Latest / Masters in Business / Tariffs, The Fed, and Macro Focus with Morgan Stanley’s Ellen Zentner

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Tariffs, The Fed, and Macro Focus with Morgan Stanley’s Ellen Zentner · Masters in Business

• 0:02
  Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is Masters in
• 0:11
  Speaker 1: Business with Barry Ritholts on Bloomberg Radio.
• 0:16
  Speaker 2: This week on the podcast what Can I Say? Tour
• 0:19
  Speaker 2: de forced conversation about all things economic with Ellen Zettner.
• 0:24
  Speaker 2: She's been at Morgan Stanley for just about a decade
• 0:28
  Speaker 2: now better part of a decade.
• 0:31
  Speaker 3: She was chief Economist.
• 0:33
  Speaker 2: She has morphed into the Chief Economic Strategist and global
• 0:39
  Speaker 2: head of thematic and macro investing for Morgan Stanley Wealth Management.
• 0:43
  Speaker 2: The firm runs something crazy number like seven trillion dollars.
• 0:47
  Speaker 2: She's also a member of the firm's Global Investment Committee.
• 0:51
  Speaker 2: She's won every accolade and economic award you can as
• 0:56
  Speaker 2: a Wall Street economist, and her interest just rangers far
• 1:00
  Speaker 2: and wide. We talk about everything from tariffs to fit
• 1:05
  Speaker 2: independence to data integrity at the BLS. She's just a
• 1:10
  Speaker 2: very thoughtful, insightful economist who spends a lot of time
• 1:17
  Speaker 2: thinking about how can I fashion this information in a
• 1:20
  Speaker 2: way that will be useful for my clients, many of
• 1:25
  Speaker 2: whom are investors, And now in her new role at
• 1:30
  Speaker 2: Morgan Stanley Wealth Management, she becomes the client she's helping
• 1:35
  Speaker 2: to run that big pile of money. I thought this
• 1:37
  Speaker 2: conversation was absolutely fascinating, and I think you will also
• 1:41
  Speaker 2: with no further ado my discussion with Morgan Stanley's Allen Zettner.
• 1:47
  Speaker 4: Hi, Barry, thanks for having me. I'm really glad that
• 1:49
  Speaker 4: you got my title correct and without losing your breath
• 1:53
  Speaker 4: because it's a long one.
• 1:54
  Speaker 2: Well, you know, AI helped me assemble that, and I
• 1:57
  Speaker 2: know that's a theme of yours, so well, we'll get
• 2:00
  Speaker 2: that to that a little later. It's been it's been
• 2:03
  Speaker 2: a while since we had you on the last time
• 2:06
  Speaker 2: you hear it was the first Trump administration. We're going
• 2:10
  Speaker 2: to talk about a lot of policy issues, but before
• 2:13
  Speaker 2: we get there, I just want to talk a little
• 2:15
  Speaker 2: bit about your background because it's so interesting and not
• 2:19
  Speaker 2: what we think of as the typical path to Wall Street.
• 2:22
  Speaker 2: You get a bachelor's and an MBA from the University
• 2:26
  Speaker 2: of Colorado. What was the original career planning.
• 2:28
  Speaker 4: Yeah, bachelor's and masters from Denver, University of Colorado at Denver,
• 2:33
  Speaker 4: which I think surprises people even more. Yeah, so I
• 2:39
  Speaker 4: had gotten a late start, as I would put it,
• 2:42
  Speaker 4: with the university. After high school, I was partying, having
• 2:47
  Speaker 4: a great time gap year it was well, it turned
• 2:51
  Speaker 4: out to be an unplanned gap year.
• 2:53
  Speaker 5: And you know, in.
• 2:54
  Speaker 4: The state of Texas, there's a lot of room. You
• 2:56
  Speaker 4: don't need to live at home, and at least back
• 2:58
  Speaker 4: then you didn't need to live at home in order
• 3:00
  Speaker 4: to afford you know, you could afford to live.
• 3:03
  Speaker 5: On your own.
• 3:04
  Speaker 4: So I remember turning eighteen and my mother looked at
• 3:06
  Speaker 4: her watch and basically said, why are you still here?
• 3:09
  Speaker 4: And so I moved out with my friends. Was just
• 3:11
  Speaker 4: having a great time. And so by the time I
• 3:14
  Speaker 4: decided to get serious and said, hey, you know I
• 3:16
  Speaker 4: want to I want to go somewhere else for university.
• 3:22
  Speaker 4: I was starting university when my friends were graduating, and
• 3:26
  Speaker 4: so I wanted a commuter campus, and University of Colorado
• 3:28
  Speaker 4: Denver was just a phenomenal place to be with an
• 3:32
  Speaker 4: amazing economics department.
• 3:34
  Speaker 2: So Texas girl up in Denver. How to be a
• 3:38
  Speaker 2: climate shock to you?
• 3:40
  Speaker 3: It was?
• 3:40
  Speaker 5: It was a little strange.
• 3:41
  Speaker 4: So we had registered side unseen my parents and I
• 3:45
  Speaker 4: we drove up the fifteen hour drive from Austin, Texas
• 3:49
  Speaker 4: to Denver. The first twelve hours are in the state
• 3:52
  Speaker 4: of Texas and then you finally get out of the state.
• 3:55
  Speaker 5: That's that's starting in the middle.
• 3:57
  Speaker 2: That wait, so New York to cut Texas to Colorado,
• 4:02
  Speaker 2: Austin to Denver, Boston to Denver, fifteen hours, eighty percent
• 4:07
  Speaker 2: of which are still in the stot are still in.
• 4:08
  Speaker 5: The state of Texas.
• 4:09
  Speaker 4: So you go through one tiny corner called Ratone Pass.
• 4:13
  Speaker 4: That's where my Texas comes out. Rattone Pass right there
• 4:17
  Speaker 4: where Colorado and New Mexico and Texas come together, and
• 4:20
  Speaker 4: you just slip right through into Colorado. And so we
• 4:23
  Speaker 4: registered side unseen. My mother woke me up. I was
• 4:28
  Speaker 4: sleeping in the backseat of the car, and she said, Ellen,
• 4:31
  Speaker 4: look and I woke up and I looked out of
• 4:33
  Speaker 4: the window and I saw the mountains, and I was like, Mama,
• 4:36
  Speaker 4: I'm home.
• 4:37
  Speaker 5: I had never seen mountains before.
• 4:39
  Speaker 2: Had you seen snow before?
• 4:41
  Speaker 4: I had seen snow in Austin once every six years
• 4:43
  Speaker 4: on average, it snowed. And so we made a snowman
• 4:46
  Speaker 4: with a lot of rocks and sticks in it and leaves,
• 4:50
  Speaker 4: but it was a snowman. But my mother had spent
• 4:53
  Speaker 4: summers in Boulder. So my grandfather taught. Both my grandparents
• 4:58
  Speaker 4: taught at University of Texas. My grandmother got her PhD
• 5:01
  Speaker 4: from Cornell in the early thirties. My grandfather got his
• 5:04
  Speaker 4: PhD from Columbia here in New York. They were both
• 5:07
  Speaker 4: teaching at the University of Texas. He founded the physical
• 5:10
  Speaker 4: education department at the University of Texas, and so here
• 5:15
  Speaker 4: was a legacy. My mother grew up spending summers living
• 5:18
  Speaker 4: in the dorm in Boulder because he would teach summers
• 5:22
  Speaker 4: at University of Colorado and Boulder, and so she always
• 5:25
  Speaker 4: talked about the mountains. And just when I decided to
• 5:29
  Speaker 4: leave Texas for school, I said, that's where I want
• 5:33
  Speaker 4: to go, is the mountains, even though I had no
• 5:34
  Speaker 4: idea exactly what I was saying.
• 5:36
  Speaker 2: But you ended up not leaving Texas permanently. After you
• 5:40
  Speaker 2: get your MBA Revenu Estimating Division at the Texas State
• 5:45
  Speaker 2: Controller's Office, working with some guy named George W.
• 5:49
  Speaker 4: Bush, tell ye, tell us a little bit about this
• 5:51
  Speaker 4: guy that used to be the governor of the state
• 5:52
  Speaker 4: of Texas, you know.
• 5:55
  Speaker 5: But no, that was great.
• 5:56
  Speaker 4: So I got my master's degree in economic and said, well,
• 6:01
  Speaker 4: what do I do now? And so made sense to
• 6:03
  Speaker 4: go back home to Austin. Now, at that time, for economists,
• 6:06
  Speaker 4: your option was to work for the state, or you
• 6:08
  Speaker 4: could work for a u TEMCO, which is University of
• 6:10
  Speaker 4: Texas Investment arm Like there's not a lot of areas
• 6:13
  Speaker 4: for economists. Then now there's a thriving investment community, hedge funds,
• 6:18
  Speaker 4: you name it. But then you worked for the state,
• 6:21
  Speaker 4: and so it was a great way to start. Texas
• 6:26
  Speaker 4: legislature is a binding a legislature. It's only in session
• 6:29
  Speaker 4: in odd years. So I think I worked really really
• 6:33
  Speaker 4: hard for five months every other year, and it was
• 6:36
  Speaker 4: a wonderful, wonderful way.
• 6:38
  Speaker 5: The rest of the time. Let's see, in the.
• 6:41
  Speaker 4: Late nineties, there was this thing called day trading with
• 6:45
  Speaker 4: no restrictions in a firm. You just sort of like
• 6:48
  Speaker 4: have fun and be like, oh, I made a few
• 6:50
  Speaker 4: thousand dollars today day trading. No, it was it was
• 6:53
  Speaker 4: sort of a let's let's put it this way. It
• 6:56
  Speaker 4: was a wonderful way to start where I could really
• 6:59
  Speaker 4: dive deep into topics such as studying the fairness of
• 7:02
  Speaker 4: the tax system in the state of Texas, doing economic
• 7:06
  Speaker 4: development studies. We were a part of the study that
• 7:09
  Speaker 4: helped attract the first Toyota tundra plant to the state
• 7:13
  Speaker 4: of Texas in San Antonio and working for Tamra Ploute,
• 7:17
  Speaker 4: who was just so important in steering my career.
• 7:23
  Speaker 5: She was the chief.
• 7:24
  Speaker 4: Economist for the State of Texas at the time PhD
• 7:27
  Speaker 4: from University of Pennsylvania. You mentioned the Lawrence Arkline Award.
• 7:31
  Speaker 4: It was such an honor to receive that twice because
• 7:36
  Speaker 4: Tamar had studied under Lawrence Klin at University of Pennsylvania,
• 7:40
  Speaker 4: and so it was just being thrown into a macro
• 7:43
  Speaker 4: role was such a huge determinant of my entire career
• 7:50
  Speaker 4: and studying things like household behavior in the state of Texas,
• 7:53
  Speaker 4: which gave me my love for the consumer and household behavior,
• 7:57
  Speaker 4: which has lasted my whole career. So I lasted there
• 7:59
  Speaker 4: for about five years and then started looking for something
• 8:01
  Speaker 4: in New.
• 8:02
  Speaker 2: York, and consumer and household behavior lasted your whole career
• 8:06
  Speaker 2: to good effect and good result, because as we've seen
• 8:09
  Speaker 2: over the past fifty years, the US consumers what drives
• 8:13
  Speaker 2: the entire economy. So being an expert in that space,
• 8:17
  Speaker 2: I can't imagine that hurt your either your career hasn't hurt,
• 8:20
  Speaker 2: or your economic forecast.
• 8:21
  Speaker 4: And I've propelled many an economist off of the back
• 8:25
  Speaker 4: of bringing them onto my team and saying, here you go,
• 8:28
  Speaker 4: here's a huge consumer platform, learn it and run it.
• 8:31
  Speaker 4: And they have gone on to do amazing things. One
• 8:34
  Speaker 4: of them still with me at Morgan Stanley. Paula Campbell Roberts.
• 8:38
  Speaker 4: One of my shining, shining achievements in my career is
• 8:42
  Speaker 4: seeing her career at KKR flourish.
• 8:45
  Speaker 2: That's really interesting. So how do you go from the
• 8:49
  Speaker 2: Revenue Estimating Division in the Texas government to Bank of
• 8:53
  Speaker 2: Tokyo Mitsubishi on Wall Street. That seems like a big jump.
• 8:57
  Speaker 5: It is a big jump.
• 8:58
  Speaker 4: So part of it was that I felt State government
• 9:05
  Speaker 4: was not where I wanted to be for the long run.
• 9:07
  Speaker 4: There's something about uh something in my DNA, as it
• 9:11
  Speaker 4: is with many people in finance, that attracts me to
• 9:13
  Speaker 4: just a fast moving environment. I needed something that was
• 9:18
  Speaker 4: much more.
