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Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.

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Speaker 2: Hello and welcome to another episode of the All Thoughts podcast.

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Speaker 2: I'm Tracy Alloway.

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Speaker 3: And I'm Joe Wisenthal.

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Speaker 2: Joe, Obviously, there's a lot going on right now in

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Speaker 2: the Gulf. One of the things that's been happening is

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Speaker 2: that Iran, of course, has been sending drones across the

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Speaker 2: sea and over to the UAE and hitting various energy

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Speaker 2: infrastructure assets. But it's also been hitting some non energy

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Speaker 2: infrastructure assets such as hotels, you know, consulates, residences.

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Speaker 3: Right of course, you know we've seen, for example, the

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Speaker 3: various strikes. We're going to talk about Dubai specifically in

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Speaker 3: this episode. The interesting thing about Dubai, as we know

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Speaker 3: is there's been a lot of people who've moved there,

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Speaker 3: lots and lots of money, to say the least. But

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Speaker 3: part of the appeal there is here's an island of stability,

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Speaker 3: not just an island. And this is what the part

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Speaker 3: that enters me not technically an island, not technically an island,

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Speaker 3: and not just an island of stability. Within the context

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Speaker 3: of the Middle East. There is this growing perception all

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Speaker 3: around the world, particularly in rich countries where people don't

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Speaker 3: like what's going on with taxes, where they don't like

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Speaker 3: feel safe about the trajectory of politics in these countries,

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Speaker 3: et cetera. This sort of ongoing feeling of deterioration of

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Speaker 3: various flavors where they're from. And it's like, you know what,

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Speaker 3: I want to live in a country that has low crime,

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Speaker 3: a high level of stability, and sort of you know,

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Speaker 3: to be crude, escape the failing West. Exit as they say,

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Speaker 3: in sort of the idea of exit, loyalty and voice

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Speaker 3: and so forth.

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Speaker 4: Right.

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Speaker 2: So this is really interesting because in addition to styling

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Speaker 2: itself as this sort of island proverbial island of stability,

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Speaker 2: that's true, but they've also styled themselves as and I'm

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Speaker 2: stealing this from the guests that I will introduce in

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Speaker 2: just a minute or two, but they've styled themselves as

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Speaker 2: the capital of capital. Right. So, here is this region

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Speaker 2: that has an enormous amount of money from oil wealth,

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Speaker 2: and a lot of that money has been flowing into

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Speaker 2: not just real estate in the region itself, but real

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Speaker 2: estate externally in the West. We know that there are

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Speaker 2: big sovereign wealth funds in the Middle East and they

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Speaker 2: invest in all sorts of things. Lately, there's been a

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Speaker 2: lot of private debt investment, which is an interesting one

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Speaker 2: given the concerns around private lending at the moment. They've

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Speaker 2: invested in famously US treasuries. Tech stocks like the UAE

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Speaker 2: Saudi Arabia are huge, huge forces when it comes to

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Speaker 2: tech valuations at the moment. And so when you kind

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Speaker 2: of start connecting all of these things together, you have

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Speaker 2: to ask what does the situation in Iran actually mean,

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Speaker 2: not just for the idea of Dubai and Abu Dhabi

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Speaker 2: as this sort of expat paradise, but also as this

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Speaker 2: locus of an enormous amount of money that tends to

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Speaker 2: flow around.

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Speaker 3: The world absolutely and again like this is a place

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Speaker 3: where those with means, those with like lots of money

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Speaker 3: are feeling like this is this is arguably the future.

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Speaker 3: This is where I want to set up shop. Ray

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Speaker 3: Zalio has a family office that's in the UAE and

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Speaker 3: so forth. And you know, historically there have been these places,

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Speaker 3: these places where capital wants to be either have a

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Speaker 3: literal or sort of figurative footprint. Switzerland of course long

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Speaker 3: time in that category. Singapore perhaps similar, but you have

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Speaker 3: people in the West. You have a lot of people

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Speaker 3: in the UK and you're like, you know what, this

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Speaker 3: is where I'm going. This is my bet on the future, right,

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Speaker 3: I'm betting my future, the future of my money, the

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Speaker 3: future of my business somehow to be domiciled figuratively or

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Speaker 3: literally in Dubai, the UAE, et cetera.

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Speaker 2: There's also something that the UAE in particular has done,

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Speaker 2: which is it's achieved this sort of diplomatic or strategic ambiguity. Yeah,

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Speaker 2: I guess you could say where it's a place where

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Speaker 2: everyone from the US to Russia and to some extent

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Speaker 2: Iran can do business right. So there's a big question

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Speaker 2: over whether that continues at all. Anyway, we do, in

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Speaker 2: fact have the perfect guest. I actually think this is

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Speaker 2: a really good way to look at the sort of

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Speaker 2: interconnection of global capital and some of the gray market

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Speaker 2: stuff that happens in the UAE is through property and

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Speaker 2: commercial property in particular.

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Speaker 3: Totally, And you know, I just want to say, this

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Speaker 3: is not the first time, you know, we've talked about

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Speaker 3: the UA. Certainly we've talked about the golf, but it's

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Speaker 3: even prior to the last few weeks. In my mind,

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Speaker 3: I've thought I want to do more on this topic,

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Speaker 3: specifically in England. It's a very big deal. It's a

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Speaker 3: very big part of the sort of news and politics.

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Speaker 3: How many of their wealthy have left over the years

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Speaker 3: to go to the UAE and so forth. I wonder

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Speaker 3: to some extent the UAE. And I'm not the first

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Speaker 3: person to make this observation, but like the you know,

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Speaker 3: if you imagine this place with an extraordinary amount of

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Speaker 3: abundant natural resources, et cetera, a world in which there

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Speaker 3: is an extreme and it makes a miracle look very

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Speaker 3: pale in comparison, an extreme gap between the haves and

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Speaker 3: the have nots, et cetera. Sometimes I think about, like,

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Speaker 3: you know, is the future of the world? Essentially, do

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Speaker 3: buy a five where you have this very tiny slice

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Speaker 3: of people who are just insanely wealthy kind of you know,

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Speaker 3: to use the popular parlance, a permanent underclass within the

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Speaker 3: same thing, a place where there a lot of these

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Speaker 3: successful people are like something you talk a lot about,

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Speaker 3: which is is the future of the economy, just like

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Speaker 3: people who look really good and so forth. No for real, Yeah,

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Speaker 3: and you know, we know that it's a home to

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Speaker 3: a lot of influencer is taking photos in front of

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Speaker 3: iconic hotels on man made beaches, et cetera. I have

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Speaker 3: this feeling that there is a version of the world

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Speaker 3: that looks like the UAE, for better or worse. So

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Speaker 3: I've just been thinking, both literally and sort of metaphorically,

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Speaker 3: we need to understand these dynamics of the UAE better.

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Speaker 2: It's funny because when I was an Abu Dhabi and

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Speaker 2: people asked me what it was like living there, I

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Speaker 2: used to say, it's like living in Texas in the

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Speaker 2: sense that you spend a lot of time in the

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Speaker 2: shopping mall, you spend a lot of time in your car,

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Speaker 2: and it's hot all the time, and you don't really

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Speaker 2: see that many people out on the street. Now I

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Speaker 2: kind of think, well, you know, maybe Abu Dhabi is

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Speaker 2: the blueprint for some places in Texas. But anyway, you

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Speaker 2: know what.

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Speaker 3: I just say, you know what it looks like is

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Speaker 3: it looks like Miami. And if you've spent any time,

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Speaker 3: like on North Collins Avenue and some of the architecture

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Speaker 3: and hotels, etc.

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Speaker 5: There.

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Speaker 3: When I've looked at some of the recent photos, including

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Speaker 3: unfortunately one of the hotels that got hit, I was like,

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Speaker 3: this could be like this could be a building that

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Speaker 3: went up two years ago in like somewhere in Miami Beach.

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Speaker 3: So so much to discuss, all right.

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Speaker 2: Rather than us spending more time discussing this, we do,

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Speaker 2: in fact have the perfect guests, someone who's been on

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Speaker 2: the podcast before talking about real estate for the ultra wealthy,

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Speaker 2: and someone who has personal connections to Dubai as well.

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Speaker 2: We're going to be speaking with Hitten Stani. He is

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Speaker 2: the founder of ten thirty one Media and publisher of

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Speaker 2: the Promote. So, Hitten, thanks so much for coming back

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Speaker 2: on the podcast.

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Speaker 5: Hey, good to be here.

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Speaker 2: Would you agree with that framing? How do you think

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Speaker 2: about you know, Dubai's reputation in the world in recent years.

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Speaker 4: I think for the most part it's correct, I would

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Speaker 4: add to it. So, not only is it styled itself

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Speaker 4: as a safe haven to do business, I think where

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Speaker 4: it has probably gone further than any country in the

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Speaker 4: modern era is cherry picking the kind of society that

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Speaker 4: an ultra rich person would think about too. So there's

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Speaker 4: one thing to be in Singapore and say all right,

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Speaker 4: make your money here, But we have a Singaporean society

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Speaker 4: that is very specific right in ubbe Dubai etc. It's

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Speaker 4: almost like a build your own bear kind of society. Okay,

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Speaker 4: you're a wealthy person, come here. The only rule is

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Speaker 4: don't mess with our politics. You're never getting involved in

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Speaker 4: anything related to any sort of democratic debate. Outside of that.

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Speaker 4: You want to live a decadent lifestyle, we have everything.

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Speaker 5: Set up for you.

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Speaker 4: You want to live a pious lifestyle, it's all set

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Speaker 4: up too. We will guarantee you safety, and that's obviously

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Speaker 4: the big asterisk why we're talking today. Will guarantee you safety,

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Speaker 4: will guarantee you an incredibly pro business environment, and you

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Speaker 4: can kind of stitch together this existence. I think there

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Speaker 4: is no other place in the world that has this

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Speaker 4: mix between the decadent and kind of the family friendly

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Speaker 4: life that the UA government has very very concernedly created

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Speaker 4: for the well healed globally. And I think Tracy had

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Speaker 4: made a point about sort of all these nationalities coming

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Speaker 4: together in this diplomatic xanadu. It's been true forever.

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Speaker 2: Yeah, it always reminded me a little bit of like Casablanca,

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Speaker 2: you know, all these years the day around, Yeah, exactly.

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Speaker 3: I don't know what people do there. I don't know

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Speaker 3: if people work, I don't know if anyone actually does work.

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Speaker 3: The only thing, you know, I see the Instagram photos,

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Speaker 3: et cetera. But like, talk to us about the scale

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Speaker 3: of the influx, particularly among the global elite, and to

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Speaker 3: what degree is it a real phenomenon. You see people

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Speaker 3: talk about this on Twitter of like a certain type

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Speaker 3: of people who's kind of given up on the West

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Speaker 3: and they're willing to take that trade off. I bet

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Speaker 3: a lot of them if you'd asked them, they're like, yeah,

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Speaker 3: democracy is good, et cetera like that, but they're like,

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Speaker 3: you know what, I look at Western democracy and it

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Speaker 3: really does not look that good. It only looks in

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Speaker 3: one direction. I'm worried about communists taking over and taking

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Speaker 3: my money. I'm worried about all this, and Dubai looks

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Speaker 3: like this, you know, oasis and how big has that

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Speaker 3: trend to ground?

