WEBVTT - Tariff Exemptions Boost Stocks as Uncertainty Remains High 0:00:02.520 --> 0:00:13.760 Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg 0:00:13.840 --> 0:00:17.920 Surveillance Podcast. Catch us live weekdays at seven am Eastern 0:00:18.200 --> 0:00:22.000 on Apple CarPlay or Android Auto with the Bloomberg Business App. 0:00:22.360 --> 0:00:25.680 Listen on demand wherever you get your podcasts, or watch 0:00:25.760 --> 0:00:27.200 us live on YouTube. 0:00:27.600 --> 0:00:30.080 Joining us Chief, where are we economists at? 0:00:30.160 --> 0:00:35.000 EIU Constance owner joins us After a good conversation last week, 0:00:35.159 --> 0:00:37.360 it seems like three months as we last talked to you, 0:00:37.400 --> 0:00:39.080 I think it was two cups of coffee. 0:00:39.320 --> 0:00:41.959 It's I mean, that is it only Tuesday? 0:00:42.040 --> 0:00:42.240 Yeah? 0:00:42.400 --> 0:00:46.560 On a day to day basis, how do you sustain 0:00:46.720 --> 0:00:47.720 your analysis? 0:00:47.760 --> 0:00:51.440 So, as Lisa was giving her excellent rundown, I was 0:00:51.479 --> 0:00:53.880 thinking about how we spent all of yesterday looking at 0:00:53.920 --> 0:00:55.360 the pharma codes. 0:00:55.680 --> 0:00:56.840 So there's two codes. 0:00:56.880 --> 0:00:59.600 There's the codes that start with the number thirty that 0:00:59.680 --> 0:01:01.400 are all sort of the finalized goods. 0:01:01.560 --> 0:01:03.319 There's the codes that start with the. 0:01:03.320 --> 0:01:06.160 Number twenty nine, and those are all the goods that 0:01:06.319 --> 0:01:09.560 the intermediate goods that go into pharma. And of course 0:01:09.560 --> 0:01:13.800 Trump is threatening these pharma tariffs, and we're trying to 0:01:13.800 --> 0:01:16.920 get ahead of this by like really just ingesting all 0:01:16.959 --> 0:01:19.080 the codes, thinking about what the impacts would be. 0:01:19.160 --> 0:01:21.959 The bottom line is he may screw up our feed 0:01:22.160 --> 0:01:24.320 of antibiotic materials. 0:01:24.640 --> 0:01:25.800 That's what we're talking about. 0:01:26.080 --> 0:01:28.120 Yes, I mean when you put tariffs on like this 0:01:28.160 --> 0:01:30.720 and we basically embargoed China, there is not going to 0:01:30.760 --> 0:01:34.120 be any more supply of many, many goods from China. Right, 0:01:34.440 --> 0:01:37.920 we do that to pharmaceuticals. It's a very dangerous game 0:01:37.959 --> 0:01:40.199 to play in an ad hoc way. 0:01:40.360 --> 0:01:43.760 So you put all this stuff in a blender, and 0:01:43.959 --> 0:01:45.920 I don't know what goes in this blender anymore, But 0:01:46.520 --> 0:01:48.200 what does it do to your economic forecast? 0:01:48.320 --> 0:01:51.240 Do you even? I guess you have to keep so. 0:01:51.640 --> 0:01:58.200 Obviously we keep analyzing and expanding our modalities for analyzing 0:01:58.240 --> 0:02:00.720 what the weighted average tarif rate is. But what we 0:02:00.840 --> 0:02:04.360 have and this is this is almost stupidly simple. But 0:02:04.440 --> 0:02:06.960 what we have done is we've looked at the uncertainty 0:02:07.000 --> 0:02:09.760 index that Baker and Bloom put out from Stanford. Now, 0:02:10.040 --> 0:02:12.440 one of the bases of that index is actually the 0:02:12.440 --> 0:02:16.560 EIU database are written works over the last thirty years. 0:02:16.760 --> 0:02:17.760 That's one component. 0:02:17.880 --> 0:02:22.600 Another component is the change in tax code that's anticipated 0:02:22.639 --> 0:02:24.959 over the next two years. Obviously, we have the TCJA 0:02:25.080 --> 0:02:27.760 coming up that leads to a lot of uncertainty and 0:02:27.800 --> 0:02:31.760 then the dispersion of economic forecasts. And when you use 0:02:31.840 --> 0:02:35.280 this index, you can see that it is correlated with recessions. 