Speaker 1: Welcome to Bloomberg Opinion. I'm Vonnie Quinn. This week, the
Speaker 1: key concern usually is precisely when a curve re steepened
Speaker 1: rapidly to get back to zero. That's when you're about
Speaker 1: to get a re station. Not when you know that
Speaker 1: one is coming, but when it's actually here. Chief Rates
Speaker 1: Correspondent Garfield Reynolds on the signals Rates are sending investors
Speaker 1: about the economy, and it's kind of like a wee
Speaker 1: work way. It's kind of like sake it to you
Speaker 1: make it. Julie Ran on the latest to Danny concerns
Speaker 1: shaking the integrity of India investment. We also hear from
Speaker 1: the University of Georgia Stephen mim about the curious history
Speaker 1: of meat alternatives. First though, to Chief Rates Correspondent now
Speaker 1: Garfield Renalds and the markets topsy turvy week. Here's fed
Speaker 1: Jerry J. Powell at the Economic Tub of Washington, d C.
Speaker 1: The message we were sending at the fon C meeting
Speaker 1: last Wednesday was really that the disinflationary process, the process
Speaker 1: of getting inflation down, has begun, and it's begun in
Speaker 1: the goods sector, which is about a order of our economy.
Speaker 1: But it has a long way to go. These are
Speaker 1: the very early stages of disinflation. So the services sector
Speaker 1: really except for housing services, pardon me, is not really
Speaker 1: showing any any disinflation. So Garfield Powell had another opportunity
Speaker 1: this week to speak to the markets, and it felt
Speaker 1: like he didn't take any opportunity to correct the market
Speaker 1: or maybe deflect the market. He just said exactly what
Speaker 1: he has been saying. He's not making any effort anymore.
Speaker 1: Is he to talk down the market? Well, I think
Speaker 1: he is very conscious of the idea that he's got
Speaker 1: a very narrow path forward towards the situation where he
Speaker 1: gets inflation there without crashing the economy, and so he
Speaker 1: doesn't want to skip people too much as the way
Speaker 1: it comes across, and he's sort of willing to, as
Speaker 1: it were, talked, pass markets and just stick with this
Speaker 1: is what I see we need to do. How many
Speaker 1: times can he say he's determined to bring inflation down
Speaker 1: and then he doesn't want to repeat the mistakes. He
Speaker 1: said that that's part of the furniture, and he's also
Speaker 1: I mean, the method this week has been to let
Speaker 1: the other fair officials be the ones who really seeing
Speaker 1: the Hawkish chorus. It's amazing, and his deputies do all
Speaker 1: of that work these days, and not him so much. Well,
Speaker 1: I mean it's that we get part of FED speak,
Speaker 1: and that also the market is paying a lot of
Speaker 1: attention to it. The other fact that here is that
Speaker 1: you are have to all effort and see that is
Speaker 1: a committee. There is a range of views, and so
Speaker 1: quite possibly how themselves is somewhat less purekfish, somewhat more
Speaker 1: optimistic about potential to get a soft landing, you know,
Speaker 1: than some of his colleagues who are for whatever particular
Speaker 1: reasons where it comes to background, whether it comes to
Speaker 1: their particular reason that they're looking at their far more
Speaker 1: concerned about just making absolutely sure that inflation is brought
Speaker 1: in the check. They're far more willing to take the
Speaker 1: punch bowl away. Well, as we speak to and your
Speaker 1: yield at three sixty five and change the two years
Speaker 1: at four or forty eight. So we have repriced a
Speaker 1: certain amount, but there's no wholesale repricing going on. Still,
Speaker 1: Why is that? Do you think? While there's a couple
Speaker 1: of issues going on, a mere one is as were mentioned,
Speaker 1: pow E's aiming very determinedly for a soft landing, and
Speaker 1: so a soft landing is seen as allowing for interstrections
Speaker 1: not yet too high, to come down soon around than
Speaker 1: later if they need to. But the other issue is
Speaker 1: there's such an enormous advertise US treasuries. Now some of
Speaker 1: that demand has come from tensions who define benefit. Tensions
Speaker 1: in the US have got about a trillion dollars to
Speaker 1: play with the circlus and so that they don't need
Speaker 1: to do anything other than just an income on it,
Speaker 1: so they're happy to buy treasuries. We saw a very
Speaker 1: very strong the amount of the ten year options this week.
Speaker 1: There is that undercurrent of demand for treasuries at these
Speaker 1: yields for long term buyers. At the same time, that's
Speaker 1: very short and we have people betting on the potential
Speaker 1: that defend takes the interest rate to six percent, and
Speaker 1: certainly the terminal rate pricing the general consensus that moved
Speaker 1: up as well. So you're seeing a market that is
Speaker 1: saying we're going to hedge against the potential of defend
Speaker 1: goes harder. In the longer term. We're confident that a
Speaker 1: three and a half percent to four percent yield on
Speaker 1: a ten year treasury is too good to miss out.