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Speaker 4: Sure, So there's two ways to think about it. One

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Speaker 4: is what you're talking about, which is sort of the chavvy, right,

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Speaker 4: the chav chavvy British influencer.

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Speaker 3: Made a bunch of money because they were early to

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Speaker 3: Solana and yeah.

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Speaker 4: Yeah, I saw someone shoot up outside my house on

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Speaker 4: a very nice street in the UK. I'm sick of this,

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Speaker 4: I'm going to go over to Dubai twenty four to

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Speaker 4: seven son no taxes, blah blah blah. That is obviously

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Speaker 4: one component.

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Speaker 3: Of four seven son. I'm pretty sure.

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Speaker 2: I mean, except when there's like a dust storm, they

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Speaker 2: pretty much do.

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Speaker 3: Okay, Okay, I'll have to figure out the astronomy of

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Speaker 3: that one, but keep going.

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Speaker 4: Well, they do cloud seating too, so they can mess with.

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Speaker 5: The weather and ways they Okay think amazing.

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Speaker 4: There is that cohort of sort of disgruntled let's say,

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Speaker 4: upper middle class to wealthy people from places like the

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Speaker 4: UK et cetera. That's one class, and I think that

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Speaker 4: is culturally much more significant than it is financially significant. Okay,

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Speaker 4: the other class, and I think the inflection point that

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Speaker 4: is probably the most logical to take is the Russian

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Speaker 4: invasion of Ukraine. Right around early twenty twenty two. There

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Speaker 4: was this unbelievable influx of people from let's call it

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Speaker 4: Russian Republic for just to make it a little easier

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Speaker 4: kind of that area of the world. All this money

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Speaker 4: flowed in, and now you look at parts of Dubai

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Speaker 4: that have been transformed by let's call it Russian wealth.

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Speaker 4: Right there are parts of Dubai that look exactly like

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Speaker 4: Sunny Isles Beach in Miami, which is Russian wealth, Russian dominated.

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Speaker 4: That's the tongue you hear in the streets, and the

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Speaker 4: culture of it has been turned on its head very

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Speaker 4: dramatically and very rapidly. So unlike other places, Dubai is

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Speaker 4: very I'm going to pull up some numbers now. So

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Speaker 4: the city Dubai specifically is home to about three point

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Speaker 4: eight million people at the moment. I think when I

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Speaker 4: was growing up there in the nineties that was number

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Speaker 4: was probably close to two million, and it's expected to

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Speaker 4: surge by to five point eight million by twenty forty.

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Speaker 4: So you're talking about adding two million people to the

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Speaker 4: city in what fifteen years or so, Right, that's gonna.

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Speaker 2: Be a I'm already imagining what that means for traffic.

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Speaker 4: I mean, it's traffic there is now kind of a

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Speaker 4: parody of itself, Like there is no way to gauge

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Speaker 4: what's going on. The metros are you know, in full capacity,

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Speaker 4: but it's always terrible, right, So they do have all

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Speaker 4: these infrastructure problems similar to what Miami is going through now.

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Speaker 4: But I think the difference in in the Ua in

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Speaker 4: general is the government is really on it. They're really

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Speaker 4: trying to create large scale solutions to a lot of

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Speaker 4: the problems that we have there. Right so be a

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Speaker 4: traffic they're building roads every single day. The joke is

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Speaker 4: that people like my dad who grew up there are

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Speaker 4: actually the worst drivers there because they try to go

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Speaker 4: by gut and they can't because there's always a new flyover,

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Speaker 4: our new intersection, et cetera. But they're doing that the infrastructure,

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Speaker 4: they're doing the cloud seating for the weather, They're trying

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Speaker 4: so many different social experiments for cohesion. There's a lot

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Speaker 4: going on, and I haven't seen a government as kind

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Speaker 4: of on it, which is why where we are today

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Speaker 4: is it's such a big question mark.

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Speaker 2: What have you seen just in terms of property prices

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Speaker 2: in Dubai in recent years. So you mentioned the influx

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Speaker 2: of Russians my you know, anecdotally, I still have friends

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Speaker 2: in Dubai. They were saying that all the rents basically

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Speaker 2: went up for residential because you had this huge population jump.

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Speaker 2: But I'm curious also what happened with commercial property prices.

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Speaker 4: I think a lot of the sort of the explosion

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Speaker 4: of growth in Dubai can be seen can be seen

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Speaker 4: in land prices. Land prices are up by a factor

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Speaker 4: for four forty to seventy percent, And this all stems

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Speaker 4: from the super luxury boom that Dubai has seen. I

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Speaker 4: think the last time we talked a year or change ago,

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Speaker 4: I was telling you about the superprime luxury market in Dubai,

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Speaker 4: which is globally defined by night Frank as sales of

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Speaker 4: ten million dollars or more. Dubai is leading the charts

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Speaker 4: for a long time. I think in Q three they

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Speaker 4: had north of two billion dollars of sales just in

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Speaker 4: the super prime category. So by volume they are they

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Speaker 4: have the most transactions of any market in the world

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Speaker 4: in this category.

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Speaker 5: Right.

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Speaker 4: So, because developers can get and this is something we

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Speaker 4: that is mirrored in Manhattan for the longest time. Because

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Speaker 4: developers can get that kind of pricing for condos and homes,

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Speaker 4: they then go and buy more and more land. They

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Speaker 4: do some land banking, and because land has become so

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Speaker 4: expensive now, they're going and getting some exotic financing for it. So, Tracy,

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Speaker 4: you probably remember covering Sukuk and all the Islamic bond

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Speaker 4: stuff that is blowing up now in the real estate market.

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Speaker 4: So I think you guys had a stat. Bloomberg got

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Speaker 4: a stat that dollar bond in sukkook issuance has grown

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Speaker 4: more than twelvefold to six billion dollars since twenty twenty one.

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Speaker 3: Wow. When I'm in Miami and I love Miami, I've

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Speaker 3: never been to Dubai, but I love Miami. I'm going

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Speaker 3: to be sort of diplomatic in my words here about

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Speaker 3: when I'm in Miami, I get this feeling that it

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Speaker 3: is a very diverse on paper city.

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Speaker 5: Right.

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Speaker 3: You have your Russians, you have your other Eastern Europeans,

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Speaker 3: you have your Ironans, effect you have your Israelis, you

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Speaker 3: have your various multi obviously Latin Americans of various sorts,

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Speaker 3: et cetera. There is this nominal diversity in terms of

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Speaker 3: the type of person who comes there, and yet everyone

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Speaker 3: sort of merges into the same guy, if you know

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Speaker 3: what I mean. They sort of dressed the same, they

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Speaker 3: drive this cars, they kind of talk the same. There

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Speaker 3: is this sort of I would say, ethnically ambiguous Miami guy.

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Speaker 3: They end up all kind of looking the same, et cetera.

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Speaker 3: They have the same vibe. Is it sort of true

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Speaker 3: in Dubai? Do you have this sort of nominally diverse population,

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Speaker 3: but then when they're there, they suddenly fuse into Dubai. Guy,

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Speaker 3: do you know what I'm saying?

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Speaker 5: Hundred percent? Get it? Okay, this is yeah, one hundred percent.

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Speaker 4: So a friend of mine recently went to what's known

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Speaker 4: as a watch party, okay, where it's a bunch of

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Speaker 4: guys who just sport their ice on the wrist, right,

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Speaker 4: and and that that is exactly when you go into

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Speaker 4: a party like that, you will see people had every

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Speaker 4: nationality bound by just the love of that.

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Speaker 3: I yes, yes they have this, yes.

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Speaker 5: The masquerading love whatever you want.

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Speaker 4: Yeah, there is this kind of Dubai type right, because

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Speaker 4: in a city where roots are not really a thing

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Speaker 4: for a lot of people, the external factors be more

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Speaker 4: and more important. The car I remember vividly. I was

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Speaker 4: out with friends for shisha and we were heading from

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Speaker 4: from I missed the shisha so much. It's probably, yeah,

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Speaker 4: probably better for us that we don't smoke it all

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Speaker 4: the time now. But I remember going from a sort

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Speaker 4: of a pedestrian sheiesha place to a nicer sisha place

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Speaker 4: right so old part of town to new part of town,

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Speaker 4: et cetera. I remember this friend. We went home to

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Speaker 4: switch cars. That's the only reason we went this place.

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Speaker 4: We went to the garage, we did not go inside.

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Speaker 4: We switched cars, and then we went back out. This

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Speaker 4: is a very common thing that has always been a

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Speaker 4: part of Dubai. The difference between what you talked about,

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Speaker 4: Joe and what happens in Dubai is it's not necessarily

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Speaker 4: a melting pot. It really is like it is it is.

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Speaker 4: It is a collection of ethnic enclaves, right, and the

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Speaker 4: only thing they have in common is that they live

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Speaker 4: in Dubai. You can spend your entire life sort of

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Speaker 4: ghettoized in your with your type of people. Interesting, and

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Speaker 4: I think with so much influx that has only become

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Speaker 4: more accentuated now. It would be silly to say, oh, yeah,

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Speaker 4: you only see your type. I have friends from all

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Speaker 4: over the world. Anyone who lives in Dubai has had

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Speaker 4: that privilege too, right, Like you can kind of tap

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Speaker 4: into any culture you want. Yeah, but you can also

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Speaker 4: stay very fixated in yours.

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Speaker 2: Let's say there's also a lot of racial stratification maybe

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Speaker 2: that's the right word, where you know, if you go

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Speaker 2: into a fancy restaurant, a lot of the people who

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Speaker 2: are like sat down will either be Amoradi or white,

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Speaker 2: and all the servers and waiters are going to come

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Speaker 2: from Nepal or India. Like that happen. It's very noticeable.

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Speaker 4: Yeah, I think I think Tracy, a lot of that

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Speaker 4: has changed quite a bit, right, I think so much

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Speaker 4: money coming in from all parts of the world, including

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Speaker 4: South Asia, that that hierarchy that used to be so

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Speaker 4: preced there is very much diluted a little bit.

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Speaker 5: So you will go to.

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Speaker 4: The top restaurant or top club and you will kind

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Speaker 4: of a United Nations type of vibe.

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Speaker 2: Now, talk to us about what you're hearing just on

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Speaker 2: the ground in Dubai at the moment, because the information

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Speaker 2: flow is a little bit tricky. The UAE controls the

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Speaker 2: information that not only circulates domestically but also circulates externally.

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Speaker 2: So while we have seen some videos of drones hitting

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Speaker 2: various buildings, it's not entirely clear. We're getting a really

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Speaker 2: good sense of the situation there. What are you hearing

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Speaker 2: from friends and family on the ground.

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Speaker 4: So overwhelmingly the messages that things are okay in life

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Speaker 4: is moving on. I think anyone you talk to in

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Speaker 4: the region has a certain the information flow problem that

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Speaker 4: you kind of alluded to. That is very much a thing.

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Speaker 4: Most people are getting their news and information from social

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Speaker 4: media nowadays.

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Speaker 5: Social media is.

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Speaker 4: Very tightly controlled in the UA and in the region

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Speaker 4: in general, so a lot of us who are have

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Speaker 4: Dubai sort of close to their hearts from the outside

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Speaker 4: end up seeing kind of more than we more than

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Speaker 4: the people back home do.

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Speaker 5: Now.