0:02:35.560 --> 0:02:38.720 You know that those recessions weren't we didn't we were. 0:02:38.800 --> 0:02:41.960 They were called after the fact as NBER does, and 0:02:42.120 --> 0:02:45.240 probably that data ended up being revised down. So we 0:02:45.360 --> 0:02:50.160 know that this forecasts and corresponds with a reduction in capex, 0:02:50.760 --> 0:02:53.560 a reduction in consumer spending, and of course those two 0:02:53.639 --> 0:02:58.440 things together mean lower employment growth eventually declines in employment. 0:02:58.560 --> 0:03:02.280 Okay, where are you on jobs? The elasticity of all 0:03:02.320 --> 0:03:06.800 of these emotions, crisis. Whatever our listeners and viewers think, 0:03:07.240 --> 0:03:10.320 the bottom line is, I'm sorry, if I'm elected free beer. 0:03:10.360 --> 0:03:12.000 It comes back to jobs, right. 0:03:11.919 --> 0:03:16.320 Yeah, When to claims pop or other series, the constance 0:03:16.400 --> 0:03:17.720 hunter looks at yeah. 0:03:17.560 --> 0:03:21.079 And I mean, we're expecting somewhat softer jobs in the 0:03:21.280 --> 0:03:23.600 in the April report, but that's going to be a 0:03:23.600 --> 0:03:26.000 really critical factor, I think, and when the Fed can 0:03:26.040 --> 0:03:28.799 actually go ahead and move rates, right, so as long 0:03:28.840 --> 0:03:31.040 as jobs are holding in there, and of course we 0:03:31.120 --> 0:03:35.680 know it's at best a coincidence indicator, probably a lagging 0:03:35.680 --> 0:03:38.800 indicator in many instances, but they are still going to 0:03:39.200 --> 0:03:41.240 wait to see some weakness. So we're going to look 0:03:41.240 --> 0:03:43.360 at things like ours worked. We're going to look at 0:03:43.400 --> 0:03:46.720 the diffusion index. We're going to look at the composition 0:03:46.800 --> 0:03:48.960 of what types of jobs are being created, because state 0:03:49.000 --> 0:03:51.040 and local governments are probably going to pull back on 0:03:51.080 --> 0:03:53.320 some of the hiring they've done. They did made up 0:03:53.480 --> 0:03:56.480 makeup hiring over the last four years since the pandemic 0:03:56.480 --> 0:03:59.480 because they were under hiring in all the years following 0:03:59.520 --> 0:04:00.920 the globalinantle crisis. 0:04:02.040 --> 0:04:04.120 Do you have a recession in your forecast? 0:04:04.160 --> 0:04:05.840 We do have a recession in our forecast. 0:04:05.880 --> 0:04:08.000 And how deep it is not so. 0:04:08.000 --> 0:04:11.200 It is it is concentrated in the second and third quarters. 0:04:11.760 --> 0:04:13.520 We do think the Fed ax. We think the FED 0:04:13.560 --> 0:04:17.320 goes four times this year. But it really just depends 0:04:17.360 --> 0:04:19.960 on if we can dampen down some of this uncertainty, 0:04:20.320 --> 0:04:22.560 if they could, if they could come out and be 0:04:22.640 --> 0:04:24.840 a little more clear in the way they. 0:04:24.760 --> 0:04:32.000 Can economist, I mean, whatever anybody's political persuasions, Paul am 0:04:32.000 --> 0:04:34.080 I right, we're hanging headline to headline. 0:04:34.440 --> 0:04:37.920 Yes, nobody in companies can't plan, nobody does capex in 0:04:37.960 --> 0:04:38.560 this environment. 0:04:38.640 --> 0:04:41.840 Okay, Lisa to cut to the chase. China said we 0:04:41.880 --> 0:04:45.400 want Seattle. Boeing does a ton of work with Cathay 0:04:45.480 --> 0:04:48.599 Pacific in the rest and now they're saying we don't 0:04:48.640 --> 0:04:51.920 even want the parts from Bowing. And I keep getting 0:04:51.920 --> 0:04:55.240 notes from smart people saying it's a whole supply chain thing. 0:04:55.360 --> 0:04:58.320 Yeah, and the supply chain is so integrated across borders 0:04:58.360 --> 0:04:59.880 as well, right, I mean things. 