WEBVTT - Luxury Supertowers Are Going Even Higher 0:00:01.800 --> 0:00:04.440 This is Bloomberg Business Week. I'm Carole Masser and I'm 0:00:04.480 --> 0:00:07.280 Bloomberg Quick Takes Tim Stanovk. We're here every day bringing 0:00:07.320 --> 0:00:09.840 you the latest news from the world to business and finance, 0:00:09.840 --> 0:00:13.680 plus technology, politics, economics, all purtnising the power of Business 0:00:13.680 --> 0:00:17.160 Week reporters and editors, not to mention our journalists and 0:00:17.160 --> 0:00:20.000 analyst in more than one twenty countries. You can download 0:00:20.000 --> 0:00:23.479 Bloomberg Business Weekend iTunes, SoundCloud, or Bloomberg dot Com. You 0:00:23.480 --> 0:00:25.439 can also listen to our radio show at two pm 0:00:25.440 --> 0:00:28.400 Eastern Time on Bloomberg Radio or watch us on YouTube 0:00:28.400 --> 0:00:32.280 search Bloomberg Clovel News. Well, don't forget. We get another 0:00:32.280 --> 0:00:35.640 FED decision on Wednesday, and with investors nervous about the 0:00:35.640 --> 0:00:39.560 feds eventual tapering ahead of that policy meeting, we're gonna 0:00:39.600 --> 0:00:41.440 tell you about the taper that will really bite into 0:00:41.560 --> 0:00:44.199 us growth. This is a must read today, I think Ed. 0:00:44.520 --> 0:00:47.120 Let's get to Bloomberg News Economics reporter Rich Miller. He 0:00:47.159 --> 0:00:51.199 writes about this. Rich joins us on the phone from Washington. Hey, Rich, 0:00:51.280 --> 0:00:53.640 good to have you here with Ed and myself. So 0:00:54.320 --> 0:00:56.040 we are all focusing on what we're going to get 0:00:56.080 --> 0:00:58.160 from the Fed. On Wednesday. We're wondering if they're going 0:00:58.200 --> 0:01:00.280 to be more specific about when they will pull back 0:01:00.760 --> 0:01:04.720 on some of their asset purchases they're so called tapering, 0:01:04.760 --> 0:01:07.360 whether or not we'll see that. You say, there's something 0:01:07.360 --> 0:01:09.240 else we have to be watching when it comes to tapering. 0:01:09.440 --> 0:01:14.440 What is that? Basically the disappearance of all this support 0:01:14.480 --> 0:01:17.920 we've been getting from UM Washington in the form of 0:01:18.080 --> 0:01:23.280 you know, stimulus, checks, grants, the small business money for 0:01:23.360 --> 0:01:27.360 satan local governments, the whole panopally of of things. That's 0:01:27.400 --> 0:01:31.160 all basically going away, um you know, started going away 0:01:31.160 --> 0:01:34.080 from the second quarter, and that that arguably is going 0:01:34.160 --> 0:01:36.080 to have a bigger bite, take a bigger bite out 0:01:36.080 --> 0:01:39.160 of growth over the next year, especially towards the end 0:01:39.160 --> 0:01:42.200 of next year. Then then then the taper by the Fed. 0:01:43.080 --> 0:01:46.640 Remember the taper by the Fed is they're gonna they're 0:01:46.680 --> 0:01:49.000 gonna be cutting back on the amount of simulus they're 0:01:50.200 --> 0:01:52.640 injecting into the economy, but they're still going to be 0:01:52.640 --> 0:01:55.280 injecting stimulus. What are you gonna see on the fiscal 0:01:55.280 --> 0:01:59.120 policy side is that they're actually going to be similar simulus. 0:01:59.160 --> 0:02:02.760 It's going to disappear year rich. What's difficult to kind 0:02:02.760 --> 0:02:05.320 of make sense of is these measures were supposed to 0:02:05.360 --> 0:02:08.760 be temporary anyway, right, you know, in terms of payment, 0:02:08.840 --> 0:02:13.200 support for employers, in terms of benefit and subsidy for 0:02:13.240 --> 0:02:16.600 those hardest hit by the pandemic. Why did economists and 0:02:16.720 --> 0:02:20.280 indeed the US government not see this coming sooner? Well, 0:02:20.320 --> 0:02:24.520 I guess, I mean the government has seen it coming sooner. 0:02:24.560 --> 0:02:29.520 But um, um, the sheer magnitude of it is what 0:02:29.720 --> 0:02:32.880 what's uh? What's you know, in a normal recession, you 0:02:32.960 --> 0:02:36.320 might have you know, some of this and then disappear. 