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Speaker 4: There have been certain things, right there was an attack

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Speaker 4: on the airport that was major news. The government in

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Speaker 4: Dubai duscent or the government in the UE, sends out

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Speaker 4: alerts and all that, that's the kind of thing that

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Speaker 4: they see. But in general, and I think this is

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Speaker 4: going to be a broader part of our conversation, and

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Speaker 4: not to make a desert pun here, but the UE

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Speaker 4: has to project an image of an oasis of common stability.

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Speaker 5: Right.

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Speaker 4: I like to say that New York is a great

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Speaker 4: city any day of the week, any weather, at all times.

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Speaker 4: Los Angeles has to be on its best best weather

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Speaker 4: behavior at all times, and there is a similar analogy.

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Speaker 5: To be made at the UAE.

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Speaker 4: The whole game does not work unless it feels safe.

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Speaker 4: That is the number one thing that the government talks

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Speaker 4: about that is the number one thing that investors taut

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Speaker 4: in their materials. When you're soliciting investment for the UAE

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Speaker 4: or convincing someone to move your business to the UE,

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Speaker 4: safety is the number one thing. And again we don't

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Speaker 4: know how bad this is. I think I'd like to

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Speaker 4: make an example from another neighbor of the UAE, the

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Speaker 4: Kutthery Energy minister. Did you guys see that comment? I

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Speaker 4: mean that is absolutely stunning.

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Speaker 2: Oh what do you say?

400
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Speaker 4: So the Iranians struck an LNG facility.

401
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Speaker 2: In Kuthar and about the repair time, No, this is.

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Speaker 4: About he said that it took out seventeen percent of

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Speaker 4: Cutter's expert capacity. That is a stunning revelation to make.

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Speaker 4: I think this guy, his name is Sad the Cabby,

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Speaker 4: I think he is a little bit more outspoken than

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Speaker 4: I've seen other government ministers. But he said they might

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Speaker 4: have to invoke force majure contracts on experts to certain countries.

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Speaker 5: Right.

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Speaker 4: That is the kind of thing that should give people pause. Right,

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Speaker 4: And we're going to talk about this in a second.

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Speaker 4: But a lot of these countries, the UE, in particular Katar,

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Speaker 4: Saudi Arabia, Kuwait are big, big investors in the global landscape.

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Speaker 3: You mentioned a l Right, you go into the nice restaurant,

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Speaker 3: and maybe at this point it does have sort of

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00:22:00,640 --> 00:22:06,719
Speaker 3: the clientele has this United Nations feel, But as Tracy mentioned,

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Speaker 3: maybe the waiter is from Nepal or somewhere else in

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Speaker 3: South Asia, et cetera. Again, there's this meme in that

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Speaker 3: the world is gonna entering what they call, you know,

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Speaker 3: the global permanent under class. You have to buy this

420
00:22:21,840 --> 00:22:25,479
Speaker 3: cryptocurrency because this is your lottery ticket out of the

421
00:22:25,520 --> 00:22:29,199
Speaker 3: global permanent underclass. You have to whatever Ai sort of

422
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Speaker 3: are talked about in the same language as crypto in

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Speaker 3: that respect. From inside of Dubai, that waiter or the

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Speaker 3: child of that waiter, is there this sense that they

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Speaker 3: will always be part of that permanent underclass, and that

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Speaker 3: there is no relationship in a sort of societal fabric

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Speaker 3: between the life of that waiter and the life of

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Speaker 3: everyone that they're serving in that restaurant.

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Speaker 4: Yeah, I think that that's very true the Horatio Alger

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Speaker 4: stories and I tend to be the person who's come

431
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Speaker 4: in and made the life for themselves, right, the scrap

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Speaker 4: the entrepreneur who came at thirty years old with nothing

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Speaker 4: and now owns a bunch of yachts. That is the

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Speaker 4: kind of story you do not typically see social mobility

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00:23:13,640 --> 00:23:16,040
Speaker 4: within the city. Right, So if you are part of

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Speaker 4: what you described as the social underclass, you tend to

437
00:23:19,119 --> 00:23:21,960
Speaker 4: stay in that role until you leave, and you will

438
00:23:21,960 --> 00:23:24,320
Speaker 4: always leave, right, that's the other part of it.

439
00:23:24,760 --> 00:23:27,520
Speaker 3: Yeah, and just you know, on your point about business

440
00:23:27,560 --> 00:23:30,199
Speaker 3: as usual. One of the things that I like to

441
00:23:30,240 --> 00:23:34,000
Speaker 3: do to sort of get some perspective on an area

442
00:23:34,280 --> 00:23:37,880
Speaker 3: is go to Instagram and see what the latest photos

443
00:23:38,000 --> 00:23:40,440
Speaker 3: from that area are. And it's sort of like I've

444
00:23:40,440 --> 00:23:42,479
Speaker 3: always found that to just be a nice way of

445
00:23:42,480 --> 00:23:45,359
Speaker 3: like figuring out, like what is the vibe of this,

446
00:23:45,640 --> 00:23:48,520
Speaker 3: what's going on? It's still to this day if you

447
00:23:48,560 --> 00:23:51,120
Speaker 3: look at if you try to pull up any location

448
00:23:51,440 --> 00:23:56,119
Speaker 3: in Dubai, particularly an outdoor location, there's a good chance

449
00:23:56,160 --> 00:24:00,160
Speaker 3: that the only photos you're going to see are You're

450
00:24:00,160 --> 00:24:02,440
Speaker 3: going to see a lot of butts in that photo, right,

451
00:24:02,600 --> 00:24:06,720
Speaker 3: You're going to see photos of women in bikinis with

452
00:24:07,320 --> 00:24:11,399
Speaker 3: the bourgeak khalifa in the background, or some artificial island

453
00:24:11,480 --> 00:24:14,520
Speaker 3: chain in the background, etc. In terms of the information

454
00:24:14,720 --> 00:24:18,080
Speaker 3: coming out, it is almost no different than I believe

455
00:24:18,560 --> 00:24:21,200
Speaker 3: what gets posted on social media is almost no different

456
00:24:21,240 --> 00:24:22,680
Speaker 3: than it would have been, say, a month ago.

457
00:24:22,960 --> 00:24:25,479
Speaker 4: Yeah, I think your strategy works better in the country

458
00:24:25,520 --> 00:24:29,000
Speaker 4: where there is a broader sort of a more free press, etc.

459
00:24:29,400 --> 00:24:29,600
Speaker 5: Right.

460
00:24:30,240 --> 00:24:32,239
Speaker 4: One of the and you guys have probably seen the

461
00:24:32,280 --> 00:24:34,119
Speaker 4: flood of op eds coming out. I think the Wall

462
00:24:34,160 --> 00:24:37,840
Speaker 4: Street Journal bureau chief back there wrote a very very

463
00:24:37,840 --> 00:24:40,840
Speaker 4: spirited piece in defense of the country because it's a

464
00:24:40,920 --> 00:24:43,120
Speaker 4: very easy place to take shots at, right, And we've

465
00:24:43,119 --> 00:24:45,600
Speaker 4: probably taken a couple here in this episode. It's a

466
00:24:45,680 --> 00:24:47,720
Speaker 4: very easy place to take shots at because a lot

467
00:24:47,720 --> 00:24:52,560
Speaker 4: of people are judging the bargain from the American lens,

468
00:24:52,640 --> 00:24:55,320
Speaker 4: or let's call it the lens of the depraved West.

469
00:24:55,680 --> 00:24:56,679
Speaker 5: That is not the bargain.

470
00:24:56,760 --> 00:24:58,800
Speaker 4: They don't care about, you, Joe, And to be honest,

471
00:24:59,040 --> 00:25:02,480
Speaker 4: what they care about is like a wealthy person who

472
00:25:02,600 --> 00:25:04,800
Speaker 4: does not care so much about the sort of the

473
00:25:04,840 --> 00:25:08,000
Speaker 4: broader Western ideals and only cares about the Western ideal

474
00:25:08,040 --> 00:25:11,880
Speaker 4: of capitalism, and then they will provide all the other

475
00:25:12,040 --> 00:25:15,000
Speaker 4: things we talked about, safety, high quality of life in

476
00:25:15,040 --> 00:25:15,800
Speaker 4: one sense.

477
00:25:15,560 --> 00:25:15,960
Speaker 5: Et cetera.

478
00:25:16,280 --> 00:25:18,920
Speaker 4: So that's very much the case. I think that we

479
00:25:19,000 --> 00:25:20,760
Speaker 4: tend to be as people who've been in the West

480
00:25:20,800 --> 00:25:23,320
Speaker 4: for a long time tend to be more concerned that

481
00:25:23,440 --> 00:25:25,640
Speaker 4: we don't get to see the truth as much as

482
00:25:26,119 --> 00:25:28,359
Speaker 4: they don't seem to care as much. What do people

483
00:25:28,359 --> 00:25:30,760
Speaker 4: really care about? Just having a safe, chill place to live,

484
00:25:30,840 --> 00:25:33,359
Speaker 4: and the UA does that better than pretty much anyone.

485
00:25:34,720 --> 00:25:37,239
Speaker 2: Yeah, but I mean there is a tension here at

486
00:25:37,280 --> 00:25:39,439
Speaker 2: the moment where you could argue that if you're a

487
00:25:39,480 --> 00:25:42,480
Speaker 2: citizen on the ground, like you would like to be

488
00:25:42,600 --> 00:25:45,840
Speaker 2: more informed about missiles flying around. I know they have

489
00:25:45,880 --> 00:25:50,160
Speaker 2: an alert system, but also since you mentioned Instagram, I'm

490
00:25:50,200 --> 00:25:53,000
Speaker 2: now thinking about geotagging. We know that a lot of

491
00:25:53,000 --> 00:25:56,960
Speaker 2: the location services in Dubai and Abu Dhabi aren't working

492
00:25:56,960 --> 00:26:00,240
Speaker 2: at the moment because they're getting jammed because they don't

493
00:26:00,280 --> 00:26:04,000
Speaker 2: want Iranian drones to know where they're going and vice versa.

494
00:26:04,119 --> 00:26:09,000
Speaker 2: So like there is this informational problem and informational control problem.

495
00:26:09,640 --> 00:26:11,320
Speaker 2: But I just want to talk for a second about

496
00:26:11,359 --> 00:26:16,800
Speaker 2: where golf money has actually been flowing externally in the world,

497
00:26:16,920 --> 00:26:19,560
Speaker 2: because this has been a big story but still an

498
00:26:19,640 --> 00:26:21,560
Speaker 2: underappreciated one. I think.

499
00:26:21,840 --> 00:26:24,320
Speaker 4: I think it's just a lotifying story of the investment

500
00:26:24,640 --> 00:26:25,600
Speaker 4: escape of the last ten years.

501
00:26:25,720 --> 00:26:27,800
Speaker 2: Yeah, yeah, Okay, talk to us about.