• 9:18
  Speaker 2: Dynamic and not closed every other year.
• 9:21
  Speaker 4: Yeah, not closed every other year, although I do sometimes
• 9:26
  Speaker 4: long for the boring days of working at the State.
• 9:29
  Speaker 5: Uh So, I knew that I needed.
• 9:32
  Speaker 4: To go to either a d C or Chicago or
• 9:36
  Speaker 4: in New York. I wasn't quite sure where. And so
• 9:41
  Speaker 4: while I was job searching, which back then involved looking
• 9:45
  Speaker 4: in the newspapers or which is going to sound I mean,
• 9:48
  Speaker 4: people are just being like.
• 9:52
  Speaker 5: Mailing them, so many of them.
• 9:55
  Speaker 4: But also, you know, I have a long, rich history
• 9:59
  Speaker 4: now with the National Association for Business Economics and their
• 10:03
  Speaker 4: jobs Board, which was extremely antiquated then. Well didn't seem
• 10:07
  Speaker 4: antiquated back then. People would be appalled at that job's
• 10:10
  Speaker 4: board now. But I actually found my job at.
• 10:12
  Speaker 5: Bank of Tokyo Mitsubishi.
• 10:15
  Speaker 4: Through the NABE Jobs Board, which is still econjobs dot org.
• 10:20
  Speaker 4: And so I think of Nabe as being my partner
• 10:24
  Speaker 4: in my career since I joined Nabe in the late nineties.
• 10:28
  Speaker 4: Long story short, I get this great job at Bank
• 10:32
  Speaker 4: of Tokyo Mitsubishi. The as the senior economists there, I
• 10:39
  Speaker 4: basically was a one man band, which was great because
• 10:45
  Speaker 4: I had to wear every hat as economists for smaller
• 10:49
  Speaker 4: institutions or with smaller research arms have to do. And
• 10:53
  Speaker 4: what's so interesting about my time there, and I was
• 10:55
  Speaker 4: there for eight years, is that during that time the
• 11:00
  Speaker 4: financial crisis hit and I felt so lucky to be
• 11:04
  Speaker 4: at a Japanese firm at that time because we had
• 11:06
  Speaker 4: not taken part in mortgage backed security investing. We had
• 11:11
  Speaker 4: already gone through a financial crisis of our own that
• 11:15
  Speaker 4: had lasted a long time. Japanese firms were sitting on
• 11:18
  Speaker 4: a pile of cash, and it was at that time
• 11:21
  Speaker 4: that the ceremonial check was walked across Broadway to purchase
• 11:27
  Speaker 4: twenty percent of Morgan Stanley to keep Morgan Stanley.
• 11:30
  Speaker 2: Afloat from banks from from MUFG, which the check is
• 11:36
  Speaker 2: written from Bank of Tokyo Mitsubishi.
• 11:39
  Speaker 5: So that happened.
• 11:41
  Speaker 4: And what was interesting was when I eventually ended up
• 11:45
  Speaker 4: at Morgan Stanley to hear what it was like from
• 11:48
  Speaker 4: my colleagues from the other side on a Friday, being told,
• 11:52
  Speaker 4: you know, go home and we'll let you know on
• 11:53
  Speaker 4: Sunday if you still have a job, if the doors
• 11:56
  Speaker 4: are going to be open, and then being told on
• 11:58
  Speaker 4: Sunday that you can go back to work, and the
• 12:01
  Speaker 4: fear that they felt versus I didn't feel total job
• 12:05
  Speaker 4: security because I for the first time I was seeing
• 12:08
  Speaker 4: economics teams just on the whole, just being cut and
• 12:12
  Speaker 4: you had never seen that poor. The economists are sort of,
• 12:14
  Speaker 4: you know, we're kind of we've got decent job security
• 12:18
  Speaker 4: compared to the rest in finance.
• 12:21
  Speaker 5: But sorry.
• 12:23
  Speaker 4: This is when I could make a joke about certain
• 12:25
  Speaker 4: news that came out after.
• 12:27
  Speaker 5: Free but no I didn't. But anyhow, what I.
• 12:32
  Speaker 2: Really so vividly remember, similar to you, I was in
• 12:37
  Speaker 2: an institution that, through a combination of dumb luck and
• 12:41
  Speaker 2: what have you, was on the right side of that.
• 12:44
  Speaker 2: So while the street was freaking out, I didn't feel
• 12:47
  Speaker 2: personally the same job in security of pressure that everybody
• 12:51
  Speaker 2: else did. But I had maintained an email list of
• 12:56
  Speaker 2: ten or fifteen thousand readers, and most of the addresses
• 13:02
  Speaker 2: were you know, MS dot com, mL dot com, whatever,
• 13:07
  Speaker 2: the various institutional and you know, you would occasionally have
• 13:13
  Speaker 2: somebody leave a position and you would have a bounce
• 13:16
  Speaker 2: back rate each week of two three emails, but eight
• 13:21
  Speaker 2: or nine I was seeing like three hundred, four hundred,
• 13:25
  Speaker 2: five hundred emails a week come back. This is no
• 13:28
  Speaker 2: longer a valid email address at GS dot com or
• 13:31
  Speaker 2: whatever it happened it was.
• 13:32
  Speaker 5: It was really alarming.
• 13:34
  Speaker 2: It very like that was nothing I've ever experienced. Even
• 13:37
  Speaker 2: two thousand, which seemed like it was a disaster, didn't
• 13:42
  Speaker 2: compare to this.
• 13:43
  Speaker 4: Yeah, yeah, so never experienced anything like it, And so,
• 13:48
  Speaker 4: and you know, I really think that that's when LinkedIn
• 13:52
  Speaker 4: took off because I had signed up for LinkedIn at
• 13:54
  Speaker 4: the time but didn't use it. I'm still not a
• 13:57
  Speaker 4: huge fan of social media. I know that's terrible to say.
• 14:00
  Speaker 4: How can anybody be successful today with that?
• 14:02
  Speaker 5: Using social media?
• 14:03
  Speaker 2: I'm going to tell you I think that was a
• 14:05
  Speaker 2: formally minority position, like an outlier position, And now I
• 14:12
  Speaker 2: think the consensus has built that the algorithm is awful.
• 14:17
  Speaker 2: It manipulates us towards outrage. You look at the rising
• 14:22
  Speaker 2: levels of depression amongst teenagers. It's really tracks the rise
• 14:27
  Speaker 2: of smartphones and social media. So I don't think it's
• 14:31
  Speaker 2: as bad a thing to say in twenty twenty five
• 14:34
  Speaker 2: more Yeah, But in twenty fifteen people would have looked
• 14:37
  Speaker 2: at you like, what do you mean?
• 14:38
  Speaker 3: You don't like, what do you mean?
• 14:39
  Speaker 1: Yeah?
• 14:39
  Speaker 2: And now I think the verdict is in or yeah.
• 14:42
  Speaker 4: Well, I think for two thousand and eight. You know,
• 14:44
  Speaker 4: in finance, oftentimes the jobs we have, when your time
• 14:47
  Speaker 4: is up, you're ripped out of your seat and.
• 14:51
  Speaker 2: With the box and a security guard escorting you to
• 14:53
  Speaker 2: the time.
• 14:53
  Speaker 4: Because you have access to sensitive information like that's how
• 14:57
  Speaker 4: for most of us in finance, that's how you're is
• 15:00
  Speaker 4: going to look one day, and so if you had
• 15:06
  Speaker 4: joined LinkedIn, it was the way that you didn't lose
• 15:08
  Speaker 4: all those contacts. And so I really think that's where
• 15:11
  Speaker 4: and certainly that's where I was like, Okay, maybe I
• 15:14
  Speaker 4: should keep up with people through LinkedIn, but I'll tell
• 15:17
  Speaker 4: you that I have learned how to train those algorithms.
• 15:20
  Speaker 4: So with Instagram, which I have since dropped all together.
• 15:24
  Speaker 4: But when I was on Instagram, I got so tired
• 15:28
  Speaker 4: of being marketed to as a fifty plus year old woman.
• 15:34
  Speaker 4: It was every single ad was the best mascarra for
• 15:38
  Speaker 4: insert you know, or it was the best insert you
• 15:41
  Speaker 4: know blank for women over fifty. So it's the best
• 15:44
  Speaker 4: mass scare for women over fifty, the best shampoo for
• 15:47
  Speaker 4: women over fifty, the best whatever. And it would always
• 15:50
  Speaker 4: somehow show this beautiful woman that happened to be over fifty.
• 15:53
  Speaker 2: Wait till you're over sixty and just go through your
• 15:56
  Speaker 2: spam folder and see you the sort of stuff that
• 15:59
  Speaker 2: they marketing.
• 16:00
  Speaker 5: Yeah, it's a little insulting.
• 16:01
  Speaker 4: But what I did was I saw an ad one
• 16:06
  Speaker 4: time for dog food. Now I don't have any pets,
• 16:09
  Speaker 4: so I clicked on that ad and it started showing
• 16:12
  Speaker 4: me dog food adds. So I stopped purchasing things because
• 16:16
  Speaker 4: this was the problem. I'm an impulse buyer, so I
• 16:18
  Speaker 4: would purchase things on Instagram and so, but then Instagram started,
• 16:24
  Speaker 4: It got my number, It knew what I was doing,
• 16:26
  Speaker 4: and so that I thought, okay, I need to click
• 16:27
  Speaker 4: on the dog food ad and now poke around in
• 16:29
  Speaker 4: that site a little bit, and then okay, I need
• 16:32
  Speaker 4: to poke around the side of it and then add
• 16:33
  Speaker 4: something to my cart, and then just abandoned it. And
• 16:36
  Speaker 4: so for a while I was able to train. If
• 16:37
  Speaker 4: I just did that a couple times, then for thirty days,
• 16:40
  Speaker 4: I would get dog ads and I easily could continue
• 16:43
  Speaker 4: to enjoy Instagram without buying a thing.
• 16:45
  Speaker 2: One of the things that has made Facebook so valuable
• 16:49
  Speaker 2: is its ability to create not just targeted ads to
• 16:54
  Speaker 2: you and your demographics. All right, you're a woman over fifty,
• 16:58
  Speaker 2: that's two blunts. They can also track your browsing history.
• 17:02
  Speaker 2: They can link it to your zip code. They know
• 17:05
  Speaker 2: how your town and county voted in the last election.
• 17:10
  Speaker 2: They know your credit score and your purchase history, so
• 17:14
  Speaker 2: you could really find you know, the old joke in
• 17:17
  Speaker 2: advertising is half of advertising dollars are wasted. We just
• 17:21
  Speaker 2: don't know which half. As you bring in more and
• 17:24
  Speaker 2: more technology to this, we're starting to figure out exactly
• 17:28
  Speaker 2: how to not waste any dollars, which is why some
• 17:31
  Speaker 2: of the ads you get are kind of spooky and creepy, like, hey,
• 17:36
  Speaker 2: is my phone listening to me? No, Well, whether it
• 17:39
  Speaker 2: is or not, your browsing just is so revealing of THEIA.
• 17:43
  Speaker 5: And it's true.
• 17:44
  Speaker 4: But if you think about it, if we tie that
• 17:46
  Speaker 4: back to the old days of just having to send
• 17:48
  Speaker 4: out surveys for data and such, you know, as an economist,
• 17:53
  Speaker 4: I want as much data as possible. I want it
• 17:57
  Speaker 4: to measure everything you could possibly you know, look at sideways,
• 18:03
  Speaker 4: and I appreciate having that detailed data. My husband used
• 18:07
  Speaker 4: to get irritated because, again, back in the old days,
• 18:09
  Speaker 4: when someone might actually call to do a survey, I
• 18:13
  Speaker 4: would be the one that would give them the time
• 18:14
  Speaker 4: of day and answer the survey because I knew that
• 18:17
  Speaker 4: as a practicing economist, I would really appreciate having that detail.
• 18:22
  Speaker 5: Instead.
• 18:23
  Speaker 4: Now, because it's being done by algorithms and machines and
• 18:27
  Speaker 4: there's not a personal call behind it, we're sort of
• 18:29
  Speaker 4: alarmed that someone is getting that much information, But it's
• 18:32
  Speaker 4: also because a good deal of it's not used to
• 18:35
  Speaker 4: make the government more data more accurate, right, It's used
• 18:38
  Speaker 4: to make a company more profitable by selling to you.
• 18:42
  Speaker 5: So it is a bit different.
• 18:44
  Speaker 4: But you know, if the government could employ those techniques
• 18:47
  Speaker 4: and give me that kind of detailed data on our population,
• 18:51
  Speaker 4: I would use it all day long.
