Ukrainians Return Home by the Millions

You can also listen to our radio show at two pm Eastern Time on Bloomberg Radio, or watch us on YouTube search Bloomberg glovel News. It is almost eight months since the Russian invasion and war in Ukraine. Just over six million people who fled their homes because of that invasion have since come back, and an online story at Bloomberg business Week dot Com takes us to the individuals behind those numbers. Tim Mark Champion is the senior reporter

for international affairs. He's behind this story. It's available online right now. Mark is joining us on the phone from London, and Mark spent a lot of time in Ukraine reporting out this story. We got Joel Weber with us he's the editor of Bloomberg Business Week. He's with us right

now in the Bloomberg Interactive Broker Studio. Joel We spent a lot of time in the early part of the war hearing about many and many of them were women and children who left Ukraine when Russia started bombing it's cities, uh, and it's countryside as well. Why are so many people

returning even as the war continues to drag on. Well, I mean this is the home, their home, right and so at some level, um getting back there is is uh, you know, as long as you could take years in some instances, but you know, there has been um despite this kind of more recent um barrage, there had been a little moment where it felt like you could potentially return. And so what when Mark set out here, you know, he told us that he was interested in kind of

documenting this a while ago. And and really what what gets me is just this the humanity of this and what it's like to live through um, a total tragedy. And then also like there are things that feel really special there and you know, the dance studio is one market I wanted to ask you about what what what sticks out to you mark you you've you've been there multiple times now and I'm just curious, like bringing back for those of us who haven't been there, what's it like?

And as these people return to their homes. Yes, I mean all zones are strange places because they often have a sort of huge variation in uh, you know, in how things are, not just in terms of place, you know, for one area of a country to another, but also in terms of time. So when you're in a place like Butcher or ip In, Um, these were absolutely horrific

places at a certain you know, just a few months ago. Um. And the stuff that was being done to people we discovered since of course people who lived there new at the time was unspeakable. Um. And yet you go back now and people are rebuilding their lives. Um. You know, the restaurants are reopening, people are trying to make things work. All those women and their children, it's on. They want to come back. Almost everybody left Butcher for example, Um.

But they want to come back because they left their husbands behind, they left you know, parents, grandparents behind who couldn't move. Uh. And so you see them come back, And what interested me was what happens to them when they come back. Um, you know, are they are they the lucky ones who escaped, or are they themselves um, you know, kind of traumatized by it or um and

the experience. The result of you know, my reporting was simply that it's very difficult to escape the trauma because you know, for example, one lady was a uh a life coach, so she fled to Poland with their children, you know, right at the beginning before, which was occupied and was still fighting and uh. And she's in Poland. But what did she do. She carries on her work online. She's talking to people, her clients who are living through everything,

and so she lives through the same experiences. Another woman, very very impressive woman, was running a business center and she decided, well, what can I do to help? As as she was leaving, and she decided to set up a call center so that they could you know, uh, find out which people were stuck in their homes, couldn't get medicine, couldn't get food, needed help, and they could send people into help. Um. In the end, because it was occupied and you couldn't move, they couldn't do a

lot of that. But they got twenty calls from people saying, uh, you know, what's the news on the escape routes. You know, the green corridors are being made so they could help organize people to get out. UM. They also people would just call in and say, I just saw two people,

you know, children killed in a car happened at this place. UM. And they have this record of what happened throughout in Butcher where people were calling it in UM and that now record now remains that woman was really very sort of damaged by the whole experience because she was to live through it while it was happening and then again

when it came over in the news and was made public. Mark, I mean you've been back and forth, like what strikes you the most as you talk to these individuals, because I do think there is this sense that often sometimes all of us who are far removed, it's just another headline. But as you really tell us, I mean, the faces, the people, the stories, these are real lives that we're talking about. Yes, very much so. And it's it's hard, Uh,

you know, the jobs really aren't there. Butcher strangely is relatively lucky, which is a very strange thing to say, but uh, it is was always a clearly middle class suburb just outside of Kiev. Uh and because of its fame or or notoriety, whatever you wanted to call it, as a result of the massacres there where they found uh you know, mass grades and so on. Um, there is a lot of international attention. There are a lot

