Speaker 1: This is Bloomberg Business Week. I'm Karl Masser and I'm
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Speaker 1: been keeping a watch on shares of Beyond Meat because
Speaker 1: we've seen some selling pressure again today in fact at
Speaker 1: their lows down as much as nine percent or just
Speaker 1: shy of that still down about five percent as we speak,
Speaker 1: and the Stuck. If I take a look at what
Speaker 1: it's doing, it is down, Tim so far Ino, we
Speaker 1: got Dina Shanker with us. She's consumer reporter for Bloomberg News.
Speaker 1: She covers Beyond Meat and other foe meat companies for
Speaker 1: Bloomberg News. She wanted to get her on the program
Speaker 1: because she had a deep dive that came out yesterday
Speaker 1: morning into uh A, dirty conditions at a key plant.
Speaker 1: It's a facility in Pennsylvania, and it illustrates the alt
Speaker 1: meat makers ongoing difficulties. Dina Shanker joins us now via
Speaker 1: zoom from New York City. Dina, according to these reports,
Speaker 1: what was found at that plant in Pennsylvania, Hi, thank
Speaker 1: you guys so much for having me on UM. Basically,
Speaker 1: what we saw from photos and internal documents was a
Speaker 1: plant that was just not operating safely or um following
Speaker 1: basic h health and safety measures. UM. We saw a
Speaker 1: lot of mold, both on ingredient containers and on the walls.
Speaker 1: I mean, these pictures, Dina, are pretty shocking that are
Speaker 1: included in the piece. Yeah, I mean they are. They
Speaker 1: are because I don't think that any of us want
Speaker 1: to see a food plant that looks like this. UM.
Speaker 1: You know, there are things in these pictures that many
Speaker 1: of us might not even notice as bad practice. But UM,
Speaker 1: for example, you have a picture that shows, um, a
Speaker 1: trolley car turned over into a large funnel um type
Speaker 1: of shape of machine, and we don't we can look
Speaker 1: at that, we can say that that doesn't look right
Speaker 1: to me, we can't necessarily say why or exactly what's
Speaker 1: wrong with it. But um, the experts actually not only
Speaker 1: pointed out that which they said, um is dangerous for
Speaker 1: the people involved. They said it's contaminated or there's room
Speaker 1: for contamination, because you never want something with wheels on
Speaker 1: the floor to be UM that close to your food
Speaker 1: production services. But if you look at that picture, yeah, right, um,
Speaker 1: But if you look at that picture, you'll also see,
Speaker 1: UM to the left, there's a bucket on a machine.
Speaker 1: And that was actually a point. We don't even mention
Speaker 1: this in the story, but the experts also noticed that bucket. Um,
Speaker 1: it's cut off in the photo, and they said that
Speaker 1: bucket shouldn't be on a machine. And there's a hammer
Speaker 1: on a machine. They said, those things shouldn't be on
Speaker 1: those machines that they're supposed to be messy. And we
Speaker 1: got just for everybody's watching on YouTube quick take you
Speaker 1: can actually see what Dina is talking about. Do you know,
Speaker 1: I gotta say mold right like with it my basement,
Speaker 1: like it starts to freak it out, you freak out,
Speaker 1: and you just take care of it because it can
Speaker 1: be dangerous. But mold growth takes a while, right, So
Speaker 1: it's not like, oops, we just missed it. It It just happened.
Speaker 1: This stuff takes a while to develop, that's right. And
Speaker 1: we see the mold on ingredients containers, but we also
Speaker 1: see it on the wall. Um, I'm one photo on
Speaker 1: a wall and it's uh, that's exactly right. It doesn't
Speaker 1: mean that this one day, at this one moment in time,
Speaker 1: somebody happened to capture a bad situation. It means that
Speaker 1: that situation has been like that for a little while
Speaker 1: in order for that to happen. Do you know where
Speaker 1: did these photos come from? From a former employee who
Speaker 1: worked in the plant and was really concerned about the
Speaker 1: conditions in it and what it beyond me tell you.
