Ep 135： Two Economic Crises (2008

But what happened was because the bank had access to so much easy money that they started giving more and more loans out with all this money that they had.

3002

And they gave them out on increasingly cheaper terms,

3006

whether those cheaper terms are in terms of the interest rate that consumers paid or whether it's in terms of the covenants or the conditions that went into it.

3014

And of course, this was also exacerbated by a bunch of factors, which I actually want to do a future episode on the 2008 crisis alone, which is something for the future.

3024

And I even have a guest in mind. I have to write to him.

3026

But they were a whole bunch of complicated factors like, you know, they would then they were not worried about the risk of these loans because they would parcel it out in using these complex instruments that were given good ratings by credit rating agencies, which were paid by the banks themselves.

3043

Not just that, there was also an oligopoly. State mandated oligopoly on credit rating agencies. Only three were allowed.

3051

And they weren't autonomous. They were essentially paid by these people.

3055

So the incentives were to keep the banks happy, which absolutely cannot work.

3060

Plus you had the semi-government agencies, Fannie and Freddie, basically guaranteeing all of these loans, thus creating a sort of moral hazard there.

3070

And you had, I mean, if your Google Community and Reinvestment Act, which is something that came about in the late 1970s, if I remember, which incentivize the banks to lend to people who would otherwise not be loan worthy.

3082

In fact, it was a little more insidious than that, which is that, you know, prior to a particular date, I forget the date, US banks were highly restricted in terms of their operations.

3094

Consumer banks could only operate in one state. And when the government decided that they would allow banks to apply for national licenses, one of the conditions was that they should increase their share of lending to what were redlined areas.

3115

Redlined areas being those areas where largely black or Hispanic or whatever, where a very small share of housing and mortgage loans found their way.

3130

So they're actually being pressured in a way.

3133

I mean, the incentives were corrupted all along. So much as, you know, the narrative about the typical populist narrative about greedy bankers has some merit.

3141

You also have to look at the systems and the structures within which they function.

3146

And there is a lot of blame. I would say the lion's share of the blame to be taken by the state. But leave that aside. That's a subject.

3152

In fact, just to finish off that point, in his book Fault Lines, Raghuram Rajan, who was one of the few central bankers to see it coming.

3164

In his analysis, he actually says that there was a political and hence policy compulsion to make credit cheap because the lack of upward mobility of the working class in the U.S.

3183

created a compulsion to make them feel good and making them making a higher percentage of them household owners and seeing household prices go up was a key feel good policy of the government.

3200

I almost found that too sort of too scheming to be credible. But I'm sure he knew what he was talking about, otherwise he wouldn't have written about it.

3213

Raghuram Rajan, and this is another classic example of good politics in the short term leading to bad economics in the long run.

3220

But sort of moving away from what the crisis itself was and shifting the focus back to you.

3226

You saw the crisis coming. Why did you see the crisis coming? What were the warning bells?

3232

And take me through your journey of one beginning to recognize the crisis, figuring out that yes, I'm not wrong.

3239

This is really a crisis and then figuring out what should I do about it and then all the way through to when the crisis ends.

3245

Right. So you never figure out that you're right till it actually happens. And as you and I have discussed often investing is a probabilistic game.

3257

And it's very you can never assign 100 percent probability to anything.

3262

And today my thinking on that is probably a little bit more nuanced and I understand something about Bayesian logic, which I certainly didn't at that point in time.

3276

So I think I also need to go back just in terms of my own personal journey to the period 99, 2000, when I was living in the mountains and therefore my contact with the world of investing was very, very limited.

3291

But there were a couple of points in time when I did spend a little bit of time in the city and very interestingly, for a very brief period of time, I think all of six days,

3304

I anchored daytime television for several hours a day on CNBC when they were just beginning to move into becoming a stock market channel.

3321

And this was also the time of the IT boom. And I was like this country hick who'd been pulled out of a small village in Kumao and talking to people who saw the world in a very, very different way.

3338

And I was looking at investments, you know, you invest in a company and maybe 20 years later, it's worth something. And I found people asking me on a day to day basis, literally.

3349

So what is the price of Infosys stock going to be next week? And I would say I'll be lucky if I get the price for next decade, right, not next week.

3358

And I realized that this was a very, very different game from the way in which I thought. And I was very late to the IT party.

3367

I bought some Infosys stock at three thousand five hundred rupees. And I next saw a newspaper a month later because we didn't get newspapers where I was.

3381

And I rubbed my eyes because the price was now four thousand five hundred rupees. And I actually went to an STD booth.

3388

This is before the days of cell phones. I went to an STD booth, called up my stockbroker and said, you know, I thought I bought the Infosys stock at three thousand five hundred.

3397

The paper is now saying four thousand five hundred. Did I make a mistake? It's gone from three thousand five hundred to four thousand five hundred and it'll go to ten thousand.

3408

This kind of dialogue disturbed me very, very deeply. And anyway, I went off on a long track and I came back and reached home in the middle of the night.

3418

And so didn't pick up a newspaper on the way. And maybe a couple of months later came back to Delhi and was six thousand five hundred rupees.

3426

So all in like three months. And this was now beginning to just look completely weird.

3432

So I picked up a piece of paper and a pencil. I got a hold of two or three of the balance sheets.

3440

And those days you had to actually get physical copies and so on so forth and did some back of the envelope calculations before I knew how to use a spreadsheet.

3448

So I had to use handle calculator, paper, pencil. And I said, by my logic and by the way, I look at the price of money, the share prices got to go up.

3460

The earnings of this firm have got to go up by, I forget the number, 60 percent per annum for the next 10 years to justify this price.

3468

And I don't know of any company in the history of the world that has seen its earnings go up by 60 percent per annum for 10 years.

3474

Therefore, this is a sell. And I rang up my broker and I said, please sell the share.

3480

And he said, I said on momentum alone, your guess is good as mine. My guess will go to 11000.

3490

I was just joking with him, obviously, but I'm selling today and we were both wrong because it went to 12000.

3500

But within a year, it was a thousand rupees.

3504

So in a very, very, very tiny way, I saw what that kind of reckless optimism could do to a stock.

3516

I'm talking about my personal participation. Newspapers, et cetera, once saw.

3522

But this personal act of taking a call and exiting in a contrarian way happened in that really tiny way.

3530

And this would have underlined the importance of following through on your conviction.

3534

Correct. And on hard numbers and some amount of analysis.

3538

So now, in 2007, I saw all the signs of euphoria.

3544

The signs were that I started investing in stocks seriously in 2003 for the reason that I returned to the city after six years.

3556

B, that I saw that interest rates in India were the lowest that they'd been in memory.

3561

And I thought this was a good reason for a bull run.

3564

And in 2003, there were several beaten down sectors like consumer goods, et cetera, which nobody was buying.