Speaker 1: You don't see that over the long term yields are
Speaker 1: going to move significantly higher and stay significantly higher for
Speaker 1: any long stretch of time. Yeah, I mean it's phenomenal.
Speaker 1: It's very hard to believe that that will actually happen
Speaker 1: when you see what the market is doing these days,
Speaker 1: but I guess it has to happen at some point
Speaker 1: now you mentioned it there, there has been lots of
Speaker 1: chatter and lots of options market movement pricing it will
Speaker 1: be great of six percent or even hired. Should we
Speaker 1: be seeing these types of tail risks priced in elsewhere though, Well,
Speaker 1: I mean definitely, because the concern has to be if
Speaker 1: you look a little bit further away from just the
Speaker 1: Treasury from itself, what impact if the Fed goes to
Speaker 1: five and a half or six percent or beyond on
Speaker 1: the wider world outside treasuries? What happens to tech stocks
Speaker 1: that have been very, very strong and a particular evaluations
Speaker 1: to earning spaces. What happens to the credit complex where
Speaker 1: corporate spreads have come in markedly and have continued to
Speaker 1: march in even as what's really gone on with government
Speaker 1: yields is they've sort of stabilized in their current range.
Speaker 1: So if the FED goes to five point two five,
Speaker 1: five point five, five point seven five in the longer term,
Speaker 1: somebody who bought a ten year yield at this level
Speaker 1: might well decide that they're going to be okay. They
Speaker 1: just need to write out the short term pain. But
Speaker 1: those other markets, they don't have that luxury. And I
Speaker 1: haven't even mentioned what would go on with junk bonds. Yeah,
Speaker 1: it's phenomenal when you think about it. I mean, what
Speaker 1: should be happening now in order to prepare for a
Speaker 1: world that's like that? Or do all of these other
Speaker 1: markets assume one of two options that everything is smooth
Speaker 1: and fine and hunky dorry and this plenty of demand
Speaker 1: for all of the products made by these tech companies,
Speaker 1: or there's going to be a massive recession. Yeah, yeah,
Speaker 1: and the and the I mean the question of the
Speaker 1: massive recession too is mostly down to what goes on
Speaker 1: with inflation and what goes on with the FED fight
Speaker 1: against the inflation. And if inflation continues to come down
Speaker 1: smoothly and at a barely rapid pace, then even if
Speaker 1: you don't get the FED rate cuts later on in
Speaker 1: the year that people are looking for, I think you'll
Speaker 1: get a soft landing for the economy. You might get
Speaker 1: some pain for those people who bought ten year bonds
Speaker 1: at three and a half per cent, but that won't
Speaker 1: really hurt the wider world. The big risk is if
Speaker 1: you get inflation staying elevated, or if you get something
Speaker 1: in the way that inflation is coming down that still
Speaker 1: concerns the FED. The FED goes higher than people are
Speaker 1: expecting it and stays there the longer, that could cause
Speaker 1: that recession that we're talking about. So the other part
Speaker 1: of this, and the FED chair mentioned it has mentioned
Speaker 1: a few times now, is this is inflation, and that's
Speaker 1: the stickier side of things, and it also accounts for,
Speaker 1: you know, more of the bokers than goods inflation. It's
Speaker 1: not coming down. How on earth could we possibly get
Speaker 1: a rate cut by the end of the year. Game
Speaker 1: out the scenario where we do go one, Well, that's
Speaker 1: always been one of the conundrums because if you do
Speaker 1: get a you know, equities have been rallying on the
Speaker 1: idea that the Fed is soon started done with rates
Speaker 1: best we can tell. There are some other issues as well,
Speaker 1: but that's certainly been paral the narrative. There will soon
Speaker 1: be done hiking, and it will be ready to cut
Speaker 1: at the first sign of trouble, the way that pal
Speaker 1: did before the pandemic teen when they raised rates and
Speaker 1: said that they were determined to keep raising them, but
Speaker 1: then once the economy wobbled while, they cut them again.
Speaker 1: So there's an expectation that would do that again. The
Speaker 1: difficulty is inflation is still way too high for the
Speaker 1: Fair to countenance rate cuts. So if you're going to
Speaker 1: get rate cuts later this year, even from where we
Speaker 1: are now, if the Fair stop where it is now
Speaker 1: and then ends up cutting rates by the end of
Speaker 1: this year, that has to be a recession in order
Speaker 1: for them to do that, because the inflation rate is
Speaker 1: just too high. Yeah, I mean, Stephen Major has always
Speaker 1: had this idea of why would have fed overhike in
Speaker 1: order to have to cut again. Why wouldn't it just
Speaker 1: hiken off and stay there for a while and then
Speaker 1: cut eventually sometime maybe, So, I'm not sure why that
Speaker 1: isn't more popular of a view. Well, I think the
Speaker 1: point there is a central banks do tend to overreact.