0:02:36.639 --> 0:02:38.880 But this is the sheer magnitude. This is going to 0:02:38.960 --> 0:02:42.240 be the biggest swing in the deficit. I the biggest 0:02:42.280 --> 0:02:44.480 of fall and the budget deficit from one year or 0:02:44.560 --> 0:02:49.880 next since basically after the you know, the war, so 0:02:50.160 --> 0:02:52.959 um on its own, you know, it's going to be 0:02:53.000 --> 0:02:55.320 a huge contraction. Now, I think the point you're making 0:02:55.360 --> 0:02:57.600 is you know that there's gonna be offsetting factors. Right. 0:02:58.440 --> 0:03:02.080 People have built up savings during during the pandemic because 0:03:02.120 --> 0:03:06.520 they couldn't go on expensive vacations, etcetera. Um. State and 0:03:06.560 --> 0:03:08.760 local government's got a lot of money from the federal government. 0:03:09.360 --> 0:03:13.440 Um uh, they haven't spent all of it. Uh, companies 0:03:13.440 --> 0:03:15.600 that need to build their inventories. But even with all that, 0:03:16.080 --> 0:03:20.040 you know, some economistsy you know this really having this 0:03:20.120 --> 0:03:22.760 fiscal what they call fiscal dreg really have an impact 0:03:22.760 --> 0:03:25.600 on growth. And one economists I quote in the story, 0:03:25.600 --> 0:03:28.320 Wendy Edelberg at Brookings say we might even see a 0:03:28.400 --> 0:03:31.560 quarter or two towards the end of next year into 0:03:32.400 --> 0:03:35.000 where we don't grow at all. Wow. I mean that 0:03:35.000 --> 0:03:37.560 would certainly shock the markets. What's interesting, too, Rich in 0:03:37.560 --> 0:03:40.520 a story like this is always perspective. So all of 0:03:40.560 --> 0:03:45.120 this fiscal stimulus or stimulus that came from the government, 0:03:45.320 --> 0:03:47.680 I mean, it was a lot more than what we 0:03:47.760 --> 0:03:52.800 got from the Fed. Correct. Yeah, I think even the Fed, 0:03:52.920 --> 0:03:56.920 you know when you hear uh Fed chair your own power, 0:03:57.920 --> 0:04:02.240 you know talk. He gives Gray credit to Congress for 0:04:02.320 --> 0:04:05.840 acting quickly, especially with the Cares Act, the first Act. 0:04:06.200 --> 0:04:08.800 But yeah, but he he know, he acknowledges that you know, 0:04:09.560 --> 0:04:11.640 you know, the FED lowered interest rates, but you know 0:04:12.280 --> 0:04:15.480 it didn't hand out money to people, right um um, 0:04:16.839 --> 0:04:19.000 and the and the FED did you know, buy bonds. 0:04:19.040 --> 0:04:21.640 But you know, he even he acknowledges that the fiscal 0:04:22.960 --> 0:04:28.040 the fiscal thrust, the fiscal emergency stimulus was what really 0:04:28.160 --> 0:04:31.520 really helped during the pandemic. Richie flick at this in 0:04:31.560 --> 0:04:33.599 the story. But it's gonna be painful for some people 0:04:33.680 --> 0:04:38.160 and potentially politically tricky for Biden, right, yeah, I mean, well, 0:04:38.200 --> 0:04:40.000 I mean, if these economists are right, you know, this 0:04:40.080 --> 0:04:44.320 slowdown is going to be happening just as the we're 0:04:44.360 --> 0:04:48.279 heading into November mid term elections, you know, and unless 0:04:48.279 --> 0:04:50.720 he gets unless he gets his big plan through, right, 0:04:50.760 --> 0:04:52.840 I mean that's the other the other factor in all 0:04:52.839 --> 0:04:55.160 of this. I mean that is a factor. But but 0:04:55.240 --> 0:04:57.680 what you know, what's what's kind of lost in and 0:04:57.839 --> 0:04:59.400 talk about the big Plan and there's a lot of 0:04:59.440 --> 0:05:02.720 big numbers thrown about, but you know that's spread out 0:05:02.760 --> 0:05:09.760 over ten years, uh soo exactly, so you know it 0:05:09.880 --> 0:05:12.960 is going to help, like you know, over over a 0:05:13.000 --> 0:05:14.760 longer period of time, but it's not really going to 0:05:14.880 --> 0:05:18.000 help next year. And and some some some folks on 0:05:18.000 --> 0:05:20.400 Wall Street are saying, yeah, well, we might get the 0:05:20.440 --> 0:05:23.760 tax increases before we see the benefits of the infrastructure spending, 0:05:24.120 --> 0:05:26.520 and that would hurt the stock market too. It does 0:05:26.560 --> 0:05:28.960 sound like just quick, quick, rich just got about thirty 