Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. This is Bloomberg business
Speaker 1: Week Inside from the reporters and editors who bring you
Speaker 1: America's most trusted business magazine, plus global business, finance and
Speaker 1: tech news. The Bloomberg Business Week Podcast with Carol Messer
Speaker 1: and Tim Stenebeck from Bloomberg Radio.
Speaker 2: Interesting story right through about history being on the side
Speaker 2: of stock and bond balls as FED officials kicked off
Speaker 2: that two day policy meeting. Today, equities and bonds have
Speaker 2: posted weekly gains amid six of the eight FED meetings
Speaker 2: over the past year. This according to an analysis team
Speaker 2: by City Group.
Speaker 3: And yet the devil always in the details with the
Speaker 3: key points to focus on in tomorrow's FED decision. Back
Speaker 3: with us, we have Steven Skanke, chief economic advisor at
Speaker 3: the Wealth Advisor kill Point. Steve also a former US
Speaker 3: Treasury in White House National Security Council staff member serving
Speaker 3: during the Nixon, Ford, Carter, and Reagan administration. Steve joins
Speaker 3: us from Washington, DC. Also here in the studio Bloomberg
Speaker 3: Economics US economist Stuart Paul Stewart. Good to have you
Speaker 3: here in the studio with us. I do want to
Speaker 3: start with you because the FED is not expected to
Speaker 3: make any move tomorrow, but we do are a lot
Speaker 3: of investors that I should say expect to hear signals of
Speaker 3: perhaps a move come September. How do they thread that
Speaker 3: needle where they say, Okay, we're not going to do
Speaker 3: anything in July. Maybe we're not gonna do anything. You know,
Speaker 3: we're not gonna do anything until September. How do you
Speaker 3: do that?
Speaker 4: There are a few different ways that they could sort
Speaker 4: of gently modify the FMC statement, the formal statement that
Speaker 4: comes out, For example, in the opening paragraph, there's a
Speaker 4: line in recent months there has been modest for the
Speaker 4: progress there's a committee two percent inflation target. Just stripping
Speaker 4: out the word modest, just there's been further progress would
Speaker 4: be one of those little gentle.
Speaker 2: Signs we said the devil was in the details. One word,
Speaker 2: that's right.
Speaker 4: They could be a bit more bold and say things
Speaker 4: that if the data evolves as the committee expects, it
Speaker 4: will soon be appropriate to begin cutting rates. That would
Speaker 4: be a much bolder, clearer call for illuming rate cut
Speaker 4: in September.
Speaker 2: All right, I want to bring in Steve and I'm
Speaker 2: just pulling it up on the Bloomberg. So September eighteenth
Speaker 2: is a long way off I think about, you know, Steve,
Speaker 2: We've made progress, a lot of progress in the past year.
Speaker 2: When it comes to inflation, it seems to be settling
Speaker 2: down consistently. We continue to see US economic growth. That's
Speaker 2: a good thing. We got some data today consumer confidence
Speaker 2: rising on an improved outlook for the economy, job openings
Speaker 2: beating forecast. It's this delicate balance. If you were still
Speaker 2: advising the White House, what would you be telling them
Speaker 2: about tomorrow's FED decision?
Speaker 5: Whether they just need to be patient and not seem
Speaker 5: anxious and not jump the gun on it. The Fed
Speaker 5: is navigating this very carefully and really very doubtfully. You know,
Speaker 5: a week or so ago, the FED Chair, the New
Speaker 5: York Fed Bank President, we're all talking about the you know,
Speaker 5: the concern about what was happening in labor markets, and
Speaker 5: are really signaling they're eager to start cutting rates, but
Speaker 5: they really need to see good inflation numbers and then
Speaker 5: lo and behold, they get a reprieve because we get
Speaker 5: better than disinflation numbers with the PCE flator down at
Speaker 5: two and a half percent for the last year, and
Speaker 5: then better expected than expected second quarter economic growth at
Speaker 5: two point eight percent annualized, even though when you dig
Speaker 5: into it it's not quite as good as it looks,
Speaker 5: but kind of is slowing, but not in the tank.
Speaker 5: Inflation is coming down, and even the hard to squeeze
Speaker 5: housing or shelter component of the CPI and PCE to
Speaker 5: flator has started to give up. But you know, it
Speaker 5: had been trending at six and a half to seven
Speaker 5: percent inflation and now it's at four.
Speaker 2: So, Steve, would you be telling, if you were advising
Speaker 2: the White House right now, say hey, listen, guys, go
Speaker 2: take that vacation. We got plenty of time. Just cut
Speaker 2: to the chases. Would you say that?
Speaker 5: I certainly would say that because anything that they could say, Carol,
Speaker 5: is not going to be helpful to the FED doing
Speaker 5: what it really wants to do, and that is cutting
Speaker 5: rates in September. Now they can applaud positive economic growth,
Speaker 5: they can applaud in plation coming down. But I would
Speaker 5: tell the folks in the White House to say absolutely
Speaker 5: nothing about the FED meeting and what the FED is doing.
Speaker 3: They're independent, of course, Carol, Remember the Fed. The FED
Speaker 3: is politically in the parent You've heard Stuart. Economic data
Speaker 3: that you have an eye on at Bloomberry Economics as
Speaker 3: US economist, Where are you starting to see concerns? Do
Speaker 3: you think the Fed is acting too slowly on these concerns.
