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Constance Hunter Discusses International Finance · Masters in Business

0:02
Speaker 1: This is Masters in Business with Barry Ridholts on Bloomberg Radio.
0:09
Speaker 1: This week on the podcast, I have a special guest.
0:12
Speaker 1: Her name is Constance Hunter. She is the chief economist
0:17
Speaker 1: at accounting and consulting giant KPMG. She's also a fishing buddy.
0:23
Speaker 1: I've spent some time with her up in Maine at
0:25
Speaker 1: Camp Ko Talk discussing all manner of things. She has
0:30
Speaker 1: a really interesting and fascinating career path not the typical economists.
0:36
Speaker 1: She started on the bye side as a trader and
0:39
Speaker 1: fund manager. Eventually UH did some work managing alternative investments
0:44
Speaker 1: before she ended up as chief economist at KPMG. This
0:49
Speaker 1: is a really interesting conversation I expect you will find
0:52
Speaker 1: in intriguing with no further ado, my conversation with Constance Hunter.
1:02
Speaker 1: My guest today is Constance Hunter. She has been chief
1:05
Speaker 1: economist at KPMG since previously, she was the Deputy Chief
1:12
Speaker 1: Investment Officer for fixed income at ACTA Investment Managers, where
1:17
Speaker 1: she joined after fifteen years on the by side, investing
1:21
Speaker 1: globally in fixed income equities and foreign exchange. She is
1:26
Speaker 1: a member of the New York Association of Business Economics
1:30
Speaker 1: and one hundred Women in Finance. She also participates in
1:34
Speaker 1: the National Committee for US China Relations, working on track
1:39
Speaker 1: to economic dialogues. She earned her master's degree in International
1:44
Speaker 1: Affairs at Columbia. Constance Hunter, Welcome to Bloomberg. Berry is
1:49
Speaker 1: so good to be here. So Constance, let's talk a
1:51
Speaker 1: little bit about your background. How did you find your
1:54
Speaker 1: way into finance? So a couple of ways. First, my father,
2:00
Speaker 1: uh worked for an investment bank in Philadelphia, and so
2:04
Speaker 1: there was investing going on in my family. That's where
2:07
Speaker 1: you grew up. I grew up in Philadelphia. And and
2:09
Speaker 1: then how did you manage to make your way to Manhattan? Well,
2:13
Speaker 1: I went to ny U. But the other influence that
2:16
Speaker 1: got me into finance my very good friend father, Dan Bongovanni,
2:20
Speaker 1: was an avid reader, and so he was reading a
2:24
Speaker 1: book called The Coming Economic War with Japan, and I was,
2:29
Speaker 1: I know, this was the early eighties. I was in
2:31
Speaker 1: high school. And let me just let me just set
2:34
Speaker 1: the scene a little bit. The Japanese are dominating exports,
2:39
Speaker 1: They're buying Rockefell Or Center. They're gonna take over America,
2:42
Speaker 1: take over America a little bit like China today. But
2:45
Speaker 1: we'll get back to that Uh. So, I remember he's
2:48
Speaker 1: reading this book the Coming Economic War with Japan, and
2:51
Speaker 1: the whole concept of an economic war seemed fascinating to me.
2:54
Speaker 1: And I was fourteen or fifteen, and so he ended
2:57
Speaker 1: up telling me about the book and I borrowed it.
3:00
Speaker 1: I read it. I don't you know how much of
3:01
Speaker 1: it went over my head, but it I was hooked.
3:04
Speaker 1: I was hooked that I not only on finance, but
3:07
Speaker 1: on international finance. You end up at n y U.
3:10
Speaker 1: Was there a business or international relations in the undergraduate?
3:13
Speaker 1: So I did um Liberal Arts, So I have a
3:16
Speaker 1: b a. In economics. Uh, And I felt that was important.
3:19
Speaker 1: I wanted to have that broad philosophical grounding that a
3:24
Speaker 1: good liberal arts degree gives you, um in being able
3:27
Speaker 1: to think and baby being able to understand, uh, sort
3:31
Speaker 1: of history of Western thought, reading all of the great books.
3:35
Speaker 1: That's I think a good grounding for someone who's going
3:38
Speaker 1: to spend their career thinking and so. Um. So that
3:42
Speaker 1: was my My undergraduate degree was in economics. And then
3:46
Speaker 1: you go to Columbia for a master's in International Relationship
3:49
Speaker 1: Master so it's a school of International and Public Affairs.
3:54
Speaker 1: So my degree is a Master of International affairs, but
3:56
Speaker 1: I focused on economics and international economics, and so I
4:00
Speaker 1: had professors like jug desbug Waddy and Armenio Fraga, who
4:04
Speaker 1: was a adjunct professor when he was at Soros and
4:08
Speaker 1: then later went on to become the head of the
4:10
Speaker 1: Central Bank of Brazil, for example. So world famous UM faculty. Yes,
4:15
Speaker 1: just to say the very least. So you you come
4:19
Speaker 1: out with this international relations graduate degree, how does that
4:24
Speaker 1: translate to a career on Wall Street? So interestingly enough,
4:28
Speaker 1: I was interviewing at Chase Manhattan Bank, so pre Chemical
4:32
Speaker 1: Bank merger. I mean, so you're talking n early late
4:39
Speaker 1: ninety three, early Ninet'm interviewing at Chase, and they were
4:43
Speaker 1: recruiting for the private bank, and I wasn't terribly interested
4:46
Speaker 1: in that. UM. I was also interviewing at a bankers
4:49
Speaker 1: Trust if anybody go back in time and remember bankers
4:52
Speaker 1: Trust for auto analyst position, so very heavily on economics.
4:56
Speaker 1: International affairs is important. There's obviously trade component to that.
5:00
Speaker 1: So I'm they're interviewing at the private bank, and I
5:03
Speaker 1: see this research piece and it's a daily foreign exchange
5:06
Speaker 1: update on what happened overnight and what's going on with
5:10
Speaker 1: the currencies, and like it was one sentence, maybe two
5:13
Speaker 1: sentences about every single economy and a font that I
5:15
Speaker 1: couldn't read today to save my life. And and I
5:19
Speaker 1: saw this, and I thought, this is what I want
5:21
Speaker 1: to do. I want to do this, And so I
5:24
Speaker 1: networked my way to the to the Foreign Exchange Department
5:27
Speaker 1: and the person who was responsible for this, and it
5:30
Speaker 1: turns out they were hiring and and so that person's
5:33
Speaker 1: name is chriss Igo, who was also I worked with
5:35
Speaker 1: him at ACCA later in my career, and um, he
5:39
Speaker 1: had interviewed PhD economists who would say, well, there's a
5:43
Speaker 1: perfect information and there's no foreign exchange markets, or you
5:46
Speaker 1: know that you can't make any extra money, why forecast them?
5:49
Speaker 1: It's all the information is already in the price. And
5:52
Speaker 1: here I was coming in looking at the economics and
5:55
Speaker 1: the politics and and how they all interplayed with one
5:59
Speaker 1: another packed the foreign exchange market. So it was really
6:02
Speaker 1: the perfect first job out of graduate school for me.
6:04
Speaker 1: And it's funny that two of us are both sitting
6:06
Speaker 1: here holding reading glasses in our hands, and you're talking
6:09
Speaker 1: about funds. Let me mix this up a little bit
6:12
Speaker 1: with you. McKenzie just came out with a study that
6:16
Speaker 1: said by the year almost a million jobs will have
6:21
Speaker 1: been replaced by and with technology. What does that tell
6:26
Speaker 1: you about what's going on in the labor market these days? Okay,
6:30
Speaker 1: so let's put this in a big context. The US
6:33
Speaker 1: labor market is how many people, hundred and fifty million
6:37
Speaker 1: people and fifty exactly, So this is percentagewise, a small
6:42
Speaker 1: percentage of total jobs. It sounds big, right, it's a
6:46
Speaker 1: little Austin powers. One million jobs are going to disappear, right,
6:50
Speaker 1: But but the reality is, first of all, let's so
6:52
Speaker 1: contextualize it in terms of the whole labor market. There's
6:55
Speaker 1: two other things that need to be highlighted when thinking
6:57
Speaker 1: about this issue, and we're actually working on some search
7:00
Speaker 1: on this, which I can tell you about in more detail.
7:03
Speaker 1: But the first thing is they don't talk about what
7:06
Speaker 1: new jobs are going to be created, and that's a
7:09
Speaker 1: really important thing to think about. They also don't talk
7:12
Speaker 1: about the areas where labor shortages and pending labor shortages
7:17
Speaker 1: intersect with the technology. So let me give you one example.
7:20
Speaker 1: As the trucking industry and long haul trucking, it's widely
7:24
Speaker 1: anticipated we're going to have self driving trucks. And while
7:27
Speaker 1: they aren't necessarily we're not necessarily going to have the
7:30
Speaker 1: robotics to do the loading of the truck, the unloading
7:33
Speaker 1: of the truck, the bringing of the goods into the
7:35
Speaker 1: home or the store. Eventually, who knows. We're making progress
7:39
Speaker 1: in robotics, but just the driving part is certainly something
7:42
Speaker 1: the and the long haul driving part is something that
7:44
Speaker 1: could be automated. Young people don't want to do this job.
7:47
Speaker 1: It's a very old industry and and you know, you
7:50
Speaker 1: can't be on your little dopamine giving device all day
7:54
Speaker 1: when that is your job when you're driving a truck.
7:57
Speaker 1: And so if we had a self driving truck, that
7:59
Speaker 1: could really help an industry that has had to continue
8:03
Speaker 1: to raise wages to get people to even consider working
8:06
Speaker 1: in that field. It's not something people want to do anymore.