0:05:29.000 --> 0:05:31.039 seconds here. We'll also get a truer picture of the 0:05:31.080 --> 0:05:34.960 economy right as we start to back off of all 0:05:35.000 --> 0:05:40.279 these stimulus efforts. Yeah, definitely, definitely. You know, uh, once 0:05:40.320 --> 0:05:42.280 we come off the emergency support, we're gonna have to 0:05:42.279 --> 0:05:46.160 see how much underlying strength is there. And you know, hope, hope, hope, 0:05:46.279 --> 0:05:47.960 hope it's there and we can sort of stand on 0:05:48.000 --> 0:05:49.880 our own two feet, so to speak. Right, would you 0:05:49.920 --> 0:05:53.160 wonder if, certainly ahead of the FOMC meeting, is you know, 0:05:53.360 --> 0:05:56.760 the real economy is what J. Powell and company are 0:05:56.800 --> 0:05:59.159 looking to see? Rich Miller, it's must read. Thank you 0:05:59.200 --> 0:06:01.720 so much, Rich Mill, our economics reporter at Bloomberg News 0:06:01.720 --> 0:06:03.919 on the phone from d C on his story the 0:06:03.960 --> 0:06:06.599 taper that we're really bite into us growth isn't the 0:06:06.600 --> 0:06:08.719 fits I mean, And this is a really timely story. 0:06:08.760 --> 0:06:10.640 And something we need to be thinking about is those 0:06:10.640 --> 0:06:14.360 policy meeker makers get ready to uh to meet and 0:06:14.480 --> 0:06:18.680 maybe update policy. Yeah. And for the real economy, for 0:06:18.760 --> 0:06:20.719 the people that have lived on the subsidy, lived on 0:06:20.760 --> 0:06:23.520 the benefit, lived on the ppe checks. You wake up 0:06:23.560 --> 0:06:25.240 one day and it's gone, and you wonder how that 0:06:25.320 --> 0:06:28.360 really impacts spending going forward? All Right, something we're going 0:06:28.400 --> 0:06:30.800 to continue to track. You are listening to Bloomberg Business 0:06:30.800 --> 0:06:37.240 Week and this is Bloomberg Radio. This is Bloomberg Business 0:06:37.320 --> 0:06:41.120 Week with Carol Masser and Bloomberg Quick Takes Tim Stenovic 0:06:41.600 --> 0:06:44.520 on Bloomberg Radio. One other story that we want to 0:06:44.520 --> 0:06:46.599 get to, and as we mentioned, it will be in 0:06:46.600 --> 0:06:49.640 the upcoming sooner than you think, Bloomberg Business Week issue 0:06:49.680 --> 0:06:52.280 Joel is with us and also joining us from Switzerland 0:06:52.600 --> 0:06:55.479 is Bloomberg Business Week writer James Tarmy. And we're talking 0:06:55.520 --> 0:06:59.039 about Joel Um tall buildings. Actually they're super tall building, 0:06:59.120 --> 0:07:01.960 the super tall one, and here in New York City, 0:07:01.720 --> 0:07:04.599 there's been a couple that have gone up. And what 0:07:04.600 --> 0:07:07.600 what James story is really interesting about is like, really, 0:07:07.640 --> 0:07:10.920 when these buildings started to go this big, nobody had 0:07:10.960 --> 0:07:13.360 done that really before, right, and so they were kind 0:07:13.360 --> 0:07:17.600 of having to learn almost on the fly, and and 0:07:17.600 --> 0:07:21.320 and that has led to some some lessons and we'll 0:07:21.320 --> 0:07:24.200 talk about those lessons. And then the other big takeaway 0:07:24.240 --> 0:07:27.360 that I thought was just amazing is that we were 0:07:27.360 --> 0:07:29.680 going to start seeing buildings go even higher, which is 0:07:30.080 --> 0:07:32.880 really crazy to me because I just get, you know, 0:07:33.040 --> 0:07:35.239 my stomach kind of does a little, you know, dance. 0:07:36.760 --> 0:07:39.440 So James what have been some of the problems that 0:07:39.480 --> 0:07:43.720 have happened with these super tall buildings. Well, I think 0:07:43.760 --> 0:07:47.320 one of the biggest problems is that people don't know 0:07:47.520 --> 0:07:49.640 really what they don't know, and so every time that 0:07:49.720 --> 0:07:53.960 they pushed the limits, they find out something new, which 0:07:54.040 --> 0:07:57.000 is fascinating if you look at it from an engineering 0:07:57.000 --> 0:08:01.040 standpoint less exciting if you have spent a tremendous amount 0:08:01.040 --> 0:08:03.120 of money to live in one of these buildings and 0:08:03.120 --> 0:08:06.600 then discover that, well, actually