3571

I could see the logic very clearly. I bought them. Nobody was buying.

3575

Even my stockbroker, why are you buying this share? Nobody's interested. There's no liquidity.

3581

So in a sense, 2003, I went through the same cycle of being, for want of a better word, contrarian.

3589

Buying stocks. I was on the wrong side of the market.

3593

But actually, that's the place to be, right? You only make money when you're on the wrong side of the market.

3599

And then in 2006, 2007, I saw all the people who didn't believe in buying stocks in 2003 now piling into the market.

3609

This was the first sort of sign to me that the psychology is changing.

3614

And it's when markets start getting really crowded with buyers that you need to be looking at it in caution.

3620

But that was only one part of it.

3622

The second part of it and what really informed my thinking was some of the numbers that I've talked to you about.

3629

Here was a time, as I told you, I had got re-exposed to economics. I was getting interested. I was doing a lot of reading.

3636

The Internet was coming alive and therefore you could read a lot more than you could when I was a student in the formal sense of economics.

3643

I was a much better informed student. I had access to a much bigger library than the daily university library.

3650

I had the library of the words, publications.

3652

And so I could see some of these signs. I could see how credit in the U.S. was expanding, how households were taking on debt.

3664

I could see this whole McMansion phenomenon happening of everybody buying homes, people buying third and fourth and fifth homes,

3672

people with no income, no jobs, no assets.

3676

And by then I think I was fully internalized to this fact that boom leads to bust and that good times make bad loans

3687

and that when loans go bad the whole banking system goes kaput.

3691

So the more I read, and you know what, these are often very self-reinforcing.

3697

You start reading something, it leads to a link to something else, and this conviction started building in my head.

3705

And India at the time was also going through an unprecedented boom phase.

3710

And that boom was being fueled by, yes, we had a high savings rate.

3717

We've never seen that savings rate again, and I'll come to that a little bit later if we get there.

3722

We also, our exports were booming.

3725

Our exports were growing 15% per annum again, which was quite unprecedented.

3730

And because of all of this money sloshing around all over the world, there was all of this money coming into India as well.

3737

And so the question I had to ask myself was if there's a sudden stop in this whole credit cycle, what is the impact on India going to be?

3747

Is India going to be one of the last places from where the money retreats or one of the first places?

3752

And from whatever I read in the management literature and the banking literature,

3760

I came to the firm hypothesis that when there's a crisis, people withdraw to the center.

3768

So if you have a money manager in the U.S., the last place that he's going to pull money out of is the U.S.

3774

The first place he's going to pull money out of is the Cameroons or Bangladesh or India.

3780

And so I came to believe that while in scale the impact on the U.S. would be the largest in terms of time and severity,

3793

India as a capital short nation would be one of the first to feel the impact.

3799

Not comparing it to other nations since one was not exposed to markets in any other nations,

3803

but just as an Indian, here was stock markets which were richly valued in a time when growth and flow of capital was its greatest.

3815

And if the engine of that money, which was the U.S., if the credit system got disrupted over there,

3822

then we would be the earliest to feel the impact.

3827

Now at the time, I was writing a fortnightly column in a magazine which was reasonably widely followed by investors,

3836

which was called Outlook Money.

3838

And I was for the first time in my, for the only time in my life, I guess, a journalist with a badge.

3847

So I was on the, I was not just a byline, I was on the masthead, I was consulting editor,

3854

and I was writing fortnightly sometimes two columns in every issue on investing, specifically on equity investing.

3863

And I had been very much a votary of the bull run and very much a votary of shifting money from secondary investments,

3875

meaning post office savings banks and FDs and so on into primary investments, which was equity.

3881

But by May 2007, I was so completely convinced that this was about to come to an end.

3889

If I have the date right, I may be off by a couple of days, but not more than that.

3893

If I remember right, on May 23, 2007, I wrote my column and it said the end of the GIBDR.

3905

So that title was necessitated by the fact that there was only that much space on the page,

3910

which I then said the great Indian bull run. So this is the end of the GIBDR, the great Indian bull run.

3916

Of course, I was completely wrong. This was May 2007.

3920

And if I remember right, the NIFTY was at about $4,500 at that point in time.

3926

And I started exiting stocks. I also started, for the first time in my life, I started shorting the market through various instruments.

3937

And I set a certain sum of money aside. I was not naive enough to believe that the shorts would make money from day one.

3948

But they took much longer than I thought to make money.

3953

And for the next seven months, my conviction was being questioned every day, implicitly or explicitly,

3965

by a market which went from $4,500 to $6,300.

3970

And all this while you were shorting stocks and losing money?

3973

And losing money. I was writing a cheque every month to my broker for the stocks I was short.

3978

Did this make you question yourself and think that am I wrong? Am I missing something? Am I falling prey to confirmation bias?

3986

So I hadn't met you then. I didn't know the word confirmation bias.

3991

But I questioned my hypothesis. I read more and more and more and more.

4002

I went deeper into economic history and I could find absolutely no way to destroy my own hypothesis,

4013

except for that one ingredient which seemed to be fueling everybody else, which was hope.

4020

I actually found nothing to destroy that hypothesis.

4027

I remember one day telling my sister, I don't talk much about finance and economics with anybody in my family

4034

because they've never questioned me. They're not interested.

4038

They're all people of very modest needs and those get met quite simply.

4044

But I remember one day telling my sister, I think she may have asked me, how come there's so much money lying in my account?

4053

Meaning, why have you sold the stock and why is there all this cash lying there?

4057

So I remember the words with which I said, you know, it's like I'm standing at the railway crossing

4065

and I can see this train coming and I know that it's about to crash.

4071

But when I point it out to other people, they can't see it.

4075

And the train keeps on coming.

4077

And the train keeps on coming.

4079

And I rubbed my eyes and I read more and nothing changed my view.

4088

And of course you were aware of the saying that the markets can stay irrational more than an individual can stay solvent.

4096

Oh, yes, I was acutely aware of it and more so because as I was sort of hatching this plot and drawing data and talking to people and so on and so forth,

4107

I acquired a co-conspirator, a person who was probably more financially literate than me,

4114

who was a full-time markets person and we both started taking shorts together.

4121

And after three and a half or four months, he rung me up and almost apologetically,

4128

it's not that our money was pooled or anything, we were just working in parallel,

4131

but almost apologetically he told me I'm getting out because I'm having sleepless nights and it's not worth it.

4140

Luckily, I never had sleepless nights.

4143

So I think part of it was that I sort of set a sum aside and circumscribe that sum.

4153

And actually, I would have sort of exhausted that sum by March of 2008.

4162

But between January 20th and Republic Day, I think it was 21st and 22nd or 22nd and 23rd, the Nifty tanked like 15% in two days.