0:05:00.360 --> 0:05:03.840 We can't but we can't do manufacturing your shop ei 0:05:04.000 --> 0:05:07.800 U owns saying analysis, what do you look at? 0:05:08.040 --> 0:05:10.400 So we're looking at all the intermediate goods, right, So 0:05:10.400 --> 0:05:13.039 if you think about even manufacturing in the US, even 0:05:13.040 --> 0:05:17.440 the manufacturing we do here takes imported parts and puts 0:05:17.480 --> 0:05:19.359 that into the final goods. 0:05:19.600 --> 0:05:19.800 Right. 0:05:19.880 --> 0:05:23.120 So this is this is like the policies of Juan 0:05:23.200 --> 0:05:27.120 Peron in Argentina in nineteen forty five when he said, well, 0:05:27.279 --> 0:05:29.560 we're just going to make everything here in Argentina, Like 0:05:29.640 --> 0:05:32.160 if we keep going down this road, it does not end. 0:05:32.200 --> 0:05:34.960 Well, that's the first time I've heard that. That's brilliant, man. 0:05:35.040 --> 0:05:38.120 I saw Anne Marie in Buenos airesis last night. Yeah, 0:05:38.240 --> 0:05:40.120 she had the red ball main thing guy, and I 0:05:40.120 --> 0:05:42.479 think she looked like a Vina Yep. Yeah, you know, 0:05:42.520 --> 0:05:47.040 I was looking at it's it's a Vina and she's 0:05:47.040 --> 0:05:47.400 a pro. 0:05:47.440 --> 0:05:48.280 She's very Madonna. 0:05:48.680 --> 0:05:50.760 What do we do here with our labor market? 0:05:50.760 --> 0:05:50.920 Here? 0:05:51.160 --> 0:05:54.440 Do you fear that this were essentially a fully employed 0:05:54.480 --> 0:05:57.080 labor market with low four percent unemployment? 0:05:57.240 --> 0:05:58.640 Where do you think that goes? Oh? 0:05:58.680 --> 0:05:59.960 I think it has to go higher. 0:06:00.240 --> 0:06:04.000 And we have a pretty I would say tempered forecast 0:06:04.120 --> 0:06:06.440 for the end of this year. If I were going 0:06:06.440 --> 0:06:08.240 to guess, the risk is to the downside, right, So 0:06:08.279 --> 0:06:11.120 we have it going up to four point six, I 0:06:11.160 --> 0:06:13.520 think four point eight, and then you get into when 0:06:13.600 --> 0:06:14.880 does it become nonlinear? 0:06:15.040 --> 0:06:15.200 Right? 0:06:15.240 --> 0:06:17.680 When does it go from four point eight up to 0:06:18.160 --> 0:06:19.000 five point five? 0:06:19.480 --> 0:06:19.720 Right? 0:06:19.800 --> 0:06:22.080 And how quickly does that move happen? 0:06:22.120 --> 0:06:24.960 Because that's what happens if you really get into a 0:06:25.040 --> 0:06:25.800 vicious circle. 0:06:25.920 --> 0:06:27.720 You're the first one I want to finish up with this. 0:06:27.839 --> 0:06:31.560 You're the first one on air to bring up what 0:06:31.680 --> 0:06:34.080 I'm focused on. And folks, this goes back to my 0:06:34.240 --> 0:06:37.960 major in college and all that you know a long 0:06:38.000 --> 0:06:41.800 time ago, and that is the pharmaceuticals. And I think 0:06:41.839 --> 0:06:44.000 people are like, oh, one, I can't spell it and 0:06:44.040 --> 0:06:46.920 it's too complicated, But the answer. 0:06:46.800 --> 0:06:49.320 Is all of those pills we give our. 0:06:49.240 --> 0:06:53.400 Family members, particularly our kids when they're sick, have materials 0:06:53.440 --> 0:06:56.320 from China. That's an accurate statement, right. 0:06:56.480 --> 0:06:58.800 And think of all the people we have an aging population. 0:06:58.960 --> 0:07:01.599 Think of know a person over the age of sixty 0:07:01.640 --> 0:07:03.440 that doesn't take at least one prescription a day. 0:07:03.880 --> 0:07:04.240 Very few. 0:07:04.520 --> 0:07:09.159 I've never confronted that. I mean, I mean, if I 0:07:09.200 --> 0:07:10.440 look at this concert, I. 0:07:10.360 --> 0:07:13.200 Put myself, I'm not over sixty, but I still I'm 0:07:13.200 --> 0:07:15.240 at the age where I'm taking one medicine a day 0:07:15.280 --> 0:07:16.800 at least you and Michael Backer. 0:07:16.840 --> 0:07:20.840 But the bottom line constants Hunter is and I'm suggesting 0:07:20.880 --> 0:07:26.240 here maybe exaggerating this pharmaceutical debate, it's way more than 0:07:26.320 --> 0:07:29.400 just another press release or overlaw office statements. 