Speaker 1: Bloomberg Audio Studios, Podcasts, radio News. This is Master's in
Speaker 1: Business with Barry red Holds on Bloomberg Radio.
Speaker 2: This week on the podcast, I have a delightful guest.
Speaker 2: Kyla Scanlan is the person who created the phrase vibe session,
Speaker 2: and twenty twenty two she wrote the book In This Economy,
Speaker 2: How Money and Markets Really Work. She is quite an
Speaker 2: accomplished twenty six year old who has built a career
Speaker 2: as a investing and economic literacy expert, helping to educate
Speaker 2: people about how the economy really works, why there's a
Speaker 2: disconnect in what people feel versus what's really happening, what
Speaker 2: we should think about things like centiment and the dollar,
Speaker 2: and green energy, and go down the list. I thought
Speaker 2: this was a fascinating conversation. I really enjoyed it, and
Speaker 2: I think you will also. With no further ado, my
Speaker 2: interview with Kyla Scanlin.
Speaker 1: Thanks for having me.
Speaker 2: Well, thank you so much for coming. I've been looking
Speaker 2: forward to this since I got the book over the summer.
Speaker 2: I will tell you I didn't see many other people
Speaker 2: on the beach in the Hampton during this, but I
Speaker 2: enjoyed it. It's filled with fun, not only concepts, but
Speaker 2: sketches and illustrations, and I could tell you had some
Speaker 2: fun writing this.
Speaker 1: Yeah I did.
Speaker 2: So let's talk a little bit about your background. You
Speaker 2: graduate Western Kentucky in twenty nineteen, triple major financial management, economics,
Speaker 2: and business data Analytics. That sounds like you knew exactly
Speaker 2: what you wanted to do.
Speaker 1: Well I didn't.
Speaker 2: I did not.
Speaker 1: Yeah, I didn't even know you can major in economics
Speaker 1: til I got to college.
Speaker 2: But in college those three things scream markets and the economy, right.
Speaker 1: Yeah, I mean it was like kind of funny. I
Speaker 1: don't know why they were such a big disconnect, but
Speaker 1: I was trading options when I was in high school
Speaker 1: and I got to college and I was like, oh,
Speaker 1: I'll just be an engineer, like I'll, you know, do
Speaker 1: that path. And then I took an econ class as
Speaker 1: a general education course and I just loved it. And
Speaker 1: then I was like, oh, you can actually major in finance,
Speaker 1: and like you can trade options for a living, which
Speaker 1: I didn't end up doing for obvious reasons. But yeah,
Speaker 1: so I really fell in love with the data and
Speaker 1: with the analysis, and just the classes were so fun.
Speaker 1: I had a great time.
Speaker 2: You know, the old options traders joke, right, No, I
Speaker 2: don't really. Option traders never die. Oh they just expired, right,
Speaker 2: I mean that's a that's a classic. We've all dabbled
Speaker 2: with options. I find them compelling and addictive. But I
Speaker 2: am you know, ninety percent investor ten degenerate speculator. Options
Speaker 2: are perfect for that. How did you do as an
Speaker 2: option straight?
Speaker 1: I did poorly, which is why I don't really do
Speaker 1: it anymore. More of a buy and hold sort of person.
Speaker 2: There you go.
Speaker 1: Yeah, but options were fun. It taught me a lot
Speaker 1: about risk, It taught me a lot about manage. It
Speaker 1: was great.
Speaker 2: So so you you graduate, you joined Capital Group as
Speaker 2: an associate, pretty much right into the pandemic. Tell us
Speaker 2: what you were doing at Capital Group when? What was
Speaker 2: it like starting work right into that mess?
Speaker 1: Yeah? It was hard. I remember I graduated, you know,
Speaker 1: basically June of twenty nineteen, and I moved out to
Speaker 1: LA from Kentucky like five days after I graduated school.
Speaker 1: Had never been to LA before. That's where Capitol Group
Speaker 1: is based. And you know, six months later, pandemic happens.
Speaker 1: But Capitol Group was wonderful. There was a rotational program
Speaker 1: that I was a part of called the cap Group,
Speaker 1: and so I got to experience fixed income, I got
Speaker 1: to sit on an equity desk, I got to do
Speaker 1: macroeconomic research, I got to do a big stock project.
Speaker 1: But I ended up leaving to focus more on financial
Speaker 1: education because that's where I felt I wanted to be,
Speaker 1: which was really surprising. I thought I'd been the rest
Speaker 1: of my life at Capital Group. It was kind of
Speaker 1: the perfect path. And then I was like, I just
Speaker 1: I can't know what happens without like trying to do this,
Speaker 1: to do the financial education stuff.
Speaker 2: I can't imagine two places more different than Kentucky and LA.
Speaker 2: What was that transition? Like?
Speaker 1: It was really hard. Yeah, I didn't understand what it
Speaker 1: was like to live in a big city. I'd never
Speaker 1: been to New York at that point, I'd never really
Speaker 1: left Kentucky those couple of years, the whole life that
Speaker 1: I had there, And yeah, I mean I used to
Speaker 1: have to be at Capitol Group very early in the
Speaker 1: morning because it's on the West coast. We to East
Speaker 1: coast hours, and so I would just like walk around
Speaker 1: really early in the morning in LA and that's not
Speaker 1: so safe. And I got a couple of run ins there.
Speaker 2: Oh no kidding, yeah, yeah, because I just.
Speaker 1: Didn't know any better, Like nobody gives you a playbook
Speaker 1: when you moved to la on, like how to live there,
Speaker 1: and so it was a really good experience. The pandemic,
Speaker 1: of course, was difficult, but it definitely helped me grow
Speaker 1: a lot faster being in a big city like that.
Speaker 2: Did the pandemic and being locked down at home lead
Speaker 2: to you writing this book?
Speaker 1: I think so. Yeah. I had a blog all throughout college,
Speaker 1: ending with Julie actually was reading when I was in
Speaker 1: college was crazy, but it was called scan lit on Stocks,
Speaker 1: and so I'd always been really passionate about writing. I
Speaker 1: had always been really passionate about sharing ideas. And then
Speaker 1: when I got to Capitol Group, obviously I was under compliance.
Speaker 1: They really you really can't be talking about stocks online.
Speaker 1: That's like not cool, and I was like, okay, fine.
Speaker 1: So I started doing these big data analysis pieces and
Speaker 1: like harvesting data from the various apps I would do that.
Speaker 2: You could do just not specific stocks.
Speaker 1: Yeah, not specific stocks. So I do things like with
Speaker 1: the ride, shared data with Uber and Lyft that I had,
Speaker 1: like dating app data, like all these different projects. But
Speaker 1: then during the pandemic, I think a lot of people,
Speaker 1: myself included, were like, oh, you know, maybe I don't
Speaker 1: want to spend the rest of my life doing this thing,
Speaker 1: and like, I do want to take a chance because
Speaker 1: I don't know what's going to happen next. And so
Speaker 1: that's how I ended up leaving Capitol Group, which was
Speaker 1: really scary, and I joined a tech startup called on
Speaker 1: Deck and built out their investment education arm, and then
Speaker 1: I started doing social media basically at the same time time.
Speaker 2: So it's funny I had the exact same experience with
Speaker 2: compliance at a brokerage firm in the early two thousands
Speaker 2: when I launched the Big Picture, write whatever you want,
Speaker 2: just don't recommend or buy or sell any specific stocks.
Speaker 2: You know, if you stay away from that, you're fine,
Speaker 2: which in hindsight was pretty hip. A lot of places
Speaker 2: wouldn't even have given you that much. But data analytics
Speaker 2: knock yourself out whatever you want to do.
Speaker 1: Yeah, it was just cool. So the name of the
Speaker 1: blog changed the scaling on stocks or scaling on stats,
Speaker 1: sorry on stats on stats. Yeah, I didn't stay the same.
Speaker 2: Can't scaling on stocks to scaling on stats. So I'm
Speaker 2: fascinated by the partnership you have with O'Shaughnessy Ventures. I
Speaker 2: love what Jim is doing with that tell us about
Speaker 2: that experience and that help you transition to what you're
Speaker 2: doing today.
Speaker 1: Yeah, I know, Jim O'Shaughnessy is amazing. So I approached
Speaker 1: him with an idea for a financial education startup and
Speaker 1: he had been you know, really supportive him Patrick, both
Speaker 1: his son, and I was like, hey, Jim, like, I'm
Speaker 1: thinking about starting this tech company that might do financial education,
Speaker 1: and he was like, do you have a plan? And
Speaker 1: I was like sort of. And then this book deal
Speaker 1: came along, and so I was like, it's gonna be
Speaker 1: really difficult for me to build a company and then
Speaker 1: also write a book. And I ended up deciding to
Speaker 1: focus fully on the book, and so Jim kept me
Speaker 1: on the team as an entrepreneur in residence for a year,
Speaker 1: and so that was neat. It was just kind of
Speaker 1: like almost a fellowship of sorts that supported me as
Speaker 1: I did this like book endeavor.
Speaker 2: Were you the first entrepreneur in residents that he did,
Speaker 2: because now O'Shaughnessy Adventures almost does like a MacArthur grants
Speaker 2: to a number of people. Were you literally the first one?
Speaker 1: I was the first one. Yeah, yeah, it was really cool.
Speaker 1: I think what he's doing is incredible. It's really nice
Speaker 1: to see. I guess I guess you'd call it venture
Speaker 1: capital money, you know, be used in that way, like just.
Speaker 2: Just less focused on traditional technology companies and more towards
Speaker 2: content orient of things. Is that is that a fair test?
Speaker 1: And like maybe stuff that isn't going to have a
Speaker 1: media returns, like it's not so much a multiple, which
Speaker 1: I think traditional VC tends to focus heavily on because
Speaker 1: that's their whole game. But I think he is like, okay,
Speaker 1: like there's a bunch of people who need just a
Speaker 1: little bit of money, right right, Like I didn't. They
Speaker 1: didn't give me a ton of money, but it was
Speaker 1: enough for me to be like, Okay, I'm safe to
Speaker 1: focus on like this project that is going to take
Speaker 1: up so much of my time, but also eat away
Speaker 1: at the other projects that would have earned me money.
Speaker 2: Huh. Really kind of interesting. So at your YouTube channel,
Speaker 2: you do a lot of short clips, explaner videos, short
Speaker 2: form contents on financial topics, really just financial literacy and education.
Speaker 2: What motivated this idea? This is not your typical Most
Speaker 2: people go through a cycle of working their way through
Speaker 2: various aspects of Wall Street before they at a sheer frustration,
Speaker 2: say hey, we need a lot more financial literacy and
Speaker 2: we don't have it. What led you to financial logic
Speaker 2: so young?
Speaker 1: Yeah, I mean I think growing up in Kentucky you
Speaker 1: just kind of see like financial literacy. And I sold cars.
Speaker 1: I sold hun days for a summer, and I think
Speaker 1: that was really formative because people would come in the
Speaker 1: car lot and they wouldn't even really know what an
Speaker 1: interest rate was, right, And so you were signing these
Speaker 1: people on eighty four month, you know, car.
Speaker 2: Leading four months, believe it Monday. By the way, you're
Speaker 2: not paying off a Ferrari, You're paying off on Monday.