8:09
Speaker 1: And that we're talking about right there. It's a it's
8:12
Speaker 1: a profession that has two and a half million people.
8:14
Speaker 1: So there's there's a match that that's happening in some
8:17
Speaker 1: cases where the disappearing of these jobs is a good thing.
8:20
Speaker 1: The second thing that they don't talk about, um is
8:23
Speaker 1: the number of new jobs that could appear. So someone's
8:27
Speaker 1: got a design and build all those robotics. Well, and
8:29
Speaker 1: interestingly enough, right now there are more people being employed
8:33
Speaker 1: in in artificial intelligence and um robotics than than people
8:39
Speaker 1: that are being than jobs that are being destroyed. Now,
8:41
Speaker 1: I'm not saying that's going to go on forever, but
8:42
Speaker 1: if we look back historically too, when we had guilt,
8:46
Speaker 1: when artisans produced things where it took one guy a
8:51
Speaker 1: month to produce let's say an ax, right, and he
8:54
Speaker 1: produced all parts of that acts. Then we moved away
8:57
Speaker 1: from artisans and we had factories and you had one
9:00
Speaker 1: producing the handle and one guy producing the top part
9:03
Speaker 1: of the metal part of the acts. And then you
9:06
Speaker 1: had then you had multiple people working in this factory
9:09
Speaker 1: and you could produce. You could have fifteen people producing
9:13
Speaker 1: a hundred axes in a month. Right. That's a representative example.
9:17
Speaker 1: Those aren't the exact numbers, but the point being that
9:20
Speaker 1: you create actually created more jobs because the thing that
9:23
Speaker 1: you're producing became less expensive. But you created new types
9:27
Speaker 1: of jobs. So the idea of a clerical worker that
9:30
Speaker 1: didn't exist, right, You that that role of clerical worker.
9:35
Speaker 1: People to do the accounting, people to do hr management,
9:38
Speaker 1: people to do building management, all that kind of stuff
9:41
Speaker 1: evolved after we had corporate structure, which we couldn't have
9:44
Speaker 1: until we had specialized jobs. So my suspicion is that
9:49
Speaker 1: we will have new jobs that evolve as a result
9:53
Speaker 1: of the technology that we're building. Now, let's jump right
9:56
Speaker 1: into where we are in the modern economy. On the
10:00
Speaker 1: perspective of a big accounting and consulting firm, they split
10:05
Speaker 1: the two pieces into different groups. Is that right? So
10:10
Speaker 1: we have some regulatory requirements that create Chinese walls, and
10:15
Speaker 1: we there are a long list of advisory services that
10:19
Speaker 1: we cannot offer to our audit clients. Um. But this
10:23
Speaker 1: is a great business model because it diversifies our business.
10:26
Speaker 1: We have audit and tax um, and then we have
10:28
Speaker 1: our entire advisory business, which is very diverse. So we
10:32
Speaker 1: do things like data and analytics, we do things. We
10:35
Speaker 1: have an entire business called people and change, which when
10:38
Speaker 1: you think about what is happening in the labor force
10:42
Speaker 1: and the way technology is impacting firms and how they're
10:44
Speaker 1: managing for that, how they're retraining their workers. Um, that's
10:48
Speaker 1: a that's a huge practice for us. For example, so
10:51
Speaker 1: you of course risk compliance, all that other stuff that
10:54
Speaker 1: traditionally expect someone like KPMG to do so. You originally
10:58
Speaker 1: were on the buy side, You were in an investor
11:00
Speaker 1: in fixed income and alternative investments. How has that colored
11:05
Speaker 1: how you see, uh, the world of economics, whether it's
11:10
Speaker 1: for an audit slash consulting firm or anyone else. What
11:14
Speaker 1: does coming from the buy side due to your economic perspective? Well,
11:19
Speaker 1: for me, I think it's critical to my edge and
11:23
Speaker 1: and that is that I've spent most of my career
11:25
Speaker 1: using economics to make investment decisions and put money on
11:29
Speaker 1: the line. So that sort of classic UH saying I'd
11:33
Speaker 1: love to find a one handed economist. Right on the
11:37
Speaker 1: other hand, um and and certainly that that discipline I
11:42
Speaker 1: think is very important. And I think the other thing
11:44
Speaker 1: that it really um and that's sort of a chicken
11:47
Speaker 1: and egg thing. I noticed this about myself when I
11:50
Speaker 1: was at Chase. I noticed that I had an ability
11:53
Speaker 1: to do pattern recognition and see when there might be
11:56
Speaker 1: opportunities in the market as a result of either shifting
11:59
Speaker 1: market data or shifting economic data and matching those two
12:03
Speaker 1: together and doing analysis on them. So because I had
12:06
Speaker 1: this ability to see inflection points, it pushed me from
12:10
Speaker 1: the cell side at chase into the by side, and
12:14
Speaker 1: while I was at on the Bye side, that's really
12:17
Speaker 1: where I had my edge. And coming back into doing
12:22
Speaker 1: applied economics or business economics, I think when I go
12:26
Speaker 1: speak with either the leaders of our firm, our clients,
12:29
Speaker 1: when I write research, it's all oriented towards what is
12:32
Speaker 1: the inflection point we need to be paying attention to
12:35
Speaker 1: and how do you make money off of this inflection point.
12:37
Speaker 1: So let's address that precise topic. Where are we in
12:42
Speaker 1: the economic cycle today and where do you see the
12:45
Speaker 1: next inflection point coming, both in terms of sectors or chronology. Yeah,
12:52
Speaker 1: so we're in the happy part of the cycle, We're
12:55
Speaker 1: in the we're in the end of the cycle probably,
12:58
Speaker 1: Although with that said, I firmly believe UH expansions don't
13:03
Speaker 1: die of old age, right, they need to bump into something.
13:07
Speaker 1: And so we have had consecutive months and this consecutive
13:11
Speaker 1: is really important, consecutive months of jobs growth. If you
13:14
Speaker 1: look back over previous recoveries, that is a streak that
13:18
Speaker 1: is seventy longer than the previous record. So even though
13:25
Speaker 1: people aren't necessarily happy about the jobs mix that we
13:28
Speaker 1: have in the economy right now, that is still an
13:30
Speaker 1: unprecedented statistic, and it is allowed consumers to really feel
13:36
Speaker 1: very confident. We see that in the consumer confidence data.
13:38
Speaker 1: The consumer has been the backbone of the recovery. We
13:41
Speaker 1: haven't had as much investment, for example, as in previous recoveries,
13:45
Speaker 1: and so it's it's helping us sort of continue that
13:49
Speaker 1: consumption boom. But it's well founded. Household balance sheets are
13:53
Speaker 1: fairly healthy, right, we haven't um In fact, because of
13:57
Speaker 1: the crisis, we actually had a bit of a line
14:00
Speaker 1: in in debt for households, mostly in the in the
14:04
Speaker 1: housing sector. But it's allowed us to have sort of
14:07
Speaker 1: a balanced recovery for the most part. And so in
14:11
Speaker 1: terms of inflection points, at some point, I know people
14:15
Speaker 1: have been watching and waiting for this. I expect we're
14:17
Speaker 1: going to see some wage increases and we're seeing significant
14:20
Speaker 1: shortages in a very important sector and that is the
14:23
Speaker 1: construction sector. So the Associated General Contractors does a survey
14:28
Speaker 1: and there are a number of categories where over seventy
14:33
Speaker 1: of their respondents say they cannot find qualified workers and
14:36
Speaker 1: that they have to go ahead and raise wages. How
14:39
Speaker 1: much of that is related to the fact that during
14:42
Speaker 1: the financial crisis and during the housing collapse, a huge
14:47
Speaker 1: number of immigrants who were actually contractors, builders, electricians, plumbers, etcetera.
14:54
Speaker 1: All went home, went back to Mexico or wherever because
14:58
Speaker 1: the jobs weren't here. And so you created this void.
15:01
Speaker 1: The economy created this void in that segment of the
15:05
Speaker 1: labor force. So we lost about a million and a
15:08
Speaker 1: half construction jobs, and some of them were filled by immigrants,
15:12
Speaker 1: some of them were filled by native born individuals, and
15:16
Speaker 1: a lot of people started to do new things. They
15:19
Speaker 1: had to pivot to new careers, and they haven't been
15:22
Speaker 1: drawn back into the construction sector. Um. Another thing that
15:27
Speaker 1: we had during the housing boom is we had people
15:29
Speaker 1: forego higher education and just leave high school and go
15:32
Speaker 1: start doing construction because it was a career where you
15:36
Speaker 1: could make a fair amount of money towards the end
15:38
Speaker 1: of the boom. And and so those people, a lot
15:42
Speaker 1: of them went back to university after the crisis and
15:45
Speaker 1: then retooled themselves. If we get frothy enough again, if
15:48
Speaker 1: the if the price of labor goes up enough, you
15:51
Speaker 1: will draw people into that sector. The issue, of course,
15:54
Speaker 1: is that they won't have the skills, right, So some
15:56
Speaker 1: of these some of these jobs are our medium skilled
15:59
Speaker 1: jobs that you need to learn how to do a
16:02
Speaker 1: specialty where whether we're talking about electricians, plumbers, um carpenters,
16:08
Speaker 1: so you you can't just walk into that job. Now
16:10
Speaker 1: that we're ten years past the financial crisis, are things
16:16
Speaker 1: beginning to normalize in the world of economics, Yes, in
16:20
Speaker 1: a way, there's still a big mystery. So even though
16:24
Speaker 1: I expect some of the labor shortage data that we're seeing,
16:28
Speaker 1: whether it's National Federation of Independent Business or this associated
16:31
Speaker 1: General Contractors, some of this labor shortage I expect to
16:34
Speaker 1: eventually translate into wage increases. But I'll tell you, the
16:38
Speaker 1: FETE has been waiting for this for a long time.