Speaker 1: In response to inquiries related to these photos and what
Speaker 1: it showed at allegedly happening at the plant, UM, they
Speaker 1: said that the Pennsylvania Department of Agriculture UM found no
Speaker 1: instant says of nonconformance with regulations during their inspection. They
Speaker 1: said that they go above and beyond industry and regulatory
Speaker 1: standards of their food safety protocol. They mentioned audits which
Speaker 1: gives them very high ratings. They did not comment specifically
Speaker 1: on the documents or the conditions we described to them
Speaker 1: from the photos. One thing that emerged to me in
Speaker 1: terms of reading your piece was sort of this pattern
Speaker 1: of I don't I don't want to ascribe intent to this,
Speaker 1: but I was pretty surprised to see that basic paperwork
Speaker 1: and fees hadn't been paid to the state, like a
Speaker 1: thirty dollar fee I recall, Yeah, yeah, the thirty five
Speaker 1: registration fee. That's right. What does that illustrate to you
Speaker 1: that they're they're not following basic good practices? But to me,
Speaker 1: I wonder who's in charge and where are they? And um,
Speaker 1: why is this such a pervasive problem in this plant?
Speaker 1: I mean, I have a lot more photos that we
Speaker 1: didn't include, so it goes way beyond um. And you
Speaker 1: know four four aograph and you point out for anybody
Speaker 1: who's listening at this point. Internal reports also show that
Speaker 1: some contaminated products made it through to consumers. So ultimately
Speaker 1: did a lot get out to consumers? What do we know?
Speaker 1: And I am curious when it comes to beyond meat facilities,
Speaker 1: this Pennsylvania one, how important is it in terms of
Speaker 1: overall production? So, um, I'll in order in terms of
Speaker 1: what reached consumers, what we know is that from the
Speaker 1: documents that we're sharing UM that UH some would in
Speaker 1: two UH separate A and W burgers at two different
Speaker 1: restaurants was found by consumers UM and UH that a
Speaker 1: metal link was found in a bag of Duncan sausage patties. UM.
Speaker 1: And there's also there was recently a recall from Costco
Speaker 1: in Canada because of wood found in the products. UM.
Speaker 1: That's what we have documents of from from reporting this story. UM.
Speaker 1: In terms of the role of this plant plays in
Speaker 1: the company, it's actually a very important one because the
Speaker 1: company doesn't have a lot of its own real estate
Speaker 1: in the US. They have UM two sister sites in Columbia,
Speaker 1: Missouri and this plant, and the plan had been UM
Speaker 1: for this plant to be upgraded and expanded. UM. The
Speaker 1: company had been planning on doubling the size of this
Speaker 1: plant UM as recently as this summer. There were expectations
Speaker 1: that that would happen. So this was certainly an important
Speaker 1: I mean, this is an important location for this company.
Speaker 1: Most of its manufacturing in the US is done by
Speaker 1: co manufacturers. They make their their raw material UM sort
Speaker 1: of like their secret sauce kind of ingredients at their
Speaker 1: Columbia Facilities, Dennis Shankar Consumer Report at Bloomberg News. Check
Speaker 1: out more just head to Bloomberg dot com. Thank you, Dina.
Speaker 1: This is Bloomberg. You're listening to Bloomberg Business Week with
Speaker 1: Carol Masser and Bloomberg Quick Takes. Tim Stinovic on Bloomberg Radio.
Speaker 1: I gotta tell you the conversations we are having behind
Speaker 1: the scenes right now when it comes to all things crypto,
Speaker 1: and I feel like crypto is this bucket where we
Speaker 1: throw everything in and not all crypto elements are the same,
Speaker 1: but it's just trying to stay on top of it
Speaker 1: and makes sense of it. We should have some of
Speaker 1: those conversations behind the scenes have we should have them
Speaker 1: on air. So let's do that. Let's bring in Katie Gryfel,
Speaker 1: Blomberg New Senior Markets reporter, co host of Crypto I
Speaker 1: r L on Bloomberg Quicktake and Bloomberg TV. She is
Speaker 1: here in studio and we know one of the big
Speaker 1: stories today was what the bankruptcy here and getting underway
Speaker 1: for f t X first day motions. And what's unusual
Speaker 1: is that it took this long to have this hearing
Speaker 1: usually happens so much quicker. I mean, when did f
Speaker 1: t X file for bankruptcy. It feels like a literal
Speaker 1: year ago, two weeks ago, so an unusual amount of
Speaker 1: time there. I mean, there was a lot sort through.
Speaker 1: It seems like one of the key takeaways was the
Speaker 1: record keeping process, which we already knew it was pretty lax.
