WEBVTT - AI Picks and Shovels 0:00:01.360 --> 0:00:05.680 This is Bloomberg Business Wait inside from the reporters and 0:00:05.880 --> 0:00:09.440 editors who bring you America's most trusted business magazine, plus 0:00:09.520 --> 0:00:13.680 global business finance and tech news. The Bloomberg Business Week 0:00:13.720 --> 0:00:18.640 Podcast with Carol Messer and Tim Stenebek from Bloomberg Radio. 0:00:20.079 --> 0:00:21.799 Tim, I don't know about you, but I feel like 0:00:21.880 --> 0:00:23.119 disaster has been. 0:00:23.400 --> 0:00:26.720 Everywhere apocalyptic the past couple of years. Right, Yeah, No, 0:00:26.840 --> 0:00:27.440 it really. 0:00:27.200 --> 0:00:31.680 Has global pandemic, wildfire's, Russian invasion of Ukraine. It's all 0:00:31.720 --> 0:00:34.040 over the place. And our next guest wants to help 0:00:34.120 --> 0:00:36.720 us prepare for that. He's the founder of an AI 0:00:36.800 --> 0:00:40.640 nonprofit that's focused on disaster preparedness, and he joins us 0:00:40.640 --> 0:00:43.480 now to discuss the product and of course the AI space, 0:00:43.479 --> 0:00:44.640 because we've got to talk about that. 0:00:45.240 --> 0:00:45.520 Phil. 0:00:45.760 --> 0:00:48.239 Great to speak with you. Phil Siebele joining us on 0:00:48.360 --> 0:00:51.920 zoom here. Seagull rather the founder of Captor Center for 0:00:51.960 --> 0:00:56.160 Advanced Preparedness and Threat Response Simulation. Phil, thanks again for 0:00:56.320 --> 0:00:58.680 coming on. Start by just telling us a little bit 0:00:58.720 --> 0:01:00.640 about what you're I does. 0:01:02.120 --> 0:01:06.080 So what we are is the intersection of artificial intelligence 0:01:06.120 --> 0:01:12.640 and gaming war gaming. The basic idea is to better prepare, 0:01:13.080 --> 0:01:16.840 we need to create a set of threats that are 0:01:16.959 --> 0:01:20.440 plausible that we some of which we've experienced, some of 0:01:20.480 --> 0:01:25.840 which we haven't experienced, and then run them through simulation 0:01:25.959 --> 0:01:33.399 games to train our our crisis management personnel UH and 0:01:34.280 --> 0:01:37.880 our politicians and decision makers to make better decisions. 0:01:37.920 --> 0:01:38.880 And I think, you. 0:01:38.840 --> 0:01:41.080 Know, we could say, you know, with a lot of 0:01:41.120 --> 0:01:44.480 the types of crises we've had over the last several years, 0:01:45.160 --> 0:01:48.560 you know, maybe we have a fair amount of room 0:01:48.600 --> 0:01:52.840 for improvement. We use artificial intelligence both to generate these 0:01:52.880 --> 0:01:58.480 scenarios UH and also to help the quote unquote players 0:01:58.600 --> 0:02:01.000 in the game make better decisions. 0:02:01.080 --> 0:02:03.040 What are some of the games that you've simulated? 0:02:04.040 --> 0:02:09.280 Yeah, so we've done. We created a new virus and 0:02:09.440 --> 0:02:12.359 ran a game with the Rockefeller Foundation, like a. 0:02:12.280 --> 0:02:14.840 Real virus, like a I mean, like a not a 0:02:14.840 --> 0:02:18.560 computer virus. We're talking like an actual you know, COVID 0:02:18.639 --> 0:02:19.079 like virus. 0:02:19.160 --> 0:02:22.519 Yes, yes, it wasn't COVID like. It had a very 0:02:22.560 --> 0:02:28.280 different characteristic. It came from livestock in the US, which 0:02:28.320 --> 0:02:31.920 is actually quite common, but it had very different characteristics. 0:02:31.960 --> 0:02:36.000 And we ask scientists to figure out what was going 0:02:36.040 --> 0:02:38.640 on and whether or not it was going to be 0:02:39.320 --> 0:02:44.200 a high, medium, or low threat to a regional population. 0:02:45.120 --> 0:02:50.760 We've created a game actually for City of Austin emergency 0:02:50.760 --> 0:02:55.160 management personnel to see how well the different departments that 0:02:55.200 --> 0:02:59.839 are supposed to respond to a threat like this would respond. 