16:40
Speaker 1: We have all been waiting for this for a long time,
16:43
Speaker 1: and there is some slack in the labor market still
16:48
Speaker 1: that that is um confusing. And I'll tell you why.
16:52
Speaker 1: Most people that have been out of the labor force
16:54
Speaker 1: for a period of time, they're not setting wages right,
16:57
Speaker 1: they're not the most desirable people to hire. They've had
17:00
Speaker 1: skills atrophy. They come back in generally if they come
17:03
Speaker 1: back in at a lower rage, and it's not We've
17:06
Speaker 1: had a pickup in the participation rate, but not to
17:09
Speaker 1: the point where you would really expect this portion of
17:12
Speaker 1: the labor force to be influencing wages, and so it
17:15
Speaker 1: is perplexing to me, it is perplexing to the Fed.
17:19
Speaker 1: Um Janet Yellen has called the lack of inflation and mystery.
17:23
Speaker 1: So we have normalized in some ways, but in this
17:27
Speaker 1: aspect of prices and whether um and and specifically related
17:33
Speaker 1: to wages we have we don't seem to have normalized.
17:38
Speaker 1: Although maybe we're all just misunderstanding the slack that's out there,
17:43
Speaker 1: or perhaps want a tipping point of higher wages, which
17:46
Speaker 1: I think in certain sectors is an absolute given. You've
17:49
Speaker 1: had a number of pretty high profile jobs in the
17:53
Speaker 1: world of finance. Does this tell us anything about women
17:58
Speaker 1: in finance? We know women have been let me man
18:02
Speaker 1: explain to you women in finance. We have very interested
18:05
Speaker 1: in what you have to say. Well, we know that
18:08
Speaker 1: women have not been promoted. There aren't as many women
18:11
Speaker 1: on the board level, at the sea level, uh, managing assets, etcetera.
18:16
Speaker 1: It's it's uh disproportionately a boys club, although there are
18:22
Speaker 1: signs that that's starting to change. Tell us a little
18:25
Speaker 1: bit about your career path and what it was like
18:29
Speaker 1: being a woman in a world where these were, for
18:32
Speaker 1: a long time traditionally male jobs. Well, I would say
18:37
Speaker 1: that I'm still in a very male dominated industry in general.
18:41
Speaker 1: Now at KPMG, we have a goal of having of
18:45
Speaker 1: our partners be women. And we're at twenty five now,
18:51
Speaker 1: so compared to Wall Street, that is definitely a better environment.
18:57
Speaker 1: And our CEO is a woman. We oh, Lynn Duddy
19:01
Speaker 1: is a woman. She's fabulous. She happens to be a woman.
19:04
Speaker 1: She's fabulous CEO and um. And so we've made a
19:09
Speaker 1: concerted effort. And the reason that's important, and the reason
19:13
Speaker 1: I think that it's taken so long in places like
19:15
Speaker 1: Wall Street that are male dominated, is that there's an
19:19
Speaker 1: natural in group bias, right, so we tend to hire
19:22
Speaker 1: people who look like us and who who act like
19:25
Speaker 1: us and I share the same interests and and so
19:28
Speaker 1: it's it's understandable, and it pervades everything. It pervades the
19:34
Speaker 1: recruiting practices. It also pervades what when you look at
19:38
Speaker 1: young women and they look out, well, what do I
19:39
Speaker 1: want to be when I grew up? Now, I was
19:41
Speaker 1: lucky I had My father was in finance, so he
19:45
Speaker 1: never had a bias that I shouldn't be in finance.
19:46
Speaker 1: In fact, he probably had a bias that I should
19:48
Speaker 1: be in finance, right, So so that I think gave
19:52
Speaker 1: me um an edge and uh and a unique perspective
19:57
Speaker 1: and approach that I never thought it was d that
20:00
Speaker 1: I would be in finance or that I would be
20:02
Speaker 1: very successful in finance. Michelle Myers, who's one of the
20:05
Speaker 1: senior economists at Merrill Lynch, specifically said at in the
20:10
Speaker 1: current environment, there are now women who are role models,
20:15
Speaker 1: whether it's real Seabird or Lizzie and Sanders at Schwab
20:19
Speaker 1: or there's a whole run of different absolutely women you
20:21
Speaker 1: can name, but go back at generation there really weren't
20:25
Speaker 1: a whole lot of role models for women who wanted
20:28
Speaker 1: to go to Wall Street. Well, let's focus on this
20:29
Speaker 1: because this issue of role models is really important and
20:32
Speaker 1: it's one of the things that's going to propel more women,
20:35
Speaker 1: and it's one of the reasons where you need a
20:37
Speaker 1: certain critical mass because if you were just the token woman,
20:41
Speaker 1: you don't get really from a firm perspective, you don't
20:44
Speaker 1: get necessarily all of the diversifying effects and all of
20:47
Speaker 1: the beneficial effects of having a more diverse perspective in
20:51
Speaker 1: your workplace. But once you hit a critical mass, let's
20:53
Speaker 1: say it's you start to have a very different um
21:00
Speaker 1: type of conversation around certain things. Your marketing appeals to
21:03
Speaker 1: a broader segment of the purchasing population. Uh, you just um,
21:09
Speaker 1: you tend to have less fraud. They are all sorts
21:12
Speaker 1: of definite advantages to having a greater mix of men
21:17
Speaker 1: and women in an organization. So since you've joined the
21:20
Speaker 1: world of finance, what improvements have been made towards achieving
21:25
Speaker 1: a better balance of males to females um in the workplace. So,
21:31
Speaker 1: certainly in the field of business economics now is different
21:34
Speaker 1: in academic economics. I was very fortunate to join the
21:37
Speaker 1: National Association for Business Economics as a young economist, and
21:41
Speaker 1: NAVE as it's called for short, has always had women
21:45
Speaker 1: leaders within the organization. So we had women presidents of NAVE,
21:50
Speaker 1: people like Maureen Haver who founded Haver Analytics, Diane Swank
21:54
Speaker 1: when she was the chief economist at Mazzaro. Uh, Ellen
21:57
Speaker 1: Hughes Cromwick who used to be the chief economy missed
22:00
Speaker 1: it Ford. Uh you know I could, I could list
22:03
Speaker 1: more right, and so that I saw these women who
22:07
Speaker 1: were chief economists as role models and that, and I
22:10
Speaker 1: saw women attending our meetings. Um, now when I have
22:15
Speaker 1: I have a young woman on my team who you
22:17
Speaker 1: who I brought into I said, you have to start
22:19
Speaker 1: at name. Young, You're going to learn so much it
22:21
Speaker 1: will be great. And to me, coming from Wall Street,
22:24
Speaker 1: I thought, well, Name is great because we probably have
22:27
Speaker 1: in the membership about women and in leadership probably about women.
22:33
Speaker 1: So people on the board of Name, people who are
22:35
Speaker 1: presidents of Name. And she's like, no, it's so she
22:38
Speaker 1: sees all men, whereas I see, Oh, my gosh, that's
22:40
Speaker 1: so much improvement because my frame of reference. So this
22:44
Speaker 1: makes me excited for a couple of reasons. One, I
22:46
Speaker 1: got to see progress too. It's obviously not yet and
22:51
Speaker 1: the next generation is going to make that happen. The
22:53
Speaker 1: fact that it's women, they look at its oh, this
22:57
Speaker 1: isn't remotely what it Maybe it's thirty five, but still
23:00
Speaker 1: compared with twenty years ago, it's miles ahead. And the
23:04
Speaker 1: fact that it's looked at as oh, they're not getting
23:06
Speaker 1: this done is pretty that's pretty amazing. So we now
23:11
Speaker 1: have men who are feminists and and mainstream men people
23:15
Speaker 1: like Justin Trudeau, who's the Prime Minister of Canada. Right,
23:19
Speaker 1: and now I've heard I've heard more and more men
23:22
Speaker 1: say I'm a feminist. And and the thing is is
23:26
Speaker 1: that it takes both men and women to make this happen.
23:29
Speaker 1: It takes us working together. This isn't just a woman's cause.
23:34
Speaker 1: And it's not even just a men of men who
23:36
Speaker 1: are fathers of daughters cause. Right. It benefits everybody. And
23:41
Speaker 1: so the more men that can get out there and say, yeah,
23:43
Speaker 1: I'm also a feminist, it benefits them. It benefits them financially,
23:47
Speaker 1: it benefits them socially, and we're starting to see that
23:51
Speaker 1: more and more. Let me ask you a question that
23:53
Speaker 1: will give the compliance people at KPMG a heart attack,
23:56
Speaker 1: since you you brought up Trudeau in Canada. I am
24:00
Speaker 1: absolutely fascinated by the concept that Canada will become the
24:06
Speaker 1: first G seven country that's going to completely legalize marijuana.