4176

So I made up all the money that I had frittered away or if you want to say in retrospect invested in shorts.

4187

It all came back in two days and then of course went on through 2008.

4192

And you kept making money through?

4194

I kept making money. I continued the shorts.

4205

So I actually did three things.

4208

One is that I took money out of the market.

4210

I liquidated part of the portfolio and they just sat on the sidelines,

4214

the money in my sister's account, for example.

4218

The second thing that I did was with a very tiny sum of money.

4223

So it was a small pile.

4228

I took on shorts and those of course did extraordinarily well as a return on that starting pool.

4240

In those kinds of situations, returns are not measured in percent per annum.

4245

They're measured in multiples per annum.

4250

But again, I want to underline that the pool was very, very small.

4254

But the third thing that I did, which was in a sense one of my few own personal experience of what Howard Marks calls second order thinking,

4266

was to try and figure, okay, let's assume that this debt crisis happens.

4273

And how are governments going to react?

4277

And the only way I saw them doing it was to further lower the price of money

4287

because then the cost of servicing those loans goes down.

4290

So if you want the banks to become healthy again, you want to make it easier for them to repay the money.

4297

And you possibly want to give them more money.

4300

You want to give them more money on terms which don't make it difficult for them.

4303

So you start dropping the price of money now because in most of the world, money is very, very fluid.

4313

It flows from one jurisdiction to another.

4317

I imagined a scenario where central banks around the world were going to start competing to reduce the cost of money,

4326

both to depreciate, both to make it easier for banks and other financial institutions to repay,

4333

as well as to drive up exports, which then everybody would feel the need for.

4339

And in that kind of competitive depreciation, what I saw happening is people taking recourse to gold as a hedge for a non-depreciating currency.

4354

So, you know, unlike dollar, which occurs on balance sheets, both on the asset and the liability side,

4362

gold is an asset which you can hold without there being a counterparty on the other side.

4367

And therefore, it becomes a very attractive place to go to when currency stability is a question.

4374

You know, you don't know how the dollar is going to move against the euro.

4381

And so if you're in euro, you don't want to be in dollar any longer.

4385

You don't know how the yen is going to behave.

4387

You're certainly not interested in the rupee.

4389

And so you're going to. So this was sort of second order thinking.

4394

And you put a lot of money.

4395

I put a fair amount of money into gold.

4397

And that, of course, did phenomenally well.

4401

It just went on this crazy bull run from about $700 an ounce in 2007.

4409

I think it peaked at about $1800 by 2012.

4412

And meanwhile, the rupee also went down.

4414

So the return you got was a product of two things.

4419

Yeah, I did all of these three in retrospect.

4425

But it's easy to say that I would have taken a much larger pool of money to short on.

4430

I've got a lot more gold, but you know, that's very easy to say.

4435

That's a hindsight bias.

4437

But the very fact that you saw it coming and you actually acted on it

4440

and took the great risk of losing a lot of money,

4443

whether in terms of nominal returns or just actually losing the money is quite something.

4449

You had skin in the game, as Taleb would say.

4451

Taleb invites very, very mixed reactions.

4455

But I think somewhere, A, he's a very good thinker.

4459

And B, I love that sort of code of conduct.

4464

It's like a very old code of conduct, which is you have to have skin in the game.

4470

And I think we're seeing more of that in many ways in the world today.

4475

This whole model of building companies around entrepreneurs and VCs and so on and so forth

4482

at its core is this whole aspect of skin in the game, you know,

4487

as opposed to old companies which were built purely by bankers, you know,

4491

who had very little skin in the game.

4494

It was just the capital and the interest on it.

4496

People are willing to take the upside in terms of the return within the company rather than from the company.

4502

So I like all of this.

4503

And I think somewhere at core, even though I didn't grow up in the Levant

4507

and didn't have all of these ancient Mediterranean trading codes hardwired into me,

4515

somewhere deep inside of me, I love this concept of skin in the game.

4520

Yeah, I mean, Taleb is a phenomenal character in the sense his books are great

4523

and he is a hardcore total troll on Twitter.

4526

In fact, I can, you know, whenever he attacks someone on Twitter whom I haven't heard of,

4530

I immediately check out his work because it so happens that some of my favorite public intellectuals

4536

have been attacked by Taleb on Twitter from Philip Tetlock to Steven Pinker to Nate Silver to Per Byland.

4542

All these are very fine thinkers and Taleb keeps going after them.

4546

So maybe that's a good metric for figuring out who is a thinker worth following.

4550

We'll take a quick commercial break now.

4553

And some of our listeners might be getting frustrated at what about the present crisis?

4558

Will you please talk about that?

4560

Hang on, we're getting there slowly.

4562

We are getting there slowly.

4563

Another couple of hours of conversation.

4564

I'm just kidding.

4565

Another one minute and then we will be on the current crisis.

4569

Hello, everybody.

4570

Welcome to another awesome week on the IVM Podcast Network.

4573

If you are not following us on social media, please make sure you do.

4576

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4578

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4582

and tag us on social media and we will repost your post.

4586

Also, please do tell a friend if you're enjoying a podcast what you think a friend would enjoy.

4590

Do tell them.

4591

I think that that is something that really helps us.

4593

I think that we do see, you know, I mean, like increases in listenership when you guys do that.

4597

So please, please do tell friends that you are enjoying what podcast you're listening to.

4601

Last week, we launched a new show called Agla Station Adulthood with best friends,

4604

Ritasha Rathod and Ayushi Amin.

4606

They talk about their journey into adulthood.

4608

On the first episode, they discuss crushes and female friendships.

4610

And on this week's episode, they try to crack the code on how to adult.

4614

You can also catch Ritasha and Ayushi on this week's Cyrus Says,

4616

where they talk to Cyrus about the podcast, what constitutes acting like a grownup,

4620

and Ritasha gives Cyrus detailed instructions to reach Mud Island.

4623

Know Your Kanun with Umber Rana is back with a new season.

4625

On the first episode of season two, Umber is joined by model Hasleen Kaur

4629

and actor Laura Mishra to talk about civic issues.

4631

On the empowering series, host Zarina Poonawalla is joined by investment banker Neetu El-Singhani,

4635

who shares her experience of being a single mother.

4637

On 9XM Soundcast, host Eva Bhatt is joined by Aditi Singh Sharma.

4641

Aditi shares interesting stories about her childhood in Russia and Dehradun,

4644

and singing for a rockman in Delhi.

4646

This week on Golgappa, Tripti Kamkar is joined by Priya Baput,

4649

an actor par excellence who shares some incredible stories about self-love and prioritizing oneself.

4654

This week on the Prakriti Podcast, Sandesh Anand joins Pawan Srinath to talk about cybersecurity.