0:07:30.560 --> 0:07:36.200 Absolutely, it's really really significant. And when you combine that 0:07:36.280 --> 0:07:39.160 with the fact that we withdrew from who that we're 0:07:39.560 --> 0:07:45.320 gutting HH staff, it's really has significant ramifications. 0:07:45.520 --> 0:07:46.560 Remember Robert Gordon. 0:07:46.880 --> 0:07:50.160 One of the things Rise and Fall of American growth, 0:07:50.440 --> 0:07:54.080 he cites five things that contributed to productivity of the 0:07:54.160 --> 0:07:57.600 early nineteen hundreds of mid nineteen hundreds, and Nacillan is 0:07:57.640 --> 0:08:01.000 one of them. Why Because medicine help people get sick. 0:08:01.120 --> 0:08:04.119 I mean, get sick, get recover from being sick faster. 0:08:04.640 --> 0:08:07.680 It means fewer people die, and that improves a prop. 0:08:07.960 --> 0:08:11.400 Back seeing which I remember the pin drops. Yep, consence, 0:08:11.400 --> 0:08:13.560 Thank you so much. Constance Hunter with EIU Here. 0:08:18.120 --> 0:08:21.680 You're listening to the Bloomberg Surveillance Podcast. Catch us live 0:08:21.760 --> 0:08:24.920 weekday afternoons from seven to ten am Eastern. Listen on 0:08:25.000 --> 0:08:28.640 Applecarplay and Android Otto with the Bloomberg Business app, or 0:08:28.800 --> 0:08:30.520 watch us live on YouTube. 0:08:30.760 --> 0:08:33.600 It's a week A banker names JP Morgan over in 0:08:33.640 --> 0:08:37.720 the investment side, Golden sacks JP Morgan Equity Trading ginormous 0:08:38.200 --> 0:08:41.760 City Group today two hundred and twenty nine thousand employees. 0:08:42.480 --> 0:08:43.880 How about Paul published on the. 0:08:43.800 --> 0:08:48.479 Bloomberg A bank with nine hundred and fifty one employees. 0:08:49.280 --> 0:08:51.040 Towns River, New Jersey, Jersey Shore. 0:08:51.440 --> 0:08:54.959 There we are, Jersey Shore joining us now from Ocean 0:08:55.000 --> 0:08:57.520 First Financial. I'm loving that we're doing this. Nobody told 0:08:57.559 --> 0:08:58.920 me that we're doing this. 0:08:58.920 --> 0:08:59.480 This is great. 0:08:59.559 --> 0:09:04.680 Christopher joins us from Ocean First Financial. It's back I 0:09:04.679 --> 0:09:06.520 guess to nineteen oh two, is point pleasant? 0:09:06.640 --> 0:09:07.079 That's right? 0:09:07.200 --> 0:09:10.520 Yeah, that's right, Okay, yeah, this is great. We are 0:09:10.640 --> 0:09:15.520 so mental about talking about these ginormous banks. Just simply 0:09:15.880 --> 0:09:19.160 in this modern age, how do you compete with super 0:09:19.200 --> 0:09:22.160 regionals in the ginormous. 0:09:21.559 --> 0:09:23.640 Well, you know, it all comes down to your relationship 0:09:23.679 --> 0:09:26.079 with your customers. So you know, we were founded in 0:09:26.160 --> 0:09:28.520 nineteen oh two is the Point Pleasant Building and Loan 0:09:28.559 --> 0:09:31.160 Association of Point Pleasant Beach, so at the Bailey Building 0:09:31.200 --> 0:09:34.600 and Loan right over the year's Commercial Bank Diversified. We 0:09:34.679 --> 0:09:38.679 operate throughout the Northeast and what we've found is customers 0:09:38.720 --> 0:09:42.120 really value that ability to have a conversation with a 0:09:42.120 --> 0:09:44.200 bank or a trusted partner, someone who's going to deliver. 0:09:44.640 --> 0:09:46.800 And you're going to compete on that, on doing what 0:09:46.840 --> 0:09:49.280 you promised you're going to do, doing it quickly and effectively. 0:09:49.360 --> 0:09:51.640 And if you do that, you're going to do just fine. 0:09:52.000 --> 0:09:55.280 Chris, what's a typical corporate customer for your bank? What 0:09:55.320 --> 0:09:57.640 are they like and what are they telling you these days? 0:09:57.920 --> 0:10:00.160 So you know, most of our clients are small of 0:10:00.160 --> 0:10:03.600 family owned businesses. They range, We cover a geography between 0:10:03.679 --> 0:10:08.920 DC and Boston. All sorts could be manufacturing, logistics services companies. 