WEBVTT - Morgan Stanley, Harvard, and Disney 0:00:00.120 --> 0:00:04.360 Bloomberg is now on your dashboard with Apple CarPlay and 0:00:04.360 --> 0:00:08.160 Android Auto. It gives you access to every Bloomberg podcast, 0:00:08.280 --> 0:00:11.560 live audio feeds from Bloomberg Radio, print stories from Bloomberg 0:00:11.640 --> 0:00:14.920 News in audio form, and the latest headlines of the 0:00:14.920 --> 0:00:18.600 click of a button with Bloomberg News. Now it's free 0:00:18.680 --> 0:00:21.439 with the latest version of the Bloomberg Business App. That's 0:00:21.680 --> 0:00:24.400 the Bloomberg Business App. Get it on your phone in 0:00:24.440 --> 0:00:27.760 the Apple App Store or on Google Play. Just download 0:00:27.800 --> 0:00:30.560 the app, connect your phone to your car and get started. 0:00:30.960 --> 0:00:34.400 And it's all presented by our sponsor, Interactive Brokers. 0:00:35.400 --> 0:00:38.600 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside 0:00:38.640 --> 0:00:39.800 my co host Matt Miller. 0:00:40.200 --> 0:00:44.279 Every business day we bring you interviews from CEOs, market pros, 0:00:44.320 --> 0:00:48.160 and Bloomberg experts, along with essential market movin news. 0:00:48.720 --> 0:00:51.839 I'm the Bloomberg Markets podcast called Apple Podcasts or wherever 0:00:51.960 --> 0:00:55.040 you listen to podcasts, and at Bloomberg dot com Slash Podcast. 0:00:55.320 --> 0:01:00.160 An exclusive with James Gorman, the executive chairman of More 0:01:00.280 --> 0:01:03.480 and Stanley, recently stepped down from his post as CEO, 0:01:03.760 --> 0:01:06.000 and this is the first interview in your new role 0:01:06.160 --> 0:01:09.240 as executive chairman what's your most urgent priority. 0:01:10.720 --> 0:01:12.600 Well, it was obviously to come and do this interview 0:01:12.640 --> 0:01:17.080 with you. As my first priority. You know, it's just 0:01:17.120 --> 0:01:20.399 support Teed and he's a terrific guy, will be a 0:01:20.400 --> 0:01:24.320 great CEO, and my job really is to help him 0:01:24.360 --> 0:01:26.800 as best as I can, but stay out of the road. 0:01:26.959 --> 0:01:29.480 So that's really my priority. 0:01:29.600 --> 0:01:32.280 It's interesting I've heard you used to write a handwrite 0:01:32.319 --> 0:01:35.040 a checklist of priorities at the start of every year. 0:01:35.360 --> 0:01:38.559 If you think about how you change gears into executive chairman, 0:01:38.680 --> 0:01:40.319 what does that checklist this year look like. 0:01:40.640 --> 0:01:41.720 I didn't write it this year. 0:01:42.440 --> 0:01:44.479 I did that when I was CEO for fourteen years, 0:01:44.520 --> 0:01:47.480 and it gave me a framework for focusing on a 0:01:47.560 --> 0:01:51.200 few big things that matter, because in these jobs, there 0:01:51.200 --> 0:01:54.360 are thousands, literally thousands of issues that come at you 0:01:54.960 --> 0:01:57.040 and you can easily lose sight of the stuff that 0:01:57.160 --> 0:01:59.480 actually matters, which is a few big things. So every 0:01:59.560 --> 0:02:02.080 year I would tea up on the first day I 0:02:02.120 --> 0:02:04.520 came into the office, which was yesterday, I came in 0:02:05.800 --> 0:02:08.200 and write down the list of ten things, and you know, 0:02:08.560 --> 0:02:11.680 one of them was always no new mistakes, which I 0:02:11.760 --> 0:02:13.760 defined as things that cost us more than half a 0:02:13.800 --> 0:02:17.560 billion of capital. Sometimes they were personal like stay fit 0:02:17.720 --> 0:02:20.880 or get fit, or sometimes they are at development and 0:02:21.000 --> 0:02:24.240 leadership with our top team. But no different jobs, so 0:02:24.639 --> 0:02:26.840 different you've got you've got to switch. So that's what 0:02:26.880 --> 0:02:27.320 I've done. 0:02:27.480 --> 0:02:29.480 You know, I'm glad you brought up mistakes because to 0:02:29.520 --> 0:02:32.320 the extent that we learned