Speaker 1: Day, right, Yeah, And like you'd have to do all
Speaker 1: sorts of financing tricks to make sure they could get
Speaker 1: a card, even if their credit wasn't so good. And
Speaker 1: so I just saw a lot and I saw a
Speaker 1: lot of people that could have possibly just been helped
Speaker 1: if somebody had taught them what an interest rate was,
Speaker 1: if somebody had taught them like what a car payment meant,
Speaker 1: if what appreciation was right. And so that was when
Speaker 1: I was nineteen, and it stuck with me all Throughout
Speaker 1: the rest of my time in college. I worked at
Speaker 1: a small asset manager in Kentucky called Hilliard Lions, and
Speaker 1: I saw a little bit of stuff there, but it
Speaker 1: was really the car dealership and just my time growing
Speaker 1: up in Kentucky that was so formative to this idea
Speaker 1: that financial education really matters. Like the fact that I
Speaker 1: didn't know economics was a major until I got to college,
Speaker 1: Like is it something that should happen? Right? And so
Speaker 1: I think that's the goal is just like talk about
Speaker 1: econ more, make it more interesting for people, bring more
Speaker 1: people into the fold, because not only will they learn
Speaker 1: more and hopefully make better decisions, but it can also
Speaker 1: put a lot of people on a path that they
Speaker 1: might not have gone on in the first place.
Speaker 2: So I'm a little older than you, just to touch
Speaker 2: when I was in middle school, in high school, this
Speaker 2: is how long ago the boys would get segmented off
Speaker 2: into shop class, where you would lose a finger if
Speaker 2: you weren't paying attention. And the girls, and I'm saying
Speaker 2: boys and girls purposefully because we were ten and twelve,
Speaker 2: they would get shuffled off this way into home economics,
Speaker 2: which has much less to do with economics than you
Speaker 2: would imagine. It's more about housekeeping and cleaning and cooking,
Speaker 2: not here's how to manage a household budget. People are
Speaker 2: parennially discussing about bringing things like Civics back to high school,
Speaker 2: bringing things like basic budgeting and economics. It never seems
Speaker 2: to happen. How important is it to teach just basic economics,
Speaker 2: basic budgeting, basic things that we take for granted to
Speaker 2: high school kids.
Speaker 1: I think it's important. Would you agree?
Speaker 2: One hundred percent? I'm you know, it's amazing. I can't
Speaker 2: remember the last time I use calculus, but I deal
Speaker 2: with a budget every day. I have a running total
Speaker 2: of my checking account in my head. I know where
Speaker 2: my investments are. These are all skills, you know, autodidactism.
Speaker 2: Teaching yourself this you kind of forced to unless you
Speaker 2: study this as a major in college. Nobody teaches you
Speaker 2: how to do this. It's just trial and error, and
Speaker 2: hopefully the errors aren't too expensive. So I'm completely in
Speaker 2: agreement with you on that. And to take it a
Speaker 2: step further, the big challenge with financial literacy is it
Speaker 2: has a very short half life. Even people who are
Speaker 2: fairly financially literate, you know, six to twelve months later,
Speaker 2: half that stuff is gone, So you have to keep
Speaker 2: drilling into people. Here's how this works. Here is what happens.
Speaker 2: There's something you wrote sort of related to what we're
Speaker 2: going to talk about later that I want to bring
Speaker 2: out here. A quote from the book in This Economy,
Speaker 2: which is you write that people are the economy, So
Speaker 2: let's make the economy about the people. Explain the thinking
Speaker 2: behind that.
Speaker 1: Yeah, I mean the general idea there is kind of
Speaker 1: tied into the vibe session where it's to say, idea
Speaker 1: that like how people feel really matters, like how people
Speaker 1: feel about their economic circumstances, how they feel about their
Speaker 1: ability to have upward mobility. Basically, like how people are
Speaker 1: thinking about themselves is going to influence how the economy
Speaker 1: succeeds or fails. And so I think that's just something
Speaker 1: I tried to center throughout the book, was that ultimately,
Speaker 1: people and the decisions that they make are the entire economy, right,
Speaker 1: Like everything that we do is the economy, Like a
Speaker 1: coffee cup is an economic transaction, the labor of the beans,
Speaker 1: the supply chain, all of those things. And throughout the
Speaker 1: book I tried to center people because I feel like
Speaker 1: most of the time in economics education. The reason it
Speaker 1: doesn't work in high schools is because the kids are like,
Speaker 1: this doesn't really relate to me. I don't really understand budgeting,
Speaker 1: Like I don't have any tangible experience with this.
Speaker 2: Sure they do. They have an iPhone. Here's what the
Speaker 2: iPhone costs. Here's the credit that's built in, here's the
Speaker 2: interest rate impact on it. Here's supply chains from a million,
Speaker 2: here's what you pay for apps. Like, I think you
Speaker 2: could take an iPhone and teach kids everything they need
Speaker 2: to know about the economy, markets, and budgeting one device. Yeah.
Speaker 1: No, I think that's a great idea. And that is
Speaker 1: an experience with the economy, and it's a people centric one, right,
Speaker 1: And so that's exactly it is, Like you have to
Speaker 1: sort of center it on people's lived experiences so that
Speaker 1: way it all feels relatable.
Speaker 2: And so this theme comes up over and over again.
Speaker 2: You can't separate the economy from people. It's one and
Speaker 2: the same, isn't it.
Speaker 1: Yeah, I would. I would definitely say so. Some people
Speaker 1: might argue with that, but I think that that is
Speaker 1: ignoring the fact that like all the decisions that people make,
Speaker 1: you know, consumer spending is such a big part of
Speaker 1: the economy. Government spending, all of these things, and those
Speaker 1: are all people making decisions, right.
Speaker 2: I have to ask you, you're the ripe old age
Speaker 2: of twenty six. What led you a few years ago
Speaker 2: to say, I know, I'm going to write an economics book.
Speaker 1: Well, so it actually I've always really loved writing. I
Speaker 1: wrote these books eight about a Penguin, and so I've
Speaker 1: always been writing. And I wrote a book a book,
Speaker 1: you know, quote unquote every year for I don't know,
Speaker 1: five or six years after that little Penguin book, and
Speaker 1: so being an author had always been something I was
Speaker 1: really excited about. I never thought I'd have the opportunity
Speaker 1: so early. I never actually thought I'd have the opportunity
Speaker 1: to be a published author. But how it came about
Speaker 1: was I published this piece with New York Times Opinion
Speaker 1: on the Blob session, and Penguin Random House approached me
Speaker 1: and they were like, have you ever thought about writing
Speaker 1: a book? And I was like, yeah, I have. And
Speaker 1: we came up with this idea to do almost like
Speaker 1: a beginner Guide to the Economy, but with sixty illustrations,
Speaker 1: all done by me, just doing it in a much
Speaker 1: more fun and accessible way, you know, trying to make
Speaker 1: an economic guide for the twenty first century.
Speaker 2: It's funny you mentioned the penguin because in the book
Speaker 2: you compare the labor market to a goat steadily climbing
Speaker 2: a mountain, while the Fed actively trying to slow the
Speaker 2: goat down in their progress. So, first, is this frequent
Speaker 2: usage of animals and metaphors something you've been doing a while?
Speaker 2: And what made you think of the labor market as
Speaker 2: a goat and the Fed pulling the rope trying to
Speaker 2: slow them down?
Speaker 1: Yeah, I know lots of metaphors in my in my writing.
Speaker 1: I have a subject too, kylotisubsec dot com and I
Speaker 1: always employ some sort of metaphor that I think my
Speaker 1: readers are like, okay, you know, calm down. So the
Speaker 1: book was definitely heavy with metaphors, but I really wanted
Speaker 1: there to be tangible visualizations in the book. So the
Speaker 1: beginning of the book is this economic Kingdom, because I
Speaker 1: think the interconnectivity of the economy is where a lot
Speaker 1: of people get stuck. It's like, well, how does the inflation,
Speaker 1: How does inflation you know, influence libramarket how do they work? Like,
Speaker 1: how does the Fed influence labor market, How does the
Speaker 1: Fed influence inflation? How does fiscal policy work? What does
Speaker 1: the dollar do? So I drew that at the beginning
Speaker 1: of the book as kind of like this economic kingdom
Speaker 1: land where all the castles are interacting, and then yeah,
Speaker 1: the Fed and the labor market mountain or the Fed
Speaker 1: and the mountain goat. It was just another metaphor on
Speaker 1: top of that.
Speaker 2: So you tackle a number of weighty topics in the book.
Speaker 2: Let's do a speed round. Tell me what people either
Speaker 2: get wrong or don't understand about each of these issues.
Speaker 2: Let's start with national debt.
Speaker 1: I mean, I think this is a tough one because
Speaker 1: sometimes people are right, but a lot of people think
Speaker 1: it's solely unsustainable, like the US is going to go bankrupt.
Speaker 1: And there's definitely a plausible case that the US could
Speaker 1: go bankrupt, especially because we have that debt ceiling situation
Speaker 1: that's coming up in I think twenty six days as
Speaker 1: of time we're recording, And so a lot of people
Speaker 1: get that wrong where they are like, oh, the national
Speaker 1: debt's going to explode, the dollar is going to not
Speaker 1: become the reserve currency anymore.
Speaker 2: By the way, I've been hearing that since I was
Speaker 2: in college, since Reagan was president, and it's always it
Speaker 2: has yet to be yeah and wrong. I think if
Speaker 2: you're wrong for half a century, you're not early, You're
Speaker 2: just wrong.
Speaker 1: You're wrong absolutely, And like you could say, maybe in
Speaker 1: five hundred years the dollar will be reserve barranty, and
Speaker 1: then I.
Speaker 2: Won't even give you. I'll give you two hundred years,
Speaker 2: two hundred and fifty years.
Speaker 1: But if you're dead, and like, are you still right?
Speaker 1: If you're dead, you know.
Speaker 2: More importantly, does it even matter? I don't know right
Speaker 2: at that point. Recessions? What do people get wrong about recessions?
Speaker 1: Two quarters of negative GDP growth?
Speaker 2: That is a pet peeve of mine that I have
Speaker 2: been pushing back against for years. It's there have consistently
Speaker 2: been two quarters of negative GDP that haven't been recessionary.
Speaker 2: And if you look at what took place in twenty
Speaker 2: one and twenty two, remember GDP. People don't realize this.
Speaker 2: GDP is reported in real terms, meaning inflation adjusted terms.
Speaker 2: When you have two negative quarters, maybe it means the
Speaker 2: economy is slowing down, or maybe it means the economy
Speaker 2: is overheating and prices are going up. Those are two
Speaker 2: totally different things, aren't they. Yeah.
Speaker 1: Absolutely. I think a lot of people get stuck on
Speaker 1: that one. That is unpopular, Yeah.
Speaker 2: Very unpopular. What about labor market dynamics? What don't people
Speaker 2: understand about that?
Speaker 1: I mean, I think the biggest one here is that
Speaker 1: when the labor force participation read expands, the unemployment rate
Speaker 1: can still go go up. That's a tough one because
Speaker 1: people are like, oh, like, well, the unemployment rate is
Speaker 1: going up, so people are losing their jobs. But sometimes
Speaker 1: it's just more people are entering labor force.
Speaker 2: I like to call that denominator blindness, because people don't
Speaker 2: pay attention. They just see the big, scary number. They
Speaker 2: don't see the context of the larger data set underneath, Like, hey,
Speaker 2: this company's laying out laying off ten thousand people. Is
Speaker 2: that a bad thing? Do they have twenty thousand people?
Speaker 2: Or is it Walmart with four million and ten thousand?
Speaker 2: Is you know a rounding error? It's one out of
Speaker 2: one person at every fourth store something crazy like that.
Speaker 2: People ignore the broader context. Then you talk about context
Speaker 2: and framing throughout the book. What about housing market issues
Speaker 2: and the problem with affordable housing and first time home buyers.