4658

On Advertising is Dead, Varun is joined by CEO and co-founder of Terribly Tiny Tales, Anuj Gosalia.

4663

They discuss the emergence of short-form content.

4665

On the Habit Coach, Ashley Dockter talks about acupressure, acupuncture techniques, and their benefits.

4670

On Puliyabazi, Pranay and Saurabh discuss the political history, present and future of Balochistan

4674

with former RAW officer Tilak Divashar.

4677

This week on Paperback, Satyajit and Rachita talk to Sanchita Lahore

4680

about books that bring forth an individual's hardships.

4683

And with that, let's get you on with your show.

4687

Welcome back. You're listening to The Scene in the Unseen with me, Amit Verma,

4690

and my guest today is Mohit Satyanand, who's just finished telling us about

4694

how he made tons of money off the 2008 financial crisis.

4698

I wouldn't call it tons, Amit, but yeah, it was the beginning of a small nest egg.

4703

The beginnings of a small nest egg?

4705

Nest egg.

4707

Yeah, I mean, like you said, crisis are relative, and so is tons.

4711

So for me, I'm sure it would be tons.

4713

But let's get kind of to the meat of the episode.

4715

I mean, what prompted me to ask you to come on the show was a chat we were having

4720

a couple of evenings ago where you were giving me all your reasons

4726

for why we are not just in a crisis now, but it's a worse crisis

4729

and people think or acknowledge and it's only going to get worse.

4732

And this is obviously a very different kind of crisis.

4735

It's very, very different. It's very, very different.

4739

And there are several components to it.

4746

So let me sort of try and unravel and outline some of them,

4752

which can't be done as elegantly as you do with something which you look at in hindsight

4758

and which has been widely and deeply reported upon

4763

and has been the subject of several very, very erudite books

4766

and hundreds of doctoral theses and so on and so forth.

4771

But I think that we have to look at the current Indian situation

4782

very much as a continuum of what happened in 2008,

4790

where, like the rest of the world, we suffered from the global financial crisis.

4798

The U.S., under its newly anointed president, Barack Obama,

4805

moved extraordinarily swiftly to restore health to the banking system.

4811

Huge sums of money were invented, conjured up, pumped in,

4817

all kinds of programs with different names, etc., etc.,

4821

including the very, very vast tarpaulin of the tarp were made available to banks.

4828

Banks were shut down. Banks were bought by other banks,

4832

all under the very, very watchful eye of Treasury and the Federal Reserve and the President.

4841

And this, despite the fact that if you had to take a call between Wall Street and Main Street,

4848

you would say that Barack Obama represented Main Street rather than Wall Street.

4853

But the first thing that he did was to repair Wall Street.

4857

And in a sense, if you look back at the political economy of the U.S.,

4863

the fact that Main Street sort of got neglected is a major reason, I would say,

4868

for the Trump ascendancy.

4871

But the reason I bring the U.S. up is that somehow in India,

4877

we have this enormous culture of forbearance, sweeping things under the table,

4886

ignoring the problems and hoping that they will go away, etc., etc., etc.

4892

So the kind of rapidity and aggression with which the U.S. financial system was repaired

4902

didn't find expression over here.

4905

And we sort of pretended that everything could continue pretty much as it was,

4912

that this was a blip and it would get restored.

4916

Of course, a lot of good things happened because as the financial system in the rest of the world got restored

4923

and interest rates got lowered to new lows, in fact to negative numbers,

4928

money started flowing in again and we all sort of figured that it's all all right.

4933

But as we're seeing over the last two, three years,

4936

our banking system was actually getting unhealthier and unhealthier and unhealthier.

4943

Two things happened. One is that I think Raghuram Rajan realized

4950

that we needed to look at bank loans much more severely

4953

and therefore he mandated much, much stricter norms.

4958

So in fact, he forced the uncovering of a lot of bad loans

4962

and put much, much more stringent discovery norms in place and so on,

4966

to the extent that you see not as a mainstream of thought,

4969

but as almost a trial balloon going up right now which is perhaps we shouldn't have been so rigid.

4976

I don't want to comment on that. I think it's always good to see what's happening

4982

and then perhaps take a view on it, but that view should be in public,

4985

not hidden in subcommittees and not even coming to boards and not being talked about and so on.

4993

So the banking system was getting increasingly rotten

4997

and what we saw, if we go back to my starting point about investment,

5006

we saw massive investment taking place and a lot of it turned out to be malinvestment.

5015

So you saw a Tata, for example, investing in steel in the US and in Jaguar Land Rover.

5032

You saw a company which was doing spectacularly well

5038

and were the pioneers and the brand leaders in television entertainment,

5043

which is, or not the company, the group, the Z Group,

5047

investing in infrastructure and resources and Dish TV and so on and so forth.

5059

So it was almost as if this enormous amount of money that was on tap

5066

made people think, oh, there's so much money, what can I do with it?

5070

During a period where, again, we were back to new lows in interest rates in India.

5076

India had always been a very, very high interest rate regime,

5080

but now there was all of this money.

5082

And there were all of these people who were relatively new businessmen

5087

who had done extraordinarily well in fields which they chose.

5090

Now saying, you know, I'm a good businessman, business is business,

5094

and what can I do with all of this money?

5096

And then, of course, we had, just as with the US, we had this obsession with real estate.

5105

It was almost as though the word real was some sort of guarantee of real return.

5111

Real estate is real, so how can you lose in it?

5115

There are a million Indians being born every month.

5118

They need places to go to.

5120

India is urbanizing, therefore we need real estate.

5123

And this sort of story started feeding on itself.

5127

And we had a bull run in real estate, which was co-terminous with that in the US.

5137

So 2007, 2008, we saw a blip in that.

5142

But then as the money started coming back in, the graphs resumed.

5148

They didn't go down.

5150

And so people kept building.

5153

And regulation, very, very, very, very poor.

5158

People were using advances from buyers not to build against what the advances were for,

5167

but to buy more land.

5169

And we had this lovely word being tossed around, land banks.

5174

Almost as though the fact that you had land meant that the money was safe,

5180

whereas you were bidding up the price, and there were often no buyers for it.

5184

So we saw this enormous, enormous amount of investment taking place.

5190

And investment rates in India just kept going up, and savings rates kept going up.

5196

Savings rates in India peaked in 2008 at like 38%, 39%, which was, again, unprecedented.

5204

And that coupled with the money that was coming in from abroad meant that your investment rates

5210

and fixed capital were like 40%.

5213

And what also happened during this period is that banks made a lot of malinvestments,

5221

and they continued to double down on it rather than declare something as a bad loan, for example,

5226

which is not coming back.

5227

As I said, we don't want to recognize.

5231

We don't want to recognize bad loans.