Speaker 4: I don't, So you might want to rewind the clock
Speaker 4: a little bit and think back to Q four of
Speaker 4: twenty twenty three when the inflation data were so good
Speaker 4: and everybody was expecting a rate cut to come in March.
Speaker 4: And so things can change pretty quickly.
Speaker 2: We have had a little sibling and you psych them
Speaker 2: and you pull something away or like, you know, the
Speaker 2: right psych that happening.
Speaker 6: Speaking from experience, Carol, Yeah, there's a lot of siblings.
Speaker 1: Yeah.
Speaker 4: The data in the economic landscape can change relatively quickly,
Speaker 4: and where we've seen the most change so far has
Speaker 4: been in the loosening of the labor market. It was
Speaker 4: just in the June Summary of Economic Projections that the
Speaker 4: FED is expecting to end the year with four point
Speaker 4: one percent unemployment and we're already there, and I think
Speaker 4: that odds are favoring us triggering the PSALM rule that
Speaker 4: real time recession indicator in August.
Speaker 2: Remind us what that rule is.
Speaker 4: So if the three month moving average of the unemployment
Speaker 4: rate exceeds the twelve month minimum by more than fifty
Speaker 4: bases points by half a percentage point, it's typically a
Speaker 4: good indicator that a recession has already begun, that you're
Speaker 4: in the early innings of a recession. So we're expecting,
Speaker 4: not only are we expecting to not end the year
Speaker 4: at four point one percent unemployment, which is where we
Speaker 4: are and which is where the FED expects to end
Speaker 4: the year, we think that we're going to trigger or
Speaker 4: that real time recession indicator before the September meeting, which
Speaker 4: would warrant that cut in September.
Speaker 6: Is there a chance it's triggered on Friday?
Speaker 4: Very low probability that is triggered on Friday. We basically
Speaker 4: need to get a move to four point two and
Speaker 4: a half, right, So four point twenty five percent unemployment,
Speaker 4: so a bit out of range. Consensus is expecting four
Speaker 4: point one percent unemployment rate. We think that it's more
Speaker 4: likely going to be the case that it's going to
Speaker 4: be triggered in the August job report, which comes just
Speaker 4: a few days before the September meeting.
Speaker 2: Well, I kept saying, I kept thinking, you know, we
Speaker 2: had that inverted yield curve for so long. I mean,
Speaker 2: do we get off Scott's free you know that we
Speaker 2: don't ultimately get a recession. I mean, Steve Skanke, if
Speaker 2: we get a recession, is it touch and go because
Speaker 2: we have enough growth or could it be something more
Speaker 2: dramatic and problematic.
Speaker 5: Well, the thing about it, Carol, that's a very good
Speaker 5: question is is that these things are never linear. It's
Speaker 5: not that it just sort of eases into recession. Something
Speaker 5: triggers that and pushes it, And most likely it would
Speaker 5: be mild, just given everything else that's going on in
Speaker 5: the economy. But it isn't necessarily a mild recession. And
Speaker 5: so the Fed treads very carefully. And as Stewart said,
Speaker 5: this so rule. It's a statistical observation. It's not a
Speaker 5: syllogistic argument as to why it happens. But it has
Speaker 5: a good enough statistical basis that we really need to
Speaker 5: be careful about that and watch for it. The other
Speaker 5: thing is, and I agree with Stewart, it's very unlikely
Speaker 5: that we would see unemployment trigger up to what would
Speaker 5: be needed to trigger the Son rule. But the household
Speaker 5: survey has been so quirky since since COVID and the
Speaker 5: shutdown of the economy that and it digresses so much
Speaker 5: from the employer survey that we could actually end up
Speaker 5: with something. It pushes unemployment to four point two or
Speaker 5: four point two and a half. Yeah, and then we've
Speaker 5: we've got this phenomenon of well what does it mean?
Speaker 5: And of course markets would go crazy. Will they try
Speaker 5: to figure that out?
Speaker 2: Got it?
Speaker 6: Stuart?
Speaker 3: Ten seconds, One hundred and seventy five thousand is the
Speaker 3: number that economists are expecting with the jobs report on Friday.
Speaker 6: Does it come in above or below that?
Speaker 4: We're a smidge above, but we see the downside risk
Speaker 4: to one seventy five. The effects of Hurricane Beryl are
Speaker 4: likely showing up in the data. We've already seen it
Speaker 4: effect the unemployment insurance claims data just two weeks ago
Speaker 4: in Texas.
Speaker 3: All right, there we go, so ten seconds, he did it.
Speaker 2: Love when people listen. Thank you so much, Jeeves Skanky,
Speaker 2: chief economic advisor at keel Point, and of course our
Speaker 2: own Steward Paul Blueberg Economics US economists.
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Speaker 7: And much.
Speaker 2: President Kamala Harris is kicking off a push to compete
Speaker 2: against the Republican Donald Trump in a wider swath of
Speaker 2: battleground states with a rally today in Atlanta. Harris's event
Speaker 2: in George's largest city is her first major effort to
Speaker 2: put a larger group of states back into place since
Speaker 2: launching her campaign back on July twenty first.
