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Speaker 1: Hello, and welcome to another episode of the All Thoughts Podcast.

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Speaker 1: I'm Tracy Alloway and I'm Joe Wisenthal. Joe, it's it's

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Speaker 1: nearly the end of twenty twenty three. It's been a

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Speaker 1: wild ride.

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Speaker 2: What an incredible year. I mean, the stat that just

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Speaker 2: like jumps out to me is forty one point two

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Speaker 2: four percent as of right now we're recording this December fourteenth.

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Speaker 2: That is the annual gain of the Nasdaq twenty three

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Speaker 2: point one percent on the S and P mortgage rates

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Speaker 2: below seven percent. Good times. It looks like good times

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Speaker 2: when I.

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Speaker 1: Look at the screen, even though you're talking about the rally,

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Speaker 1: it sounds like you haven't escaped the year unscathed. Because

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Speaker 1: of your voice, it sounds like you've had a rough

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Speaker 1: twenty twenty three.

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Speaker 2: It's been a good twenty twenty three. But my voice

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Speaker 2: is not in great shape at this moment.

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Speaker 1: But Joe was singing last night at his first show.

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Speaker 2: Yes, that is my excuse that I was out late

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Speaker 2: at a bar singing country music. But here I am,

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Speaker 2: and I'm very excited to talk about the bizarre, weird,

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Speaker 2: unexpected year that twenty twenty three was.

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Speaker 1: Yes, so if you recall this time last year in

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Speaker 1: twenty twenty two, it seemed like the consensus going into

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Speaker 1: the year was we were going to have a recession.

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Speaker 1: You know, people were talking about a hard landing, this

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Speaker 1: idea that the FED was going to have to keep

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Speaker 1: hiking rates and that that was eventually going to have

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Speaker 1: to bring down employment and we were going to see

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Speaker 1: a slow down in the economy. And yet here we

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Speaker 1: are and it hasn't materialized.

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Speaker 2: This time last year there was just like so much

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Speaker 2: pessimism and the market was really like in a rough

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Speaker 2: shape in November December last years this view, it's like,

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Speaker 2: you know what things are going to things are in

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Speaker 2: rough shape, but it doesn't matter. Inflation is still so high.

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Speaker 2: The FED has to keep pressing, the Fed has to

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Speaker 2: keep hiking. Yeah, it was pretty grim. And then somehow

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Speaker 2: like this is the big thing that I think people

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Speaker 2: are going to be talking about for years, which is,

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Speaker 2: how did we have like the biggest rate hike cycle

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Speaker 2: ever or one of them without more slowing in the

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Speaker 2: economic activity? And how did inflation come down from where

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Speaker 2: it was at its peak in the middle of twenty

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Speaker 2: twenty two without more weakening in the labor market?

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Speaker 1: Yes, and I should note it wasn't just economists and

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Speaker 1: analysts who were very pessimistic on the economy going into

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Speaker 1: twenty twenty three. We had a lot of you know,

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Speaker 1: real world people for lack of a better term, who

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Speaker 1: also thought that things were going to slow down. Like,

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Speaker 1: for instance, you had I think the Conference Board survey

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Speaker 1: of CEOs like almost one hundred percent. We're predicting a

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Speaker 1: recession in the US. All the sentiment surveys, as we've

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Speaker 1: been discussing on the show, have been coming from totally

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Speaker 1: well back until recently we're coming in very negative. So

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Speaker 1: you know, this wasn't just an economist problem. But I

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Speaker 1: think we should go over the year and we should review,

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Speaker 1: like what exactly happened that surprised a.

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Speaker 3: Lot of people.

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Speaker 2: Well you said this, I think in our recent episode

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Speaker 2: that we did with Ian Hatzias, and I totally agree.

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Speaker 2: I mean, I feel like the last few years will

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Speaker 2: be one of these periods and economics that people are

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Speaker 2: going to be writing PhD papers on for fifty years, right,

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Speaker 2: kind of like the Great you know, the Great Depression,

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Speaker 2: or other periods that are these sort of holy grails

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Speaker 2: or Rosetta stones for understanding how the economy works. There's

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Speaker 2: going to be so much debate and work and academic

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Speaker 2: research and relitigating debates, et cetera about like what happened

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Speaker 2: over the last four years.

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Speaker 1: I really hope we still have odd lots in twenty

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Speaker 1: seventy three, and we'll just do episodes on like what happened.

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Speaker 2: My voice will sound better.

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Speaker 1: Then, So okay, all right, why don't we just get

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Speaker 1: to it. We are going to be speaking with Anna Wong.

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Speaker 1: She is the chief US economist for Bloomberg Economics. It's

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Speaker 1: the first time we've ever had her on the show,

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Speaker 1: which is kind of surprising. Anna, Thank you so much

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Speaker 1: for coming on all thoughts, happy.

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Speaker 4: To be here at Tracy.

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Speaker 1: So, this time last year, why don't you walk us

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Speaker 1: through what exactly Bloomberg Economics was expecting. How did you

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Speaker 1: expect this particular year to turn out.

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Speaker 3: Yeah, So, a year ago, or even more like a

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Speaker 3: year and a half ago, we first put out our

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Speaker 3: recession model because at the time the feed started hiking

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Speaker 3: rates and there was just a lot of curiosity about

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Speaker 3: how this would end, and our goal then was to

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Speaker 3: have a more precise timing of the probability of recession

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Speaker 3: as opposed to just giving a vague what is the

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Speaker 3: twelfth month ahead recession? And there's a cottage industry of

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Speaker 3: these models out there, and so our model was to

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Speaker 3: put out some kind of numbers on each month of

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Speaker 3: probability in July, August and over that period since. So

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Speaker 3: this this model first came out in spring of twenty

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Speaker 3: twenty two, and at that time the model is actually

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Speaker 3: foreseeing a recession a high probability of recession only start

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Speaker 3: aring towards the end of twenty twenty three and even

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Speaker 3: in early twenty twenty four, and over the course of

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Speaker 3: last year and this year, that model evolves in terms

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Speaker 3: of the timing of when that trigger is pushed. And

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Speaker 3: all of the calls of that model has been that

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Speaker 3: the recession would begin in the second half of twenty

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Speaker 3: twenty three, and so coming into this year, we thought

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Speaker 3: that the recession that is so widely expected would be

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Speaker 3: towards the end of twenty twenty three.

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Speaker 2: Backing for a second, what goes into a recession model

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Speaker 2: and what does that even mean? Like how do you

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Speaker 2: build or construct a model and something like that.