Speaker 1: They definitely overreacted to the pandemic, and also two previous
Speaker 1: episodes of recessions, so they take rate lower and do
Speaker 1: more than than might actually have been wise, and then
Speaker 1: you end up overcharging the economy as it comes back
Speaker 1: up out of recession. And now there's the concern that
Speaker 1: they will overdo it in that way. In the opposite way,
Speaker 1: they will keep rates too high for too long because
Speaker 1: of their worries about inflation. Garfield, Where in the market
Speaker 1: are you looking for signs or clues or some kind
Speaker 1: of thinking as to what direction sentiment might be taking.
Speaker 1: I think the credit space is very much an area
Speaker 1: that is interest there. You know, that's a little bit
Speaker 1: slower twitch, so to speak, than than the equities market,
Speaker 1: which can flip up and down far more readily. So
Speaker 1: what's going on there? If you do start to see
Speaker 1: signs that spreads widening back out, I think that would
Speaker 1: be a very concerning sign that would becoming an If
Speaker 1: spreads there can stay where they are again, that would
Speaker 1: also be potentially welcome. I also think that, you know,
Speaker 1: a major concern would be if we've got a sudden
Speaker 1: re steepening of the yield, we've got an inverted yield.
Speaker 1: It's just lasted longer this current inversion than the two
Speaker 1: thousand era inversion, so the seven era inversion which presage
Speaker 1: the global financial crisis. So and it's very unusual to
Speaker 1: have an inversion this long doubt that would be a
Speaker 1: recession at the end. But the key concern usually is
Speaker 1: precisely when a yield curve re steep and rapidly to
Speaker 1: get back to zero. That's when you're about to get
Speaker 1: a recession, not when you know that one is coming,
Speaker 1: but when it's actually here. So if we see it
Speaker 1: rapid repricing where ten year yields come up fast and
Speaker 1: two year yields don't, or two year yields come down
Speaker 1: and ten year yields don't, so we get at resteepening
Speaker 1: back towards zero, that's when you might actually get some
Speaker 1: brief rallies in equities and credits on hopes that we're
Speaker 1: getting an end of the fair hiking cycle. But that's
Speaker 1: actually usually when the recession is just going to hit.
Speaker 1: So that would be a very dangerous time and date.
Speaker 1: Bloomberg Chief Rates correspondent to Garfield Reynolds. Next, Shulie Ran
Speaker 1: on the latest in India's Adanni crisis. This is Bloomberg opinion.
Speaker 1: You're listening to Bloomberg opinion. I'm Vonnie Quinn. Now to
Speaker 1: go to Madonni, one of India's biggest industrial time icons.
Speaker 1: Since short seller Hindenburg Research published its report alleging market
Speaker 1: manipulation and fraud on the part of Adani Enterprises, market
Speaker 1: repercussions have been picking up speed with the flurry of
Speaker 1: support of activity from India's billionaires, less support of activity
Speaker 1: from bondholders, credit rating agencies and index providers, not much
Speaker 1: of any support at all from India's government. In fact,
Speaker 1: parliament was suspended for five days after pandemonium broke out,
Speaker 1: the opposition wanting to debate the crisis, the legislature wanting
Speaker 1: not to. I got up with Bloomberg opinions. Shulely Wren
Speaker 1: on what comes next and what a Donni can do
Speaker 1: to stave off a wholesale crisis. So, Shuly, let's get
Speaker 1: the update on Adanni. We know that things deteriorated for
Speaker 1: several sessions. Are things stabilizing now a little bit? Especially
Speaker 1: a Dani dollar abound. A Dannie group has just slightly
Speaker 1: shy of a billion dollar abound outstanding, And starting from
Speaker 1: late last week, what we saw was that credit hatch
Speaker 1: funds and distressed. The special situations funds were scooping in
Speaker 1: to buy on it. Now, why is ADONNI and the
Speaker 1: various bonds that they can buy associated with various companies
Speaker 1: attractive or distressed investors are not you know, regular dead
Speaker 1: or equity investors. Well, they are so called them special
Speaker 1: situations funds in that they see those big corporate events
Speaker 1: and they try to progress on that. Well, a lot
Speaker 1: of credit hedge funds saw was that ADONNEI Group does
Speaker 1: have good assets, especially Adonne reports, and they feel that,
Speaker 1: you know, even if there are juderos at the headquarters
Speaker 1: at the holding company with this kind of subsidiaries, they
Speaker 1: are backed by good assets. That's why those quite offense
Speaker 1: as buying. Also at this point these bums are yielding
Speaker 1: at the over ten percent. What kind of a signal
Speaker 1: does this send in terms of confidence? I think it's
Speaker 1: more a shift of hands in the investor base. I mean,
Speaker 1: before the whole Kingdomberg show so report, ADONNEI bonds and
Speaker 1: most of them will actually believe were not investment grade
Speaker 1: and they were. They were only offering like three to
Speaker 1: five percent coupon rates. And with the short seller report out,
Speaker 1: all the allegations of corporate governors inside the trading a
Speaker 1: lot of bleach long ovatements were selling and instead those
Speaker 1: high ye more speculative, more with taking hatchments are coming.