Speaker 3: Meantime, the presidential race is on the money race that
Speaker 3: is among our most read on the Bloomberg terminal today
Speaker 3: is an exclusive about hedge fund billionaire Ken Griffin, who's
Speaker 3: spending tens of millions of dollars to back Republican primary
Speaker 3: candidates across the US. The story reported by Bloomberg News
Speaker 3: national reporter Mike Smith and Bill Allison. Bloomberg News campaign
Speaker 3: finance reporter Mike joins us from Miami. Bill in our
Speaker 3: DC bureau. Mike, I do want to start with you,
Speaker 3: how would you characterize the type of candidate that Griffin
Speaker 3: is giving to right now? Because there's a lot of
Speaker 3: nuance here.
Speaker 8: Yeah, there is a lot of nuance and it's not
Speaker 8: entirely clear exactly what he's looking for, but in general,
Speaker 8: it's sort of old school, pro business, conservative values that
Speaker 8: he is backing. For example, sample national defense, and one
Speaker 8: of the main things his promoting is sort of helping
Speaker 8: the American dream, which is obviously a very broad description,
Speaker 8: but that's how he describes him.
Speaker 2: Does that backing Mike include Donald Trump at this point.
Speaker 8: Well, so far, No, as far as we can see
Speaker 8: in the most recent filings in terms of money, he's
Speaker 8: yet to give money to Donald Trump. He hasn't ever
Speaker 8: given money to Donald Trump that we know of, and
Speaker 8: he's quite guarded in saying whether he's going to back
Speaker 8: Trump or not. He's certainly a Republican. He gives to
Speaker 8: Republican causes and candidates, but Trump has yet to be seen.
Speaker 2: So Bill, let's go through the money. What do we
Speaker 2: know about Ken Griffin and his donations to the GOP
Speaker 2: going back the last decade or so, what has he
Speaker 2: typically supported, how much has he given up and where
Speaker 2: does it go? And what is he doing today?
Speaker 9: Really since twenty sixteenocused on Congress, both the Senate and
Speaker 9: the House, he's given I think two hundred and forty
Speaker 9: eight million dollars since twenty fifteen, which is an office
Speaker 9: a lot of money, about a quarter billion dollars, and
Speaker 9: he's focused largely on super packs that again elect members
Speaker 9: of Congress. And in the last couple of cycles, he's
Speaker 9: really looked at early money and having an influence on primaries,
Speaker 9: like who gets chosen to be to get elected to Congress,
Speaker 9: you know, like you'll look at safe Republican districts. He'll
Speaker 9: put a lot of money in behind what he used
Speaker 9: as a superior candidate and try to get that person
Speaker 9: into Congress. And so far this cycle, he's spent more
Speaker 9: than seventy five million dollars into political committees at the
Speaker 9: federal level.
Speaker 3: Mike, how successful has he been over the last decade,
Speaker 3: because it seems like he hasn't always bet on the
Speaker 3: right horse, so to speak. He supported the opponent to JD.
Speaker 3: Vance and is a Ohio Senate race that JD Vance
Speaker 3: ended up who Jdvans ended up beating. He's thinking about
Speaker 3: supporting somebody who could challenge Matt Gates. He has supported
Speaker 3: Nicky Haley in the past, Kevin McCarthy in the past
Speaker 3: as well. How successful has he been?
Speaker 8: Yeah, I mean, that's an illusive thing to answer, but
Speaker 8: we can say that this this year, this this cycle,
Speaker 8: he's gotten behind sixty different candidates in congressional races and
Speaker 8: he's you know, they've they've won about two thirds of
Speaker 8: those or a little bit more. So it's not a
Speaker 8: bad record. He has won a lot, but he's also
Speaker 8: lost some And a lot of his money has gone
Speaker 8: into losing races and a lot has gone into winning races.
Speaker 2: You know, And I do wonder too, Bill, You know,
Speaker 2: we often kid, but it's it's very true. Money talks, right,
Speaker 2: and money gets attention. How influential has he been really
Speaker 2: in kind of shaping what's going on in the Republican Party?
Speaker 2: We talked so much about it being, you know, Donald
Speaker 2: Trump's party right now, but how much has he really
Speaker 2: been influential over the GOP overall?
Speaker 9: Well, the Republican operatives that we talk to, the people
Speaker 9: who run super packs, the people who recruit candidates, the
Speaker 9: people who really kind of do that nuts and bolts
Speaker 9: work of running the party say that, you know, he's
Speaker 9: fundamental to their success. He's he's very influential. He's very important. Uh,
Speaker 9: if you have an idea for a super pack, you
Speaker 9: want to elect veterans, you want to elect uh, women
Speaker 9: with business experience. There's a whole broad range of folks
Speaker 9: who do different kinds of superpacks. He's somebody who's definitely
Speaker 9: gonna be on your list to try to get, you know,
Speaker 9: to at least to his advisors to make your pitch
Speaker 9: to say, this is what my plan is, this is
Speaker 9: what I'd like to do. And you know, if he
Speaker 9: decides to fund you, you have a good chance of
Speaker 9: of you know, also drawing money from other donors.
Speaker 3: Bill, somebody might read a story like this and and
Speaker 3: come away with a really cynical view that, you know,
Speaker 3: politicians can be I'm not gonna say they can be bought,
Speaker 3: but certainly people with power are able to donate a
Speaker 3: lot of money, uh, to super packs that go around
Speaker 3: traditional campaign finance. Just give some context as to how
Speaker 3: something like this is is legal and how super PACs
Speaker 3: are able to operate in this world when certain individuals
Speaker 3: are only allowed to give a small, a relatively small
Speaker 3: amount of money to individual candidates.