• 18:53
  Speaker 2: Coming up, we continue our conversation with Allen Zenner, chief
• 18:57
  Speaker 2: economic strategist and global head of Madick and Macro Investing
• 19:01
  Speaker 2: at Morgan Stanley, discussing the Mattic Investing and her macro
• 19:06
  Speaker 2: work at Morgan Stanley. I'm Barry Dults. You're listening to
• 19:19
  Speaker 2: Masters in Business on Bloomberg Radio. Allan Zantner is my
• 19:23
  Speaker 2: extra special guest. She's chief economic strategist and global head
• 19:27
  Speaker 2: of Thematic and macro Investing from Morgan Stanley Wealth Management. Overall,
• 19:32
  Speaker 2: the firm manages over seven trillion dollars. Let's talk a
• 19:36
  Speaker 2: little bit about your role at Morgan Stanley. What brought
• 19:41
  Speaker 2: you there from? Previously you were at Nomura and Banka
• 19:45
  Speaker 2: Tokyo Mitsubishi. What brought you to Morgan Stanley?
• 19:48
  Speaker 5: Vincent Reinhardt, Oh really, yeah.
• 19:51
  Speaker 2: Of.
• 19:53
  Speaker 4: Rein Hart and Rogoff fame well, rhin Hart rein Harten Roguoff.
• 19:57
  Speaker 4: So the rhin Harten rogue offf mostly is Carmen Reinhardt.
• 20:01
  Speaker 4: And but yeah, Vincent called me up one day and said,
• 20:04
  Speaker 4: would you like to come work for me? And I
• 20:08
  Speaker 4: us of course I knew him previously. I was an economist,
• 20:12
  Speaker 4: you know.
• 20:12
  Speaker 2: I mean I knew of him. But did you know
• 20:14
  Speaker 2: I knew of him?
• 20:15
  Speaker 4: I did not know him on a personal basis, right,
• 20:18
  Speaker 4: And it was an absolute surprise to get that call.
• 20:24
  Speaker 4: And I couldn't go there fast enough.
• 20:27
  Speaker 3: Huh.
• 20:27
  Speaker 4: So it wasn't just the Morgan Stanley name, which is
• 20:30
  Speaker 4: wonderful to go to a place where just the name
• 20:33
  Speaker 4: alone gives you a certain amount of gravitas. I was
• 20:37
  Speaker 4: the same economist I was previously doing the same work
• 20:40
  Speaker 4: and the same methodologies, employing the same tools. But suddenly
• 20:44
  Speaker 4: it was like, oh, she's at Morgan Stanley. So just
• 20:47
  Speaker 4: changing the name to such a well respected firm meant
• 20:54
  Speaker 4: all the difference in my career.
• 20:56
  Speaker 5: But to specifically be able to.
• 20:57
  Speaker 4: Go and learn from an economist who sat at the
• 21:01
  Speaker 4: at the right hand of Alan Greenspan for so many years,
• 21:06
  Speaker 4: you know, being a fed watcher and being able to
• 21:09
  Speaker 4: then work for the quintessential fed watcher and sort of
• 21:13
  Speaker 4: plug the holes. In my knowledge, it was just an
• 21:16
  Speaker 4: opportunity I couldn't pass up.
• 21:18
  Speaker 2: What was the role? You obviously didn't start as chief economy.
• 21:21
  Speaker 4: I started as his senior economist.
• 21:23
  Speaker 2: Oh really? And then how much longer was it before
• 21:26
  Speaker 2: you were elevated as a chief economist?
• 21:28
  Speaker 4: Oh gosh, about a year and a half. So Vincent
• 21:31
  Speaker 4: and I were able to overlap for about a year
• 21:33
  Speaker 4: and a half before I took the chief economist role.
• 21:36
  Speaker 4: You may or may not know that that he and
• 21:38
  Speaker 4: Carmen reside in Boston, and so being able to work
• 21:43
  Speaker 4: full time from Boston continue to support Carmen in her
• 21:46
  Speaker 4: role at Harvard, and also a role that fits him
• 21:51
  Speaker 4: so perfectly well as the chief economist, the financial chief
• 21:55
  Speaker 4: economist at Bnymellon is just the perfect place to be.
• 21:59
  Speaker 4: So I am very thankful for the time that we
• 22:03
  Speaker 4: were able to spend together overlapping there at Morgan Stanley,
• 22:06
  Speaker 4: And so in twenty fifteen I then became the chief
• 22:10
  Speaker 4: US economist.
• 22:12
  Speaker 2: So on the Morgan Stanley website is a little bio
• 22:15
  Speaker 2: of you, and in it you described twenty sixteen as
• 22:19
  Speaker 2: a very significant and for you personally career defining year.
• 22:24
  Speaker 2: Why is that.
• 22:25
  Speaker 4: I like to think back of periods in my career
• 22:28
  Speaker 4: when my limits were tested, and it might be the
• 22:34
  Speaker 4: financial crisis, it might be some other recession, it might
• 22:38
  Speaker 4: have been COVID, But certainly twenty sixteen we had a
• 22:42
  Speaker 4: presidential election year and my limits were absolutely tested, both
• 22:46
  Speaker 4: physically and mentally. So I had gone to DC the
• 22:52
  Speaker 4: morning of the election. I had already voted in early voting.
• 22:57
  Speaker 4: I had left on a sixth flight, which means I
• 23:01
  Speaker 4: had to get up at four in the morning, and
• 23:03
  Speaker 4: went to DC for meetings. Then I flew on to
• 23:08
  Speaker 4: New Orleans to prep for a conference and decided that
• 23:14
  Speaker 4: I would go to the gym, as I love to
• 23:17
  Speaker 4: do when I'm at the hotel, and then you know,
• 23:20
  Speaker 4: buckle down and get ready to watch the fun electional
• 23:23
  Speaker 4: results come in, and watching the election results come in,
• 23:27
  Speaker 4: and then answering client questions at the same time, and
• 23:31
  Speaker 4: then seeing all of that unfold in a way that
• 23:33
  Speaker 4: was surprising to many people.
• 23:37
  Speaker 5: Where this cycle kicked off. Where okay, wait, I thought
• 23:43
  Speaker 5: I was going to go to the gym.
• 23:44
  Speaker 4: Okay, not going to the gym, Wait, I need to
• 23:46
  Speaker 4: order some sort of dinner to the room.
• 23:47
  Speaker 5: Okay, I can't beat.
• 23:49
  Speaker 4: Then it was then it was oh gosh, Asia is awake.
• 23:52
  Speaker 4: Got to get on calls with Asia. Then it was
• 23:55
  Speaker 4: oh boy, Europe's waking up. Got to get on calls
• 23:57
  Speaker 4: with Europe. Calls with my coll calls with these clients, calls, calls, calls, calls, calls.
• 24:03
  Speaker 4: At eleven am in the morning, which was now more
• 24:06
  Speaker 4: than twenty four hours later, after I had gotten up,
• 24:11
  Speaker 4: I decided that maybe I should at least try to
• 24:13
  Speaker 4: close my eyes for a little bit. I closed my eyes,
• 24:16
  Speaker 4: couldn't fall asleep. I had to go down stairs at
• 24:20
  Speaker 4: the hotel to deliver an economic outlook to what had
• 24:25
  Speaker 4: then become a standing room only event, because look what's
• 24:29
  Speaker 4: just happened. Let's hear from the economist. And we had
• 24:32
  Speaker 4: just putten out put out. We had just put out
• 24:35
  Speaker 4: our year ahead outlooks because those come.
• 24:37
  Speaker 5: Out in November.
• 24:38
  Speaker 4: And so I was there standing at the front of
• 24:42
  Speaker 4: the room and I just left my PowerPoint presentation on
• 24:46
  Speaker 4: the front page the holding screen as a holding screen,
• 24:49
  Speaker 4: and said, let's go ask me whatever questions you have.
• 24:54
  Speaker 4: I'm not going to have all the answers, but let's talk,
• 24:57
  Speaker 4: and I don't even remember what I said. The time
• 25:00
  Speaker 4: flew by. I then went back to the airport, tried
• 25:06
  Speaker 4: to get on an earlier flight to go back, was
• 25:09
  Speaker 4: still delayed. Finally got back at eleven pm at night
• 25:13
  Speaker 4: to New York. I could not fall asleep still either
• 25:16
  Speaker 4: on the flight or when I got home, and ultimately,
• 25:20
  Speaker 4: finally I just gave up sleeping, went into the office,
• 25:23
  Speaker 4: and forty two hours I went without sleeping.
• 25:27
  Speaker 2: At a certain point, your cognitive functioning just starts to
• 25:30
  Speaker 2: fall off a cliff. But that was real. I similarly
• 25:34
  Speaker 2: have a vivid recollection of just shock from so many
• 25:38
  Speaker 2: people questions that had to be really exciting.
• 25:42
  Speaker 5: Yeah, so was it? And see you say exciting.
• 25:43
  Speaker 4: Now I live off of that stuff because oh you're adrenaline. Jumpee, adrenaline.
• 25:48
  Speaker 4: You're tested, your limits are tested. And what a great
• 25:52
  Speaker 4: story to tell. I was also on the trading floor
• 25:55
  Speaker 4: at one am when Brexit happened. I had gone to
• 25:59
  Speaker 4: sleep at eleven and set the alarm for midnight. The
• 26:02
  Speaker 4: alarm went off, I know that my husband immediately checked
• 26:05
  Speaker 4: the phone. I heard him say, oh, sh and I
• 26:09
  Speaker 4: was like, what what? And I was like, oh my god,
• 26:12
  Speaker 4: I had to get in the shower and get to
• 26:13
  Speaker 4: the trading floor by one am.
• 26:15
  Speaker 2: I just read this morning. Nobody talks about Brexit anymore.
• 26:19
  Speaker 2: I just read a data point that shocked me, which
• 26:23
  Speaker 2: was the GDP of Italy just pasted the GDP of
• 26:27
  Speaker 2: the UK. Mind blown. And there are a lot of reasons,
• 26:33
  Speaker 2: but clearly Brexit has to be a significant part of that. Yeah, yeah,
• 26:37
  Speaker 2: giant part of that.
• 26:37
  Speaker 4: It's like, thank you UK for bringing some business back
• 26:40
  Speaker 4: to us, because here's a country that is dying. Their
• 26:43
  Speaker 4: birth rates are non existent, their population has been shrinking,
• 26:48
  Speaker 4: So how can GDP be growing. There's no fundamental basis
• 26:52
  Speaker 4: for it, so it must be some sort of tectonic
• 26:55
  Speaker 4: shift like Brexit.
• 26:56
  Speaker 2: Pretty pretty fascinating. There's so much stuff. I don't want
• 27:00
  Speaker 2: to just get stuck in twenty sixteen. Let's go forward.
• 27:05
  Speaker 2: Let's look forward. One of the things you wrote about
• 27:08
  Speaker 2: was the coming youth boom economy. And when we look
• 27:12
  Speaker 2: at gen z born between ninety seven and twenty twelve,
• 27:16
  Speaker 2: they and gen y are going to dominate the US
• 27:21
  Speaker 2: economy really in the next ten years or so. They'll
• 27:26
  Speaker 2: yield higher consumption. You wrote wages and housing demand, stimulating
• 27:30
  Speaker 2: GDP growth. This was a few years ago, do you.
• 27:33
  Speaker 5: Still hold to that was in twenty nineteen.
• 27:35
  Speaker 2: Yeah, So the youth boom is this still coming?
• 27:38
  Speaker 4: Yeah? So we're here, we're in it, and we were
• 27:41
  Speaker 4: at the cusp of it. Then Millennials were already starting
• 27:43
  Speaker 4: to outnumber baby boomers, and then you've got Gen Z
• 27:47
  Speaker 4: coming up behind them at that time that were just
• 27:49
  Speaker 4: as large. So when you combine the two, and that's
• 27:52
  Speaker 4: what we mean by the youth boom, you've got a
• 27:54
  Speaker 4: demographic that is larger than any in our country's past
• 27:58
  Speaker 4: and sets us apart on the globe stage. Because our
• 28:01
  Speaker 4: major trading partners are across G ten, nobody has those demographics. Now,
• 28:06
  Speaker 4: our birth rates have been falling, and that is a problem,
• 28:09
  Speaker 4: and that's a problem that by the way, lights of
• 28:11
  Speaker 4: Fire under the need for AI as well. But our
• 28:16
  Speaker 4: birth rates are higher than our major trading partners, and
• 28:19
  Speaker 4: so comparatively speaking, that is something that's very important that
• 28:24
  Speaker 4: drives the back drop. Now, economists love demographics. Demographics make
• 28:28
  Speaker 4: the world go round, and demographics, you know, it's when
• 28:33
  Speaker 4: you look at any point in time, how well did
• 28:36
  Speaker 4: the Census Bureau get demographic projections pretty well because it
• 28:40
  Speaker 4: turns out we sort of all age kind of along
• 28:43
  Speaker 4: the same track. And what we know from detailed government
• 28:48
  Speaker 4: data is we know how we tend to move through
• 28:51
  Speaker 4: the world and spend and behave at certain age ranges.
