Tech war in Australia, Trump’s impeachment hearing, companies moving to cheaper areas, volatility in the market, and online dating — these are some of the topics in the recent guesting of Tony Nash at BBC’s Business Matters. From Texas, he joins Rahul Tandon in UK and Michelle Jamrisko in Singapore.
What will happen to Australian businesses if Google left? Will Biden be involved in China deals? How will Trump’s impeachment hearings will bring about? How will this move to rural places evolve overtime, for example Californian companies moving to Texas? How will the stocks market play out with too much volatility with increasing number of retail investors? And will online scrabble be the new way of dating?
This podcast was published on February 12, 2021 and the original source can be found at https://www.bbc.co.uk/sounds/play/w172x197h9pkh53
BBC Business Matters Description:
The President of Microsoft, Brad Smith, says Australia’s proposals that tech giants pay for news appearing on their services, strengthen democracy by supporting a free press. We hear more from Rebecca Klar, a tech journalist from The Hill. As the second cricket test match in this series between India and England starts this weekend, the BBC’s Rahul Tandon reports that more Indian players are now coming from smaller towns than bigger cities, and how that reflects a broader economic change taking place in the country. It’s an interesting time for dating services with the pandemic throwing the world of romance into disarray; our reporter Deborah Weitzmann has been to meet some people looking for love in the time of Covid. And we’re joined throughout the programme by Michelle Jamrisko, Blomberg’s senior Asia economy reporter who is based in Singapore and economist, Tony Nash from Complete Intelligence; he’s based in Houston.
Show Notes
RT: Will there be some sort of compromise? Because Australia, and many of the businesses in Australia, particularly small and medium sized ones, would struggle if Google suddenly left?
TN: They would. How much of a compromise there would be? I’m not sure, and I think about like GDP in Europe, that wasn’t a real huge compromise. We start to see these nation states starting to act like nation states again. We’ve seen India push back on Twitter over the past. Right? And we’re starting to see countries push back on tech giants because they’re sovereign nations.
RT: What will we see countries getting together in a unified way to push back on the tech giants because there are two very powerful sides there?
TN: I hope they do, because they rule their own countries. And it’s up to a company to learn how to operate within a geography rather than the other way around.
RT: Do you think President Biden will want to get involved in this particular issue?
TN: I don’t think so. It’s interesting when you look at, like China has their way with tech companies all day long. They cultivate their own giants and they do whatever they want with Western companies. I don’t really think Biden will get involved or want to get involved, to be honest. I think it has a lot to do with whoever is closer to the campaign and whoever is closest to the Oval Office. But I think he would want to stay out of it.
RT: Do you think minds will be changed amongst those Republicans, 17 of them are going to have to vote to impeach President Trump? That looks unlikely, doesn’t it?
TN: Well, like Joe Biden, I really don’t know of anybody who’s watched it.
RT: I read something that said this had more viewers than the first impeachment trial. But from what you’re saying, it’s not exactly something that’s bringing in the ratings figures.
TN: I’m a political nerd. I talk to people all the time. I honestly don’t know of anybody who’s watching it. So what you say is possible, but it’s just not what I see. Do I think they change minds? Look, Trump is out of office like somebody pining over like losing a football game or something. This guy is out of office. They need to just let him go. That’s the way most of the people who I speak to feel. Every politician is competitive. Every politician uses rhetoric to win. And what Trump said was no different from what many, many Republicans and Democrats have said over the last four, eight, 12, 16 years. So I think this is just a clown show and it’s not going to result in anything.
RT: Michelle raised an interesting question, that is this about preventing what happened, making sure it doesn’t happen again or is a little bit about this preventing from Donald Trump running again?
TN: It’s more the latter than the former. If we look at the Supreme Court justice discussions over the last two years, especially during the cabinet hearings, there were protests in government buildings in the capital all over the place, people being violent.
RT: But this was different and they’re very different.
TN: But I don’t understand how it was different because though this was different because there was so much ruckus made about it and people wanted to make an issue of it. But if you look at the protests and the violence around the Kavanaugh hearings and you set them side by side with what happened on January 6th, there is very, very little difference aside from the Capitol Police letting people into the Capitol building, which they did.
And it’s on footage. People also let protesters into various government buildings during the Capitol hearings. So, again, this is completely about Donald Trump. Democrats are obsessed with Donald Trump and they just need to let it go. The guy’s not even in office anymore, so they just need to let it go.
RT: It’s not going to be let go for a while. And it’s going to be a conversation that we will be continuing here on business matters over the next few days as that impeachment trial continues. And Tony, China says to the U.S. confrontation will be disastrous. President Biden says he will work with China when it benefits the American people and he will have to work with China on some issues when he particularly his ideas on climate change.
TN: We will live in an integrated world. I actually think Xi Jinping would talk a a tougher game on climate change than Biden would. He certainly has at the World Economic Forum for several years. The question is what they actually do about it.