5234

And also the short-term investments of the bankers and the officials in charge come into play

5238

because their incentives are that during their term they don't want to look bad

5243

by declaring bad loans and all of that, because in some sense it seems to reflect on them.

5248

They would rather give more loans, throw good money after bad,

5251

and kick the problem down the road for the next guy to solve.

5254

Yeah, so to stay with the issue of incentives, again, we have the principal agency problem.

5258

And it's very clear if you draw a sharp line, obviously there are people on both sides of the line,

5264

but if you draw a sharp line between the private banks and the public sector banks,

5268

it's very clear that there's a radical difference in terms of non-performing assets,

5274

which is a polite word for bad loans.

5276

In fact, I've heard an episode on that as well.

5278

Yeah, it's very clear that you can really draw a sharp line in between.

5282

There are exceptions on both sides.

5284

But as an aggregate, the difference in NPA ratio is a factor of 3 is to 1 or something like that.

5291

So it's very clear that there's that agency problem as well.

5297

And again, people always want to hedge that and mealy-mouth it and so on.

5304

And so 10 days ago when we had the 50th anniversary of bank nationalization,

5309

I saw all these articles which said bank nationalization was necessary and it was imperative and so on.

5315

I couldn't even bring myself to read them.

5317

Horrendous and economically illiterate.

5319

Yeah, completely, completely.

5320

So especially when we've seen the results, it's not that the jury is out, the jury is in.

5326

The results are very clear.

5328

Anyway, so I think there was a third factor.

5332

This is only my own personal idiosyncratic spin on it,

5337

which is that loans are priced in nominal terms,

5345

which means that as far as a loan is concerned, aside from interest,

5350

today's money is as good as yesterday's money.

5353

There's no accounting for the change in the real buying power of that money.

5359

Now what happens as a result is that if your loan book is going up by 20% per annum

5369

in a situation where GDP is going up by 8 or 9% and inflation is going up by 7 or 8%,

5380

then even if you have a static market share of the GDP, your loan book is going to go up by 16% per annum.

5391

That's the nominal growth in GDP.

5394

Now what this does is that if a loan from five years ago goes bad,

5399

in those five years, your loan book has doubled

5403

and therefore the share of the NPA to your assets today has halved.

5413

This was the rate at which the economy was growing in nominal terms 2008, 2009, 2010, etc.

5421

Since then what has happened is that the GDP in real terms, nobody knows the number,

5429

let's say it's 6%, inflation is let's say 3%, so now your GDP is growing at 9% per annum.

5437

For the real value of that bad loan made some years ago to halve is now not going to take five years, but ten years.

5448

And therefore the weight of old bad loans in your system starts showing up much earlier.

5458

So a combination of a slowing economy, slowing inflation,

5465

and all of those horrible loans made when real estate was fashionable,

5472

and very important in our country which is more a microeconomic thing,

5477

there was this enormous drive towards PPP, Public Private Partnership in Infrastructure.

5485

Everybody jumped into it. Everybody thought it was a great idea.

5489

And I have to say so did I, so I'm not saying I told you so.

5493

Everybody jumped into PPP, but as it turns out the models were not thought through carefully.

5499

There was no clarity on how the repayment would come.

5502

And so people with absolutely no experience of how to recover money from infrastructure projects

5511

in an economy and a regulation system which is still fairly socialist.

5517

Oh, how can you charge people so much? Oh, let's stop toll on this.

5521

Oh, we can't charge flyers so much to take off from Delhi airport, etc., etc., etc.

5529

So here were all these people who didn't know how to roll out infrastructure projects,

5536

whose background was in making television shows or running trucking systems or you name it,

5544

all jumping into PPP because it was fashionable

5548

and because they were going to get brownie points from their local politician

5553

for setting up 20 miles of toll road or whatever,

5556

all jumping into this game without any clue as to how to manage them.

5560

And more importantly, without a clear political shift having been made in favor of people paying for infrastructure.

5568

So all of these went horribly belly up.

5572

And so when you have this kind of situation where something that becomes flavor of the decade

5580

and huge amounts of investment pile into it,

5584

which in our case was both housing as well as infrastructure as compared to the US,

5590

where it was virtually a monoline story.

5593

And then they all turn bad.

5595

And now you have the same dynamic playing,

5597

which is banks having to write off money,

5601

investment committees and banks turning conservative,

5605

available funds going down,

5608

government getting strapped because the government is now the sole owner

5612

so you can't mobilize funds from outside in order to recapitalize those banks.

5617

Recapitalization funds being restricted, you have the entire credit system choking up.

5623

And so credit growth starts going down.

5627

And that's what we've been seeing for the last few years.

5631

It should have happened 10 years ago.

5634

And it's not one party versus the next because during these 10 years,

5637

we've had UPA2 and we've had NDA1.

5642

So I'm not pointing the blame at any one political dispensation.

5648

And the impulses of the state are the impulses of the state at the end of the day.

5652

Exactly.

5653

Which party is in power is an unnis bis kafarak, really.

5655

Yeah, that's pretty clear.

5659

And so you had this massive credit crunch.

5664

And then for a whole host of reasons, some endogenous, some exogenous,

5669

you've also had slowing growth.

5672

Now, I think what we're seeing is exceedingly complex.

5678

It doesn't fall into the simple narrative with which one could perhaps express what happened in 2008.

5685

We're seeing slowing growth.

5688

We are seeing obfuscation of reality,

5695

which means the data is not coming out accurately,

5699

which stands hugely in the way of finding solutions.

5704

Because if you don't know what the problem is, you can't find the solution.

5707

Almost puerile to have to say that.

5709

But one has to because that is the situation.

5712

And I had an episode on the GDP with the economist Rajeshwari Sengupta a few weeks ago.

5716

So I'd recommend check that out.

5719

I learned a lot in that episode.

5722

Yeah.

5723

And so, you know, we have a situation where for the last four years we've been squabbling,

5728

or three years we've been squabbling about what the GDP growth rate is.

5733

And even by the government's own numbers, it's 5.8 percent for the last quarter.

5741

And there's a government which said they would bring GDP up to 10 percent.

5745

Now, that's a pie in the sky.

5747

Because to go back to what I earlier said,

5750

unless you have high savings and you have high investments, you're not going to have high growth.

5755

And the numbers that we do know is that savings rates have gone down from 38 to 32 or 33 percent,

5763

and that capital formation has gone down from 40 percent to the low 30.

5768

So obviously growth is going to come down.

5771

In fact, all of these other indicators are so bad that it seems implausible that the GDP is what the government says it is.

5780

It just fails a smell test.

5782

Yeah, it completely fails a smell test.

5784

And so I sort of say, you know, it's somewhere between four and five plus,

5792

and I hesitate to go much over five percent.