from life's challenges. I'm curious 0:02:32.320 --> 0:02:34.760 about your single moment. What is the biggest mistake you 0:02:34.800 --> 0:02:37.640 ever thought you've made at Morgan Stanley. You know, this 0:02:37.720 --> 0:02:40.040 is an exit interview. It's the chance to look back 0:02:40.320 --> 0:02:41.440 at the last decade or so. 0:02:42.360 --> 0:02:44.920 You know it might sound im modest. I don't think 0:02:44.960 --> 0:02:46.680 we made a lot of big mistakes. I mean the 0:02:47.800 --> 0:02:49.919 if you look at the major things that we did, 0:02:49.960 --> 0:02:52.520 whether they were the deals Smith Barney, each trade eat 0:02:52.560 --> 0:02:58.000 advance succession, which is critical navigating through COVID. You know, 0:02:58.040 --> 0:03:00.880 we got frankly most of the big I wish we 0:03:00.960 --> 0:03:02.880 hadn't sold Van Camp and when we sold it to 0:03:03.639 --> 0:03:06.440 Marty Flanagan and Invesco, So that was something I think. 0:03:06.480 --> 0:03:09.520 It took a little too long to get the full 0:03:09.520 --> 0:03:12.200 team that I wanted in place in the right jobs. 0:03:13.440 --> 0:03:16.080 But you know, you can't do these jobs and not 0:03:16.280 --> 0:03:18.360 make missas When I see a mistake, I embrace it. 0:03:18.960 --> 0:03:22.959 You know, it's like Kipling, those travelers of success and fail. 0:03:23.080 --> 0:03:25.480 You got to embrace them both because if you're not 0:03:25.480 --> 0:03:28.160 making mistakes, the chances are you're not doing enough. So 0:03:28.200 --> 0:03:30.200 I never see a mistake as a negative. I just 0:03:30.240 --> 0:03:31.919 see it as something you learned from move forward. 0:03:32.080 --> 0:03:33.720 You know, it's interesting, you're standing on top of a 0:03:33.760 --> 0:03:36.080 mountain now. You've had a tremendous amount of success at 0:03:36.080 --> 0:03:39.040 Morgan Stanley, but those first couple of years were rocky. 0:03:39.120 --> 0:03:40.400 Were you ever worried. 0:03:40.120 --> 0:03:42.480 In those first few years you'd be ousted before you 0:03:42.480 --> 0:03:43.680 can act to turnaround. 0:03:44.040 --> 0:03:48.200 No, you know, I just thought, listen what I felt 0:03:48.240 --> 0:03:51.920 back then. We had to act, and we had to 0:03:51.960 --> 0:03:55.920 act aggressively. And I knew that whatever we chose to 0:03:55.920 --> 0:03:58.640 do there would be critics. That didn't bother me one 0:03:58.720 --> 0:04:01.720 little bit because we're in trouble as it was, so 0:04:02.360 --> 0:04:04.680 my job was to do something about it, not listen 0:04:04.720 --> 0:04:06.520 to the critics of what we can't do, but figure 0:04:06.520 --> 0:04:09.320 out what we can do. So I was highly confident 0:04:09.360 --> 0:04:12.280 that we'd make choices and I thought they'd pay off. 0:04:12.320 --> 0:04:15.119 I thought the rebalancing the business model was the right choice, 0:04:15.240 --> 0:04:17.239 So I didn't. I just didn't listen to the critics. 0:04:17.279 --> 0:04:20.719 It's funny you kind of got Morgan Stanley at rock bottom, 0:04:20.720 --> 0:04:22.640 if you will. But a lot of investors think Ted 0:04:22.680 --> 0:04:24.560 Pick's job is even harder because he is. 0:04:24.520 --> 0:04:25.320 On a high note. 0:04:25.440 --> 0:04:27.440 What do you think Ted's biggest challenge is going to be? 0:04:27.960 --> 0:04:30.200 Oh, I don't think. I don't think it's hard or easier. 0:04:30.200 --> 0:04:32.480 They're just different. You go through different cycles. I mean, 0:04:32.480 --> 0:04:34.520 the Morgan Center I've had for the last five years 0:04:34.960 --> 0:04:38.000 is very different from the first five or the middle four. 0:04:39.000 --> 0:04:41.239 You know, for Ted, he's got one of the biggest 0:04:41.279 --> 0:04:45.400 and most successful companies in the world, phenomenal brand, He's 0:04:45.400 --> 0:04:47.839 a great culture carrier, so I'm sure the cultur will 0:04:47.839 --> 0:04:51.080 stay in track. The real choices will be strategic. So 0:04:51.160 --> 0:04:55.120 when opportunities come to move left or move right, how 0:04:55.160 --> 0:04:55.680 do you do that? 0:04:55.760 --> 0:04:57.800 How aggressively do you do it? And when do you 0:04:57.839 --> 0:04:59.840 do it? So that's they're really the choices. 