• 28:55
  Speaker 4: So you, as an economist, you can just let your
• 28:58
  Speaker 4: demographic cohorts age through those buckets and know kind of
• 29:04
  Speaker 4: how the spending shifts are going to take place. When
• 29:07
  Speaker 4: are participation rates in the labor force going to peak,
• 29:11
  Speaker 4: When do we hit peak earning years, in peak working years,
• 29:14
  Speaker 4: and therefore first time home buying years, et cetera, et cetera.
• 29:18
  Speaker 4: So you mentioned housing as being one of our key
• 29:20
  Speaker 4: calls in twenty nineteen, Well, that was only accelerated during COVID,
• 29:25
  Speaker 4: for sure, it wasn't. There were many themes that were
• 29:30
  Speaker 4: accelerated during COVID, and housing is one of those. In
• 29:34
  Speaker 4: terms of of the incredible demand. I mean, we are
• 29:39
  Speaker 4: going to be underbuilding housing for a decade.
• 29:42
  Speaker 2: We have been under building housing really since the we
• 29:45
  Speaker 2: estimate we.
• 29:46
  Speaker 4: Will have an eighteen million unit shortfall that.
• 29:51
  Speaker 2: We need to make up. That's a giant number. Chrise,
• 29:53
  Speaker 2: It's a giant of course, we've been talking about four
• 29:55
  Speaker 2: to five million currently and that comes from the National
• 29:59
  Speaker 2: Association Realtors and the Association home Builders. So there's a
• 30:03
  Speaker 2: little asterisk. Is this same and think.
• 30:04
  Speaker 4: About that that's currently and then you grow that over time.
• 30:09
  Speaker 4: You pair it with affordability, You pair it with the
• 30:12
  Speaker 4: fact that our surveys do show that millennials and Gen
• 30:16
  Speaker 4: Z by far still want to live in single family homes.
• 30:20
  Speaker 4: They may not all be able to afford single family
• 30:23
  Speaker 4: and so single family renting will be in high demand.
• 30:26
  Speaker 4: We're going to need to build those units. Home builders
• 30:30
  Speaker 4: are going to have to respond by building smaller, less
• 30:33
  Speaker 4: expensive homes. We think modular housing will have a big
• 30:37
  Speaker 4: role to play as well. And then you start to
• 30:40
  Speaker 4: think about all the different ways we need to build
• 30:42
  Speaker 4: homes as well that shortfall. In order to ensure all
• 30:45
  Speaker 4: those homes, we're going to have to think about climate
• 30:48
  Speaker 4: friendly building materials, more resist climate resistance building materials, all
• 30:54
  Speaker 4: the different ways that we can appease the insurance companies
• 30:57
  Speaker 4: so that we can actually build in the in the
• 30:59
  Speaker 4: areas and make up for those shortfalls. So I think
• 31:02
  Speaker 4: housing is certainly from a thematic perspective, something that can
• 31:06
  Speaker 4: It's a great example to me because it's something where
• 31:08
  Speaker 4: this is a longer run structural theme, but it can
• 31:12
  Speaker 4: fall out of favorite time cyclically because it is very
• 31:15
  Speaker 4: interstrate sensitive. Right now, housing is not in a great
• 31:19
  Speaker 4: place in the US. Affordability is terrible, and it's not
• 31:23
  Speaker 4: just an interest rate problem. More of the home price
• 31:26
  Speaker 4: is made up from regulatory impacts than anything else.
• 31:32
  Speaker 2: How much of this is a lack of supply I know,
• 31:34
  Speaker 2: I've Jonathan Miller and folks like that have been writing
• 31:38
  Speaker 2: supply is running twenty to thirty percent of what it
• 31:41
  Speaker 2: normally is. And how much of it is a little
• 31:44
  Speaker 2: bit of nimby. Once people buy a home, they don't
• 31:47
  Speaker 2: want to see all the pretty scenery get knocked over
• 31:50
  Speaker 2: and new houses put up over there. What's the solution
• 31:53
  Speaker 2: to this?
• 31:54
  Speaker 5: Well, I think the nimby really is a symptom of, or.
• 31:59
  Speaker 4: A side of effect of the regulation or sorry that
• 32:06
  Speaker 4: the nimbi not in my backyard leads to is part
• 32:09
  Speaker 4: of what leads to the heavy handed regulation right and
• 32:12
  Speaker 4: heavy handed regulation by far is a key contributor to
• 32:19
  Speaker 4: the cost of overall housing. Then you add the cost
• 32:22
  Speaker 4: of labor in a sector which has had a shortage
• 32:26
  Speaker 4: of labor since two thousand and eight, and we only
• 32:30
  Speaker 4: started to make up for that shortfall during the what
• 32:34
  Speaker 4: I call the immigration period where we were bringing in
• 32:37
  Speaker 4: millions of immigrants a year in twenty twenty two to
• 32:39
  Speaker 4: twenty twenty three and part of twenty twenty four, only
• 32:42
  Speaker 4: to see that reversal now put labor pressures on that
• 32:45
  Speaker 4: sector again and then tear us on materials that go
• 32:49
  Speaker 4: into construction. So it's just it's cost upon cost upon
• 32:53
  Speaker 4: cost that home builders are having to deal with that
• 32:56
  Speaker 4: help drive the affordability issues for the home buyers as well.
• 33:02
  Speaker 2: Huh. Really intriguing. So obviously thematic investing is a big
• 33:06
  Speaker 2: part of your job. Is there any other theme bigger
• 33:12
  Speaker 2: than artificial intelligence today?
• 33:15
  Speaker 4: I'm going to say a probably not, But artificial intelligence
• 33:18
  Speaker 4: it's a very broad it's very broad, and so I
• 33:23
  Speaker 4: would gear it more towards AI tech and diffusion, which
• 33:28
  Speaker 4: has been a key pillar, thematic pillar for Morgan Stanley.
• 33:33
  Speaker 4: But here's why. It seems like my answer is just
• 33:36
  Speaker 4: so easy and almost like not well thought out, almost
• 33:40
  Speaker 4: flippant in a way. AI is a generalized technology, so
• 33:44
  Speaker 4: it flows through everything. So whether you're thinking about a
• 33:47
  Speaker 4: multipolar world, theme, which importantly includes defense. We had gone
• 33:53
  Speaker 4: long global defense back in January, and it was based
• 33:58
  Speaker 4: on the fact that you've got your pallenteers of the
• 34:02
  Speaker 4: world and open aiyes of the world of you know,
• 34:06
  Speaker 4: working with the US government to modernize defense for tech
• 34:13
  Speaker 4: and AI. And so if you think about you know,
• 34:17
  Speaker 4: four themes, say longevity, AI, tech and diffusion, multipolar world,
• 34:22
  Speaker 4: and the energy of everything. AI threads through all of that.
• 34:27
  Speaker 4: It threads through.
• 34:28
  Speaker 5: All of it.
• 34:29
  Speaker 4: So when I think about, say conviction weighting those themes,
• 34:34
  Speaker 4: your highest conviction weight is going to be on the AI,
• 34:37
  Speaker 4: tech and diffusion.
• 34:38
  Speaker 5: Because it does thread through everything.
• 34:39
  Speaker 2: So what's more important the Magnificent seven or the magnificent
• 34:44
  Speaker 2: four ninety three that are going to benefit from AI.
• 34:47
  Speaker 4: Well, I think there it's very difficult to not have
• 34:50
  Speaker 4: those big, big tech names, let's say, in a multi
• 34:54
  Speaker 4: thematic portfolio, or if you're trying to take advantage of
• 34:58
  Speaker 4: an AI theme, because they are big players in the space.
• 35:02
  Speaker 4: I mean, as soon as someone in this country moves
• 35:05
  Speaker 4: into contracts with the US government, you've got an incredible
• 35:08
  Speaker 4: amount of funding. Look at someone like an Elon Musk,
• 35:11
  Speaker 4: who is a creature of the government. Sure I mean,
• 35:13
  Speaker 4: how much of his wealth comes from government contracts exactly.
• 35:18
  Speaker 4: And so when these other players are wrapped up in
• 35:23
  Speaker 4: government contracts and the government has put its priority in
• 35:27
  Speaker 4: winning this seeming two horse race on AI against China,
• 35:33
  Speaker 4: you would probably be ill advised to bet against that.
• 35:36
  Speaker 4: It doesn't mean that AI tech infusion is just the
• 35:39
  Speaker 4: mag seven. So of course, in my role, I can't
• 35:42
  Speaker 4: talk about specific companies, and you don't want to ever
• 35:45
  Speaker 4: take specific company advice from an economist.
• 35:47
  Speaker 5: I'll just say, but.
• 35:49
  Speaker 4: You've got very interesting players all the way down to
• 35:53
  Speaker 4: mid cap and small cap all the way down to
• 35:55
  Speaker 4: rustle three thousand that are important in an AI tech
• 36:00
  Speaker 4: and diffusion space.
• 36:01
  Speaker 2: Meaning they become more efficient, productive, profitable by deployment, sort
• 36:05
  Speaker 2: of like what we saw post Internet end.
• 36:08
  Speaker 4: Boss they and they become part of the fabric of
• 36:11
  Speaker 4: that generalized technology that all companies end up using as
• 36:16
  Speaker 4: AI diffuses across the economy.
• 36:19
  Speaker 2: It makes plenty of sense to me, what other big
• 36:21
  Speaker 2: themes are you paying close attention to.
• 36:25
  Speaker 5: Some big themes?
• 36:26
  Speaker 4: And again it's hard for me to get away of
• 36:27
  Speaker 4: some sort of flavor of AI. So as an economist,
• 36:31
  Speaker 4: I'm going to go back to demographics every time. What
• 36:35
  Speaker 4: are the incentives for adopting AI? Right incentives or adopting
• 36:40
  Speaker 4: are You've got to replace labor shortfalls. That's a huge incentive.
• 36:45
  Speaker 4: And so if you are a country with falling birth
• 36:48
  Speaker 4: rates and you can make up for that in several
• 36:53
  Speaker 4: different ways. One is your existing population. You can put
• 36:57
  Speaker 4: in policies to boost labor force participation so have a
• 37:01
  Speaker 4: more full participation from your current population. You can be
• 37:05
  Speaker 4: sure that you are not just have an open immigration system,
• 37:09
  Speaker 4: and I don't mean just opening your borders to indiscriminate flows,
• 37:13
  Speaker 4: but an open immigration system, a traditional open immigration system
• 37:17
  Speaker 4: where you have a sound process for integrating immigrants into
• 37:22
  Speaker 4: the labor market, something in the US has been very
• 37:24
  Speaker 4: good at, something Europe is not very good at. Or
• 37:29
  Speaker 4: you can replace that labor with AI and robotics. There's
• 37:35
  Speaker 4: your incentive. There's your incentive for countries like China, like Japan.
• 37:41
  Speaker 4: Maybe not like India right now, but India's demographics are
• 37:44
  Speaker 4: not good. Really when you look further out a decade
• 37:47
  Speaker 4: from now, fifteen twenty years from now.
• 37:49
  Speaker 2: You know, it's funny you keep talking about demographics. Isn't
• 37:53
  Speaker 2: the trend throughout history that as a country becomes first
• 37:58
  Speaker 2: less poor and then wealthier, the birth rates just drop.
• 38:02
  Speaker 4: People absolutely more affluent countries. It is a natural way
• 38:06
  Speaker 4: of things. Countries that are able to, let me just say,
• 38:10
  Speaker 4: roll with that right and boost productivity by making fuller
• 38:15
  Speaker 4: use of your existing labor pool are those that still
• 38:19
  Speaker 4: continue along that path of affluency. The US has not
• 38:24
  Speaker 4: just higher birth rates than our major trading partners, we've
• 38:28
  Speaker 4: got higher rates of productivity. It's part of what US
• 38:31
  Speaker 4: exceptionalism is built upon, is that not only have we
• 38:34
  Speaker 4: kept birth rates higher, which population growth and specifically growth
• 38:38
  Speaker 4: in your labor force goes into the potential growth in
• 38:42
  Speaker 4: your economy those calculations, but we're also making those more productive,
• 38:48
  Speaker 4: and it's part of our secret sauce of success. You know,
• 38:51
  Speaker 4: when I talk about US exceptionalism, I'm not even referring
• 38:54
  Speaker 4: to markets financial markets. I'm talking about the US having
• 39:00
  Speaker 4: more flexible labor market where we have higher rates of productivity.