of international donors. Um they you know, if they are able to open doors and to get help in a way that a lot of other places in Ukraine that nobody has ever heard of can't. So in one sense they're quite lucky. But even there, uh you know, they they fifty percent of businesses are still closed. People can't

get jobs. The deputy mayor that I was talking to, not a great dynamic woman, was saying that, uh, she is hiring all kinds of hopeless the overqualified people to work in the you know, with her and the administration in the city hall, because they can't get any other work. And and samaries are lower than new work. Before the war, public fatories were never very high, and yet people are

willing to come and work. Okay, Mark, can you take us back to the Ango studio because it still gives me chills a little bit, and I just want to hear about what why why tango and what it's done for those that you spoke with, Mark, Just so you know,

we've got about in a a minute. Okay, So it's the really extraordinary thing about the tangle was that these are all beginners, and they are mostly women who came back and they are looking for ways of thinking about anything else other than you know, the grind of life and the trauma and everything else. And this is a way that they found to do it that if you if they have to just focus on their bodies and just

focus on you know, moving your feet the right way. Um, that for a couple of outs at least, that's the only thing that they think about. Uh. And uh, it was really it was uh you know, it's it's not literally therapy, it's not clinical, but it is something that they found to kind of make life more livable. Well, as you say in your story about for two hours twice week, the dancers leave those horrors behind and we can only just imagine, uh, in that break that that

gives them. Mark Champion, thank you so much. We've really been appreciate you reporting on all of this. Senior reporter for International Affairs at Bloomberg News, joining us on the phone from London. This story you can find at Bloomberg dot com, Slash business Week, and of course our thanks to Joel Webber, editor of Bloomberg Business Week, joining us here in our Interactive Brokers studio. You're listening to Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes. Tim

Stinovic on Bloomberg Radio. I gotta say, how did you do a presentation for someone? And we're talking about Bloomberg, And I said, one of the things I really do love about Bloomberg is how wide and deep we are in terms of scope, in terms of news coverage. You can go anywhere in the globe and find a reporter to talk about who have boots on the ground and really under a understanding story. And lucky for us, we have a colleague who's normally in Hong Kong, but she's

in New York this week. We're very pleased to have with a Sophia Horte Coast. She's chief China Markets correspondent for Bloomberg near She's based on Hong Kong Bureau. Yeah, but she's with us right now in the Bloomberg Interactive Broker's Studio. She's been here in New York for a little over a week. So if you're good to have you with us this afternoon. We want to talk China markets. We want to talk about what happened over the weekend

in China. But first I want an update from you about what things are like in Hong Kong right now, because there's been some big changes over the last couple of years. Sure, I actually moved there m almost five years ago. Now it's coming up to five years in January, and what what period it's been. I mean, when I moved there in thousand eighteen, Hong Kong was kind of the the Wild East, as it were, and it was it was the freest city in China. It is at the end of the day, still a Chinese city, even

though it has its own independent structures, independent systems. UM and the erosion of those independent systems is really really common to play in the five years that I've been there. But also UM and we were talking about this during the break. I mean, COVID zero was such a huge thing in Hong Kong. And when I say was should say, I should really say it is? I mean, you still have to wear a mask every every single day or

wherever you are even outside in Hong Kong. So I mean for me here, it's it's wild that you can just walk around the street and show your face and can see people smiling. Um. But really, I mean that was smiling in New York. I saw people smile. Maybe I just smile everyone. People smile back. Maybe they think

I'm weird, Yeah exactly, No, but but really smile. Okay yeah, Carol's um, but no, but but really, I mean my point is that, yes, the protests were hard on the city, the aftermath of that national security law that came into play, that was obviously very very controversial, But it was really this year that you saw people just throwing in the talent saying I want to leave. Um. I mean February you had the stories that you heard here of parents

being separated from the children. That's all true, that happened. Um. I mean, you would go into the hospital system if you tested positive for COVID, and you really had to think about maybe not leaving for at least fifty days because you have to test negative so many times. So people did leave and and a lot of them didn't come back. The brain drain was extremely severe, so Sofia like when we think about um the next tenure of President g and there's a lot of news that came

out over the weekend. We've been talking about it all week. So this will be his third term. You know, what kind of China is it going forward? You know, coming after decades of being a market that everybody wanted to be a part of and to be able to tap into that, you know, growing domestic home base, the one billion plus population. So how should global investors think of