24:11
Speaker 1: I'm fascinating. I don't smoke weed. I mean it's not
24:14
Speaker 1: I'm you know, not a college kid anymore. But I'm
24:18
Speaker 1: fascinated from an economic perspective what that's going to do
24:21
Speaker 1: to a country in terms of taxing, it taking money
24:24
Speaker 1: away from the black market and saving countless amounts of
24:27
Speaker 1: money that's currently spent incarcerating people for you know, simple
24:32
Speaker 1: marijuana expenses. What is the potential economic impact of of
24:38
Speaker 1: something like that? There? And then the harder question is,
24:41
Speaker 1: and what does that due to the United States? So
24:44
Speaker 1: Canada produces actually a lot of marijuana over one of theirs,
24:48
Speaker 1: one of their bigger crops. I did not know that,
24:50
Speaker 1: and uh, and so it'll be it'll be very interesting.
24:54
Speaker 1: Now there is a lot of data which suggests that
24:58
Speaker 1: if you smoke or I guess now you can eat
25:02
Speaker 1: marijuana and under the age of certainly, it really is
25:08
Speaker 1: very very bad for you, sod for brain development, brain
25:11
Speaker 1: for a different precisely. So unless they can manage that
25:16
Speaker 1: part of it, which I think will be challenging. They
25:19
Speaker 1: do a pretty good job with that with alcohol and
25:22
Speaker 1: with cigarettes, certainly with twenty one. You know, you're not
25:26
Speaker 1: keeping weed away from kids today regardless. So and they
25:30
Speaker 1: have to be smarter about labeling gummy bears so it
25:34
Speaker 1: doesn't look like candy and that sort of stuff. I mean, see,
25:37
Speaker 1: when we look at Colorado and Seattle and California, they've
25:43
Speaker 1: all done a pretty mediocre job. It's kind of Hey,
25:46
Speaker 1: it's a case of first impression. They eventually figured out
25:49
Speaker 1: if you make the stuff look like candy and leaving around,
25:53
Speaker 1: guess what kids are gonna eat it? But you know,
25:56
Speaker 1: they've kind of a learned that lesson. Assuming Canada addresses
25:59
Speaker 1: that part of it and handles it well, um, then
26:04
Speaker 1: it's it's like you said that the benefit is twofold, right,
26:07
Speaker 1: And I don't know the size of the market in
26:09
Speaker 1: Canada or their incarceration rate for this sort of thing,
26:12
Speaker 1: but you get rid of the cost of incarcerating, so
26:15
Speaker 1: then we have more people in your labor force, right,
26:18
Speaker 1: So that's always a good thing when we have these
26:20
Speaker 1: population declines. And then you also have the economic benefit
26:26
Speaker 1: of this industry. And if we based it on the
26:27
Speaker 1: rest of the sin industry, right, it's pretty large. Let's
26:31
Speaker 1: talk a little bit about the state of the economy today,
26:35
Speaker 1: and there are so many different things we could go over.
26:37
Speaker 1: I have to start with the issue of the Federal
26:40
Speaker 1: reserve tightening normalizing first, what should we call what the
26:45
Speaker 1: Federal Reserve is doing? Well, they're definitely raising rates, so
26:48
Speaker 1: they're tightening. Okay, they're selling assets off of their balance sheet.
26:52
Speaker 1: Are they selling them or they letting them just roll
26:54
Speaker 1: off when there My understanding is they're doing both. That is,
26:58
Speaker 1: in effect a tightening. Now there's a debate about this, right,
27:02
Speaker 1: is it the stock of the Fed's balance sheets that
27:05
Speaker 1: is the size of the balance sheet or is it
27:08
Speaker 1: the flow that is the change? And generally speaking, the
27:16
Speaker 1: Fed thinks it's the stock. Wall Street thinks it's the flow.
27:21
Speaker 1: The Fed might end up being right, or I think
27:23
Speaker 1: the Fed is being proven correct because we look at
27:26
Speaker 1: ten yere yields and they're much lower than they were,
27:30
Speaker 1: for example, but that's due to a confluence. Are you
27:34
Speaker 1: surprised that Wall Street looks at the flow as opposed
27:37
Speaker 1: to the balance sheet. That's how the street gets paid,
27:40
Speaker 1: so of course that's what matters to them. There is
27:42
Speaker 1: a little classic confirmation bias. So what about the idea
27:46
Speaker 1: of the Fed isn't so much tightening as we're still
27:50
Speaker 1: at very accommodative rates and they're just getting off their
27:54
Speaker 1: emergency footing. This is really normalization. So I went back
27:59
Speaker 1: and looked at real tenure yields. Right over the last
28:02
Speaker 1: four decades, average is about two. Absolutly, there's wide variations,
28:08
Speaker 1: but the average is about two. Real real adjusted for inflation.
28:13
Speaker 1: Right ten year yields we are now almost zero, so
28:18
Speaker 1: still very kind, We are very it's by that metric
28:22
Speaker 1: we are still pretty accommodated emergency funding. There'n't really no
28:25
Speaker 1: other way to describe that. By the way, I find
28:28
Speaker 1: myself having to always define real because some people anytime
28:32
Speaker 1: I mentioned real, I always want the audience to hear
28:35
Speaker 1: after inflation, after inflation adjusted. Let's talk about the yield curve. Historically,
28:41
Speaker 1: an inverted yield curve was a sign of an impending
28:44
Speaker 1: and recession, not immediately, but a year or two later.
28:49
Speaker 1: And a lot of people are all up in arms
28:51
Speaker 1: over the flattening yield curve as the FED is tightening.
28:55
Speaker 1: What what do you think about what's taking place in
28:59
Speaker 1: that part of the curve. So a few things. One is,
29:03
Speaker 1: we may very well be a year and a half
29:06
Speaker 1: away from the next recession. Uh that is, that is
29:10
Speaker 1: very possible. But you also have to look at what's
29:13
Speaker 1: going on globally in terms of central bank balance sheets.
29:17
Speaker 1: So if we look globally right now, we have fourteen
29:22
Speaker 1: trillion dollars of central bank balance sheets. Now the feed
29:26
Speaker 1: is about four and a half um four point three
29:30
Speaker 1: I think to be exact and trillion. And so we
29:35
Speaker 1: have the Bank of Japan and the e c B,
29:38
Speaker 1: both with significant balance sheets. So just to put this
29:41
Speaker 1: in context, the FEEDS balance sheet is of the U
29:45
Speaker 1: S economy. The ECB balance sheet is thirty eight percent
29:50
Speaker 1: of the of the European economy, the EU economy or
29:54
Speaker 1: I'm sorry that the Monetary Union, right, And Japan's by
30:00
Speaker 1: balance sheet is ninety one per cent of GDP at
30:03
Speaker 1: the Bank of Japan's balance sheet. So these are very
30:06
Speaker 1: very significant amounts of capital, and they're influencing bond markets
30:10
Speaker 1: all over the world, but especially the tenure yield. So
30:14
Speaker 1: let's let's talk about that. You have the United States,
30:18
Speaker 1: which really seemed to get hit by the financial crisis
30:21
Speaker 1: first and then it spread globally um, and you also
30:25
Speaker 1: have the United States is the first to really aggressively
30:28
Speaker 1: respond to the financial crisis, and then Japan and then Europe.
30:32
Speaker 1: Is how unusual is it to have the three major
30:36
Speaker 1: economic centers um of the world plus China all sort
30:41
Speaker 1: of out of phase with each other in terms of economic,
30:44
Speaker 1: fiscal and especially monetary policy. Well, yes, it's both the
30:50
Speaker 1: monetary and the fiscal I think that's really important because
30:53
Speaker 1: Europe did fiscal tightening after the Great Recession Sterity right
30:58
Speaker 1: into the teeth of of collapse turns out not an
31:01
Speaker 1: especially great UH policy. Well, that and then the ECB
31:06
Speaker 1: raised rates prematurely, if you recall, and and that coincided
31:10
Speaker 1: with the Greek crisis and sort of spilled over into
31:14
Speaker 1: widening bonnields in Italy and Spain, Portugal, Ireland. UH. Now,
31:20
Speaker 1: a lot of these economies have come out the other
31:22
Speaker 1: side right or they're they're on the upswing. So really,
31:26
Speaker 1: since Draggy did his whatever it takes speech, and since
31:30
Speaker 1: they really started growing the balance sheet, you've seen consecutive
31:34
Speaker 1: months of jobs growth, You've seen consumption, you've seen bank
31:38
Speaker 1: lending expand. I mean to get to negative rates to
31:40
Speaker 1: do it, but you still saw the bank lending expand.