5795

And we don't even understand the full impact of demonetization because so much of it was in the informal sector,

5802

which is most of our economy.

5804

Yeah, which is no longer getting recorded.

5806

And yeah, so, you know, as I said, there were a whole host of both exogenous and endogenous factors.

5812

One of the endogenous factors was certainly demonetization and the ripple effects of that, we don't know.

5820

One of the major exogenous factors, but you can't say it's entirely exogenous

5826

because for a while we blamed slowing exports on the fact that global trade is shrinking.

5832

But at the same time, we know that Bangladesh is now exporting more garments than we are,

5838

where we used to be a global leader.

5840

We know that exports to GDP are going up in Vietnam.

5844

So as a small, relatively small global player, you can hugely increase your market share,

5851

but we're not able to do that.

5853

So that's a partly exogenous, partly endogenous factor.

5857

And as a capital short economy, one of the ways in which to grow is to increase your exports.

5866

And we've singularly failed at that.

5868

You know, most of the emerging nations have grown on the back of export led industry.

5874

We've completely failed to do that.

5876

So it's really now, for the last two or three years, we've been hearing what I actually find a fairly amusing story,

5884

which is that out of the drivers of economic growth, India is functioning on only one engine, which is consumption.

5893

I find that quite hilarious because consumption is not an engine of economic growth.

5899

It's a product of economic growth.

5901

As I said, the engine of economic growth is investment.

5905

And whether that comes from internal savings or external savings is a different matter.

5911

But you've got to have productive investments if you have growth and you can't say that consumption is an engine.

5919

I mean, the Keynesian solution that everyone sort of puts forward is that if the government just pumps more money into the economy,

5926

consumption will go up because people will spend more.

5929

And if people spend more and there is greater demand for goods and services, that will be sparked and so on into a virtuous cycle.

5936

Where does that break down?

5937

Well, you know, there is some truth to that, but it's a very, very distant truth

5946

because first you've got to create that consumption and then that consumption has got to go up enough

5951

for entrepreneurs to feel that now they need to expand capacity and then they've got to expand the capacity.

5960

And then that expanded capacity is going to lead to more employment.

5963

So, you know, it's a cycle that you have to continue for a long time before it starts kicking in.

5970

At this point in time in India, yes, that would probably be the only solution.

5975

But the fact is that our government's finances are also now enormously stretched.

5984

And any money that the government puts into the economy like this also has an opportunity cost.

5988

It's coming from somewhere and could have been put to some other use.

5991

Absolutely. So we, you know, the favorite phrase is crowding out.

5995

So government investment crowds out private investment,

6000

not from the point of view of making it difficult for me to set up a factory

6005

because the government has bought the land, but from a financial point of view because

6010

there will be less credit available for you.

6012

There will be less credit available.

6014

And, you know, there is at a recent colloquium on the political, well, on India Post budget,

6028

Yamini Iyer of the Center for Policy Research made a very perceptive speech.

6035

Only hindsight will tell us whether she's right or not.

6038

But her analysis of the narrative and the way it's shifted over the last few years,

6043

I thought was very, very sharp, where she said,

6046

is that we've moved away from the current leadership of the economy,

6053

describing it as a vibrant growing economy to talking about transfers

6062

and talking about redistribution as being the main narrative.

6070

I thought that was really, really perceptive because that dialogue is completely gone

6075

about India being the fastest growing large economy in the world

6079

and we're going to grow at 10% per annum, et cetera, et cetera.

6083

And it reeks of desperation.

6086

What you're implicitly admitting with that is that the pool is not growing,

6090

the pie is not growing quickly enough for everyone to benefit from it.

6095

So what little there is of it, we are going to redistribute.

6098

And we are going to do it in populist ways and try to win votes for it

6102

and spin it with all these different narratives.

6104

But actually we are just screwing everybody.

6106

Absolutely. Absolutely.

6108

And we seem to have this ability in terms of governance and so on and so forth

6116

to get some things desperately wrong.

6121

So, for example, there was this huge dialogue about make in India, et cetera, et cetera, et cetera.

6129

But the fact is that in the last two months,

6134

I've got two sets of notices from the income tax relating to angel tax.

6139

You know, you can't get something as straight as that,

6143

which is that a tax that was created to try and prevent

6149

Vainami transfer of funds into shell companies,

6154

then an income tax officer can't make out the difference between a startup

6157

and a shell company in some bilane in Calcutta.

6160

You know, there's something seriously wrong in the communication between the economic high command

6165

and the income tax department, if you can't make that out.

6169

You know, a 21-year-old can make out the difference between a shell company and a startup.

6175

You know, we still haven't been able to sort out ports and infrastructure relating to exports.

6183

So all this stuff is just empty rhetoric.

6187

And you can game the ease of doing business statistics

6195

by concentrating on what happens in Bombay and Delhi, just as you can game any exam.

6202

I mean, any metric can be gamed and any data which is brought out by the government can be manipulated.

6207

So what does it all mean?

6208

Yeah, but if you ask any businessman off the record,

6213

the compliance demands have gone up and India has now become the biggest exporter of millionaires after China.

6222

No, that's a really serious summit.

6226

And the way in which it's happening is a lot of small and medium-sized businessmen

6234

have decided it's not really worth it running businesses.

6240

I've spoken to businessmen, friends of mine who are disgusted, who are thinking of leaving,

6245

who keep talking about, you know, if we could just shut down our factories, blah, blah, and leave tomorrow, we could.

6251

And some of them, in fact, say that GST, the way it's being implemented and carried out,

6255

is far worse for them than demonetization, decimated industries.

6260

Sure, the compliance costs are enormous.

6262

And the government, instead of making it easier to pay taxes and so on, making it more and more difficult,

6269

and, you know, all of these operate at the margin.

6275

But the fact is that if you, A, lose millionaires,

6283

B, if you move money from rich people to poor people, both of them result in lower savings rates

6291

because the marginal propensity to consume of the poor is much higher than that of the rich, you know.

6298

And the other shift that's happened, especially over the last month or two,

6305

is that overseas investors are looking at India askance.

6310

And so each of these in numerical terms may not be a huge amount,

6316

but, you know, you add a few basis points here and a few basis points there,

6321

and take that away from savings and hence investments and so on.

6327

You end up with fairly significant drops in economic growth

6331

at a time when the government is really, really hungry for political reasons

6337

to put money into current expenditure rather than into investments.

6343

And so you basically undermine the long-term productive capacity of the government.

6352

If I go back to, you know, what we were talking about, which is about investments and so on,

6360

all of this is happening against a backdrop where,

6366

for the last four or five years, there was this sort of rah-rah around the Indian economy,

6374

you know, fastest growing economy, major economy in the world,

6379

a dynamic focused government which doesn't have to mess with what's happening in parliament

6385

and therefore pro-growth, etc., etc., etc.