0:05:00.040 --> 0:05:02.160 And in the first year while I'm here, I'll obviously 0:05:03.160 --> 0:05:07.120 share with him whatever views I have on stuff if 0:05:07.120 --> 0:05:09.440 he wants that, But in the lady years, he'll have 0:05:09.520 --> 0:05:11.279 his team working with him on that. 0:05:11.480 --> 0:05:13.240 So I'm confident about that. 0:05:13.279 --> 0:05:15.680 We'll talk more about strategy in a second. But another thing, 0:05:15.800 --> 0:05:18.440 as you transition to executive chairman, you have roles now 0:05:18.680 --> 0:05:21.720 outside of the bank, and succession is arguably one of 0:05:21.760 --> 0:05:24.400 the most important things you could do as a manager, 0:05:24.640 --> 0:05:26.520 and a big new responsibility for you is serving on 0:05:26.560 --> 0:05:29.360 the board of Disney, ironically, where succession has been one 0:05:29.400 --> 0:05:32.760 of the biggest issues. How does Disney live past Bob Iger? 0:05:33.400 --> 0:05:36.400 Well, firstly, I mean Bob Iger is a phenomenal executive. 0:05:36.400 --> 0:05:39.760 I mean he is iconic for a reason. He's led 0:05:39.800 --> 0:05:44.200 that company through so many cycles and really is a 0:05:44.279 --> 0:05:47.280 gifted leader. So it's a great pleasure to work with him. 0:05:47.279 --> 0:05:49.840 But it's not for me to judge Disney's future. I've 0:05:50.000 --> 0:05:52.880 joined the board yet. I'm starting I think February fourth 0:05:53.000 --> 0:05:56.440 or February second, I'm sure early February. I'm looking forward 0:05:56.480 --> 0:06:02.200 to it. I like dealing with complexity situations. The changes 0:06:02.240 --> 0:06:05.920 going on in that industry are profound and there are 0:06:06.000 --> 0:06:08.040 choices to be made, so that to me is very 0:06:08.040 --> 0:06:12.240 interesting and obviously given the experience I've had leading succession 0:06:12.320 --> 0:06:14.400 with our board here with Dennisonlly, the head of our 0:06:14.440 --> 0:06:19.000 comp committee, and Tom Glossa, they had lead director. You know, 0:06:19.120 --> 0:06:21.400 hopefully I can add something to the succession committee that 0:06:21.440 --> 0:06:22.039 I'll be joining. 0:06:22.240 --> 0:06:26.200 What about pressing challenges outside of succession at Disney? Do 0:06:26.240 --> 0:06:29.320 you think that there's anything that could be immediately addressed 0:06:29.680 --> 0:06:31.440 as they contend with activists? 0:06:32.160 --> 0:06:34.800 Well, you know, and they're always we had We've had 0:06:35.200 --> 0:06:37.360 How many activists do we have here? We had at 0:06:37.440 --> 0:06:39.320 least two, and I think they each had two bites 0:06:39.360 --> 0:06:43.120 at the Apple. So no, that is not what the 0:06:43.160 --> 0:06:45.360 focus should be on. The focus should be on strategic 0:06:45.480 --> 0:06:48.159 choices companies make. But again, I haven't joined the board, 0:06:48.240 --> 0:06:50.680 so I can't talk about a company on, not even 0:06:51.160 --> 0:06:53.000 an insider on. That wouldn't be fair to the team. 0:06:53.120 --> 0:06:56.400 More strategic decisions at Morgan Stanley, one massive question. You've 0:06:56.400 --> 0:06:59.679 built this massive wealth management business mostly in the United States. 0:07:00.080 --> 0:07:02.599 You have talked previously about the idea of Morgan Stanley 0:07:03.000 --> 0:07:06.440 internationally expanding more. Do you think Morgan Stanley though, can 0:07:06.520 --> 0:07:09.120 be a giant international wealth manager? 0:07:09.520 --> 0:07:09.680 Oh? 0:07:09.760 --> 0:07:11.720 Sure, there are a lot of wealthy people in this world. 