• 39:04
  Speaker 4: Very important that we continue to hang on to independent
• 39:07
  Speaker 4: monetary policy, that we have stable currency, but that comparative
• 39:11
  Speaker 4: advantage lies in your labor force and how far you
• 39:15
  Speaker 4: can push it, and the US is just really good
• 39:17
  Speaker 4: at that.
• 39:18
  Speaker 2: So let me ask you a thematic question, only it's
• 39:21
  Speaker 2: going to be a negative. What's the one economic myth
• 39:25
  Speaker 2: you hear more than others? What question bubbles up from clients,
• 39:29
  Speaker 2: from brokers and advisors, from people within that you wish
• 39:34
  Speaker 2: would just go away?
• 39:36
  Speaker 4: Maybe this gets too nuanced, because economists love nothing more
• 39:40
  Speaker 4: than getting nuanced. But it's like you got the chicken
• 39:45
  Speaker 4: and the egg backwards, right, right. So it's that the
• 39:49
  Speaker 4: markets are pricing in that the FED is going to
• 39:52
  Speaker 4: do something at its next meeting, and therefore the Fed
• 39:55
  Speaker 4: has to do that.
• 39:56
  Speaker 2: The markets have been so wrong about that for so long.
• 40:00
  Speaker 4: I think the market's over time it had a very
• 40:01
  Speaker 4: difficult So there's another one. Don't fight the Fed? Right,
• 40:04
  Speaker 4: how many times do we say don't fight the Fed?
• 40:06
  Speaker 4: And markets fight the Fed and they lose. But that
• 40:10
  Speaker 4: the markets lead the Fed. Now, the FED makes low
• 40:14
  Speaker 4: frequency decisions in a high frequency world. The market is
• 40:17
  Speaker 4: very high frequency.
• 40:18
  Speaker 2: That's a great way to describe that.
• 40:20
  Speaker 4: Yeah, And so the fact of the matter is the
• 40:22
  Speaker 4: market can respond on a dime when the data comes
• 40:25
  Speaker 4: out when financial conditions change. The Fed can't. The Fed
• 40:29
  Speaker 4: has to look at it, it has to deliberate it.
• 40:31
  Speaker 4: It has to gain a consensus and then it moves.
• 40:34
  Speaker 4: Much of the time, the market doesn't have it wrong.
• 40:37
  Speaker 4: The market read the labor report of the most recent
• 40:40
  Speaker 4: labor report and said that's not good. And guess what,
• 40:42
  Speaker 4: the FED also thinks that's not good. Great, you're on
• 40:45
  Speaker 4: the same page. But the market was able to price
• 40:47
  Speaker 4: it in well ahead of the FED actually delivering in September.
• 40:51
  Speaker 4: So I do believe that the FED is going to
• 40:53
  Speaker 4: cut twenty five bases points in September. Now this is
• 40:56
  Speaker 4: with my hat on as the chief economic strategist Morgan
• 41:00
  Speaker 4: Stanley Wealth Management. There are others in the firm that
• 41:03
  Speaker 4: also have FEWS views on the FED, but you've asked me,
• 41:06
  Speaker 4: and the beauty of this podcast that I get to
• 41:08
  Speaker 4: give my views and you're only talking to me here.
• 41:12
  Speaker 4: So I do think though that our focus on September
• 41:16
  Speaker 4: it can probably be best spent elsewhere in that the
• 41:20
  Speaker 4: first cut is going to be the easiest, because, as
• 41:23
  Speaker 4: Chairpell said, modestly restrictive. Do you need to be monstly
• 41:27
  Speaker 4: restrictive when job growth has slowed? This sharply If you
• 41:31
  Speaker 4: don't need to be mondstly restrictive, just make an adjustment
• 41:34
  Speaker 4: they're not making any decisions about what happens after that.
• 41:36
  Speaker 4: So the fact that you know, do they or don't
• 41:39
  Speaker 4: they cut in September and by the way, fifty basis points.
• 41:42
  Speaker 4: That's a hard no from me because I knew I
• 41:44
  Speaker 4: could tell, I could tell the question was on your
• 41:47
  Speaker 4: lips it was about.
• 41:47
  Speaker 2: One hundred points. Someone now that's definitely.
• 41:50
  Speaker 5: Even harder no.
• 41:52
  Speaker 4: But I do believe that once you have made that cut,
• 41:55
  Speaker 4: it's a little harder to justify if the data don't
• 41:57
  Speaker 4: keep coming in in the same fashion to say why
• 42:00
  Speaker 4: that one adjustment was perfect but not another. So I
• 42:04
  Speaker 4: think where I would rather debate is how far do
• 42:07
  Speaker 4: they need to go? And this is where I do
• 42:09
  Speaker 4: disagree with some powers that be that the FED is
• 42:14
  Speaker 4: going to need to cut a lot. I think we're
• 42:17
  Speaker 4: going to have a good economy next year. I think
• 42:19
  Speaker 4: productivity is going to be picking up even more. I
• 42:22
  Speaker 4: think there are parts of the One Big Beautiful Bill
• 42:24
  Speaker 4: with the investment incentives that are in it, which are
• 42:27
  Speaker 4: going to help put a floor into the economy. And
• 42:30
  Speaker 4: we're not going to have an environment where the Fed's
• 42:32
  Speaker 4: going to need to cut one hundred and fifty tw
• 42:34
  Speaker 4: hundred paces.
• 42:35
  Speaker 2: To be fair. Stocks are at all time highs, real
• 42:38
  Speaker 2: estates at all time highs, revenue and profits are at
• 42:41
  Speaker 2: or near all time highs. It doesn't seem to be
• 42:44
  Speaker 2: an economy begging for rate cuts, even as we're starting
• 42:48
  Speaker 2: to see a slow down in some consumer spending and
• 42:52
  Speaker 2: some hiring. But how much of that.
• 42:55
  Speaker 5: That justifies lower rates?
• 42:57
  Speaker 4: Doesn't tell you need to cut drastically, right, So do
• 42:59
  Speaker 4: you want to good economy or do you want the
• 43:01
  Speaker 4: Fed to cut drastically?
• 43:02
  Speaker 2: Well, we know what the president wants, Yeah, what the
• 43:05
  Speaker 2: economy needs and what the market wants. They may be
• 43:09
  Speaker 2: something slightly different.
• 43:10
  Speaker 4: Yeah, And if the Fed is watching it and objectively
• 43:14
  Speaker 4: doing its job, then we will end up in the
• 43:16
  Speaker 4: right place.
• 43:17
  Speaker 2: Coming up, we continue our conversation with Allen Zenner, chief
• 43:20
  Speaker 2: economic strategist for Morgan Stanley, discussing the state of today's
• 43:25
  Speaker 2: economy in light of tariffs and trade policy. I'm Barry Ridults.
• 43:30
  Speaker 2: You're listening to Masters in Business on Bloomberg Radio. I'm
• 43:42
  Speaker 2: Barry Redults. You're listening to Masters in Business on Bloomberg Radio.
• 43:46
  Speaker 2: My extra special guest is Alan Zenner. She is chief
• 43:49
  Speaker 2: economic strategist and global head of thematic and macroinvesting for
• 43:53
  Speaker 2: Morgan Stanley. The firm runs over seven trillion dollars. So
• 43:58
  Speaker 2: you've written about tariff and trade policy. My question for
• 44:02
  Speaker 2: you is how disruptive or destabilizing is this to either
• 44:07
  Speaker 2: the US or global economy.
• 44:09
  Speaker 4: So we've certainly seen disruption in confidence. Markets don't like opaqueness,
• 44:15
  Speaker 4: they like certainty, and we could see that early on
• 44:18
  Speaker 4: in the volatility of Wow. January hit and it was
• 44:24
  Speaker 4: tariff's tarifs, tariffs, and the market clearly was caught off sides.
• 44:27
  Speaker 4: Policymakers were caught off sides, economists were caught off sides.
• 44:31
  Speaker 4: And so then you kick off the flory of activity.
• 44:34
  Speaker 4: What does this mean when the world order is being reset?
• 44:38
  Speaker 4: And it can mean a whole host of things. It's
• 44:40
  Speaker 4: one reason why all economists, all forecasters have to take
• 44:46
  Speaker 4: a very big slice of humble pie and take a
• 44:50
  Speaker 4: big bite out of that because the uncertainty bands of
• 44:53
  Speaker 4: any kind of forecast you put out are going to
• 44:55
  Speaker 4: be highly uncertain. There's no way to know the impacts
• 44:59
  Speaker 4: of tariffs truly until well after the fact. And that's
• 45:03
  Speaker 4: because tariffs fall here, there, and everywhere. You're going to
• 45:07
  Speaker 4: have some degree of manufacturers and the countries that we
• 45:10
  Speaker 4: import from eating the cost. You're going to have importers
• 45:14
  Speaker 4: along the way eating the cost, wholesalers eating the cost,
• 45:17
  Speaker 4: businesses that sell final goods eating the cost, and consumers
• 45:21
  Speaker 4: having to eat some of that as well. The forecasting
• 45:24
  Speaker 4: comes in where okay, how much of each? What percentage
• 45:29
  Speaker 4: of each? I think one thing that I've observed is
• 45:32
  Speaker 4: businesses have been sitting on a good deal more cushion
• 45:37
  Speaker 4: in terms of cash and free cash flow than I
• 45:39
  Speaker 4: think anybody had suspected that they would.
• 45:42
  Speaker 2: Be, Meaning they have the ability to eat.
• 45:44
  Speaker 5: Some of the ability to eat some of it.
• 45:45
  Speaker 4: I do think that even after Chinese manufacturers surprised us
• 45:49
  Speaker 4: in twenty nineteen to the degree that they were willing
• 45:52
  Speaker 4: to eat the costs, I think they've been able to
• 45:56
  Speaker 4: continue to absorb it. I think ultimately for economists, because
• 46:04
  Speaker 4: economists by and large are wearing a lot of egg
• 46:06
  Speaker 4: on our face for getting it wrong, for sounding the alarm.
• 46:10
  Speaker 4: The companies were sounding the alarm too. We're taking our
• 46:12
  Speaker 4: cues from what the surveys are saying, what we're hearing
• 46:15
  Speaker 4: directly from companies that I'm going to pass on these
• 46:17
  Speaker 4: prices to consumers. I am not going to eat this,
• 46:20
  Speaker 4: But then how much of that are companies talking their
• 46:22
  Speaker 4: own book as well?
• 46:23
  Speaker 2: To be fair, it's the middle of August. Liberation Day
• 46:26
  Speaker 2: was early April, we had a ninety day pause. We
• 46:30
  Speaker 2: really haven't felt the full impact on tariffs, and we
• 46:34
  Speaker 2: probably won't until the fourth quarter or first quarter next year.
• 46:38
  Speaker 2: So is it a little early to say, hey, no harm,
• 46:42
  Speaker 2: no foul. No.
• 46:43
  Speaker 4: I think it's definitely to early say no harm, no foul.
• 46:46
  Speaker 4: And I don't think anyone, even the administration, is saying
• 46:49
  Speaker 4: there won't be some bit of bearing the brunt of
• 46:52
  Speaker 4: that among consumers, among businesses.
• 46:55
  Speaker 5: In the US.
• 46:56
  Speaker 4: I think it's just that you've got one faction saying
• 46:59
  Speaker 4: that it's going to be a lot less of an
• 47:01
  Speaker 4: impact than some other factions. And no one really knows,
• 47:05
  Speaker 4: so let's all.
• 47:06
  Speaker 3: Be humble about it.
• 47:07
  Speaker 2: No one knows. But there seems to be a bit
• 47:10
  Speaker 2: of a consensus that tariffs are a consumption tax. It's
• 47:14
  Speaker 2: like a vat tax on US households and businesses. Is
• 47:19
  Speaker 2: that overstating the threat or is that is that accurty?
• 47:22
  Speaker 4: No, that's exactly how it works, to the extent that
• 47:25
  Speaker 4: they that companies eat it on the margin or pass
• 47:28
  Speaker 4: it onto households, and households eat it and paying higher prices.