31:43
Speaker 1: And that's helped give the European economies legs. But like
31:47
Speaker 1: you said, they're not synchronized with and the fiscal and
31:50
Speaker 1: the fiscal austerity has waned right there, so they've they've
31:53
Speaker 1: moved through that. So I would say there maybe two
31:57
Speaker 1: or three years behind us in terms of the business
32:00
Speaker 1: coal um if you look at Japan, how but in
32:03
Speaker 1: terms of the monetary cycle, how far are they behind
32:05
Speaker 1: the US that is sort of coming off, I would
32:09
Speaker 1: say I would say about two years behind, maybe eighteen
32:13
Speaker 1: eighteen months to two years. Well, Japan is its own
32:15
Speaker 1: special case, and it's its own special case because it's
32:18
Speaker 1: demographics are so much worse. Right, so they they're working
32:24
Speaker 1: age population began to decline in which was right about
32:28
Speaker 1: the time their debt bubble burst. What was the peak
32:31
Speaker 1: in the of the nine I think it was nine,
32:35
Speaker 1: and so it took a little while for the debt
32:36
Speaker 1: bubble to fully burst. And then they of course have longevity,
32:41
Speaker 1: so people living in retirement for longer. So that's a
32:45
Speaker 1: drag fiscally, uh, and it's also disinflationary or deflationary. That
32:49
Speaker 1: damn healthy lifestyle and low red meat diet that's right,
32:55
Speaker 1: is causing that that issue and almost zero immigration where
33:00
Speaker 1: very immigration, fairly uniform society and culture. But even with
33:04
Speaker 1: that said, is the year the European the Europe's working
33:09
Speaker 1: age population started to decline, and our working age population
33:12
Speaker 1: is merely growing at a slower rate. So we're growing
33:16
Speaker 1: at zero point three percent a year. And it's problem yes, absolutely,
33:22
Speaker 1: but it's problematic but it's definitely better than if it
33:24
Speaker 1: was outright declining like you have in Japan. So that
33:27
Speaker 1: in Japan is now declining at a rate of zero
33:29
Speaker 1: point three percent per year, and that puts Japan in
33:33
Speaker 1: a very very special case. And something that and and
33:36
Speaker 1: and their debt to GDP ratio is a hud. Nobody
33:41
Speaker 1: else is even close. Nobody else is even close. But
33:43
Speaker 1: I'll tell you something that they're doing. So if you
33:44
Speaker 1: look at the debt held by the public versus the
33:47
Speaker 1: debt held by the central bank, because they have been
33:50
Speaker 1: purchasing so much of the debt, the debt held by
33:53
Speaker 1: the public has gone down to of debt to GDP. Yes,
33:59
Speaker 1: And and I'm glad we introduced the concept of real
34:02
Speaker 1: versus nominal before because if you look at their nominal
34:05
Speaker 1: growth rate, it is about two basis points above their
34:09
Speaker 1: ten uere yield, and that is allowing them to obtain
34:14
Speaker 1: greater and greater fiscal health. So they're using this negative
34:18
Speaker 1: rate policy and this extreme balance sheet example again balance
34:22
Speaker 1: sheet expansion again to their GDP. Right, they're using this
34:27
Speaker 1: to uh refinance their government debt effectively at a much
34:32
Speaker 1: lower rate well negative rates negative So imagine your corporation
34:36
Speaker 1: and you're overindebted and you can't default, but over time
34:42
Speaker 1: you can refinance your debt with negative rates, meaning you
34:45
Speaker 1: get paid for your debt basically, which is which is shocking.
34:49
Speaker 1: You know, you hinted at something I want to expand
34:53
Speaker 1: on because it's so fascinating when when we talk about
34:56
Speaker 1: the declining labor for US, we really have to discuss
35:01
Speaker 1: the falling um fertility rates and the falling um I
35:06
Speaker 1: forgot the replacement percentage what it's called, just the declining
35:12
Speaker 1: birth rates effectively in Japan, in Europe, and up until recently,
35:17
Speaker 1: the United States was marginally positive. I think we just
35:20
Speaker 1: slipped negative also in terms of our birth replacement rate
35:24
Speaker 1: replacement rate of new birth versus deaths. The US population
35:30
Speaker 1: is becoming fairly stable, and it's outright shrinking in Europe
35:34
Speaker 1: and Japan. What does this mean for the economy ten
35:38
Speaker 1: years since? Yeah, so it's very challenging. And let's not
35:42
Speaker 1: forget China's working age populations started to decline this year
35:46
Speaker 1: right now, how much of that has to do with
35:48
Speaker 1: the one child at the child right so, they haven't
35:52
Speaker 1: been at replacement rate for decades now. And even though
35:55
Speaker 1: that rule has been overturned. People are not rushing to
35:58
Speaker 1: have more than one child. It's not it's not like
36:02
Speaker 1: the minute that was overturned. In the next year you
36:05
Speaker 1: saw a whole bunch of two and three child families.
36:08
Speaker 1: Right now. That may change, and they may may need
36:11
Speaker 1: to do things and create incentives for that, but that
36:15
Speaker 1: it's it's not going to change overnight. Um and so.
36:20
Speaker 1: And then we have South Korea. They're working age population
36:22
Speaker 1: started to decline. So this is a phenomenon in a
36:24
Speaker 1: lot of a lot of different places. So it's starting
36:27
Speaker 1: to impact emerging markets more in Asia, more in Asia
36:30
Speaker 1: x X India than in Latin America or Africa. Because
36:34
Speaker 1: I've thought of this as a developed world issue, not
36:36
Speaker 1: an emerging markets issue. Are you saying that this is
36:39
Speaker 1: even spilling fast forward fifteen years and it's going to
36:41
Speaker 1: be Look at Mexico. Their birth rates are declining. It's
36:44
Speaker 1: one of the reasons we have. There are two reasons
36:46
Speaker 1: we have fewer Mexican immigrants into the U. S M.
36:48
Speaker 1: Why the flow is actually been the other direction first
36:50
Speaker 1: of the wall, and then what's the what's the other reason.
36:53
Speaker 1: So as their birth rates have declined, they've needed more
36:57
Speaker 1: labor in their own economy. Right, So there's just a
36:59
Speaker 1: few were people that come here are going up their
37:03
Speaker 1: and their wages have been going up a little bit
37:04
Speaker 1: more so. So not the wall, and we actually have flow.
37:10
Speaker 1: The flow has actually gone the other direction for several years.
37:12
Speaker 1: But that's an aside since the financial crisis, since the
37:16
Speaker 1: and which which loops back into when we were talking
37:18
Speaker 1: about housing earlier. Right. So anyway, we are digressing massively here.
37:24
Speaker 1: So let me get us back on track. Something about
37:26
Speaker 1: the yield curve. I think we started with, yes, and
37:29
Speaker 1: and so this these disinflationary or deflationary pressures are also
37:35
Speaker 1: distorting the shape of the yeld curve. So you have
37:37
Speaker 1: you have a completely new demographic phenomenon that aside from
37:41
Speaker 1: a brief period uh during the Great Depression when we
37:46
Speaker 1: had a declining working age population for a little blip
37:48
Speaker 1: of time about seven years UM, we have never had
37:52
Speaker 1: before and we've never and and while we have that,
37:54
Speaker 1: we did not have the longevity that we're having now. Right.
37:57
Speaker 1: So the combination of these two things disinflationary um disinflationary
38:03
Speaker 1: meaning you're not seeing inflation go up and the rate
38:06
Speaker 1: of inflation is going down correct, not not outright deflationary,
38:11
Speaker 1: just five four two inflation or one and a half
38:15
Speaker 1: percent these days, right, correct? So what does that tell
38:18
Speaker 1: us that the future economy looks like? If if you
38:22
Speaker 1: if you had a draw a conclusion from the disinflation
38:25
Speaker 1: in the system, is that informing us of anything? So
38:29
Speaker 1: a few things to say about that. One is that
38:31
Speaker 1: I'm going to introduce the concept of potential GDP. So
38:35
Speaker 1: in its simplest form, potential GDP is the sum of
38:38
Speaker 1: the growth rate of the working age population plus the
38:41
Speaker 1: growth rate of productivity. And historically, if we look back
38:47
Speaker 1: fifty years, we had average working age population growth of
38:51
Speaker 1: one point six percent, average productivity growth of one point eight. Quickly,
38:56
Speaker 1: that gets us to a three point six percent potential GDP.
39:00
Speaker 1: We now have a working age population growth rate of
39:03
Speaker 1: zero point three and until recently, productivity during the recovery
39:08
Speaker 1: was averaging zero point eight, so that's a one point
39:11
Speaker 1: one potential GDP. Now productivity is picked up to one
39:14
Speaker 1: point five, so that gets us up to about a
39:17
Speaker 1: one point eight percent potential GDP, which is the growth
39:20
Speaker 1: rate that you can grow without inducing inflation in the economy.
39:23
Speaker 1: It's that mythical beast equilibrium. Let me ask you a
39:26
Speaker 1: question about productivity, because this is an ongoing UM question
39:31
Speaker 1: that I keep wrestling with, and every time I have
39:33
Speaker 1: an economist in front of me, I feel obligated to
39:36
Speaker 1: ask the question. In the real world, we are all
39:40
Speaker 1: experiencing a massive amount of personal productivity gains software the
39:48
Speaker 1: ability to walk around with with a powerful computer in
39:52
Speaker 1: my pocket. That's ten x what the what the astronauts
39:57
Speaker 1: took to the moon. UM is in a amazing productivity enhancer.
40:02
Speaker 1: And I'm not being on Facebook, so I don't get
40:05
Speaker 1: the productivity killing aspect of it, although I guess Twitter
40:09
Speaker 1: substitutes for that. But in the office, what we're capable
40:12
Speaker 1: of doing in terms of communicating with clients and doing
40:16
Speaker 1: screen shares to say, show them different charts and documents
40:20
Speaker 1: and this and that, it feels like we're doing so
40:23
Speaker 1: much more with a handful of people versus a hundred
40:28
Speaker 1: people that was required a few years ago. It makes
40:32
Speaker 1: me ask the question, do we have a productivity problem
40:36
Speaker 1: or do we have a problem in measuring productivity? It
40:39
Speaker 1: depends on the industry. So in finance, you're in an
40:42
Speaker 1: industry whereas there's been huge measured productivity gains, all right,
40:47
Speaker 1: So what you're saying makes sense. It's what's shown in
40:50
Speaker 1: the data, and it is true for other financial services firms.
40:55
Speaker 1: This is something that is puzzling everybody because we can't
40:57
Speaker 1: change the birth rate, so we're only going to get
40:59
Speaker 1: saved by increasing productivity. Although some Nordic countries are actually
41:03
Speaker 1: running p s a s to encourage people to go
41:06
Speaker 1: on vacation in the South of France and leave their
41:09
Speaker 1: birth control at home. I mean they're literally television commercials
41:13
Speaker 1: for that. I don't see that happening here. That said,
41:16
Speaker 1: but that's still a long term prospect, right, You're still
41:18
Speaker 1: it's twenty one years until you see benefit from that,
41:21
Speaker 1: maybe twenty six given the current education rates. So it's
41:24
Speaker 1: not an immediate solution, right. We need to do something
41:26
Speaker 1: in the intervening years. And the only savior then is productivity.