0:07:11.800 --> 0:07:15.800 I think population just tipped eight b and and you know, 0:07:16.040 --> 0:07:18.120 I've just come back from a long trip through Asia, 0:07:18.200 --> 0:07:22.400 through Thailand, Singapore, Hong Kong, and I was in Europe 0:07:22.600 --> 0:07:25.000 last week. I've been all over there. There are plenty 0:07:25.040 --> 0:07:27.600 of pockets of opportunities, so it's a question of where 0:07:27.840 --> 0:07:29.920 where you pick your shots. I mean the whay you 0:07:29.960 --> 0:07:34.520 pick your spots. There are endless opportunities, and I think 0:07:34.680 --> 0:07:37.119 our Asia business, we have a wealth business in Asia. 0:07:37.160 --> 0:07:41.960 It's small ish but growing very fast. Obviously that's a 0:07:41.960 --> 0:07:44.600 focus Japan. I think with that partner Amuog is a 0:07:44.640 --> 0:07:47.560 tremendous focus that I suspect Ted and the team will 0:07:47.600 --> 0:07:49.760 do even more with which he's already started doing on 0:07:49.800 --> 0:07:50.840 the trading side. 0:07:51.720 --> 0:07:54.200 So there are endless opportunities. I'm not worried about. 0:07:54.240 --> 0:07:56.560 What are the biggest challenges with China in particular are 0:07:56.600 --> 0:07:58.960 given the rising geopolitical tensions and the state of the 0:07:59.000 --> 0:07:59.680 economy there. 0:08:01.560 --> 0:08:04.400 Well, China has you know, China has some fundamental challenges. 0:08:04.480 --> 0:08:09.400 First and foremost is demographics. The one child policy guaranteed 0:08:09.440 --> 0:08:12.000 the population is going to shrink, and right when you 0:08:12.040 --> 0:08:14.720 need more productive working people coming through to support the 0:08:14.760 --> 0:08:17.720 older generation, they've got few of them, and they don't 0:08:17.760 --> 0:08:21.280 have good immigration. So I think China has some profound 0:08:21.360 --> 0:08:24.840 challenges on demographics. It has profound challenges in terms of 0:08:25.120 --> 0:08:29.520 building a consumption economy. You know that there's still an 0:08:29.560 --> 0:08:35.080 export savings driven economy. So but on the other hand, 0:08:35.200 --> 0:08:38.360 China's one point four bm people, second largest economy in 0:08:38.360 --> 0:08:41.080 the world, and gross domestic product. 0:08:41.160 --> 0:08:45.160 It's it's a key factor in global economic health. 0:08:45.840 --> 0:08:49.240 So beyond Asia expansion, if you think about the wealth 0:08:49.280 --> 0:08:51.920 management space, even in the US, there's another thing that's 0:08:51.960 --> 0:08:54.760 happening that a lot of financial advisors are thinking about 0:08:54.800 --> 0:08:58.160 in particular, and that is the approval actually or the 0:08:58.240 --> 0:09:02.480 lack thereof, of a Bitcoin spot ETF in the United States. 0:09:02.960 --> 0:09:05.719 When you think about what wealthy clients invest in, when 0:09:05.760 --> 0:09:07.240 you think about the future of wealth management, do you 0:09:07.240 --> 0:09:09.199 think bitcoin is a suitable investment. 0:09:09.880 --> 0:09:10.960 I've never been. 0:09:12.600 --> 0:09:16.880 You know, I've never really understood the value of bitcoin 0:09:17.200 --> 0:09:21.560 as a form of stored value. Others have, and others 0:09:21.600 --> 0:09:23.360 have made a lot of money on it. I joked once, 0:09:23.400 --> 0:09:25.280 I wish I bought it at sixty dollars, and I'm 0:09:25.280 --> 0:09:28.920 glad I didn't buy it at sixty thousand. It's clearly speculative. 0:09:29.400 --> 0:09:31.920 I think it should play for wealthy people a very 0:09:31.920 --> 0:09:36.880 small role in their financial fabric because it's so speculative, 0:09:36.920 --> 0:09:40.319 it's so volatile, and again it's going through enormous regulatory 0:09:40.400 --> 0:09:44.120 change and industry disruption. We're seen with some classic failures 0:09:44.120 --> 0:09:47.320 of late, So some bitcoin's not going away. It's not 0:09:47.360 --> 0:09:51.559 a fad. I just don't think it's a core investment. 