you're living in a two 0:08:06.640 --> 0:08:08.960 point o building and three point or four point o 0:08:09.040 --> 0:08:11.440 buildings are going to be the ones that fixed it. Um. 0:08:11.720 --> 0:08:15.280 So you know, we can go all the way back 0:08:15.600 --> 0:08:20.760 to something like the Sears Tower, which was incredibly high 0:08:20.800 --> 0:08:24.280 and which was just a feat of engineering, and which 0:08:25.000 --> 0:08:29.040 was built with really not much wind tunnel modeling, and 0:08:29.080 --> 0:08:32.240 so they only discovered when it was constructed that there 0:08:32.240 --> 0:08:34.680 were basically wind board di sees that were rattling the 0:08:34.720 --> 0:08:38.240 building and causing things to break, and um, it only 0:08:38.440 --> 0:08:41.440 kind of got worse from there as people discovered the 0:08:41.440 --> 0:08:45.079 whole extent of what wind does to a building and 0:08:45.160 --> 0:08:48.440 extremely high height. So I recently went on vacation to 0:08:48.600 --> 0:08:52.640 Chicago and I took the official Chicago Architecture Tour. And 0:08:52.720 --> 0:08:54.760 of course one of the features is the Willis Tower 0:08:55.200 --> 0:08:57.960 and it can sway three feet you know, on any 0:08:58.040 --> 0:09:00.720 day with the wind coming off late Michigan. And anyway, 0:09:00.760 --> 0:09:04.000 now that I'm done bragging about my vacation, James, my story, 0:09:04.200 --> 0:09:07.920 my question rather is, you know, how important is it 0:09:07.960 --> 0:09:11.199 to have the bragging rights of the tallest super tower 0:09:11.240 --> 0:09:14.680 in a city. How linked is the skyline to the 0:09:14.720 --> 0:09:18.280 status of a city like New York, like Chicago. Well, 0:09:18.280 --> 0:09:20.800 I think it's actually two different questions. Really. One is 0:09:20.880 --> 0:09:23.920 from the developers standpoint right, if they are able to 0:09:23.960 --> 0:09:28.640 say that the buyer of the building's apartments has views 0:09:28.640 --> 0:09:31.280 that are unlike any other they can command at least 0:09:31.280 --> 0:09:35.080 in theory of premium um. And then there's another component 0:09:35.160 --> 0:09:38.640 of it where you hit on it exactly that it 0:09:38.800 --> 0:09:42.160 is not simply about economics when it comes to buildings 0:09:42.200 --> 0:09:46.559 that are not simply residential um. There is a tremendous 0:09:46.600 --> 0:09:50.560 component of bragging rights to it. And it's it's been 0:09:50.600 --> 0:09:53.720 that way since the Empire State Building became this symbol 0:09:53.760 --> 0:09:57.920 for American prosperity. Now you see it as kind of 0:09:57.960 --> 0:10:02.280 American dominance of a lot of different things sort of 0:10:02.280 --> 0:10:05.760 wayne Um. In the nineties, you see Asia becoming the 0:10:05.760 --> 0:10:08.320 place where super tall towers are built. And a few 0:10:08.360 --> 0:10:10.480 people with whom I spoke actually made the excellent point, 0:10:10.800 --> 0:10:14.320 whoever heard in America of the Patronis company until the 0:10:14.320 --> 0:10:17.120 Patronis towers were built? And you can you can you 0:10:17.160 --> 0:10:21.200 can go from there, it became there's there's It's not 0:10:21.280 --> 0:10:24.960 necessarily a price efficient way of building when you're building 0:10:25.080 --> 0:10:27.640 all the way to the tallest building in the world, 0:10:28.120 --> 0:10:30.840 but you can in a certain respect consider it a 0:10:30.880 --> 0:10:33.360 marketing expense. Okay, so let's get out a little bit 0:10:33.400 --> 0:10:36.400 about the the engineering that it takes to go super tall, 0:10:36.840 --> 0:10:39.679 because some of because they've been able to do the 0:10:39.679 --> 0:10:41.800 ones that have been super tall, we now know what 0:10:41.880 --> 0:10:45.319 it takes to go even taller. Let's start with with concrete, 0:10:45.360 --> 0:10:50.000 which you can now get three thousand feet into the air. Yeah. 0:10:50.080 --> 0:10:52.840 So there are a couple of issues with concrete which 0:10:52.840 --> 0:10:56.760 people have consistently been solving as they go higher and higher. 