41:30
Speaker 1: Because so many people are focusing on this. One of
41:32
Speaker 1: the things that the o e c D did was
41:35
Speaker 1: they did a study on the diffusion of technology throughout firms.
41:40
Speaker 1: So it may be Barry that you guys are really
41:44
Speaker 1: advanced and early adopters of technology, no doubt about that.
41:48
Speaker 1: So so, but the diffusion is important. So they looked
41:52
Speaker 1: at the productivity at the firm level, so not at
41:55
Speaker 1: the economy wide level, at the firm level of the
41:58
Speaker 1: frontier firm, so that the top five percent versus everybody else.
42:03
Speaker 1: And if you look at these graphs, it's really alarming.
42:06
Speaker 1: The gap is really really wide, and it's wider in
42:10
Speaker 1: services than it is in manufacturing. Yes, and and and
42:14
Speaker 1: the question is will we get to a point where
42:17
Speaker 1: this gap closes, like what is the cause of this
42:20
Speaker 1: lack of diffusion? And and is there a tipping point
42:24
Speaker 1: where we can start to see wider diffusion, meaning that
42:28
Speaker 1: a handful of firms are especially productive and the rest
42:32
Speaker 1: of the economic force um or firms and businesses are
42:38
Speaker 1: lagging in products are really not reaping the rewards of
42:42
Speaker 1: the technological advances we've had over the last fifteen years.
42:45
Speaker 1: There is a have and have not way of structuring.
42:50
Speaker 1: We're looking at just about every aspect of our economy.
42:54
Speaker 1: It is so bifurcated, and that duality exists in so
42:58
Speaker 1: many places. It's fascinating. I had never heard of the
43:03
Speaker 1: this diffusion between productivity, but I guess it makes some
43:08
Speaker 1: sense because you would think the early adapters of technology
43:12
Speaker 1: and other productivity hanswers would see not only a gain,
43:17
Speaker 1: but a giant differential against their competitors who aren't adopting
43:21
Speaker 1: the newest technology. We're actually studying this at KPMG, so
43:24
Speaker 1: we're taking the O A C D work and we're
43:27
Speaker 1: expanding it and and building a knowledge database of a
43:32
Speaker 1: multitude of different firms across different countries, across different sectors
43:36
Speaker 1: and um hopefully we'll have some research out on that
43:38
Speaker 1: in the next six to nine months. We have been
43:41
Speaker 1: speaking with Constance Hunter. She is the chief economist at KPMG.
43:46
Speaker 1: If you enjoy this conversation, be sure and check out
43:49
Speaker 1: our podcast extras, where we keep the tape rolling and
43:52
Speaker 1: continue to discuss all things economic. You can find that
43:56
Speaker 1: at iTunes, overcast, SoundCloud, Bloomberg, or wherever final podcasts are sold.
44:02
Speaker 1: We love your comments, feedback and suggestions right to us
44:07
Speaker 1: at m IB podcast at Bloomberg dot net. Be sure
44:10
Speaker 1: and check out my daily column. It's on Bloomberg View
44:13
Speaker 1: dot com. You could follow me on Twitter at rid Halts.
44:17
Speaker 1: I'm Barry rid Halts. You're listening to Masters in Business
44:21
Speaker 1: on Bloomberg Radio. Welcome to the podcast, Constance. Thank you
44:38
Speaker 1: so much for doing this. I have been looking forward
44:40
Speaker 1: to this for a while. I give economists a lot
44:43
Speaker 1: of grief for for both making terrible predictions or or
44:47
Speaker 1: predictions that turn out not to be accurate, and for
44:50
Speaker 1: the most part, missing the financial crisis, which we talked
44:53
Speaker 1: about earlier. You're not big into making a lot of predictions.
44:57
Speaker 1: I don't really. I see you more as analyzing the
45:01
Speaker 1: situation than doing the usual Wall Street forecast. So I
45:04
Speaker 1: have to ask why our economists so bad at making
45:07
Speaker 1: forecasts and and how did they miss the financial crisis? Well,
45:12
Speaker 1: and you probably also know that I didn't miss the
45:13
Speaker 1: financial crisis, so I was short a lot of things,
45:18
Speaker 1: uh that went down, which is always fun, which was
45:22
Speaker 1: it's it's actually nerve wracking to be honest with you,
45:25
Speaker 1: and people give you so much grief for it. Totally.
45:28
Speaker 1: I remember when I first started shorting ubs and oh,
45:33
Speaker 1: they have this activist investor in there. You don't know
45:35
Speaker 1: what you're doing. It's gonna go up, bah blah blah blah.
45:38
Speaker 1: And you know you're constantly second guessing yourself, more so
45:41
Speaker 1: on a short than along right, because the nature of
45:44
Speaker 1: things is to go up for the most part. Over
45:46
Speaker 1: the long term, and everybody that works at a company,
45:50
Speaker 1: their entire goal is to make everything go up there
45:53
Speaker 1: there there. They make new plan every year, they're they're
45:56
Speaker 1: incentivizing their employees, they're cutting costs, like every single company
45:59
Speaker 1: is focus done that as well, and so that is
46:02
Speaker 1: the nature of things. So it's very nerve racking to
46:04
Speaker 1: be short. But nevertheless, that and the theoretical infinite losses
46:08
Speaker 1: kind of hangs over your head a little bit that
46:10
Speaker 1: in the theoretical infinite losses or the actual infinite losses
46:13
Speaker 1: that can occur, people of you know, what's that? What's
46:16
Speaker 1: that famous Keynes expression? The market can remain irrational a
46:19
Speaker 1: lot longer than you can remain solvent. So so in
46:22
Speaker 1: answering your question, I think it is because of several things. First, models,
46:30
Speaker 1: I've been working on shocking my model to give it
46:33
Speaker 1: a recession because I think that we're going to see
46:36
Speaker 1: some labor shortages, that those labor shortages are going to
46:38
Speaker 1: cause wage increases, that those wage increases are going to
46:41
Speaker 1: push up inflation, that that increase in inflation, increase in
46:45
Speaker 1: prices will reduce demand. That reduction in demand will help
46:49
Speaker 1: spur us into the next recession. Plus as wages go up,
46:53
Speaker 1: as there are shortages, we're going to get to a
46:54
Speaker 1: point I would imagine where you can't find someone at
46:57
Speaker 1: any price, and so you want to expand your business,
47:00
Speaker 1: but you just can't at any price. Well, there's some
47:03
Speaker 1: professions where we just for example, let's all this technology,
47:08
Speaker 1: you can't find data scientists at any place. There's a
47:11
Speaker 1: handful of them, there's an handful of programmers there. They're
47:14
Speaker 1: really top notch. And so everybody is competing in this
47:18
Speaker 1: space for the same talent. And it's a very new
47:20
Speaker 1: set of skills. So isn't that just temporary? Aren't we
47:23
Speaker 1: going to see more people come in from Indian China
47:26
Speaker 1: and more graduate degrees and people moving into the space
47:31
Speaker 1: just because it's so lucrative. Sure, but that doesn't mean
47:35
Speaker 1: that we're going to see shortages of that labor over
47:38
Speaker 1: the next couple of years. Right. It takes time for
47:41
Speaker 1: those people to get trained and for people to move
47:43
Speaker 1: into a professional Yeah, six years, a decade something like that.
47:48
Speaker 1: So the first thing is that what I had to
47:50
Speaker 1: do to shock this model because it just kind of
47:52
Speaker 1: bump it ump, goes along on trend and and it
47:56
Speaker 1: would never forecast a recession unless you made it forecast recession, right,
48:00
Speaker 1: So you have to look for tipping points. So there
48:03
Speaker 1: were there were three things that allowed me to call
48:05
Speaker 1: the financial crisis. And I didn't call it as big
48:08
Speaker 1: as it ended up being, right because that was just large.
48:11
Speaker 1: But I've done this my whole career, the same with
48:13
Speaker 1: Russia crisis, right. So so the thing that allowed me
48:16
Speaker 1: to call the financial crisis was I was looking at
48:20
Speaker 1: mortgage equity withdrawal and g Well, not only was it giant,
48:25
Speaker 1: but if you look historically, it used to be a
48:27
Speaker 1: random walk around a hundred and fifty billion a quarter,
48:31
Speaker 1: and we go up, we'd go down. Basically a random walk.
48:34
Speaker 1: You couldn't there's no way to predict it. It It was
48:36
Speaker 1: a modest number that practically in the US fifteen trillion
48:40
Speaker 1: dollar economy is a rounding era. But also its pattern
48:44
Speaker 1: was was some some quarters were up, somewhere down. It
48:48
Speaker 1: was a random walk. It wasn't like it was a
48:49
Speaker 1: hundred and fifty billion every quarter got withdrawn. It was
48:52
Speaker 1: up and down. Wasn't on trend the way it became right,
48:55
Speaker 1: So we started withdrawing more and withdrawing more and withdrawing
48:58
Speaker 1: more to the point where we had withdrawn three and
49:01
Speaker 1: a half trillion dollars and you could just see that
49:04
Speaker 1: this there's no way it could keep going. There's just
49:07
Speaker 1: no It made no sense. It made absolutely no sense.