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Speaker 3: Yeah, there's a variety of models, right, So for example,

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Speaker 3: our model, we took thirteen indicators, typical indicators that had

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Speaker 3: some track record in identifying recessions in the past, and

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Speaker 3: most many of them are overlapped with the leis from

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Speaker 3: conference sports. So it's yield curve spread sentiment models. And

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Speaker 3: so any models that have those two things, yield curve

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Speaker 3: spreads and sentiments would tell you there's a high probability

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Speaker 3: of recession. Right, Even the LI has over ninety percent

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Speaker 3: probability of recession. But another type of models that one

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Speaker 3: uses just thinking about the probability that NBER would date

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Speaker 3: a recession, and NBR told the public that they usually

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Speaker 3: look at six monthly indicators, and so one could perceivably

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Speaker 3: be also building models based on that. But of course,

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Speaker 3: when we make a call for a recession, that is

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Speaker 3: only a very small part of all our inputs. We

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Speaker 3: tend to look at things in Bloomberg Economics, in my team,

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Speaker 3: we tend to look at things in three ways. We

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Speaker 3: approach a question in three ways, and if those three

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Speaker 3: ways all say the same thing, then we make the call.

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Speaker 3: And so for a recession call last year, we also

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Speaker 3: what really influenced our view is the range of other

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Speaker 3: theoretical models. So the model recession probability models I just

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Speaker 3: described are just empirical models, which has no theoretical frameworks, right,

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Speaker 3: But economists, of course and their tools that we have

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Speaker 3: generally caliber models. We have the large scales model, we

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Speaker 3: have state of the art models, and so we used

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Speaker 3: a model on the terminal which is called shock, which

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Speaker 3: mimics I.

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Speaker 1: Was looking at this earlier. It's pretty cool. Actually, what's

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Speaker 1: it called shot shot shok go on the terminal, right.

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Speaker 3: And that model mimics the feed's own in house general

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Speaker 3: caliber model FIRMUS. And that model would suggest that the

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Speaker 3: lags are monetary rate hikes at least on labor market

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Speaker 3: should be about eighteen to twenty four months, which is

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Speaker 3: about the standard of what has been found in economic literature.

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Speaker 3: And then another state of the art model we use

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Speaker 3: is a model that central bankers have been discussing a

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Speaker 3: lot last year. This is based on a cutting edge

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Speaker 3: economic paper, and that was the paper that tipped a

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Speaker 3: lot of central bankers off into thinking about shorter legs

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Speaker 3: of monetary policy. It's a paper by Bower and Swanson,

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Speaker 3: and that was the paper that found that, in fact,

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Speaker 3: the legs of monetary policy are much shorter. So we

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Speaker 3: also looked at that model, and what those models found,

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Speaker 3: especially that Bauer and Swanson, the very cutting edge model,

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Speaker 3: is that yes, it's true that the legs of monetary

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Speaker 3: policy are shorter for for example, for industrial production, we

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Speaker 3: already have seen you know, i P declined for you know,

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Speaker 3: over a year, and in fact, the decline of industrial

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Speaker 3: productions almost like exactly matched the contour of that model.

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Speaker 3: And so that model also says that inflation now responds

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Speaker 3: faster to fetch rate hike then you know, back in

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Speaker 3: the times of Milton Friedman. But the one area which

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Speaker 3: the model says that two areas actually that says that

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Speaker 3: the lags of frate hikes still have yet to really

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Speaker 3: hit the peak is labor market and also credit market.

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Speaker 3: And I think those two are precisely the area where

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Speaker 3: we have not seen much adjustment, and that is why

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Speaker 3: we don't have most people at least don't think we

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Speaker 3: have a recession. Yeah this year.

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Speaker 1: That's really interesting, especially putting my former credit market reporter

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Speaker 1: on the credit side of it. And I do have

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Speaker 1: a pet theory right now that I think I've we've

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Speaker 1: talked about, which is that the sheer size of the

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Speaker 1: private credit market might be making a difference here, like

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Speaker 1: if you have this bundle of money that actually doesn't

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Speaker 1: seem to be that rate sensitive in the current environment,

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Speaker 1: maybe it's propping up parts of the market. But talk

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Speaker 1: to us about why the credit market might not be

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Speaker 1: as efficient at transmitting rate hikes as it once was.

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Speaker 3: Yeah, I think that this might be the surprise the

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Speaker 3: prices in the credit market might be a surprise of

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Speaker 3: twenty twenty four, which is well. I think my pet

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Speaker 3: theory of why credit market hasn't adjusted yet in twenty

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Speaker 3: twenty three is that corporates have locked in low interest

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Speaker 3: rate in the last right, everybody knows that.

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Speaker 4: And also on.

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Speaker 3: The household side, household also had wonderful balance sheets during

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Speaker 3: the pandemic. Many households paid down the debt so deleveraged

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Speaker 3: during the pandemic. But at the same time, I think

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Speaker 3: this is the following areas where I don't think the

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Speaker 3: market understands very well for households balance sheets, how really

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Speaker 3: how accurate are the credit scores being reflected? So I

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Speaker 3: think that the credit for barons, a lot of the

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Speaker 3: debt for barance during the pandemic had distorted the credit scores.

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Speaker 3: Inflated credit scores, and there are some studies that estimate

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Speaker 3: that perhaps by as much as even fifty basis points.

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Speaker 3: So a lot of the you know what currently looks

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Speaker 3: like to be near prime are actually suprime, and some

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Speaker 3: prime could be actually near prime. And then looking at

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Speaker 3: auto delinquencies, which has risen to you know, the level

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Speaker 3: of twenty ten, right, and you look at who are

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Speaker 3: the ones who are defaulting. They're the ones who bought

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Speaker 3: cars in twenty twenty one and twenty twenty two when

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Speaker 3: car prices were extremely high, and they are also the

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Speaker 3: ones who are having suprime and near prime credit ratings.

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Speaker 3: So the question, I think in twenty twenty four is

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Speaker 3: how many of these borrowers who have leveraged up in

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Speaker 3: the past two years are in fact the credit rating

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Speaker 3: that the good credit quality that they looked to be like.

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Speaker 3: And when the moment that more defaults happen, As you know,

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Speaker 3: prices slow when inflation slows, what else happens is income slows,

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Speaker 3: wage grows slow, and that that is if interest rate

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Speaker 3: doesn't fall as fast. So suppose that the Fed do

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Speaker 3: ultimately do hold higher for longer whereas income and prices.

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Speaker 4: Are coming down.

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Speaker 3: That would means that there would be more delinquencies. So

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Speaker 3: when that moment happened, whether there will be a credit

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Speaker 3: crunch versus just a normal gradual credit slowed down depends

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Speaker 3: on how the lenders is seeing the information. Right, This

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Speaker 3: is the famous at first selection issue is like, if

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Speaker 3: there's a portion of people whose credit scores don't appappropriately

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Speaker 3: reflect their true behavior, do lenders can lender sees who

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Speaker 3: are the bad seats who are not? And this is

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Speaker 3: like a famous a symmetry in the used car market, right,

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Speaker 3: This is why it's very hard.