0:10:09.480 --> 0:10:11.599 And what they're telling us today is certainly there's a 0:10:11.679 --> 0:10:15.480 level of apprehension given all the volatility, but they're not 0:10:15.640 --> 0:10:18.720 overly concerned. You know, many of these folks took a 0:10:18.840 --> 0:10:22.640 master class in supply chain during the pandemic, so they've 0:10:22.640 --> 0:10:26.040 got you know, secondary and tertiary suppliers, they've got different 0:10:26.040 --> 0:10:30.160 warehouse capabilities. They are concerned, and we're concerned about how 0:10:30.200 --> 0:10:33.800 long the volatility continues, but generally they're weathering it pretty well. 0:10:34.200 --> 0:10:36.400 I mean, that's something that Tom has talked about a lot, 0:10:36.440 --> 0:10:40.760 which is corporations adapt and maybe that's kind of what 0:10:40.800 --> 0:10:46.200 you're seeing here. Are they putting projects on hold? 0:10:46.360 --> 0:10:47.080 Are they waiting? 0:10:47.160 --> 0:10:49.400 We've heard that from some of the larger companies out 0:10:49.440 --> 0:10:51.319 there that the larger banks. We've heard from even more 0:10:51.320 --> 0:10:53.920 Morgan standing seeing other clients are just saying just let. 0:10:53.880 --> 0:10:55.960 Us wait a little bit. Are you seeing that at 0:10:55.960 --> 0:10:56.760 the local level. 0:10:56.640 --> 0:10:59.000 Yeah, Paul, some are so. I'll use an example. We 0:10:59.080 --> 0:11:02.360 have a plastic manufacturer that was in the process of 0:11:02.360 --> 0:11:05.600 doing a significant expansion, buying some equipment, some of which 0:11:05.679 --> 0:11:08.320 was from Germany, someone was from China. The cost of 0:11:08.360 --> 0:11:10.840 the tariffs on that equipment would have raised the cost 0:11:10.880 --> 0:11:12.400 of their project. I think in the range of six 0:11:12.480 --> 0:11:15.320 hundred thousand dollars. They're likely going to continue with the 0:11:15.320 --> 0:11:17.880 project at some point, but it doesn't make sense to 0:11:18.000 --> 0:11:20.360 just forge forward and pay those tariffs. They're going to 0:11:20.400 --> 0:11:22.679 wait and see. And if this is a short term thing, 0:11:22.720 --> 0:11:24.400 I don't think it's going to upset much. But the 0:11:24.480 --> 0:11:26.720 longer this goes on, the concern builds. 0:11:27.080 --> 0:11:30.000 I'm fascinated by the day to day grind of a 0:11:30.200 --> 0:11:33.800 very small bank versus the major. Now on your website, 0:11:33.840 --> 0:11:38.079 you hired Zachary Hauser in northern Virginia. He's a Minnesota 0:11:38.160 --> 0:11:40.960 Vikings fan, which is I don't get. 0:11:40.840 --> 0:11:43.199 It, but there it is. 0:11:43.679 --> 0:11:47.880 Why would Zachary Hauser leave Bank of America, Wells Fargo, 0:11:48.280 --> 0:11:51.880 and the iconic Buffalo M and T Bank to join 0:11:52.040 --> 0:11:53.920 an itty bitty bank in Times River. 0:11:54.040 --> 0:11:57.520 Yeah. So, Look, we built a following, and I think 0:11:57.559 --> 0:12:01.280 professionals from around our industry understand that the number one 0:12:01.320 --> 0:12:03.560 thing that's important to them is their ability to serve 0:12:03.600 --> 0:12:06.640 their clients. And although we're on the smaller side, you know, 0:12:06.679 --> 0:12:09.040 it's just about fourteen billion dollars of assets, we're a 0:12:09.080 --> 0:12:13.280 top one hundred US bank. That's both wonderful and terrible. Right, 0:12:13.280 --> 0:12:15.600 we should have more banks in this country, but that 0:12:15.679 --> 0:12:19.120 gives us the scale to be able to support very 0:12:19.240 --> 0:12:20.119 large businesses. 0:12:20.480 --> 0:12:22.439 I mean, just this just came up. Paul just sent 0:12:22.480 --> 0:12:23.120 me an email. 