502
00:26:27,600 --> 00:26:32,120
Speaker 4: It, Okay, So just broadly GCC sovereigns collectively, so it's

503
00:26:32,119 --> 00:26:34,679
Speaker 4: called them the Big four of the Big five managed

504
00:26:34,720 --> 00:26:38,159
Speaker 4: close to six trillion dollars in AUM. That represents more

505
00:26:38,160 --> 00:26:41,720
Speaker 4: than forty percent of the global sovereign wealth fund total, right,

506
00:26:42,000 --> 00:26:45,280
Speaker 4: and increasingly so. I think in the nineties they were

507
00:26:45,280 --> 00:26:49,399
Speaker 4: probably mostly focused on fixed income, right, US bonds being

508
00:26:50,160 --> 00:26:52,840
Speaker 4: a big part of the equation. I think starting in

509
00:26:52,840 --> 00:26:56,160
Speaker 4: the two thousands and definitely in the twenty twenties, they've

510
00:26:56,200 --> 00:26:59,080
Speaker 4: been flowing towards let's call it more exotic cults.

511
00:26:59,280 --> 00:27:00,560
Speaker 5: Right there, crypto.

512
00:27:00,680 --> 00:27:04,119
Speaker 4: They're massively invested in venture capital, and at the highest

513
00:27:04,200 --> 00:27:09,680
Speaker 4: highest level they are obviously incredibly large real estate investors,

514
00:27:10,080 --> 00:27:13,399
Speaker 4: both as lp SO limited partners in deals, but also

515
00:27:13,480 --> 00:27:16,920
Speaker 4: increasingly in what's known as GP staking, which is when

516
00:27:17,000 --> 00:27:21,080
Speaker 4: you buy a piece of a black rock let's say, right,

517
00:27:21,160 --> 00:27:25,120
Speaker 4: and the PIF who oh yeah. So when PNC sold

518
00:27:25,119 --> 00:27:27,480
Speaker 4: a fourteen billion dollar steak in black rock around in

519
00:27:27,520 --> 00:27:31,600
Speaker 4: the pandemic at some point, the buyers were Mobabla Kia

520
00:27:31,720 --> 00:27:35,040
Speaker 4: which is Kuwait, Qia which is Cutar, and PIF, which

521
00:27:35,040 --> 00:27:38,760
Speaker 4: is sud Right, So they are all over the tentacles

522
00:27:38,800 --> 00:27:42,159
Speaker 4: are so incredibly well spread into all aspects of the

523
00:27:42,160 --> 00:27:45,840
Speaker 4: global economy, especially in the United States. And I think

524
00:27:46,240 --> 00:27:49,159
Speaker 4: one question that I have, and I'm sure a lot

525
00:27:49,200 --> 00:27:53,000
Speaker 4: of people have as this conflict drags on, is will

526
00:27:53,000 --> 00:27:56,600
Speaker 4: that bigot stop or at least tighten up, right, because

527
00:27:56,600 --> 00:27:58,840
Speaker 4: I think you wrote about it in your newsletter recently.

528
00:27:59,160 --> 00:28:04,080
Speaker 4: Petro dollars are essentially what creates this this giant pool

529
00:28:04,119 --> 00:28:10,199
Speaker 4: of money, right and right now, Let's say hopefully the

530
00:28:10,200 --> 00:28:13,119
Speaker 4: conflict ends in the next couple weeks. If that is

531
00:28:13,119 --> 00:28:16,840
Speaker 4: the case, the UA can very quickly get out of

532
00:28:16,840 --> 00:28:19,840
Speaker 4: this hole, because it probably has the best functioning government

533
00:28:20,440 --> 00:28:23,159
Speaker 4: in the modern era. If this goes on for months

534
00:28:23,320 --> 00:28:26,280
Speaker 4: and longer, then you have to have those questions. I mean,

535
00:28:26,359 --> 00:28:27,960
Speaker 4: I think it would be really interesting to talk to

536
00:28:28,000 --> 00:28:30,840
Speaker 4: a fund manager right now and see what kind of

537
00:28:30,840 --> 00:28:34,040
Speaker 4: conversations they're having with pif Mahbadla and the likes, because

538
00:28:34,359 --> 00:28:37,200
Speaker 4: those conversations, and we like to say, investors like certainty

539
00:28:37,240 --> 00:28:38,520
Speaker 4: and this ain't it right?

540
00:28:39,000 --> 00:28:43,440
Speaker 3: Okay? There have been the hits to some energy infrastructure,

541
00:28:43,920 --> 00:28:48,240
Speaker 3: like why does it change? How much do you perceive

542
00:28:48,360 --> 00:28:51,880
Speaker 3: that this story of lots of money coming in because

543
00:28:51,880 --> 00:28:54,320
Speaker 3: people carry it in their pockets and then lots of

544
00:28:54,400 --> 00:28:58,280
Speaker 3: money going out because it enters these huge funds that

545
00:28:58,320 --> 00:29:01,800
Speaker 3: are funding everything from me AI to infrastructure to all

546
00:29:01,880 --> 00:29:05,680
Speaker 3: kinds of things. So far in this war, is there

547
00:29:05,760 --> 00:29:09,440
Speaker 3: anything that disrupts the trajectory of that model?

548
00:29:10,200 --> 00:29:12,360
Speaker 4: So far in this war, there hasn't been anything that

549
00:29:12,480 --> 00:29:14,680
Speaker 4: shows like, hey, this is good, the party's going to stop.

550
00:29:14,680 --> 00:29:16,960
Speaker 4: But I think the cut Thery example that I pointed

551
00:29:17,000 --> 00:29:19,760
Speaker 4: to is the first one. I said, Wow, they're talking

552
00:29:19,760 --> 00:29:21,960
Speaker 4: about seventeen percent of export capacity.

553
00:29:21,960 --> 00:29:23,160
Speaker 5: That is very serious.

554
00:29:23,600 --> 00:29:26,800
Speaker 4: At some point, if not already, Qia has to be

555
00:29:26,800 --> 00:29:29,480
Speaker 4: brought into the room and say okay, let's assess the situation.

556
00:29:29,640 --> 00:29:30,560
Speaker 5: Right, I would.

557
00:29:30,360 --> 00:29:32,640
Speaker 4: Imagine this would come up, and then there are these

558
00:29:32,720 --> 00:29:34,480
Speaker 4: long term beds. I think you had one of my

559
00:29:34,520 --> 00:29:38,480
Speaker 4: favorite song at some point, ziadaoud to talk about, Oh yeah.

560
00:29:38,200 --> 00:29:39,640
Speaker 5: He's so good, he's incredible.

561
00:29:40,480 --> 00:29:42,560
Speaker 3: They're going to get him on a gun and just

562
00:29:42,600 --> 00:29:45,880
Speaker 3: for listeners, he's our colleague here at Bloomberg. Guy, he's

563
00:29:45,920 --> 00:29:48,840
Speaker 3: in Bloomberg Economics, right, and so yes, we're going to

564
00:29:48,880 --> 00:29:50,040
Speaker 3: try and have him on ace app.

565
00:29:50,160 --> 00:29:52,360
Speaker 4: He's incredible. I think I first heard of about him

566
00:29:52,360 --> 00:29:56,520
Speaker 4: on Sultano Kosami's cultural much less, which really fun thing

567
00:29:56,520 --> 00:29:58,000
Speaker 4: that he used to do that and he's restarting.

568
00:29:58,000 --> 00:29:58,960
Speaker 5: But anyway, you.

569
00:29:58,880 --> 00:30:02,520
Speaker 4: Guys had talked to yeah about the UA's thirty five

570
00:30:02,560 --> 00:30:06,560
Speaker 4: billion dollar investment into kind of the Egyptian coastal development,

571
00:30:06,600 --> 00:30:09,320
Speaker 4: et cetera. Right, Yes, those kind of bets are where

572
00:30:09,360 --> 00:30:11,480
Speaker 4: I would say, okay, what is That's just sort of

573
00:30:11,560 --> 00:30:16,680
Speaker 4: a commitment made to doing things in the future, right,

574
00:30:16,720 --> 00:30:19,280
Speaker 4: It's it's like a thirty five billion dollar number that's

575
00:30:19,560 --> 00:30:21,400
Speaker 4: probably going to be over a couple of decades or so.

576
00:30:22,400 --> 00:30:24,360
Speaker 4: When you make those kind of claims, or you make

577
00:30:24,400 --> 00:30:26,880
Speaker 4: that kind of commitment and you see all the stuff

578
00:30:26,920 --> 00:30:29,760
Speaker 4: happening with your own in your own home, maybe there's

579
00:30:29,760 --> 00:30:32,760
Speaker 4: some talk of redeployment, holding back, et cetera. I think

580
00:30:32,800 --> 00:30:35,080
Speaker 4: those are the big things. A lot of the other

581
00:30:35,120 --> 00:30:37,280
Speaker 4: money we're talking about, and we'll talk about private credit

582
00:30:37,280 --> 00:30:40,800
Speaker 4: in a minute, has already been committed, deployed, et cetera. Right,

583
00:30:41,520 --> 00:30:46,040
Speaker 4: But the scale of the UE's specifically's investment in this

584
00:30:46,520 --> 00:30:48,720
Speaker 4: let's call it the frontiers of the new economy, I

585
00:30:48,760 --> 00:30:52,720
Speaker 4: don't think is fully appreciated. I mean MGX, which is

586
00:30:52,760 --> 00:30:57,160
Speaker 4: a state owned state controlled Shake thenun controls this giant,

587
00:30:57,240 --> 00:30:59,080
Speaker 4: sprawling web of at least a one and a half

588
00:30:59,080 --> 00:31:02,680
Speaker 4: trillion dollar pool money, the various fund stitched together from

589
00:31:02,760 --> 00:31:08,680
Speaker 4: ubbleb It is in everything, It's absolutely in everything. And

590
00:31:08,760 --> 00:31:10,520
Speaker 4: again this is again in question of how long the

591
00:31:10,520 --> 00:31:13,160
Speaker 4: conflict will go on. I'm not an expert on that,

592
00:31:13,240 --> 00:31:15,480
Speaker 4: but if this drags on for a bit, there has

593
00:31:15,520 --> 00:31:18,280
Speaker 4: to be some reckoning with how that money is flying.

594
00:31:34,400 --> 00:31:38,360
Speaker 2: If we actually see an exodus from Dubai, and.

595
00:31:38,520 --> 00:31:40,400
Speaker 4: In terms of population, In.

596
00:31:40,400 --> 00:31:44,920
Speaker 2: Terms of population and anecdotally I certainly have seen people

597
00:31:45,160 --> 00:31:48,760
Speaker 2: leaving in recent weeks. It's hard to tell if they're

598
00:31:48,800 --> 00:31:51,520
Speaker 2: going to leave forever or if they're just planning on

599
00:31:51,800 --> 00:31:54,960
Speaker 2: departing during the worst of the conflict. But if we

600
00:31:54,960 --> 00:31:57,920
Speaker 2: were to see an exodus from Dubai, and presumably real

601
00:31:58,040 --> 00:32:02,280
Speaker 2: estate prices would be impact from that, that could be

602
00:32:03,000 --> 00:32:05,280
Speaker 2: the line of entry where you start to get more

603
00:32:05,320 --> 00:32:07,280
Speaker 2: pressure on government finances.

604
00:32:07,400 --> 00:32:11,320
Speaker 4: Right, yeah, I think more than any other city probably

605
00:32:11,360 --> 00:32:14,520
Speaker 4: in the world, debuys in the sentiment business right, the

606
00:32:14,560 --> 00:32:20,080
Speaker 4: sentiment business. Right, their primary sources of revenue are real estate, tourism,

607
00:32:20,200 --> 00:32:22,640
Speaker 4: and commerce. Right, those are the three and those are

608
00:32:22,680 --> 00:32:27,280
Speaker 4: all sentiment based industries. In fact, I don't think I've

609
00:32:27,280 --> 00:32:31,320
Speaker 4: seen I haven't heard personally of any departures in the

610
00:32:31,320 --> 00:32:33,520
Speaker 4: way that I remember in the first Golf War in

611
00:32:33,560 --> 00:32:35,800
Speaker 4: the nineties there was a flood of people that left.