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Speaker 5: Market for lemons, right, right, What is the takeaway from

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Speaker 5: the realized disinflation.

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Speaker 2: That we've seen? You know, I think at one point,

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Speaker 2: CPI is around nine percent now where basically you can

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Speaker 2: argue that in recent months we are by some measures

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Speaker 2: at the Fed's target, and yet unemployment is at three

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Speaker 2: point seven percent. And that was a set of conditions

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Speaker 2: that very few people would have anticipated was even possible,

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Speaker 2: in part because the standard story as well, you need

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Speaker 2: to reduce demand to use prices, and the way you

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Speaker 2: use demand is by people unfortunately having to lose their jobs.

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Speaker 2: What have we learned about, at least what we've seen

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Speaker 2: so far in.

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Speaker 3: This cycle, Yeah, Joe, So I would say one will

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Speaker 3: have to acknowledge that it's going better than what everybody

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Speaker 3: thought at first, that it will have to be extremely painless.

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Speaker 3: But at the same time, I think, as as Powell

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Speaker 3: said yesterday, it is too soon to declare victory on

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Speaker 3: flamee inflation. And and here's why. So so, based on

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Speaker 3: various model decomposition of the drivers of inflation over the

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Speaker 3: last two years, our assessment is that half of it

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Speaker 3: is driven by supply and about half of it is

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Speaker 3: driven by demand. But of course it's the mixture of

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Speaker 3: those two high demand while supply is heard which led

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Speaker 3: to this explosive inflation. Right. And in terms of inflation,

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Speaker 3: we saw this year earlier this year when SVB collapsed.

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Speaker 3: At that time the CPI recall, it was actually falling

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Speaker 3: and everybody thought, uh, inflation is not a problem. But

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Speaker 3: infect the supercore, which is Powell's preferred measure, which captures

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Speaker 3: the labor intensive part of inflation, was not slowing at all.

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Speaker 3: But then moving into the second half of this year,

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Speaker 3: we start to see a lot of disinflation and it

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Speaker 3: actually start in June this year. And this is where

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Speaker 3: I said that you know, the lacks of monetary policy

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Speaker 3: on labor market is about eighteen to twenty four months,

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Speaker 3: so that slowed down in wage growth actually hit right

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Speaker 3: about the time that all these models would suggest, and

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Speaker 3: so we started seeing movement in that, but still core

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Speaker 3: inflation is still around four percent during the summer. On

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Speaker 3: the second day of the December FOMC meeting, the FOMC

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Speaker 3: received a very critical data point. It is the November's

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Speaker 3: c PPI sorry, and so feed staff usually can pull

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Speaker 3: together a PCE inflation number very quickly the moment they

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Speaker 3: have both CPI and PPI numbers in their hand. So

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Speaker 3: on the second day of December FOMC meeting, that PPI

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Speaker 3: number came in to suggest that actually core PCE for

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Speaker 3: November is going to be very low, as we estimate

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Speaker 3: that it's only zero point zero four percent, possibly so

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Speaker 3: round to zero in November, and this would mean that

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Speaker 3: the six month annualized core PCE, this is the measure

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Speaker 3: that Chris Waller and a lot of FED officials are

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Speaker 3: looking and engaging, the momentum of inflation would come in

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Speaker 3: at two point zero likely in November, right at the

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Speaker 3: FET's target. So the FOMC has that data point on

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Speaker 3: the second day, in the morning of the December FOMC meeting,

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Speaker 3: and that explained why the Summary of Economic Projection see

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Speaker 3: downward revision of core PCE to only three point two

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Speaker 3: percent for end of twenty twenty three. Now, how do

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Speaker 3: you make of this significant drop in core PCE, right,

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Speaker 3: And so I would say that when this number ultimately

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Speaker 3: is publicly released late in December, I think it would

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Speaker 3: spark a big debate. On one side, a lot of

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Speaker 3: people would say the FED is already at target, they

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Speaker 3: should be cutting rates in January even But the second

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Speaker 3: second group of people, and I would be in that

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Speaker 3: second group of people, would be saying that, but a

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Speaker 3: lot of the disinflation in November is actually in categories

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Speaker 3: that's exhaustions to the feds R effect. It's due to China.

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Speaker 3: If you look at the downside surprises, it's actually all

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Speaker 3: in categories that with high China import contents there in apparels, clothing, furnishings,

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Speaker 3: and those actually drove almost all of the downward surprises.

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Speaker 3: So what I'm I think is happening, and this give

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Speaker 3: me some memory of what happened in twenty fourteen and

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Speaker 3: twenty fifteen was you have global growth slowed down and

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Speaker 3: start by China, and then that led to commodity prices decline.

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Speaker 3: And also that also sometimes when global growth slowed down

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Speaker 3: occasionally that could also lead to OPEK having trouble keeping

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Speaker 3: a discipline with an OPAC and that leads to a

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Speaker 3: race to the bottom. On top of that, you have

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Speaker 3: US shale who's pumping suddenly a lot more of that

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Speaker 3: actually was the dynamics in twenty fifteen and twenty fourteen

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Speaker 3: that led to that collapse in oil prices. So when

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Speaker 3: you have this trying to slow down and what's going

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Speaker 3: on with oil prices, you actually could lead to this

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Speaker 3: dissiplation that we're seeing right now. But the implication is

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Speaker 3: also that for the part that the FED has been

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Speaker 3: focusing on supercore services that actually doesn't look as great.

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Speaker 3: So services inflation actually picked up a little bit in

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Speaker 3: November in the core PCE, So I think for the

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Speaker 3: FED to declare victory too soon would be a mistake.

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Speaker 3: And just looking an outlook our outlook out to twenty

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Speaker 3: twenty four, we do see the six month annualized core

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Speaker 3: PCE dipping in the first half of twenty twenty four

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Speaker 3: and dropping to even two point two percent in March

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Speaker 3: and then stabilizing it about two point seven percent in

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Speaker 3: the second half of the year, and that would be

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Speaker 3: that last mile of inflation, because the FED should not

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Speaker 3: be happy about two point seven or two point eight

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Speaker 3: percent inflation.

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Speaker 1: I definitely want to discuss the outlook a little bit more,

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Speaker 1: but before we do, I'm glad you mentioned these exogenous factors,

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Speaker 1: these exogenous price declines, because there is you know, twenty

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Speaker 1: twenty three has turned out to be better than a

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Speaker 1: lot of people expected, but there is now this vibrant

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Speaker 1: debate about how much of that can be attributed to

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Speaker 1: the rate hikes and by extension, the FED. So I

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Speaker 1: guess my question is how do you think FED tightening

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Speaker 1: has actually worked through this economy and how much of

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Speaker 1: what we've seen so far is due to monetary policy

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Speaker 1: versus perhaps normalization of things like supply chains.