0:10:57.240 --> 0:11:00.880 The big one is that it needs to be a 0:11:01.120 --> 0:11:05.280 lot stronger for it to go that much higher. And 0:11:05.320 --> 0:11:07.920 the good news is that when it gets stronger, it 0:11:07.960 --> 0:11:11.120 also gets stiffer, which keeps a building from swaying. So 0:11:12.360 --> 0:11:16.120 the advances are pretty staggering. You're looking at in the 0:11:16.200 --> 0:11:19.360 nine eight um in p s I is a is 0:11:19.400 --> 0:11:22.240 a measurement of of pressure that the concrete can withstand. 0:11:22.440 --> 0:11:24.840 You're looking at six thousand p s I for like 0:11:24.880 --> 0:11:27.679 the top of the line buildings. Now you're looking at 0:11:28.000 --> 0:11:32.559 three four times that amount um easily um And so 0:11:33.320 --> 0:11:36.480 you you're that is one component of concrete that it's 0:11:36.520 --> 0:11:40.040 critical to the super tall, super skinny towers. That's the 0:11:40.040 --> 0:11:42.160 other thing. You can build as tall as you want 0:11:42.200 --> 0:11:47.079 if you're building it, you know, incredibly wide. Um. If 0:11:47.120 --> 0:11:50.080 you're trying to build a super skinny tower, that's where 0:11:50.080 --> 0:11:52.640 the strength of concrete comes in. Then the other component 0:11:52.679 --> 0:11:54.240 of it is that you have to be able to 0:11:54.280 --> 0:11:56.760 pump it and it has to stay liquid because people 0:11:56.760 --> 0:11:59.959 have discovered that it's sort of firmed up as you're 0:12:00.040 --> 0:12:03.280 pumping it. Because hey, Joe, we got a problem. The 0:12:03.320 --> 0:12:05.760 concrete is hard on we've only made it to the 0:12:06.240 --> 0:12:10.679 you know. Um. It's a great read, and as Joe mentioned, 0:12:10.720 --> 0:12:12.440 it's a fun story to nerd out on it about 0:12:12.480 --> 0:12:14.160 the technology and what they have to do to make 0:12:14.200 --> 0:12:16.439 this happen. Check it out in the upcoming issue of 0:12:16.480 --> 0:12:19.200 Business Week magazine. James Tarmy of Business Week, along with 0:12:19.200 --> 0:12:22.319 the editor of the magazine, Jill Webber, you're listening to Bloomberg. 0:12:23.920 --> 0:12:27.520 You're listening to Bloomberg Business Week with Carol Messer and 0:12:27.600 --> 0:12:32.120 Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio Top of 0:12:32.160 --> 0:12:34.960 Investors Minds. You know what we've talked about it, How 0:12:35.000 --> 0:12:38.080 far will present g Jin Pingo with his crackdown on 0:12:38.200 --> 0:12:41.679 China's real estate sector and more broadly in the economy, 0:12:41.679 --> 0:12:44.120 Well to dissect it back with us as Bloomberg New 0:12:44.160 --> 0:12:47.040 Economy editorial director Andy Brown, who continues to explore and 0:12:47.040 --> 0:12:51.120 write about the growing Beijing crackdowns, writing this weekend about 0:12:51.160 --> 0:12:54.200 how it now includes the casino industry in Macau. Andy, 0:12:54.240 --> 0:12:56.720 by the way, former China editor at the Wall Street Journal, 0:12:56.880 --> 0:12:59.800 and he's here in our interactive broker studio. So and 0:13:00.160 --> 0:13:02.400 you do write this weekend about what's going on in 0:13:02.480 --> 0:13:06.040 Macau once again at President ge kind of it feels 0:13:06.040 --> 0:13:09.040 like going after some of the evils of the Chinese society, 0:13:09.120 --> 0:13:13.360 or so it feels exactly, Carol, I mean, she jumpaying 0:13:13.360 --> 0:13:18.120 President she jumping sees himself as a historical figure on 0:13:18.280 --> 0:13:21.720 a power with Mao, and he is now in the 0:13:21.760 --> 0:13:26.960 process of trying to re engineer Chinese society, to fundamentally 0:13:27.160 --> 0:13:31.040 change the way that China's society works, to make it 0:13:31.160 --> 0:13:36.480 less unequal. This is his slogan, common prosperity, and beyond that, 0:13:36.679 --> 0:13:39.360 to correct a lot of what he would see as 0:13:39.440 --> 0:13:46.559 being unhealthy tendencies in Chinese society, in other words, social vices, 0:13:46.640 --> 0:13:51.839 and gambling very much fits into that category. There was 0:13:51.880 --> 0:13:55.160 a fantastic line in your story that gambling