Speaker 1: I mean John j Right, the third uh was the
Speaker 1: new CEO at f t X, of course, was involved
Speaker 1: in the liquidation of Enron. He I mean, was pretty
Speaker 1: blunt that it was pretty much non existent. But that
Speaker 1: was a consistent theme today too, that there's really not
Speaker 1: a lot of records to go by, and when you're
Speaker 1: trying to sort out more than a million creditors, that's
Speaker 1: going to be a very long process. Uh, And we do,
Speaker 1: I mean, someone knows who the top fifty creditors are.
Speaker 1: We don't know who they are because the names were redacted.
Speaker 1: And that's something that was discussed uh a lot today
Speaker 1: as well. The ft X is set to me back
Speaker 1: in court, but not until January. So what happens between
Speaker 1: now and then, Katie, Well, there is supposed to be
Speaker 1: a second hearing on the issue of the fact that
Speaker 1: the names were redacted on December six teh Tim and
Speaker 1: I were talking about this yesterday with Stephen Church. Hopefully
Speaker 1: you weren't listening, Carol because you were off, but it's
Speaker 1: really you were still really unusual that the names would
Speaker 1: be redacted in this case. At least two groups of
Speaker 1: of the creditors sent lawyers to this hearing to support
Speaker 1: the request to keep their identity secret for now. One
Speaker 1: of those groups was representing members who were among the
Speaker 1: top fifty biggest. So the judge overruled objections from US
Speaker 1: trust the US Trustee who is requesting that we you know,
Speaker 1: know who these names are for now, so they're going
Speaker 1: to remain secret. I mean this to me then speaks
Speaker 1: to the contagion impact, right, like, yeah, this is what
Speaker 1: we're trying to figure out how far this goes? Certainly
Speaker 1: within the crypto universe. It doesn't feel like it's hit
Speaker 1: certainly the rest of the asset class that is kind
Speaker 1: of our world on a general, a general basis. But
Speaker 1: I mean, that's what do we know about how much
Speaker 1: further this goes? Well, that's one of the reasons why
Speaker 1: people want to know who are the top creditors here?
Speaker 1: I mean, who had the most exposure we know some
Speaker 1: of you know who might be on the list by
Speaker 1: their own admission, for example, Gemini, Galaxy, a few other
Speaker 1: names have come out and talked about their own exposure
Speaker 1: to f t X. But when you're trying to map
Speaker 1: where to look for the contagion, you would want to
Speaker 1: see this list. What about the names that are out
Speaker 1: there that feel like we're going to talk to Kathy
Speaker 1: wood about this, and she's been buying coin Base, she's
Speaker 1: been buying grace Scale. I think there are questions about,
Speaker 1: you know, are these untouched or not. It's a great question.
Speaker 1: Coin based coin bas is an interesting one because coin Base,
Speaker 1: I mean, it's a u S publicly listed company. It
Speaker 1: falls under the purview of the SEC. From everything that
Speaker 1: we can see right now, it was untouched by this
Speaker 1: FTX blow up. But at the same time, I mean,
Speaker 1: the stock has just been obliterated, which is probably why
Speaker 1: Cathy is looking into it. She likes to buy the discounts.
Speaker 1: But if you think about the future of the crypto industry,
Speaker 1: it feels like there's been a lot of love lost
Speaker 1: for centralized exchanges such as coin Base. You've seen a
Speaker 1: lot of movement into decentralized exchanges back into decentralized finance,
Speaker 1: into these cold wallets. So if that's the future for crypto,
Speaker 1: this sort of like deglobalization of the industry, I don't
Speaker 1: know how coin base fits in there, right. I want
Speaker 1: to go back to the exposure question, Katie, because why
Speaker 1: are we hearing now that companies are struggling as a
Speaker 1: result of the contagion from f t X, when a
Speaker 1: mere two weeks ago they were kind of talking about, Oh,
Speaker 1: we'll be fine. I think it had to work its
Speaker 1: way through the daisy chain, like they were so sorry
Speaker 1: to interrupted. Does that mean that they weren't directly connected
Speaker 1: to f t X, but a fall in digital asset
Speaker 1: prices has led them to have some sort of issue.