0:02:59.639 --> 0:03:05.079 And we're building games right now for scientists who are 0:03:05.320 --> 0:03:08.200 members of a group at the New York Academy of Sciences. 0:03:08.240 --> 0:03:11.840 So we're building a lot of games. We're using artificial 0:03:11.880 --> 0:03:16.800 intelligence to you know, really come up with some creative scenarios, 0:03:16.840 --> 0:03:21.920 but plausible scenarios. And that's you know, what we're seeing 0:03:22.200 --> 0:03:24.880 is that with more practice, just like pilots with a 0:03:24.880 --> 0:03:28.200 flight simulator, people do a better job when they practice. 0:03:29.120 --> 0:03:33.280 All right, So obviously you are part of the AI 0:03:33.400 --> 0:03:36.960 bucket that we have become obsessed with in the first 0:03:37.000 --> 0:03:39.400 half of this year. So I do want to get 0:03:39.440 --> 0:03:41.560 your take on the space while we have you, because 0:03:41.600 --> 0:03:45.480 it's seen so much attention, and I have to wonder 0:03:45.520 --> 0:03:47.960 if the fundamentals back up some of the prices that 0:03:48.000 --> 0:03:50.640 we've seen for these big names like the end videos 0:03:50.640 --> 0:03:53.880 of the world. What is your calculation and your thinking 0:03:54.000 --> 0:03:56.880 when it comes to the AI rally that we've seen, 0:03:57.400 --> 0:04:00.040 and which of these names are going to continue to 0:04:00.080 --> 0:04:00.400 make it? 0:04:01.600 --> 0:04:02.800 Yeah, So in my day job. 0:04:02.840 --> 0:04:07.520 I'm a private equity manager, so I think that, you know, 0:04:07.600 --> 0:04:10.480 the old adage of picks and shovels kind of win 0:04:10.560 --> 0:04:13.880 in the early days is probably fairly true here. I 0:04:13.920 --> 0:04:16.520 think that I don't know whether you would say in 0:04:16.600 --> 0:04:20.480 Nvidia is over Christ, but I would say that having 0:04:20.520 --> 0:04:23.560 it run up given it to the by far leader 0:04:23.880 --> 0:04:25.880 in the chip space, which is the ultimate pick and 0:04:25.920 --> 0:04:30.000 shovel here makes a lot of sense. There's other you know, 0:04:30.760 --> 0:04:35.279 products like that, or there's other pieces like their supply chain. 0:04:36.080 --> 0:04:38.239 You've seen a lot of run up in those stocks 0:04:38.279 --> 0:04:41.120 as well, and you know those seem we know those 0:04:41.120 --> 0:04:43.800 are going to benefit from what we're doing. Once you 0:04:43.839 --> 0:04:47.760 get past that, it gets a little murkier. I don't 0:04:47.800 --> 0:04:50.960 think we yet know whether the producers of the large 0:04:51.040 --> 0:04:54.000 language models, the the you know, the the ones that 0:04:54.040 --> 0:04:56.440 have made the big splash, are going to have viable 0:04:56.440 --> 0:04:59.320 business models. Yet we we haven't seen that. In fact, 0:05:00.400 --> 0:05:02.800 it's not clear to me whether the large language model 0:05:03.880 --> 0:05:06.280 makers are going to be the winners or people who 0:05:06.320 --> 0:05:09.160 are experts at helping companies do small language models are 0:05:09.200 --> 0:05:11.680 going to be the winners in the space. So there's 0:05:11.680 --> 0:05:15.120 still a lot of uncertainty and cloudiness, I think for 0:05:15.160 --> 0:05:16.080 the next several years. 0:05:16.160 --> 0:05:17.960 Well, Phil, as you mentioned your JAY job is in 0:05:18.000 --> 0:05:23.320 private equity. You've been an investor in private companies, venture 0:05:23.400 --> 0:05:26.680 backed companies, You've been a professor, you were a BCG 0:05:26.839 --> 0:05:30.599 as a managing director and partner for many years. Where 0:05:30.600 --> 0:05:34.200 does your passion for AI come from and for trying 0:05:34.240 --> 0:05:37.719 to create an organization that helps with disaster preparedness? 