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Speaker 3: Yeah, good, good question, Tracy. You know, I think the

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Speaker 3: way that monetary policy has worked this year is largely

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Speaker 3: as the models expected. As I was saying, if you

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Speaker 3: use the state of the art models, you would see

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Speaker 3: industrial production has declined exactly according to that contour that

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Speaker 3: the model would describe inflation as well, and the places

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Speaker 3: where which has not been behaving as models would describe

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Speaker 3: would be the credit market and labor market. But even so,

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Speaker 3: the labor market in fact is moving in the direction

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Speaker 3: that the model would describe. So you know, with eighteen

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Speaker 3: to twenty four month lag of monetary policy on labor market,

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Speaker 3: we should be seeing a more clear slow down in

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Speaker 3: job job growth in the second half of this year,

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Speaker 3: and I think we did see that. And I will

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Speaker 3: also have to add that the strong non farm payroll

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Speaker 3: data over the year is likely to be overestimating the

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Speaker 3: strength of the labor market. That in fact, about forty

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Speaker 3: percent of the three million non farm payroll gains is

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Speaker 3: due to a biel as birth and death models. So

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Speaker 3: if you think about whether this makes sense, so you know,

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Speaker 3: this is a year where bankruptcy has risen to the

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Speaker 3: level of twenty ten. Right at the same time, business

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Speaker 3: are complaining that it's been very hard for them to hire.

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Speaker 3: So if that's the case, how could it be that

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Speaker 3: new firms could contribute to forty percent of the three

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Speaker 3: million job gains this year? So I think I think

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Speaker 3: that in fact, after all the revisions are done, which

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Speaker 3: will take a year or two more then it will

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Speaker 3: be it will be clear that, in fact in twenty

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Speaker 3: twenty three, the job market did slow down significantly in

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Speaker 3: the second half of this year.

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Speaker 2: What do you see in the data that makes you

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Speaker 2: thinking that the strength of the labor market is overstated,

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Speaker 2: because I mean, if small businesses are still to this

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Speaker 2: day and on, we like I said, you know, recording

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Speaker 2: this December fourteenth. Earlier in the week we got the

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Speaker 2: NFIB survey which said that labor, finding labor is still

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Speaker 2: a challenge for many companies. It's like in the first

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Speaker 2: one or two paragraphs of the report that sounds like

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Speaker 2: a robust type labor market. So what do you see

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Speaker 2: the data that makes you think that it's there is

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Speaker 2: this acceleration going on.

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Speaker 3: Yeah, several things. So I think the difference between our views,

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Speaker 3: our assessment of the labor market and other soft landing

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Speaker 3: really staunch soft Landers view of the labor market really

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Speaker 3: differs only in how much weight we place in different

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Speaker 3: labor market indicators. For example, job openings, so that has

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Speaker 3: been very high throughout this year, and in fact, for

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Speaker 3: most of most of this year it was still over

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Speaker 3: one point eight vacancies for every unemployed. But we put

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Speaker 3: very little weight in that data because, first of all,

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Speaker 3: a lot of HR recruiters have been fired over the

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Speaker 3: turn of last year, and so logically you would ask

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Speaker 3: yourself if so, if most of the layoffs late in

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Speaker 3: twenty twenty two in early twenty twenty two is in

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Speaker 3: the recruitment industry, than who are the people you know

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Speaker 3: looking for jobs and recruiting people? And second, we do

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Speaker 3: rely on anecdotes, and in turning points of and economy,

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Speaker 3: anecdotes are extremely useful because they don't get revised, and

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Speaker 3: and the FED also relies a lot on Facebook and

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Speaker 3: anecdotes during turning points as well. But so we thought

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Speaker 3: that the JULTS was just overstating and and but what

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Speaker 3: gives us more confidence are the price measures, so wage growth,

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Speaker 3: And throughout the year we have seen wage growth measures

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Speaker 3: coming down softer and softer, even as you see these

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Speaker 3: headline numbers being very strong in terms of hero gains

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Speaker 3: and job openings. And I do believe that that price

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Speaker 3: measures are better collected and less susceptible to revisions because

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Speaker 3: you just collect a price data, right, whereas with counting

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Speaker 3: the number of jobs you need to you need to

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Speaker 3: consider are you appropriately taking account of all the failed firms,

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Speaker 3: because firms who are going bankrupt would not be answering

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Speaker 3: surveys of how many people they hired and so so

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Speaker 3: you know, so that's why we put a lot more

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Speaker 3: focused on price measures, which suggests to us us that

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Speaker 3: in fact, the laborer market is softening more. And also

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Speaker 3: we look at a range of recession rules that are

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Speaker 3: that are based on unemployment, and so, uh.

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Speaker 1: Yeah, Bloomberg Economics has its own recession rule. I didn't

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Speaker 1: realize that.

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Speaker 3: Yes, So a couple weeks ago I have a piece

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Speaker 3: with Bill Dudley and we consider twenty eight recession rules

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Speaker 3: that are based on unemployment. And the idea is that

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Speaker 3: unemployment is a very good indicator because number one, it

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Speaker 3: doesn't really get revised, and number two, it also unemployment

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Speaker 3: a job is the most important variable economy that determines

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Speaker 3: income consumption saving patterns. So that's why I would focus

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Speaker 3: on unemployment. And so an unemployment rate is just the

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Speaker 3: inflows of people into the unemployed state minus the people

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Speaker 3: escaping the unemployed state, divided by the labor force. Right,

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Speaker 3: that is the unemployment rate. But even within unemployed states,

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Speaker 3: there's a lot of different categories. The most commonly used

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Speaker 3: unemployment rate is the U three rate, the rate that

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Speaker 3: we know about, but they are also U one, which

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Speaker 3: measures the number of people who have been unemployed for

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Speaker 3: fifteen months or longer. There's also U two rate, which

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Speaker 3: measures the people who are laid off and who are

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Speaker 3: temporary workers who finish their temporary stint. And so our

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Speaker 3: twenty eight rules basically look at these three unemployment rates

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Speaker 3: as well as just flow inflows and outflows. And in fact,

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Speaker 3: back in January two thousand and eight, Janet Yeallen was

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Speaker 3: discussing the state of the labor market in the FOMC

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Speaker 3: meeting then, and she was the San Francisco FED president then,

439
00:27:15,920 --> 00:27:19,479
Speaker 3: and she talked about unemployment flows. And so when you

440
00:27:19,520 --> 00:27:22,640
Speaker 3: see a lot more people flowing into the unemployed state

441
00:27:22,680 --> 00:27:25,080
Speaker 3: but having a hard time getting out of it, that

442
00:27:25,240 --> 00:27:27,880
Speaker 3: is how you get a swelling of the unemployment rate.