China going forward? I think there was a lot of expectation and hope that during the Party Congress there would be any any kind of signal, any kind of signal or or because you know, when it comes to China, it's all about signals. It's never straightforward reading what's happen penning in China, that there would be some kind of pivot from Shi jumping, or at least a government that was more pragmatic and more focused on growth and again

looking at the economy. Uh instead of um, you know, prioritizing Si jimping thought um but stead they delayed right GDP, which was kind of like blew your mind. Yeah, So though there is kind of a there might be a boring explanation to that that people actually need to physically sign off on those reports, and there might be a COVID zero element there that the people who needed to

to stamp them couldn't couldn't physically do that. UM. But obviously it adds to the whole noise, in the whole uncertainty around where China's priorities are in terms of growth. And what She Jumping really made clear in the past two years is that UM communists the Communist Party's policies. And when when we say the Communist Party nowadays, it really does mean Si Jimping. I mean, he's not called the Chairman of Everything for no reason. UM. And that

trumps everything. It trumps economic growth, it trumps pragmatism, it trumps UM you know, profits by by corporates and by the China's biggest companies, and it trumps the markets. I mean the sell off that we saw in in Chinese financial markets, not just this year but last year. Importantly, that was all down to policy. And that's something that I think would never happen in a place like the US.

You know, if if Biden saw financial markets tanking because of policies, UM, you know that his government brought out there would be a kind of rollback, and we're seeing that in the UK now, I mean less trust is rolling back policies because of the market reaction. Shijiping didn't do that and didn't do that, really stuck to those

damaging policies for for for two years. But at the same time and really unfortunately about a minute left, but there are there was also at the same time policies that they said certain I guess Chinese regulators were talking about ways to prop up the Chinese equity markets. So sometimes it feels like mixed signals. It's mixed sALS. I mean it is. It is kind of invest as much as you like from you know, China is still does

still want foreign capital inside its markets. It's still wants to roll out the red carpet for um capital to come into China. It needs that capital, but it's very much on China's terms. That capital can't go everywhere. It can't go um you know, to kind of big tech or two streaming companies for example. He needs to go where she jumpin. C's are the biggest policy priorities for the future, and that's green, that's high tech, that's AI

that's chip making. China wants that kind of growth and not the you know, the kind of big tech or property market growth of the past decade. It's really fascinating. Hey, just have like fifteen seconds left. Sofia, do you ever envision at COVID zero policy going away or easing at all? Uh? Well, it can't last forever, is my conclusion, but it can last for a very long time. All right, there, it

is big thank you to Sofia Rtea E. Coasta. She's chief China Markets correspondent for Bloomberg New is usually based in our Hong Kong bureau, but with us in the Bloomberg Interactive Brokers studio from Hong Kong. It's not like there's a time difference or anything. It's bedtime. It's like the middle of the night. There, come back, come back, come back to New York and I love to continue and talk more with you. Our thanks to Sophia. All right,

you're listening in watching Bloomberg Business Week. This is Bloomberg Radio. This is Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes. Tim Stinovic on Bloomberg Radio. We gotta read on the economy thanks to the FED Beige Book. We did that at the top of our broadcast and keep it only. There are two FED meetings left in two we're talking about in November and December. We're very pleased

with us. A tap with us this afternoon, Chris Ansy, senior editor for Bloomberg News, who joins us on the phone from Boston. Chris, it's interesting because we got some data from the Federal Reserve earlier today in the Beige Book. I don't want to call it data, but it was anecdotes about what you know, the country is seeing in different or with the Federal Reserve is seeing in different districts,

and we saw a little bit of a cooling. Sort of difficult to kind square that with the CPI data that we got last week, but it always all raises a big question about, you know what, the Fed hiking rates so aggressively right now, why aren't we seeing it really play out when it comes to tightening financial conditions at least bringing down inflation. Yeah, that's uh, that's a good question. Uh. And uh, you know, we look at financial markets. Uh, we've got a beer market in stocks,