Speaker 1: Yeah, housing is something I spend a ton of time
Speaker 1: on right now. I mean, I think the biggest issue
Speaker 1: is that people think that expanding the housing supply will
Speaker 1: make all home values go down. That's not necessarily the case,
Speaker 1: but it's very important to expand housing supply. It's very
Speaker 1: important that people have access to housing. So I think
Speaker 1: that's a big one. There's a lot of nimbiism that
Speaker 1: can arise. And then also, this is something that I
Speaker 1: don't think a lot of people realize, is that if
Speaker 1: you have a mortgage, you have to have insurance.
Speaker 2: Which is another crisis you talk about.
Speaker 1: I'm really concerned about insurance right now. But yeah, I
Speaker 1: would say those are the two things with housing.
Speaker 2: Yeah. Right. There was an interesting piece that came out recently.
Speaker 2: I don't remember if it was Bloomberg or somewhere else,
Speaker 2: but I definitely soared in the past two weeks that
Speaker 2: the states that build the most amount of houses are
Speaker 2: having the fastest GDP. So if you look at places
Speaker 2: like Florida and Texas, and I think we're probably at
Speaker 2: peak Florida right now, but hold that aside. Florida cranking
Speaker 2: up housing left and right. Texas builds a lot of houses.
Speaker 2: When you look at even fairly robust economies California and
Speaker 2: New York, they're growing much more slowly than those southern states,
Speaker 2: and they have horrific nimbiism and really challenging to put
Speaker 2: up new housing unless you're knocking down another house and
Speaker 2: just replacing it, that you can do, but expanding the
Speaker 2: amount of housing. Big problem in big states, Yeah, big problem.
Speaker 1: Like it's kind of funny. I think we maybe saw
Speaker 1: the same graph where it's like blue versus Red, Like
Speaker 1: it's actually a political divide where red states are doing
Speaker 1: a great job building more housing and blue states aren't.
Speaker 1: And that's you know, we should all be building more
Speaker 1: housing because that's kind of the housing theory of everything
Speaker 1: is something I heavily subscribe to, where if people feel
Speaker 1: like they're able to get a home, they're able to
Speaker 1: afford it, it's not a big worry. You know, everything
Speaker 1: will hopefully improve from that.
Speaker 2: You buy a house, you're then gonna furnish it, You're
Speaker 2: gonna buy durable goods and appliances. You're probably gonna buy
Speaker 2: a horror to You're going to spend a ton of money.
Speaker 2: It means you have a job. It means you have
Speaker 2: good credit. The housing theory of everything is pretty persuasive.
Speaker 2: Tell us a little bit about that.
Speaker 1: Yeah, I mean, I think it's it's super important. It
Speaker 1: is that idea that like you will participate in the economy.
Speaker 1: And I think also for you know, there's a chart
Speaker 1: the distributional financial assets from the Federal Reserve. It's one
Speaker 1: of my favorite charts and I talk about it all
Speaker 1: the time.
Speaker 2: Do you one flow of funds or something else.
Speaker 1: It's a distribution of financial assets. So it shows the breakdown.
Speaker 2: Of wealth, oh by death stiles or yeah.
Speaker 1: Yeah, So like they'll have like the bottom fifty percent,
Speaker 1: you know, the top zero point one percent and if
Speaker 1: you look at the bottom fifty percent, all their wealth
Speaker 1: is in their house. The top ten percent and it's
Speaker 1: in business ownership in equities. So there's a lesson to
Speaker 1: be learned there. But yeah, homes are a wealth generation
Speaker 1: tool for a lot of people. And I think to
Speaker 1: the point of, like, what do people get wrong about
Speaker 1: housing is that maybe it can't be both a speculative
Speaker 1: asset where you know, people do invest so much into
Speaker 1: it and expect it to appreciate so rapidly in a
Speaker 1: place to live. I think that's going to be a
Speaker 1: tough dichotomy over the next to you year.
Speaker 2: Right, you know, my parents' generation when they were buying
Speaker 2: houses for twenty five thirty five, forty thousand dollars and
Speaker 2: they live through that big inflationary cycle and then rate
Speaker 2: crash over from nineteen eighty to twenty twenty two. You
Speaker 2: have to live somewhere. Plus, if your home prices appreciate dramatically, hey,
Speaker 2: that's great for your retirement. I'm not so convinced that
Speaker 2: the current generation are going to have the same experience.
Speaker 1: I don't know if I'll ever be able to buy
Speaker 1: a home, and I think a lot of people in
Speaker 1: my generation feel the same way. So I'm technically a
Speaker 1: Gen Z and one and four Gen Z do own homes,
Speaker 1: but seventy eight percent of them got help from their
Speaker 1: parents to buy that house. And so I think that's
Speaker 1: going to be the thing for this upcoming generation, is
Speaker 1: that it's really going to help. If your parents did well,
Speaker 1: the greatest wealth the greatest generational wealth transfer is about
Speaker 1: to happen.
Speaker 2: It's already happening right as it was. I keep seeing
Speaker 2: forty eight sixty eight trillion, Yeah, crazy, crazy number.
Speaker 1: Ninety trillion by twenty forty five.
Speaker 2: Wood it's a ton of money.
Speaker 1: And yeah, some people will get a house out of that,
Speaker 1: and I think that's going to be maybe the only
Speaker 1: way that you get a house.
Speaker 2: Even if you get a down payment out of it,
Speaker 2: it's still it's going to help move you in the
Speaker 2: right right direction. Public transit give us. What are people
Speaker 2: getting wrong about public transit?
Speaker 1: I mean, I think people think it's like not useful
Speaker 1: to have public transit. Whenever it come to New York,
Speaker 1: it's so wonderful because the subway is so efficient. But
Speaker 1: I think a lot of people are like, no, we
Speaker 1: should just expand the highways. But if we invested just
Speaker 1: in light rail in these cities rather than adding another
Speaker 1: lane to the highway, you could transmit so many more
Speaker 1: people and you could free up the gridlock. People really
Speaker 1: love their cars in the United States because it's in
Speaker 1: you know, it's a place where you can go. It's
Speaker 1: an individualistic thing. But if we are able to invest
Speaker 1: in public transit, the economy will grow. People will be
Speaker 1: able to get around better. Just imagine, like you know,
Speaker 1: not how having to rely on a commute in order
Speaker 1: to go into work. It would expand the opportunities for
Speaker 1: so many people who right now are maybe strapped by
Speaker 1: not having a car or not wanting to do a
Speaker 1: certain commute.
Speaker 2: Right and the data shows adding additional lanes to highways
Speaker 2: just creates additional traffic. It does not solve the problem.
Speaker 2: The other thing that's so interesting about housing is the
Speaker 2: racial divide when you look at who's wealthy and who's
Speaker 2: not and where it comes from. African Americans tend to
Speaker 2: own houses at a much lower percentage rate when you
Speaker 2: look at the sources of wealth, let's call it the
Speaker 2: we'll ignore the top quartile, like the bottom seventy five percent.
Speaker 2: Very often people who are middle class or above. Housing
Speaker 2: wealth is a big part of it, and you just
Speaker 2: see much lower ownership rates amongst blacks in America than
Speaker 2: amongst whites. Has a huge impact on income inequality by
Speaker 2: racial device.
Speaker 1: Oh no, we have true. I think I believe incoming
Speaker 1: equality has improved, but wealth inequality has worsened since the pandemic.
Speaker 2: Meaning the difference between salary and your assets.
Speaker 1: Yeah yeah, yah. So like a lot of people you
Speaker 1: know didn't appreciate or didn't get to benefit from the
Speaker 1: appreciate of the rise in stock market values, they didn't
Speaker 1: have a home that was appreciating and value. Real wages
Speaker 1: did go up, but you know that's not quite enough
Speaker 1: I think for a lot of people, and it has
Speaker 1: created a lot of disparity, and I think that's it's
Speaker 1: really tough to navigate that. I think the candidates for
Speaker 1: the election are like trying to figure out, like, Okay,
Speaker 1: how do we sort of fix this? And like one
Speaker 1: way that the government could address it is by taxing
Speaker 1: people so they have more money, so they could maybe
Speaker 1: distribute more money. But that's very unpopular, So like we
Speaker 1: have to have a total rethink I think of these
Speaker 1: social programs because we're like just helping people to close
Speaker 1: that inequality gap because that is going to be a
Speaker 1: massive issue over the next decade.
Speaker 2: And our last speed round question green energy. What are
Speaker 2: your thoughts on renewable or green energy?
Speaker 1: Oh? I think it's so important. I mean, I think
Speaker 1: the thing is a lot of people think it's all
Speaker 1: or nothing. You kind of still have to have fossil
Speaker 1: fuels as you try.
Speaker 2: Natural gas going to be a transitional fuel for decades
Speaker 2: to come.
Speaker 1: Transitional is the perfect word for that. Yeah, you have
Speaker 1: to like still have all that stuff. You can't just
Speaker 1: go green right away. But you know, solar power is
Speaker 1: becoming extraordinarily useful, you know, hydrogen, all that stuff is.
Speaker 2: Solar is now cheaper than coal, and it's about to
Speaker 2: become cheaper than oil, which is a huge Like twenty
Speaker 2: years ago that was unthinkable, you.
Speaker 1: Know, and it's exciting, and I think a lot of
Speaker 1: people are still stuck on, you know, oil being so important.
Speaker 1: But green energy is the only way that we can
Speaker 1: move forward as a society. We're just going to have
Speaker 1: to rely on the traditional fuels for a little longer.
Speaker 2: Tell us about I like the way you phrase this,
Speaker 2: the abundance mindset.
Speaker 1: That's Derek Thompson's term from The Atlantic. Yeah, he's tremendous,
Speaker 1: but that is kind of this idea that we tend
Speaker 1: to think limiting, right, Like we're like, oh, we can't
Speaker 1: have all this, we can't have all this, we can't
Speaker 1: have that, we can't do this, And Derek Thompson argues like,
Speaker 1: well we can, Like we can have abundance, like we
Speaker 1: can focus on immigration, we can build more housing, like,
Speaker 1: we can have all these things. We can do green energy,
Speaker 1: like we can do all of these things. Right, there's
Speaker 1: a Keynes quote.
Speaker 2: That's about that about scare the scarcity mindset right where.
Speaker 1: It's like if the I think it's if the government
Speaker 1: can pay for it, you can do it essentially, Is
Speaker 1: that right?
Speaker 2: And why can't the government pay for it? If you
Speaker 2: think about you know, it's ironic how often politicians ignore
Speaker 2: what lord Kin's taught us a century ago, which is,
Speaker 2: during economic contractions, the government should spend to make up
Speaker 2: the short fall and consumer and business spending. What politicians
Speaker 2: always tend to forget is and when the economy is expanding,
Speaker 2: well then you pull back and let the private sector
Speaker 2: fill that gap. The problem is we never seem to
Speaker 2: pull back. It's it's pedal to the metal all the time.
Speaker 1: Yeah, which is that's going to be interesting with inurnching
Speaker 1: that we were talking about, because the government's gonna probably
Speaker 1: backstop all of that, and I don't know how that'll go.
Speaker 2: But why should the government backstop that? If you move
Speaker 2: to a part of the world that is being dramatically
Speaker 2: affected by climate change. Oh and by the way, if
Speaker 2: your state governor doesn't believe it and refuses to do
Speaker 2: anything to moderate it, why do I, as someone in
Speaker 2: a different part of the country have to bail out
Speaker 2: your bad decision. It's one thing when a hurricane hits
Speaker 2: and everybody is shocked. It's another thing when you're building
Speaker 2: waterfront property and no private sector ensure will cover you
Speaker 2: because they're like, no, the odds are you're gone in
Speaker 2: ten to twenty years. We're not going to take that risk.
Speaker 1: Yeah. I don't think the government should backstop those decisions,
Speaker 1: but I think it's going to be really tough because
Speaker 1: there is that mindset where it's like, oh, I should
Speaker 1: be able to build wherever I want, and.