49:10
Speaker 1: And then if you look at the demographics, that made
49:12
Speaker 1: no sense either, because you could see that the working
49:15
Speaker 1: age population started to decline in two thousand, so you
49:18
Speaker 1: could see it's shifting demographic demand if you were looking
49:22
Speaker 1: for it, right. But you have to be open and
49:25
Speaker 1: searching for the things that are going to be inflection points,
49:28
Speaker 1: and then you have to have the conviction to shock
49:31
Speaker 1: your model, in other words, come up with some set
49:35
Speaker 1: of exogenius or or maybe normal economic shifts that tip
49:41
Speaker 1: an economy into a recession or or or into a
49:44
Speaker 1: big growth period as well. Um So, so I think
49:48
Speaker 1: you have to be willing to look for those things
49:51
Speaker 1: and and and understand inflection points. But that is not
49:56
Speaker 1: the way most people study economics necessarily. And I'm fortunate
50:00
Speaker 1: that I have this pattern recognition skill combined with a
50:06
Speaker 1: lifetime of investing that has honed that skill. So the
50:11
Speaker 1: other question I didn't get to that I have to
50:13
Speaker 1: ask you about we really haven't touched upon China And
50:18
Speaker 1: let's talk a little bit about China for a moment.
50:20
Speaker 1: What do you see going on in China? Is it
50:23
Speaker 1: a growth area? Is it a risk? Does China become
50:26
Speaker 1: the biggest economy by far? Just extrapolating trends out for forever.
50:31
Speaker 1: What is the role of China in the modern economy?
50:35
Speaker 1: So China is a big economy. It's the same size
50:40
Speaker 1: as the US. Obviously, their population is much larger, so
50:42
Speaker 1: their per capita GDP is smaller. So they're big, but
50:46
Speaker 1: they're not rich, right, They're not first world economy. Obviously
50:51
Speaker 1: the coast are rich. You've multiple because it's so large,
50:53
Speaker 1: you have many different China's. But if we just think
50:57
Speaker 1: about that for a second, their sheer size um makes
51:01
Speaker 1: them an amazing market. And if we think about it
51:03
Speaker 1: in the context of what's happening with artificial intelligence and
51:07
Speaker 1: data and analytics, you have huge amounts of data there um,
51:12
Speaker 1: which is an interesting, uh situation given our modern focus
51:18
Speaker 1: on platform companies and and um the network effect. Right,
51:23
Speaker 1: So you have that sort of on steroids in China,
51:25
Speaker 1: and it's interesting to watch. However, like any economy, imbalances
51:30
Speaker 1: developed and China is still a command economy. It is not.
51:35
Speaker 1: Let's not mistake it for a market economy. It has
51:38
Speaker 1: some features of a market economy, but it has many
51:41
Speaker 1: more features of a command economy. They're essentially planned communist
51:45
Speaker 1: regime that seems to dabble in capitalism precisely. Okay, So
51:50
Speaker 1: I just had to touch upon that because I know
51:52
Speaker 1: it's it's such a fascinating area. So I think China
51:55
Speaker 1: is gonna see some bumps in the road that are
51:58
Speaker 1: going to surprise people over the next two to three years.
52:01
Speaker 1: Do those bumps in the road have the potential to
52:04
Speaker 1: tip any major economies into a recession? Yeah, I think
52:07
Speaker 1: they might. And and so if you look back right,
52:10
Speaker 1: we were at three percent almost on the tenure if
52:13
Speaker 1: you use the p m I index, uh, seventy nine
52:18
Speaker 1: percent of the world was growing. And if you look
52:21
Speaker 1: at what happened in China, China's demand shifted downward. And
52:25
Speaker 1: so what I look at I look at a hole
52:27
Speaker 1: host and we saw that across commodities especially well especially
52:30
Speaker 1: and so if you look at China's imports and you
52:32
Speaker 1: use the O E C D data, and this is
52:34
Speaker 1: important because they get the real the real number, not
52:37
Speaker 1: the nominal number. Because obviously for commodities there's a huge
52:40
Speaker 1: fluctuation in nominal price changes. And they compile the data
52:45
Speaker 1: using all of China's trading partners, so they don't rely
52:48
Speaker 1: on the Chinese data collection. And this is important because
52:51
Speaker 1: we all know that there are some question marks around
52:53
Speaker 1: China's data collection. They make Bernie made off look like
52:57
Speaker 1: he was actually using real numbers. That that's what you
53:00
Speaker 1: can't say, but I can set you. I cannot say that.
53:03
Speaker 1: So in any case, um, what we saw was a
53:07
Speaker 1: big year, your year over year decline in imports and
53:11
Speaker 1: this impacted all of the commodity producers Australia, Russia, South Africa, Brazil,
53:18
Speaker 1: you name it. And we felt only six of the
53:21
Speaker 1: pm I reporting countries experiencing growth. So let's in the
53:25
Speaker 1: last and so we had a massive impact, I guess.
53:27
Speaker 1: So when to answer your question, it could have a
53:30
Speaker 1: very significant impact on global liquidity and global demand. All right,
53:33
Speaker 1: So now in our remaining minutes, let's jump to our
53:36
Speaker 1: favorite questions. Tell us about the most important thing people
53:41
Speaker 1: don't know about your background. So this is a tough
53:45
Speaker 1: question to answer to, Mary, I know, I like, I mean,
53:47
Speaker 1: one question is you know genos or Pats, I can
53:50
Speaker 1: ask you that, but give us okay, So that could
53:53
Speaker 1: be and with not without okay. So that's if you
53:57
Speaker 1: know about Philadelphia, about your people email what that was
54:01
Speaker 1: she talking? You can google there's an NPR story about this,
54:03
Speaker 1: with or without, and Pats got it. So I think
54:07
Speaker 1: people don't know because it's been some time has passed
54:11
Speaker 1: that I used to invest in the former Soviet Union.
54:14
Speaker 1: I have traveled all over the former Soviet Union. I've
54:17
Speaker 1: been a mile underground in the nickel mine. Really, yeah,
54:22
Speaker 1: you know, I look at the Soviet Union as an
54:24
Speaker 1: organized crime family with a standing army attached? Is that
54:28
Speaker 1: is that an exaggeration? Or well, back when I was there,
54:31
Speaker 1: it was in the hopeful days of glassnost Prestoika, right, um,
54:37
Speaker 1: Yeltson was was president. He was he was trying to reform.
54:41
Speaker 1: Now was there some corruption, Yes, there were? They're oligarchs
54:45
Speaker 1: most definitely. Are you surprised that the way Russia has
54:49
Speaker 1: changed to Underputin? Not really? You know when he first came, so,
54:58
Speaker 1: yelts In hand picked him, which is interesting, that's yeah.
55:02
Speaker 1: And and and Putin came into power and let Yelson
55:05
Speaker 1: live and just as well, you know, pre Gorbachev, this
55:11
Speaker 1: was not the way of Soviet power transition or Russian
55:14
Speaker 1: power transition. So he was a drunk old man at
55:18
Speaker 1: that point though, wasn't It was pretty harmless, um, but
55:23
Speaker 1: you could tell that it was a very different approach,
55:26
Speaker 1: a very very different approach. And remember they had they
55:29
Speaker 1: were just coming off the default and devaluation, right oil
55:34
Speaker 1: was it about twenty barrel, So we had to do
55:38
Speaker 1: something to get the economy going and to do things
55:41
Speaker 1: and and coming off of that crisis, and what happened
55:45
Speaker 1: in his first decade in power really improved people's lives.
55:49
Speaker 1: So the loyalty that he has among Russians who remember
55:53
Speaker 1: that time period is very very high. Some people have
55:57
Speaker 1: said that he is actually the wealthiest man in the
55:59
Speaker 1: world than he's worth three. I have heard that from
56:02
Speaker 1: a lot of reliable sources. Really, so it's not number two.
56:07
Speaker 1: That's fascinating. Early mentors. Tell us about some of your
56:10
Speaker 1: early mentors. So I think my earliest mentor was probably
56:15
Speaker 1: my father, who uh had me calculate saber metrics and baseball. Yeah,
56:22
Speaker 1: learned That's how I learned statistics. And he he would
56:26
Speaker 1: he would This is back when people would read the
56:28
Speaker 1: Wall Street Journal and look at all the stock metrics
56:31
Speaker 1: on the back of the back pages of the journal.
56:33
Speaker 1: So he taught me what a pe was and dividends
56:37
Speaker 1: pre money ball, pre money ball. This is the seventies,
56:40
Speaker 1: so you were literally doing this with baseball stats or
56:43
Speaker 1: with baseball stats, with baseball stats, NI six Philadelphia Phillies
56:48
Speaker 1: World Series, rally fingers. That's right that I'm old enough
56:54
Speaker 1: to remember. That's that is impressive. You're gonna have more
56:57
Speaker 1: googling and more more questions that mustash. Who could forget that?
57:00
Speaker 1: Must um? And then I had really amazing professors like Columbia.
57:05
Speaker 1: So we had a class that was taught by two
57:09
Speaker 1: gentlemen who were at George Soros running money for George
57:12
Speaker 1: at the time. And so it was Armenio Fraga and
57:16
Speaker 1: Robert Johnston. Robert Johnson is now with i NET Institute
57:19
Speaker 1: for New Economic Thinking, and Armenia Fraga went on to
57:22
Speaker 1: be the head of Brazil's Central Bank and then has
57:25
Speaker 1: started a fund called Cavilla. I think, um it's been
57:28
Speaker 1: around for for a decade or more. So these were
57:31
Speaker 1: two people who really it was a little confirmation bias
57:35
Speaker 1: on my part, but they really solidified this idea that
57:39
Speaker 1: you need to read widely on a lot of different subjects.