We've got an historic beer market in bonds. We've got a super strong dollar. All of these kinds of signs are screaming, uh, major reaction to the federal reserves, aggressive tightening. But when we look at the actual uh you know, economic data, we don't see any major problems here. Even you know, this morning's housing starts. Uh, they came off a bit in September, but the level of housing starts is still above where it was before COVID. Uh. We

look at yesterday's industrial production figure, Uh, it handily beat forecasts. Uh. And uh, the percentage of factory capacity that's in use is at a multi decade high. Um. Job games are still going pretty well. So uh. You know you were referring before to the jargon that economists use these long lags. Uh, they aren't that variable right now, I got to say, but there are these long lags between Fed policy action

and fundamental turns in the economy. Chris, I was trying to get uh tim to sing Long and Winding Road by the Beatles came into my head when I was reading long invariable Lags. I don't know why, Yeah, like it just as kind of a one of my least favorite Beatles songs. I haven't say, that's why I don't want to sing a carol. I don't want to send a favorite one. Okay, UM, so soon we're going to

be singing help nicely done, nicely done? Well you know in your writing today, um, in the Bloomberg New Economy Daily, because you you mentioned tourists who's got a story out about the report last week regarding central banks and how they have now quote revised down significantly end quote their estimate of where the U S economy speed limit is.

The significance of that, So that is significant because it means if the economy is kind of trend growth rate is lower than it was, it means that all of these indicators that we get uh don't need to be too hot to trigger inflation. That means that the economy is going to react in a more inflationary way uh to just small opticks in economic activity. Uh. And so it makes it all the harder to ring inflation out of the system. Uh. And you know we meant just

mentioned industrial output. Yesterday after that report, Goldman sacked economists came out and up to their running calculation for third quarter g d P to two point four percent, now two point four percent is above everybody's estimate of the U S trend. So if the US is clocking that kind of growth pacee, it just means more inflationary pressure and more work for the Federal Reserve to do to bring it down. So what does this all mean in the last minute that we have with you, Chris, for

the path of rate hikes going forward? I mean we're thinking for November obviously, what about December? What about what cash car? He said yesterday? Uh? How are you reading into it more and more and more looking at this whole time? Well, it means a hard day's night for Mr Powell and his colleague, that's for sure. But you know what I think is that, you know, uh Anna Wong and Bluebrig Economics was pretty prescient predicting, you know,

a five percent policy rate next year. Uh. And it's a call that she's increasingly uh that is increasingly shared by others. All right, well you work in yellow submarine next time, and uh, you are then going to be my favorite person. I'm gonna be totally in awe of you, Chris,

more than I am already. Um, Chris, thank you so much, really appreciate it really fits into our coverage here of Beige Book and just all things fed and especially as we get ready for that Bloomberg exclusive with Jim Buller, the president of the St. Louis Fed Our Thanks to Bloomberg New Senior Editor Chris Anty and who also knows his Bloomberg Bloomberg songs, I should say Beatles songs really well.

Writing in the Bloomberg New Economy Daily. You're listening to Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes. Tim Stinovic on Bloomberg Radio talking about Netflix throughout the day, Shares just off their high, still up about surging as a subscriber growth signaling the worst is over. It added two point forty one allion customers in the third quarter, exceeding internal forecast as well as expectations on Wall Street. Well chairman, president, co CEO, and of course the co

founder of Netflix. We're talking about read Hastings Winging on the conference call last night. He too, issuing a bit of a sigh of relief. Check it out. Well, thank god, we're done with shrinking quarters. So it's a big feeling of we're back to the positivity. We still got f X, so that's a huge hit, you know, as we've explained, So that's not going to go away. Um, but other than that, all the stars are lining up very well

for us. That was Netflix co founder co CEO, Read Hastings and chairman as well, from the company's conference call following Tuesday's earnings results. We've got a great voice with us. Geta Rananathan is technology and media analysts for Bloomberg Intelligence. She joins us on Zoom from our Princeton, New Jersey bureau. GA. Great to have you with us. So is it true? I mean, are we should Read Hastings actually be breathing a sigh of relief here? Is you know, one quarter

does not change everything, does it. Yeah, that's a great question. But I think we're back on track here finally. Um. You know, there was so much I think what had happened earlier in this year was this kind of perfect storm of all negatives, right, whether it was the COVID hangover, whether it was increasing subscriber uh you know, competition from other rival streaming services, whether it was the COVID log jam,

you know, causing all the production delays. It really kind of everything went wrong for Netflix at at the wrong time, right, and Um, you know, finally we're seeing some green shoots here, so they have a good trajectory in place. I mean, make no mistake, this is still a model that is maturing, so we're not going to see those explosive subscriber gains anymore.