0:09:51.640 --> 0:09:52.200 I think it's a. 0:09:52.720 --> 0:09:55.480 Speculative asset of which there are plenty of choices. 0:09:55.800 --> 0:09:58.679 Speaking of regulation, you've been very vocal about the new 0:09:58.720 --> 0:10:02.320 regulations being made in the United States about bank capital, 0:10:02.720 --> 0:10:06.040 about operational risk. Do you believe the rules are likely 0:10:06.120 --> 0:10:09.880 to change before implementation based on your recent discussions with 0:10:09.960 --> 0:10:11.680 regulators and what do you think they will look. 0:10:11.520 --> 0:10:13.400 Like at the end? Oh, that definitely change. 0:10:13.440 --> 0:10:15.840 I mean they put out an extended comment period which 0:10:15.880 --> 0:10:19.960 got extended further. There have been thousands of comments put 0:10:20.000 --> 0:10:24.160 into the various regulatory bodies, led by the FED. It 0:10:24.320 --> 0:10:29.559 was a proposal that I would say was extremely aggressive 0:10:30.360 --> 0:10:33.280 and set a marker. It will not go through in 0:10:33.320 --> 0:10:36.640 that form. If it did, I think it would have very, 0:10:36.760 --> 0:10:39.960 very negative consequences for corporate lending across this country, which 0:10:40.000 --> 0:10:40.800 is not what you want. 0:10:40.920 --> 0:10:42.560 It's not going to help the economy growth. Well. 0:10:42.559 --> 0:10:45.800 You've also spoken about the treasury market potential impacts from 0:10:45.840 --> 0:10:48.840 these regulations. We've already seen stresses of late in the 0:10:48.840 --> 0:10:51.520 treasury market. Do you have fears that those stresses will 0:10:51.559 --> 0:10:52.360 be exacerbated? 0:10:52.679 --> 0:10:54.760 I can't tell until I see the actual rules. But 0:10:54.880 --> 0:10:59.040 all I know is what was put out is highly highly, 0:10:59.160 --> 0:11:01.960 highly unlikely to be what's ultimately regulated. 0:11:02.240 --> 0:11:02.440 Now. 0:11:02.520 --> 0:11:05.640 Investors don't necessarily see that or agree with it. But 0:11:05.720 --> 0:11:07.720 in my experience, I've been in this a long time. 0:11:08.280 --> 0:11:10.040 I was on the FED board for six years in 0:11:10.080 --> 0:11:13.800 New York. I chared the fac in Washington. I think 0:11:13.840 --> 0:11:17.559 this is a highly aggressive proposal that will be materially 0:11:17.920 --> 0:11:20.200 wound back when it finally becomes law. 0:11:20.360 --> 0:11:24.360 Regulation now, there has been tighter capital rules proposed under 0:11:24.360 --> 0:11:27.920 the Biden administration. There's also been a lot of regulatory 0:11:27.960 --> 0:11:31.080 actions taken against banks. If the Republicans take the White 0:11:31.080 --> 0:11:34.360 House in twenty twenty four, whether it's Donald Trump or 0:11:34.400 --> 0:11:38.320 another contender, do you expect that this tighter regulatory environment 0:11:38.440 --> 0:11:40.360 will just fully unwind too. 0:11:40.440 --> 0:11:41.520 It's too hard to predict. 0:11:41.920 --> 0:11:45.160 You know, I think we're in you know, you see 0:11:45.200 --> 0:11:49.440 pendulum swing, and we swung to lighter regulation to I 0:11:49.480 --> 0:11:52.760 think an excessive proposal. I think it'll swing back. So 0:11:52.840 --> 0:11:55.520 it's heading back to more balance regulation, and that's where 0:11:55.520 --> 0:11:58.480 it should be. I'm all about balance. The banking system 0:11:58.520 --> 0:12:01.199 should not be deregulated. That would be a nightmare. On 0:12:01.240 --> 0:12:04.240 the other hand, if you overregulate and you require capital 0:12:04.280 --> 0:12:06.599 standards that are so high that the banks run investable, 0:12:06.880 --> 0:12:09.640 they can't grow. That doesn't serve communities. 0:12:09.679 --> 0:12:10.000 Well. 0:12:10.280 --> 0:12:14.600 You need prosperous, thriving banks to provide lending products for 0:12:14.679 --> 0:12:16.360 small businesses and consumers. 