Speaker 1: I mean, I'm sure that that's the case. Obviously the
Speaker 1: lines have gone down as a result, not as much
Speaker 1: as you might have expected if you're talking about the
Speaker 1: present bitcoin um, but that is one of the forms
Speaker 1: that contagion can take. Maybe it's not a direct impact.
Speaker 1: Maybe you weren't a counterparty to f t X, but
Speaker 1: you're probably counterparty to someone who was a counterparty. And
Speaker 1: something that I've been thinking a lot about the crypto
Speaker 1: industry in the last few days, is that so many
Speaker 1: functions are concentrated in these one companies. It's not unusual
Speaker 1: for a crypto company to be in exchange, a broker,
Speaker 1: a custodian. The list goes on. Those are all separate
Speaker 1: functions and trad five. So go to Digital Currency Group,
Speaker 1: Barry silver It's like, you know, so they right UM,
Speaker 1: gray Scale Bitcoin to trust is. I think they're the
Speaker 1: largest shareholder in that UM. I think they own about
Speaker 1: ten percent of gray Scale. And then you think about
Speaker 1: they also own the cryptobroker Genesis right, which was affiliated
Speaker 1: with Alameda, And I guess, like, what do we know
Speaker 1: about Silburton his world and the tentacles and where they go?
Speaker 1: We I would love to know more about. I'm not
Speaker 1: putting my fingers and anything's wrong, but I just feel
Speaker 1: like it's once again that equation akin to what we
Speaker 1: saw with that. And we know that Genesis, which again
Speaker 1: falls under his empire, is searching for fresh funding right now.
Speaker 1: Ber News had a fantastic scoop yesterday that they need
Speaker 1: fresh funding or bankruptcies in the offing. Barry Silbert also
Speaker 1: owns gray Scale. Like you said, the DCG Digital Currency
Speaker 1: Group is the largest shareholder in the Bitcoin Trust. So
Speaker 1: even though gray scale from all that we know, is
Speaker 1: fine here, their largest shareholder might come under some pressure
Speaker 1: of Genesis, which is also in the empire false bankruptcy. Okay,
Speaker 1: so what could be the next hues to drop in
Speaker 1: thirty seconds? I would watch Genesis. That's what everyone's looking
Speaker 1: for now. I mean, it's hard to overstate Barry Silbert's reach. Yeah,
Speaker 1: it is interesting these these singular individuals, right who we
Speaker 1: look to kind of as a north star. And again
Speaker 1: I'm not saying anybody, I mean, at least Barry Silbert.
Speaker 1: We don't know anything that has gone wrong, but it's
Speaker 1: just interesting these singular individuals and how wide and vast
Speaker 1: their reach was in different verticals within the crypto world. Exactly.
Speaker 1: So Okay, creedy, Katie, thank you. Sorry, it's just you
Speaker 1: know that kind of I've been called worse, Katie grypheld
Speaker 1: Bloomberg New Senior Markets report of co host of Crypto
Speaker 1: I R. L and our go to when it comes
Speaker 1: to the crypto universe, joining us in studio. This is Bloomberg.
Speaker 1: This is Bloomberg Business Week with Carol Masser and Bloomberg
Speaker 1: Quick Takes, Tim Stenovic on Bloomberg Radio. There's a lot
Speaker 1: in the spotlight today, Crypto of course, Twitter and Ellen.