6388

And your introduction about narrative, you know, this was a very powerful narrative,

6393

and it carried the stock markets through.

6398

Now, the same company with the same profitability today,

6405

if it's looking at high growth for the next five years,

6409

is going to command a very, very different price

6412

from the same company with the same profit number today where growth is looking shaky.

6418

And I think that Indian stock markets have not yet reckoned with the disjunct

6426

between the way in which stock markets are getting priced

6430

and the underlying growth of the economy.

6436

You know, the price of Indian stocks is at least three standard deviations above the mean,

6447

and that can't sustain for very long.

6449

And that's what brings me to what I see as, just from that limited point of view,

6455

to get the economic or the financial or the fiscal or the jobs

6460

or the other demographic crises in the country and so on,

6466

is to this particular opportunity, you could say,

6472

for people like me to say, you know what, the stock market is grossly overpriced.

6478

A, protect yourself by taking some money off the table.

6483

And in that sense, you know, the last four or five years have been a slow motion,

6490

less intense sort of replay of what happened to me in 2007,

6496

where I said markets are going to crash and they didn't till they did,

6503

to everyone saying, oh, you know, we're going to see a resurgence of investment

6509

and the power sector is going to mushroom because we have this new scheme called Udaya,

6516

or whatever it was, and infrastructure is going to boom, et cetera, et cetera.

6521

And I say, you know what, it's not so easy.

6526

And people were selling it as a Modi story.

6530

And I was saying, you know, it's not Modi.

6533

It's about the fact that certain very, very, very hard-headed,

6539

deep responses to the banking crisis need to be made.

6544

And they're not being made.

6546

And if you think Modi is going to do it, that's great.

6552

I was mildly hopeful that he would.

6555

But one didn't see that kind of break from incrementalism and hiding things under the carpet.

6562

In fact, in terms of hiding things under the carpet,

6565

the Modi government proved to be even more adroit than earlier governments.

6572

There are masters of narrative management to the point that they seem to think,

6576

perhaps correctly, that narrative management is all that matters.

6579

Governance does not. Optics is everything.

6581

And the 2019 election seemed to have even vindicated that.

6585

But my sort of follow-up question is that, you know, at the start of the show,

6589

I mentioned the different kinds of crisis that we are having,

6592

which have been decades in building up.

6594

There's the jobs crisis, which is exacerbated by demographics,

6597

in the sense our demographic dividend is turning into a demographic disaster.

6601

You have 12 million people coming into the workforce every month,

6604

12 to 20 million, depending on where you take the numbers from.

6606

Every year.

6607

Every year.

6608

Luckily, more than a million.

6609

Yeah, it's about more than a million a month and 12 to 20 million every year.

6614

And those jobs simply aren't there, which you would imagine would lead to youth unrest

6620

and not really manifested in a big way yet.

6624

There is an agricultural crisis, which has been building up for decades.

6627

And again, I have had episodes on that.

6629

And it's not necessarily the fault of any one party or the other.

6633

But the fact of the matter is that this party also is doing nothing to solve it.

6637

Plus, there is now this credit crisis and a different sort of financial crisis in the making.

6644

And a fiscal crisis.

6645

And a fiscal crisis.

6646

So my two sort of questions for you is that number one,

6650

you would imagine that look, something's got to give at some point.

6653

What could it possibly be?

6655

And the second question is that what can now be done to mitigate this

6660

and what is realistic to happen?

6663

As far as the second is concerned, I don't see anything that can be done in the short term.

6670

And governments are notoriously bad at solving long-term problems.

6676

And to take a hard line on matters, as we've seen in the past,

6684

especially in India, requires a crisis, a crisis that actually sort of wraps you in the face.

6692

You know, financial crises, economic crises are a long time in coming.

6697

The ingredients are all there.

6699

But when do they blow up?

6701

It requires a sharp discontinuity somewhere.

6705

And you can't pinpoint either the time or the manner of it.

6713

And what strikes me about this one and why it might be deeper is it's not just an economic crisis per se,

6718

it's a social crisis as well.

6719

But let me just stay with the economic crisis just for a second,

6722

which is that all of this is against the backdrop of very high provision of liquidity around the world.

6733

And if that for any reason had stopped, then the crisis in India would have been deep and sharp.

6742

That's not happened as yet.

6744

And that's papered over some of the cracks.

6748

It's allowed us to keep going.

6751

Because even through the last three years, literally until July, we were still getting money from abroad.

6757

People were still putting money in.

6759

People were still buying India as a growth story kind of narrative.

6764

So I think that as long as there is global liquidity and as long as a significant percentage of those

6778

who are those global investors who are tasked with putting money into emerging markets coming into India,

6785

I think that crisis may not strike very sharply.

6790

So, you know, maybe again going back to my personal practice,

6794

maybe those shorts won't yield the same kind of X returns as they did in 2008.

6802

But I still prefer to be largely out of the markets than in them, even if I don't take huge deep short exposures.

6813

I believe that the crunch, when it comes, will come from the external sector.

6824

It will come when we find it difficult to borrow money from abroad.

6831

It will come when the Indian government finds it difficult to meet its payments.

6839

Because we still have, you know, we keep talking about our foreign reserves.

6847

But again, I find it very funny, you know, we have this number of foreign exchange.

6851

Nobody talks about what we owe abroad, which is always larger than what our reserves are.

6857

So the fact is that on a daily basis, even though our bond markets are not as liquid as they should be,

6866

we have restrictions on foreign borrowing and so on.

6869

But the fact is that on a daily basis, foreign investors are buying bonds, you know.

6874

And if the underlying economic reality continues to slide,

6882

a point in time will come when the government can manufacture whatever narrative it wants to,

6887

as far as the Indian consumer is concerned.

6891

But foreign investors march to their own tune, you know, they're going to take their own call.

6897

And if at some point in time they decide, you know, these are not risks worth taking,

6902

then conditions can snowball very, very rapidly.

6907

And what social manifestation do you see of this?

6911

India has got to be the most tolerant country in the world.

6915

We tolerate every kind of injustice, every kind of bad governance.

6923

I mean, we were having this conversation, Amit, about a month ago when I was in Bombay,

6928

and we were having dinner and we were talking about the state of infrastructure.

6932

I find it inconceivable that in the year 2019, you can have one of the financial centers,

6942

in the modern world and certainly of Asia, running on as antiquated and dilapidated

6949

and uncomfortable and sweaty a suburban train system as exists in Bombay.

6955

It's anti-diluvian. It's inhuman.

6959

And you have 12 people a day dying as a result of the way in which that rail system interfaces with the population.

6966

And it's normalized. We take it for granted and we have to get to work every day.

6970

So that's the spirit of Bombay.