Speaker 9: Boy, there's you know, there's a famous saying in politics
Speaker 9: that you know, there are three important things in politics
Speaker 9: money and I forget what the other two are. And
Speaker 9: this is this has been kind of consistent throughout history.
Speaker 9: Super PACs are legal because of basically the First Amendment.
Speaker 9: The Supreme Court held that you know, if you're if
Speaker 9: you're speaking independently, i e. Not donating to donating to
Speaker 9: a politician, but donating to a group that tries to
Speaker 9: elect politicians at that's First Amendment protected activity. And that
Speaker 9: something called the Citizens United Case gave us these these
Speaker 9: creatures or these super PACs, and you know, you know,
Speaker 9: it's it is fairly you know, it is fairly important
Speaker 9: in US politics that you know, you be able to
Speaker 9: have you know, there's there's three different kinds of owns.
Speaker 9: There's small dollar donors which are very important, but you
Speaker 9: need millions and millions of them to add up to
Speaker 9: you know, a lot of money. And then you have
Speaker 9: a handful of people there's the folks in the middle,
Speaker 9: and you have the handful of people at the top
Speaker 9: who can with one check, you know, fund you know,
Speaker 9: a huge, huge advise. You know, we've seen already in
Speaker 9: this campaign an investor named Timothy Mellon who put fifty
Speaker 9: million dollars into a super pack backing Donald Trump. I
Speaker 9: mean it's we've had, you know, we've done stories that
Speaker 9: Elon Musk is thinking of putting forty five million dollars
Speaker 9: into a super pack each month to help Donald Trump
Speaker 9: with his ground game. So obviously it's hugely important and
Speaker 9: it's perfectly legal.
Speaker 2: You know, Mike, I think about Ken Griffin, right, he's
Speaker 2: been in Florida, what now, maybe a couple of years
Speaker 2: or it's been a couple of years since he announced
Speaker 2: moving down there, has become very influential, certainly on the state.
Speaker 2: But I do think about as you guys are laying
Speaker 2: out the causes that are of importance to him. He
Speaker 2: doesn't necessarily buy into the polism, does he that Donald
Speaker 2: Trump seems to espouse along with JD.
Speaker 6: Van's.
Speaker 8: Yeah, I think that's a good way to put it.
Speaker 8: He stresses that, and the people that are close to
Speaker 8: him stressed that what he's looking for is candidates we're conservative, Republican,
Speaker 8: but also candidates that can govern governance. He likes to
Speaker 8: use that word a lot in a lot of things
Speaker 8: that he does in terms of giving and I think he,
Speaker 8: you know, he strives, or he says he strives to
Speaker 8: apply that to the candidates and the politicians that he
Speaker 8: decides to back. And he's quite loyal. You know, he
Speaker 8: will stick with a politician that he believes in or
Speaker 8: feels like is worth backing through wins and through losses.
Speaker 8: And that seems to be a key driver what he does.
Speaker 8: He wants leaders in Congress, especially who will actually get
Speaker 8: things done, who will legislate the kind of things he
Speaker 8: wants Congress to do that he supports, and he shies
Speaker 8: away from backing candidates that are are less effective in governing,
Speaker 8: as he.
Speaker 9: Likes to call it.
Speaker 3: Mike, what do we know about Citadel Public Affairs head
Speaker 3: case and Carter?
Speaker 8: Well, he's, uh, he's he's he's very key to this process. Uh,
Speaker 8: he wouldn't talk to us for this story, but he
Speaker 8: u is plays a pivotal role in helping Ken Griffin
Speaker 8: decide where where to put his money, not just in
Speaker 8: political giving, but also in philanthropy for example. So he's
Speaker 8: a pivotal, uh sort of advisor in.
Speaker 2: That realm Hey, Bill, when you look at the money, uh,
Speaker 2: that's been drummed up in this race so far, I
Speaker 2: think about, you know, Kamala Harris, the money that she's
Speaker 2: raised since she has essentially taken over the mantle from
Speaker 2: from Joe Biden. I think about We just talked about
Speaker 2: Elon Moss. We're talking about Bill Griffin, Pill Griffin, Ken Griffin.
Speaker 2: It's a lot of money. I'm just curious, is this
Speaker 2: turning out to be one of the more expensive of
Speaker 2: campaigns or rases.
Speaker 9: It's like it's going to be. I mean, it's you know,
Speaker 9: every presidential record sort of sets a record. Presidential election
Speaker 9: sets a record because you know, contribution limits go up,
Speaker 9: things get more expensive. Super packs are you know, play
Speaker 9: a bigger role. You know, there was some thought that
Speaker 9: maybe the twenty twenty election because of COVID, whether it
Speaker 9: be less spending. It turned out there was more spending
Speaker 9: than ever. So I think we'll see more spending. And
Speaker 9: it's in part because, you know, as Ken Griffin said
Speaker 9: or told us in the article, it's you know, there's
Speaker 9: a lot at stake in this election. It's an important
Speaker 9: time for the country, and you know kind of you know,
Speaker 9: you know, all the money is coming out.
Speaker 3: Bill just twenty seconds left. Any whispers of campaign finance
Speaker 3: reform around the halls of Washington, DC these days.
Speaker 9: It's you know, there are people who still plug away
Speaker 9: at it. It is not really a priority for Congress
Speaker 9: or this administration. And it hasn't been for years and years.