Speaker 1: That's a given. And then there is always, I feel like,
Speaker 1: in the background as of late, the private equity where
Speaker 1: which is no doubt about it in the sights of
Speaker 1: Washington and an array of regulators. Leon Island writes all
Speaker 1: about it. She's anti trust reporter for Bloomberg Near. She
Speaker 1: joins us right now from our studio in Washington. Check
Speaker 1: out her story. It's on the Bloomberg terminal and at
Speaker 1: Bloomberg dot com. Slash A business Week. Joe Weber is
Speaker 1: the editor of Bloomberg Business Week. He's with us right
Speaker 1: now in the Bloomberg Interactive Brokers studio. Jolia wrote this
Speaker 1: story with Todd Shields as well. And I gotta tell you, Um,
Speaker 1: I thought, you know, with carried interest being safe after
Speaker 1: almost dying a few months ago thanks to a couple
Speaker 1: of senators on the Democratic side, Um, what else is
Speaker 1: in the crosshairs of of Oh, maybe everything about it? Um,
Speaker 1: everything about yeah, yeah exactly so, So that's right. I
Speaker 1: think carried interest has been the thing that people who
Speaker 1: have long associated with the private equity industry. UM and
Speaker 1: it has come up many times, and it kind of
Speaker 1: gets kicked around and then kick kicked down. And what's
Speaker 1: interesting now is about the Biden administration and regulators throughout
Speaker 1: agencies that are starting to kind of like pinch these
Speaker 1: places that private equity doesn't like to get pinched, and
Speaker 1: that has It's not like a direct thing. Biden isn't
Speaker 1: quoted saying that he's coming for the industry, but it's
Speaker 1: sort if you read between the lines, there's clearly something
Speaker 1: happening here. So so Leah tell us more. Yeah, So
Speaker 1: there are quite a few regulators here in Washington who
Speaker 1: sort of set their sights on private equity. The SEC
Speaker 1: has proposed a new rules about disclosure UM and the
Speaker 1: antitrust regulators, that's the Justice Department and the Federal Trade
Speaker 1: Commission have both made some noise about how they have
Speaker 1: concerns here. The Justice Department opened the surprise probe a
Speaker 1: month or so ago into what are called the interlocking
Speaker 1: Directorate's that's where UM a company or a person sits
Speaker 1: on the board of two competitors. And after the analysis probe,
Speaker 1: tom A Brava directors stepped down from two different public companies.
Speaker 1: They've also sent out, you know, notes to a couple
Speaker 1: other major private equity folks like Apollo and Blackstone, raising
Speaker 1: some concerns about some of their holdings. And then the
Speaker 1: sort of centerpiece of our story was about this deal
Speaker 1: between Standard General, which is a hedge fund, and tag Now,
Speaker 1: which is the broadcast stations that were spun out of
Speaker 1: gannett Um. But the sort of interesting piece about the
Speaker 1: steal is that it's backed by Apollo, and so that
Speaker 1: aspect has sort of put it under the microscope with
Speaker 1: both telecom regulators and the Justice Department, who need to
Speaker 1: clear the deal before I can go through. So Leah,
Speaker 1: talk a little bit about the idea of transparency here,
Speaker 1: because this is an industry that you know inherently as private, right, Well,
Speaker 1: I was gonna say, they don't call it private equity exactly.
Speaker 1: So I'm wondering what you're hearing from the industry because
Speaker 1: you quote some folks who represent the industry about what
Speaker 1: they think about this, and look, there's politics here too,
Speaker 1: and you think of prominent donors as well. Yet they're
Speaker 1: not that happy about this, I'll put it that way.
Speaker 1: You know, they think that they're doing good, they're investing
Speaker 1: in lots of companies. Um, none of these, as Joe said,
Speaker 1: none of these are sort of direct attacks. You're not
Speaker 1: hearing Joe Biden say anything about private equity. But these
Speaker 1: are sort of his people within the administration giving them
Speaker 1: a little bit of a poke at some of the
Speaker 1: things that they've done for a long period of time.
Speaker 1: I mean, sitting on the boards of various companies is
Speaker 1: something that has gone on for for quite a while.
Speaker 1: But um, the Justice Department noted, you know, this law
Speaker 1: has existed since nineteen fourteen. Just because you guys have
Speaker 1: done it for the past couple of decades doesn't necessarily
Speaker 1: mean it's legal. Leo, what's the what's the truth about
Speaker 1: private equity? Or is it a little bit of everything?
Speaker 1: Meaning that they sometimes come in provide the funding when
Speaker 1: others don't want to touch something. Sometimes it's distressed assets
Speaker 1: or what have you. The other flip side is, you know,
Speaker 1: a lot of cost cutting, a quick way of like
Speaker 1: within a what a two or three year a little
Speaker 1: bit of a little bit of debt, you know, and
Speaker 1: spit it out and make some money. So what's the
Speaker 1: truth when it comes to private equity? I mean, that's
Speaker 1: a little bit of a complicated question. I'll just say
Speaker 1: that the ones that um the regulators are concerned about,
Speaker 1: they say, you know, there's not one size fits all here.