612
00:32:35,880 --> 00:32:38,080
Speaker 4: I think that, if anything, the UA is kind of

613
00:32:38,120 --> 00:32:40,840
Speaker 4: being more tested now than back then. But I think

614
00:32:40,840 --> 00:32:43,920
Speaker 4: they've done a really good job of creating long term

615
00:32:43,920 --> 00:32:46,960
Speaker 4: incentives this time around for people to stick around. Things

616
00:32:47,000 --> 00:32:49,440
Speaker 4: like the Golden Visa, which is very similar to the

617
00:32:49,560 --> 00:32:53,040
Speaker 4: EB five visa or the Trump Gold Card. It's kind

618
00:32:53,040 --> 00:32:56,440
Speaker 4: of modeled on the Golden Visa, things like property rights,

619
00:32:56,920 --> 00:33:00,640
Speaker 4: a more robust legal system. They've put all those things together. Now,

620
00:33:00,760 --> 00:33:04,240
Speaker 4: if people do leave, what does that look like? First

621
00:33:04,280 --> 00:33:07,640
Speaker 4: of all, real estate prices. People have been talking about

622
00:33:07,640 --> 00:33:10,120
Speaker 4: a correction in the UA for a long time. If

623
00:33:10,160 --> 00:33:12,800
Speaker 4: people start leaving, that is certainly going to be on

624
00:33:12,840 --> 00:33:16,760
Speaker 4: the table, right And then the kind of the back

625
00:33:17,080 --> 00:33:21,840
Speaker 4: infrastructure of financing a lot of these projects will be tested,

626
00:33:22,320 --> 00:33:25,920
Speaker 4: the bond market, the Islamic financing market, et cetera. That's

627
00:33:25,960 --> 00:33:27,960
Speaker 4: when things will start getting shaky. And again, one of

628
00:33:28,000 --> 00:33:28,760
Speaker 4: the things.

629
00:33:28,920 --> 00:33:29,320
Speaker 5: That is.

630
00:33:31,240 --> 00:33:34,720
Speaker 4: Dubai has got a very, very very robust private market's

631
00:33:34,720 --> 00:33:37,560
Speaker 4: economy now, but at some point or the other there

632
00:33:37,600 --> 00:33:40,840
Speaker 4: is some government involvement in that, right, either by backstopping

633
00:33:41,120 --> 00:33:44,560
Speaker 4: or being an LP and many things, etc. I don't know,

634
00:33:44,560 --> 00:33:47,080
Speaker 4: I think, Tracy, I don't know where AMARS stands now,

635
00:33:47,120 --> 00:33:50,240
Speaker 4: but at some point it was very much an arm

636
00:33:50,320 --> 00:33:51,760
Speaker 4: of the state.

637
00:33:51,840 --> 00:33:55,280
Speaker 2: Now, yeah, yes, I think that's fair.

638
00:33:55,520 --> 00:33:58,880
Speaker 4: Yeah, so I think we'll be if we do see

639
00:33:58,880 --> 00:34:03,040
Speaker 4: an actual exodus or an outflux, then there's a lot

640
00:34:03,080 --> 00:34:05,760
Speaker 4: of questions to be asked about the stability of that market.

641
00:34:05,800 --> 00:34:09,200
Speaker 4: And again, this is an absolutely insane market. So things

642
00:34:09,239 --> 00:34:11,879
Speaker 4: have been selling off plan. There are stories out there

643
00:34:11,920 --> 00:34:15,319
Speaker 4: about eight hundred million dollars worth of product selling in

644
00:34:15,360 --> 00:34:19,040
Speaker 4: a single day. Right, that is a momentum driven like

645
00:34:19,120 --> 00:34:21,479
Speaker 4: I need to get in while this market is still

646
00:34:21,560 --> 00:34:24,319
Speaker 4: semi affordable, and by semi affordable, I think one of

647
00:34:24,320 --> 00:34:26,960
Speaker 4: our the reason we connected in the first place is

648
00:34:27,000 --> 00:34:29,040
Speaker 4: that you have to look at the ultra luxury market

649
00:34:29,040 --> 00:34:32,720
Speaker 4: in the world as a collection of properties as opposed

650
00:34:32,760 --> 00:34:36,920
Speaker 4: to compare them to local comps. Right, and at that level,

651
00:34:37,239 --> 00:34:39,880
Speaker 4: if you look at it from that level, the Dubai,

652
00:34:40,000 --> 00:34:43,600
Speaker 4: Weleve et cetera. Are still a relative bargain, right, So

653
00:34:45,040 --> 00:34:49,560
Speaker 4: this all really is contingent on it maintaining its demand

654
00:34:49,800 --> 00:34:53,040
Speaker 4: from very wealthy people, and safety is obviously that that

655
00:34:53,200 --> 00:34:54,160
Speaker 4: X factor and all of that.

656
00:34:54,520 --> 00:34:57,080
Speaker 3: You could make the argument that the UAE has the

657
00:34:57,120 --> 00:34:59,840
Speaker 3: best functioning government in the world. And I think this

658
00:35:00,080 --> 00:35:04,719
Speaker 3: is very important because, particularly in the West, that is

659
00:35:04,840 --> 00:35:07,840
Speaker 3: not a comment that will be uttered in a million

660
00:35:07,960 --> 00:35:12,120
Speaker 3: years in the United States, in the UK and France,

661
00:35:12,440 --> 00:35:15,000
Speaker 3: in Europe, et cetera. I mean, the idea of a

662
00:35:15,040 --> 00:35:20,560
Speaker 3: functioning government feels almost like what's that? Those words don't

663
00:35:20,600 --> 00:35:24,920
Speaker 3: even go together anymore. Could you explain a little bit,

664
00:35:25,640 --> 00:35:29,480
Speaker 3: you know, how that works. We often think that governments,

665
00:35:29,480 --> 00:35:34,440
Speaker 3: particularly non democracies, are riven with corruption and have no

666
00:35:34,560 --> 00:35:38,200
Speaker 3: accountability and so forth, and there are all kinds of

667
00:35:38,320 --> 00:35:42,480
Speaker 3: reasons on paper to think that that would be impossible.

668
00:35:42,960 --> 00:35:46,080
Speaker 3: How would you describe the sort of organizing principle of

669
00:35:46,120 --> 00:35:51,560
Speaker 3: the government such that it doesn't it doesn't collapse whatever

670
00:35:51,640 --> 00:35:55,160
Speaker 3: it is. What is it about how it's structured where

671
00:35:55,320 --> 00:35:58,600
Speaker 3: actually public sector is taken very seriously and effective.

672
00:35:59,160 --> 00:36:02,359
Speaker 5: Okay, it's a heavy question, but let's try. Right.

673
00:36:03,080 --> 00:36:06,240
Speaker 4: There's two elements to this. One is a functioning society,

674
00:36:06,280 --> 00:36:09,440
Speaker 4: in which things just seem to work, and the UE

675
00:36:09,600 --> 00:36:13,520
Speaker 4: government has done, probably again an incredible job of doing that.

676
00:36:14,200 --> 00:36:15,960
Speaker 4: You want to set up a business, you can do it.

677
00:36:15,960 --> 00:36:17,839
Speaker 4: You want to make money, it's yours. No one takes

678
00:36:17,880 --> 00:36:19,800
Speaker 4: it away from you. This has always been true.

679
00:36:19,640 --> 00:36:20,040
Speaker 5: Et cetera.

680
00:36:20,160 --> 00:36:23,600
Speaker 4: Right, if a crime happens, it is handled very quickly.

681
00:36:23,920 --> 00:36:26,440
Speaker 4: That's one part of it, right, that's the actual tangible

682
00:36:27,000 --> 00:36:29,360
Speaker 4: on the ground. They build roads all the time. You

683
00:36:29,400 --> 00:36:32,080
Speaker 4: can see the progress. There's never a pothole inside. You

684
00:36:32,120 --> 00:36:34,839
Speaker 4: will never see any vagrants, you will never see any

685
00:36:34,920 --> 00:36:37,759
Speaker 4: violent crime, et cetera. So that is the as a

686
00:36:37,800 --> 00:36:40,520
Speaker 4: person living here that makes half a million dollars a

687
00:36:40,600 --> 00:36:44,400
Speaker 4: year and expects a certain quality of life, the government

688
00:36:44,440 --> 00:36:46,319
Speaker 4: is giving me that quality of life. That's one part

689
00:36:46,320 --> 00:36:48,040
Speaker 4: of it. The other part of it is a little

690
00:36:48,080 --> 00:36:51,040
Speaker 4: more state crafty, right, which is the illusion that is

691
00:36:51,080 --> 00:36:53,240
Speaker 4: created that this is the best government in the world,

692
00:36:53,480 --> 00:36:55,720
Speaker 4: the illusion that is created that this is the safest

693
00:36:55,760 --> 00:36:58,279
Speaker 4: place in the world, and then is repeated and amplified

694
00:36:58,320 --> 00:37:00,839
Speaker 4: by everyone who lives there, because that's part of the deal.

695
00:37:01,040 --> 00:37:02,400
Speaker 5: Right, you go there.

696
00:37:03,800 --> 00:37:06,640
Speaker 4: Anyone, and again they do an incredible job of creating

697
00:37:06,680 --> 00:37:11,960
Speaker 4: that society everyone from athletes to actors to footballers, et cetera,

698
00:37:12,520 --> 00:37:16,680
Speaker 4: will throw in a plug for Dubai randomly, seemingly randomly

699
00:37:16,719 --> 00:37:19,480
Speaker 4: in any conversation they have, And I think part of

700
00:37:19,480 --> 00:37:21,440
Speaker 4: this is because there's gratitude, and part of it is

701
00:37:21,480 --> 00:37:23,160
Speaker 4: because it seems like that's part of the deal.

702
00:37:23,680 --> 00:37:26,520
Speaker 2: Let's go back to private credit for a second, because

703
00:37:26,560 --> 00:37:28,360
Speaker 2: this is one of the reasons we really wanted to

704
00:37:28,400 --> 00:37:30,279
Speaker 2: talk to you, because a lot of that money, you know,

705
00:37:30,360 --> 00:37:33,880
Speaker 2: direct lending, has found its way into your world in

706
00:37:34,120 --> 00:37:38,799
Speaker 2: various ways. It's hard to gauge how active or how

707
00:37:38,840 --> 00:37:42,319
Speaker 2: big the GCC presence in that market has been, but

708
00:37:42,440 --> 00:37:43,480
Speaker 2: what's your sense of it.

709
00:37:44,480 --> 00:37:48,280
Speaker 4: I think it's it's been fairly large and only growing.

710
00:37:48,320 --> 00:37:50,359
Speaker 4: And I think a good example to look at as

711
00:37:50,440 --> 00:37:54,160
Speaker 4: something like Mabadla, Right. Mabudla is one of the more prominent.