Speaker 9: I mean, the closest thing we have is some bills
Speaker 9: to disclose dark money, but you know they get stuck
Speaker 9: in the senator of the House and don't really go anywhere.
Speaker 2: All Right, Well, if you weren't depressed enough, we're going
Speaker 2: to have some talk of climate change coming up in
Speaker 2: just a moment to keep the mood going. Bloomberg News
Speaker 2: National Reporter Mike Smith and Bill Allison, Bloomberg News Campaign
Speaker 2: Finance Reporter. This is a Bloomberg exclusive and among our
Speaker 2: most read on the Bloomberg terminal.
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Speaker 3: Well, rural students lagged behind the rest of the country
Speaker 3: in college attendance, and one of the world's top bankers
Speaker 3: is spending a lot of money to address that. Byron Trott,
Speaker 3: who grew up in a small Missouri town and became
Speaker 3: one of the world's top Bankers will spend one hundred
Speaker 3: and fifty million dollars over ten years to help more
Speaker 3: the colleges and public universities recruit ural students.
Speaker 2: That's right, Tim. The new donation builds on a twenty
Speaker 2: million dollar initiative his family foundation started last year with
Speaker 2: schools such as Yale, Ohio State, and the University of Chicago,
Speaker 2: his alma mater. Bloomberg News Higher education finance reporter Janet
Speaker 2: Lauren writing about this in recent days, She joins us
Speaker 2: now here in our Bloomberg Interactive Broker studio. Also with
Speaker 2: us is Jim Nondorf. He's Dean of college Admissions at
Speaker 2: the University of Chicago, along with Margie Bettley, who is
Speaker 2: Deputy Director of Admissions at the University of Chicago. They
Speaker 2: both join us from that city, and Jenna, I want
Speaker 2: to start with you because Byron Trott is somebody we
Speaker 2: used to talk about. I feel like a lot well
Speaker 2: known in the financial industry, although maybe not as of late.
Speaker 2: Tell us little bit more about him and what he's
Speaker 2: done well.
Speaker 10: Byron Trott grew up in a very small town in Missouri,
Speaker 10: and it really wasn't the kind of place that got
Speaker 10: visits from admissions officers like Yale or MIT or the
Speaker 10: University of Chicago, and he became extremely successful. He went
Speaker 10: to Chicago for college and earned an MBA there and
Speaker 10: started a very long career with Goldman Sachs, where he
Speaker 10: earned the title of Warren Buffett's favorite banker, and good title.
Speaker 10: He went out, and you know, he's been an investor
Speaker 10: and runs his own merchant bank, paired with Michael Dell's investments,
Speaker 10: and has been become extremely successful. And had a conversation
Speaker 10: with Jim Nondorf asking about rural students of the University
Speaker 10: of Chicago, and that led to an effort to recruit
Speaker 10: more students there, and then it led to a bigger
Speaker 10: effort to recruit students from additional colleges, as we've mentioned,
Speaker 10: sixteen schools, and now he's doubling that and putting one
Speaker 10: hundred and fifty million for recruiting efforts, but also to
Speaker 10: help students in high school sort of understand what college is.
Speaker 10: And you know, it's not just the college just explaining
Speaker 10: them what is college, how to get there, and it's
Speaker 10: a lot of public universities as well.
Speaker 2: All right, Jim, come on in on this. Thank you
Speaker 2: both for being with us. What did that mean? What
Speaker 2: does this money mean for you guys?
Speaker 11: So really, and I do want to correct Margie. In
Speaker 11: addition to being an outstanding admissions officer for U Chicago,
Speaker 11: she is actually the executive director for Stars. So she
Speaker 11: really puts it all together and works with all of
Speaker 11: the other colleges and universities. She's much more important than
Speaker 11: me in many ways. So but I will tell you
Speaker 11: what it means for us is, you know, rural areas,
Speaker 11: small towns, sometimes they're easy to overlook it, they're harder
Speaker 11: to get to, they're harder to engage, and quite often
Speaker 11: it will be you know, there won't be anybody who's
Speaker 11: ever gone to U Chicago or Yale or or wherever,
Speaker 11: and so they don't have easy access to role models
Speaker 11: that are going to inspire them and say hey, I
Speaker 11: welcome there. And so what what these funds do is
Speaker 11: they enable all of us to both have someone on
Speaker 11: our teams. In our case, I have a a TRUP
Speaker 11: rural director who focuses on engaging our other admissions officers
Speaker 11: to make sure we cover small town and rural school
Speaker 11: high schools, but also that you know that we can
Speaker 11: do programming bring them to our campus at U Chicago.
Speaker 11: Prior to launching Stars, Iron had supported a program called
Speaker 11: Emerging Rural Leaders, which Margie ran, and it brought students
Speaker 11: from all around the country. And what is wonderful as
Speaker 11: those students then go back and they are a proof
Speaker 11: points to all the other students in their high schools
Speaker 11: right that they're welcome in ours.
Speaker 10: So tell us a little bit about the efforts. You know,
Speaker 10: how we know how difficult it is to get to
Speaker 10: rural towns just as one person, but going with a
Speaker 10: group and sort of doing an admissions tour of Tennessee.
Speaker 10: We wrote about that last here. What does it mean
Speaker 10: to have, you know, so many schools reaching out to
Speaker 10: so many different towns, And tell us a little bit
Speaker 10: about the efforts class fall, Margie, come on.