Speaker 1: So I think it's a change in investor base for
Speaker 1: Adani at this point. Can we read anything about whether
Speaker 1: it means that there is more confidence in Adani's survival
Speaker 1: or his thriving, let's say, or less confidence. I think
Speaker 1: rather than speaking of a confidence, it's it's more the
Speaker 1: kind of part of following that capital markets now demanding
Speaker 1: for Adani before because of it, it's green energy ambition,
Speaker 1: et cetera, and it's pushed to help India fast track
Speaker 1: into the next generation South Korea. Global friends were willing
Speaker 1: to lend money to Adani a very very cheap rate,
Speaker 1: and these days no longer they are treated more like
Speaker 1: a high risk bat. Now oak Tree, Davidson, Kempernor or
Speaker 1: some names we know well have been buying up some debt.
Speaker 1: Explained to us why they're comfortable buying up a Dannie dead.
Speaker 1: They're very experienced. I mean, Auktree has been in both
Speaker 1: fums have been in China. Everground groups and their China's
Speaker 1: other conglomerates such as unit groups before right, So they
Speaker 1: are compared to Blee Chips, Long Only, Credit, fung Way
Speaker 1: more experienced with the emerging markets conglomerates and their cross
Speaker 1: shareholdings and also served Shenanigans, so they feel very comfortable
Speaker 1: going to this. Do they tend to stay for the
Speaker 1: long hole? Or what happened when it came to China
Speaker 1: Everground Group. They can be in for the quite a
Speaker 1: long hole, and they are quite tenacious. I mean Auctree
Speaker 1: famously gave a loan to China Everground Group and then
Speaker 1: when the developer he folded on that loan. They basically
Speaker 1: sees a big plot of land in in Hong Kong
Speaker 1: last year and they sold it and they're the Cubodian
Speaker 1: loan plus interest. So they can be quite a nation,
Speaker 1: hard nosed and demanding. Now you actually write that Adoni
Speaker 1: needs to take a leaf out of soft Bank and
Speaker 1: Folsons playbooks, explain what you mean by that? Actually, so
Speaker 1: right now, I think there's a lot of market uncertainty
Speaker 1: around the Adonny's ability to tap on to the different
Speaker 1: financing channels. Like Adoni, it's just like Vision and soft
Speaker 1: Bank because they have very diversified funding channels with Adoni
Speaker 1: over came from global banks and another seven eight percent
Speaker 1: coming from the dollar bond market. And I think what
Speaker 1: they need to do is trying to sell some assets,
Speaker 1: because they should change the narrative from a liquidit tea
Speaker 1: quench to credit analysts saying wait a minute, Adoni has
Speaker 1: very good assets, and they do. They have a lot
Speaker 1: of top tier ports in their for instance, right, So
Speaker 1: if they can show that their assets worth quite a
Speaker 1: lot of money in the marketplace, the credit analysts narratives
Speaker 1: couldn't change. And another thing they could do, and that's
Speaker 1: being done with a lot of Asia's biggest conglomerates, is
Speaker 1: that they try to buy back some bonds, just like
Speaker 1: what people do with stox, right, just to boost the
Speaker 1: market confidence because once you buy by some bounds, the
Speaker 1: bond market will be open and there's a lot of
Speaker 1: money in that. Now a Dannie husband preparing some payments, right,
Speaker 1: what is he doing there? How is that working? So
Speaker 1: it is a sign that global banks are having cod feet.
Speaker 1: I mean the so called pre payments really was basing
Speaker 1: margin courts from global banks like City Group, Torture Bank,
Speaker 1: JP Morgan, and they've been a little bit never So
Speaker 1: that's a big problem for Adonney because over fifteen cent
Speaker 1: of their total financing came from global banks. Local banks
Speaker 1: also financed. Obviously, you suggest that perhaps Adanni can convince
Speaker 1: local banks to lend more, maybe take the place of
Speaker 1: some of those foreign banks. Well, that has to be
Speaker 1: the case if they want to continue growing at that page.
Speaker 1: I mean with their China's distress comoberates case, domest banks
Speaker 1: have coming like in the case of Fusion, for it's
Speaker 1: a huge private equity operator. And we'll have and was
Speaker 1: when the dollar bound sending channels were being closed, uh,
Speaker 1: domestic banks, they were giving out the syndicated loans to
Speaker 1: Fusion and that's that's what happened in their China space.