revenues from 0:13:55.200 --> 0:13:58.079 Macau as six times what they are from the Las 0:13:58.160 --> 0:14:01.160 Vegas strip, which gives you a sense, right how a 0:14:01.360 --> 0:14:04.640 crucial that section of the economy is. But b how 0:14:04.720 --> 0:14:07.680 far he's going, I mean, is this just a question 0:14:07.679 --> 0:14:11.120 of profits take a backseat to ideology when it comes 0:14:11.160 --> 0:14:15.480 to President Gees's mindset. That's that's that's definitely part of it. 0:14:16.200 --> 0:14:20.680 You know, the Communists have never liked gambling, all right. Uh, 0:14:20.760 --> 0:14:23.560 they banned it, They banned the horse racing as soon 0:14:23.600 --> 0:14:26.680 as they took over. Um. They saw this as a 0:14:26.760 --> 0:14:32.080 remnant of the old society, and they inherited gambling in 0:14:32.160 --> 0:14:36.480 Macau from the Portuguese When they took over Portugal Macau, 0:14:36.560 --> 0:14:41.720 which is the Portuguese colony, and they've sort of tolerated it, 0:14:42.480 --> 0:14:46.320 although their tolerance is wearing very thin. And in fact, 0:14:46.480 --> 0:14:48.400 when she J Pink took over in late two thousand 0:14:48.400 --> 0:14:50.320 and twelve, one of the first things he did was 0:14:50.400 --> 0:14:55.680 launched this anti corruption campaign, and casinos in Macau were 0:14:55.760 --> 0:14:58.920 were early targets. Well, you know, I do wonder, Andy, 0:14:58.960 --> 0:15:01.640 if the inequality it is that we if we they 0:15:01.680 --> 0:15:04.040 weren't existing in the Chinese society, will we be going 0:15:04.040 --> 0:15:08.000 through this right now with President G. Well, he's a 0:15:08.200 --> 0:15:12.760 he's a populist figure and uh he considers himself to 0:15:12.800 --> 0:15:16.760 be a mau like figure, and social equity is a 0:15:16.880 --> 0:15:21.160 very important part of his campaign. But if there weren't 0:15:21.160 --> 0:15:23.880 the inequities in Chinese society, would we be going through 0:15:23.880 --> 0:15:26.160 this with President G right now? Well, it's not just 0:15:26.400 --> 0:15:30.320 the inequities. I mean, he's he's addressing in a very 0:15:30.360 --> 0:15:33.960 decisive way a lot of problems that exist all over 0:15:34.000 --> 0:15:37.280 the world in different societies. As an example, he's going 0:15:37.320 --> 0:15:41.600 after the video gaming industry because he's perceived that Chinese 0:15:41.720 --> 0:15:46.200 kids spend too much time addicted to online video games. 0:15:46.880 --> 0:15:49.600 Um he's doing out so different from what we're seeing 0:15:49.640 --> 0:15:51.320 in some of the developed world, even if you think 0:15:51.320 --> 0:15:53.520 about big tech, right, what we're seeing in Europe, what 0:15:53.560 --> 0:15:56.640 we're seeing in the United States, right, exactly, except he's 0:15:56.680 --> 0:16:01.160 going after it in a far more peremptory, dracone in way, 0:16:01.320 --> 0:16:06.040 with very little, with very very little public consultation and 0:16:06.320 --> 0:16:10.480 certainly no media debate. This is top down re engineering, 0:16:10.640 --> 0:16:15.040 definitely not democracy from the bottom up. Joined the dots 0:16:15.080 --> 0:16:18.080 for us here, what is the link between what's going 0:16:18.120 --> 0:16:21.960 on with China's gambling crackdown an ever grand in the 0:16:21.960 --> 0:16:27.880 property market. So um, here's here's here's the link I think, 0:16:28.600 --> 0:16:34.080 which is this that in in re engineering Chinese society, 0:16:34.240 --> 0:16:39.120 he's got to also re engineer the economy. And the 0:16:39.160 --> 0:16:43.280 reason for that is that the big drivers of economic 0:16:43.320 --> 0:16:49.000 growth in China, most particularly the housing market, tend towards 0:16:49.480 --> 0:16:53.280 unequal outcomes. So if you were lucky enough to have 0:16:53.440 --> 0:16:57.440 bought property in one of the big Chinese cities twenty 0:16:57.520 --> 0:17:00.560 years ago, or actually anytime over the last twenty years, 0:17:00.600 --> 0:17:06.159 you would have doubled, traveled, quadruple, quintuple, uh your money. 