Speaker 5: In on that.
Speaker 11: Yeah, so I'll give you a framework and then maybe
Speaker 11: Margie'll take the details. But the framework is really sometimes
Speaker 11: it's wonderful to have multiple schools so that students get
Speaker 11: a sense of the breadth and depth of higher education
Speaker 11: and that there are schools who have four percented mid
Speaker 11: rates and eighty percent A mid rates and there's a
Speaker 11: lot of amazing places to go. It also allows us
Speaker 11: to kind of divide and conquer where maybe we can't.
Speaker 11: As you, Chicago, go see every more schools. If we
Speaker 11: divide them up amongst thirty two schools, we can see
Speaker 11: thirty two times more schools and represents all thirty two
Speaker 11: schools just by one one admissions officer visiting that school.
Speaker 11: So it really it's about leverage and expanding the impact
Speaker 11: that we can make individually when we do it all together.
Speaker 11: But Margie has gone on these, she's led them, she's
Speaker 11: put them together. I'll leave it to Margie to tell
Speaker 11: you a little more.
Speaker 12: Yeah, I think Jim is exactly correct. We can do
Speaker 12: exponentially more as a network than we could do as
Speaker 12: one highly selective institution. The need is huge, and as
Speaker 12: one school we can only impact a very small number
Speaker 12: of students, whereas as a network of schools we can
Speaker 12: impact thousands of students. It's a massive difference. So I
Speaker 12: would day any given year the University Chicago, even though
Speaker 12: we had Rural as an initiative, we were only visiting
Speaker 12: maybe a couple dozen rural high schools during our recruitment time,
Speaker 12: whereas this past year as a network for Stars, we
Speaker 12: visited over eleven hundred high schools. Another example that I
Speaker 12: have is that with these trips where we go to students,
Speaker 12: many times it is their first opportunity to meet with
Speaker 12: multiple admissions counselors. I have a group of students that
Speaker 12: I work with over this summer through Emerging World Leaders.
Speaker 12: Out of that group of sixty students, almost every time
Speaker 12: when I ask how many of you have had more
Speaker 12: than five colleges and universities visit your high school, only
Speaker 12: two hands went up this year. In one swing with
Speaker 12: a group, we can more admissions counselors, more different kinds
Speaker 12: of schools, more information, and more options to these students
Speaker 12: in one fell swoop than they're ever going to see
Speaker 12: in an entire year.
Speaker 5: So it is.
Speaker 12: Exponential what we can do as a group that we
Speaker 12: couldn't do alone.
Speaker 10: So both of you came from small towns to study
Speaker 10: at the University of Chicago. So once you've recruited students
Speaker 10: and told them about college, it's another thing to sell
Speaker 10: them to be able to go to a place like
Speaker 10: the University of Chicago or MIT, or even you know,
Speaker 10: a large state flagship. Can you tell them, explain what
Speaker 10: you're telling them about coming to college and in the
Speaker 10: big difference coming going to a local community college versus
Speaker 10: a four year college that can give them opportunities and
Speaker 10: really also help their family. Margie, why don't you start perfect?
Speaker 12: Yeah, Having gone through that kind of experience of never
Speaker 12: having taken public transportation before in my life, never are
Speaker 12: really needing to navigate something as large as the city
Speaker 12: of Chicago. Coming from a smaller town in Georgia, it
Speaker 12: was a huge transition, and there are lots of transitions
Speaker 12: that students are going to go through. It's going to
Speaker 12: be academic, social, So we want to meet them at
Speaker 12: every stage, and we want to meet them where they are.
Speaker 12: I think support systems are something every single member school
Speaker 12: has focused a lot of time on this past year.
Speaker 12: Jim mentioned at the very beginning that part of these
Speaker 12: funds go towards finding a point person on each team
Speaker 12: in each of these universities. That person is a face
Speaker 12: for students to ask questions. We are there for them
Speaker 12: not only admissions process, but we build those relationships all
Speaker 12: the way through to when they're students on our campuses.
Speaker 12: For example, I host quarterly socials for our rural and
Speaker 12: small town students on campus. I'm available for one on ones,
Speaker 12: I act a little bit as a social advisor to
Speaker 12: help them make some of those transitions. So we are
Speaker 12: thinking about academic social care. We are financial all those
Speaker 12: different really important support systems. One other thing that I'll
Speaker 12: point to the University Chicago of being a really good
Speaker 12: example of this is that financial support. So we offer
Speaker 12: amazing financial support in general for all of our students.
Speaker 12: But when we started these efforts and working with rural students,
Speaker 12: we really pinpointed one important thing, which were family farms.
Speaker 12: That was a big barrier for students because we were
Speaker 12: counting them as assets in their financial aid applications. Well,
Speaker 12: not fair to ask a students to go sell their
Speaker 12: home family farm in order to attend college. So we
Speaker 12: took that out. We changed our financial aid policies to
Speaker 12: be more welcoming and to be more accessible for rural
Speaker 12: and small fown students.
Speaker 2: Hey just got about forty seconds here. I am curious, Jim,
Speaker 2: were you guys not recruiting from rural areas beforehand? And
Speaker 2: again just got about thirty forty seconds.
