960 Speaker 1: monitoring and things like that, and loads of people say, well, 301 00:16:15,960 --> 00:16:18,080 Speaker 1: this is the number, rock saying no, this is the number. 302 00:16:18,320 --> 00:16:20,080 Speaker 1: It takes two to three months to actually see if 303 00:16:20,080 --> 00:16:23,080 Speaker 1: anyone's cheating. So it just doesn't have the enforce ability. 304 00:16:23,120 --> 00:16:26,360 Speaker 1: It doesn't have adaptability. Um, and that's why it's so 305 00:16:26,400 --> 00:16:29,040 Speaker 1: difficult to really get everyone together on the same page 306 00:16:29,200 --> 00:16:33,400 Speaker 1: unless they're terrified. So let's go back. When we started 307 00:16:33,640 --> 00:16:38,880 Speaker 1: the episode, Tracy introduced you as someone who had was 308 00:16:38,920 --> 00:16:43,360 Speaker 1: working on the solutions to some of the region's biggest 309 00:16:43,880 --> 00:16:47,000 Speaker 1: vexing problems. And so let's get into this from an 310 00:16:47,040 --> 00:16:52,600 Speaker 1: oil perspective. How could the Mid East oil producers sort 311 00:16:52,600 --> 00:16:56,560 Speaker 1: of rearrange their affairs such that they didn't get you know, 312 00:16:56,920 --> 00:17:00,200 Speaker 1: such that they weren't so susceptible to these traps. Yeah, 313 00:17:00,240 --> 00:17:01,600 Speaker 1: I mean, I'm just trying to give my kind of 314 00:17:01,640 --> 00:17:04,080 Speaker 1: tuppence and try and help out wherever I can. But 315 00:17:04,119 --> 00:17:07,000 Speaker 1: my suggestion is what I call the tactical Petroleum Fund, 316 00:17:07,480 --> 00:17:11,960 Speaker 1: which is to flip the focus from supply onto demand 317 00:17:12,359 --> 00:17:17,399 Speaker 1: and effectually can create a marginal consumer for oil. So 318 00:17:17,520 --> 00:17:19,560 Speaker 1: rather than have this very blunt instrument where you cut 319 00:17:19,640 --> 00:17:22,399 Speaker 1: x million barrels and you lose ten billion dollars every 320 00:17:22,440 --> 00:17:26,800 Speaker 1: single six months, Instead, if the aim is to remove 321 00:17:26,880 --> 00:17:29,840 Speaker 1: barrels from the market now because you think now there's 322 00:17:29,880 --> 00:17:32,240 Speaker 1: over supply, in the future, there will be under supply 323 00:17:32,520 --> 00:17:35,280 Speaker 1: because you're not doing the investments the trillions of dollars 324 00:17:35,320 --> 00:17:38,320 Speaker 1: that have been canceled to maintain the future supply in 325 00:17:38,480 --> 00:17:41,560 Speaker 1: the face of declining production, because you know, you lose 326 00:17:41,600 --> 00:17:43,920 Speaker 1: four or five million barrels a year from existing fields 327 00:17:43,920 --> 00:17:46,720 Speaker 1: of production. That's huge and shall can fill some, but 328 00:17:46,720 --> 00:17:49,679 Speaker 1: it can't fill that oil. Um my sugestion is that 329 00:17:49,880 --> 00:17:53,280 Speaker 1: rather than cut you know, exper cent of your production, 330 00:17:53,800 --> 00:17:57,639 Speaker 1: put half of that amount equivalent, produce a maximum and 331 00:17:57,680 --> 00:18:00,200 Speaker 1: put it into a fund. And then what the fund 332 00:18:00,240 --> 00:18:02,000 Speaker 1: can do is the fund can leverage up two to 333 00:18:02,080 --> 00:18:04,600 Speaker 1: three times because you can effectually head against the oil 334 00:18:04,600 --> 00:18:09,359 Speaker 1: price dropping and go out and purchase barrels from the 335 00:18:09,400 --> 00:18:12,639 Speaker 1: market and move them off the market being available to 336 00:18:12,680 --> 00:18:15,639 Speaker 1: the market. Because the most fascinating thing for me, for 337 00:18:15,800 --> 00:18:18,080 Speaker 1: the oil prices and the oil market is that not 338 00:18:18,160 --> 00:18:21,080 Speaker 1: every barrel is equal. When you get a headline out 339 00:18:21,119 --> 00:18:24,360 Speaker 1: of Iraq, you know, che hun Kirkuk pripelines down four 340 00:18:24,400 --> 00:18:26,560 Speaker 1: hundred thousand bows a two hundred thousand bollars a day, 341 00:18:26,800 --> 00:18:30,320 Speaker 1: or Nigerian crew down three hundred thousand bollars day, the 342 00:18:30,359 --> 00:18:33,199 Speaker 1: market often doesn't even flinch a little bit of a 343 00:18:33,200 --> 00:18:37,520 Speaker 1: shift on us shell and the market goes ballistic. Oil 344 00:18:37,640 --> 00:18:40,639 Speaker 1: in a strategic petroleum reserve is treated as effectually not 345 00:18:40,680 --> 00:18:43,600 Speaker 1: available to the market. Oil in US inventories, which is 346 00:18:43,600 --> 00:18:46,320 Speaker 1: the current focus, is treated as massively available to the market. 