Speaker 1: There there are some some good things that private equity
Speaker 1: can do, but the ones that really raise their concerns
Speaker 1: or sort of what we might call a strip and flip,
Speaker 1: you know, where you come in, you load it down
Speaker 1: with dad, and then you sell it off and it's
Speaker 1: not going to do as well. The other ones that
Speaker 1: they're really concerned with are are roll ups, right, So
Speaker 1: you might buy one company and then you start adding
Speaker 1: on more and more and more companies, and some of
Speaker 1: these are small, so it might not have come to
Speaker 1: the attention of regulators that they're sort of amassing this
Speaker 1: dominant player in the market. Okay, so what are some
Speaker 1: of the latest volleys because and talk cut through the
Speaker 1: agencies that are kind of nipping here and which ones
Speaker 1: are you guys watching in DC? Yeah, so I primarily
Speaker 1: look focus a lot on the Justice Department and the
Speaker 1: Federal Trade Commission. The Justice Department is the one that's
Speaker 1: doing this probe into interlocking directorate's as they're called, and
Speaker 1: also it's looking at the Standard General TEGNA merger the
Speaker 1: FTC is a consumer prottection in anti trust UM regulator eight.
Speaker 1: UM has raised a little bit of concerns about private
Speaker 1: equity and the healthcare space. You know, there have been
Speaker 1: some articles in the press about how maybe when private
Speaker 1: equity invests in healthcare that the health outcomes aren't as good. UM.
Speaker 1: This is looking particularly at things like nursing homes. UM
Speaker 1: the FTC actually had a settlement earlier this year with
Speaker 1: um J a b UM over it rolling up a
Speaker 1: bunch of emergency veterinary clinics. They were concerned that they
Speaker 1: had UM sort of bought three different emergency bet clinics
Speaker 1: rolled them up into one, and maybe that was increasing prices.
Speaker 1: When you know, your dog accidentally swallows your shoe or something,
Speaker 1: so uh, you know, these are the sort of things
Speaker 1: you're speaking from experience, Jill Alia, before we let you go,
Speaker 1: I'm curious how this is rippling into fundraising, And it's
Speaker 1: probably difficult to make a connection at this point because
Speaker 1: this stuff kind of takes years to work through a system.
Speaker 1: But when you talk to your sources about going out
Speaker 1: and raising money from LPs, what are gps telling you
Speaker 1: about whether or not it's more difficult because of potential
Speaker 1: regulatory scrutiny. I mean, that's definitely something that you have
Speaker 1: to pay attention to now, you know, this is this
Speaker 1: is the sort of thing that has to be thought
Speaker 1: about when you're doing a deal, whether the the review
Speaker 1: might be extended. In the standard General Tegna case, they
Speaker 1: had hoped that this deal would get review within nine months,
Speaker 1: and they had added this provision called ticking fees. So
Speaker 1: the longer the review takes, the more money they're actually
Speaker 1: going to have to pay to Techno shareholders. So they're
Speaker 1: not that happy about the fact that regulators are lengthening
Speaker 1: this deal since it means that they're going to have
Speaker 1: to pay more. I'm really curious what's going to be
Speaker 1: the next turn of the screw that that is going
Speaker 1: to make private equity you know, call their call their
Speaker 1: local lobbyists. Well, I mean, the Justice Department is continuing
Speaker 1: to investigate the Interlocking Directorate's issue and also, you know,
Speaker 1: just whether having private equity owners is changing the incentives
Speaker 1: of UM some companies. Um I we're sort of expecting
Speaker 1: maybe a big private equity deal block maybe in the
Speaker 1: next year UM where they'll sort of make this point
Speaker 1: either at the d J or the FTC. Alright, certainly. Um,
Speaker 1: a relevant story and something that we've been talking about
Speaker 1: a lot here. I feel like on business Week on
Speaker 1: a regular basis. Um, Leah, thank you so much. Leon Island,
Speaker 1: she is anti trust her porter at Bloomberg News and
Speaker 1: are not anyone studio in Washington, d C. Check out
Speaker 1: this story in the current issue of Bloomberg Business Week.
Speaker 1: It can also find it on the Bloomberg and at
Speaker 1: Bloomberg dot com slash business Week are thanks to Jill Webber,
Speaker 1: editor of Bloomberg Business Week. Here in studio, roam a journal.
Speaker 1: Yeah but you let me drive? No, no, no no, I
Speaker 1: want a drive. It's a good question. Drive. This is
Speaker 1: the drive to the Globe music Well Dawn radio. All right,
Speaker 1: just about ten minutes left in today's trading session. We're
Speaker 1: seeing somebody once again into the close. I feel like
Speaker 1: a broken record because I feel like over the last
Speaker 1: week or so, we've seen that a few times. We're
Speaker 1: now pretty much at our best levels of this date.