0:12:23.240 --> 0:12:26.680 Paul, I think a refine through ocean first shot. I 0:12:26.720 --> 0:12:30.360 think it says it, Sure, you can take your vest, but. 0:12:30.440 --> 0:12:33.000 Down there exactly, you know, check it out. We'll find 0:12:33.000 --> 0:12:36.400 these guys. So, Chris, you mentioned you know, maybe we 0:12:36.480 --> 0:12:37.240 need more banks. 0:12:37.440 --> 0:12:39.280 I think what a lot of people came to understand 0:12:39.320 --> 0:12:41.680 when we saw the regional bank crisis of several years. 0:12:41.520 --> 0:12:43.600 Ago with SVB is Boyd. 0:12:43.720 --> 0:12:47.000 We have five thousand regional banks around the country. No 0:12:47.160 --> 0:12:51.319 other country has that. Do we consolidate the regional bank business? 0:12:51.320 --> 0:12:52.000 How do you think about that? 0:12:52.040 --> 0:12:54.880 Well, certainly there's a need for efficiencies and consolidation. I 0:12:54.880 --> 0:12:56.800 think we'll see some of that. But on the other hand, 0:12:57.000 --> 0:12:59.680 you know, we provide a niche regional banks in general, 0:12:59.760 --> 0:13:02.400 where we're the main street lenders. So when you think 0:13:02.440 --> 0:13:06.680 about these family owned, privately held businesses, the majority of 0:13:06.720 --> 0:13:09.120 credit to that sector comes from regional banks like US 0:13:09.160 --> 0:13:11.959 between ten billion and one hundred billion dollars in deposits. 0:13:12.320 --> 0:13:15.000 If you think back to COVID, we were the industry 0:13:15.040 --> 0:13:17.680 that jumped in and handled the PPP out of the gate. 0:13:18.160 --> 0:13:20.440 We were faster than the big banks. We made early 0:13:20.480 --> 0:13:22.800 commitments to doing it, and in our case, you know, 0:13:22.840 --> 0:13:24.880 we were out. We're one of the first lenders in 0:13:24.920 --> 0:13:28.280 the business getting dollars on the street to our clients. 0:13:28.280 --> 0:13:31.240 So we do need that kind of layer of banks 0:13:31.280 --> 0:13:33.080 that are much more responsive to their customers. 0:13:33.080 --> 0:13:34.760 Do you read Jamie Diamond's annual letter? 0:13:34.880 --> 0:13:35.439 Absolutely? 0:13:36.200 --> 0:13:38.680 What do you take from mister Diamond's letter that you 0:13:38.760 --> 0:13:41.600 can apply to nine hundred and fifty one employees out 0:13:41.600 --> 0:13:42.320 of Thymes River. 0:13:42.520 --> 0:13:44.600 There's a lot of commonality. So when you think about 0:13:44.640 --> 0:13:47.800 the principles that Jamie runs by and we believe the 0:13:47.840 --> 0:13:49.880 same thing. You want to have a fortress balance sheet. 0:13:49.920 --> 0:13:52.160 You know, look, we don't want a recession, but we're 0:13:52.200 --> 0:13:54.319 prepared for a recession. If you're running a bank, you 0:13:54.440 --> 0:13:57.480 better expect that one could happen. I think the discipline 0:13:57.480 --> 0:14:00.400 about doing the right thing by your customers, by your employees. 0:14:00.720 --> 0:14:03.640 Probably my favorite story is the outsourcing of their security 0:14:04.520 --> 0:14:07.320 and then the reinsourcing of their security, because at the 0:14:07.400 --> 0:14:08.760 end of the day, you want to make sure that 0:14:08.760 --> 0:14:10.439 your people are connected to the customers. 0:14:11.480 --> 0:14:14.280 Private equity, I mean private credit. How is that is 0:14:14.280 --> 0:14:14.559 that a. 0:14:14.480 --> 0:14:17.000 Competitor to you in your market, because we've heard about 0:14:17.040 --> 0:14:19.440 it that they're competing with the JP Morgans of the 0:14:19.480 --> 0:14:23.440 world and taking business from them or maybe substituting for them. 0:14:23.480 --> 0:14:25.120 Are you seeing in the smaller markets? 