I actually worked for the Chinese government for a couple of years and the Central Economic Planning Agency. So I understand in a very detailed matter how the Chinese government actually works. And this discussion is just preliminary. It doesn’t mean anything. OK, we’ll know in six or nine or 18 months what the real policies are.
My concerns are with, we really have to look at the people on the National Security Council in the US and their relationships with China.How many paid speeches have they had in China that those are the biggest issues that we need to look at with regard to China policy today from the U.S. perspective.
RT: That trend in India where we’re seeing the growth of what’s called Taiwan tier two, often, these much smaller towns. Is that something that you’re seeing in Texas at all or is it still very much focused around Houston, Dallas, Austin, economic growth?
TN: First on India. The tier two and three cities is something I would forecast when I was with The Economist back in those days. We did work on this 10, 15 years ago. And it’s amazing to see it happen. You go outside of cities like Chandigarh and you see what used to be fields. That is all some suburban cities. It’s really incredible to see that is in Texas.
What we’ve seen since COVID is more people are moving to semi-rural areas or buying bigger plots of land further out. And it’s some people from Texas, but it’s a lot of people from outside of Texas. Some of us, including myself, get a little bit defensive about Texas, if you can imagine.
RT: One interesting thing I think that we are seeing as well is maybe COVID will accelerate this. But this was always going to happen, that we will see businesses moving to cheaper areas. We see that in the States, don’t we? With some movement from California towards Texas?
TN: Yes, but you also see this in places like I was hearing about a technology company that in Taiwan, so the companies are based in Taipei, for example, and the workers wanted to move outside of the city since they couldn’t come into town, into the office. So they moved to small towns around Taiwan where their family was. The company actually indexed their pay based upon the cost of living to those country towns. Right. So and I think what you’ll start seeing as you see the diffusion of employment, companies will start looking at their costs and say, “look, these people aren’t paying for an apartment in Manhattan, they’re living in Iowa.” So we need to really understand where people are living. That company in Taiwan was using mobile phone records to understand where those individuals were so they can index their pay. I think you’ll see more and more of that. It’s not that people won’t be able to live. It’s just that they won’t make the salary from Manhattan while living in, say, rural Texas.
RT: I think we’re seeing that in many parts of the world with that sort of story you described. The taking place in and companies looking at and what’s happening with employees if they move to what you could describe as cheaper areas.
We had Carrie Lee here, there being a little bit cautious about what’s happening with many of these companies are going public. There is a lot of cash around from stimulus in the U.S. Interest rates are very low. Do you see this continuing?
TN: We’re very late in the investment cycle and we’ve moved from a company being valued on its earnings or future potential to a speculator’s market. And a lot of what we’re seeing in markets today are stocks that pop for one day by 50 percent and then they lose that 50 percent the next day. We just saw that with a big pot stock, a big marijuana stock over the past 24 hours here in the U.S. And people are trying to to squeeze out as much gain as they can in markets. So this this market is very long in the tooth. I just don’t see this lasting much longer because we are in such a speculative market right now.
RT: Do you not think that when stimulus begins to to slow down in many parts of the world, some of that frothiness in the markets may disappear?
TN: There’s a concept of stock, meaning how much money is in the market. And then there’s a concept of flow, meaning how much money is moving into the market. And because a lot of the investment climate right now is focused on flow. So how much money is coming in stimulus? How much money is coming in support from other mechanisms? Not necessarily a reallocation of the money that’s already in the market.
One of the big triggers potentially could be a possible disappointment with the the package coming out of the U.S. Congress. If it’s not what people have been promised, then there’s a possibility that those marginal investors who’ve been pumping stocks up by 50 percent per day could be squeezed out of the market. And then we see that flow start or grind to a trickle. And then the action really slows down and then we start to see a correction. No one wants to call a top. I don’t necessarily think this is it. I have no idea. But it is that stock and flow discussion that really worries me.
RT: The thought of dating is always absolutely petrified me. I was always happy my mom would have arranged my marriage and to Indian way somehow there were not many takers. Unfortunately, if you had to go back in the dating scene, would playing Scrabble online be your idea of romance?
TN: No. No, not at all, sorry, it just doesn’t cut it.
RT: No?
TN: We would find way. Look, I have two 19 year old kids. They get out, they’ve been social. Their friends are dating. I know it’s impacted some parts of the world in a very difficult way, but it hasn’t necessarily impacted my kids and their friends. I certainly wouldn’t settle for online scrabble. Who is the researcher at the university in London who snuck out for a hookup? I think we would sneak out outside a curfew to get things done if needed.
RT: OK. All right. Thank you, Tony. We’re getting a very different image of you now. Tony, stop sneaking out, please. No breaking curfew for you. That’s it for business matters.