India and the rise of the ‘octopus class’

This is Bloomberg Opinion Today, a handy-dandy summation of Bloomberg Opinion’s opinions. Sign up here. The illiberals go Dutch. Santa may h [Bloomberg]( This is Bloomberg Opinion Today, a handy-dandy summation of Bloomberg Opinion’s opinions. [Sign up here](. Today’s Must-Reads - The illiberals go [Dutch](. - Santa may have [diamonds]( and Rolexes in the bag. - India’s [Himalayan]( disasters. - Who will say “no” at [OpenAI](? - [Palantir’s]( big British deal. - Apple’s [EV lessons]( in Chinese. The Cephalopod Theory of Economic Development One of the more fascinating terms to emerge in recent months is the “[octopus class](” of India. It may sound a little slimy, but it’s positively apt: The mollusc’s ability to stretch its tentacles into nooks and crannies is applied to the relatively small group of people who are driving India’s dramatic growth in consumption — everything from pricey World Cup Cricket tickets to Royal Enfield motorcyles to Birkenstock footwear. Coined by Saurabh Mukherjea, the founder of Mumbai-based Marcellus Investment Managers, a portfolio advisory firm, it refers to the 200,000 families (about 1 million individuals) who have seen their wealth increase 16-fold over the last two decades. My colleague Andy Mukherjee (no relation to Mukherjea) [says]( the octopi have contributed to India’s emergence this year as the “world’s most loved emerging market” — evidenced by foreign investment pouring in — as well as to the country’s record $31 billion trade deficit last month. Marcellus analysts believe there are octopi in small cities that can raise consumer spending for all. Yet a town of 500,000 may have 20 tentacled clans that possess 80% of the community’s wealth, their riches passed along generation after generation, the largesse buttressed by growing social and political status. Andy cautions that the inequity is causing some jitters: “The octopi have assets; the non-octopi have liabilities.” The broader masses have been taking out loans just to keep up with the rising cost of food and energy. “Banks and finance companies have been so active in pushing retail credit out the door that the central bank had to step in this month and raise capital requirements against unsecured personal loans.” That’s mainly because of the success of new digital technologies aimed at finding and screening borrowers. The Reserve Bank of India has been moving to rein in the subprime leverage because “retail loans... could spiral out of control. And that could become a recipe for future trouble amid high unemployment and stagnant real wages.” Will that dim the consumer-led glow of the world’s favorite developing economy? Says Andy: “Ahead of India’s general elections due by May 2024, the Modi government will try to channel as much money in handouts as it can to deflect political criticism about jobless growth and the high cost of living. An RBI-induced increase in borrowing costs could suck out air from the consumption-recovery thesis.” It all bears watching, of course, by investors. As Andy points out: “From June next year India will be included in JPMorgan Chase & Co.’s global bond indexes, a move that’s expected to draw in about $24 billion over a short period.” Octopi may be lovable, but keeping up with them may not be pleasant for the non-octopi. You don’t want to have to deal with hundred-headed hydras. The Way Forward at OpenAI Parmy Olsen is pretty sure she knows [what’s coming down]( at OpenAI, after the dramatic re-hiring of Sam Altman as chief executive officer. It “will find a way to neuter its nonprofit board so that the events of last week don’t ever happen again.” She’s also saying what must be said: “They must think carefully about the remaining board members they add, and not just to look progressive. They need women, people of color and other diverse voices for whom biased language models are most likely to cause harm, and who will speak up about those risks.” Two women figured most prominently among the board members who voted to oust Altman: academic Helen Toner and robotics entrepreneur Tasha McCauley. Both were fired this week as Altman made his return. Says Parmy: “The board was admittedly sloppy in its execution, and its members probably fell prey to groupthink as they griped over Altman in a tight bubble. They should have more clearly communicated their concerns, which are [still shrouded in mystery](. Even so, OpenAI must stay true to its founding principles and appoint board members who don’t just tick a box but understand AI’s side effects well enough to push back when necessary.” Telltale Charts “Instead of seeking an imaginative boss to reshape the company, BP is looking for a safe pair of hands to administer its current strategy. If the oil major had printed a job advertisement, it would read something like: ‘Seeking new CEO. Reporting to the board, the successful candidate will maintain the course followed by the previous CEO.’ The firm is looking to appoint someone more akin to a chief operating officer rather than a chief executive. Even so, a COO masquerading as a CEO wouldn’t be a problem if the current strategy was working, and if investors liked it. But it isn’t, and they don’t.” — Javier Blas in “[BP Needs a Fresh Strategy, Not Just a New CEO](.” “Prices for natural diamonds may be stabilizing. This comes after industry players took steps to stem the slide — De Beers allowed buyers more flexibility rather than requiring them to purchase their contracted allocations, and the market in India imposed a halt on imports... Yet, in one corner of the diamond market — lab grown stones — values are still plummeting. Although consumers, particularly in the US, are increasingly embracing man-made gems, their positioning as a cheaper alternative to natural diamonds means shoppers also demand the best deals.” — Andrea Felsted in “[Diamond Rolex, Anyone? This Holiday Season May Call for It](.” Further Reading The $15 billion game of [chicken](. — Chris Hughes Where live [streaming]( is on life support. — Tim Culpan A [Pandora’s box]( for Jeremy Hunt. — Merryn Somerset Webb Chipping away at Wall Street’s lack of [diversity](. — Paul J. Davies [Taylor Swift]( versus the climate crisis. — Lara Williams All I want for Christmas is Mariah’s [tyranny](. — Howard Chua-Eoan Walk of the Town: Istanbul Edition “So you came to Turkey for turkey!” the tourist guide at the Aya Sofia mosque said when I mentioned I was visiting friends in Istanbul for Thanksgiving. I didn’t want to make the play on words myself because the Turks don’t look kindly on foreigners who pun on the name of their country with the gobbling bird. Indeed, as I noted in a [column]( earlier this year, they prefer you use “Türkiye” instead of Turkey. Still, when my Istanbul-based colleague Benjamin Harvey said he was preparing for the American holiday — complete with the bird — I finally took up his long-extended invitation to visit the city on the Bosphorus. As I meditated on John Authers and Isabelle Lee’s [list of things to be grateful for](, the repast came out of the kitchen accompanied by a host of sides and delights (including a wonderful pumpkin pie and a fabulous pilaf) brought by Turkish friends who joined us for the celebration. There’s always trepidation about the way the big bird will turn out, but the main course was spectacular, probably the best I’ve ever had, thanks to Benjamin, guided by food writer Anya Von Bremzen, working off a recipe by our mutual friend Melissa Clark of The New York Times. Turkey at chez Harvey in Istanbul. Photograph by Howard Chua-Eoan Benjamin’s young son at one point turned to me and asked, “Isn’t it disrespectful of Americans to name a bird after a country?” I agreed and asked him what the word for the turkey was in Turkish. He said, “Hindi” — which means India.[1](#footnote-1) We both laughed and we agreed it isn’t polite to call strange birds by the name of people we consider exotic. “We should call it ‘America,’” he said. “That’s where it’s from.” Turks may not appreciate the Turkey/turkey cognate, but they do have a favorite animal all year round. It’s the cat. There are cats everywhere, living on the streets, fed by neighborhoods, lazing on the steep steps that allow you to climb the many hills of Istanbul. I was seated with friends at Demeti, a restaurant you had to walk up a flight of stairs to reach, when a cat wandered in and snuggled next to me. I spent a good part of dinner rubbing its forehead. The cat who came to dinner. Photograph by Howard Chua-Eoan/Bloomberg There are 200,000 cats in the city, about 125,000 of them strays like the one that joined us for a meal. The felines make sure there are almost no rodents to be seen, remarkable for an immense city. As I walked home from Thanksgiving dinner, I passed two cats toying with a strange creature: It was a bedraggled rat looking dazed and confused as its tormenters stopped momentarily to stare at me innocently. “We’re just having fun here. Move along now,” they seemed to say. Drawdown Thanks for coming by and hanging on. I’m proud of you. ”Humility is my greatest asset.” Illustration by Howard Chua-Eoan/Bloomberg Notes: Please send high-tone and low-brow feedback to Howard Chua-Eoan at hchuaeoan@bloomberg.net. [Sign up here]( and follow us on [Instagram](, [TikTok](, [Twitter]( and [Facebook](. [1] The francophile Ottomans may have taken the name from coq d'Inde or "rooster of India." The French still call turkeys dinde Follow Us Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. 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