Speaker 2: You can build wherever you want. Well, you just can't
Speaker 2: ensure where if you want. Those are two very different
Speaker 2: then yeah, but.
Speaker 1: If people expect insurance and you can self ensure if
Speaker 1: you do cash, but.
Speaker 2: Yeah, a bank will't finance you. So I remember during Sandy,
Speaker 2: my wife and I went for a drive along Dune
Speaker 2: Road out in the Hampton's and it was shocking to
Speaker 2: see what essentially is a barrier island that's been there
Speaker 2: for hundreds of years, the ocean going straight through it,
Speaker 2: like there are parts where houses were floating away and
Speaker 2: big gaps. It was crazy what had taken place there.
Speaker 2: And the Army Corps of engineers come in and they
Speaker 2: rebuild it. The only thing that really has changed is
Speaker 2: that FEMA has mandated, I think you have to be
Speaker 2: eleven feet above sea level above high tide, and so
Speaker 2: all these houses are built on stilts, and so you
Speaker 2: could kind of drive up to like the third or
Speaker 2: fourth step, and so by the time you get to
Speaker 2: the ground floor, you're relatively safe. If we get another sandy,
Speaker 2: the house at least shouldn't wash away. But that doesn't
Speaker 2: do any good if the rest of the barrier island
Speaker 2: pus is the way, right, So should I know we
Speaker 2: have a shortage of housing? Do we have a shortage
Speaker 2: of housing that's ocean front?
Speaker 1: I mean, that's a good question. It's like not only
Speaker 1: ocean front though, Like insurers have pulled out of California too.
Speaker 2: It was a wildfire, those fires, right.
Speaker 1: And they've pulled out of Louisiana for the same words
Speaker 1: of hurricanes. They pulled out of Florida because of the
Speaker 1: issues with hurricanes too, And so I think it's just
Speaker 1: like there's an increasing climate risk, and that's across.
Speaker 2: The board, right. It's one thing for politicians to argue
Speaker 2: about climate risk, but when insurers say, oh no, we're
Speaker 2: not going to cover that because we've done the numbers.
Speaker 2: This is an opinion they're uninsurable in that part of
Speaker 2: the world or that part of the country. It really
Speaker 2: raises some fascinating questions.
Speaker 1: Yeah, when Florida's second biggest insurer is the government, it's
Speaker 1: Citizens Insurance, And so that's kind of the funny situation
Speaker 1: that we're going to be in. You know, natural disasters
Speaker 1: are only increasing just because of what's happening to the environment,
Speaker 1: which is why green energy is so important. And I
Speaker 1: think that'll just be a big reckoning moment where it's like,
Speaker 1: you know, housing is so important, but we also have
Speaker 1: to have this huge conversation about how we're going to
Speaker 1: ensure these homes right because insurance has gone up twenty
Speaker 1: percent on average, I think since twenty twenty three across
Speaker 1: the whole country. Like property insurance is a huge burden
Speaker 1: for a lot of people right now, and that's something
Speaker 1: that you have to consider with the broader conversation around
Speaker 1: what does it mean to own a home in the
Speaker 1: United States?
Speaker 2: Right I recall when my mom moved to Florida, you know,
Speaker 2: decades ago, there was a fantastic arbitrage opportunity the cost
Speaker 2: of living there was a fraction, real estate was a fraction.
Speaker 2: Now between taxes, problems with insurance and all the HOA fees,
Speaker 2: the homeowners association fees for condos and houses have gone
Speaker 2: up because their costs have gone so much up, it
Speaker 2: doesn't feel like that it's a bargain anymore. Hey, maybe
Speaker 2: you get nicer weather when there's not a hurricane, but
Speaker 2: it doesn't seem to be the same bargain.
Speaker 1: No. I think Florida is in a really unique spot
Speaker 1: as a state because they there's nothing that's being done
Speaker 1: to make the homes more ensurable. Because one way that
Speaker 1: you could do that is to maybe invest in climate
Speaker 1: resilient infrastructure.
Speaker 2: I don't know, it's a hoax. We can't waste money
Speaker 2: on that. Climate change is a hope.
Speaker 1: No, it's it's it's a And like there's other reasons
Speaker 1: why insurance has increased other than climate, Like you do
Speaker 1: have to talk about the reinsurance companies, the people who
Speaker 1: ensure the insurance. They've raised greats. You know, inflation has
Speaker 1: impacted the costs rebuilding the homes. So like there's other
Speaker 1: reasons outside of climate change, But like we can't live
Speaker 1: in this state of denial. Not to like turn this
Speaker 1: into a climate change conversation, but it's.
Speaker 2: A it's a factor, and I think it's a more
Speaker 2: of a factor for your generation than my generation, because
Speaker 2: by the time climate change is really bad will be
Speaker 2: done and buried for a long time, You'll still be
Speaker 2: clearing up the mess that I like to blame my
Speaker 2: parents on. I'm semi green. You're probably much greener than me.
Speaker 2: I have a hybrid, I have an electro vehicle. I also,
Speaker 2: you know, fly, and my house is probably too big
Speaker 2: relative to what I really need. But that's a very
Speaker 2: generational thing. You could see how people's carbon footprints really
Speaker 2: vary with age. So what happened with the egg situation
Speaker 2: in twenty twenty two? What did people get so wrong
Speaker 2: about that? Oh?
Speaker 1: Man, I think eggs were It's funny, like thinking back
Speaker 1: to it, I'm like, that was so long ago now,
Speaker 1: but it was, you know.
Speaker 2: It was a year or so, right, So there was
Speaker 2: a chicken flu going around that was killing that millions
Speaker 2: of hens, and people lost their mind when eggs were
Speaker 2: like seventy eight dollars a dozen.
Speaker 1: Yeah, yeah, I know, people freaked out and they were
Speaker 1: like oh, you know, inflation is so bad. Everything is
Speaker 1: so bad. You know, the eggs, there's pray scouging going on,
Speaker 1: all this stuff, and it was really just kind of
Speaker 1: like a supply and demand misbalance because of the chicken flu.
Speaker 2: And there was price gouging going on, just not with eggs,
Speaker 2: of all the things. To point out to eggs was
Speaker 2: a legitimate Hey you kill fifty million chickens, guess what
Speaker 2: less eggs.
Speaker 1: Yeah, and I remember there being egg shortage at the
Speaker 1: grocery store if people were freaking out. But it all,
Speaker 1: I mean, it all calmed down like a month, like
Speaker 1: it really normalized quite quickly.
Speaker 2: Yeah, that's a pretty short gestation period for birds, right.
Speaker 1: Yeah, they lay a lot of eggs. Good for us,
Speaker 1: I guess when we eat them. But yeah, that was
Speaker 1: just kind of I think the a good example of
Speaker 1: you know, people and how important they are for the economy,
Speaker 1: because how people freak out ultimately does impact how everyone
Speaker 1: feels about things. Because that was kind of like mass
Speaker 1: hysteria in a really big way too, like the egg situation.
Speaker 1: I mean, I remember some of my friends were texting
Speaker 1: me about it, and they're like, Kylo, what's going on,
Speaker 1: the eggs, like economically speaking, by.
Speaker 2: The way, that that would take you a little thirty
Speaker 2: seconds to figure out on Google, I'm always surprised, like,
Speaker 2: there there's an acronym that I haven't seen recently on Twitter,
Speaker 2: but it used to be let me google that for
Speaker 2: you lmgt me f y. And it's just like, come on,
Speaker 2: why are you asking me so much of readily accessible answer?
Speaker 2: Ask something more complicated. But people see highering prices, they
Speaker 2: lose their mind. Let's talk about something else that I
Speaker 2: found fascinating from the book. People's eyeballs are now dollar signs.
Speaker 2: Explain what you mean by that?
Speaker 1: Yeah, so this is something I talk a lot about
Speaker 1: the presentations I give too, because the attention economy is
Speaker 1: really important. I think that our eyeballs are the most
Speaker 1: expensive things that we have because advertisers will pay so
Speaker 1: much to acquire them, and so I think that is
Speaker 1: both good and bad, right, Like it's valuable as a
Speaker 1: consumer because you kind of ordered the product, and so
Speaker 1: a lot of products can be free, like the social
Speaker 1: networking sites. But I think there's this general sense of
Speaker 1: exhaustion where people are like, I'm really sick of being
Speaker 1: advertised too. I know how expensive. My attention is and
Speaker 1: I don't want to pay attention anymore. And so I
Speaker 1: think that's kind of what we're seeing with the attention
Speaker 1: economy is people are quite tired of it because their
Speaker 1: attention is so valuable.
Speaker 2: And you mentioned advertising. The younger guys in my office,
Speaker 2: half their wardrobe comes from Instagram. They see something they like,
Speaker 2: click and buy it right from that. It's it's it's
Speaker 2: almost as if the advertisers are being removed from the middle.
Speaker 2: It's here's an influencer wearing this, Oh I like that, Bang,
Speaker 2: You're purchasing it in real time.
Speaker 1: Yeah, Instagram shopping is extraordinarily powerful, and that's true, is
Speaker 1: people like and that's kind of I think the exhaustion too,
Speaker 1: Like you do see sort of this influencer pushback. I
Speaker 1: wrote about this at the end of last year, like
Speaker 1: the influencer apocalypse that could be upon us, where people
Speaker 1: are very sick of like not knowing what's an advertisement
Speaker 1: and whatsnot. But there's also such power in the curation
Speaker 1: that influencers provide that I think it's more just people
Speaker 1: are like, I don't want to deal with it, but
Speaker 1: I think it's really valuable and the influencers do get
Speaker 1: paid quite a bit of a course to be essentially
Speaker 1: a billboard for these companies.
Speaker 2: Right. You know, it's funny because you and I both
Speaker 2: do a lot of content marketing, which is a phrase
Speaker 2: I don't love. But anybody who pays attention to someone
Speaker 2: who does that, it's because, hey, I've been following them
Speaker 2: for a while. I understand their process. I trust their judgment.
Speaker 2: They're not for sale, and if they're telling me go
Speaker 2: read this or go look at that, it's because they've
Speaker 2: done it and they think it's valuable. Like is that
Speaker 2: going to go away? Also? At what point how far
Speaker 2: down does the influence or apocalypse go? I don't know,
Speaker 2: he asked self interestedly, Right.
Speaker 1: Like what do you think? Yeah? I wrote this piece
Speaker 1: in February of this year around trust and because I
Speaker 1: think trust is a very expensive commodity too, and I
Speaker 1: think that trust is you know, there's not a lot
Speaker 1: of it going around. It's very difficult to gain trust,
Speaker 1: and so I think people will still have, you know,
Speaker 1: people like you where they trust, they trust your judgment.
Speaker 1: They're like, he knows what he's talking about. He's not
Speaker 1: going to try and pedle me a product. But like,
Speaker 1: once you do pedal, somebody a.
Speaker 2: Product now variable of newit. He's coming to you from right.
Speaker 2: Once that happens.
Speaker 1: Once that happens, trust you're done.
Speaker 2: So I've told this war story a million times, but
Speaker 2: it's just so perfect. The same day, during the lockdown,
Speaker 2: I want to say it was like March or April
Speaker 2: early in twenty twenty. No, maybe it's May or June,
Speaker 2: but you know, first half of the year still early days.
Speaker 2: I get an email from two different companies the same day,
Speaker 2: and one was Delta saying, hey, listen, we know you're
Speaker 2: stuck at home and this sucks and everybody's really frustrated.
Speaker 2: One thing you don't have to worry about are your miles.
Speaker 2: They're gonna last forever. And your silver medallion status now platinum.