0:17:06.920 --> 0:17:08.600 I know this for a fact. I bought a place 0:17:08.640 --> 0:17:11.119 in Beijing in two thousand and four and sold it 0:17:11.200 --> 0:17:15.080 two years ago and did very very well. Um, However, 0:17:15.640 --> 0:17:19.240 if you are now a young family in one of 0:17:19.280 --> 0:17:24.159 those large Chinese cities, um, you're probably uh not able 0:17:24.200 --> 0:17:27.840 to afford a place to live. Uh. And if you are, 0:17:28.520 --> 0:17:30.840 you don't want to have kids because you can't afford it. 0:17:30.880 --> 0:17:34.720 Then that's another big motivating factor for Gjim Ping. There's 0:17:34.760 --> 0:17:37.639 a demographic issue here as well. Well, it's so interesting 0:17:37.680 --> 0:17:40.040 in China, right, how it went from you know, one 0:17:40.119 --> 0:17:44.320 child policy to now encouraging right families to have more kids. Right, 0:17:44.359 --> 0:17:46.240 But who wants to have three kids? And you can't 0:17:46.240 --> 0:17:48.080 afford it, if you can't afford it, you can't afford 0:17:48.080 --> 0:17:50.280 the education, because like we're talking about San Francisco or 0:17:50.280 --> 0:17:51.960 New York or pick your city here in the United 0:17:52.000 --> 0:17:55.280 States to some extent, or indeed any big city now 0:17:55.600 --> 0:17:59.040 anywhere in the world. Well that's another part of it. 0:17:59.119 --> 0:18:00.960 And and and well, talk a bit more about China, but 0:18:01.000 --> 0:18:03.040 I do there's another story on the Bloomberg they just 0:18:03.040 --> 0:18:06.320 talked about how housing now is really a global problem 0:18:06.359 --> 0:18:08.800 where there are so many around the world who cannot 0:18:08.800 --> 0:18:11.480 afford to live in many cities in their country, and 0:18:11.480 --> 0:18:14.600 then you're seeing as a result, either hopefully policies change 0:18:14.760 --> 0:18:20.199 or upheavals or uprisings. Indeed, governments are falling as a result. 0:18:20.280 --> 0:18:23.240 We saw the Swedish government collapse earlier this year, and 0:18:23.520 --> 0:18:25.560 one of the reasons was that it tried to get 0:18:25.640 --> 0:18:30.560 rid of a cap on on rents. The Canadian election 0:18:30.960 --> 0:18:33.680 coming up later this year is being fought in part 0:18:34.040 --> 0:18:37.520 on the issue of housing. Justin Trudeau his promise that 0:18:37.560 --> 0:18:41.000 if he comes back into office, he'll play some moratorium 0:18:41.000 --> 0:18:45.080 of two years on foreign purchases of Canadian property, foreign 0:18:45.119 --> 0:18:49.280 purchases being a big driver of property brice increases in Canada. 0:18:49.680 --> 0:18:53.639 Um Andy, in terms of the news flow from China, 0:18:53.800 --> 0:18:56.600 is this just going to kind of continue where we're 0:18:56.600 --> 0:18:59.280 going to see more oversight as you said, as he's 0:18:59.680 --> 0:19:02.639 you know, remaking the economy, We're going to continue to 0:19:02.680 --> 0:19:05.159 see this spread even into other sectors. Are are we 0:19:05.240 --> 0:19:08.560 getting to the end of it? We're at the beginning 0:19:08.560 --> 0:19:13.560 of it, I said earlier, But jimping. The president is 0:19:13.600 --> 0:19:16.960 trying to re engineer Chinese society, and to do so, 0:19:17.080 --> 0:19:20.960 he's going to have to re engineer the economy. And 0:19:21.240 --> 0:19:24.800 is everybody on board with this in China. Uh, put 0:19:24.840 --> 0:19:27.240 it this way, Um, you're not going to find anybody 0:19:27.280 --> 0:19:31.119 who's standing up. It's going to say against Hi Jimping's 0:19:31.160 --> 0:19:37.560 plan to promote common prosperity. No, everybody in government regulatory 0:19:37.600 --> 0:19:41.399 authorities is on board. And the sin, of course is 0:19:41.440 --> 0:19:48.080 to under is to under interpret his instructions, not to 0:19:48.280 --> 0:19:53.000 overinterpret them. Hence you're seeing this really fierce, vicious regulate 0:19:53.119 --> 0:19:57.800 reaction against multiple industries. They've worked their way through digital 0:19:57.840 --> 0:20:03.920 platforms to fintech, a tech and now gambling. You paint 0:20:03.920 --> 0:20:07.919 this beautiful image in your newsletter