443
00:27:28,440 --> 00:27:32,280
Speaker 3: And you don't necessarily need layoffs to get to get

444
00:27:32,320 --> 00:27:36,000
Speaker 3: a higher flow of unemployed, right It could be re

445
00:27:36,280 --> 00:27:39,600
Speaker 3: entrance into the labor market or new entrants into labor market.

446
00:27:40,040 --> 00:27:44,119
Speaker 3: And in fact, in the most three the nineteen ninety,

447
00:27:44,200 --> 00:27:47,240
Speaker 3: two thousand and one, two thousand and seven recession, the

448
00:27:47,359 --> 00:27:51,320
Speaker 3: initial increase in unemployment rate is actually due to entrance,

449
00:27:51,520 --> 00:27:57,000
Speaker 3: new entrants and reentrant, not layoffs. So the most accurate

450
00:27:57,560 --> 00:28:00,639
Speaker 3: rule that we have found is the unemployment flows and

451
00:28:00,680 --> 00:28:05,399
Speaker 3: outflows indicator that whenever the six month moving average of

452
00:28:05,560 --> 00:28:10,720
Speaker 3: unemployed inflows exceed outflows is when you are about two

453
00:28:10,880 --> 00:28:16,520
Speaker 3: months after a recession begin. And I think the intuition

454
00:28:16,680 --> 00:28:20,080
Speaker 3: there is just that usually the beginning of a recession

455
00:28:20,200 --> 00:28:24,000
Speaker 3: begin with people just finding harder to find a job,

456
00:28:24,320 --> 00:28:27,520
Speaker 3: not because there's layoffs, but because there are less people quitting,

457
00:28:27,960 --> 00:28:31,919
Speaker 3: less turnover, so it's harder to find a job. And

458
00:28:32,000 --> 00:28:36,000
Speaker 3: only after this, you know, the stagnant state goes on

459
00:28:36,119 --> 00:28:39,320
Speaker 3: for a while and labor market when firms decided because

460
00:28:39,320 --> 00:28:41,600
Speaker 3: of the low attrition, they have to lay off people,

461
00:28:41,600 --> 00:28:43,760
Speaker 3: and that's where you get all the layoffs. That's the

462
00:28:44,280 --> 00:28:47,880
Speaker 3: increase in you tube rate. So based on these this rule,

463
00:28:48,880 --> 00:28:52,640
Speaker 3: it suggests that we have we are likely already in

464
00:28:52,680 --> 00:28:55,520
Speaker 3: this state of downturn. And that is why we think

465
00:28:55,560 --> 00:28:58,440
Speaker 3: that you know, a year from now, or even a

466
00:28:58,520 --> 00:29:00,920
Speaker 3: year and a half from now, if beer word to

467
00:29:02,240 --> 00:29:05,240
Speaker 3: time the beginning of a recession, I think October could

468
00:29:05,280 --> 00:29:09,200
Speaker 3: be a candidate. And usually after this rule is triggered

469
00:29:09,280 --> 00:29:15,400
Speaker 3: on employment rate would persistently increase because because it's just

470
00:29:15,480 --> 00:29:17,080
Speaker 3: harder and harder for people to find.

471
00:29:17,280 --> 00:29:36,200
Speaker 1: Yeah, it's exponential. So you mentioned the Psalm rule, and

472
00:29:36,320 --> 00:29:39,400
Speaker 1: we had Claudia sam on the show a few weeks ago,

473
00:29:40,120 --> 00:29:43,960
Speaker 1: and she has made the point in many venues now.

474
00:29:44,120 --> 00:29:47,680
Speaker 1: But the idea that yes, the Psalm rule exists, and

475
00:29:47,800 --> 00:29:51,400
Speaker 1: it is one of twenty eight recession rules, as you

476
00:29:51,480 --> 00:29:54,560
Speaker 1: just mentioned, Anna, but it is just a rule. It

477
00:29:54,640 --> 00:29:58,479
Speaker 1: is just a guide, and the economic cycle of the

478
00:29:58,520 --> 00:30:01,840
Speaker 1: post pandemic period has been so unusual that there is

479
00:30:01,880 --> 00:30:05,240
Speaker 1: a good chance that maybe the rule doesn't apply to

480
00:30:05,440 --> 00:30:09,320
Speaker 1: this particular cycle. I'm curious how you factor in I

481
00:30:09,360 --> 00:30:17,360
Speaker 1: guess the extraordinary unusualness of the COVID period into your outlook.

482
00:30:17,440 --> 00:30:20,280
Speaker 1: Is that something that you take into account when you're

483
00:30:20,320 --> 00:30:25,480
Speaker 1: looking at things like the relationship between unemployment and the economy.

484
00:30:25,520 --> 00:30:29,880
Speaker 1: Would you adjust those models for I guess the weirdness

485
00:30:30,000 --> 00:30:32,600
Speaker 1: of the post pandemic economy definitely.

486
00:30:33,080 --> 00:30:36,360
Speaker 3: And that's one of the reasons why we were never

487
00:30:36,720 --> 00:30:39,280
Speaker 3: calling for a recession in twenty twenty two or even

488
00:30:39,360 --> 00:30:42,200
Speaker 3: first half of this year, because the most important thing

489
00:30:42,240 --> 00:30:45,320
Speaker 3: to adjust for in terms of the unusualness of the

490
00:30:45,320 --> 00:30:49,920
Speaker 3: pandemic is the excellent balance sheet of household and corporates right,

491
00:30:50,280 --> 00:30:54,320
Speaker 3: And you could only really time the downturn once you

492
00:30:54,320 --> 00:31:00,520
Speaker 3: have a good understanding of when those cushion financial buffers

493
00:31:00,520 --> 00:31:03,960
Speaker 3: that people have built up build up exhaust themselves. And

494
00:31:04,040 --> 00:31:09,200
Speaker 3: also another very special factor about the pandemic is this

495
00:31:09,720 --> 00:31:13,480
Speaker 3: labor shortage, and that could be a reason for why

496
00:31:13,680 --> 00:31:17,760
Speaker 3: firms would be hoarding war labors and therefore less likely

497
00:31:17,840 --> 00:31:21,360
Speaker 3: to let people go. However, I would say that we

498
00:31:21,440 --> 00:31:25,560
Speaker 3: did we always supplement our model based or rule thumb

499
00:31:25,640 --> 00:31:30,000
Speaker 3: based analysis with historical analysis, and we went back to

500
00:31:30,080 --> 00:31:33,760
Speaker 3: look at the Beige books, the FOMC transcripts, real time

501
00:31:33,920 --> 00:31:39,800
Speaker 3: FOMC minutes of previous recessions, and we found that labor

502
00:31:39,880 --> 00:31:44,720
Speaker 3: shortage is always a problem in previous recession effect. In

503
00:31:44,840 --> 00:31:48,920
Speaker 3: nineteen seventy three, that was at that time the deepest

504
00:31:49,720 --> 00:31:56,240
Speaker 3: recession since World War Two. Employment was climbing even eleven

505
00:31:56,280 --> 00:32:00,360
Speaker 3: months after the recession began. And also that was also

506
00:32:00,440 --> 00:32:04,320
Speaker 3: a recession where everybody in the FMC at that time

507
00:32:04,480 --> 00:32:06,719
Speaker 3: was talking about how tight the labor market was. There

508
00:32:06,800 --> 00:32:12,200
Speaker 3: was enormous labor shortage, and that was why even eleven months,

509
00:32:12,240 --> 00:32:16,760
Speaker 3: only eleven months into that recession did employment turn negative.