0:12:16.600 --> 0:12:18.679 You know, to the extent we're less than a year 0:12:18.679 --> 0:12:22.200 away from a spate of bank failures, to the extent 0:12:22.200 --> 0:12:24.560 that there are still fragilities in the financial system, what 0:12:24.640 --> 0:12:25.000 are they. 0:12:25.320 --> 0:12:27.319 I don't think they are a speed of failures. Honestly, 0:12:27.360 --> 0:12:29.760 I think there were three banks that got it wrong. 0:12:30.880 --> 0:12:33.560 I've said that publicly. They made choices that were the 0:12:33.600 --> 0:12:37.760 wrong choices. Wasn't complicated. They got washed up and cleaned 0:12:37.800 --> 0:12:39.760 up and folded into other banks, and you move on. 0:12:39.880 --> 0:12:42.400 This wasn't People kept telling me, we're having a banking crisis. 0:12:42.800 --> 0:12:45.080 No, we're not. We had a crisis among three banks. 0:12:45.320 --> 0:12:47.920 It was a crisis for their shareholders and their employees. 0:12:48.160 --> 0:12:49.600 It's not a crisis for the market. 0:12:49.840 --> 0:12:52.640 The core banking system is in rude good health to 0:12:52.720 --> 0:12:53.880 use a British expression. 0:12:54.320 --> 0:12:56.280 Well, you know, it's not just the banking system. If 0:12:56.320 --> 0:12:58.520 you think about the hedge fund industry, regulators are also 0:12:58.640 --> 0:13:01.640 very concerned about some fragil there. It wasn't too long 0:13:01.679 --> 0:13:04.200 ago that Morgan Stanley lost almost a billion dollars in 0:13:04.200 --> 0:13:06.520 the week of the collapse of Archagoes. Do you think 0:13:06.559 --> 0:13:08.640 that there needs to be more safeguards on the non 0:13:08.720 --> 0:13:09.440 bank system. 0:13:09.880 --> 0:13:14.560 I mean, it's honestly, there's too many participants in the 0:13:14.600 --> 0:13:15.880 non bank system to say yes. 0:13:15.960 --> 0:13:18.600 So no, you'd have to go subset by subset. 0:13:18.640 --> 0:13:23.320 We talked about payments, we talk about private creditor go 0:13:23.440 --> 0:13:26.360 through each of the pieces of it. But there are 0:13:26.400 --> 0:13:29.360 always risks when you're dealing with leverage in a financial system. 0:13:29.400 --> 0:13:31.679 But if you don't have leverage, you don't have lending, 0:13:31.840 --> 0:13:35.079 So it's a balance again. I'm always back to there 0:13:35.160 --> 0:13:37.839 is a balanced solution to most of these debates, and 0:13:37.920 --> 0:13:40.200 you can find it with full discussion with regulators. 0:13:40.280 --> 0:13:43.040 Speaking of leverage, the cost of leverage is higher today 0:13:43.080 --> 0:13:45.240 than it was a couple of years ago. Where do 0:13:45.280 --> 0:13:47.520 you think interest rates go headed into the end of 0:13:47.520 --> 0:13:49.160 the year, and what do you think the market starts 0:13:49.200 --> 0:13:52.800 to look like through twenty twenty four? They go down, 0:13:52.960 --> 0:13:54.920 as simple as that, Yeah, how far down? 0:13:55.000 --> 0:13:55.880 I've got no idea. 0:13:55.920 --> 0:13:59.480 I mean I thought that unlikely the FAD would cut 0:13:59.559 --> 0:14:03.679 rates this year, but inflation has moved down pretty materially 0:14:04.240 --> 0:14:07.439 quickly that it's now become more likely. So first half 0:14:07.440 --> 0:14:08.520 of the year, I suspect nothing. 0:14:08.559 --> 0:14:09.200 Back half of the year. 0:14:09.200 --> 0:14:10.840 They could easily move a couple They could move a 0:14:10.840 --> 0:14:14.480 couple of times. But the key point is we started 0:14:14.480 --> 0:14:18.199 this journey with inflation at ten percent, rates at zero, 0:14:18.760 --> 0:14:22.440 unemployment at three and a half percent, and my objective 0:14:22.520 --> 0:14:25.200 was to get us to four four and four four 0:14:25.240 --> 0:14:28.760 percent inflation, four percent rates, four percent unemployment. We're about 0:14:28.760 --> 0:14:31.320 three percent inflation, we're five percent five and a half 0:14:31.360 --> 0:14:33.480 in rates, and we're about three and a half in unemployment. 