Speaker 2: Your silver medallion status won't expire, will extend it for
Speaker 2: another eighteen months. You don't have to worry about it.
Speaker 2: Once you're ready to once this ends and you're ready
Speaker 2: to start traveling, Delta is ready when you are. And
Speaker 2: I'm like, holy cow, that's fantastic. And then I read
Speaker 2: the next email from Starbucks and it was, hey, your
Speaker 2: Starbucks points, which are nonsensical things that you get a
Speaker 2: free latte if you, you know, buy enough stuff, they're
Speaker 2: gonna expire at the end of the month, so go
Speaker 2: out and use them right away. And it's like, are
Speaker 2: you kidding me? I don't know if it was the juxtaposition,
Speaker 2: but I know that since then, I fly Delta a
Speaker 2: whole lot and I go to Starbucks a whole lot less.
Speaker 2: And I don't know if the guy from Chipotle is
Speaker 2: gonna do anything about that, but it just seemed like
Speaker 2: such a petty, silly, panicky thing to do. Like, wait,
Speaker 2: your cost of food is like the least expensive part
Speaker 2: of the real estate, the labor, everything you do. My
Speaker 2: dumb egg white whole wheat McMuffin, you're gonna just take
Speaker 2: that because we're in the middle of a pandemic. Nobody's
Speaker 2: going to your store, don't you want to encourage. I
Speaker 2: guess that was their attempt use it or lose it.
Speaker 2: That look, I'm curious your thoughts on how does corporate
Speaker 2: America capture and maintain trust from people who my generation
Speaker 2: is arguable will be more loyal to brands like my
Speaker 2: neighbor's growing up. He's a Ford guy, he's a Chevy guy.
Speaker 2: I don't know if that sort of brand loyalty really
Speaker 2: exists anymore.
Speaker 1: There's a really good piece called Life After Lifestyle by
Speaker 1: Toby Shoren, and he kind of talks about this, how
Speaker 1: like some parts of brands are influencing culture, but it's
Speaker 1: not the traditional brands. So it'd be brands like you
Speaker 1: know how your office guys go on Instagram. It would
Speaker 1: be like all Birds. All Birds is now a terrible stock.
Speaker 1: But that's just one example, like where.
Speaker 2: Oh god, we've had those for like seven eight years,
Speaker 2: that's like mid twenty ten.
Speaker 1: But they were kind of like the pinnacle of like
Speaker 1: forming some part of culture and some sort of brand identity.
Speaker 1: But as you're saying, people jumped immediately to the next thing.
Speaker 1: So I don't think it's like cohesive brands stories anymore.
Speaker 1: It's kind of like these brands that patch together to
Speaker 1: create like an archetype of a person.
Speaker 2: Especially in fashion that changes so rapidly. Although these aren't
Speaker 2: Warby Parker's, but they seem to be doing pretty okay.
Speaker 2: Like some companies develop a relationship I love my Maui
Speaker 2: Jim's or my Olaci shoes, And at a certain point,
Speaker 2: maybe this is being an old man. But it's just
Speaker 2: like you just know, just reorder the next one. Oh,
Speaker 2: these shoes are ratty, all right, leave them out at
Speaker 2: the beach house, order another pair, get a new pair.
Speaker 2: But I don't know if that's true for your generation. No.
Speaker 1: I think it is that you know, you sort of
Speaker 1: follow the trends. There's a really good book by douglash
Speaker 1: Rushkoff called Present Shock where he talks about how everything
Speaker 1: moves in a fashion timeline now, so like people just recycle,
Speaker 1: like they just moved through stuff so quickly.
Speaker 2: Literally fast fashion is what you know, shine in those
Speaker 2: companies are all about.
Speaker 1: Yeah, trends move so fast, and you want to be
Speaker 1: on top because your whole life is you know, on screen.
Speaker 2: On screen, to say the least. So what were you
Speaker 2: looking at that led you to the phrase vibe session? Yeah?
Speaker 1: I mean I think for me it was really fortunate
Speaker 1: because I had all these comments, Like I was making
Speaker 1: these social media videos, so I'd get hundreds of comments
Speaker 1: a day of me talking about how GDP was going okay,
Speaker 1: and then people would be like, we're in a recession.
Speaker 1: I'm upset, Like what are you talking about? And so
Speaker 1: I was like, what's going on? Like why, Like the
Speaker 1: economic data is okay, but all these people are extraordinarily upset.
Speaker 1: And so I was on a bike ride one day
Speaker 1: and I was thinking about that, and it's kind of
Speaker 1: like this disconnect of vibes, right, Like it's this disconnect
Speaker 1: with beading consumer sentiment and economic data, and that gap
Speaker 1: is really the important part. The vibe session has taken
Speaker 1: a life of its own, which is really cool. But
Speaker 1: it's been used incorrectly. A couple of times.
Speaker 2: Do people use it incorrectly.
Speaker 1: They'll be like, people shouldn't be feeling bad. It's like,
Speaker 1: and that's not the point of that word.
Speaker 2: That's a generational thing, isn't it. You and I were
Speaker 2: talking earlier, my buddy Dave, our friend, mutual friend, Dave
Speaker 2: Nadic was saying, hey, people over fifty hey, vibe session
Speaker 2: concept and people under seem to get it. What is
Speaker 2: it about the way it's being misus used? That reflects
Speaker 2: the lack of comprehension.
Speaker 1: From my experience of having conversations because a lot of
Speaker 1: people don't like the word. I got death threads over it.
Speaker 2: It was toxic social media? Right? What is better than Twitter?
Speaker 2: Since Elmo took it over?
Speaker 1: Oh, God, it's a nightmare right now. It was lucky.
Speaker 1: This was two years ago, you know, just to make
Speaker 1: that word because I don't know what the comments would
Speaker 1: be like currently. But we're kind of seeing a real
Speaker 1: time social experiment with that. Like it's almost like four
Speaker 1: chun come back to life. But none of these people
Speaker 1: are anonymous.
Speaker 2: Well, plenty of them are anonymous, and my guess is
Speaker 2: thirty forty percent of them are just bots.
Speaker 1: Yeah, yeah, that's the foreign interference is a really big thing.
Speaker 2: Some domestic, but a lot of China and North Korea,
Speaker 2: Russia elsewhere. For sure. Arguably I ran, although I'm not
Speaker 2: not as convinced of that. So you coin this phrase.
Speaker 2: June twenty twenty two. By Quinn's ends, CPI inflation peaked
Speaker 2: at nine percent in June twenty twenty two. How much
Speaker 2: of vibe session was just utter frustration with rapidly rising inflation?
Speaker 1: A lot of it. Yeah. So the way that I
Speaker 1: talk about vibe session now, you know, tw years later,
Speaker 1: is that it is an element of structural affordability, right, Like,
Speaker 1: inflation is really high. Even with inflation going down, that
Speaker 1: doesn't mean the prices are going down. Housing is unaffordable
Speaker 1: as we talked about Eldercare is extraordinarily unaffordable. Childcare costs
Speaker 1: are up thirty two percent since twenty nineteen. So like
Speaker 1: there's a structural affordability that is being captured in people's
Speaker 1: vibes that doesn't necessarily show up in the broader economic data,
Speaker 1: Like you don't look at GDP and say, okay, people
Speaker 1: can't afford to put their mom in a nursing home.
Speaker 1: And there's also media headlines like the media has become
Speaker 1: really negative. Sentiment has you know, decreased over time too,
Speaker 1: and so I think it's those two things where it
Speaker 1: is unaffordable, and then also there's a lot of stories
Speaker 1: about things being really bad and that is creating a vibesession.
Speaker 2: So it's interesting you mentioned sentiment. I did a blog
Speaker 2: post around the same time, and I was kind of
Speaker 2: fascinated that the University of Michigan sentiment survey was lower
Speaker 2: than the pandemic, lower than the financial crisis, lower than
Speaker 2: September eleventh, lower than the dot com implosion. That seemed
Speaker 2: to be wildly inappropriate. What else do you think factored
Speaker 2: into that disconnect?
Speaker 1: Well, I don't know if you saw the Harris Guardian
Speaker 1: poll that like a lot. God, I can't remember the
Speaker 1: exact number, but a number that is way too high.
Speaker 1: Percentage of people think that now was worse than the
Speaker 1: Great Depression, And so I think that that's kind of
Speaker 1: what's going on is people are looking at circumstances and
Speaker 1: as we were talking about earlier, maybe not having context
Speaker 1: for what's happening right now. Right now, we're not in
Speaker 1: a great depression.
Speaker 2: It's unaffordable, but we're not even in a recession. Arguable,
Speaker 2: you were expanding two and a half three percent somewhere
Speaker 2: in that range in the third or fourth quarters of
Speaker 2: twenty twenty four. So I have to ask you this question.
Speaker 2: I forgot. I looked up the quote the future is here.
Speaker 2: It's just not evenly distributed by William Gibson. How much
Speaker 2: of what you described Vibe session is about the abundance
Speaker 2: of our economies here, it's also not evenly distributed. I'm
Speaker 2: old enough to recall that the Baby boomers are in trouble.
Speaker 2: They're never gonna pay the wealthiest generation in history. Everybody
Speaker 2: got that wrong, or a lot of people got that wrong.
Speaker 2: We see gen X doing well, we see Gen Z
Speaker 2: kind of coming up a little bit and now they're
Speaker 2: a new generation that's calling jen Alpha or something like that.
Speaker 2: So how does the ditribution of wealth back and loaded
Speaker 2: to the oldest people who have been working and saving
Speaker 2: and investing the longest. How does that impact the concept
Speaker 2: of vibe session.
Speaker 1: Yeah, I mean I think you know, there's so there's
Speaker 1: a couple of things there, right, Like there's a saying
Speaker 1: where America has a lot of wealth but not a
Speaker 1: lot of prosperity. And I think that's kind of the
Speaker 1: situation where a lot of people have a lot of
Speaker 1: money and a lot of assets, but that is not
Speaker 1: evenly distributed, as you said. And I think also because
Speaker 1: people are living longer and you know, staying in jobs longer,
Speaker 1: taking longer to retire, there isn't maybe as much upward
Speaker 1: mobility as there used to be.
Speaker 2: Will you people hurry up? And what's the problem?
Speaker 1: No, I just it isn't it's I don't think people
Speaker 1: should die. But it is interesting because there's I need
Speaker 1: to do more work on this. But there's almost kind
Speaker 1: of like a leadership slash mentorship crisis where it seems like.
Speaker 2: Certainly with remote work is giantly problematic.
Speaker 1: Absolute because like how do you train up the next
Speaker 1: generation if you're not with them. And also there is
Speaker 1: an element of resistance to training up the next generation,
Speaker 1: I think, because there's elements of agism, like the older
Speaker 1: people don't want to be pushed out of their jobs
Speaker 1: and they feel like that's happening, and it's tough within
Speaker 1: like within the generations too, Like I think it's forty
Speaker 1: three percent baby boomers have no retirement savings and then
Speaker 1: some of them have, you know, a.
Speaker 2: Bubble toimes right, it's not even lead distributed, no doubt
Speaker 2: about it.
Speaker 1: And so I think that's totally true because in the
Speaker 1: US we are very much in all or nothing society,
Speaker 1: like you either figure it out or you don't, and
Speaker 1: there's nobody who's going to help you.