But there are some catalysts in place which tells us that they do have a sustainable path to revenue reacceleration as well as opening up the market to you know, to reach a much broader audience with this new add tear that they're coming up with, which is priced really aggressively. In my view, hey, listen, will will be as excited with Netflix that that add to your story? Wasn't part of it? Right now? Geta in your in your view, yeah, I don't think so. I think we we definitely needed it.

Wasn't just reversal of subscriber losses, right, we need something at the end of the day, you know, this is a subscribe This is pretty much a subscriber story. Yes, they're trying to shift, They're trying to pivot away from just that hyper focus on subscribers to other financial metrics.

We're seeing that they're they're going to even stop issuing subscriber guidance, but still at the very core of the story, it is a subscriber story, and so you do need that add heere for kind of boosting those subscriber numbers, especially in a lot of the developing economies. Alright, So we're rebummed out that they didn't give some kind of a forecast. Were you expecting that from them or were you expecting to get some kind of guy So they did give us a forecast for four Q and and

the good news is the forecast was actually above consensus estimates. Uh, there's also potential upside because they didn't really bake in anything from the AD model. Given that it's still early days, what's going to happen is going here? Okay, that they didn't break out like in terms of a forecast for the AD model, that's okay, Yeah, No, I think that's okay. I think it's it's still really really early days. It's it's very hard to say how that's going to pan out.

I think what they're trying to do now is obviously really shift focus away from you know, kind of just that hyper focus on subscriber editions quarter and quarter out. And remember every time they do report those quarterly ads, we we do see huge swings in the stock, so I think, what, this is a good thing. I think it's actually a positive that they're not going to do this because I think it reduces the volatility a little bit. Otherways, there's just so much drama, you know, every time they

report quarterly numbers. Quita, how important was content in this quarter? Because we got I mean, it's kind of a funny question to ask because Netflix is all content, right, but you know, people will quit. They've learned if they don't always have something that they want to watch. We saw Stranger Things the new season. Uh, they released the Korean smash hit Extraordinary, Attorney Woo, some movies Gray Man and Purple Hearts. How important was that to the blockbuster number

that we saw yesterday? Did you guys watch any of that? Did you watch any that I did? I did. I'm a big Stranger Things fans, so yeah, I watched it multiple. You can only say it's part of your job. You have to do it. I'm just working here, okay, But I know, I mean, I think it's so much of the story really banks on content and what was really interesting I think in their investor letter, Tim and Carroll Is. They kind of showed us some of their pieces of content.

They showed us engagement and they said that their you know, engagement on the Netflix platform is way above their rival services, whether it's an Amazon Prime, whether it's a Disney Plus. And then they showed us like the Google search trends for you know, their latest hit, which is the Jeffrey Dahmer Show, and they and they compared that to both House of Dragons from HBO as well as you know a Lot of the Rings, which was the big splash

from Amazon. Sign similarities in those stories. No similar these no similarities. But it does show that you know, Netflix content, once it resonates, resonates and kind of builds that buzz, it really becomes like a big hitting title. And that's kind of what they're really looking to do. Um, you know, not just have a few of these franchises, but kind of have multiple many many of these sleeper hits, if

you will. So what does it mean. I'm just trying to make sense of this headline and forgive me if you've kind of touched on this stretched then to support all advertising demand. Are they saying that they're getting tons of it or like, how do you read that? Yeah, so they did say they did mention this on the call yesterday. They said that advertisers are absolutely wanting to get on the Netflix platform. And we're not surprised. I mean,

this is, you know, a premium experience. If you just kind of took a look at one of the ads that they debuted, it was actually for their new show Emily in Paris, and just to look in the feel of things, you know, and just to look in the feel of the ad is so different from what you normally watch. Right. It's stylish, it's engaging, it's modern. It almost feels like it's an integral part of the show. So, you know, I think that's what they're gonna do. They're