Speaker 1: Interestingly enough, on the S and p F I found
Speaker 1: it over the last five days, Carol, we're up only
Speaker 1: two tenths of one percent. Yeah, so right, so you
Speaker 1: know it's been a little more perspective. Yeah, let's get
Speaker 1: into it with Asha Meta, founder and chief investment officer
Speaker 1: at Global Delta Capital, also the author of Power of Capital,
Speaker 1: An adventure capitalist Journey to be Sustainable Future, joining us
Speaker 1: via zoom this afternoon. Asha, how are you hi. I'm
Speaker 1: delighted to be with you. It's good to have you
Speaker 1: with us this afternoon. I just want to start with
Speaker 1: the markets and then get a little bit into your book,
Speaker 1: because this is some really interesting stuff. UM, how would
Speaker 1: you describe where we are right now in terms of
Speaker 1: rate hikes, a tightening cycle, and when we're gonna be
Speaker 1: on the other side of these that's there. This is
Speaker 1: a tough question to begin with, UM, and I think
Speaker 1: we just heard in some of the former commentary about
Speaker 1: the rate cycle continuing, perhaps at a lower pace. Um.
Speaker 1: What it speaks to is in inflation that hasn't been
Speaker 1: experienced in a generation here in the developed markets. Thanks
Speaker 1: for the nice intro. UM. I manage a strategy that
Speaker 1: focuses on emerging markets. So when I look at where
Speaker 1: we are with the markets more broadly, at the moment,
Speaker 1: I'm seeing investors looking around for growth and thinking about
Speaker 1: how are we going to capture growth like we've seen
Speaker 1: over the last decade and the years to come, with
Speaker 1: inflation being where it is, with the rates rising as
Speaker 1: they are and continuing ahead, UM investors who are looking
Speaker 1: for growth are starting to think beyond UM the single country,
Speaker 1: single sector concentrated approach that's been successful over the last decade.
Speaker 1: And again I'm as an emerging markets investor, I'm starting
Speaker 1: to feel UM quite optimistic about the opportunity ahead for
Speaker 1: markets outside of the US. After you also think about
Speaker 1: you know, emerging markets and are the intersection of emerging
Speaker 1: markets in fintech and I just think about you know, UH,
Speaker 1: and you think about innovation disruption, something we're gonna talk
Speaker 1: a lot about with Cathy Wood UH in just about
Speaker 1: ten fifteen minutes time. But what's interesting too, and I
Speaker 1: think with the backdrop of f t X and Sam
Speaker 1: bankment freed, like, how are you thinking about that and
Speaker 1: the impact UM that they meant that might have as
Speaker 1: as kind of an investing class going forward. I think
Speaker 1: it's one of the most critical themes and things for
Speaker 1: introducing my book Power of Capital. It's an adventure capitalist
Speaker 1: journey in which I introduced three mega themes that I
Speaker 1: see reshaping the growth globe. One of them is what
Speaker 1: we just talked about, the new global paradigm, the rise
Speaker 1: of the emerging markets and this new sort of growth class.
Speaker 1: Another one is around sustainable investing. But a critical theme
Speaker 1: is the one you just mentioned technology. The reality is
Speaker 1: that the vast majority of the world's population today carries
Speaker 1: the supercomputer in their pockets and in the emerging markets
Speaker 1: in particular, I see necessity is the mother of invention. UM,
Speaker 1: an asset class that has had less access to liquidity
Speaker 1: today has a very strong young demographic, which we all
Speaker 1: know is very quick to pick up technology. Some of
Speaker 1: the most exciting and scalable technologies across the globe are
Speaker 1: coming from Africa, where mobile money was born, in China,
Speaker 1: where clean technology is is hitting scale um and India,
Speaker 1: where some of the strongest technology universities in the world reside.