0:14:25.200 --> 0:14:28.160 Absolutely, private credit as a competitor, But interestingly they're also 0:14:28.200 --> 0:14:31.000 becoming a big client of ours. So in many cases 0:14:31.640 --> 0:14:34.200 we are doing more and more business with private credit 0:14:34.640 --> 0:14:38.800 where we're lending along with them, coming into join credit 0:14:38.800 --> 0:14:41.440 facilities or lending to them either on a deal by 0:14:41.480 --> 0:14:43.880 deal basis and note on note finance or lending to 0:14:43.920 --> 0:14:46.760 the fund itself. So I think it's the fastest growth 0:14:46.760 --> 0:14:47.400 area for US. 0:14:48.240 --> 0:14:51.000 I gotta ask, I mean, are you I mean, I 0:14:51.000 --> 0:14:53.120 don't mean to be rude, but I'm going to be rude. 0:14:53.320 --> 0:14:55.920 Are you guys helping out Jon bon Jovi with a 0:14:56.040 --> 0:14:56.720 soul kitchen? 0:14:57.320 --> 0:14:59.440 Times Are of New Jersey, as a matter of fact, 0:15:00.040 --> 0:15:02.880 did a joint project with jompon Jovi in the Soul kitchen. 0:15:02.920 --> 0:15:05.000 We built out a new facility a couple of years back. 0:15:05.120 --> 0:15:08.680 We were one of four donors that helped make that possible. 0:15:08.720 --> 0:15:11.760 The Ocean First Foundation is made over fifty million dollars 0:15:11.800 --> 0:15:13.880 worth of grants in our communities and that was one 0:15:13.920 --> 0:15:15.480 of our special grants a number of years ago. 0:15:15.520 --> 0:15:18.280 Did he sing a concerts for your mister Ward meeting. 0:15:18.320 --> 0:15:20.080 We didn't get a concert, but he was a very 0:15:20.120 --> 0:15:20.760 gracious man. 0:15:20.920 --> 0:15:23.960 So Chris Mayor, thank you so much. Greatly appreciate it. 0:15:23.960 --> 0:15:26.040 With the Ocean First team. 0:15:26.360 --> 0:15:30.280 This is the Bloomberg Surveillance Podcast. Listen live each weekday 0:15:30.320 --> 0:15:33.720 starting at seven am Eastern on Applecarplay and Android Auto 0:15:33.760 --> 0:15:36.720 with the Bloomberg Business app. You can also listen live 0:15:36.800 --> 0:15:40.360 on Amazon Alexa from our flagship New York station, just 0:15:40.400 --> 0:15:44.960 say Alexa Play. Bloomberg eleven thirty said this before. 0:15:45.120 --> 0:15:47.760 That there's like four hundred and twenty two books out 0:15:47.800 --> 0:15:52.080 on asset allocation and diversification. In the single read for 0:15:52.200 --> 0:15:56.160 adults both Global Wall Street and people engaged in the 0:15:56.160 --> 0:15:59.400 debate is from Sebastian Page. His day job as a 0:15:59.440 --> 0:16:01.960 tea rope. His night job is to sit in the 0:16:02.000 --> 0:16:04.600 Orioles dugout. He writes it, I don't like an iPad 0:16:04.680 --> 0:16:09.720 or whatever, and we celebrate today. His new book is 0:16:10.080 --> 0:16:12.280 that is out and it's a shift. It's called The 0:16:12.360 --> 0:16:16.840 Psychology of Leadership. Sebastian Page joins us right now come on, 0:16:16.920 --> 0:16:18.840 you're doing a Malcolm Gladwell thing here. 0:16:19.160 --> 0:16:21.280 Why are we doing this? Why are we doing this? 0:16:21.400 --> 0:16:24.800 Psychology of leadership? Did cal rip Can put you up 0:16:24.840 --> 0:16:25.120 to this? 0:16:26.640 --> 0:16:30.320 Tom, that's a great compliment. I think Malcolm Gladwell is 0:16:30.360 --> 0:16:33.400 a great writer. And by the way, Tom, I don't 0:16:33.400 --> 0:16:36.680 write on iPads. That's pretty hard if you're a writer. 0:16:37.520 --> 0:16:40.160 I'm super excited the book is coming out today. I'm 0:16:40.200 --> 0:16:44.800 basically giving you an exclusive in the broadcast media, and 0:16:44.840 --> 0:16:48.280 there's a lot in there for investors, Tom, in particular 0:16:48.600 --> 0:16:54.120 sports psychology, which I find absolutely fascinating. You have to 0:16:54.200 --> 0:16:58.960 learn about losing, you know, Federer said in a statement 0:16:59.080 --> 0:17:03.720 to students and commencement. He said, whatever game you play 0:17:03.760 --> 0:17:06.280 in life, you're going to lose. And so that applies 0:17:06.320 --> 0:17:10.720 to the psychology of leadership of investing as well. And 0:17:10.960 --> 0:17:13.240 you know what we do every day, Tom, in financial 0:17:13.280 --> 0:17:16.840 market differentiate between luck and skills. That's important too. 0:17:17.160 --> 0:17:18.480 You've got a great idea here. 0:17:18.640 --> 0:17:20.680 I saw in an old movie David Ogilvy, one of 0:17:20.720 --> 0:17:22.000 the giants of advertising. 