347 00:18:46,840 --> 00:18:48,919 Speaker 1: So what you need to do is effectually create a 348 00:18:48,920 --> 00:18:51,919 Speaker 1: buffer stock, just like Joseph in the Bible, you know, 349 00:18:52,040 --> 00:18:54,520 Speaker 1: with the seven years of beasts and seven years of famine, 350 00:18:54,800 --> 00:18:57,480 Speaker 1: whereby you take these barrels and you just move them 351 00:18:57,480 --> 00:19:00,440 Speaker 1: off the market. And because you don't actually care about 352 00:19:00,480 --> 00:19:03,800 Speaker 1: going to zero on that fund, there are so many 353 00:19:03,840 --> 00:19:06,199 Speaker 1: ways you can do it, and you can really have 354 00:19:06,400 --> 00:19:08,040 Speaker 1: things like if you've got too much light oil, you 355 00:19:08,080 --> 00:19:10,119 Speaker 1: can move the light toil too much heavy, or you 356 00:19:10,160 --> 00:19:12,520 Speaker 1: can move the heavy oil. If the oil curve and 357 00:19:12,560 --> 00:19:14,840 Speaker 1: the oil market is not in oversupply, you don't make 358 00:19:14,880 --> 00:19:19,159 Speaker 1: any purchases. You know, you have that flexibility and importantly 359 00:19:19,200 --> 00:19:22,400 Speaker 1: you have enforceability because it's not a case of two 360 00:19:22,400 --> 00:19:25,520 Speaker 1: months later have you cut production, no, it's have you 361 00:19:25,560 --> 00:19:29,280 Speaker 1: paid at the start of this month yes or no? Um. 362 00:19:29,280 --> 00:19:31,440 Speaker 1: So it's also a lot fairer because for example, now 363 00:19:31,480 --> 00:19:35,720 Speaker 1: Saudi Arabia is cutting. They produce thirty percent of production, 364 00:19:35,920 --> 00:19:38,520 Speaker 1: but they're bearing to the cost of this OPEC cut. 365 00:19:39,359 --> 00:19:43,840 Speaker 1: So realistically, given the dynamics within Opeque, and you know 366 00:19:43,880 --> 00:19:45,520 Speaker 1: what we've seen so far. What do you think are 367 00:19:45,560 --> 00:19:48,760 Speaker 1: the chances that they would do something like this, because 368 00:19:48,880 --> 00:19:52,199 Speaker 1: in some ways it means you have to seed a 369 00:19:52,240 --> 00:19:55,800 Speaker 1: little bit of influence to an independent party, right like 370 00:19:55,800 --> 00:19:58,800 Speaker 1: I'm assuming the oil fund would be somewhat independent from 371 00:19:58,880 --> 00:20:02,640 Speaker 1: individual producers. Yeah, I mean, I think the typical way 372 00:20:02,680 --> 00:20:05,480 Speaker 1: that these types of buffer stock systems, although there hasn't 373 00:20:05,520 --> 00:20:08,359 Speaker 1: been coming quite like this given the interesting nature of 374 00:20:08,359 --> 00:20:11,200 Speaker 1: the all market is that anyone who participates gets a 375 00:20:11,280 --> 00:20:12,960 Speaker 1: vote and a share, and you get kind of a 376 00:20:13,040 --> 00:20:15,440 Speaker 1: view into that. It becomes a bit of an invisible 377 00:20:15,480 --> 00:20:17,760 Speaker 1: hand in the market. And what it can do is 378 00:20:17,760 --> 00:20:20,240 Speaker 1: it can smooth out the volatility of the price, but 379 00:20:20,320 --> 00:20:22,320 Speaker 1: then if you start to get greedy, you will eventually 380 00:20:22,320 --> 00:20:26,159 Speaker 1: get taken out. Um. I think probably the optimal solution is, 381 00:20:26,200 --> 00:20:28,720 Speaker 1: once they've gained through the scenarios and you know, the 382 00:20:28,800 --> 00:20:31,199 Speaker 1: lessoners can do this at home, just introduced this as 383 00:20:31,240 --> 00:20:33,760 Speaker 1: a player into the game. It works out a lot 384 00:20:33,760 --> 00:20:36,600 Speaker 1: better financially is to have a hybrid system whereby you 385 00:20:36,640 --> 00:20:38,840 Speaker 1: have an opequ cut just as you have now, but 386 00:20:38,880 --> 00:20:40,919 Speaker 1: then you introduce this as a small player in the 387 00:20:40,960 --> 00:20:43,960 Speaker 1: market and see where is it balancing. Just like Saudi 388 00:20:43,960 --> 00:20:46,320 Speaker 1: Arabia want to see how is shail going to balance 389 00:20:46,359 --> 00:20:49,280 Speaker 1: the market, because it becomes very interesting there. So you 390 00:20:49,280 --> 00:20:51,400 Speaker 1: don't it's not either all you can have a hybrid, 391 00:20:51,680 --> 00:20:54,040 Speaker 1: but I think in the long term this well, you 392 00:20:54,040 --> 00:20:57,359 Speaker 1: can show mathematically, you can show qualtitatively, this is a 393 00:20:57,400 --> 00:21:01,240 Speaker 1: superior option than very crude OPEC cut. Let's take a 394 00:21:01,359 --> 00:21:04,560 Speaker 1: turn a little bit from this tracy. And also in 395 00:21:04,600 --> 00:21:06,480 Speaker 1: the beginning we were talking about some of the other 396 00:21:06,640 --> 00:21:11,880 Speaker 1: tensions that existed in the region, beyond just the challenges 397 00:21:12,280 --> 00:21:15,719 Speaker 1: of oil economics, the questions about the long term viability, 398 00:21:16,160 --> 00:21:19,080 Speaker 1: the sort of game theory, aspects of how the OPEC 399 00:21:19,119 --> 00:21:22,560 Speaker 1: countries deal with each other. There's obviously a lot of 400 00:21:22,560 --> 00:21:29,080 Speaker 1: issues related to politics, religion, There's the refugee crisis emanating 401 00:21:29,119 --> 00:21:31,520 Speaker 1: out of Syria, all kinds of things that people sort 402 00:21:31,520 --> 00:21:35,159 Speaker 1: of see as never ending issues one after another in 403 00:21:35,200 --> 00:21:37,840 Speaker 1: the Mid East. You will also are very interested in 404 00:21:37,880 --> 00:21:41,200 Speaker 1: those areas, and you've sort of thought through some ideas. 405 00:21:41,200 --> 00:21:42,720 Speaker 1: Tell us a little bit about some of the stuff 406 00:21:42,760 --> 00:21:45,880 Speaker 1: that you're working on there. Um So yeah, I mean 407 00:21:45,880 --> 00:21:48,359 Speaker 1: I think that there are two main things. One is 408 00:21:48,400 --> 00:21:51,280 Speaker 1: on religion and one is on kind of the refugee crisis. 409 00:21:51,960 --> 00:21:54,439 Speaker 1: M just to touch on the religion one, because I 410 00:21:54,440 --> 00:21:57,560 Speaker 1: can't talk too much about it. Um. You know, we've 411 00:21:57,560 --> 00:21:59,680 Speaker 1: done a lot of work in terms of really understanding 412 00:21:59,720 --> 00:22:03,200 Speaker 1: extreme smism and Islam and kind of the various aspects 413 00:22:03,240 --> 00:22:04,800 Speaker 1: of that, because obviously you don't have the Sunny Sia 414 00:22:04,880 --> 00:22:07,399 Speaker 1: divide and then you have these extremists burning up the 415 00:22:07,440 --> 00:22:11,560 Speaker 1: place in Syria. When you start kind of really doing 416 00:22:11,800 --> 00:22:17,160 Speaker 1: and analyzing Islam in a very structured way, it's becomes 417 00:22:17,320 --> 00:22:20,760 Speaker 1: very clear that kind of the politicization of it, as 418 00:22:20,760 --> 00:22:24,480 Speaker 1: with many other religions, stems from a lack of access 419 00:22:24,520 --> 00:22:28,480 Speaker 1: to available information. Um. And it's actually quite fascinating because 420 00:22:28,520 --> 00:22:31,760 Speaker 1: when you see in terms of Johar, this recruitment is 421 00:22:31,800 --> 00:22:33,919 Speaker 1: that they provide a little bit of information which is 422 00:22:33,960 --> 00:22:36,720 Speaker 1: more than you get from the established authorities, and then 423 00:22:36,760 --> 00:22:40,800 Speaker 1: people believe they know everything. And what happens then is 424 00:22:41,200 --> 00:22:44,480 Speaker 1: when you believe you know everything, that's when you're the 425 00:22:44,560 --> 00:22:47,760 Speaker 1: most dangerous in many different fields. Right, Um, kind of 426 00:22:47,760 --> 00:22:50,560 Speaker 1: this has been shown and this is what allows people think, well, 427 00:22:50,640 --> 00:22:52,080 Speaker 1: I know better in that person, and then I can 428 00:22:52,119 --> 00:22:55,040 Speaker 1: go and kill or do all sorts of dangerous things. 