going to elevate the ad experience for for all players. Um, you know, the creative element is going to be huge, and I think advertisers know that. They realize that and they want to be on that Netflix platform. Hey, I wonder about the people who will be signing up for

the new version of Netflix, the ad supported version. Are Are they saying that it's people who've quit Netflix in the past because it's gotten too expensive and they don't necessarily have what they want to watch at any given time, or are people going to downgrade their memberships for cheaper membership options. Yeah, this, this trade down point was was brought up multiple times during the calling. What Netflix management kept saying is they don't really see a lot of cannibalization.

So what they're really trying to do with this new seven dollar price point, and remember this is historically the lowest price point that Netflix has ever priced one of its plans that is to kind of really attract a whole new market, tap to a whole different demographic, probably a slightly lower income demographic that wants to watch Netflix but just hasn't been able to afford, you know, maybe that the ten dollar price point or even the fifteen

fifteen fifty the standard uh plan. And so that's what they're kind of saying. Although the worry on the street is that many many subscribers, maybe even of subscribers, actually trade down. I don't personally think that's going to happen, because remember this is going to be a lower resolution, it's a seven twenty versus your ten a DP. And also you're not gonna be able to download all of

the content. In fact, not even all of the content is going to be available on this AD supported plan, So I really think maybe the risk of trading down is going to be somewhat limited. So in an ideal world, they don't lose anybody that's existing kind of members to some extenders subscribers, and that they just open up a whole new revenue stream, right and new members that maybe

weren't on it because it was too expensive before. I mean, that's that's the dream plan, right exactly, exactly, just opening up their addressible market. Yep. But the key when it comes to the content not all being available on the ad supported tier, that's a function of rights that Netflix has, right, they don't. It's not like they're withholding content because people aren't paying for the full subscription. Can you explain what's going on there? No, that's just because of some of

the licensing deals that they have in placed. And again, it's not a whole lot of content that's not available. It's only about ten percent of their entire content catalog that's not going to be available. And they said that they're working through these licensing rights with some of the you know, the third party providers. I think over time it will become available, but to begin with, they still

have to iron out a few wrinkles. Kita, what was there anything that with all that we got from Netflix and on the call after earnings, was there anything that you didn't get answered that you would love to just you know, hey, read, can you just tell me a little bit more about this? Yeah? I think you know. One of the things that we've constantly kind of scratched our heads with a little bit has been this whole

gaming effort. And just today we got this new news about them exploring a cloud gaming service potentially, now we know that anybody who's kind of for it into that venture, it's it's been really challenged, right whether it's been a Google Stadium, whether it's been Amazon, they haven't really been able to make much headway in that space. And so I'm just kind of wondering what exactly Netflix's thought process is here. Are they really looking to do something big?

Do they need to make a big acquisition? Um? You know, that's obviously one of the things that I think a lot of investors would like to hear more about from them. Does this just got about thirty seconds forty seconds left? Or does this say anything about from the other streaming service that we whether it's Disney's or Amazon, that we should be looking out for, just quickly now, just that you know, I think the streaming story is back in

a big way. I think investors are kind of totally soured on it, but I think what this tells us is that there is a lot of growth left. And you know, streamers just have to have to be creative in order to monetize all the different revenue streams. Oh I know is I get so many different services and I can't tell you my time, My husband and I are like, what do you want to watch? We can't find anything that's crazy. Gita, thank you so much. Our

Gita ring Nathan. She is Bloomberg Intelligence, Technology and media analysts, joining us via zoom from our Princeton, New Jersey. You're really a great deep dive into Netflix. The stock still up about twelve forgive me in today's trading session. If you could only have one, which one would it be? Streaming app? I have Apple TV. I really kind of like Apple TV. Yeah, we're watching for All Mankind now we're on season three. It's really good about one show,

no one service. What service would you to keep? Probably HBO, Max HBO Max. Thanks for listening to Bloomberg Business Week. Download the podcast on iTunes, SoundCloud, or Bloomberg dot com, and you can also listen to our radio show at two pm Eastern on Bloomberg Radio or watch us on YouTube. Search to Bloomberg Global News