Speaker 11: Sure, So, to be very honest, wasn't something we tracked
Speaker 11: so that that we didn't do it? I'm sure we
Speaker 11: visited some schools. But when Byron first approached me about this,
Speaker 11: he asked how many ural students we had in a class,
Speaker 11: and I didn't even know the answer, and it was
Speaker 11: a small number. It was about thirteen. And now there
Speaker 11: are ten percent of our class. And you actually have
Speaker 11: to identify and make it a priority. And that's what
Speaker 11: Stars does for all of our schools, and that's what
Speaker 11: Byron support has. Really it's radically changed the composition of
Speaker 11: our incombing class well.
Speaker 2: And it certainly fits with this idea, right that we say,
Speaker 2: you know, there needs to be diversity of all kinds
Speaker 2: when it comes to academia, right, that's part of the experience.
Speaker 2: So really interesting stuff. Listen, Thank you both so appreciated.
Speaker 2: Our thanks to Jim Nondorf. He's Deena College Admissions at
Speaker 2: the University of Chicago and Margie Bettley, Deputy Director of
Speaker 2: Admissions at the University of Chicago. But really instrumental she
Speaker 2: is in terms of this program. And of course Jennet
Speaker 2: Lauren for bringing this story to our attention. She's our
Speaker 2: Bloomberg News higher Education Finance Repur. So much going on
Speaker 2: when it comes to higher education.
Speaker 5: Mu.
Speaker 1: The journal.
Speaker 2: How about you let me drive Oh no.
Speaker 4: No, no, no, who's going to drive?
Speaker 5: Honey?
Speaker 7: Please, I'll do the gravel.
Speaker 4: Let's wat I want to try it. It's a good question.
Speaker 1: This is the drive to the clothes, Tim think we'll
Speaker 1: buy around? Should it on on Blueberg Radio?
Speaker 2: Oh? If people just knew how you sang to the themes,
Speaker 2: you can't do it.
Speaker 6: We don't have the rights to the music, so I
Speaker 6: can't sing it. Maybe we can. You do it well
Speaker 6: than you can't.
Speaker 2: You do like it for three seconds or something.
Speaker 1: I'm not allowed to.
Speaker 6: I don't know something like that.
Speaker 2: What we are allowed to do, though, is talk about
Speaker 2: the markets bouncing around here. We're off our highs and
Speaker 2: lows of the session, down on the S and P
Speaker 2: and the Nasdaq one hund you just heard Charlie breaking
Speaker 2: it down. We are up on the Dow Jones industrial averages.
Speaker 2: We get ready for a big drop of earnings after
Speaker 2: the closing bell. So curious to see what Walker Williams
Speaker 2: has to say about it all. He's chief market strategist
Speaker 2: of private wealth at the wealth advisory firm Lido Advisors.
Speaker 2: They have twenty billion in assets under management and enjoins
Speaker 2: us from Vail, Colorado.
Speaker 6: How are you.
Speaker 7: I'm doing well. How about you guys this afternoon doing okay?
Speaker 2: Doing okay? How are you doing?
Speaker 6: Tim good? I kind of wish I was in Veil.
Speaker 6: I was going to say that, you know, it's the
Speaker 6: worst place.
Speaker 1: It's them.
Speaker 6: It's okay, do some mountain biking.
Speaker 2: Are people worried about, you know, politics and climate change
Speaker 2: and geopolitics and growing US debt in Veil.
Speaker 7: More so than you think? I think, you know, when
Speaker 7: we're looking at the worries in Veil or New York
Speaker 7: or wherever they're they're kind of very much similar politics.
Speaker 7: I'd always put at the top of the list. We
Speaker 7: can change the players, but we frankly get questions about
Speaker 7: what does this implification mean for growth, especially for taxes,
Speaker 7: for structuring, for things of that nature. You know, talking
Speaker 7: about climate change. I think that's uniquely interesting topic because
Speaker 7: when we discuss climate change, it's not just you know
Speaker 7: the idea of hey, what's going on with storms? You know,
Speaker 7: we've done a lot of work on what does that
Speaker 7: mean for property and casualty insurance companies? You know, you
Speaker 7: see this right now. There's been actually a couple of
Speaker 7: deals that we've seen where insurability has been a you know,
Speaker 7: an issue that couldn't get past the finish line, especially
Speaker 7: if you're buying properties or investing in properties in certain
Speaker 7: parts of this country. You know LEDO, we're headquartered out
Speaker 7: of California. You know the risk of wildfires and what
Speaker 7: that means from transactions or simply like, hey, can I
Speaker 7: get home owner's insurance in separate areas of the state
Speaker 7: is something you really have to dig into and consider.
Speaker 3: So, Walker, just to help us understand your role at LEEDO,
Speaker 3: are you focused on the Colorado area? Geographically focused on
Speaker 3: the greater Denver area Edwards Veil.
Speaker 6: Sort of that that area?
Speaker 7: No, so like my role as a national role is
Speaker 7: the chief market strategist for the firm. I do live
Speaker 7: in as you mentioned Vail, Colorado, So from that's.
Speaker 6: A good at place to be chief market strategy you travel.
Speaker 7: Yeah, ok, yes, so I am based here, but my
Speaker 7: role is really a national role where I spend most
Speaker 7: of my time thinking about strategies and trends that are
Speaker 7: affecting the markets in various aspects.