429 00:22:55,400 --> 00:22:57,720 Speaker 1: The most optimal solutions away. You know a bit and 430 00:22:57,760 --> 00:22:59,320 Speaker 1: you know you don't know that much, or when you 431 00:22:59,320 --> 00:23:02,240 Speaker 1: know a lot, you know you don't know that much. Um. 432 00:23:02,240 --> 00:23:03,879 Speaker 1: And so my question is kind of how can you 433 00:23:03,920 --> 00:23:06,399 Speaker 1: provide a resource to avoid this because when you look 434 00:23:06,440 --> 00:23:07,960 Speaker 1: at the data, I don't know, if you guys know 435 00:23:07,960 --> 00:23:10,520 Speaker 1: about engineers are ten times more likely to become extremists 436 00:23:10,520 --> 00:23:15,280 Speaker 1: than any other group as an example. Huh why is that? 437 00:23:15,880 --> 00:23:17,320 Speaker 1: It's because if you think about what you do as 438 00:23:17,320 --> 00:23:20,600 Speaker 1: an engineer or an education individual, you build models, right, 439 00:23:21,280 --> 00:23:23,560 Speaker 1: and so if they get information that's a little bit 440 00:23:23,560 --> 00:23:27,720 Speaker 1: better than what's publicly available, it seems like a plausible, 441 00:23:27,800 --> 00:23:32,560 Speaker 1: coherent hole the message of these jahadis, especially if they 442 00:23:32,680 --> 00:23:37,320 Speaker 1: are marginalized for some reason or another, usually political. Um. 443 00:23:37,359 --> 00:23:38,760 Speaker 1: And so I thought was for me was the most 444 00:23:38,800 --> 00:23:42,480 Speaker 1: fascinating thing, And I thought about how do individuals access information? 445 00:23:42,640 --> 00:23:45,600 Speaker 1: How does Islam work? Just in kind of one minute, 446 00:23:45,800 --> 00:23:48,800 Speaker 1: how Islam works or Sunni Islam? Should I say is 447 00:23:48,840 --> 00:23:50,440 Speaker 1: that during the time of the profit, it was really 448 00:23:50,480 --> 00:23:52,080 Speaker 1: eased to find out what Islam was because you asked 449 00:23:52,160 --> 00:23:54,840 Speaker 1: him and he had revelation. When he died, it became 450 00:23:54,880 --> 00:23:58,760 Speaker 1: a bit more complex, and then everyone all his disciples. Disciples, 451 00:23:58,760 --> 00:24:01,520 Speaker 1: the disciples said all sorts of things. So three centuries 452 00:24:01,560 --> 00:24:05,200 Speaker 1: after they decide to codify it by getting the eternal 453 00:24:05,280 --> 00:24:08,200 Speaker 1: Koran and building a picture of the temporal life of 454 00:24:08,240 --> 00:24:10,680 Speaker 1: the profit and figuring out the links between them and 455 00:24:10,720 --> 00:24:14,240 Speaker 1: applying it to today. That's actually quite an interesting thing 456 00:24:14,280 --> 00:24:17,720 Speaker 1: because what subjective versus subjective in the religion, Because in 457 00:24:17,760 --> 00:24:19,960 Speaker 1: certain religions you have this hierarchy where you have a 458 00:24:20,000 --> 00:24:22,960 Speaker 1: large amount of subjectivity because the revelation, whereas Islam is 459 00:24:22,960 --> 00:24:26,399 Speaker 1: actually quite ordered. So one of my projects analysis an 460 00:24:26,440 --> 00:24:31,840 Speaker 1: attempt to provide the information access in an ordered basis um. 461 00:24:32,000 --> 00:24:34,400 Speaker 1: And we're starting with the Koran and having a really 462 00:24:34,520 --> 00:24:36,240 Speaker 1: nice version of the Koran where you can have full 463 00:24:36,240 --> 00:24:39,720 Speaker 1: contextual access um in terms of being able to dig 464 00:24:39,720 --> 00:24:42,040 Speaker 1: in as much depth as you want into the language, 465 00:24:42,119 --> 00:24:47,840 Speaker 1: into all of the sources, really consumrified. And hopefully by 466 00:24:47,880 --> 00:24:50,560 Speaker 1: building that up and doing the same for Shia, Islam 467 00:24:50,680 --> 00:24:53,880 Speaker 1: and other religions will have a kind of standardized kind 468 00:24:53,920 --> 00:24:57,520 Speaker 1: of Wikipedia Google Age system where you have reliable access 469 00:24:57,520 --> 00:24:58,800 Speaker 1: to all of these sources and you can start to 470 00:24:58,840 --> 00:25:01,959 Speaker 1: compare and contrast because the difference between Shia and Sunny 471 00:25:02,040 --> 00:25:06,680 Speaker 1: aren't that big, right, the differences between mainstream and fundamentalist. 