712
00:37:54,200 --> 00:37:57,719
Speaker 4: I think it's three hundred and fifty billion dollars ish aum,

713
00:37:58,200 --> 00:38:01,920
Speaker 4: but is incredibly aggressive in the credit space. They recently

714
00:38:02,000 --> 00:38:05,160
Speaker 4: did a full takeover Fortress, which is a big player

715
00:38:05,200 --> 00:38:09,000
Speaker 4: in commercial real estate credit. They have been and I

716
00:38:09,080 --> 00:38:11,000
Speaker 4: think we talked about this in your in your newsletter

717
00:38:11,040 --> 00:38:14,759
Speaker 4: as well. Abdew in general has been getting very much

718
00:38:15,000 --> 00:38:19,160
Speaker 4: into the debt game, not only directly by purchasing companies

719
00:38:19,200 --> 00:38:22,759
Speaker 4: like Fortress, but also by being an anchor LP in

720
00:38:22,800 --> 00:38:25,040
Speaker 4: a lot of the private credit funds that we see.

721
00:38:25,360 --> 00:38:26,319
Speaker 5: Right, So.

722
00:38:27,840 --> 00:38:30,719
Speaker 4: Blackrock and I think this all comes back to a

723
00:38:30,719 --> 00:38:33,680
Speaker 4: trend that we like to call aum gobbling. Right, So

724
00:38:34,480 --> 00:38:36,759
Speaker 4: you cannot there's no such thing as a good mid

725
00:38:36,800 --> 00:38:39,680
Speaker 4: sized fund anymore. Everyone's got to be Brookefield, or everyone's

726
00:38:39,680 --> 00:38:43,760
Speaker 4: got to be Blackstone, and so Sixth Street. I think Fortress,

727
00:38:44,200 --> 00:38:46,799
Speaker 4: this co CEO made the statement, which is like, for

728
00:38:46,960 --> 00:38:49,480
Speaker 4: us to stay relevant, we need to keep growing assets.

729
00:38:49,520 --> 00:38:51,040
Speaker 4: It's not enough to run the book that.

730
00:38:51,000 --> 00:38:52,799
Speaker 5: We have and do it well. We just have to

731
00:38:52,840 --> 00:38:54,719
Speaker 5: keep gobbling up other parts of things.

732
00:38:54,760 --> 00:38:57,200
Speaker 4: So if you had a dedicated fund, let's say you

733
00:38:57,239 --> 00:39:00,520
Speaker 4: had a senior housing and affordable housing fund, and you're

734
00:39:00,560 --> 00:39:03,000
Speaker 4: doing very well, you have two billion dollars you're running,

735
00:39:03,040 --> 00:39:06,279
Speaker 4: you're incredibly good at that. Eventually the call comes in

736
00:39:06,320 --> 00:39:08,000
Speaker 4: from a Fortress or a Sixth Street, etc.

737
00:39:08,560 --> 00:39:09,319
Speaker 5: And you're picked up.

738
00:39:09,840 --> 00:39:12,120
Speaker 4: To make these kind of things happen, you need an

739
00:39:12,160 --> 00:39:16,000
Speaker 4: incredible amount of liquidity slash capital, and all roads lead

740
00:39:16,000 --> 00:39:18,080
Speaker 4: to able when it comes to that kind of thing right.

741
00:39:18,120 --> 00:39:23,200
Speaker 4: So Bloomberg had an amazing article about how to meet

742
00:39:23,280 --> 00:39:25,160
Speaker 4: the World's one and a half trillion dollar man. I

743
00:39:25,200 --> 00:39:27,480
Speaker 4: think it was called, and it was about Shike Tachnun

744
00:39:27,560 --> 00:39:31,960
Speaker 4: and his entire web of companies and amazing that.

745
00:39:31,880 --> 00:39:32,520
Speaker 5: Kind of figure.

746
00:39:32,560 --> 00:39:34,840
Speaker 4: And once you're in with someone like the Shee or

747
00:39:34,840 --> 00:39:37,279
Speaker 4: one of his deputies, you have access to kind of

748
00:39:37,400 --> 00:39:41,360
Speaker 4: unlimited amount of capital. Larry Fink is in what I

749
00:39:41,440 --> 00:39:44,320
Speaker 4: would venture to guess every month, Ray Daallyio. There's that

750
00:39:44,520 --> 00:39:47,160
Speaker 4: iconic shot of him and the Condura sitting there at

751
00:39:47,160 --> 00:39:51,520
Speaker 4: the table with all the movers and shakers. They have

752
00:39:51,719 --> 00:39:56,719
Speaker 4: sort of infiltrated every aspect of private credit when it

753
00:39:56,719 --> 00:39:59,080
Speaker 4: comes to real estate. The name keeps coming up, and

754
00:39:59,080 --> 00:40:01,440
Speaker 4: if the name doesn't come up directly, it comes up

755
00:40:01,480 --> 00:40:02,960
Speaker 4: as a backer of a lot of these.

756
00:40:02,800 --> 00:40:04,080
Speaker 5: Companies that we talked about.

757
00:40:04,320 --> 00:40:08,120
Speaker 4: AI Infrastructure PIF, I believe is the anchor investor in

758
00:40:09,440 --> 00:40:12,440
Speaker 4: Blackstone I'm sorry, and PIF is the anchor investor in

759
00:40:12,520 --> 00:40:16,200
Speaker 4: Blackstone's Infrastructure Fund, which is their quote lends into the

760
00:40:16,239 --> 00:40:20,480
Speaker 4: AI boom. MGX is a partner in this really stop

761
00:40:20,520 --> 00:40:25,200
Speaker 4: and start government project the US government called Stargate with

762
00:40:25,360 --> 00:40:28,120
Speaker 4: open Ai etc. It's had a bit of a mixed run.

763
00:40:28,200 --> 00:40:31,160
Speaker 4: But MGX is an anchor investor in that. MGX is

764
00:40:31,200 --> 00:40:34,760
Speaker 4: also an investor with Microsoft and Blackrock in that giant

765
00:40:34,960 --> 00:40:40,160
Speaker 4: AI venture. Right, so there's just the odds that UBW

766
00:40:40,440 --> 00:40:42,480
Speaker 4: or one of the Middle Easterns is involved when it

767
00:40:42,480 --> 00:40:44,480
Speaker 4: comes to these big infrastructure bets.

768
00:40:44,320 --> 00:40:44,960
Speaker 5: Is very high.

769
00:40:45,080 --> 00:40:49,040
Speaker 3: The Golf States didn't ask for this war, at least

770
00:40:49,320 --> 00:40:54,800
Speaker 3: the vast majority talk to us about sort of regional politics.

771
00:40:54,880 --> 00:40:57,840
Speaker 3: And obviously, you know, we know that it may have

772
00:40:57,920 --> 00:41:02,280
Speaker 3: been his first foreign visit. Right taking the presidency, Trump

773
00:41:02,400 --> 00:41:06,000
Speaker 3: quickly went to the golf and you know even at

774
00:41:06,000 --> 00:41:07,040
Speaker 3: the sword dance.

775
00:41:06,840 --> 00:41:08,239
Speaker 5: The iconic sword dance thing.

776
00:41:08,200 --> 00:41:12,880
Speaker 3: Oh yeah, the orb yes, yeah, but still the same

777
00:41:13,120 --> 00:41:19,319
Speaker 3: same deal. You get this impression that like Trump has

778
00:41:19,400 --> 00:41:21,080
Speaker 3: golf tastes, oh right.

779
00:41:21,400 --> 00:41:24,160
Speaker 4: That I mean even even before all this, right, he

780
00:41:24,400 --> 00:41:27,239
Speaker 4: his brand was actually so the way that people in

781
00:41:27,280 --> 00:41:31,160
Speaker 4: New York think of the Trump brand is tacky luxury,

782
00:41:31,600 --> 00:41:32,480
Speaker 4: tacky luxury.

783
00:41:32,560 --> 00:41:35,040
Speaker 5: Right in the golf, it's thought of his luxury luxury.

784
00:41:35,440 --> 00:41:38,520
Speaker 4: Yeah right, It's it's always been there. There's sympatico in

785
00:41:38,560 --> 00:41:43,120
Speaker 4: so many ways. Uh, from kind of having incredible control

786
00:41:43,239 --> 00:41:46,080
Speaker 4: over their societies, which is something that our president has

787
00:41:46,200 --> 00:41:49,640
Speaker 4: has always kind of aspired to, right, and some would

788
00:41:49,640 --> 00:41:53,239
Speaker 4: say he's doing pretty well on that front. But there's

789
00:41:53,280 --> 00:41:57,120
Speaker 4: always been that kind of sympatico between Donald Trump and

790
00:41:57,200 --> 00:42:00,600
Speaker 4: the golf leaders. Uh, there has been friction on the

791
00:42:00,640 --> 00:42:01,680
Speaker 4: front recently, though.

792
00:42:01,960 --> 00:42:04,000
Speaker 3: Well, this is what I'm trying, This is what I'm

793
00:42:04,040 --> 00:42:08,480
Speaker 3: getting at, Like, could that change again, massive damage to

794
00:42:09,040 --> 00:42:13,480
Speaker 3: their domestic economies for a war that they certainly didn't

795
00:42:13,520 --> 00:42:17,879
Speaker 3: ask for. Is there any prospect of in the wake

796
00:42:17,960 --> 00:42:23,040
Speaker 3: of this, whenever that ends, some slightly new trajectory between

797
00:42:23,600 --> 00:42:24,880
Speaker 3: the US and the Gulf.

798
00:42:25,239 --> 00:42:28,279
Speaker 4: Impossible to tell if the war drags on, but for now,

799
00:42:28,320 --> 00:42:30,120
Speaker 4: I don't think so. I think they've been pretty in

800
00:42:30,160 --> 00:42:34,520
Speaker 4: lockstep with pretty in lockstep with the US's policy on this. Right,

801
00:42:34,520 --> 00:42:36,799
Speaker 4: There's there's been reports, and this is above my pay

802
00:42:36,800 --> 00:42:39,279
Speaker 4: grade and above my beat, but there's been reports that

803
00:42:39,880 --> 00:42:42,160
Speaker 4: Saudi was very much pushing for this this.

804
00:42:42,400 --> 00:42:44,920
Speaker 3: Yeah, as the one exception, you sort of get the

805
00:42:44,920 --> 00:42:47,359
Speaker 3: impression that Saudi was also one of.

806
00:42:47,800 --> 00:42:51,120
Speaker 4: Right, and then then the country over correct. The GCC

807
00:42:51,160 --> 00:42:55,000
Speaker 4: countries often don't see to I, especially on Iran. Right,

808
00:42:55,040 --> 00:42:58,359
Speaker 4: there's there's a fair amount of friction between the two powerhouses,

809
00:42:58,800 --> 00:43:00,960
Speaker 4: the UA and Saudi arab on a lot.

810
00:43:00,840 --> 00:43:02,480
Speaker 5: Of geopolitical issues.

811
00:43:02,520 --> 00:43:05,280
Speaker 4: They're they're brothers, but kind of not right as well,

812
00:43:06,120 --> 00:43:09,760
Speaker 4: and there's a lot of rivalry in general for capital

813
00:43:09,880 --> 00:43:13,040
Speaker 4: and the joke I think even when Tracy lived there

814
00:43:13,120 --> 00:43:15,279
Speaker 4: was probably you you lived in Dubai and you would

815
00:43:15,320 --> 00:43:19,319
Speaker 4: go consultant WW sorry, in Saudi for four days a week.