0:05:38.839 --> 0:05:43.000 Yeah, so I volunteered during the pandemic to work with 0:05:43.160 --> 0:05:48.040 BCG on helping some of their government clients respond to 0:05:49.200 --> 0:05:53.360 the COVID emergency and saw through that work that we 0:05:53.440 --> 0:05:57.239 have a lot of opportunity to practice. You know, again, 0:05:57.279 --> 0:06:00.120 I kind of thought about the analogy of when you 0:06:00.120 --> 0:06:02.560 get on an airplane, if you heard that your pilot 0:06:03.480 --> 0:06:08.040 hadn't been in a flight simulator, you'd be pretty alarmed. Yet, 0:06:08.360 --> 0:06:11.919 you know, with a lot of our disaster preparedness and 0:06:12.000 --> 0:06:16.320 crisis management, we aren't doing that type of work every 0:06:16.360 --> 0:06:19.400 year we do. You know, obviously, this group of people 0:06:19.440 --> 0:06:23.640 is highly educated and hard working, but I would like 0:06:23.680 --> 0:06:28.279 to see them every year spending time honing their skills 0:06:28.320 --> 0:06:30.600 so that they're more ready and better. And that was 0:06:30.880 --> 0:06:34.440 that was really what caused me to want to co 0:06:34.560 --> 0:06:38.240 found this, uh this this ng O if you will, 0:06:38.320 --> 0:06:39.040 or nonprofit. 0:06:39.200 --> 0:06:41.360 Well, where does the where does the AI come from? 0:06:41.640 --> 0:06:44.680 And and are you at all concerned about AI in 0:06:44.720 --> 0:06:47.880 the sense of it being a threat to humanity? 0:06:49.320 --> 0:06:49.599 Yeah? 0:06:49.720 --> 0:06:52.279 I I uh, well, that's two very different questions, so 0:06:53.200 --> 0:06:56.240 I'll focus on the second. I'm I'm less worried about, 0:06:57.200 --> 0:06:59.479 you know, the scenarios we see in the movies like 0:07:00.200 --> 0:07:05.680 I Robot or Terminator to where the AI becomes sentient 0:07:05.880 --> 0:07:09.040 and on its own decides it's going to destroy humanity. 0:07:09.080 --> 0:07:12.600 I am very worried that bad actors are going to 0:07:12.800 --> 0:07:16.960 use these technologies and are already using these technologies to 0:07:17.040 --> 0:07:19.800 do bad acts, and that's what we need to be 0:07:19.840 --> 0:07:23.840 protecting against in the short term. 0:07:23.960 --> 0:07:27.000 Thirty seconds, Phil, who are some of the companies and 0:07:27.080 --> 0:07:30.560 names that should not be jumping on AI and investing 0:07:30.640 --> 0:07:32.600 heavily into the AI space. 0:07:33.520 --> 0:07:36.360 Yeah, it's a good question, and I'm not one hundred 0:07:36.360 --> 0:07:39.080 percent sure how to answer it other than to say 0:07:39.160 --> 0:07:42.040 I think there are some sectors where they really need 0:07:42.080 --> 0:07:47.840 to be thinking about, especially capital intensive sectors, where if 0:07:47.880 --> 0:07:52.160 they change the basic business model through investing in AI, 0:07:52.320 --> 0:07:54.640 they can lower the barriers to entry, they might have 0:07:55.080 --> 0:07:58.400 new entrants come in, whether it's the mining and exploration 0:07:59.160 --> 0:08:02.960 industry and so forth. You don't want to bring in 0:08:03.040 --> 0:08:05.640 new entrants that you don't have to. But on the 0:08:05.640 --> 0:08:08.000 other hand, you need to lower your operating costs, and 0:08:08.040 --> 0:08:09.239 so it's a race. 0:08:10.120 --> 0:08:12.360 Yeah, and it's all about capital allocation. At the end 0:08:12.400 --> 0:08:15.000 of the day, Phil, thank you so much for joining us. 0:08:15.000 --> 0:08:16.679 We're going to have to bring you back on. Phil Siegel, 0:08:16.760 --> 0:08:19.640 founder of CAPTORS. That's the Center for Advanced Preparedness and 0:08:19.680 --> 0:08:23.160 Threat respond Simulation, among many other resume lines. 0:08:23.720 --> 0:08:27.280 You're listening to the Bloomberg Business Week podcast. Catch us 0:08:27.320 --> 0:08:30.680 live weekday afternoons from three to six Eastern Listen on 0:08:30.720 --> 0:08:34.760 Bloomberg dot com, the iHeartRadio app, and the Bloomberg Business app, 0:08:35.040 --> 0:08:36.760 or watch us live on YouTube. 