Speaker 1: So what we want to see is if India's stair
Speaker 1: own banks are willing to step in place of global back,
Speaker 1: does a journey end up smaller after this? No matter what? Now, Oh,
Speaker 1: I think it has to. And I apologize for using
Speaker 1: this kind of extreme example. It's kind of like we
Speaker 1: work right, Um, it's kind of like fake it till
Speaker 1: you make it. And what happens is that assume as
Speaker 1: the Adanne and then they have said that Adanney Ports
Speaker 1: were instance, they're going to have their capital expenditure spending.
Speaker 1: So as soon as you scale backing ambition, that also
Speaker 1: means that your stock valuation will not be as high
Speaker 1: as before, because before investors were buying into a groowth options,
Speaker 1: they were buying into a core option. And now people
Speaker 1: see that the court doesn't have much back so Downey
Speaker 1: stocks will be just treated like any normal port operator
Speaker 1: or you know, energy operator. We did see some credit
Speaker 1: ratings downgrades, but not on everything truly. Will there be
Speaker 1: more coming? I think, I mean so far, like there
Speaker 1: is not much right, but they're quite rating agencies. They
Speaker 1: are very very careful and they must be watching this
Speaker 1: very carefully because there is reputation risk ethpeic for them
Speaker 1: as well, especially if Adoni Bounds are trading at the
Speaker 1: fifty cents on the dollar, and if you say, oh,
Speaker 1: you know, you're investment grades, that's not a good look
Speaker 1: for the ratings agencies. And I think Adanie has to
Speaker 1: be very very careful to keep its investment grade rating.
Speaker 1: I mean when Adani reports, for instance, they said they're
Speaker 1: going to lower the leverage ratios, which ratings agencies like
Speaker 1: movies and essidently look at all of that doesn't actually
Speaker 1: address some of the other concerns, and the Hindenburger reports
Speaker 1: such as these entities based in Mauritius, for example, will
Speaker 1: any of that get addressed? On the some manipulations that
Speaker 1: it's very hard to prove definitively if Adani insiders are
Speaker 1: manif relating the stocks. I mean that Hindenberg, we caught
Speaker 1: a lot of it constential right. For instance, if you
Speaker 1: have a two billion dollar so called India Opportunity rese
Speaker 1: funds and billion is invested in a few Adonny stocks,
Speaker 1: it is a little bit sketchy. I mean, are you
Speaker 1: saying that India has no other opportunities other than the
Speaker 1: few Adonne stocks. Having said that, how do you prove
Speaker 1: definitively that that money actually came from the Adamy time.
Speaker 1: I think it's going to be very hard to prove.
Speaker 1: Bloomberg Opinions Shuli Ren Stay tuned next on Bloomberg opinion.
Speaker 1: It's one thing if you get to have access to
Speaker 1: protein and me and your alternative is no protein like
Speaker 1: the seventeen hundreds, and in that case, the Americans are
Speaker 1: better off. At this point, you'd be hard pressed argued
Speaker 1: consuming two hundred and sixty four pounds of meat per
Speaker 1: person per year is inherently a healthy thing. It's especially
Speaker 1: given the alternatives. The University of Georgia history professor and
Speaker 1: Bloomberg Opinion columnist Stephen men this is Bloomberg Opinion. You're
Speaker 1: listening to Bloomberg Opinion. I'm Vonnie Quinn. Alternative meats are
Speaker 1: now firmly out of fashion. Beyond meat is down seventy
Speaker 1: four percent year over year, even having had a thirty
Speaker 1: rally so far this year. Kellogg just announced it's pulling
Speaker 1: its plan to look at selling its plant based division,
Speaker 1: which includes the meat substitute incog Meato, and that thanks
Speaker 1: to plummeting valuations. It turns out this happens once in
Speaker 1: a while, going all the way back to the colonial era,
Speaker 1: I spoke with the University of Georgia history professor and
Speaker 1: Bloomberg Opinion columnist Stephen mim So. Stephen, in the colonial era,
Speaker 1: according to your research, Americans ate what an average of
Speaker 1: two hundred pounds of meat a year, and now we're
Speaker 1: at two hundred sixty four pounds of meat a year
Speaker 1: on average, which is quite surprising. But in the interim
Speaker 1: there has been a lot of variation, So just explained
Speaker 1: to us why on Earth, going back to the colonial era,
Speaker 1: Americans had that kind of meat and were able to
Speaker 1: eat as much as two hundred pounds of meat a
Speaker 1: year on average, right, well, at least after they got
Speaker 1: through the initial starvation your hit. Yes, it took a
Speaker 1: little while, but absolutely so. The colonial era is pretty unusual,
Speaker 1: and that Americans living in these rural places on farms
Speaker 1: were astonishingly well fed relative to basically almost all the
Speaker 1: rest of the world, so that whenever Europeans would come,
Speaker 1: they were struck by the fact that they were eating
Speaker 1: meat three times a day, you know, by contrast at
Speaker 1: the time it's like two or three times a week
Speaker 1: in Europe. At this point it was because they were
Speaker 1: living on farms and they were able to raise animals,
Speaker 1: But wouldn't that have been the case in Europe too.