816
00:43:20,440 --> 00:43:23,160
Speaker 4: That's not so much the thing anymore. Sally's been pushing

817
00:43:23,880 --> 00:43:26,520
Speaker 4: people to live there and you know, upon threat of

818
00:43:26,560 --> 00:43:29,520
Speaker 4: losing business, et cetera. But I think back to this

819
00:43:29,640 --> 00:43:32,920
Speaker 4: fracture or potential fracture between the US government and the GCC.

820
00:43:33,440 --> 00:43:37,960
Speaker 4: We haven't seen anything from government level friction yet. We

821
00:43:38,120 --> 00:43:42,840
Speaker 4: have seen, though, a couple of very influential businessmen, Kalfelptur,

822
00:43:43,000 --> 00:43:46,480
Speaker 4: who was a big developer player in the in the UAE,

823
00:43:47,200 --> 00:43:51,520
Speaker 4: had had put out a letter kind of excoriating Trump

824
00:43:51,640 --> 00:43:55,080
Speaker 4: for starting this conflict at the best of at the

825
00:43:55,080 --> 00:43:57,600
Speaker 4: behest of Israel, right, and this was a this was

826
00:43:57,640 --> 00:44:02,120
Speaker 4: a big, big deal for a statesman level businessman in

827
00:44:02,160 --> 00:44:05,560
Speaker 4: the UA to talk about this. The letter was at

828
00:44:05,560 --> 00:44:08,960
Speaker 4: some point redacted, right, and then and then Hoaptor sat

829
00:44:09,000 --> 00:44:12,000
Speaker 4: down with the Washington Post and did this incredibly entertaining

830
00:44:12,120 --> 00:44:15,200
Speaker 4: interview about you know, it's more about kind of the

831
00:44:15,200 --> 00:44:17,760
Speaker 4: cohesion for the long term, et cetera. It doesn't agree

832
00:44:17,760 --> 00:44:20,200
Speaker 4: with the war, but I think in general pissing off

833
00:44:20,239 --> 00:44:22,480
Speaker 4: your American allies at this point is not good, et cetera,

834
00:44:22,520 --> 00:44:25,759
Speaker 4: et cetera. So we have seen some of that. Now again, Joe,

835
00:44:25,840 --> 00:44:29,480
Speaker 4: your question is really about how long this lasts. For now,

836
00:44:29,520 --> 00:44:31,920
Speaker 4: they can kind of keep things going. But if this

837
00:44:32,080 --> 00:44:35,279
Speaker 4: is a month's long conflict or longer, God forbid, then

838
00:44:35,520 --> 00:44:38,240
Speaker 4: then there might be a little bit more of a fracture.

839
00:44:38,320 --> 00:44:38,520
Speaker 5: Right.

840
00:44:40,239 --> 00:44:42,960
Speaker 2: Just on that note, what are you watching in terms of,

841
00:44:43,080 --> 00:44:47,520
Speaker 2: I guess, gauging the overall health of the Dubai property market,

842
00:44:47,640 --> 00:44:52,560
Speaker 2: but also the overall health or circulation of that oil

843
00:44:52,600 --> 00:44:54,560
Speaker 2: money in the wider property space.

844
00:44:54,960 --> 00:44:56,799
Speaker 4: So in the first one about the overall health of

845
00:44:56,840 --> 00:44:58,920
Speaker 4: the Dubai property market, I think one thing you want

846
00:44:58,960 --> 00:45:04,440
Speaker 4: to pay attention to is if any planned or announced projects,

847
00:45:04,480 --> 00:45:07,279
Speaker 4: if they are kind of continuing on the timeline that

848
00:45:07,320 --> 00:45:10,000
Speaker 4: they talked about. Again, a lot of these depend kind

849
00:45:10,000 --> 00:45:14,719
Speaker 4: of like Miami's economy on pre sales, right, they get

850
00:45:14,760 --> 00:45:18,080
Speaker 4: commitments and then they go build the thing and the views.

851
00:45:18,120 --> 00:45:20,880
Speaker 4: I mean, these things get more and more fantastical. Tracy,

852
00:45:20,920 --> 00:45:22,120
Speaker 4: this is very much for you.

853
00:45:22,200 --> 00:45:24,920
Speaker 5: There is one. I'm gonna pull it up. Hang on.

854
00:45:25,880 --> 00:45:28,080
Speaker 4: There's a tower that's coming up which is called Aiwa,

855
00:45:28,880 --> 00:45:32,000
Speaker 4: which is twenty one story resident a twenty one story

856
00:45:32,040 --> 00:45:35,560
Speaker 4: residential tower designed to look like the Hallelujah Mountains from

857
00:45:35,600 --> 00:45:36,600
Speaker 4: the Avatar movies.

858
00:45:36,800 --> 00:45:39,279
Speaker 2: All right, that's going Why do you say that once

859
00:45:39,320 --> 00:45:39,560
Speaker 2: for me?

860
00:45:39,640 --> 00:45:41,719
Speaker 4: Because you love this stuff, You've always won I do.

861
00:45:41,880 --> 00:45:44,360
Speaker 2: I do, like I wouldn't want to live there, but

862
00:45:44,440 --> 00:45:46,120
Speaker 2: I like hearing about it for sure.

863
00:45:46,239 --> 00:45:49,440
Speaker 4: There are doing a lot of interesting innovations with engineering

864
00:45:49,440 --> 00:45:53,520
Speaker 4: and design. They're doing Manhattan like skinny super talls now

865
00:45:53,560 --> 00:45:57,640
Speaker 4: as well. So they have a tower coming up that's

866
00:45:57,680 --> 00:46:01,799
Speaker 4: a seventeen to one ratio, which is the kind of

867
00:46:01,840 --> 00:46:04,239
Speaker 4: skinny pencil tower that you would see on Billionaire's row.

868
00:46:04,880 --> 00:46:07,480
Speaker 4: But on billionaire's row land is such a crazy constraint

869
00:46:07,760 --> 00:46:11,040
Speaker 4: in Dubai. It hasn't really been until Yeah, that's.

870
00:46:10,920 --> 00:46:13,239
Speaker 2: Wild to think that they're doing that now, that like,

871
00:46:13,440 --> 00:46:15,000
Speaker 2: that's that's how far it's gone.

872
00:46:15,200 --> 00:46:18,319
Speaker 4: Well, I think it's I think it's a little bit

873
00:46:18,360 --> 00:46:21,680
Speaker 4: of both. I think it is one a financial constraint

874
00:46:21,680 --> 00:46:24,479
Speaker 4: that they're trying to solve for and the other like, hey,

875
00:46:24,520 --> 00:46:26,439
Speaker 4: if this is you know, this is all the rage

876
00:46:26,440 --> 00:46:29,279
Speaker 4: in New York, then why not do it here with

877
00:46:29,520 --> 00:46:32,680
Speaker 4: with the government or with the sorry with the UE.

878
00:46:32,719 --> 00:46:35,759
Speaker 4: It's hard to tell when it's being done for sort

879
00:46:35,800 --> 00:46:38,359
Speaker 4: of financial prudence and when it's being done because someone

880
00:46:38,360 --> 00:46:39,359
Speaker 4: else somewhere else did it.

881
00:46:41,160 --> 00:46:43,960
Speaker 3: What has been the strategy I mean, okay, the ultra

882
00:46:44,120 --> 00:46:48,560
Speaker 3: rich going moving to moving to the golf, moving to

883
00:46:48,640 --> 00:46:55,480
Speaker 3: the GCC states. How active is the push buy to

884
00:46:55,560 --> 00:46:59,359
Speaker 3: get just the merely rich or the sort of you know,

885
00:46:59,640 --> 00:47:02,919
Speaker 3: as they would say, the mass affluent, et cetera. Has

886
00:47:03,000 --> 00:47:06,399
Speaker 3: there been a push to sort of like make more

887
00:47:06,520 --> 00:47:10,799
Speaker 3: people around the world aware of the fact that they

888
00:47:10,840 --> 00:47:13,120
Speaker 3: can move to Dubai and cut their tax bill and

889
00:47:13,160 --> 00:47:15,080
Speaker 3: live a much more comfortable life and better weather.

890
00:47:15,239 --> 00:47:17,920
Speaker 4: I would say it's almost a strategic imperative of the government.

891
00:47:18,000 --> 00:47:21,120
Speaker 4: It is such a big initiative to get not just

892
00:47:21,280 --> 00:47:23,560
Speaker 4: your Ray Dalios of the world, which is much more

893
00:47:23,560 --> 00:47:27,279
Speaker 4: of a personal relationship banking relationship, but to get those

894
00:47:27,320 --> 00:47:31,560
Speaker 4: families that are down for this lifestyle to come over

895
00:47:31,600 --> 00:47:34,200
Speaker 4: when you enter the Dubai Airport now, which is one

896
00:47:34,239 --> 00:47:36,600
Speaker 4: of the busiest airports in the world, you will see

897
00:47:36,600 --> 00:47:41,560
Speaker 4: these giant, absolutely giant interactive ads about all ethnicities used

898
00:47:41,600 --> 00:47:45,120
Speaker 4: to see typically you would see white people in these ads.

899
00:47:45,360 --> 00:47:48,279
Speaker 4: Right now, I just went a couple months ago or

900
00:47:48,280 --> 00:47:52,560
Speaker 4: a month ago. You're seeing Usbeks, You're seeing Canadians, you know,

901
00:47:52,719 --> 00:47:56,600
Speaker 4: and it says specifically Canadians, this is your Dubai usbex,

902
00:47:56,640 --> 00:47:59,560
Speaker 4: this is your Dubai, et cetera. They are pushing this

903
00:47:59,680 --> 00:48:02,960
Speaker 4: beyond and I wouldn't be surprised if there's like an

904
00:48:03,040 --> 00:48:06,160
Speaker 4: arm of the government dedicated just to what you're talking

905
00:48:06,200 --> 00:48:07,440
Speaker 4: about and just.

906
00:48:07,400 --> 00:48:10,600
Speaker 2: Going back to thinking about, you know, warning signs of

907
00:48:10,640 --> 00:48:13,360
Speaker 2: trouble ahead. What are you looking for in that global

908
00:48:13,560 --> 00:48:14,440
Speaker 2: capital space.

909
00:48:15,440 --> 00:48:17,960
Speaker 4: A lot of these conversations happen behind closed doors, but

910
00:48:18,000 --> 00:48:20,160
Speaker 4: I think one of the things that we're doing is

911
00:48:20,200 --> 00:48:23,399
Speaker 4: talking to fund managers and seeing if there's any kind

912
00:48:23,480 --> 00:48:28,160
Speaker 4: of hesitance expressed by these LPs right whether it's in

913
00:48:28,480 --> 00:48:32,680
Speaker 4: snaking conversations or backing funds. That's that's probably where you're

914
00:48:32,680 --> 00:48:35,359
Speaker 4: going to see the most pressure, which is not now,

915
00:48:35,400 --> 00:48:38,040
Speaker 4: and in fundraising, not now is as good as no right.