0:08:38.000 --> 0:08:40.560 First, we're going to put our economist hats on Tim 0:08:40.840 --> 0:08:41.720 not Broadline today. 0:08:41.880 --> 0:08:42.520 Did you I did? 0:08:42.600 --> 0:08:44.760 Yeah, took it on the train with you, on the 0:08:44.760 --> 0:08:48.200 train with me. Here's the thing, a simple economics rule 0:08:48.320 --> 0:08:50.640 that helps us suss out whether the US is in 0:08:50.640 --> 0:08:54.079 a recession. It's getting called into question by its own creator. 0:08:54.520 --> 0:08:57.800 It's called the Psalm rule, and it's architects the architect 0:08:57.920 --> 0:09:00.920 rather is worried that her creation has become a monster. 0:09:01.200 --> 0:09:04.040 That's the headline of the Business Week story we're focusing 0:09:04.040 --> 0:09:06.480 on today, which you can find on the terminal, of course, 0:09:06.520 --> 0:09:09.480 at Bloomberg dot com. Here to discuss the breakdown with 0:09:09.559 --> 0:09:12.360 us is Bloomberg BusinessWeek editor Joel Weber and the reporter 0:09:12.480 --> 0:09:15.120 on this story and occurr in Joel. 0:09:16.320 --> 0:09:18.920 It's all in the Did you describe this as a 0:09:18.960 --> 0:09:20.680 simple economic rule? 0:09:21.320 --> 0:09:24.720 Is there such a thing? I just want to clarify it. 0:09:24.760 --> 0:09:25.600 Is there such a thing? 0:09:26.440 --> 0:09:28.400 I won't pretend it's simple. I won't pretend I even 0:09:28.400 --> 0:09:31.280 fully understand the mechanics of it. So that's a brave call. 0:09:31.440 --> 0:09:32.160 Okay, all right? 0:09:32.240 --> 0:09:34.720 So what does does he feel better? And that makes 0:09:34.720 --> 0:09:35.320 me feel better? 0:09:35.600 --> 0:09:38.560 I honestly I had never heard of the some rule. 0:09:38.760 --> 0:09:41.920 So break it down for us? And what uh, you 0:09:41.960 --> 0:09:43.640 know what everybody's talking about here? 0:09:44.200 --> 0:09:47.120 So the clods. First of all, she's a very accomplished economist. 0:09:47.160 --> 0:09:49.640 She had a long career at the FED. She had 0:09:49.640 --> 0:09:51.640 a stint in the White House as well, and at 0:09:51.640 --> 0:09:54.560 her time at FED. In twenty nineteen she published this 0:09:55.200 --> 0:09:58.839 this rule or this measure, which essentially looks for increases 0:09:59.000 --> 0:10:02.200 in unemployment in a real time way and looks for 0:10:02.240 --> 0:10:05.320 how it looks for the increased relatives to the average, 0:10:05.360 --> 0:10:07.160 the three month average compared to the low point of 0:10:07.200 --> 0:10:09.640 the year before. Point being, it's a real time weight 0:10:09.679 --> 0:10:12.040 to gauge. Oh, look, the job market might be turning. 0:10:12.160 --> 0:10:14.920 Jobs are being lost. And the second part of it 0:10:14.960 --> 0:10:17.760 is that that's a warning sign to governments, or the 0:10:17.800 --> 0:10:20.439 US government in particular, that we're in a recession and 0:10:20.480 --> 0:10:22.720 so it's time to start getting money out to those 0:10:22.920 --> 0:10:25.160 who need it fast. So that's the key point about it. 0:10:25.160 --> 0:10:28.360 It's a real time gauge. It looks at the labor market, 0:10:28.520 --> 0:10:31.200 and that's much faster than the current system of gauging 0:10:31.240 --> 0:10:34.600 when there's a recession, which is an eight member committee 0:10:34.600 --> 0:10:36.880 that come together and often don't diagnose it until a 0:10:36.960 --> 0:10:37.839 year after the event. 