• 47:32
  Speaker 4: That is exactly how it works. I mean, that is
• 47:34
  Speaker 4: the economic theory of it. That is sound. It's the
• 47:38
  Speaker 4: degree to which the costs are absorbed and by what
• 47:41
  Speaker 4: players along the import channel. That is the That is
• 47:46
  Speaker 4: the unknown factor. And I can tell you that you know,
• 47:49
  Speaker 4: what the President is doing or has been doing, is
• 47:53
  Speaker 4: changing global trade in a way that typically would play
• 47:57
  Speaker 4: out over a decade or so in a very short
• 48:01
  Speaker 4: period of time, and so that's led to a tremendous
• 48:04
  Speaker 4: amount of uncertainty. And like you said, this may be
• 48:08
  Speaker 4: something where the full tariff impacts aren't felt until the
• 48:12
  Speaker 4: fourth quarter or first quarter of next year. And if
• 48:16
  Speaker 4: that is the case, we'll deal with it when it
• 48:18
  Speaker 4: comes and Chair Pal and the Fed will be there
• 48:21
  Speaker 4: to act very nimbly around that. I am confident of.
• 48:24
  Speaker 4: But has there been unfair trade practices? Absolutely? Do we
• 48:30
  Speaker 4: need to renegotiate trade contracts? Absolutely. I was at the
• 48:34
  Speaker 4: State of Texas during NAFTA. NAFTA was not renegotiated until
• 48:39
  Speaker 4: it became the USMCA under Trump's first term. Why the
• 48:44
  Speaker 4: global economy is so dynamic. How could a trade agreement
• 48:48
  Speaker 4: put together in the nineties still be relevant in twenty seventeen,
• 48:53
  Speaker 4: twenty eighteen, twenty nineteen.
• 48:54
  Speaker 5: It makes no sense.
• 48:56
  Speaker 4: So absolutely we need to be revisiting, like alongside a
• 49:02
  Speaker 4: dynamic global.
• 49:03
  Speaker 2: Economy on a more regular basis, on.
• 49:05
  Speaker 5: A more regular basis.
• 49:06
  Speaker 4: We're just doing this over a short period of time,
• 49:08
  Speaker 4: and that's created a good deal of disruption and uncertainty
• 49:12
  Speaker 4: and volatility and guesswork, if you will, among the economics community.
• 49:17
  Speaker 2: So let's talk about that guess work. There's going to
• 49:19
  Speaker 2: be some of these tariffs showing up as on the
• 49:24
  Speaker 2: household level. Is that a head wind for consumption? Same
• 49:28
  Speaker 2: question about businesses If they have to eat some of
• 49:31
  Speaker 2: the tariffs, that's going to affect profitability. There's no free lunch.
• 49:35
  Speaker 1: Is there.
• 49:35
  Speaker 4: No, There's never a free lunch. So we are seeing
• 49:38
  Speaker 4: consumer spending slow now. It's slowing for several reasons. One,
• 49:43
  Speaker 4: we've had a reversal of immigration in the US. That is,
• 49:49
  Speaker 4: no small number of people bodies consume and so if
• 49:53
  Speaker 4: you've got fewer bodies, they're consuming less.
• 49:56
  Speaker 2: And I want to say we have had a negative
• 50:00
  Speaker 2: net new population this year for the first time I
• 50:04
  Speaker 2: think in US history. Is that is that accurate?
• 50:06
  Speaker 4: Yeah, it's I mean we've slowed to a trickle in
• 50:08
  Speaker 4: population growth at times, but it is highly unusual, highly unusual.
• 50:15
  Speaker 4: You've got less bodies in the US, so you're consuming less.
• 50:21
  Speaker 4: Now those bodies contributed to low income consumption. You've also
• 50:26
  Speaker 4: got low income consumers in general in the US that
• 50:30
  Speaker 4: when prices for goods go up from tariffs or for
• 50:33
  Speaker 4: whatever reason, they're going to consume less. So consumer spending
• 50:38
  Speaker 4: has been slowing. Now why hasn't it slowed even more
• 50:43
  Speaker 4: so than it has when population growth has been negative
• 50:46
  Speaker 4: from a reversal in immigration, Because the top end consumers
• 50:50
  Speaker 4: are still spending. So the top income quintile in the
• 50:55
  Speaker 4: US represents forty five percent of all consumer spending. If
• 50:59
  Speaker 4: you take just the top two income quintels, that's more
• 51:01
  Speaker 4: than sixty percent of all consumer spending. And so we
• 51:04
  Speaker 4: want what we want. And whether you say maybe that's
• 51:07
  Speaker 4: still an artifact of COVID, we were all taught we're
• 51:09
  Speaker 4: going to die tomorrow, So spending it's God or it's
• 51:13
  Speaker 4: just this tremendous, tremendous increase in real estate wealth and
• 51:18
  Speaker 4: tremendous increase in financial wealth. And even though our marginal
• 51:22
  Speaker 4: propensity to consume out of that wealth is smaller for
• 51:25
  Speaker 4: upper income households, the growth in wealth is just enormous,
• 51:29
  Speaker 4: and so when they're spending, it tends to mask weakness
• 51:33
  Speaker 4: at the low end. But there are some risks along
• 51:35
  Speaker 4: the horizon. Student borrows have to.
• 51:37
  Speaker 5: Start paying that back.
• 51:39
  Speaker 4: I don't think that we're out of the woods and
• 51:42
  Speaker 4: that because the economy is growing at half the pace
• 51:45
  Speaker 4: it was last year, we're just fine. I think we
• 51:47
  Speaker 4: can grow even more slowly before it gets better.
• 51:49
  Speaker 2: So let's talk about two issues that are policy concerns
• 51:53
  Speaker 2: that you've raised. One is economic data integrity. Durding this
• 52:00
  Speaker 2: a few days after Trump fired the head of the BLS.
• 52:04
  Speaker 2: What sort of concerns does this raise in terms of
• 52:08
  Speaker 2: protection of data integrity?
• 52:10
  Speaker 4: So data integrity cuts both ways. So prior to that
• 52:14
  Speaker 4: very high profile firing of the BLS commissioner, the concern
• 52:19
  Speaker 4: among the economics community for quite some time has been
• 52:23
  Speaker 4: that data integrity has been slipping. And the way we
• 52:28
  Speaker 4: look measure that is we look at survey response rates,
• 52:32
  Speaker 4: and especially because the Labor Market report is the end
• 52:36
  Speaker 4: all be all number one data.
• 52:39
  Speaker 5: Point in the US that we follow.
• 52:41
  Speaker 4: The response rates had been slipping and now why is that, Well,
• 52:46
  Speaker 4: they're myriad reasons. One is that we have frequent government shutdowns,
• 52:53
  Speaker 4: and so when the lights aren't on and no one's
• 52:55
  Speaker 4: there to police the survey and call you the business
• 52:58
  Speaker 4: and say hey, it's really important that you respond, and
• 53:00
  Speaker 4: you don't get that call as of business, it starts
• 53:03
  Speaker 4: to instill in you the sense of maybe this survey
• 53:06
  Speaker 4: isn't so important, maybe I don't need to answer that.
• 53:10
  Speaker 4: And so what we've seen is after those episodes, you
• 53:13
  Speaker 4: tend to have a slippage and response rates that you
• 53:15
  Speaker 4: never quite get back. Another issue is we talked about
• 53:20
  Speaker 4: the youth boom. I don't see a lot of youthful
• 53:22
  Speaker 4: people jumping up and down to work for the government.
• 53:26
  Speaker 4: Maybe that's because the systems are antiquated. I wonder, because
• 53:31
  Speaker 4: you've got older generations at the government that are having
• 53:34
  Speaker 4: to teach an antiquated programming language to younger generations coming
• 53:39
  Speaker 4: in programming languages that don't exist anywhere else, And so
• 53:44
  Speaker 4: how does that instill excitement among young people to come
• 53:49
  Speaker 4: in and work for the government. We have also had
• 53:53
  Speaker 4: a systematic underfunding of data agencies for quite some time
• 53:57
  Speaker 4: as well. How can you you overhaul your systems without
• 54:02
  Speaker 4: the proper funding, and so it's something that the NAY
• 54:08
  Speaker 4: of the National Associate for Business Economics has really followed
• 54:10
  Speaker 4: this closely. We have a Statistics Committee that meets with
• 54:14
  Speaker 4: all the heads of the statistical agencies, and the statistical
• 54:17
  Speaker 4: agencies have a very strong outreach program to economists in academia,
• 54:23
  Speaker 4: in government, and in the private sector to say, here
• 54:27
  Speaker 4: are methodologies, how.
• 54:29
  Speaker 5: Can we do it better?
• 54:30
  Speaker 4: And so we're constantly searching for ways to improve and honestly,
• 54:33
  Speaker 4: to their credit, half the time, the private sector economists
• 54:36
  Speaker 4: are like crickets, how can we do it better? Oh,
• 54:39
  Speaker 4: you don't like the way we measure housing, tell us
• 54:41
  Speaker 4: how we can do it better. Cricket, cricket. No, I
• 54:45
  Speaker 4: just like to say I don't like the way you
• 54:46
  Speaker 4: do it. I mean, but we're not really offering a
• 54:49
  Speaker 4: lot of sound solutions. We're a massive economy. It's not
• 54:53
  Speaker 4: easy to measure the data. But one thing that we
• 54:55
  Speaker 4: do well historically is we measure data well, and we
• 55:00
  Speaker 4: have the best most robust data sets out of any
• 55:03
  Speaker 4: other country. We compare ourselves to, but it has been
• 55:06
  Speaker 4: slipping so very fun. What I will advocate for is
• 55:10
  Speaker 4: funding the data agencies and encouraging them to overhaul their systems.
• 55:14
  Speaker 2: So let's talk a little bit about the Federal Reserve independence.
• 55:18
  Speaker 2: How much risk is there that the FED could get politicized.
• 55:22
  Speaker 5: So we have to take the risk seriously.
• 55:24
  Speaker 4: And I understand why folks might be concerned that we
• 55:29
  Speaker 4: could be headed for a time when there's collusion between
• 55:34
  Speaker 4: the White House and the FED, because we've been there before,
• 55:36
  Speaker 4: so you could understand the concern. And that was a
• 55:40
  Speaker 4: very different time between Arthur Burns and the Nixon White House.
• 55:45
  Speaker 5: But it was a very real time.
• 55:47
  Speaker 4: And then it led to the hyperinflation, and those of
• 55:50
  Speaker 4: us of a certain age, we don't want to live through.
• 55:52
  Speaker 2: Nineteen seventies inflation. That was an ugly decade.
• 55:55
  Speaker 3: Economics, that was an ugly decade.
• 55:57
  Speaker 4: And I tell those harrowing tales to my team of
• 56:01
  Speaker 4: waiting in line for gasoline with my mother, you know,
• 56:05
  Speaker 4: because it was rationed or we couldn't get gasoline on
• 56:09
  Speaker 4: a Sunday.
• 56:10
  Speaker 2: I remember I had a lawn mowing business and I
• 56:13
  Speaker 2: would show up with my little red gas can and
• 56:16
  Speaker 2: they would say do you have an odd number license
• 56:18
  Speaker 2: plate or an even number license plate? And my answer
• 56:21
  Speaker 2: was always, I'm twelve. I don't have a license plate.
• 56:25
  Speaker 2: I just need a gallon of gas so I can
• 56:27
  Speaker 2: mow missus McCarthy's lawn down the street.
• 56:29
  Speaker 4: Yeah.
• 56:30
  Speaker 3: Always.
• 56:30
  Speaker 4: I can't believe they had the nerve to ask a
• 56:31
  Speaker 4: twelve year old, Oh, no, you show up, But it
• 56:34
  Speaker 4: shows you why should you a twelve year old get
• 56:36
  Speaker 4: priority or someone that needs.
• 56:37
  Speaker 5: To commute to work.
• 56:38
  Speaker 3: But apparently, but.
• 56:39
  Speaker 4: My parents bought a house at eighteen percent mortgage interest
• 56:43
  Speaker 4: in nineteen.
• 56:43
  Speaker 2: Eighty eighteen percent.
• 56:44
  Speaker 4: That was normal because if you didn't buy it that day,
• 56:47
  Speaker 4: it was more expensive the next day. That's what strikes
• 56:51
  Speaker 4: fear in the hearts of monetary policy makers because that
• 56:54
  Speaker 4: is inflation expectations. The price was going to be more
• 56:57
  Speaker 4: expensive tomorrow, so you better buy it today.
• 57:00
  Speaker 2: Inflation expectations lead to consumer and behavior that helps the drive.
• 57:05
  Speaker 4: Prices, yes, and it starts off that sort of vicious cycle.
• 57:09
  Speaker 4: And so this is at the heart of why you
• 57:12
  Speaker 4: need independent monetary policy making, because if the market believes
• 57:16
  Speaker 4: that the FED might keep rates easier than the economy
• 57:21
  Speaker 4: would otherwise dictate, then is that going to again lead
• 57:26
  Speaker 4: to something like runaway inflation is going to lead to stagnation.