472 00:25:06,960 --> 00:25:09,800 Speaker 1: Is a fundamentalist believe they know everything. If you can 473 00:25:09,840 --> 00:25:12,000 Speaker 1: provide resources where you can object to be show they 474 00:25:12,000 --> 00:25:15,439 Speaker 1: don't know everything, or introduce that element of doubts, maybe 475 00:25:15,440 --> 00:25:18,159 Speaker 1: that will have an impact, you know. And so that 476 00:25:18,960 --> 00:25:20,800 Speaker 1: is kind of what I'm hoping, because, like I said, 477 00:25:20,800 --> 00:25:23,440 Speaker 1: when I start breaking it down from the research we've done, 478 00:25:24,600 --> 00:25:26,919 Speaker 1: there isn't that much difference between some of these groups 479 00:25:26,920 --> 00:25:30,600 Speaker 1: warring with each other on an ideological basis. And definitely 480 00:25:30,640 --> 00:25:34,960 Speaker 1: these extremists they literally cherry pick. But sometimes people don't 481 00:25:34,960 --> 00:25:37,520 Speaker 1: know better. More people google Isis than Islam. Now, so 482 00:25:37,560 --> 00:25:40,960 Speaker 1: what are they going to think? Can I ask? I 483 00:25:41,000 --> 00:25:42,719 Speaker 1: know you can't say that much about this, but can 484 00:25:42,760 --> 00:25:45,520 Speaker 1: I ask a very quick question? You said you're starting 485 00:25:45,640 --> 00:25:48,480 Speaker 1: out with the Quran? Um, how do you plan on 486 00:25:48,560 --> 00:25:51,840 Speaker 1: dealing with the hadiths? And I should say, you know, 487 00:25:52,680 --> 00:25:55,959 Speaker 1: I'm an outsider looking in UM, but my understanding is 488 00:25:56,240 --> 00:25:59,520 Speaker 1: the hadiths, which are basically UM, the reports of what 489 00:25:59,600 --> 00:26:02,520 Speaker 1: the pro fits said UM while he was living, and 490 00:26:02,760 --> 00:26:06,760 Speaker 1: they kind of exploded after he died. Um, how are 491 00:26:06,800 --> 00:26:09,040 Speaker 1: you going to go about treating those? Because that seems 492 00:26:09,040 --> 00:26:11,920 Speaker 1: to be where some of the confusion comes from. Yeah, 493 00:26:12,000 --> 00:26:13,879 Speaker 1: so I mean he said the hitdi through the stories 494 00:26:13,880 --> 00:26:16,280 Speaker 1: to the prophet, and three cents, three generations after the 495 00:26:16,320 --> 00:26:19,199 Speaker 1: prophet died, these were collated to build a picture of 496 00:26:19,200 --> 00:26:21,240 Speaker 1: the life of the prophet, which is what's called the Sunna, 497 00:26:21,560 --> 00:26:23,800 Speaker 1: which is why kind of the major group of Muslim 498 00:26:23,880 --> 00:26:26,080 Speaker 1: is called the Sydneys. They're the ones who followed this model. 499 00:26:26,720 --> 00:26:28,240 Speaker 1: But you know how you have this whole thing about 500 00:26:28,240 --> 00:26:32,680 Speaker 1: fake news now right, how do you judge authority. There's 501 00:26:32,680 --> 00:26:34,560 Speaker 1: a whole science in Islam about trying to figure out 502 00:26:34,600 --> 00:26:35,919 Speaker 1: which one of these are true and which of these 503 00:26:35,920 --> 00:26:38,600 Speaker 1: are fake. And a lot of the issue comes where 504 00:26:38,680 --> 00:26:42,240 Speaker 1: things with a bit of dubious quality, potentially in terms 505 00:26:42,240 --> 00:26:45,280 Speaker 1: of only one chain of narrators, for example, versus lots 506 00:26:45,280 --> 00:26:47,600 Speaker 1: of people saying the same thing Chinese whispers style from 507 00:26:47,800 --> 00:26:51,520 Speaker 1: Gibraltar to Kazakhstan and agreeing on the content those come through. 508 00:26:51,560 --> 00:26:53,600 Speaker 1: So people just hang their hats on just this one 509 00:26:54,080 --> 00:26:57,800 Speaker 1: transmission and then say that women can't drive as an example. 