0:10:38.080 --> 0:10:40.160 So how did she create a monster? Because that's the 0:10:40.160 --> 0:10:41.880 fun part exactly. Yeah. 0:10:42.200 --> 0:10:45.760 So the issue here is that it's got it's got 0:10:45.880 --> 0:10:48.440 two things. First of all, people are kind of talking 0:10:48.480 --> 0:10:50.959 about it in the sense of forecasting that much of 0:10:51.000 --> 0:10:53.600 anted the US recession. Will it won't it? And our 0:10:53.640 --> 0:10:56.840 point is it's not a tool for forecasting recessions. It's 0:10:56.880 --> 0:10:59.760 an indicator to say when we're in a recession. And 0:11:00.080 --> 0:11:02.120 second point of it is, it's just got tied up 0:11:02.160 --> 0:11:04.839 in this whole broader tug of war of will the 0:11:04.920 --> 0:11:07.720 US fall inter session, will it not? What's the s rule, 0:11:08.040 --> 0:11:11.080 sam Room rule telling us when her point is that 0:11:11.120 --> 0:11:13.679 this was meant to be an indicator that look, people 0:11:13.679 --> 0:11:15.600 are losing their jobs and the governments need to get 0:11:15.600 --> 0:11:19.160 money out straight away because that mitigates offsets whatever damage 0:11:19.160 --> 0:11:21.839 your session might be coming. So she she just feels 0:11:21.840 --> 0:11:23.640 that it's getting caught up in the maelstream of this 0:11:23.720 --> 0:11:25.240 whole seft landing debate. 0:11:25.720 --> 0:11:29.280 Well, she said to you, the whole point of it was, Okay, 0:11:29.440 --> 0:11:31.480 we need to get people help, because if you can 0:11:31.520 --> 0:11:34.199 get in at the beginning of a recession, you can 0:11:34.240 --> 0:11:37.640 do so much to soften the blow. The issue is 0:11:38.280 --> 0:11:41.840 the consumer has been so resilient, The American consumer has 0:11:41.840 --> 0:11:46.000 been so resilient. So yeah, this has been pretty humbling, 0:11:46.040 --> 0:11:49.200 not just for her but for for so many economists. 0:11:49.800 --> 0:11:51.760 Yeah. So in terms of you know, the rule itself, 0:11:52.720 --> 0:11:56.120 you know this policy advice that she was giving, say 0:11:56.160 --> 0:11:59.280 pre pandemic. Ultimately, it's what the Trumpet administration did is 0:11:59.320 --> 0:12:02.080 that when people are losing their jobs, they put money 0:12:02.080 --> 0:12:04.880 into people's households, upset the worst of their session. So 0:12:04.920 --> 0:12:08.120 it kind of did follow the policy prognosis. But you're right, 0:12:08.600 --> 0:12:10.840 the real crux of this is where we are now. 0:12:11.720 --> 0:12:15.160 You know, the job market is softening somewhat. There's a 0:12:15.200 --> 0:12:17.200 lot of talk that the economy will soften with Claudia 0:12:17.200 --> 0:12:20.280 Aslam is making the point that, look, if unemployment was 0:12:20.320 --> 0:12:24.160 to go up somewhat and you know, mechanically trigger her rule, 0:12:24.200 --> 0:12:27.439 that suggests it's passing a threshold that the economy might 0:12:27.440 --> 0:12:29.719 be going into her session. So the jobless rate was 0:12:29.760 --> 0:12:31.600 to go up, but the actual economy doesn't go into 0:12:31.600 --> 0:12:34.800 her session, she'll be fine with that. She doesn't mind 0:12:34.840 --> 0:12:37.839 if her rule is proven, is tested, so to speak, 0:12:37.840 --> 0:12:40.079 are even proven to be inaccurate in this occasion, as 0:12:40.080 --> 0:12:42.079 long as it means the US pulls off of self lanning. 0:12:42.080 --> 0:12:45.280 And she's in the camp that the there doesn't need 0:12:45.320 --> 0:12:47.840 to be your session to bring down inflation. At the moment, 0:12:47.840 --> 0:12:50.120 she thinks inflation is on a glide path lower. You 0:12:50.200 --> 0:12:52.640 don't need to blow up the job's market. She said, 0:12:52.640 --> 0:12:55.520 it's still possible that happens, but she thinks it's a 0:12:55.559 --> 0:12:57.320 path for self lanning, and that's her whole that's her 0:12:57.360 --> 0:12:59.200 whole point about it. If her rule is proven wrong 0:12:59.240 --> 0:13:01.720 this time jobbles raid goes up a touch, but there 0:13:01.760 --> 0:13:03.520 is no recession, She'll be fine with that. 0:13:04.120 --> 0:13:07.440 She also just sounds funny to me. She said that 0:13:07.480 --> 0:13:09.920 she created a monster. She said she never she was 0:13:09.960 --> 0:13:12.319 surprised she ended up at the FED, even though she's 0:13:12.360 --> 0:13:15.800 obviously a genius and created this rule. She would love 0:13:15.880 --> 0:13:18.760 to see this break. What were your impressions of her. 0:13:20.480 --> 0:13:23.160 Clothly's very accomplished the columns, like you just mentioned, a 0:13:23.240 --> 0:13:26.880 long career in the public sector, a lot of academic research, 0:13:26.960 --> 0:13:30.640 PhD from Michigan. She's proved. She has a proven track 0:13:30.679 --> 0:13:34.800 record behind her. Clodly also was on the front line 0:13:34.880 --> 0:13:37.360 of pushing for the diversity debate at the FED when 0:13:37.400 --> 0:13:39.200 she was there. We spoke a lot about that. She 0:13:39.280 --> 0:13:41.800 said the institution has come a long way compared to 0:13:41.880 --> 0:13:43.840 the time she was there. And of course we got 0:13:43.880 --> 0:13:46.120 into the world of social media, because that's also a 0:13:46.120 --> 0:13:49.040 big part of the story that the economic debate has 0:13:49.040 --> 0:13:51.760 moved from say the wholes of universities and maybe the 0:13:51.800 --> 0:13:54.520 opinion pages of newspapers into this real time back and 0:13:54.600 --> 0:13:57.439 forward sort of punch bowl on Twitter, et cetera. 0:13:57.880 --> 0:14:00.680 And Clonia herself like thinks he knows he's talking about 0:14:00.920 --> 0:14:03.400 I know. That's when you know we've got a problem. 0:14:03.520 --> 0:14:07.280 Just wait till the Stenevec rule. Just wait until that happens. 0:14:07.760 --> 0:14:09.959 Rules called Friday five and I'm out of the area 0:14:10.240 --> 0:14:11.120 six six. 0:14:11.440 --> 0:14:13.520 But En, you bring up a really good point, because 0:14:13.600 --> 0:14:16.520 she is, she's huge on Twitter, and she she does 0:14:16.559 --> 0:14:19.480 such spent she's I mean, I haven't I must confess 0:14:19.520 --> 0:14:21.800 I have taken a break from Twitter lately. But X 0:14:22.560 --> 0:14:25.840 whatever it's called. She she's and she writes for Bloomberg Opinion. 0:14:25.880 --> 0:14:26.680 I mean, she's out there. 0:14:28.160 --> 0:14:30.400 He used to be very out there as well, very vocal. 0:14:30.440 --> 0:14:32.600 I mean, she wrote a blog post in twenty twenty 0:14:32.640 --> 0:14:36.160 that was highly critical of some very senior peers in 0:14:36.200 --> 0:14:40.080 the Eglamus field and she named them. So that caused a 0:14:40.120 --> 0:14:41.840 big stary at time. And you know, she was on 0:14:41.880 --> 0:14:44.160 the front edge of a lot of sharp exchanges on 0:14:44.200 --> 0:14:48.120 Twitter as well. But you know, Claudia has pulled back 0:14:48.120 --> 0:14:49.880 from Twitter. She made that point. She took a couple 0:14:49.880 --> 0:14:51.000 of breaks, a couple of months. 0:14:50.880 --> 0:14:51.200 Off of it. 0:14:51.280 --> 0:14:53.200 She's back on it now just to publish her research. 0:14:53.240 --> 0:14:55.520 She's not interested in getting involved in the back and 0:14:55.560 --> 0:14:58.360 forth the hot take debates. In fact, she said she 0:14:58.440 --> 0:15:01.040 stays off Twitter and the hot take days, the hot 0:15:01.040 --> 0:15:03.080 take the will obviously be the Jobs Day on Friday. 0:15:03.520 --> 0:15:06.080 She's hearing well clear of that. 0:15:06.800 --> 0:15:07.880 She's got all these rules. 0:15:07.920 --> 0:15:10.280 I wouldn't know the rest of the rules actually, Okay, 0:15:10.520 --> 0:15:13.760 So you right that if she get it get it right. 0:15:13.880 --> 0:15:18.360 In economics, textbooks will be rewritten, get it wrong, and 0:15:18.400 --> 0:15:20.480 the credibility of central bank will be damaged in the 0:15:20.520 --> 0:15:22.000 US economy, doomed to stagflation. 