• 57:30
  Speaker 4: And that's why every time there's some headline where the
• 57:35
  Speaker 4: FEDS and dependence may be threatened, you see term premium
• 57:40
  Speaker 4: increase at the long end of the yield curve. You
• 57:43
  Speaker 4: see the stagnation playbook go go into effect among investors,
• 57:49
  Speaker 4: and you know, going back to US exceptionalism. Independent monetary
• 57:53
  Speaker 4: policy making is a pillar of US exceptionalism.
• 57:58
  Speaker 2: Really interesting in a bunch of names floated for FED
• 58:02
  Speaker 2: chair other than Scott Besson, who has said he's not
• 58:06
  Speaker 2: interested and I think is probably the most thoughtful person
• 58:11
  Speaker 2: that I've heard names I've heard thrown out. Any of
• 58:14
  Speaker 2: those names make you remotely comfortable? Or what do you
• 58:19
  Speaker 2: think about some of these trial balloons that keep getting
• 58:22
  Speaker 2: tossed around?
• 58:23
  Speaker 5: Yeah, so I think I agree with you.
• 58:26
  Speaker 4: I like the steady hand and careful thinking that comes
• 58:31
  Speaker 4: from Treasury Secretary Besson. It would actually, in policy circles,
• 58:36
  Speaker 4: be a demotion to send the Treasury secretary to become
• 58:41
  Speaker 4: a chair.
• 58:42
  Speaker 3: Of the FMC. That's the emotion we think of it.
• 58:45
  Speaker 4: So in markets, I often hear this from investors is wait,
• 58:49
  Speaker 4: but the chair of the FED is the most powerful
• 58:51
  Speaker 4: person in the world, but from in policy circles, it
• 58:56
  Speaker 4: is a lesser position than Treasury secretary.
• 58:59
  Speaker 2: Very interesting, it's a longer tenure, especially if we look
• 59:04
  Speaker 2: at recent administrations. It's not like someone becomes treasure secretary
• 59:09
  Speaker 2: and they're there for all four years. They seem to
• 59:11
  Speaker 2: turn over pretty rapidly.
• 59:13
  Speaker 5: It can be the case, right, but we've had not always.
• 59:16
  Speaker 2: We've had back to back six year terms for pal.
• 59:20
  Speaker 2: That's a pretty yeah, yeah for.
• 59:23
  Speaker 4: Your terms, but yeah, and there tends to be a
• 59:26
  Speaker 4: lot of longevity with FED chairs because they also don't
• 59:30
  Speaker 4: change typically with administrations. Uh, and so in political parties,
• 59:36
  Speaker 4: they tend to span political parties.
• 59:38
  Speaker 5: So, look, there are a lot.
• 59:39
  Speaker 4: Of you know, I obviously am going to have some
• 59:43
  Speaker 4: personal favorites of mine that have been thrown out there.
• 59:45
  Speaker 4: But unfortunately I'm not going to give you those names.
• 59:49
  Speaker 3: But they will just tell me who you really don't like.
• 59:51
  Speaker 4: There is yes, yes, I'll do the opposite. No, but
• 59:54
  Speaker 4: there there there are plenty of names in there that
• 59:57
  Speaker 4: have been tossed around as possibilities that would make fine
• 1:00:02
  Speaker 4: FMC chairs. I think what you're going to see is
• 1:00:05
  Speaker 4: with each of those names of a float to the top.
• 1:00:08
  Speaker 4: The markets will have their say on whether that is
• 1:00:12
  Speaker 4: a candidate that would be believed to be a mouthpiece
• 1:00:15
  Speaker 4: of President Trump or not.
• 1:00:17
  Speaker 2: When I look at various cabinet members Defense, Intelligence, Health
• 1:00:25
  Speaker 2: and Welfare and most recently now BLS, can't say these
• 1:00:32
  Speaker 2: are the best and the brightest. It's not camelot under Kennedy,
• 1:00:36
  Speaker 2: and you could kind of under John F. Kennedy in
• 1:00:40
  Speaker 2: nineteen sixty you could kind of get away with that
• 1:00:44
  Speaker 2: in certain cabinet positions. Am I wrong in saying markets
• 1:00:51
  Speaker 2: won't tolerate someone like an RFK junior and all of
• 1:00:56
  Speaker 2: his anti vaccination attitudes at a place like NIH or
• 1:01:01
  Speaker 2: CDC with a FED chair. Is the bar higher for
• 1:01:06
  Speaker 2: the chairman of the Federal Reserve than other specific cabinet positions.
• 1:01:12
  Speaker 4: Well, I think piggybacking on, you know, sort of your
• 1:01:14
  Speaker 4: exact examples there, Who directly has a hand in influencing
• 1:01:21
  Speaker 4: financial markets. That is the FED chair, That is the
• 1:01:26
  Speaker 4: FOMC collectively, not just the FED chair, but the FOMC
• 1:01:29
  Speaker 4: is a collective body, and that's why the markets will
• 1:01:32
  Speaker 4: always be most sensitive to who is the chair of
• 1:01:35
  Speaker 4: the FED.
• 1:01:36
  Speaker 2: So I want to ask a question about policy, not politics.
• 1:01:40
  Speaker 2: But very often when we talk about you know, anytime
• 1:01:43
  Speaker 2: something comes up, like taco whatever, it seems to get
• 1:01:47
  Speaker 2: overly politicized. But the one descriptor I heard that's kind
• 1:01:52
  Speaker 2: of fascinating is that there isn't a Trump put, there's
• 1:01:56
  Speaker 2: a Trump collar. And what that means is when markets
• 1:02:00
  Speaker 2: are near all time highs, he's someone in bolden and
• 1:02:03
  Speaker 2: can be very aggressive in doing things like firing the
• 1:02:06
  Speaker 2: BLS commissioner when the market sells off and suddenly we're ten, fifteen,
• 1:02:12
  Speaker 2: almost twenty percent off the highs. Hey, we're going to
• 1:02:15
  Speaker 2: put a pause on taris for ninety days. There's a
• 1:02:18
  Speaker 2: little bit of a floor there, and hence the phrase
• 1:02:21
  Speaker 2: Trump collar. I know, we only have six or eight
• 1:02:25
  Speaker 2: months worth of recent data. How important do you believe
• 1:02:31
  Speaker 2: market prices are to this president and this administration?
• 1:02:35
  Speaker 4: So in the first administration, you know, we we were like, okay,
• 1:02:39
  Speaker 4: we've got his number. We've got his number. He takes
• 1:02:42
  Speaker 4: the stock market as the single best indicator of his
• 1:02:45
  Speaker 4: approval rating, right, and so if the stock market pukes,
• 1:02:49
  Speaker 4: if it's a huge sell off, he's going to listen.
• 1:02:52
  Speaker 4: And so we went into this second Trump term with
• 1:02:57
  Speaker 4: the markets assuming Aha, Yes, all we have to do
• 1:03:01
  Speaker 4: is speak and will speak volumes with a sell off
• 1:03:05
  Speaker 4: and he will change his tune. Well, that is not
• 1:03:08
  Speaker 4: what happened. That's not what happened, because the markets did
• 1:03:11
  Speaker 4: puke when it became apparent that he was going to
• 1:03:14
  Speaker 4: be very aggressive on a trade policy in his second term.
• 1:03:18
  Speaker 4: The market puked and the President stayed the course.
• 1:03:21
  Speaker 2: So someone asked me my opinion as to what I
• 1:03:25
  Speaker 2: think trade policy is going to look like going forward,
• 1:03:29
  Speaker 2: given how frequently we've seen flip flops and back and
• 1:03:32
  Speaker 2: forth and extensions, and what I answered, And I'm curious
• 1:03:37
  Speaker 2: as to your perspective on this. Tell me the last
• 1:03:40
  Speaker 2: person who whispers and President Trump's year before a decision
• 1:03:45
  Speaker 2: is made, and that'll tell me where the market will go.
• 1:03:49
  Speaker 2: If it's Treasury Secretary Scott Bessen is the last person
• 1:03:53
  Speaker 2: to speak to him. I think the markets would be
• 1:03:55
  Speaker 2: pretty steady and on a gradual move higher if it
• 1:03:59
  Speaker 2: had happens to be someone like Pena Navara will buckle
• 1:04:03
  Speaker 2: up wearing for a bumpy ride. Fair way to describe
• 1:04:07
  Speaker 2: the policy making in DC, I think.
• 1:04:10
  Speaker 4: So, I mean basically what you're getting at in a
• 1:04:12
  Speaker 4: roundabout way is just who do the markets trust? Who
• 1:04:16
  Speaker 4: do the markets trust? And I think you've had Treasure
• 1:04:20
  Speaker 4: Secretary Bessant that had an active role in that hair
• 1:04:23
  Speaker 4: raising time between April second and April ninth, meeting with
• 1:04:28
  Speaker 4: Chair Pal, helping to persuade the President to sort of
• 1:04:33
  Speaker 4: back off at that time, adding to that hair raising
• 1:04:37
  Speaker 4: moment by threatening to fire Pal like the markets have
• 1:04:40
  Speaker 4: come to know Bessn't as a calm and steady voice.
• 1:04:43
  Speaker 2: And steady is the word that always seems to pop
• 1:04:46
  Speaker 2: into my head.
• 1:04:47
  Speaker 4: Any equals certainty, equals your tea equals the opposite of volatility,
• 1:04:51
  Speaker 4: and so you know the markets will speak volumes as
• 1:04:55
  Speaker 4: to who they believe they can trust.
• 1:04:58
  Speaker 2: Coming up, we continue our comversation with Ellen Zenner, chief
• 1:05:02
  Speaker 2: economic strategist from Morgan Stanley. I'm Barry Riddults. You're listening
• 1:05:06
  Speaker 2: to Masters in Business on Bloomberg Radio. All right, so
• 1:05:17
  Speaker 2: I only have you for a limited amount of time.
• 1:05:19
  Speaker 2: Let's jump to our favorite questions, starting with who are
• 1:05:23
  Speaker 2: your mentors who helped shape your career? Well?
• 1:05:27
  Speaker 4: Tamer Plout, so I have mentioned I worked for her
• 1:05:30
  Speaker 4: at the State of Texas. She was a very influential
• 1:05:34
  Speaker 4: chief economist at the State of Texas, and that was
• 1:05:37
  Speaker 4: my She was my first.
• 1:05:38
  Speaker 5: Barry.
• 1:05:38
  Speaker 4: You always remember your first, So she was the first
• 1:05:41
  Speaker 4: chief economist that I worked for, and he has followed
• 1:05:45
  Speaker 4: my career for the next twenty five years. She's followed
• 1:05:49
  Speaker 4: my career. I think my first foura fora into investment banking,
• 1:05:55
  Speaker 4: my chief economist was David Wrestler at Numerous Security. He
• 1:06:00
  Speaker 4: was a twenty six year veteran chief economist at twenty
• 1:06:04
  Speaker 4: six year veteran of Numerous Securities and he's now playing
• 1:06:10
  Speaker 4: golf twenty four to seven in the South. But he
• 1:06:15
  Speaker 4: because it was my first foray into investment banking, into
• 1:06:20
  Speaker 4: the high frequency world trading as a trading desk economist.
• 1:06:24
  Speaker 4: He was very influential there and I still hear from
• 1:06:29
  Speaker 4: him all the time when he sees me in the
• 1:06:32
  Speaker 4: media or he hears of some forecasting award or something
• 1:06:37
  Speaker 4: like that, like he's still the proud Papa today. And
• 1:06:40
  Speaker 4: so those were two big early mentors of mine that
• 1:06:43
  Speaker 4: helped shape my career.
• 1:06:44
  Speaker 2: That's great. Before we get to books, and you actually
• 1:06:47
  Speaker 2: brought a few books, I want to ask you about streaming.
• 1:06:51
  Speaker 2: What are you listening to or watching What's What's keeping
• 1:06:54
  Speaker 2: you entertained?
• 1:06:55
  Speaker 5: I really developed a love for streaming.
• 1:06:58
  Speaker 3: I've watched TV before very similar cod the TV was.
• 1:07:03
  Speaker 4: Never on in our apartment, and so with COVID, I
• 1:07:06
  Speaker 4: really my eyes were open. And so I really love documentaries.
• 1:07:14
  Speaker 4: The one that I'm watching right now is on Billy Joel.
• 1:07:16
  Speaker 2: I'm literally just wrapping up the first we stopped just
• 1:07:21
  Speaker 2: before the Stranger.
• 1:07:23
  Speaker 5: Yeah.
• 1:07:23
  Speaker 4: So they must have made it for fifty somethings in
• 1:07:25
  Speaker 4: this world, right, So well, if.