916
00:48:38,480 --> 00:48:41,680
Speaker 4: So if you start seeing those conversations where God knows

917
00:48:41,719 --> 00:48:44,799
Speaker 4: Brookfield is going to raise another distressed credit fund, and

918
00:48:44,880 --> 00:48:47,759
Speaker 4: the conversations with Lubble Ubby or with Saudi, etc. Get

919
00:48:47,800 --> 00:48:51,080
Speaker 4: a little bit more, a little bit more wishy washy,

920
00:48:51,480 --> 00:48:55,560
Speaker 4: that is something definitely to look out for, right, because

921
00:48:56,040 --> 00:49:02,360
Speaker 4: without without ongoing constant moment him, this doesn't work and

922
00:49:03,520 --> 00:49:07,240
Speaker 4: the scale of capital needed. I think a great example

923
00:49:07,320 --> 00:49:10,279
Speaker 4: is that of God. If that electronic arts LBO deal

924
00:49:10,480 --> 00:49:13,520
Speaker 4: was going on now, the EA Sports formerly EA Sports

925
00:49:13,520 --> 00:49:16,840
Speaker 4: Electronic Arts. It was a fifty five billion dollar LBO,

926
00:49:16,920 --> 00:49:19,200
Speaker 4: which I believe is the largest in history. It was

927
00:49:19,239 --> 00:49:24,200
Speaker 4: broken randomly by Jared Frickin. Kushner right and PIF wrote

928
00:49:24,239 --> 00:49:28,080
Speaker 4: a twenty nine billion dollar equity check into this transaction

929
00:49:28,200 --> 00:49:31,319
Speaker 4: to take I think majority control of EA. Would that

930
00:49:31,440 --> 00:49:34,680
Speaker 4: deal have happened in this environment, I venture to say

931
00:49:34,680 --> 00:49:36,120
Speaker 4: it would have taken a little bit long down.

932
00:49:38,120 --> 00:49:40,080
Speaker 2: All right, Hitten, We're going to have to leave it there.

933
00:49:40,200 --> 00:49:42,880
Speaker 2: But this has been a fantastic conversation. Thank you so

934
00:49:43,000 --> 00:49:44,520
Speaker 2: much for coming back from myos.

935
00:49:44,560 --> 00:49:45,920
Speaker 4: Really appreciate it, my pleasure.

936
00:49:46,000 --> 00:49:50,120
Speaker 5: Thank you, Tracy, Thanks Joe, Joe.

937
00:49:50,120 --> 00:49:53,040
Speaker 2: Obviously a lot that stood out from that conversation. But

938
00:49:53,120 --> 00:49:54,799
Speaker 2: one of the things I was thinking was that sort

939
00:49:54,800 --> 00:49:59,200
Speaker 2: of flywheel dynamic that Hitten was talking about towards the end,

940
00:49:59,280 --> 00:50:02,560
Speaker 2: and also just the interrelatedness of all of this. So

941
00:50:02,880 --> 00:50:05,960
Speaker 2: I think that one of the difficulties is if you're

942
00:50:05,960 --> 00:50:09,160
Speaker 2: a sovereign wealth fund in Abu Dhabi or Dubai at

943
00:50:09,200 --> 00:50:12,600
Speaker 2: the moment, and you've invested a lot in private credit,

944
00:50:13,040 --> 00:50:17,640
Speaker 2: a lot in tech those areas, even independently of what's

945
00:50:17,920 --> 00:50:21,239
Speaker 2: happening in the golf, there are concerns around that at

946
00:50:21,239 --> 00:50:23,839
Speaker 2: the moment, right, And then if you think that, well,

947
00:50:23,880 --> 00:50:26,440
Speaker 2: maybe the UAE won't be able to sell as much

948
00:50:26,520 --> 00:50:29,319
Speaker 2: oil as it has in the past, or maybe some

949
00:50:29,440 --> 00:50:32,000
Speaker 2: of that tax and tourism revenue is going to start

950
00:50:32,040 --> 00:50:36,440
Speaker 2: going down because there are drone strikes in various cities,

951
00:50:37,600 --> 00:50:39,880
Speaker 2: that's I think where you start to get the potential

952
00:50:39,920 --> 00:50:41,480
Speaker 2: for some real weakness.

953
00:50:41,800 --> 00:50:44,759
Speaker 3: Yeah, I mean you just think, like, how much does

954
00:50:44,800 --> 00:50:48,120
Speaker 3: it really take to change the trajectory, and does it

955
00:50:48,239 --> 00:50:51,279
Speaker 3: you know, could it be as simple as a meaningful

956
00:50:51,400 --> 00:50:54,719
Speaker 3: down shift. I'd say the war ends fairly soon, but

957
00:50:54,960 --> 00:50:57,520
Speaker 3: you know what if you had a year or two

958
00:50:57,560 --> 00:50:59,920
Speaker 3: in the wake of it, where there was a significant

959
00:51:00,200 --> 00:51:03,720
Speaker 3: decrease in the amount of capital flowing into the region

960
00:51:04,320 --> 00:51:08,759
Speaker 3: relative to what's expected. What are the ripple effects of that?

961
00:51:09,320 --> 00:51:12,680
Speaker 3: And again, you know, it's hard to get really good

962
00:51:12,760 --> 00:51:15,920
Speaker 3: information from what you said in the beginning, and I

963
00:51:15,960 --> 00:51:20,560
Speaker 3: think this is really key. I do think it's hard

964
00:51:20,600 --> 00:51:25,040
Speaker 3: to tell from the outside world. Like you see plenty

965
00:51:25,040 --> 00:51:27,560
Speaker 3: of pictures where it all sort of looks the same,

966
00:51:27,920 --> 00:51:29,799
Speaker 3: but you don't really know about the truth of that.

967
00:51:30,000 --> 00:51:33,279
Speaker 3: And I think right now, in this moment, there are

968
00:51:33,320 --> 00:51:35,960
Speaker 3: probably plenty of people it's like, you know what, I

969
00:51:36,120 --> 00:51:39,520
Speaker 3: like the idea of moving from England, and I think

970
00:51:39,560 --> 00:51:44,000
Speaker 3: it's really big. It's it's actually like our government doesn't

971
00:51:44,040 --> 00:51:46,920
Speaker 3: pay attention to anything big going on domestically or whatever.

972
00:51:47,239 --> 00:51:49,080
Speaker 3: I know that this is a very big part of

973
00:51:49,280 --> 00:51:53,600
Speaker 3: UK politics right now, the flight of the well off

974
00:51:53,880 --> 00:51:56,920
Speaker 3: who they're already under a tremendous fiscal strain. And if

975
00:51:56,920 --> 00:51:59,239
Speaker 3: you have money and you don't like the fact that

976
00:51:59,239 --> 00:52:02,080
Speaker 3: half of your money is going to the government and

977
00:52:02,239 --> 00:52:05,120
Speaker 3: all of these sort of pathologies and dysfunctions that we

978
00:52:05,200 --> 00:52:09,080
Speaker 3: see in the UK, it has become an extremely popular

979
00:52:09,120 --> 00:52:11,720
Speaker 3: option to just DeCamp to Dubai.

980
00:52:11,800 --> 00:52:14,680
Speaker 2: But this is the other thing if you're targeting, if

981
00:52:14,680 --> 00:52:19,360
Speaker 2: you're trying to attract an extremely wealthy mobile population into

982
00:52:19,400 --> 00:52:23,839
Speaker 2: your city. The converse of that is that they can

983
00:52:23,920 --> 00:52:28,320
Speaker 2: leave right like if for whatever reason they don't feel safe,

984
00:52:28,400 --> 00:52:30,160
Speaker 2: or they just think, like, you know what, now's the

985
00:52:30,200 --> 00:52:33,520
Speaker 2: time for a really long vacation somewhere else in the world,

986
00:52:33,800 --> 00:52:34,319
Speaker 2: they can go.

987
00:52:34,600 --> 00:52:38,200
Speaker 3: And I really think that again, you know this meme

988
00:52:38,320 --> 00:52:40,520
Speaker 3: the globe, there's going to be a point where there's

989
00:52:40,560 --> 00:52:43,880
Speaker 3: this global permanent underclass, which is a phrase, and I

990
00:52:44,000 --> 00:52:49,319
Speaker 3: do feel as though Dubai is ground zero for this

991
00:52:49,400 --> 00:52:54,239
Speaker 3: phenomenon where you have an extremely rich, well off part

992
00:52:54,280 --> 00:52:59,920
Speaker 3: of the society that has access to every luxury experience

993
00:53:00,040 --> 00:53:03,120
Speaker 3: that you could possibly think of, and then there's this

994
00:53:03,320 --> 00:53:06,920
Speaker 3: layer of people that will never ascend to that despite

995
00:53:06,960 --> 00:53:09,560
Speaker 3: living in the same country. It does not seem like

996
00:53:09,560 --> 00:53:12,279
Speaker 3: a place where you could quote work your way up.

997
00:53:12,640 --> 00:53:15,920
Speaker 2: Yeah, I have to say, you know, Hitten mentioned also

998
00:53:16,200 --> 00:53:20,480
Speaker 2: the sort of like UAE legends, like the Horatio Algis

999
00:53:20,800 --> 00:53:23,719
Speaker 2: of the UAE. I still remember A big one was

1000
00:53:23,800 --> 00:53:25,080
Speaker 2: this Indian guy called b. R.

1001
00:53:25,200 --> 00:53:25,520
Speaker 3: Shetty.

1002
00:53:26,320 --> 00:53:27,320
Speaker 2: Does that name ring about?

1003
00:53:27,320 --> 00:53:27,480
Speaker 5: Oh?

1004
00:53:27,920 --> 00:53:32,239
Speaker 2: So he built this huge medical company called NMC and

1005
00:53:32,280 --> 00:53:35,200
Speaker 2: then it turned out to be a massive fraud. But

1006
00:53:35,360 --> 00:53:38,000
Speaker 2: he was like the guy that people would point to

1007
00:53:38,280 --> 00:53:41,840
Speaker 2: as you know, you can make it here anyway, we

1008
00:53:41,880 --> 00:53:42,560
Speaker 2: can keep going on.

1009
00:53:42,640 --> 00:53:46,440
Speaker 3: Position is just the past. Yeah, I love talking to him.

1010
00:53:46,520 --> 00:53:47,640
Speaker 2: All right, shall we leave it there.

1011
00:53:48,040 --> 00:53:48,799
Speaker 3: Let's leave it there.

1012
00:53:48,960 --> 00:53:51,240
Speaker 2: This has been another episode of the Odd Thoughts podcast.

1013
00:53:51,320 --> 00:53:53,960
Speaker 2: I'm Tracy Alloway. You can follow me at Tracy Alloway.

1014
00:53:54,120 --> 00:53:56,480
Speaker 3: And I'm Jill Wisenthal. You can follow me at the

1015
00:53:56,520 --> 00:53:59,440
Speaker 3: Stalwart follow or guesst hit ten some Tommy He's at

1016
00:53:59,560 --> 00:54:03,480
Speaker 3: Hits Empty. Follow our producers Carmen Rodriguez at Kerman armand

1017
00:54:03,560 --> 00:54:07,200
Speaker 3: dash Ol Bennett at Dashbot and Kale Brooks at Kalebrooks.

1018
00:54:07,360 --> 00:54:09,880
Speaker 3: And from our odd Laws content. Go to Bloomberg dot com.

1019
00:54:09,880 --> 00:54:12,200
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1020
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1022
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1023
00:54:19,200 --> 00:54:22,040
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1024
00:54:22,239 --> 00:54:26,720
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1025
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1026
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1030
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