0:15:23.120 --> 0:15:25.040 Which way is it trending so far? And when will 0:15:25.080 --> 0:15:25.360 we know? 0:15:26.160 --> 0:15:29.160 We've got to you know, textbooks require some you know, 0:15:29.520 --> 0:15:30.280 forward planning. 0:15:31.400 --> 0:15:33.880 Right here, right now, there's this window that the US 0:15:33.920 --> 0:15:36.040 can pull this off, that they can get inflation down, 0:15:36.080 --> 0:15:38.200 that data has been heading in the right direction, inflation 0:15:38.280 --> 0:15:41.040 is coming off, and maybe they can navigate some sort 0:15:41.080 --> 0:15:43.520 of a soft landing without the kind of massiver session 0:15:43.520 --> 0:15:46.480 that some people were warning about. Now, if that happens, 0:15:46.920 --> 0:15:50.720 that puts your own Powell in the whole of legends 0:15:50.800 --> 0:15:53.400 up there with Vulkar in terms of global central bankers 0:15:53.440 --> 0:15:57.320 who pulled off the impossible. But there are a lot 0:15:57.360 --> 0:15:59.800 of people who push back and say it's too soon 0:15:59.840 --> 0:16:03.800 to say mission accomplished. We don't yet know what the 0:16:03.840 --> 0:16:06.200 full impact of these rate hikes will be. We don't 0:16:06.240 --> 0:16:07.880 yet know if inflation is going to come all the 0:16:07.920 --> 0:16:09.560 way back down the word it should be in people 0:16:09.600 --> 0:16:11.880 on the street. They're feeling the impact of these price 0:16:11.960 --> 0:16:14.320 rises over the past few years. So there's another camp 0:16:14.360 --> 0:16:16.760 out there saying, hang tight for another six months or 0:16:16.800 --> 0:16:17.680 so and see where we are. 0:16:17.720 --> 0:16:19.640 Then you just didn't vote to Volker. 0:16:20.360 --> 0:16:24.800 I'm actually curious if pulls this off, who becomes. 0:16:24.440 --> 0:16:25.840 More of a legend, Volker or pal. 0:16:26.960 --> 0:16:30.000 It's an interesting question. I think if Powell pulled this off, 0:16:30.080 --> 0:16:32.360 it would be seen to be quite a feat because 0:16:32.560 --> 0:16:34.880 there's a backstory. You could say, hang on, central banks 0:16:34.880 --> 0:16:37.400 missed how all this inflation was building up anyway, But 0:16:37.800 --> 0:16:40.040 when they went they went very hard to federally doing 0:16:40.040 --> 0:16:42.320 all those massive rate hikes seventy five base of points 0:16:42.320 --> 0:16:44.200 at a time. A lot of people being very critical, 0:16:44.280 --> 0:16:45.760 you're going to blow up the economy. Don't need to 0:16:45.800 --> 0:16:48.760 do this. And if they do pull this off and 0:16:48.760 --> 0:16:51.480 get inflation, then on a glide path. It looks like, 0:16:51.640 --> 0:16:53.320 you know, would put the US in pretty good order 0:16:53.360 --> 0:16:56.240 compared to some of its peers around the world. Part 0:16:56.280 --> 0:17:00.240 of what's going on Europe, for example, And I think, well, 0:17:00.280 --> 0:17:02.880 then would maybe take something up a victory lot. 0:17:02.880 --> 0:17:05.680 But I just retire just like I'm done. 0:17:05.920 --> 0:17:07.679 I think Joel brings up a good point end. I mean, 0:17:07.680 --> 0:17:11.040 because you know, Vulcar had to raise rates to what 0:17:11.640 --> 0:17:14.760 close to twenty percent in the early nineteen eighties, and 0:17:14.840 --> 0:17:18.160 if Powell pulls this off with rates around five percent. 0:17:18.600 --> 0:17:22.000 An unemployment went to eleven percent. Yeah, the Vulgar I mean. 0:17:22.160 --> 0:17:25.160 And you know, under Powell, unemployment fell to three point 0:17:25.160 --> 0:17:27.359 four percent in February, which was the lowes since nineteen 0:17:27.400 --> 0:17:30.480 sixty nine. So the fairly different circumstances. Maybe we're seeing 0:17:30.520 --> 0:17:32.160 the birth of the Powell rule here. 0:17:32.240 --> 0:17:35.200 We don't yet know. Did you just coin that? That's good? 0:17:35.680 --> 0:17:39.200 So original? I fear that I just jinxed everything. 