Speaker 2: So you're hinting with the mentorship issue, you're hinting at
Speaker 2: something vibe session related, which is I mean, let's talk
Speaker 2: about the eight hundred pound gerill in the room. How
Speaker 2: big an impact was the pandemic, the lockdown, being forced
Speaker 2: to work remotely, not being able to have the sort
Speaker 2: of social interaction that my generation took for granted when
Speaker 2: I was your age. How big of an impact was
Speaker 2: that mess on? And let's be blunt the pandemic was
Speaker 2: not well handled by the previous administration. You can argue
Speaker 2: the at least they got the vaccine out and was
Speaker 2: somewhat better handled by the next administration, although both of
Speaker 2: them contributed Karzac one, Karzac two, and Karzac three that
Speaker 2: massive fiscal stimulus is a big part of the inflation spike.
Speaker 2: How much did the pandemic contribute to Vibe session feelings.
Speaker 1: I think a lot. Yeah, I think, you know, to
Speaker 1: the point of social interactions, Like I graduated basically into
Speaker 1: the pandemic and I still don't know how to like
Speaker 1: talk and adult species, right, right, So I think that's
Speaker 1: definitely a big part of it, is like the lack
Speaker 1: of social interaction. And then two, like a lot of
Speaker 1: people ended up just consuming content all day long, right,
Speaker 1: and what goes viral, as you know, on social media
Speaker 1: is doomer stuff, right, And so I think that's a
Speaker 1: big thing, is like people were consuming because we were
Speaker 1: stuck inside. It was extraordinarily scary. Nobody knew what was happening.
Speaker 1: And you when people are telling you that the world
Speaker 1: is ending, and you're like, okay, yeah, that makes sense
Speaker 1: to me, and you just kind of keep on consuming
Speaker 1: that info even after things get better.
Speaker 2: Right, That lack of information hygiene is really important. Here's
Speaker 2: another generational difference, and I want to ask you how
Speaker 2: this contributed to the vibe session. So people I don't know,
Speaker 2: over fifty, maybe even over forty, like that, were already
Speaker 2: in their teens or twenties when the Internet came about.
Speaker 2: The Internet has always been a room in the house
Speaker 2: we would visit, Oh, I'm going to go online for
Speaker 2: a while, whereas the forty and under generation, the internet
Speaker 2: has always been there. Is that true forty and they,
Speaker 2: let's say thirty and under certainly since the mid nineties,
Speaker 2: and they exist in the Internet. It's not like a
Speaker 2: separate thing. It's part of their virtual reality. So raises
Speaker 2: the question, what's the impact of social media on that
Speaker 2: generation's self identity? They at least a decade ago, we're
Speaker 2: so focused on likes and social approval and you mentioned
Speaker 2: going viral. Does that lead them to be less data driven,
Speaker 2: less more embracing of these subjective measures of reality?
Speaker 1: Maybe? Yeah, that's interesting. I think definitely. Yeah, Like the
Speaker 1: Internet is something that it's like a room that you
Speaker 1: go into in your head, right right, Like you are
Speaker 1: not with other people if you're on your phone, even
Speaker 1: if you're around them, right, And so I think that's
Speaker 1: something that we're like just starting to grapple with. I've
Speaker 1: noticed it within myself where it's like, once I start scrolling,
Speaker 1: I'm not in the room with my friends, like I'm
Speaker 1: in the room on Twitter. And so I think that's
Speaker 1: a big part of it too, where you do everything
Speaker 1: does end up being influenced by feelings versus like quantitative measures,
Speaker 1: and you kind of know how it feels in your
Speaker 1: head and you kind of extrapolate that out into the
Speaker 1: world beyond you. And so maybe we do have a
Speaker 1: more subjective generation that is like, well, this is how
Speaker 1: I feel about stuff, because look how feelings perform on
Speaker 1: the internet.
Speaker 2: Right and listen, social media has perfected the algorithm for outrage,
Speaker 2: because outrage increases engagement even as it slowly eats away
Speaker 2: like a cancer society from the inside. You know. I
Speaker 2: have mixed feelings on the death of Twitter as it
Speaker 2: slowly circles.
Speaker 1: The dreaming it's going to die.
Speaker 2: I think it's dead already.
Speaker 1: Really.
Speaker 2: So last summer, not twenty four to twenty three, I
Speaker 2: lost I got hacked. I call him Elmo but Elmo
Speaker 2: decided to make you pay for two factor authentication, which
Speaker 2: is standard security practices. It used to come with it.
Speaker 2: And I came home from dinner Saturday night. Apparently you
Speaker 2: could send an email requesting a change of password and
Speaker 2: those idiots would just do it, like if you don't
Speaker 2: object to it in sixty minutes, that's something silly. So
Speaker 2: that's how I lost my Twitter account, and fortunately the
Speaker 2: folks here helped me get it back and only took
Speaker 2: three months. And again Dave nottiing and I I was
Speaker 2: like lamenting this, and He's like, you're not missing anything.
Speaker 2: It's died already. This is a year ago, and I'm
Speaker 2: genuinely shocked at how the engagement has gone down, how
Speaker 2: the interaction and half the people I know irl I've
Speaker 2: met on Twitter over the past fifteen years ago. It's
Speaker 2: so terrible, And there's nothing else has come along that
Speaker 2: quite matches it. Just that. So now I'm pretty much
Speaker 2: down to just focusing on my lists. At least it
Speaker 2: used to be with your list, you weren't seeing a
Speaker 2: lot of other junk that even that's starting to get
Speaker 2: corrupted because I know I have a list on behavior
Speaker 2: finance and a list on charts and at markets and economics,
Speaker 2: and a list on automobiles, and a list on travel,
Speaker 2: and a list on I have all these lists, and
Speaker 2: I used to be able to just go, you know what,
Speaker 2: I'm just going to spend some time learning about, you know,
Speaker 2: the hills of southern Spain, and you could do that.
Speaker 2: And now everything is just intruded with craziness and politics.
Speaker 2: But it brings I want to bring this back to
Speaker 2: the vibe session question. So we've talked about the pandemic,
Speaker 2: We've talked about inflation as a driver of the vibe session.
Speaker 2: How much of this is driven by social media? How
Speaker 2: much of this is that doomer loop of people who
Speaker 2: have been wrong since the financial crisis and yet still
Speaker 2: have a big following.
Speaker 1: Yeah. No, it's something I combat all the time with
Speaker 1: the stuff that I post on Instagram and TikTok, because
Speaker 1: that's what goes viral, is like not the truth, but
Speaker 1: big scary things. And that's a huge problem on Twitter,
Speaker 1: as we both know. And so I think it is
Speaker 1: definitely an issue because, like, you know, we have these
Speaker 1: animal brains and they're trying to protect us since they're like,
Speaker 1: you know, pay attention to the big scary thing, and
Speaker 1: that's always going to be a duomer story, right, right,
Speaker 1: Like nobody really wants to hear Okay, the economy's going okay.
Speaker 1: It's like, no, the economy's going crazy and you're in
Speaker 1: a lot of trouble. Like that's what you're going to
Speaker 1: end up paying attention to. And so I think totally
Speaker 1: the vibe session has been heavily influenced by social media.
Speaker 1: Even when I was writing that initial piece, I reached
Speaker 1: out to a lot of people in my comment section
Speaker 1: who had been commenting that they were like not feeling
Speaker 1: good and that they were very worried, and there's of
Speaker 1: course like true economic pain out there. But a lot
Speaker 1: of these people were like, Oh, I read an article
Speaker 1: that things are not okay.
Speaker 2: And what's the track record of that paper on that author?
Speaker 2: How why do you assume that because it was published
Speaker 2: it's accurate. I'm always sure I spend a lot of
Speaker 2: time fending off nonsense that clients read and say, hey,
Speaker 2: you know, New York Stock Exchange margin dead is at
Speaker 2: record highs. So is the New York Stock Exchange. Look
Speaker 2: at the two. As long as you're it's at all
Speaker 2: time highs. Margin dead is also going to be at
Speaker 2: all time highs. Why is that a problem? Back to
Speaker 2: denominator blindness. You got to look at the broader context,
Speaker 2: and yet people don't seem to ask those questions.
Speaker 1: Do you think that's an element of media literacy?
Speaker 2: There's some of that. It's also you brought up you know,
Speaker 2: our lizard brains. Things that are good are not an
Speaker 2: existential threat. So all right, it's great, things that are bad.
Speaker 2: Oh my goodness, this can end. Hey, I'm here to
Speaker 2: propagate my genetic lineage if if this threatens that, you know,
Speaker 2: we were hardwired to be a classic risk aversion. It's
Speaker 2: losses feel twice as bad as gains because losses are
Speaker 2: an existential threat.
Speaker 1: Yeah. Absolutely. I was reading this really interesting article about
Speaker 1: the you know, propagating the generic lineage thing, because I'm
Speaker 1: really interested in the dating apps and how they're sort
Speaker 1: of influencing the mindset of the younger generation around that
Speaker 1: and this guy, he's a sociologist, and he's arguing that
Speaker 1: our brains are actually switching away from the desire to
Speaker 1: repopulate and they're more so becoming focused on the individual
Speaker 1: and that's maybe why we're having more and more of
Speaker 1: a fertility crisis.
Speaker 2: Isn't that a global issue? Oh yeah, seeing a fertility
Speaker 2: crisis around the world across the board. You mentioned the
Speaker 2: quant who works in my shop, Nick Majulie. He did
Speaker 2: some stuff years ago, look scraping the data from the apps.
Speaker 2: You should dig that up. I remember it was like
Speaker 2: just insane the sort of numbers he pulled out of that.
Speaker 2: I think I'm hard pressed to imagine that five years
Speaker 2: or ten years of social media are going to undo
Speaker 2: two million years of evolutionary biology. Maybe I'm wrong, but
Speaker 2: is this something that it's just a novel theory or
Speaker 2: you finding against a lot of wetwear and hardwired aspects
Speaker 2: of the human experience.
Speaker 1: Yeah, yeah, I think it's it's definitely like paper covering
Speaker 1: the deeper, you know, need to do that, because I
Speaker 1: do think that's a genetic desire. But it's just interesting
Speaker 1: and like maybe that's like why the vibes are disconnected, right,
Speaker 1: Like why you see these high rates of depression, anxiety,
Speaker 1: et cetera. You know, whenever you talk about society at large,
Speaker 1: you're always pulling theories and there's always gaps in them.
Speaker 1: But I think it's just interesting to think about like,
Speaker 1: you know, what is the impact of dating apps, What
Speaker 1: is the impact of being on social media and seeing
Speaker 1: you know, not real faces but edited faces, Like how
Speaker 1: does that impact how we actually exist in the real
Speaker 1: world and ultimately how we feel about everything that we're
Speaker 1: doing and the economy at large.
Speaker 2: Well, we know that kids have a much higher depression
Speaker 2: rate than they used to ever since you know, the
Speaker 2: iPhone came out and all the apps, so it's having
Speaker 2: a real effect all right, which leads to my last
Speaker 2: vibe session question, which is there were a number of
Speaker 2: economists who thought a vibe session would be a self
Speaker 2: fulfilling prophecy and that we would end up negative sentiment,
Speaker 2: would end up driving recession. That didn't happen.
Speaker 1: Why, Yeah, that was good. That was actually the title
Speaker 1: of the original piece, you know, vibeesession, self fulfilling prophecy.
Speaker 1: And I don't think it ended up happening because the
Speaker 1: economic data has been so strong, Like the government is
Speaker 1: spending a lot of money, right, and that's going to
Speaker 1: help prop up GDP, and that's going to help a
Speaker 1: prop up the consumer. The consumer had an incredible savings
Speaker 1: buffer post COVID, and we did see real wage gains
Speaker 1: and so you had a resilient consumer who was ready
Speaker 1: to spend, especially on services. And so I think that
Speaker 1: helped us avoid a recession as we had a government
Speaker 1: to you know, spending a lot of money. And then
Speaker 1: we had a consumer that up until recently has been
Speaker 1: quite strong in a labor market that was incredibly strong.