510 00:26:58,760 --> 00:27:01,119 Speaker 1: I think that again that need to be systematized with 511 00:27:01,200 --> 00:27:04,080 Speaker 1: the help of the scholars, because what I see from 512 00:27:04,119 --> 00:27:07,080 Speaker 1: my studies of Islam, and kind of the research recommissioned 513 00:27:07,160 --> 00:27:09,479 Speaker 1: is that, look, you had a thousand years of Islamic 514 00:27:09,520 --> 00:27:12,800 Speaker 1: caliphate and it wasn't like isis. It wasn't great, it 515 00:27:12,840 --> 00:27:16,919 Speaker 1: wasn't perfect, But what you had was process and reasonable doubt. 516 00:27:17,600 --> 00:27:21,800 Speaker 1: For example, for amputation, um, you know, the whole Aladdin thing, 517 00:27:22,000 --> 00:27:24,320 Speaker 1: Princess Jasmin who gets a hand grab because he's stolen 518 00:27:24,320 --> 00:27:26,560 Speaker 1: an orange and then drop it off. There were eighty 519 00:27:26,560 --> 00:27:29,480 Speaker 1: four preconditions for that under a thousand years. You know, 520 00:27:29,720 --> 00:27:31,280 Speaker 1: they had to have seen you stealing three and a 521 00:27:31,320 --> 00:27:33,760 Speaker 1: half thousand dollars worth of stuff from someone's pocket and 522 00:27:33,800 --> 00:27:35,560 Speaker 1: you've kind of been hungry, and you had to have 523 00:27:35,600 --> 00:27:38,720 Speaker 1: two witnesses to that. You know, this whole stoning for adultery, 524 00:27:39,000 --> 00:27:42,040 Speaker 1: you need to see four witnesses to penetration, which is 525 00:27:42,119 --> 00:27:44,840 Speaker 1: kind of weird, but if you didn't have four witnesses 526 00:27:44,880 --> 00:27:48,600 Speaker 1: to penetration, then the accusers would get lash eighty times. 527 00:27:48,880 --> 00:27:51,800 Speaker 1: What you had was harsh punishments, but a massive amount 528 00:27:51,800 --> 00:27:55,120 Speaker 1: of process. You've lost that process now and that's why 529 00:27:55,440 --> 00:27:58,240 Speaker 1: you're seeing the really negative side of things. But again 530 00:27:58,240 --> 00:28:01,280 Speaker 1: this needs to be systematically done, the whole community backing. 531 00:28:01,600 --> 00:28:03,400 Speaker 1: But this is the fun thing about data now, right, 532 00:28:03,920 --> 00:28:06,879 Speaker 1: we can assemble data. It just needs to be done systematically. 533 00:28:07,200 --> 00:28:09,800 Speaker 1: So you know, hopefully I'll plant the seed and those 534 00:28:09,880 --> 00:28:11,720 Speaker 1: working with me well, and then it's up to the 535 00:28:11,800 --> 00:28:15,000 Speaker 1: Islamic community to kind of take that forward, kind of 536 00:28:15,040 --> 00:28:17,880 Speaker 1: google Wikipedia for Islam with a little bit of Ai 537 00:28:17,960 --> 00:28:20,159 Speaker 1: thrown in, and we'll see how it grows. Again, this 538 00:28:20,240 --> 00:28:22,360 Speaker 1: is going to take most of my life, but if 539 00:28:22,400 --> 00:28:24,439 Speaker 1: it works, you know, it will help my kids at 540 00:28:24,440 --> 00:28:29,400 Speaker 1: the very least. That I really like that perspective. Before 541 00:28:29,400 --> 00:28:33,280 Speaker 1: we wrap up, we just have a couple more minutes, um, 542 00:28:33,320 --> 00:28:35,440 Speaker 1: but tell us a little bit about you also are 543 00:28:35,520 --> 00:28:39,960 Speaker 1: interested in the you know, pursuing things regarding the refugee crisis. 544 00:28:39,960 --> 00:28:42,920 Speaker 1: Tell us quickly about what you're working on there. Yeah, 545 00:28:42,960 --> 00:28:47,120 Speaker 1: so this is actually my wife's project. It's called Humanitory. Basically, 546 00:28:47,720 --> 00:28:50,680 Speaker 1: hopefully in the next she wants to give every refuge 547 00:28:50,680 --> 00:28:54,800 Speaker 1: a biometric smartphone. Um so Galaxy S four equivalent costs 548 00:28:54,800 --> 00:28:58,360 Speaker 1: about forty five dollars. Now, this is really interesting because 549 00:28:58,360 --> 00:28:59,960 Speaker 1: what you have is a group who really need to 550 00:29:00,080 --> 00:29:03,840 Speaker 1: have help and access to information, who have lost their identity. 