0:17:22.359 --> 0:17:25.280 There's no statue to committees in parks. You go over 0:17:25.280 --> 0:17:28.919 to Central Park and there's no statue. Paul Sweeney to 0:17:29.000 --> 0:17:29.720 a committee. 0:17:29.720 --> 0:17:33.199 You've got a chapter in there on rethinking team leadership. 0:17:33.480 --> 0:17:35.200 Are we two team leadership now? 0:17:35.280 --> 0:17:39.400 Sebastian page, you know, and psychology, there's a lot of research. 0:17:39.520 --> 0:17:43.360 It's become very popular to talk about introverts and extroverts, 0:17:43.600 --> 0:17:46.920 and so in an investment committee you can see those dynamics. 0:17:47.520 --> 0:17:51.960 The research is fascinating because it shows that when people 0:17:52.280 --> 0:17:55.879 take time to think about their decision on their own 0:17:55.960 --> 0:18:00.720 and do independent thinking without the influence of others in 0:18:00.800 --> 0:18:04.840 the room, and then bring those decisions to the table 0:18:05.040 --> 0:18:10.439 to debate them, the outcome on decision making is generally better. 0:18:11.000 --> 0:18:14.879 So I find that fascinating. And in our assocation committee, 0:18:14.880 --> 0:18:17.359 what we do is before the meeting and we have 0:18:17.440 --> 0:18:22.000 one tomorrow, everyone submits their thinking, their views on tactical 0:18:22.040 --> 0:18:26.960 ass allocation independently and then we collate them and discuss 0:18:27.040 --> 0:18:29.399 them as a committee. This way you remove things like 0:18:29.480 --> 0:18:33.439 group think. Tom But you know, we all say we 0:18:33.480 --> 0:18:38.040 hate meetings. Meetings are essential. Collaboration is essential. At tiro Price. 0:18:38.080 --> 0:18:42.560 Our collaboration style is I would say different. We see 0:18:42.600 --> 0:18:45.640 the exchange of ideas as a source of alpha, so 0:18:45.800 --> 0:18:47.160 it's super important for us. 0:18:47.240 --> 0:18:50.080 I would point out the tiro Price invented this folks 0:18:50.119 --> 0:18:52.959 a few years ago. I mean, I mean they are 0:18:53.080 --> 0:18:55.960 kind of going to buy side Paul for fractions. 0:18:55.560 --> 0:19:00.280 Debate Sebastian, how do you think what's the best way 0:19:00.320 --> 0:19:03.280 to learn leadership skills? I just came from a board 0:19:03.280 --> 0:19:04.960 meeting at the Business School of Duke last weekend and 0:19:05.000 --> 0:19:07.359 that was a big, big topic at the board level 0:19:07.520 --> 0:19:11.280 talking about leadership and how you teach that, how do 0:19:11.280 --> 0:19:12.560 you think that's best instilled. 0:19:13.800 --> 0:19:19.040 So in the Psychology of leadership, I talk about several 0:19:19.040 --> 0:19:22.600 ways in which what we think about leadership is wrong. 0:19:23.240 --> 0:19:25.280 For example, you think a leader needs to be a 0:19:25.320 --> 0:19:29.640 great communicator. Well, the higher you go up the organization, 0:19:30.359 --> 0:19:33.320 the more you need to listen and be a good listener. 0:19:33.400 --> 0:19:36.359 We think leaders need to be decisive. A lot of 0:19:36.520 --> 0:19:40.880 really smart, effective leaders I've known knew how to look 0:19:40.880 --> 0:19:46.080 at decisions where they needed strategic patients. That's often counterintuitive 0:19:46.080 --> 0:19:49.160 because we all want to be super decisive in investment 0:19:49.240 --> 0:19:52.840