Speaker 1: It was, But the one thing about the colonists is
Speaker 1: that the kind of fertility of the land and the
Speaker 1: productivity of it relative to Europe, which had been farmed
Speaker 1: for millennia, was much higher, and there was a lot
Speaker 1: more space to have grazing animals, so you could have
Speaker 1: a much easier time of it. Raising livestock, it turns
Speaker 1: out eating livestock. So Americans were really kind of noteworthy
Speaker 1: and that very well fit I mean unusually so well.
Speaker 1: At some point, though, eating meat became associated with negative connotations.
Speaker 1: What happened, Even though initially the vegetarian movement about two
Speaker 1: d years ago was pretty fringe e as we would
Speaker 1: say today, there were people who concluded and Sylvester Graham,
Speaker 1: the inventor of what is now called the Graham Cracker,
Speaker 1: was among these dietary kind of thinkers who came to
Speaker 1: the conclusion that eating meat was bad in part because
Speaker 1: they believed that it excited your passions and made you
Speaker 1: basically engage in illicit sexual behavior like an animal um.
Speaker 1: That was the jumping logic. They also pointed out by
Speaker 1: the way that the Garden of Eden there's no mention
Speaker 1: of Adam and E eating any meat, so that they
Speaker 1: started for the rib. No, that is true. I guess
Speaker 1: you didn't eat it. He just gave it to her.
Speaker 1: There was Yeah, I didn't eat it, just God used it.
Speaker 1: So that's right now. Was this purely ideological or did
Speaker 1: this Mr Graham also have sort of a secondary reason
Speaker 1: for this. He was the inventor of the Graham crack
Speaker 1: after Roules. He did. So he had this belief that
Speaker 1: there were all sorts of foods that were bad for you,
Speaker 1: and he was kind of right in certain ways. He
Speaker 1: was like, refined carbohydrates are bad for you. Turns out
Speaker 1: it's like he was like the Atkins diet. So he
Speaker 1: had these ideas that it was not only you know,
Speaker 1: would excite your passions, it was also bad for you
Speaker 1: to cause also health problem. I suppose there are those
Speaker 1: who would say that today, and that's why we did
Speaker 1: have this explosion once again fairly recently, of all of
Speaker 1: these meat substitutes. That's right, And so this has been
Speaker 1: a long recurrent theme trying to swear off meat, which
Speaker 1: is like the American tradition of consuming way too much
Speaker 1: of it, arguably, and then flirting with these ideas about
Speaker 1: abstaining from it, and then somehow or another falling off
Speaker 1: the wagon and getting back on the meat train and
Speaker 1: whatever you want to call it. Kellogg was even involved
Speaker 1: in this, that's right. So he's even more influential. So
Speaker 1: Sylvester Graham's successor in the vegetarian movement was James Harvey Kellogg,
Speaker 1: who is the man behind corn flakes was devised as
Speaker 1: a meat alternative for breakfast, but he's not worthy and
Speaker 1: he's kind of cool, and that he went way farther
Speaker 1: and that he wasn't just counseling being a vegetarian, he
Speaker 1: was counseling eating baked meats. That he's really the one
Speaker 1: who pioneers these new products, ones called nutos, which is
Speaker 1: made of like nuts. Protos also had not send a
Speaker 1: lot of grains, and they claimed to be indistinguishable from
Speaker 1: actual meat, which of course they weren't. But that's the
Speaker 1: same claims that have been made about meat substitutes from
Speaker 1: that point forward. I wonder if you had Protos today,
Speaker 1: if it would taste very different to something like the
Speaker 1: Impossible Burger or be On burger. Absolutely, I kind of wondered.
Speaker 1: That it is a man, Adam Shrinson, I believe was
Speaker 1: his name, who's written this history of vegetarianism, and he
Speaker 1: actually tried to recreate Protos based on the recipe, and
Speaker 1: he said it was okay, you know, but in a
Speaker 1: way that these meat substitutes are often okay, especially if
Speaker 1: they're kind of soaked in other flavorings, you know, and
Speaker 1: like the thing and that's sort of why they go
Speaker 1: out of fashion, and perhaps why they've gone out of
Speaker 1: fashion at the moment, right because there is a lot
Speaker 1: of extra additives. Absolutely, and there's a question here in
Speaker 1: some cases whether is this actually a healthy alter put
Speaker 1: aside the ethical dimensions of the question, is it actually
Speaker 1: a healthy alternative? And sating organic grasp at beef and
Speaker 1: injury is sort of out on that, you know, in
Speaker 1: terms of their contents. It turns out that in fact,
Speaker 1: vegetarianism is still a very small portion of the population,
Speaker 1: much smaller than you would think, you know. Even more important,
Speaker 1: the needle really hasn't moved on it much over the
Speaker 1: last twenty years. It's still at the very most ten
Speaker 1: percent of the population. And that's not as much even
Speaker 1: as I would have expected. Tell us how the meat
Speaker 1: packing industry went about it, because they're not known for
Speaker 1: their solved diplomacy, let's put it that way. No, they're not.