551 00:29:03,840 --> 00:29:06,120 Speaker 1: Biometrics have a lot of ethical issues around them. In 552 00:29:06,200 --> 00:29:09,760 Speaker 1: terms of fingerprint iris scans. But imagine giving a refugee 553 00:29:09,760 --> 00:29:12,280 Speaker 1: a phone in coming to the UK. They can suddenly 554 00:29:12,320 --> 00:29:15,560 Speaker 1: get a bank account, oyster card for the transport. But 555 00:29:15,600 --> 00:29:18,000 Speaker 1: the most interesting thing is they can suddenly have access 556 00:29:18,080 --> 00:29:21,320 Speaker 1: to work. And this is about God us thinking about 557 00:29:21,320 --> 00:29:23,200 Speaker 1: the future of work in terms of you go, you 558 00:29:23,240 --> 00:29:25,200 Speaker 1: log in, you can start working for a charity. You 559 00:29:25,240 --> 00:29:30,040 Speaker 1: can build up a biometric CV for yourself which shows 560 00:29:30,040 --> 00:29:33,080 Speaker 1: who you are, and that's incredibly important, giving people back 561 00:29:33,080 --> 00:29:36,160 Speaker 1: their identity. And again it's kind of like it's going 562 00:29:36,200 --> 00:29:39,200 Speaker 1: to be difficult, but I think it's achievable because everyone 563 00:29:39,200 --> 00:29:42,280 Speaker 1: wants to help the refugees. This is forty fifty dollars 564 00:29:42,280 --> 00:29:45,560 Speaker 1: when the average refugee costs three thousand to thirty dollars 565 00:29:45,560 --> 00:29:48,160 Speaker 1: a year, and you know, as you can start building 566 00:29:48,200 --> 00:29:51,000 Speaker 1: this at least it's an option. Because I don't know 567 00:29:51,040 --> 00:29:52,800 Speaker 1: about you guys, but I'm scared about kind of the 568 00:29:52,840 --> 00:29:56,760 Speaker 1: next five ten years, UM, kind of looking where global 569 00:29:56,800 --> 00:30:00,760 Speaker 1: trade is going, looking where artificial intelligences go, looking when 570 00:30:00,840 --> 00:30:03,080 Speaker 1: jobs are going. So, you know, again, trying to do 571 00:30:03,120 --> 00:30:05,400 Speaker 1: a little bit to help UM, but really trying to 572 00:30:05,440 --> 00:30:07,000 Speaker 1: pull together a lot of different strings to do so 573 00:30:07,680 --> 00:30:10,000 Speaker 1: all right, Ammad, most tack, we're going to have to 574 00:30:10,360 --> 00:30:12,360 Speaker 1: leave it there. Thank you so much for joining us. 575 00:30:23,560 --> 00:30:28,160 Speaker 1: So Joe, I think, um well, I think Amad has 576 00:30:28,560 --> 00:30:34,760 Speaker 1: given himself a pretty hefty workload, right, Yeah, solve the 577 00:30:34,960 --> 00:30:40,000 Speaker 1: sort of game theory stuff that's vexed opex OPEC for decades, uh, 578 00:30:40,200 --> 00:30:44,360 Speaker 1: defeat extremism, and solve the refugee crisis. But I loved 579 00:30:44,720 --> 00:30:47,200 Speaker 1: love that conversation. I mean, we've I've talked to Mod 580 00:30:47,320 --> 00:30:50,760 Speaker 1: before on TV. He's definitely one of the sort of 581 00:30:50,800 --> 00:30:54,040 Speaker 1: more interesting people around and I like that, rather than 582 00:30:54,200 --> 00:30:56,160 Speaker 1: just talk about all this stuff which we all do 583 00:30:56,200 --> 00:30:59,440 Speaker 1: all the time, he actually has ideas that he's putting 584 00:30:59,480 --> 00:31:02,600 Speaker 1: into actus and or trying to put into practice. Yeah. 585 00:31:02,640 --> 00:31:05,120 Speaker 1: I think there's a tendency in market sometimes to just 586 00:31:05,200 --> 00:31:07,120 Speaker 1: kind of throw your hands up and say, well that's 587 00:31:07,120 --> 00:31:10,640 Speaker 1: the way it's always been, and people don't really think about, 588 00:31:10,680 --> 00:31:14,680 Speaker 1: well could you actually change the structure and make it different. Um, 589 00:31:14,720 --> 00:31:17,800 Speaker 1: So it's really interesting to hear from someone who's actually 590 00:31:17,800 --> 00:31:22,000 Speaker 1: trying to do that on a number of levels, absolutely, right, 591 00:31:22,000 --> 00:31:24,720 Speaker 1: Like we just sort of just sort of accept Okay, 592 00:31:24,760 --> 00:31:28,160 Speaker 1: this is how OPEC works, or this is the information 593 00:31:28,280 --> 00:31:33,080 