6972

But this can only happen in Bombay. Elsewhere, this would lead to riots.

6976

This can only happen in India. So we've internalized all of this bullshit.

6980

We've internalized the fact that the government can mistreat us whichever way it wants.

6985

And it's part of our legacy, our spirit, our tolerance, our passivity, our Hinduism, whatever else it is.

6995

And maybe it's just part of our majburi. What do we do?

7000

Well, you know, but the thing is that majburi is an Indian word.

7006

And we've seen this movie in Latin America.

7010

And this movie of bad governance, of urban decay, of lack of jobs has led to extreme violence.

7022

India, surprisingly, has very low crime rates, very low homicide rates.

7029

So it is cultural.

7031

And I think the other thing is, which is also cultural, is the fact that families are much more tolerant of people within the family who don't do so well.

7043

And they don't get frustrated at young men particularly because we also have one of the lowest female labor participation rates in the world.

7054

So women are not necessarily expected to bring in money.

7057

But the fact that the young man hasn't been able to get a job, you know, and he just sits around and he hasn't got a job.

7062

And he keeps applying to government jobs which aren't available.

7065

And he's not getting off his ass and going to sell newspapers at the corner or whatever it is to make a living.

7072

So we seem to take all of it in our stride.

7075

And on balance, even though as an economist I really, on balance that's probably a good thing.

7082

I'd much rather live in a poor and passive society than in a violent, bullet-riddled one like Brazil.

7092

Which is equally poor.

7094

But at some point one wonders if something will give.

Less poor.

True, true.

Much less poor.

Nevertheless, very intolerant of all of that.

7102

So to kind of round up this episode, let me ask you a question with which I sort of end many of my episodes on whatever the subject of the episode is.

7111

You know, you've painted a very bleak picture of this current crisis.

7116

In fact, a basket of crises as it were that we are undergoing right now.

7122

Looking forward to the next 10 years, what's the best case scenario?

7126

What's the worst case scenario?

7131

The worst case scenario is that we slide towards a Latin American kind of situation of deep unrest.

7145

And widespread impoverishment and deepening social fissures between the rich and the poor.

7159

Poor countries which get into financial difficulty end up with these kind of patterns of distribution.

7170

So that's the worst case scenario.

7178

The best case scenario is that we have a government that realizes that we need to encourage entrepreneurship in deed.

7200

And through removing a lot of the barriers in place, of which there's an unending list, both in industry and services, as well as in agriculture.

7214

And that as a result, the current despondency among economic actors, I mean entrepreneurs and industrialists, lifts.

7226

And because this whole aspect of animal spirits, which Keynes talked about, is a real fact.

7236

It's the biggest unknown in the entire equation.

7241

And if you can bring that back into the system, then the fact is that Indians are extraordinarily entrepreneurial.

7249

And even though it's a thin slice, the best educated Indians are extraordinarily well educated.

7258

And are extremely good at setting up businesses and finding the gap, as it were.

7270

And so that's the best case scenario, that we're able to encourage entrepreneurship and economic growth.

7279

Is it likely to happen in as short a period as five to ten years?

7286

Is something that worries me, because when the wave changes from exuberance to pessimism, it takes a long time to reverse.

7301

And all of the impulses of the current government, which has five out of those ten years, at the very least, to run, seem to be towards control rather than encouragement.

7314

And it's kind of tragic, because the best case scenario, as you pointed out, is...

7321

I sort of look at Indian history as a tussle between the state and society.

7327

And society is madly creative and entrepreneurial and full of these animal spirits.

7333

But the state has restricted society from reaching its full potential, in a manner of speaking, which continues to the present day.

7340

So the best case scenario in this case, to put your words slightly differently, is really the state getting out of the way of society.

7347

And kind of the opposite seems to be happening.

7351

Absolutely. We are moving towards tighter and tighter and tighter, top-down control, rather than letting...

7359

So to put it in a third way, which is this gorgeous word, very simple word, is trust.

7369

I think those societies do best where there's widespread trust in the system.

7374

We're seeing trust squeezed out of the system.

7378

We are seeing deeper and deeper polarizations, and certainly going back to businessmen.

7385

And businessmen are key to growth of an economy.

7388

Businessmen are more and more looking over their shoulders, as to what they should do, where they should invest,

7396

whether their accounts are in order, etc., etc.

7400

And if you can't bring trust back into the system and amplify it,

7407

obviously we're not going to get to Scandinavian levels of trust in five or ten years,

7412

but at least start moving in that direction, then nothing is going to happen.

7419

Maybe the best case scenario is that things will get so bad that we are forced to move in that direction, Mohit.

7424

That's what I said. We need another crisis.

7426

We need another crisis, and we need to end this podcast here because you, dear listener, must be so tired,

7432

though I am told that the seen and the unseen has made people across the country fitter as they prolong their exercise routines

7438

because they cannot bear to stop listening.

7441

So thank me for that. Thank you for listening, and thank you for coming on the show, Mohit.

7446

My pleasure, Amit.

7496

Hello, everyone. Welcome to Tech Careers in the New, the new podcast series presented by Accenture.

7501

I'm your host, Shiladitya Mukhopadhyay.

7504

In this podcast series, we'll get you the latest and greatest in the world of technology

7508

that's shaping the future of business as we know it.

7511

We're talking intelligent platforms, cloud, AI, blockchain, extended reality, and a whole lot more.

7518

Every fortnight on Wednesdays, we'll have for you a hot topic

7522

with expert speakers from Accenture talking about top trends in the space,

7527

how these are changing the world and creating growth across industries.

7531

And importantly, we'll tell you how you can learn more,

7534

build your skills and expertise to grow and stay relevant in your career.

7539

Episodes out on the IVM Podcasts app or wherever you get your podcasts from.

7548

Hello, everyone. I'm Zain.

7549

I'm Avanti.

7550

And welcome back to a brand new season of Marbles Lost and Found.

7553

A show on mental health and its stigma, and we're kind of making it an open conversation.

7559

Pretty much, yeah, and we're really, really excited about the season

7561

because we have a number of guests on and we'll be talking about things like addiction,

7565

grief, children and mental health.

7567

Exactly, children and mental health. And our listeners have also written in.

7570

Yeah, and we have an episode dedicated to that.

7573

Yes, and guys, thank you so much for writing and we really, really appreciate it.

7577

And we're really excited for you to tune in on Tuesdays on the IVM website or app

7581

or wherever you get your podcasts from.

7583

And you can find Marbles Lost and Found on Facebook

7586

or you can find Marbles Lost and Found on Instagram as well.

7589

The handle being Marbles Podcast India.

7591

Can't wait for you to tune in.

7592

Thank you very much. See you guys soon.

Ep 135： Two Economic Crises (2008 _ 2019) | The Seen and the Unseen