57:42
Speaker 1: You need to be a student of history, you need
57:44
Speaker 1: to be a student of people. You need to understand
57:48
Speaker 1: as many different financial crises as you possibly can. So
57:51
Speaker 1: this was right after the UH Nordic banking crisis, right,
57:55
Speaker 1: so we were delving into what was the cause of
57:58
Speaker 1: that Nordic banking crisis? Um, so it was it was
58:02
Speaker 1: those were two really just um big, big thinkers who
58:06
Speaker 1: had a very strong influence on the way I practice
58:09
Speaker 1: economics and the way I invest. So I've interviewed almost
58:13
Speaker 1: a hundred seventy people here. I can't tell you how
58:17
Speaker 1: often the issue of being well rounded, being well read
58:22
Speaker 1: comes up over and over and over again from people.
58:26
Speaker 1: Uh and if you read what Charlie Munger and Warren
58:28
Speaker 1: Buffett and Howard Marks has said this, and Cliff Astnes
58:33
Speaker 1: has said this, and Bill McNab a vanguard, its time
58:36
Speaker 1: and time and time again people say, if you were
58:38
Speaker 1: not well rounded, well read, if you're just focused in
58:42
Speaker 1: a tiny niche within finance, you won't be able to
58:45
Speaker 1: do that job well because you need to be outside
58:48
Speaker 1: of that specialty in order to develop skills and that specialty,
58:52
Speaker 1: which lead me to everybody's favorite question, tell us about
58:57
Speaker 1: some of your favorite books and what you're reading now. Okay,
59:01
Speaker 1: So I am actually rereading a book that was my
59:05
Speaker 1: mother's book called The Worldly Philosophers, which is yes, it's
59:10
Speaker 1: a great book about all of the sort of foremost
59:14
Speaker 1: economists that are the basis of economic theory. Right. So
59:19
Speaker 1: Adam Smith keenes Um, I think that he has a
59:25
Speaker 1: chapter on Veblen. Uh. Yeah, yeah, it's a it's a
59:31
Speaker 1: great it's a great book. And then uh, I love
59:36
Speaker 1: reading biographies, and I love reading autobiographies of the few
59:42
Speaker 1: great ones around. Oh, there are many great ones. So
59:45
Speaker 1: one of one of my favorite biographies that I read
59:47
Speaker 1: a long time ago was called West with the Night
59:50
Speaker 1: by Beryl West. West with the Night. It's by Beryl
59:53
Speaker 1: Markham and she was a female pilot in East Africa
1:00:00
Speaker 1: in the thirties and she made money taking people on
1:00:04
Speaker 1: hunting trips. Yeah, it's a great it's a great book.
1:00:09
Speaker 1: And um. One of the things that she talked about
1:00:12
Speaker 1: in the book was how the elephants would know that
1:00:17
Speaker 1: the planes were coming and then it meant that they
1:00:19
Speaker 1: were going to be shot and they would literally take.
1:00:22
Speaker 1: She talks about how the the largest female elephant would
1:00:26
Speaker 1: often hide with her head in a tree, so you
1:00:29
Speaker 1: couldn't see if it was a male or female. You
1:00:31
Speaker 1: couldn't see the tusks, while the hole rest of the herd,
1:00:34
Speaker 1: including the bull, would go off away from where the
1:00:37
Speaker 1: plane was. And then when they were far enough away,
1:00:42
Speaker 1: the female elephant would bring her head out, and they
1:00:44
Speaker 1: would be circling above, kind of waiting and waiting, and
1:00:47
Speaker 1: it turns out it was the female and not the bull.
1:00:49
Speaker 1: And then they would they want the bull with the tust,
1:00:51
Speaker 1: and now they had lost the herd. And so this
1:00:54
Speaker 1: this intelligence that these animals possessed, and just the way
1:00:57
Speaker 1: she tells the story, and and so I just think again,
1:01:02
Speaker 1: to go back to your point of being well rounded
1:01:03
Speaker 1: and the different ways that people think creatively in the
1:01:06
Speaker 1: different life experiences and things you can learn, it's just endless.
1:01:10
Speaker 1: Any other modern any modern biographies you're looking at or read.
1:01:14
Speaker 1: I have a giant stack of things I'm dying my
1:01:17
Speaker 1: reading list I can I purchase at a much greater
1:01:20
Speaker 1: rate than I could possibly ever read. I call that
1:01:24
Speaker 1: the bought to read ratio. I actually one one. I
1:01:31
Speaker 1: actually went back and made a list of everything I
1:01:35
Speaker 1: purchased in the previous year and then how much I read.
1:01:39
Speaker 1: And you end up with like a three to one ratio.
1:01:41
Speaker 1: For every three books you bought this year, you've probably
1:01:45
Speaker 1: read one. Well, I'm definitely a ten to one. So
1:01:47
Speaker 1: I'm definitely because every year, so twice a year I
1:01:50
Speaker 1: do here's my favorite books for the winter. Here in
1:01:52
Speaker 1: my summer books and in the fall. I said, you
1:01:55
Speaker 1: know what, let me just go to my bookshelf and
1:01:57
Speaker 1: pick ten books that I want read that I haven't
1:02:01
Speaker 1: read that are sitting there and it's embarrassing. It's like,
1:02:04
Speaker 1: how have I not read this? So I have It's
1:02:07
Speaker 1: a first all problem, though, Barry, it's a good first
1:02:09
Speaker 1: of all problem. It's a very good first I have
1:02:11
Speaker 1: a so I'll give you. I'm going to a reference.
1:02:15
Speaker 1: So I have, I have Grant, I have Springsteen, and
1:02:18
Speaker 1: I have Galileo on my bookshelf. Oh, I want to
1:02:21
Speaker 1: read Springsteen's biography. Let me get to my last two questions,
1:02:25
Speaker 1: my favorite two questions that I have to ask you
1:02:28
Speaker 1: because you and I keep digressing. Um, So a millennial
1:02:32
Speaker 1: comes to you when they say they want they're thinking
1:02:33
Speaker 1: of a career in finance or a recent college graduate.
1:02:36
Speaker 1: What sort of advice would you give them? Okay, so
1:02:39
Speaker 1: you need to have rapacious curiosity, rapacious curiosity, and you
1:02:45
Speaker 1: need to indulge your curiosity. You need to read, you
1:02:49
Speaker 1: need to learn, You need to really enjoy finding out
1:02:52
Speaker 1: about the world. It helps if you are doing something
1:02:56
Speaker 1: you are infinitely curious about. Right. If you're not is
1:03:00
Speaker 1: about it, you're not going to be engaged. You're not
1:03:02
Speaker 1: gonna love it. And and you can't only do what
1:03:05
Speaker 1: you love. Every job has has parts that are that
1:03:08
Speaker 1: are annoying or tedious, so you need to do those two.
1:03:12
Speaker 1: You need to do what I call play the scales. Right,
1:03:15
Speaker 1: so it doesn't matter to play the scale, to learn
1:03:17
Speaker 1: the basics and practice the basics over and over and
1:03:20
Speaker 1: over again. So UM, I still go and make my
1:03:23
Speaker 1: own graphs sometimes well not by hand, no, in havior analytics.
1:03:27
Speaker 1: But I still go in and and immerse myself in
1:03:30
Speaker 1: the data, do my own uh EViews calculations, just because
1:03:33
Speaker 1: it keeps your you keep your your fingers in the dirt,
1:03:36
Speaker 1: so to speak. Um, And then I would say, get
1:03:39
Speaker 1: in before the boss and leave after the boss, all right,
1:03:42
Speaker 1: And the last question that our favorite question. What is
1:03:45
Speaker 1: it that you know about economics and investing today that
1:03:48
Speaker 1: you wish you knew twenty years ago when you started?
1:03:51
Speaker 1: Everything is the knowing, just the amount of knowledge you have,
1:03:55
Speaker 1: and how that becomes cumulative. It's it's so valuable, and
1:04:00
Speaker 1: and knowing the history, just having it your fingertips, having experienced,
1:04:04
Speaker 1: you know, having experienced crisis. So what I experienced the
1:04:07
Speaker 1: Russia crisis and as we were approaching the dot com crisis,
1:04:11
Speaker 1: and that was raising reins. I said, you know what,
1:04:13
Speaker 1: I think I've seen this movie before. I think I
1:04:15
Speaker 1: know how this is probably going to end right. And
1:04:18
Speaker 1: so every every experience becomes cumulative and it helps you
1:04:23
Speaker 1: if you let it. We have been speaking with Constance Hunter.
1:04:27
Speaker 1: She is the chief economist at KPMG. If you enjoy
1:04:31
Speaker 1: this conversation, look up an Inch or Down an Inch
1:04:34
Speaker 1: on Apple iTunes and you could see any of the
1:04:36
Speaker 1: other hundred and seventy five such podcasts we have recorded previously.
1:04:40
Speaker 1: We love your comments, feedback and suggestions right to us
1:04:45
Speaker 1: at m IB podcast at Bloomberg dot net. I would
1:04:48
Speaker 1: be remiss if I did not thank my crack staff
1:04:51
Speaker 1: that helps to put this together. Taylor Riggs is our booker,
1:04:55
Speaker 1: Medina Parwana is our recording producer. Michael Batnick is our
1:05:00
Speaker 1: head of research, and Attica Valbron is our business director.
1:05:05
Speaker 1: I'm Barry Ritolts. You've been listening to Masters in Business
1:05:09
Speaker 1: on Bloomberg Radio.