of private company CEOs 0:20:07.960 --> 0:20:10.600 and the blackjack baccarat halls, the v I P rooms, 0:20:10.680 --> 0:20:14.320 rubbing shoulders with officials. That's where business gets done. So 0:20:14.640 --> 0:20:17.680 you know what is the conversation between the private sector 0:20:18.000 --> 0:20:20.600 and Jijing Peng. Is it open or is it simply 0:20:20.640 --> 0:20:28.520 one way traffic? Well, the conversation is hardly a dialogue 0:20:28.560 --> 0:20:32.119 of equals. This is these are solutions that are being 0:20:32.240 --> 0:20:38.240 imposed on whole swaths of the privately run economy. Um, 0:20:38.560 --> 0:20:44.280 and essentially you're there to learn your fate. And thinking 0:20:44.280 --> 0:20:46.679 about the gambling industry, you know what might happen to 0:20:46.720 --> 0:20:51.000 the casinos in Macau. Well, you know, if they're lucky, 0:20:51.160 --> 0:20:56.080 maybe they meet the same fate as the video gaming operators. 0:20:57.000 --> 0:21:01.080 Those guys are now being throttled by regulation, including only 0:21:01.119 --> 0:21:04.560 allowing kids to play online games for three hours a week. 0:21:04.920 --> 0:21:08.840 If they're unlucky, they end up like the home tutoring companies, 0:21:09.359 --> 0:21:13.600 which are closed down all together. There is no public 0:21:13.680 --> 0:21:20.760 consultation process in China overall, the public commentary right exactly. Well, 0:21:20.800 --> 0:21:23.680 what's interesting too is and I wonder, Andy, because as 0:21:23.720 --> 0:21:25.679 you say, if we look at a lot of the 0:21:25.720 --> 0:21:30.359 developed world, Europe is looking at the growth and dominance 0:21:30.760 --> 0:21:32.680 and control of big technology. We are too in the 0:21:32.800 --> 0:21:36.359 United States. Um, and we're looking at the inequalities in 0:21:36.359 --> 0:21:40.000 our society. So we're looking at the same thing. Obviously, 0:21:40.080 --> 0:21:43.400 China does it differently. But I do wonder if ultimately, 0:21:43.680 --> 0:21:45.480 I mean, China is so important in terms of the 0:21:45.480 --> 0:21:50.520 global economy, does it ultimately longer term create again and 0:21:50.600 --> 0:21:55.840 even more dynamic Chinese economy. Um, well, that would certainly 0:21:55.920 --> 0:22:01.840 be goal here right to get there. If indeed they 0:22:02.119 --> 0:22:05.240 can get there, there is going to be a huge 0:22:05.520 --> 0:22:08.359 amount of turbulence. Look at what's happening now in the 0:22:08.400 --> 0:22:12.879 real estate sector, where Chinese authorities seem ready now to 0:22:13.000 --> 0:22:17.680 countenance the collapse of their second largest real estate company 0:22:17.920 --> 0:22:21.320 ever Grand, all in the name of trying to make 0:22:21.359 --> 0:22:25.479 housing more affordable for the masses, not a speculative asset 0:22:25.560 --> 0:22:28.840 for the rich. Well, if that's if, if if he's 0:22:28.880 --> 0:22:32.879 serious about that, um he's going after a sector of 0:22:32.960 --> 0:22:38.399 the economy that counts for between and a third of 0:22:39.000 --> 0:22:42.760 g d P. It's a lot a sector in which 0:22:43.920 --> 0:22:50.680 Chinese people have invested of their assets. Nine homeownership ratio 0:22:51.119 --> 0:22:53.760 in China one of the highest ratios in the world. 0:22:53.800 --> 0:22:56.479 If you've had money, if you make money in China, uh, 0:22:56.680 --> 0:22:58.560 you don't put it in the stock market, which is 0:22:58.720 --> 0:23:02.639 pretty much a a casino in itself. You put it 0:23:02.640 --> 0:23:05.439 in you put it in real estate. And I think 0:23:05.480 --> 0:23:09.560 what people are underestimating here is the potential impact on 0:23:09.680 --> 0:23:16.240 consumer behavior if ever Grand, this real estate giant goes down, 0:23:16.359 --> 0:23:20.000 and if people perceive that the government really is ready 0:23:20.400 --> 0:23:24.720 to let real estate prices sink, what that does to 0:23:24.800 --> 0:23:28.679 consumer behavior and the wealth impact? The wealth impact, And 0:23:28.680 --> 0:23:31.680 don't forget that consumption in China is a very low 0:23:31.760 --> 0:23:37.119