510
00:32:17,200 --> 00:32:19,240
Speaker 3: And then also the Beige Book, if you go back

511
00:32:19,240 --> 00:32:23,040
Speaker 3: to the Page Book in two thousand and one, and

512
00:32:23,080 --> 00:32:26,760
Speaker 3: that is the recession that I think if we were

513
00:32:26,800 --> 00:32:30,080
Speaker 3: to have one today would be most likely to resemble

514
00:32:30,640 --> 00:32:34,200
Speaker 3: that one. Was where everybody actually lived through that recession

515
00:32:34,520 --> 00:32:37,520
Speaker 3: before realizing that there's even one and by the time

516
00:32:37,960 --> 00:32:42,280
Speaker 3: NBR announced it's already over. And at that time, what

517
00:32:42,400 --> 00:32:46,280
Speaker 3: people were talking about when that recession started was that

518
00:32:47,040 --> 00:32:50,320
Speaker 3: labor market is very tight. There's a lot of shortages.

519
00:32:50,720 --> 00:32:54,720
Speaker 3: There were pockets of weaknesses manufacturing as in hiring, and

520
00:32:55,360 --> 00:32:58,959
Speaker 3: it's hard to get a manual labor. There are decreased

521
00:32:59,000 --> 00:33:03,880
Speaker 3: demand for temporary workers, but there's also shortages of white collars.

522
00:33:05,000 --> 00:33:09,560
Speaker 3: So it actually always this, this narrative of labor shortage,

523
00:33:10,280 --> 00:33:15,280
Speaker 3: tight labor market always existed in the first month of recessions.

524
00:33:15,360 --> 00:33:18,360
Speaker 3: That's that's so this is why we to us it

525
00:33:18,480 --> 00:33:22,760
Speaker 3: was not a powerful enough of an argument to push

526
00:33:22,840 --> 00:33:28,440
Speaker 3: back against a embarraical regularity. That actually, to be honest,

527
00:33:28,480 --> 00:33:31,040
Speaker 3: I don't think econdoms have a very good understanding about

528
00:33:31,040 --> 00:33:35,360
Speaker 3: and so if we don't understand why unemployment rate would

529
00:33:35,400 --> 00:33:38,680
Speaker 3: always jump by another, you know, one point five percentage

530
00:33:38,720 --> 00:33:41,840
Speaker 3: point after jumping one point zero point five percentage point.

531
00:33:42,200 --> 00:33:43,080
Speaker 4: Then it's very.

532
00:33:42,880 --> 00:33:46,520
Speaker 3: Hard to uh deconstruct this argument if you don't even

533
00:33:46,600 --> 00:33:48,200
Speaker 3: know why it is that way.

534
00:33:48,680 --> 00:33:52,160
Speaker 1: So speaking of things that economists might not have a

535
00:33:52,200 --> 00:33:55,080
Speaker 1: great understanding of. You kind of touched on this earlier.

536
00:33:55,120 --> 00:33:59,000
Speaker 1: But the other big debate of the moment is this

537
00:33:59,120 --> 00:33:59,600
Speaker 1: idea of.

538
00:33:59,560 --> 00:34:01,160
Speaker 4: Hard versus soft data.

539
00:34:01,240 --> 00:34:04,240
Speaker 1: So the hard data is still coming in relatively strong,

540
00:34:04,320 --> 00:34:07,040
Speaker 1: although as you point out, maybe it gets revised down later.

541
00:34:07,600 --> 00:34:12,799
Speaker 1: These surveys, the soft data are pretty bad, at least

542
00:34:12,840 --> 00:34:15,279
Speaker 1: up until recently. There's been some improvement. But if you

543
00:34:15,280 --> 00:34:18,560
Speaker 1: were looking at something like the consumer sentiment survey earlier

544
00:34:18,640 --> 00:34:22,120
Speaker 1: this year, you probably would have thought the recession was

545
00:34:22,200 --> 00:34:25,960
Speaker 1: already here. How are you squaring those two variables, the

546
00:34:26,040 --> 00:34:26,879
Speaker 1: soft and the hard.

547
00:34:27,440 --> 00:34:33,640
Speaker 3: Yeah, so soft indicator sentiment indicators have not really played

548
00:34:33,640 --> 00:34:36,520
Speaker 3: a key role in our recession, call for the reason

549
00:34:36,560 --> 00:34:40,000
Speaker 3: that you mentioned, And I do agree that if you

550
00:34:40,120 --> 00:34:45,520
Speaker 3: look at the decomposition of the sentiment, it's driven by

551
00:34:45,600 --> 00:34:51,319
Speaker 3: political party lines. However, I would say that it is

552
00:34:51,400 --> 00:34:57,000
Speaker 3: important to take into account people's lift experience because ultimately,

553
00:34:57,080 --> 00:35:02,759
Speaker 3: people's ultimately, and I stress the ultimately people's behavior is

554
00:35:02,800 --> 00:35:05,920
Speaker 3: a function of how they feel the world is going

555
00:35:06,000 --> 00:35:09,560
Speaker 3: to be like. And I could understand why sentiment is

556
00:35:09,640 --> 00:35:13,160
Speaker 3: very poor because you know, the key, the key reason,

557
00:35:13,360 --> 00:35:16,600
Speaker 3: the key explanation is that price levels are still high.

558
00:35:17,120 --> 00:35:21,240
Speaker 3: And you know, not only in US, but all around

559
00:35:21,239 --> 00:35:23,600
Speaker 3: the world. When you look at countries that has suffered

560
00:35:23,640 --> 00:35:27,800
Speaker 3: from high inflation, what happened is that the relative levels

561
00:35:27,880 --> 00:35:33,840
Speaker 3: of prices in the economy is completely distorted, and it

562
00:35:33,920 --> 00:35:37,320
Speaker 3: takes a while for these relative levels to return to normal,

563
00:35:38,080 --> 00:35:42,840
Speaker 3: even if the growth rate of inflation falls to two percent.