Speaker 1: asymmetry that allows extremism to thrive. But I thought that 594 00:31:33,160 --> 00:31:36,280 Speaker 1: was really interesting because it related to his ideas, related 595 00:31:36,280 --> 00:31:39,200 Speaker 1: to a conversation that we had several months ago with 596 00:31:39,520 --> 00:31:43,440 Speaker 1: Graham Would who wrote that book about Isis and it 597 00:31:43,520 --> 00:31:46,720 Speaker 1: is very similar stuff, which is that in in Graham's view, 598 00:31:47,280 --> 00:31:51,120 Speaker 1: the solution to combating extremism was not to dismiss the 599 00:31:51,200 --> 00:31:54,120 Speaker 1: extremists or say something, you know, say catchphrases like oh, 600 00:31:54,160 --> 00:31:56,920 Speaker 1: that's not really Islam or whatever, but to actually sort 601 00:31:56,920 --> 00:32:00,320 Speaker 1: of compete with them on the information front and say, no, 602 00:32:00,480 --> 00:32:04,720 Speaker 1: here's more information, and actually out argue them with data. 603 00:32:04,760 --> 00:32:07,200 Speaker 1: And so here's an example of what a MOD is 604 00:32:07,200 --> 00:32:10,640 Speaker 1: doing that's very much along those lines. Yeah. Well, we'll 605 00:32:10,640 --> 00:32:13,200 Speaker 1: have to get them on once the project has moved 606 00:32:13,240 --> 00:32:16,520 Speaker 1: a little further and see how it's going. Yeah. No, 607 00:32:16,600 --> 00:32:18,680 Speaker 1: but I think it's really cool. And also, again, like 608 00:32:18,680 --> 00:32:22,959 Speaker 1: the refugee stuff, we we always talk about how awful 609 00:32:23,000 --> 00:32:25,320 Speaker 1: it is, but how many people are actually trying to 610 00:32:25,560 --> 00:32:28,200 Speaker 1: think of something new that might might address it. Yeah. 611 00:32:28,280 --> 00:32:31,200 Speaker 1: Didn't you ask me once where refugees charge their phones? 612 00:32:32,560 --> 00:32:35,200 Speaker 1: That was that? Actually? Yeah? I mean, because you see 613 00:32:35,240 --> 00:32:38,520 Speaker 1: all these photos of um, you know, Uh, you hear 614 00:32:38,600 --> 00:32:42,000 Speaker 1: about you know, refugees using their phones to get across 615 00:32:42,040 --> 00:32:44,880 Speaker 1: waters and stuff like that, and I was just thinking 616 00:32:44,920 --> 00:32:48,640 Speaker 1: about the logistical aspects of that. It's not surprising that 617 00:32:48,920 --> 00:32:52,560 Speaker 1: refugees have phones, of course, it's a mainstay technology all 618 00:32:52,600 --> 00:32:54,280 Speaker 1: around the world. But you know, you just think about 619 00:32:54,320 --> 00:32:57,440 Speaker 1: like the challenge of actually using a phone while you're 620 00:32:57,640 --> 00:33:00,840 Speaker 1: dealing with, you know, the challenges of being refugee. So 621 00:33:00,920 --> 00:33:03,880 Speaker 1: the technical aspects are still very interesting to me. Yeah, 622 00:33:03,920 --> 00:33:06,680 Speaker 1: for sure. I guess soon you might be asking where 623 00:33:06,680 --> 00:33:10,440 Speaker 1: they're charging their biometric phones, right, hopefully so, and then 624 00:33:10,440 --> 00:33:12,920 Speaker 1: we can see how the project is working. All right, 625 00:33:13,600 --> 00:33:16,160 Speaker 1: should we leave it there, Let's do it. This has 626 00:33:16,200 --> 00:33:20,600 Speaker 1: been another episode of the Odd Lots podcast. I'm Tracy Alloway. 627 00:33:20,680 --> 00:33:24,000 Speaker 1: You can follow me on Twitter at Tracy Alloway. And 628 00:33:24,080 --> 00:33:27,120 Speaker 1: I'm Joe Wisenthal. You can follow me on Twitter at 629 00:33:27,160 --> 00:33:30,880 Speaker 1: the Stalwart and you can follow Immad at imo Stock. 630 00:33:44,120 --> 00:33:46,320 Speaker 1: Put knowledge to work and grow your business with c 631 00:33:46,520 --> 00:33:50,680 Speaker 1: I T from transportation to healthcare to manufacturing, c I 632 00:33:50,760 --> 00:33:54,520 Speaker 1: T opers commercial lending, leasing, and treasury management services for 633 00:33:54,600 --> 00:33:57,480 Speaker 1: small and middle market businesses. Learn more at c I 634 00:33:57,560 --> 00:33:59,680 Speaker 1: T dot com. Put Knowledge to Work