0:14:33.680 --> 0:14:34.680 So rates will come down. 0:14:34.800 --> 0:14:36.360 Do you think the economy is in at all clear 0:14:36.400 --> 0:14:39.440 when it looks like a soft landing versus a hard landing, 0:14:39.480 --> 0:14:42.120 do you think that the economy will survive this year 0:14:42.160 --> 0:14:42.880 in good shape? 0:14:43.360 --> 0:14:47.400 Economy is fine. I mean, there's this obsession with the 0:14:47.440 --> 0:14:50.280 our word recession. I mean, you have recessions. They come 0:14:50.320 --> 0:14:53.120 and go when you get imbalances between unemployment rates and 0:14:53.160 --> 0:14:57.200 economic growth. So no, the economy is doing fine. I 0:14:57.320 --> 0:15:00.880 personally think it is unlikely we'll have a recession, very 0:15:01.000 --> 0:15:02.560 unlikely we'll have a hard landing. 0:15:02.920 --> 0:15:03.760 But we'll see. 0:15:03.880 --> 0:15:05.840 But the odds are clearly in favor of soft landing. 0:15:05.840 --> 0:15:07.160 I think the Fed's done a great job. 0:15:07.640 --> 0:15:11.440 Now for you, You've told me before that you would 0:15:11.560 --> 0:15:14.320 look to teach in your post life at Morgan Stanley, 0:15:14.360 --> 0:15:16.560 in your life after Morgan Stanley, I want to ask 0:15:16.560 --> 0:15:18.280 you about that for a moment, because there is a 0:15:18.280 --> 0:15:21.920 lot of turmoil on college campuses these days. Do you 0:15:21.920 --> 0:15:24.520 think you'd ever take a bigger role at a university 0:15:24.560 --> 0:15:27.560 given all the political pressures and donor activism that you're seeing. 0:15:27.800 --> 0:15:28.640 Well, I'm joining. 0:15:29.040 --> 0:15:32.040 I have been the chair of Columbia Business School for 0:15:32.400 --> 0:15:35.040 many years, several with Henry Cravis's my co chair and 0:15:35.120 --> 0:15:38.840 now chair of the school. I'm looking to get more 0:15:38.840 --> 0:15:42.560 involved at Columbia University in the coming months, and I 0:15:42.600 --> 0:15:44.440 think that'd be great to do. I think, you know 0:15:44.560 --> 0:15:48.920 the importance of high quality education for a well functioning 0:15:49.000 --> 0:15:52.400 society is profound, It's obvious. So yeah, I want to 0:15:52.440 --> 0:15:55.600 be part of that, and obviously universities this is not 0:15:55.720 --> 0:15:58.920 the first time universities have been hotbeds of dissent and 0:15:59.000 --> 0:16:01.800 turmoil my whole life. They've been that from when I 0:16:01.840 --> 0:16:03.880 went to university in Australia in the nineteen seventies. 0:16:03.920 --> 0:16:06.240 So that doesn't that doesn't bother me. 0:16:07.680 --> 0:16:10.720 But it's important that people are able to have dialogue 0:16:10.720 --> 0:16:15.800 and discussion on campus without intimidation and expressing their rights 0:16:15.800 --> 0:16:16.560 for free speech. 0:16:17.800 --> 0:16:22.160 What is the next big ambition for James Gorman you. 0:16:22.160 --> 0:16:24.480 Mean today or I. 0:16:26.360 --> 0:16:29.160 Internally Morgan soon is to help ted and to help 0:16:29.200 --> 0:16:31.920 with our clients around the world. I have a very 0:16:32.000 --> 0:16:34.480 large client network that I built up over a long career, 0:16:34.480 --> 0:16:37.320 and I think I can help our bankers and others 0:16:37.320 --> 0:16:40.280 in that regard. For me personally, it's to live in 0:16:40.320 --> 0:16:42.560 a little bit of a world of unknown for my 0:16:42.600 --> 0:16:44.720 whole life. I've kind of known what the next steps 0:16:44.760 --> 0:16:47.560 are as you mentioned, I've I've joined one public company. 0:16:47.600 --> 0:16:50.040 We'll be joining one public company board Disney. I'll be 0:16:50.520 --> 0:16:54.320 getting more involved at Columba University months ahead, and then 0:16:54.360 --> 0:16:54.880 I'll take. 0:16:54.720 --> 0:16:55.200 It from there. 