Speaker 1: And every industry has its trade groups, and in the
Speaker 1: United States of the twentieth century, that trade group was
Speaker 1: the am I or American Meat Institute. I've even pamphlets
Speaker 1: for it's like meat recipes you're right home about, you know,
Speaker 1: issued by the American like, not chicken, just meat. It's
Speaker 1: just meat. Uh. And yes, So in various period of
Speaker 1: twentieth century, you'd have scientists say, look, we think we
Speaker 1: can make a meat substitute from yeast or soy or
Speaker 1: what have you, and the meat Institute would come out
Speaker 1: of the woodwork, and you know, brandness as quackery and
Speaker 1: also appealing obviously in the United States to Americans long
Speaker 1: standing tradition of eating meat and lots of it. Stephen,
Speaker 1: what happened for the conclusion that meets somehow excited passions
Speaker 1: for that emination to go away well and continued actually
Speaker 1: well into the twentieth century. Man named Bernard mc fadden,
Speaker 1: who was arguably like the one of the nation's first
Speaker 1: kind of fitness and health gurus, also believe this. He
Speaker 1: also believed that ketchup would have the same effect. Um,
Speaker 1: so maybe it does. Does anyone just move this exactly?
Speaker 1: That's a very good point. I think this has never
Speaker 1: been subjected to sign to studies, so you don't know.
Speaker 1: But for these guys, you know, fake meat was like
Speaker 1: a culinary equivalent of a cult shower. You know, it's
Speaker 1: a way of blunting your excessive passion that did. They
Speaker 1: fade away into the post war era, and when vegetarian
Speaker 1: resumed its popularity in the nineties seventies, it was wrapped
Speaker 1: around actually an interesting kind of consequence, which was a
Speaker 1: fear of overpopulation in what that would need for the
Speaker 1: ability to planet to feed itself, with vegetarians and meat
Speaker 1: substitutes all being the only answer. But that too, sputtered
Speaker 1: and died out didn't help. Soil and Green, dystopian thriller
Speaker 1: released in the nineties seventies, depicted a world people subsisting
Speaker 1: on meat substitutes and the end of the film and
Speaker 1: people should plug their ears if they want to see
Speaker 1: it because about to spoil the ending. It turns out
Speaker 1: was made from human beings, and so that probably put
Speaker 1: people off fake meats for another generation. It does see, though,
Speaker 1: that this arc of meat popularity, let's call it, had
Speaker 1: nothing really to do with supply and demand or wars intervening,
Speaker 1: or immigration or immigration or anything like that. That it
Speaker 1: is really a product of you know, big companies, that's right,
Speaker 1: or these kind of ideological movements. Conversely, the times where
Speaker 1: you see people consume less meat is oftentimes imposed by
Speaker 1: hardship and it's not a choice. It's like great depression comes,
Speaker 1: meat consumption declines. But that's understandable. It's like nothing surprising.
Speaker 1: It's not a wholehearted, bullforded embrace of vegetarianism. Yeah, and
Speaker 1: now Americans eat two sixty four pounds per person per
Speaker 1: year on average. That's an all time high. I mean,
Speaker 1: I'm not quite sure what to say about that. Does
Speaker 1: health go along with this? Is this a healthier America
Speaker 1: or a less healthy America because of that, you know,
Speaker 1: like meat consumption, putting aside the ethical considerations that many
Speaker 1: people understand we have. It's one thing if you get
Speaker 1: to have access to protein and meat and your alternative
Speaker 1: is no protein, right, you know, that's kind of like
Speaker 1: the seventeen hundreds, and in that case, the Americans are
Speaker 1: better off. But at this point you'd be hard pressed
Speaker 1: to argue that consuming two hundred and sixty four pounds
Speaker 1: of meat per person per year is inherently a healthy thing.
Speaker 1: It's especially given the alternatives meat substitutes than otherwise. And
Speaker 1: I mean this includes all sorts of meats, even meats
Speaker 1: that people eat from takeouts. Correct fish managed to avoid
Speaker 1: this whole sickly, Yes, And I think fish is harder
Speaker 1: to replicate. I gather both inconsistency and flavor, although you
Speaker 1: do see artificial crabstick, for example, but that itself is
Speaker 1: actually made from some fish products, so it's not a
Speaker 1: purely synthetic creation. That's Boomerg opinion and the University of
Speaker 1: George's Stephen min Well, if you're not among the dry
Speaker 1: January clue out there, you've got to listen to this
Speaker 1: next interview. Justin Fox had a look at the data
Speaker 1: and found people are spending more on alcohol even post pandemic. So,
Speaker 1: Justin you wrote a very consoling recent column. Not consoling
Speaker 1: in the sense that it told us that the pandemic
Speaker 1: drinking binge just kept on going after the pandemic was
Speaker 1: ostensibly over, but very consoling for those of us who've
Speaker 1: had a couple of drinks in the last week or two.