564
00:35:43,200 --> 00:35:46,239
Speaker 3: In fact, everything is there a different For example, the

565
00:35:46,280 --> 00:35:51,760
Speaker 3: price of a burger relative to you know, my income

566
00:35:51,960 --> 00:35:56,440
Speaker 3: is permanently higher. And also, you know, if your heater

567
00:35:56,600 --> 00:36:00,080
Speaker 3: is broken this winter, you'll be shocked to find out that,

568
00:36:00,160 --> 00:36:03,879
Speaker 3: in fact, it now costs twenty thousand dollars to get

569
00:36:03,880 --> 00:36:07,440
Speaker 3: a heat pump versus before the pandemic it was you know,

570
00:36:07,640 --> 00:36:12,280
Speaker 3: about ten thousand dollars. So many prices actually increased more

571
00:36:12,360 --> 00:36:15,680
Speaker 3: than thirty percent, forty percent. And I think it's just

572
00:36:15,760 --> 00:36:19,200
Speaker 3: harder for people to plan for the future. Whenever financial

573
00:36:19,239 --> 00:36:22,400
Speaker 3: shocks happen. And also if you look at the distribution

574
00:36:22,520 --> 00:36:26,880
Speaker 3: of the gains from financial asset appreciation during the past

575
00:36:26,920 --> 00:36:32,520
Speaker 3: three years, it is actually very concentrated in baby boomers.

576
00:36:32,560 --> 00:36:36,000
Speaker 3: And you know, seventy percent of stocks are owned by

577
00:36:36,840 --> 00:36:39,759
Speaker 3: people who are older than fifty nine years old. And

578
00:36:40,080 --> 00:36:44,600
Speaker 3: whereas the people the millennials and general Generation X, what

579
00:36:44,719 --> 00:36:47,440
Speaker 3: they had in the last three years is actually they

580
00:36:47,480 --> 00:36:52,280
Speaker 3: saw their debt load climbed. In fact, a consumer credit

581
00:36:52,440 --> 00:36:58,440
Speaker 3: for millennials rose over thirty percent over the last three years.

582
00:36:58,440 --> 00:36:59,680
Speaker 4: So you know, there's a.

583
00:36:59,640 --> 00:37:04,040
Speaker 3: District fuctional aspect to it. And I think if you

584
00:37:04,239 --> 00:37:07,640
Speaker 3: ask the baby boomers, yes, times are great. What you know,

585
00:37:08,000 --> 00:37:12,279
Speaker 3: for the younger generation they cannot. They have a hard

586
00:37:12,320 --> 00:37:14,960
Speaker 3: time buying a house. So I think one way that

587
00:37:15,000 --> 00:37:20,080
Speaker 3: we could get a sustained soft landing and would be

588
00:37:20,160 --> 00:37:23,320
Speaker 3: if the baby boomers could transfer their wealth to the

589
00:37:23,760 --> 00:37:26,759
Speaker 3: millennials to help the debt burden. That is sure if

590
00:37:26,760 --> 00:37:32,000
Speaker 3: all the old people die, no, just be altruistic.

591
00:37:32,960 --> 00:37:36,719
Speaker 1: Yeah, okay, yes, yes, please give us our inheritance.

592
00:37:36,760 --> 00:37:39,399
Speaker 2: Now twenty twenty four, what should we watch for what's

593
00:37:39,400 --> 00:37:39,960
Speaker 2: going to happen?

594
00:37:40,880 --> 00:37:46,560
Speaker 3: Yeah, I think there are are both definitely both positive

595
00:37:46,640 --> 00:37:51,239
Speaker 3: risk and negative risk. So, as I mentioned, I think

596
00:37:51,320 --> 00:37:53,520
Speaker 3: that there there might be a chance that a recession

597
00:37:53,520 --> 00:37:56,480
Speaker 3: in fact has already started late in twenty twenty three,

598
00:37:56,920 --> 00:38:01,560
Speaker 3: but I don't think any recessions are in because there's

599
00:38:01,640 --> 00:38:05,840
Speaker 3: this short period of time where if policy makers act

600
00:38:05,960 --> 00:38:08,960
Speaker 3: on it and you could turn it around. Right, And

601
00:38:09,680 --> 00:38:12,799
Speaker 3: when I wrote my twenty twenty four outlook, we are

602
00:38:12,880 --> 00:38:15,200
Speaker 3: our base case is that we think a downturn has

603
00:38:15,200 --> 00:38:19,680
Speaker 3: started in October, but the FED can still achieve its

604
00:38:19,680 --> 00:38:23,359
Speaker 3: soft lending if they cut faster and earlier. And in

605
00:38:23,360 --> 00:38:25,800
Speaker 3: my mind I was thinking if that should be cutting

606
00:38:25,840 --> 00:38:30,160
Speaker 3: in December and January, And amazingly we did see a

607
00:38:30,160 --> 00:38:35,400
Speaker 3: great pivot from Powell in the December FOMC meeting, and

608
00:38:35,520 --> 00:38:38,760
Speaker 3: that is actually the sort of stuff that could staunch

609
00:38:38,920 --> 00:38:43,480
Speaker 3: the downturn dynamics and turn it all around. And also,

610
00:38:43,560 --> 00:38:47,880
Speaker 3: of course it helps that you have positive exogenous supply

611
00:38:47,960 --> 00:38:51,360
Speaker 3: shocks like China slow down, as bad it is to

612
00:38:51,400 --> 00:38:54,920
Speaker 3: global growth, actually helps Powell's case in that it drives

613
00:38:54,920 --> 00:38:59,640
Speaker 3: down commodity prices. So but on the negative risk side,

614
00:38:59,680 --> 00:39:04,239
Speaker 3: I main concern about credit crunch. I mentioned that our

615
00:39:04,280 --> 00:39:08,120
Speaker 3: models would suggest that the credit sector has not adjusted

616
00:39:08,560 --> 00:39:11,960
Speaker 3: to FED rate hikes, and it takes time for the

617
00:39:12,040 --> 00:39:15,840
Speaker 3: rate hikes to hit that sector because first you need

618
00:39:16,080 --> 00:39:19,680
Speaker 3: the balance sheet cushion of consumers and corporates to be depleted,

619
00:39:20,239 --> 00:39:24,040
Speaker 3: and then second the downturn a slowed. You don't actually

620
00:39:24,080 --> 00:39:26,480
Speaker 3: need a negative growth, you just need slow down in

621
00:39:26,560 --> 00:39:31,239
Speaker 3: revenues for corporates to feel the heat. And then there

622
00:39:31,840 --> 00:39:35,080
Speaker 3: then you'll see more default and as you see more

623
00:39:35,120 --> 00:39:39,880
Speaker 3: defaults than you can see lenders pullback or the defaults

624
00:39:39,880 --> 00:39:43,200
Speaker 3: could also reveal that there is actually some underlying vulnerability,

625
00:39:43,239 --> 00:39:46,200
Speaker 3: either in the consumer a credit segment, or corporate.