0:17:39.280 --> 0:17:43.359 Oh yeah, great, Joel crash Landing, Oh Weber. 0:17:43.520 --> 0:17:46.480 I would love for you to be the leading indicator 0:17:46.520 --> 0:17:47.520 of our economy, Joel. 0:17:47.680 --> 0:17:50.639 Just you know, there are some people on Twitter x 0:17:51.240 --> 0:17:56.679 who have written how the Business Week covers are we are? 0:17:56.880 --> 0:17:59.520 You know, that's really I don't know about this. Can 0:17:59.560 --> 0:18:00.480 you explain once. 0:18:00.320 --> 0:18:04.240 We talk about it, it means it's late and and everything. 0:18:05.240 --> 0:18:08.880 Like once on the cover I brought down the dollar. 0:18:08.960 --> 0:18:10.760 The dollar was very strong, and then we did the 0:18:10.800 --> 0:18:12.280 cover story and it was less strong. 0:18:12.359 --> 0:18:13.920 I will push back on that. I think it's like, 0:18:13.960 --> 0:18:16.240 there's no perfect record here, but there's like, you know, 0:18:16.280 --> 0:18:17.399 there's a couple prominent ones. 0:18:18.160 --> 0:18:20.640 Get we get you know, every once in a while, we. 0:18:20.600 --> 0:18:21.920 Hold you is like an oracle. 0:18:22.200 --> 0:18:26.720 Okay, speaking of oracles, can we talk about into some more? 0:18:26.760 --> 0:18:29.280 Because he was busy this week and he wrote about Barbie. 0:18:29.840 --> 0:18:32.679 I was hoping, Yeah, you know, let's just stay with 0:18:32.800 --> 0:18:34.800 cool things, like, I mean, some world pretty cool. You 0:18:34.840 --> 0:18:36.720 didn't know about that, but maybe you knew about Barbie 0:18:36.720 --> 0:18:40.560 with tell us about what you wrote for today's newsletter. 0:18:40.640 --> 0:18:41.840 End up. Yeah. 0:18:41.840 --> 0:18:43.520 So the toy industry has been in a bit of 0:18:43.520 --> 0:18:46.520 a slowdown this year because you know, it's coming off 0:18:46.560 --> 0:18:48.920 to the highs of the pandemic when people are buying 0:18:48.960 --> 0:18:51.199 so much of that stuff. This year, stores have been 0:18:51.240 --> 0:18:54.800 running down to inventory less buying of toys, especially from Asia. 0:18:54.840 --> 0:18:56.639 Of course, so I touched base with a couple of 0:18:56.640 --> 0:18:59.280 manufacturers and said, hire are things looking and one of 0:18:59.280 --> 0:19:01.359 those I spoke to you. He's one of the biggest 0:19:01.359 --> 0:19:03.800 makers of toy dinosaurs in the world, and he said 0:19:03.800 --> 0:19:05.560 he can't wait for this year to be over. So 0:19:05.600 --> 0:19:08.679 the thinking is that the Barbie effect, the Barbie effect, 0:19:08.720 --> 0:19:11.359 might give it all boats a lift. I mean, Mattel 0:19:11.400 --> 0:19:14.080 themselves are talking about they're expecting a lift from the 0:19:14.119 --> 0:19:17.800 Barbie chain of products. And of course there's a thinking 0:19:17.840 --> 0:19:19.760 that might get people back in the toy stores and 0:19:19.800 --> 0:19:23.320 spending money on other products too, And that's what it's 0:19:23.320 --> 0:19:25.119 time maker I spoke to he's making the point that 0:19:25.160 --> 0:19:26.639 he's hoping for a lift towards the end of the 0:19:26.720 --> 0:19:30.000 year because certainly buying toys hasn't been an everyone shopping 0:19:30.000 --> 0:19:31.280 list so far in twenty twenty three. 0:19:31.400 --> 0:19:35.240 Wait a second, did you say the world's biggest manufacturer 0:19:35.480 --> 0:19:37.879 of dinosaurs, one of the biggest. 0:19:38.000 --> 0:19:39.960 Yeah, and he also makes chat him out of the 0:19:40.000 --> 0:19:40.760 talking Hamster. 0:19:41.240 --> 0:19:43.640 He's got a rank product. 0:19:43.760 --> 0:19:47.840 We've got questions about that, but let's stay with dinosaurs. 0:19:48.000 --> 0:19:50.120 So the dinosaur business is difficult right now. 0:19:50.920 --> 0:19:53.240 Well, so he sells, he makes and sells for some 0:19:53.280 --> 0:19:56.200