• 1:07:28
  Speaker 2: You grew up in the sixties, seventies, eighties Bill, especially
• 1:07:32
  Speaker 2: in New York or Long Island, Billy Joel was everywhere.
• 1:07:35
  Speaker 4: Yeah, which I'm of an age that I know him
• 1:07:39
  Speaker 4: in real time. But I'm from the South, so I
• 1:07:42
  Speaker 4: didn't know all of these things. So my streaming habits
• 1:07:47
  Speaker 4: are extremely polarized and polarizing probably so it's anywhere from
• 1:07:52
  Speaker 4: documentary so I can expand my knowledge and expand my
• 1:07:57
  Speaker 4: mind to the most streaming reality shows like Love Island
• 1:08:05
  Speaker 4: and I Am not kidding you if anyone wants to say, wow,
• 1:08:08
  Speaker 4: she really is a real person.
• 1:08:11
  Speaker 5: It's the fact that I can.
• 1:08:12
  Speaker 4: Enjoy Love Island and then in the next hour, I
• 1:08:15
  Speaker 4: can enjoy a documentary on Billy Joel.
• 1:08:18
  Speaker 2: So you have a couple of books here, let's talk
• 1:08:20
  Speaker 2: about books are what are you reading now? What are
• 1:08:23
  Speaker 2: some of your favorites?
• 1:08:24
  Speaker 5: Yeah, I have a couple of books.
• 1:08:25
  Speaker 4: So when I first as you mentioned, I was on
• 1:08:27
  Speaker 4: almost exactly eight years ago, and I talked about Jonah
• 1:08:30
  Speaker 4: Sarah's book A Piece of the Action, How the Middle
• 1:08:33
  Speaker 4: Class Became the Money Class, still one of my favorite
• 1:08:36
  Speaker 4: books on the rise of consumer credit in the US
• 1:08:39
  Speaker 4: and our love hate relationship with it.
• 1:08:41
  Speaker 2: But it's been that analysis of how the middle class
• 1:08:46
  Speaker 2: suddenly gained entry to homes, mortgages, cars, and lots of
• 1:08:51
  Speaker 2: consumer discretionary goods. Huge boom for middle class America, right.
• 1:08:57
  Speaker 5: Incredible.
• 1:08:59
  Speaker 4: It really is still an incredible book. And every economist
• 1:09:02
  Speaker 4: of mine that I have covered the consumer and study
• 1:09:04
  Speaker 4: household behavior, they have to read it. So I brought
• 1:09:09
  Speaker 4: in today Kurt Vonnegutz player piano.
• 1:09:11
  Speaker 3: Can't go wrong with Vonni and so I.
• 1:09:13
  Speaker 4: Have not read this book, but I'll tell you that
• 1:09:16
  Speaker 4: what I'm showing you, if the listeners could see, is
• 1:09:19
  Speaker 4: a handwritten note from a colleague after watching a webcast
• 1:09:23
  Speaker 4: of my how many people get handwritten notes.
• 1:09:25
  Speaker 2: Still not many, right, but they catch your attention.
• 1:09:29
  Speaker 4: And the webcast was me and Adam Jonas and Adam
• 1:09:34
  Speaker 4: Jonas is he was always referred to as the Tesla guy.
• 1:09:39
  Speaker 4: He's probably the quintessential thought leader at Morgan Stanley. He's
• 1:09:45
  Speaker 4: just got a celebrity following, and he is leading the
• 1:09:49
  Speaker 4: charge on robotics and humanoids. And so after that webcast,
• 1:09:55
  Speaker 4: I was sent this because this book, written in the
• 1:09:59
  Speaker 4: nineteen fifty covered rise of the corporation and replacement of
• 1:10:03
  Speaker 4: the state, the ruthless efficiency of capitalism in dealing with labor,
• 1:10:07
  Speaker 4: the overpowering of the worker.
• 1:10:10
  Speaker 5: By AI and automation.
• 1:10:12
  Speaker 3: That's all in this book from the nineteen seventy five
• 1:10:14
  Speaker 3: years ago.
• 1:10:15
  Speaker 5: Maybe five years ago.
• 1:10:16
  Speaker 4: The other book I brought in so again, just like
• 1:10:18
  Speaker 4: my streaming habits a cleft, is called The Bluegrass Conspiracy,
• 1:10:24
  Speaker 4: An inside story of power, greed, drugs and murder. This
• 1:10:28
  Speaker 4: is the backstory to Cocaine Bear, the movie Oh, which
• 1:10:31
  Speaker 4: is one of my favorite movies.
• 1:10:32
  Speaker 3: I haven't seen it because it sounds so bare crazy.
• 1:10:37
  Speaker 2: Come on, yeah, I mean, it just sounds like a
• 1:10:40
  Speaker 2: wildly fictionalized account of a highly unlikely event.
• 1:10:45
  Speaker 3: Yeah, how's the book?
• 1:10:46
  Speaker 4: The book, I am just starting and I cannot wait
• 1:10:49
  Speaker 4: to get through it because the movie, the only thing
• 1:10:53
  Speaker 4: that the movie that really happened that was in the
• 1:10:56
  Speaker 4: movie was that there was a dead bear found in
• 1:10:59
  Speaker 4: a national park with a belly full of cocaine.
• 1:11:01
  Speaker 5: That is the.
• 1:11:02
  Speaker 4: Only thing in the movie that was accurate. It was accurate.
• 1:11:07
  Speaker 4: That actually is in the book. But there's a whole
• 1:11:10
  Speaker 4: backstory here and I cannot wait to read it. It comes
• 1:11:13
  Speaker 4: highly recommended, So you can see that my taste in
• 1:11:15
  Speaker 4: books runs the gambit as well, just like my streaming.
• 1:11:19
  Speaker 3: So if you haven't.
• 1:11:21
  Speaker 2: Read Player Piano yet, have you read other Vonnugut? Have
• 1:11:25
  Speaker 2: you read Kat's Cradle or Swaterhouse Vonnagut? All right, so
• 1:11:30
  Speaker 2: everybody should read Slaughterhouse five, And if you're at all
• 1:11:34
  Speaker 2: remotely interested in science and technology, run a mock Cat's
• 1:11:40
  Speaker 2: Cradle is his version of that. What makes him so
• 1:11:44
  Speaker 2: fascinating is he finds these incredible concepts and just so
• 1:11:50
  Speaker 2: simply explains them in such an compelling and entertaining fashion.
• 1:11:55
  Speaker 4: But isn't it also scary how books can be written
• 1:11:58
  Speaker 4: that long ago? And then here we are talking about
• 1:12:01
  Speaker 4: humanoids and robotics because another I have to say piggybacking
• 1:12:05
  Speaker 4: off of this idea of robotics and humanoids. Twenty thirteen.
• 1:12:10
  Speaker 4: Have you seen the movie Robot and Frank. No, Robot
• 1:12:14
  Speaker 4: and Frank, Frank Langella was in it. Susan Sarandon, Peter
• 1:12:18
  Speaker 4: sars Guard, James Marsden, Live Tyler Grow.
• 1:12:23
  Speaker 3: That's some cavy.
• 1:12:24
  Speaker 5: It is so.
• 1:12:25
  Speaker 4: Talk about when we think about thematics, longevity is a
• 1:12:29
  Speaker 4: thematic AI tech and diffusion is a thematic in terms
• 1:12:33
  Speaker 4: of thematic investing. Robot and Frank is about a senior
• 1:12:40
  Speaker 4: gentleman that he wants to age in place, and to
• 1:12:43
  Speaker 4: help him do that, his family buys him a home
• 1:12:46
  Speaker 4: companion robot.
• 1:12:48
  Speaker 2: To which him, which is really not decades away.
• 1:12:51
  Speaker 4: No, we're not that far off from that. In Japan,
• 1:12:54
  Speaker 4: they're already testing it. So this was in twenty thirteen.
• 1:12:57
  Speaker 4: The kicker, though, is that it just so happens that
• 1:13:01
  Speaker 4: Frank was a petty thief in his prior life. He's
• 1:13:05
  Speaker 4: now going through early dementia. He was a petty thief
• 1:13:08
  Speaker 4: and he co opts the robot to help him. That's
• 1:13:11
  Speaker 4: the fun part of the movie. But Robot and Frank
• 1:13:14
  Speaker 4: twenty three.
• 1:13:15
  Speaker 2: I'm check absolutely check that out. Our last two questions,
• 1:13:18
  Speaker 2: what sort of advice would you give a recent college
• 1:13:21
  Speaker 2: grad interest in the career in economics, finance, investing. What
• 1:13:26
  Speaker 2: would your advice you to that.
• 1:13:27
  Speaker 4: I would say for them to find any and everyone
• 1:13:30
  Speaker 4: they can think of that works in that field already.
• 1:13:34
  Speaker 5: The best is to if you.
• 1:13:35
  Speaker 4: Can, not to cold call, but to try to find
• 1:13:38
  Speaker 4: some sort of connection, whether it's your wealth advisor, and
• 1:13:41
  Speaker 4: see who your wealth advice. I get contacted by our
• 1:13:44
  Speaker 4: wealth advisors that say, hey, my client has a son
• 1:13:48
  Speaker 4: who this Do you mind if I put you in
• 1:13:50
  Speaker 4: touch with him? Find some way, And when you start
• 1:13:53
  Speaker 4: to have conversations with people that are already working in
• 1:13:56
  Speaker 4: areas where you think you want to work, never leave
• 1:13:59
  Speaker 4: that converse without getting two more names from them of
• 1:14:02
  Speaker 4: people they think you should contact, and can they make
• 1:14:06
  Speaker 4: that opening for you so that you always have another
• 1:14:09
  Speaker 4: conversation to be had.
• 1:14:10
  Speaker 2: Each call always asks for two more names. That's great
• 1:14:13
  Speaker 2: advice for someone right out of college. And our final question,
• 1:14:17
  Speaker 2: what do you know about the world of economics, investing,
• 1:14:21
  Speaker 2: thematic investing, macro economy today that might have been helpful
• 1:14:25
  Speaker 2: twenty five or so years ago, really, when you were
• 1:14:28
  Speaker 2: first starting out.
• 1:14:30
  Speaker 5: I think if I were to know that.
• 1:14:35
  Speaker 4: Models are not the end all be all, I would
• 1:14:39
  Speaker 4: have started using anecdotal evidence a lot earlier. I am
• 1:14:44
  Speaker 4: a very big believer in anecdotal evidence, and I've been
• 1:14:47
  Speaker 4: criticized for that in my career. It's not statistically sound.
• 1:14:52
  Speaker 4: I like to use my one man data sample, which
• 1:14:55
  Speaker 4: is my husband when I studied behavior, and and I
• 1:15:01
  Speaker 4: just it's a great way to connect to people, connect
• 1:15:03
  Speaker 4: to your audience, get a message across. And I'm a
• 1:15:05
  Speaker 4: big believer in using anecdotal evidence when thinking about how
• 1:15:09
  Speaker 4: to adjust your forecast subjectively, and so I wish I
• 1:15:13
  Speaker 4: had started using that my career even earlier.
• 1:15:16
  Speaker 2: Ellen, this has been absolutely a pleasure. It's been way
• 1:15:19
  Speaker 2: too long since we had you in here. We have
• 1:15:22
  Speaker 2: been speaking with Alan Zenner. She's chief economic strategist and
• 1:15:26
  Speaker 2: global head of thematic and macro investing for Morgan Stanley
• 1:15:29
  Speaker 2: Wealth Management. They manage over seven trillion dollars in total assets.
• 1:15:36
  Speaker 2: If you enjoy this conversation, well, be sure and check
• 1:15:39
  Speaker 2: out any of the five hundred and forty seven we've
• 1:15:42
  Speaker 2: done over the past twelve years. You can find those
• 1:15:46
  Speaker 2: at iTunes, Spotify, Bloomberg YouTube, wherever you find your favorite podcast,
• 1:15:53
  Speaker 2: and be sure and check out my new book, How
• 1:15:55
  Speaker 2: Not to Invest The ideas, numbers and behaviors that they're
• 1:16:00
  Speaker 2: joy wealth and how to avoid them, How Not to
• 1:16:03
  Speaker 2: Invest at your favorite bookstore.
• 1:16:05
  Speaker 3: I would be remiss.
• 1:16:06
  Speaker 2: If I didn't thank the Crack team that helps with
• 1:16:08
  Speaker 2: these conversations together each week. Peter Nicolino is my audio engineer.
• 1:16:14
  Speaker 2: Anna Luke is my producer. Sean Russo is my researcher.
• 1:16:18
  Speaker 2: Sage Bauman is the Heavy podcast at Bloomberg. I'm Barry Rutolts.
• 1:16:23
  Speaker 2: You've been listening to Masters in Business on Bloomberg Radio