626
00:39:46,360 --> 00:39:48,480
Speaker 1: All right, well, Anna Wog, thank you so much for

627
00:39:48,520 --> 00:39:50,399
Speaker 1: coming on all thoughts and walking us through your twenty

628
00:39:50,480 --> 00:39:53,400
Speaker 1: twenty three call and giving us a preview of twenty

629
00:39:53,440 --> 00:39:55,279
Speaker 1: twenty four as well. Really appreciate it.

630
00:39:55,360 --> 00:39:56,040
Speaker 3: Happy to be here.

631
00:39:56,120 --> 00:40:09,359
Speaker 4: Thanks Joe.

632
00:40:09,400 --> 00:40:11,680
Speaker 1: That was really interesting. There's so many things to pull

633
00:40:11,760 --> 00:40:15,720
Speaker 1: out of that conversation. I thought the credit market point

634
00:40:15,920 --> 00:40:18,520
Speaker 1: was an extremely interesting one. People have been talking about

635
00:40:18,680 --> 00:40:21,720
Speaker 1: the idea of the credit market maybe having a reckoning

636
00:40:21,960 --> 00:40:26,120
Speaker 1: for many years now, but the idea that maybe you know,

637
00:40:26,920 --> 00:40:29,480
Speaker 1: the lags between the interest rate hikes and the credit

638
00:40:29,520 --> 00:40:33,680
Speaker 1: market have somehow changed due to the big maturity takeout

639
00:40:33,680 --> 00:40:35,960
Speaker 1: that we saw, but also the idea that if revenues

640
00:40:36,000 --> 00:40:37,799
Speaker 1: start to come down, that's when you could see the

641
00:40:37,840 --> 00:40:41,880
Speaker 1: crunch point that we're interesting. The idea of the distribution

642
00:40:42,520 --> 00:40:45,719
Speaker 1: of sentiment. I think that's something that we're starting to

643
00:40:45,719 --> 00:40:48,839
Speaker 1: hear over and over again, not just in the political sense,

644
00:40:48,920 --> 00:40:53,120
Speaker 1: so obviously Republicans and Democrats are reporting very different things

645
00:40:53,200 --> 00:40:56,440
Speaker 1: at the moment, but also maybe differences in ages. If

646
00:40:56,440 --> 00:40:59,200
Speaker 1: you're a baby boomer with a huge stock portfolio and

647
00:40:59,280 --> 00:41:02,120
Speaker 1: a house, you're probably feeling pretty good right now. If

648
00:41:02,120 --> 00:41:05,560
Speaker 1: you're a millennial without that much in stock based savings

649
00:41:05,760 --> 00:41:09,480
Speaker 1: or any hard assets like houses, then you're probably not

650
00:41:09,520 --> 00:41:10,239
Speaker 1: feeling so good.

651
00:41:10,400 --> 00:41:10,600
Speaker 5: Yeah.

652
00:41:10,640 --> 00:41:13,360
Speaker 2: I thought there were so many interesting observations there, but

653
00:41:13,400 --> 00:41:15,839
Speaker 2: I can't talk, so Tracy just say more of the Yeah, you.

654
00:41:15,760 --> 00:41:17,520
Speaker 1: Could just say that's a good point.

655
00:41:17,640 --> 00:41:18,959
Speaker 2: Is a great point, Tracy.

656
00:41:18,719 --> 00:41:19,239
Speaker 4: Yeah, thank you.

657
00:41:19,280 --> 00:41:22,640
Speaker 1: I appreciate that. Also, the idea that if we do

658
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Speaker 1: get a recession soon, it could resemble something like two

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Speaker 1: thousand and one.

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Speaker 4: We wore to talk.

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Speaker 2: About that recession. We should do an episode on the

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Speaker 2: two thousand and one recession.

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Speaker 1: I would totally be up for it, the idea that

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Speaker 1: people it was one of those recessions where people didn't

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Speaker 1: realize it was happening that much until afterwards.

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Speaker 2: Nine eleven sort of like woke, you know, that was

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00:41:42,600 --> 00:41:45,760
Speaker 2: the moment. But yes, I think that is a really

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Speaker 2: and at that point people like O were really you know,

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Speaker 2: clearly we're going to have this contraction. But I do

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Speaker 2: think that's a really interesting historical recession we don't talk

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Speaker 2: about much, and I do think there's like sort of

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Speaker 2: this interesting question about the lags between when the NBA

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00:42:00,239 --> 00:42:03,320
Speaker 2: dates the start of a recession to win the consensus

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Speaker 2: sets in that over in recession, So it's sort of

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Speaker 2: an interesting thing to look back at, like how long

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Speaker 2: it typically takes historically.

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Speaker 1: Joe, I think we should leave it there because it

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Speaker 1: sounds painful just listening to you. I apologize, no, I

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Speaker 1: thank you for coming on the show and you know,

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Speaker 1: working it out, but let's leave it there.

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Speaker 2: Let's leave it there.

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Speaker 4: Okay.

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Speaker 1: This has been another episode of the Oddlots Podcast. I'm

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00:42:26,320 --> 00:42:29,280
Speaker 1: Tracy Alloway. You can follow me at Tracy Alloway.

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00:42:29,360 --> 00:42:31,800
Speaker 2: And I'm Joe Wisenthal. You can follow me on Twitter

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00:42:31,880 --> 00:42:35,080
Speaker 2: at the Stalwart follow our guest Anna Along. She's at

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00:42:35,120 --> 00:42:39,399
Speaker 2: Anna Economist. Follow our producers Carmen Rodriguez at Carmen Arman,

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00:42:39,840 --> 00:42:42,880
Speaker 2: dash Ol Bennett at dashbod and kill Brooks at Kilbrooks.

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00:42:43,080 --> 00:42:46,000
Speaker 2: Thank you're to our producer Moses onm For more Odd

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00:42:46,040 --> 00:42:48,960
Speaker 2: Lots content, check out Bloomberg dot com slash odd Lots

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00:42:49,080 --> 00:42:50,120
Speaker 2: and go to our discord

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00:42:50,880 --> 00:42:52,960
Speaker 1: And if you enjoy Odd Lots, if you want us

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00:42:53,000 --> 00:42:55,640
Speaker 1: to do an episode on the two thousand and one recession,

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Speaker 1: then please leave us a positive review on your favorite

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