Speaker 1: We're seeing weakness in that now, but I think that's
Speaker 1: why we were able to avoid the self fulfilling prophecy
Speaker 1: aspect of it.
Speaker 2: Are we really seeing weakness? Are we just seeing less
Speaker 2: strength than we.
Speaker 1: Did, We're seeing That's a good point. It's more lukewarm versus.
Speaker 2: High and the crazy thing I think people So you
Speaker 2: talk about the abundance mindset earlier, there are a couple
Speaker 2: of areas in the economy that scarcity has taked. So
Speaker 2: we don't have enough single family homes, there aren't enough laborers.
Speaker 2: We've reduced a number of legal immigrants since nine to eleven.
Speaker 2: We lost a whole bunch of people to COVID we launched,
Speaker 2: We have removed a whole bunch of people from the
Speaker 2: labor force through disability, including long COVID. Arguably we're short
Speaker 2: two or three million houses were short a few million
Speaker 2: automobiles due to the lag in ramping up semiconductor production.
Speaker 2: And we're also short I don't know, pick a number one, two, three,
Speaker 2: four million laborers out of a laborpool of one hundred
Speaker 2: and sixty two million people. So we have all this
Speaker 2: abundance and yet at the same time they're scarcity in
Speaker 2: very specific areas.
Speaker 1: Yeah. Absolutely, in the abundance mindset is like we can't
Speaker 1: have all these things in great numbers, and like it
Speaker 1: doesn't have to be this issue where there's not enough
Speaker 1: of things and that creates so much wordy and concern
Speaker 1: for people. But yeah, I think that's kind of the
Speaker 1: issue across the board is we don't have enough, and
Speaker 1: yet we have so much money as a country, right.
Speaker 2: Wealth, but not prosperity. I love that economy where if
Speaker 2: you go to I remember being in Europe right during
Speaker 2: the dot com implosion and everybody was so stressed out
Speaker 2: in Manhattan you could feel like, hey, I get fired,
Speaker 2: I'm gonna lose my health insurance. What it's gonna happen
Speaker 2: if my kid needs a operation. You go to Europe
Speaker 2: and they're in the cafe is having coffee and they're
Speaker 2: smoking cloth cigarettes and nobody really seems to be bent
Speaker 2: out of shape that hey, the technology is imploding eighty percent.
Speaker 2: They're all kind of just groove in life. It's a
Speaker 2: very different mindset where the focus isn't on wealth, but
Speaker 2: it's on prosperity. Yeah, are there that much geographic differences?
Speaker 2: Is United States that unique compared to the rest of
Speaker 2: the world.
Speaker 1: I don't. I mean, I think there's actually a big
Speaker 1: conversation kind of happening around this right now, like why
Speaker 1: the United States sort of does this to itself? And
Speaker 1: I think the US has these elements of workaholicism, like
Speaker 1: we love the work and Europe maybe doesn't. But yeah,
Speaker 1: we've chosen maybe not to spend so much on the
Speaker 1: social aspect of it, and you do see consequences of that.
Speaker 1: Like I think having a social safety net for people
Speaker 1: is a really good buffer. Like once you have a
Speaker 1: sense of security, there's kind of a lot that you
Speaker 1: can achieve.
Speaker 2: A lot less stress. Also, although although arguably we don't
Speaker 2: have that safety net, we don't and we've achieved I
Speaker 2: think the stress is what has driven us.
Speaker 1: Yeah, because we know that we have to have a
Speaker 1: safe you.
Speaker 2: Better get off your go do something otherwise no one's
Speaker 2: feeding you. Good luck being homalless, which kind of is
Speaker 2: really funning at about the Wall Street bets and all
Speaker 2: the crypto bros that have fun being poor. Was such
Speaker 2: an interesting basic approach to No. No, you've got to
Speaker 2: go do something, even if it's something like NFTs or
Speaker 2: crypto figure something out. That's a uniquely American proposition.
Speaker 1: Yeah. Absolutely, because there's nobody to catch you, right, and
Speaker 1: so you have to go invest in disecoin. And that's like,
Speaker 1: now we have this gambling issue as a society, like
Speaker 1: sports gambling, unbelievable. Gosh, it's awful. Yeah, and it is.
Speaker 1: I really do believe it's because we don't have a
Speaker 1: safety net for people, and so they're like, I don't
Speaker 1: know what to do, I'll just gamble my money.
Speaker 2: That makes sense. Usually if I don't know what to do,
Speaker 2: I'll go watch YouTube. But hey, whatever you have to do.
Speaker 2: So the Vibe session did not become a self fulfilling prophecy.
Speaker 2: I have to do a compare and contrast with something
Speaker 2: he wrote in the book, inflation is entirely dependent on
Speaker 2: what people expect to happen. I disagree, but I want
Speaker 2: you to explain why you think that is.
Speaker 1: Yes, So this is definitely an unpopular opinion. Drew and
Speaker 1: Poll actually talked about this in his Jackson Whole speech.
Speaker 1: You know, infulation nextperts have been tempered, so people don't
Speaker 1: expect as much inflation as it used to and that'll
Speaker 1: help the Fed.
Speaker 2: So let me just let me just stop you right there.
Speaker 2: So after inflation has fallen from nine percent to two percent,
Speaker 2: their expectations go down. That sounds quite backwards looking and lagging.
Speaker 2: Let me also point out that when inflation was about
Speaker 2: to spike up in two thousand and one, everybody's forward
Speaker 2: inflation expectations were pretty low. Isn't this like asking people
Speaker 2: what their risk tolerance is? Aren't you just getting whatever
Speaker 2: happened over the past six to twelve months? Yeah?
Speaker 1: Usually, But I think the reason I said that in
Speaker 1: the book was like, the expectations do matter, and they'll
Speaker 1: ultimately influence how the Federal Reserve makes decisions.
Speaker 2: I mean, Jerome Powell one hundred percent agrees with that.
Speaker 2: I just think he's.
Speaker 1: Wrong because you think it's what, like, what do you think?
Speaker 2: I think people don't know what the hell they think.
Speaker 2: They certainly don't know what they're gonna do you ask
Speaker 2: them a question they don't know. And because of the
Speaker 2: American educational experience where we're tested within inches of our lives, Hey,
Speaker 2: no penalties for filling in that bubble on your multiple choice.
Speaker 2: So people nobody likes to say I don't know, So
Speaker 2: here's a made up answer. Go away. I can talk
Speaker 2: about this stuff with you forever, but we have a
Speaker 2: hard stop. So I have to get to my favorite
Speaker 2: questions that I ask all of my guests, starting with
Speaker 2: what's keeping you entertained these days? What are you listening
Speaker 2: to on podcasts or watching on Netflix, Amazon, Disney, whatever
Speaker 2: you like?
Speaker 1: Yeah? So I really like the podcast Philosophize. This Philosophize, Yeah,
Speaker 1: that's one of my favorite podcasts. It's by Stephen West
Speaker 1: and he talks all about the different schools of philosophy,
Speaker 1: goes back to the very beginning, and it's just phenomenal
Speaker 1: and he walks you through everything and all the different
Speaker 1: schools of thought, and I think he does a fantastic job.
Speaker 1: And then there's this series called Land of the Giants
Speaker 1: by Box.
Speaker 2: You've heard of that, yes.
Speaker 1: Yeah, Peter Kofka has done a couple of them, but.
Speaker 2: He was a Business Week for a long time, and
Speaker 2: then I think it was briefly at the Times and
Speaker 2: now he's at Fox.
Speaker 1: Yeah, I think so. I think that was his path.
Speaker 2: Well unless it was backwards Times Business Week, but whatever.
Speaker 2: He's a good economic writer.
Speaker 1: And he's a great podcast Oh really Yeah, I really
Speaker 1: enjoyed his his dives. They talk about like delivery apps,
Speaker 1: they talk about dating apps, they talk about Twitter and
Speaker 1: what happened with Twitter, and so I really enjoyed that.
Speaker 1: And then I've been listening. I listened to a ton
Speaker 1: of audio books because I'm on a bike a lot,
Speaker 1: and so I'll listen to a book on the bike
Speaker 1: and Blood in the Machine is really good.
Speaker 2: It sounds so from the Oh.
Speaker 1: I can't remember the author's name.
Speaker 2: So I'm going to get to specific books. We'll start, Okay,
Speaker 2: so hold on that for a second. So those were
Speaker 2: all podcasts. Any any video anything you watch on video
Speaker 2: like YouTube stuff, YouTube, Netflix whatever.
Speaker 1: Oh I don't watch a ton of Netflix. I do
Speaker 1: listen to a lot of podcasts. And then on YouTube,
Speaker 1: I've been listening to Eddie Burback. Have you heard of him? No,
Speaker 1: He's kind of like a commentator YouTube guy. But he
Speaker 1: did this thing on Ai. Recently, he did this funny
Speaker 1: video where he visited all the rainforest cafes in the country.
Speaker 1: And he's just a very good producer. Uh huh, and
Speaker 1: I really enjoy think.
Speaker 2: How many rainforest cafes other in the country. There's one
Speaker 2: like didn't that come out like twenty year twenty five
Speaker 2: years ago Bruce Willis and Arnold Schwartz And there wasn't
Speaker 2: like a crazy question like they teamed up so after
Speaker 2: Planet Hollywood. I don't remember. I'm getting that wrong. I
Speaker 2: know that they were involved. Some people were involved with
Speaker 2: Planet Hollywood, and a subset of those people did Rainforest Cafe.
Speaker 2: I could be completely wrong about that.
Speaker 1: I don't know, but yeah, he walks. I don't know,
Speaker 1: maybe not everything.
Speaker 2: Are there a lot of these left?
Speaker 1: Yeah, there are at least one in every state.
Speaker 2: I think, uh huh huh. Good, that's crazy. I'm going
Speaker 2: to share a channel with you because you brought up
Speaker 2: mass transit. Yeah, there is a guy. He's a Canadian.
Speaker 2: He moved to Amsterdam and he has a channel called
Speaker 2: Not Just Spikes and I'm addicted. First of all, I
Speaker 2: love Amsterdam. It just barely edged out Paris is my
Speaker 2: favorite city. But the whole concept of, hey, what you
Speaker 2: do with your mass transit affects everything from wealth and
Speaker 2: incoming equality to quality of life and why people in
Speaker 2: countries with better mass transits have higher happiness quotients and
Speaker 2: better health outcomes. And it's crazy how it just cascades
Speaker 2: after higher education that seems to be the next most
Speaker 2: important thing.
Speaker 1: Do you know that the average car in the United
Speaker 1: States has more space for itself than the average person does?
Speaker 2: Yeah? Absolutely, Yeah, just look at all the plus to
Speaker 2: say nothing of the parking spots that.
Speaker 1: Have you read Paradise? No, Oh, it's about parking and
Speaker 1: it's great.
Speaker 2: So so let's get to your favorite books. No, let's paid Parking, Yeah,
Speaker 2: paid Paradise. About what else?
Speaker 1: The parking Blood in the Machine? Which can It's this
Speaker 1: gorgeous book and he talks about the blood hees and
Speaker 1: he goes into deep detail and like talks about what
Speaker 1: it was like and obviously a very hard time, but
Speaker 1: what it looks like for their lives to be impacted
Speaker 1: by the introduction of like the spinning machine, and how
Speaker 1: AI is like kind of comparing to that, And it's
Speaker 1: just it's really good historical writing.