0:16:55.280 --> 0:16:57.800 So I don't you know, I want I want balance 0:16:57.840 --> 0:17:03.480 in my life I've loved being CEO. It's a phenomenal company. 0:17:03.560 --> 0:17:06.800 I'm so proud of my colleagues here the job that 0:17:06.800 --> 0:17:10.159 they've done. This isn't a one person show. It's thousands 0:17:10.200 --> 0:17:13.040 of people who are really talented doing the right thing, 0:17:13.600 --> 0:17:16.240 and ultimately it's the values of the organization which is 0:17:16.280 --> 0:17:18.679 what drives it. So that's what I'm most proud of 0:17:18.720 --> 0:17:21.600 and for me personally, we'll find out. 0:17:22.200 --> 0:17:24.520 James, thank you for your time, your first interview in 0:17:24.560 --> 0:17:28.280 your new role. That's James Gorman, executive chairman now of 0:17:28.320 --> 0:17:30.399 Morgan Stanley for Bloomberg Television and Radio. 0:17:32.119 --> 0:17:35.520 You're listening to the team. Can's a live program Bloomberg 0:17:35.560 --> 0:17:38.959 Markets weekdays at ten am Eastern on Bloomberg dot com, 0:17:39.040 --> 0:17:42.160 the iHeartRadio app and the Bloomberg Business App, or listen 0:17:42.240 --> 0:17:44.360 on demand wherever you get your podcasts. 0:17:46.200 --> 0:17:48.160 One job I would not want is to be the 0:17:48.240 --> 0:17:51.280 head of a college or university these days, or any 0:17:51.359 --> 0:17:54.280 leadership position in an academic institution. It is I've seen 0:17:54.320 --> 0:17:56.560 it firsthand serving on the board of Duke's Business School. 0:17:56.760 --> 0:17:58.960 It is a tough job. And that's even before what's 0:17:58.960 --> 0:18:01.760 happened over the last several weeks at Harvard and Penn 0:18:01.800 --> 0:18:04.080 and some other places of higher education. So let's get 0:18:04.080 --> 0:18:07.720 the latest there. Janet Lauren joined US higher education finance 0:18:07.800 --> 0:18:10.360 reporter for Bloomberg New She's been on top of this 0:18:10.640 --> 0:18:13.640 with some of the top reporting out there. So, Janet, 0:18:14.560 --> 0:18:16.640 you know, we had the president of Penn step down. 0:18:16.720 --> 0:18:19.640 Now Claudine Gay of Harvard has stepped down. The pressure 0:18:19.720 --> 0:18:22.440 is just brutal here. The issues are visceral for a 0:18:22.480 --> 0:18:24.960 lot of people. How is this going to play out? 0:18:25.000 --> 0:18:27.240 Do you think, well, don't forget a couple of months 0:18:27.280 --> 0:18:29.080 ago we had the president of Stanford Stone. 0:18:29.119 --> 0:18:29.960 Oh that's right, yep. 0:18:30.320 --> 0:18:33.600 So I guess the next focus is on the board 0:18:33.720 --> 0:18:35.040 the Harvard Corporation. 0:18:35.280 --> 0:18:36.600 It had been twelve members. 0:18:36.640 --> 0:18:39.640 Now with Claudie Gay's resignation, it's eleven members. 0:18:40.520 --> 0:18:42.400 There have been calls. 0:18:42.119 --> 0:18:44.880 For them to step down, that they ran a very 0:18:44.920 --> 0:18:48.240 flawed search, and why didn't they figure out what was 0:18:48.280 --> 0:18:50.800 going on with her scholarship supposedly had been out there 0:18:50.840 --> 0:18:54.760 for a while. And the question is will they continue 0:18:54.800 --> 0:18:58.240 to serve Penny Pritzker, the former Commerce secretary, is the 0:18:58.320 --> 0:19:00.679 chair of that board, and who's. 0:19:00.440 --> 0:19:01.920 Going to want the job as president? 0:19:01.960 --> 0:19:04.200 I mean, of course, it's the most prestigious in the 0:19:04.320 --> 0:19:07.439 world academically, but as we were just talking about, it 0:19:07.480 --> 0:19:10.840 comes with so many challenges, so many constituencies. And in 0:19:10.920 --> 0:19:14.919 my story today, one of Vario esteemed professor Auvi Lobe, 0:19:14.920 --> 0:19:18.720 talked about two extremely important things are raising money, which 0:19:18.720 --> 0:19:23.000