Speaker 1: So I couldn't agree more. Technology is as a critical
Speaker 1: mega theme, and there's lots of opportunity, not just in
Speaker 1: the sector, but in the context of vertical integration. It
Speaker 1: transforms every sector from finance to consumer to retail. Well,
Speaker 1: help concentrate it a little bitter focus it a little
Speaker 1: bit for our audience, and I know you can't necessarily
Speaker 1: give picks, but can you get more specific with what
Speaker 1: you're bullish on and why? Yeah? So, so I just
Speaker 1: alluded to some of it and let me I'll spend
Speaker 1: a couple more moments on it. Mobile money thin tech,
Speaker 1: which he just brought up. I think is one of
Speaker 1: those critical themes that's reshaping the opportunity across developed markets.
Speaker 1: We're all experiencing the rise of mobile money, the ability
Speaker 1: to paying this from crypto. I do separate it from crypto,
Speaker 1: but um you know, I do look at digital currencies
Speaker 1: as another important um uh innovation that again, it has
Speaker 1: the opportunity to disrupt the opportunities ahead in terms of investing.
Speaker 1: You know, I think of digital money in terms of
Speaker 1: new sectors, the ability to invest in small caps that
Speaker 1: are you know, creating new forms of currency, but even
Speaker 1: in large cap financials within emerging markets in particular, you know,
Speaker 1: but with digital money, they're able to access a much
Speaker 1: larger demographic and again that creates opportunity, opportunity for revenue
Speaker 1: expansion across all as spects of the cap spectrum, an
Speaker 1: opportunity for earnings expansion because the reality is technology not
Speaker 1: not particularly capital intensive. Actually, I do want to just
Speaker 1: you know, did you have any exposure to the collapse
Speaker 1: of f t X in particular or any of the fallout? Thankfully,
Speaker 1: cryptos an area that that I have limited exposure. I invested,
Speaker 1: like I said, an emerging market and emerging markets specifically
Speaker 1: and equities within that. Okay, good, Good to understand that. Okay,
Speaker 1: So can you talk about different regions? I mean, I
Speaker 1: know you mentioned India. UM. I want to specifically focus
Speaker 1: on China though, because we've been talking a lot in
Speaker 1: the last few days about the reopening in China versus
Speaker 1: or I should say lack thereof, is the nation continues
Speaker 1: to at least talk about tens of thousands of cases
Speaker 1: that it's seen, uh, and report the first deaths over
Speaker 1: the weekend that we've seen in months in certain cities. UM.
Speaker 1: Why are what are what is your interpretation of what's
Speaker 1: happening in China? Is an investable right now? Uh? China
Speaker 1: is a large market probably UM, not surprising to your
Speaker 1: sophisticated audience, UM, but often a surprising to investors to
Speaker 1: recognize that China has the largest equity market in the
Speaker 1: world by liquidity. UM. Well known that China is the
Speaker 1: geopolitical powerhouse UM and economically UM, really one of the
Speaker 1: superpowers today. Yes. Absolutely. With COVID the China growth story
Speaker 1: became a little bit more blemished. UM, but we're starting
Speaker 1: to see the opportunity for China even with just a
Speaker 1: few comments that came from Presidency earlier this month, UM,
Speaker 1: the Chinese market is up more than twenty percent year
Speaker 1: to date, with a lot of volatility embedded within that.
Speaker 1: To your point on rising COVID numbers, I UM, perhaps,
Speaker 1: like you, am very bullish that when China does reopen,
Speaker 1: that it has the opportunity not only to allow the
Speaker 1: Chinese markets to bounce back even stronger, but have downstream
Speaker 1: effects where the rest of Asia is likely to benefit
Speaker 1: from a China reopening theme and UM and the globe
Speaker 1: broadly again, with inflation being where it is, to have
Speaker 1: China supply chain back on that can have a massive
Speaker 1: deflationary effect that the whole globe is hungry for. Right.
Speaker 1: But I expect a bumpy ride as we've seen in
Speaker 1: Remember I was gonna say many would argue that it
Speaker 1: will continue to be a bumpy ride, as it feels
Speaker 1: like sometimes policies coming out of China are one thing
Speaker 1: one day and another uh the following day. Asha, Thank
Speaker 1: you so much, Asha Meta, founder, chief investment officer of
Speaker 1: Global Delta Capital, her book Power of Capital and Adventure
Speaker 1: Capitalist Journey to a Sustainable Future. Thanks for listening to
Speaker 1: Bloomberg Business Week. Download the podcast on iTunes, SoundCloud, or
Speaker 1: Bloomberg dot com. You can also listen to our radio
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