Speaker 1: Tell us what are the data saying, Well, I wrote,
Speaker 1: I guess a year and a half or so ago
Speaker 1: about how much alcohol sales and seemingly consumption increased over
Speaker 1: the course of the pandemic, And I just sort of
Speaker 1: checked in again with the highest frequency data we can
Speaker 1: look at, which is just the consumer spending that the
Speaker 1: Bureau of Economic Analysis puts out they actually give you
Speaker 1: in some detail how much has spent on beer, wine,
Speaker 1: and liquor at stores, and then how much has spent
Speaker 1: in general on drinks at bars and restaurants. And it's
Speaker 1: just kept going up, even in inflation adjusted terms. And
Speaker 1: a little bit of that is maybe people are buying
Speaker 1: fancier stuff, but I think it's mostly overall Americans are
Speaker 1: drinking more. How much do we know about the internals
Speaker 1: of those data in the sense that I feel like
Speaker 1: many of the large companies put out things like X
Speaker 1: zero or X double. Oh. I don't want to give
Speaker 1: any bond names here, but are some of these zero
Speaker 1: alcohol drinks considered alcohol in this note? They don't. They
Speaker 1: don't show they shouldn't show up in any of this day.
Speaker 1: It is possible to spend a lot of money on
Speaker 1: non alcoholic liquor, and I now do that weirdly enough,
Speaker 1: but that should just show up as a non alcoholic beverage. Right. Well,
Speaker 1: there's been an explosion of those kinds of products within
Speaker 1: the brands, right And there's been definitely this increase in
Speaker 1: demand for I forget the term that the distilled spirits
Speaker 1: council uses hyper super duper premium spirits and and there's
Speaker 1: a lot more growth in the high end sales than
Speaker 1: in the low end sales. So in terms of the
Speaker 1: actual volume of at least with liquor being consumed, and
Speaker 1: probably with beer and wine too, it's not completely reflected
Speaker 1: by those increases in sales. Some of that is just
Speaker 1: people paying more money, not drinking more volume. But there
Speaker 1: there are lots of signs that there's more problematic drinking
Speaker 1: going on, the main one being a big increase in
Speaker 1: alcohol related deaths. What's going on with alcohol related deaths?
Speaker 1: Alcohol consumption in the US peaked in the nineteen seventies
Speaker 1: and had been on this long decline, partly because of
Speaker 1: less beer consumption but also less liquor consumption. Wine consumption
Speaker 1: kept going up, but not radically. Sometime in the last
Speaker 1: couple of decades, spirits consumption started rising again. And it's
Speaker 1: pretty you know, the whole cocktail boom. This's been this
Speaker 1: explosion in the number of small distilleries all over the US,
Speaker 1: and it's kind of cool in general, but it means
Speaker 1: that per capita alcohol consumption has been rising now for
Speaker 1: more than a decade. And then it seems to have
Speaker 1: just taken a leap a couple of months into the pandemic.
Speaker 1: I guess I had thought that would have fallen back,
Speaker 1: but it hasn't. Really. Another interesting thing is this increased
Speaker 1: drinking is not young people, oh, for like the eighteen
Speaker 1: to twenty four set, I think they're probably drinking less,
Speaker 1: but it's middle aged and older are the ones drinking
Speaker 1: more well. And also the ization of wheat and having
Speaker 1: weed dispensaries. New York City just has it when I
Speaker 1: sort of pushed it aside for a certain generation. I
Speaker 1: think also in the survey data, it's mostly women who
Speaker 1: are drinking more, with men maybe more. Flat interesting alcohol
Speaker 1: related deaths, do we know how they're happening? I mean,
Speaker 1: this is very grim and gruesome, but you know you're
Speaker 1: good at looking at Glosom data, right, I mean, I
Speaker 1: think the c d C has this database and you
Speaker 1: can just click alcohol induce deaths, but it's some mix
Speaker 1: of cirrhosis to deliver. And I mean what the CDC
Speaker 1: says is that that's actually only a portion of deaths
Speaker 1: that are somehow related to alcohol. Those are ones where
Speaker 1: it's basically you can very directly lay it down to
Speaker 1: alcohol use. There are lots of others in terms of
Speaker 1: accidents violence that are probably alcohol related but don't show
Speaker 1: up Bloomberg Opinions. Justin Fox. That does it for this
Speaker 1: week's Bloomberg Opinion. Don't forget. We're available as a podcast
Speaker 1: on Apple, Spotify or your favorite podcast platform. And as always,
Speaker 1: do send us your thoughts. Email me at v quinn
Speaker 1: at bloomberg dot net. We love to get your opinions
Speaker 1: and suggestions. Were produced by Eric Mollow. I'm Vonnie Quinn.
Speaker 1: H