Speaker 3: Fortunately, the Eagle Airport is not too far away and
Speaker 3: you can you can do that, all right, So let's
Speaker 3: talk a little bit about what you're seeing when it
Speaker 3: comes to the markets. Because one thing that we've been
Speaker 3: talking a lot about today and also in recent weeks
Speaker 3: is this idea of a rotation out of large caps,
Speaker 3: especially today with the tech megacaps under pressure. But give
Speaker 3: us an idea of sort of what you're seeing down
Speaker 3: the road as we do get further into the second
Speaker 3: half of the year.
Speaker 7: Yes, so obviously like we are seeing the beginning parts
Speaker 7: of a rotation that are happening in the market. If
Speaker 7: you look at the market today, even going into this summer,
Speaker 7: I think there was reasons for pausing, especially with you know,
Speaker 7: the megacap tech stocks driving disproportional aspects of return. We
Speaker 7: do think there are values that are going on right
Speaker 7: now in a rotational aspect. Back into the small cap space,
Speaker 7: we are seeing the gap between you know, the cap
Speaker 7: witted index and the equal cap index come back together,
Speaker 7: which is refreshing to say the least. I do think
Speaker 7: a lot of this is dependent though on you know,
Speaker 7: this is a big week, not sitting in the overstating
Speaker 7: the obvious with central bank actions and what goes on.
Speaker 7: I do think if we do, if the FED does
Speaker 7: change some of the verbiage and we get more to
Speaker 7: certainty around a rate cut, more than we have now.
Speaker 7: You are going to see the propensity for small and
Speaker 7: mid caps to really appreciate here based on their corporate earnings.
Speaker 7: You know, we do think there's value, especially in different
Speaker 7: sectors that are so tech dominated. You know, in the
Speaker 7: healthcare space, there's green shoots. We are seeing different sort
Speaker 7: of green shoots in various industrial companies that are being
Speaker 7: very attractive. Right now, it's been We're still looking at
Speaker 7: a market. I'm curious that. You know, from the standpoint
Speaker 7: of things do look very expensive on a high level.
Speaker 7: So any sort of rotation into different sort of value,
Speaker 7: you know, I think is a good place to be.
Speaker 7: We are seeing our clients also reposition their portfolios in
Speaker 7: to potentially benefit from that rotation down Well, that's what I.
Speaker 2: Was going to I was curious. I mean, when we talk,
Speaker 2: especially with individuals who are dealing with wealth management clients,
Speaker 2: I mean, it's long term, long term, long term. I
Speaker 2: get that, but I am curious, you know, is it
Speaker 2: plain vanilla equity, fixed income or is it a lot
Speaker 2: more alternative assets. I am curious when it comes to
Speaker 2: your clients where you are investing a lot of their
Speaker 2: their money.
Speaker 7: Yeah, so when we define alternatives, it's just for the
Speaker 7: sake of suplicity, say anything that's not a stock in
Speaker 7: a bond. Our clientele has been alternative heavy for a
Speaker 7: long time, and alternatives program is typically structured in a
Speaker 7: couple different facets. We have a lot of real estate,
Speaker 7: both debt and equity positions, which you know at this
Speaker 7: point it's not a blanket real estate buy. We think
Speaker 7: there's selects sectors and opportunities we like in real estate.
Speaker 7: You know, the student housing sector is especially interesting to
Speaker 7: us in the Sun Belt and what we call secondary universities.
Speaker 7: We are seeing opportunities, you know, in the debt space,
Speaker 7: here is a lot of companies and our clients are
Speaker 7: participating this have to refinance their real estate debt or
Speaker 7: their corporate debt. We've been long on private credit for
Speaker 7: a long time. In the different subsectors of that, a
Speaker 7: large portion of our client's allocation is in what we
Speaker 7: call defined outcome strategies. They are similar to structured notes
Speaker 7: that banks have issued for a long time. We like
Speaker 7: the ideas of them, we don't like the fees. We
Speaker 7: have a platform where we can use the liquid options
Speaker 7: market to put protection on liquid indices, individual names that
Speaker 7: are daily liquid. So from an alternative standpoint, and it's
Speaker 7: relevant to your point, the rotation that we see today,
Speaker 7: it is very advantageous for us to build these structures
Speaker 7: with downside protection very efficiently for our for our clients,
Speaker 7: which to your point is everyone says long term, long term,
Speaker 7: long term, you know, but there is the short term
Speaker 7: that does matter. I am guilty of this, and it's
Speaker 7: not bad advice with it. We've all seen market distress periods.
Speaker 7: We're in the wealth management space. A client has been
Speaker 7: working with their advisor and they've said the words, hey,
Speaker 7: stay the course, it's the right course of action. That's
Speaker 7: not bad advice. However, when everyone says that there's typically
Speaker 7: opportunities right around you that you should be picking up.
Speaker 7: So we use those defined outcome platforms and structures to
Speaker 7: give our clients the luxury of options to be in
Speaker 7: right mindset to pick up those opportunities when those dislocations
Speaker 7: do occur.
Speaker 2: Yeah, that's a good point, right. There's certain things that happen,
Speaker 2: certainly pockets within a longer term cycle that can be opportunistic, Walker,
Speaker 2: Thank you so much, Walker Williams. Cheap market strategist at
Speaker 2: Leado Advisors twenty billion in assets under manager. As we said,
Speaker 2: they are a wealth advisory firm. So yeah, but I
Speaker 2: know you're just like, can I go to VAM?
Speaker 1: Yeah?
Speaker 6: That sounds good. I'll be a market strategists there.
Speaker 8: I bet you would.
Speaker 7: This is Bloomberg.
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