Speaker 2: And I just saw a research report this morning. I
Speaker 2: don't know who put it out, is the problem with
Speaker 2: being a consumer of just too much jumps that AI
Speaker 2: is going to be a net positive? Oh, I know
Speaker 2: it was Torsten Slock looked at unemployment rates and phil
Speaker 2: the Philippines and somewhere else that a lot of a
Speaker 2: lot of call centers and a lot of outsource stuff
Speaker 2: and despite the introduction of AI, none of these places
Speaker 2: have seen an optic in unemployment yet. Oh. Just kind
Speaker 2: of fascinating, Like you would think that's that's the canary
Speaker 2: and the call, right, And.
Speaker 1: I think like the way that a lot of people
Speaker 1: are thinking about AIM, not this author of blood the machine,
Speaker 1: but as a compliment to the human laborer, where it's
Speaker 1: like it's not something where that places you, but something
Speaker 1: that has an augmentation. Yeah. I've seen AI be.
Speaker 2: An augmentation in my life one hundred percent. Every time
Speaker 2: I do uh, do the prep work for this, the
Speaker 2: last thing I do is entered into perplexity and chat
Speaker 2: GBT and see what comes up. It still is occasionally wrong.
Speaker 2: You have to be very aware that it's not trustworthy.
Speaker 2: But it's getting a little better all the time, and
Speaker 2: every now and then it'll uncover a nugget that we
Speaker 2: miss and it's I have a research team, it's not
Speaker 2: just me. And even still, those deep dives will pull
Speaker 2: pull stuff out. So Paved Paradise blend the Machine. Any
Speaker 2: other books you.
Speaker 1: Oh, gosh, yeah, I read a ton on the bike
Speaker 1: a lot. But I I read this book about the
Speaker 1: founder of Glasciator, which was really interesting. Or Glossier the
Speaker 1: water company. Yeah, it's the makeup company.
Speaker 2: Oh, the makeup Yeah.
Speaker 1: Yeah, So it's about that that founder and like what
Speaker 1: it was like for her to build a makeup company,
Speaker 1: and that was quite good. I read a lot of fiction.
Speaker 2: So right now those first three year all nonfiction you
Speaker 2: just gave me, uh huh yeah, right, so that's three nonfiction.
Speaker 2: Give us three fiction that you're enjoying.
Speaker 1: I'm reading A Gentleman in Moscow right now. Have you
Speaker 1: read that?
Speaker 2: I have it on my list forever, It's always in
Speaker 2: my queue.
Speaker 1: I never get it's like, so I'm probably a quarter
Speaker 1: of the way through it, and it's kind of a
Speaker 1: lot of dialogue, which I don't always enjoy. Like I
Speaker 1: really love world building in fiction novels like Lord of
Speaker 1: the Rings, et cetera.
Speaker 2: Are you a sci fi or fantasy. I mean, obviously
Speaker 2: Lord of the Rings is a classic.
Speaker 1: But like kind kind of it's more of I like
Speaker 1: settings to be very clear, so I can have it
Speaker 1: in my head as a visual. I don't know if
Speaker 1: that makes sense.
Speaker 2: But CJ. Scherer was this and you could tell she
Speaker 2: was a woman because it's initials. Because once she was
Speaker 2: writing back in the sixties and seventies, I had a
Speaker 2: high that she has. If you like world building, go
Speaker 2: check out Pride of channor Cha and you are ok.
Speaker 2: If you're like twenty pages into it and you're not
Speaker 2: deeply in love, just throw it away.
Speaker 1: Okay, done.
Speaker 2: Yeah, but I may just have sent you down a
Speaker 2: rabbit hole that will. Yeah. And she's just this amazing
Speaker 2: builder of worlds, wonderful that very few writers like I
Speaker 2: just remember, of all the sci fi stuff I went
Speaker 2: through as a kid, she just totally all right. So so,
Speaker 2: gentlemen of Moscow, give us two more.
Speaker 1: I'm reading. I read Olive by I can't remember her name,
Speaker 1: but it got turned into a TV show. But it's
Speaker 1: kind of really interesting because it's about and she has
Speaker 1: a sequel too, called Olive Again, and it's about this
Speaker 1: woman who just lives in this little town, and she
Speaker 1: has all these little stories that surround this woman, and
Speaker 1: all the stories interweave really beautifully, and I really like that,
Speaker 1: kind of like time bedding stuff.
Speaker 2: Elizabeth Strout, Elizabeth, thank you.
Speaker 1: Right, And then I.
Speaker 2: Google makes the universal information. We don't know anything, but
Speaker 2: where knowledge, Jason, and there it is.
Speaker 1: Let me google.
Speaker 2: Oh wait, Olive Olive again? She is too, Emma Gannon
Speaker 2: or Allah or Elizabeth Strapp.
Speaker 1: Those it's Elizabeth Stroud.
Speaker 2: Okay, Yeah, there's another book called Olive by Emma Gannon. No,
Speaker 2: it's from twenty twenty one.
Speaker 1: No, it's Stroud.
Speaker 2: Okay.
Speaker 1: Yeah. And then I read Trust by Hernan Diez. Have
Speaker 1: you read that?
Speaker 2: No?
Speaker 1: Oh you should. It's it's all about what this guy.
Speaker 1: It's I think it's a fabrication, but it's this guy
Speaker 1: that lived during the Great Depression. And there's actually three
Speaker 1: stories interwoven into one, and so you get the like
Speaker 1: the fictionalized version of this guy's life. And then that
Speaker 1: guy becomes the second part of the book and we
Speaker 1: get to hear his actual story, not one that's like
Speaker 1: fabricated by this author. And then you get another part
Speaker 1: of the book that goes a little bit deeper into
Speaker 1: his wife's life, and so it's really it's I think
Speaker 1: I want to Poultzer.
Speaker 2: Yeah, I'm looking at it right now. Could surprise winner. Yeah,
Speaker 2: I love when authors are like twenty twenty three, that
Speaker 2: was last year.
Speaker 1: Yeah, it's really good.
Speaker 2: I understand the hardcover and the paperback are now the
Speaker 2: same price.
Speaker 1: The new books are tough, tough industy.
Speaker 2: I guess one of the New York Times one hundred
Speaker 2: best books of the twenty first century.
Speaker 1: Yeah, it's quite good, as.
Speaker 2: Long as they've read every book in the twenty first
Speaker 2: century so they can make an informed evaluation like that.
Speaker 1: It's a big claim.
Speaker 2: I'm down with that.
Speaker 1: Yeah.
Speaker 2: I know it's again more stupid media stuff the modern era.
Speaker 2: So that's a great list of books right there. Yeah,
Speaker 2: I skipped the question to get to books that I
Speaker 2: have to ask you, But I'm not sure if you
Speaker 2: can have a good answer, which is who are your
Speaker 2: mentors who helped shape your career?
Speaker 1: Oh, because what I said about the mentor things, well, I.
Speaker 2: Know, Jim O'Shaughnessy is obviously a big influence.
Speaker 1: Oh gosh, I've had so many people like I could
Speaker 1: we'd be here all day.
Speaker 2: If I listed every give us one or two.
Speaker 1: So the two people that have probably been the most
Speaker 1: influential because they believed in me before I did, was
Speaker 1: my two professors in college, doctor Chocci and doctor Lebedinski.
Speaker 1: I basically would go to them and be like, I
Speaker 1: want to start a club, I want to do research
Speaker 1: around this s and P five hundred, I want to
Speaker 1: go travel to this conference. And they'd be like, all right, good,
Speaker 1: and they would just help me kind of achieve all
Speaker 1: of these streams that I had, And so they were phenomenal.
Speaker 1: Like I remember, I was applying to jobs and I
Speaker 1: wanted to do a PhD because I really wanted to teach,
Speaker 1: and doctor Chacci was like, no, you should go work
Speaker 1: in industry for a little bit and then you can
Speaker 1: go and get your PhD. And so it's just kind
Speaker 1: of like that really tailored advice and support and they
Speaker 1: were probably the most important people to me during my
Speaker 1: college time.
Speaker 2: You know, that's really interesting. Angus Deeton, who is the
Speaker 2: British economist who won the Nobel Prize, and I think
Speaker 2: he's teaching. Is he teaching at Princeton. Yeah, he's teaching
Speaker 2: at Princeton, and he said, you could look across a
Speaker 2: thousand different factors and nothing impacts your life as much
Speaker 2: as a higher education. We see it in wealth, inequality,
Speaker 2: income and equality, health outcomes, whether you go to jail,
Speaker 2: whether you get divorced, like all these social things that
Speaker 2: you would think are unrelated your self described happiness quotient
Speaker 2: like deep deep down the rabbit hole, And consistently there
Speaker 2: is a gap between between what we see on the
Speaker 2: have at college education and don't it's pretty amazing.
Speaker 1: Well, I mean it's kind of for like, I work
Speaker 1: three jobs during college, but it's four years to sort
Speaker 1: of figure yourself out. And I actually think that's really
Speaker 1: important because you learn how to socialize, you learn how
Speaker 1: to learn, You get tested, but in an environment where
Speaker 1: like if you fail, it's okay most of the time.
Speaker 1: Like if you feel out of college, it's not okay,
Speaker 1: but you kind of have the chance to make safe mistakes,
Speaker 1: is what I would call it.
Speaker 2: And that's the true today with well, it seems like
Speaker 2: some of the campuses, some of that has kind of
Speaker 2: become more challenging.
Speaker 1: Well ever, yeah, from a political angle, absolutely, yeah, I think.
Speaker 2: But it should but what you were describing should be
Speaker 2: true it should be a place where you can make mistakes.
Speaker 1: I think. So I graduated in twenty nineteen, and I
Speaker 1: think I was the last year to have that. I
Speaker 1: do because of the pandemic and because I just like
Speaker 1: the scholarship package that I got and the reason that
Speaker 1: I went to Western Kentucky. It was a full ride
Speaker 1: and I was paid to have school, and there's nothing
Speaker 1: like that unless you're like a top, top top student.
Speaker 1: And I was a good student. But it was an
Speaker 1: in state school, and so I had all these opportunities
Speaker 1: because I was able to have a full ride. And
Speaker 1: I just don't think that.
Speaker 2: Where else did you consider going besides in state of
Speaker 2: a Vanderbilt.
Speaker 1: I wanted to stay close to my family, So Vanderbilt,
Speaker 1: which was in Tennessee, I was in Kentucky. I was
Speaker 1: looking at Butler up in Indiana, Notre Dame. Yeah, like
Speaker 1: just kind.
Speaker 2: Of big us little schools both. Yeah, you looked at everything.
Speaker 1: Yeah, I wanted like a good school because I did
Speaker 1: want to.
Speaker 2: Well, none of these are bad schools. You're talking about
Speaker 2: all it good or better schools.
Speaker 1: Yes, yeah, but like I wanted to leave Kentucky and
Speaker 1: the only way I knew how to get out was
Speaker 1: like through education, and so that's why I was looking
Speaker 1: at a schools, but I ended up staying in Western
Speaker 1: Kentucky because the scholarship and it turned out to be
Speaker 1: an incredible experience.
Speaker 2: Huh, to say the very least. And our final two questions,
Speaker 2: what sort of advice would you give to a recent
Speaker 2: college grad interested in a career in either finance or
Speaker 2: investing education?
Speaker 1: So I think for me, and this is the advice
Speaker 1: I give when people ask, is like to read everything
Speaker 1: and to figure out what you'd like to read, and
Speaker 1: then try to challenge yourself to explain it, to write
Speaker 1: about it, to learn about it as deeply as you can.
Speaker 1: And I think the only way that you actually understand
Speaker 1: stuff is if you can explain it simply. And so
Speaker 1: that's what I would recommend to just be a consumer
Speaker 1: and ask questions. You'd be surprised how many people are
Speaker 1: willing to just take thirty minutes to chat with you
Speaker 1: and just ask her help as much as you can.
Speaker 1: But yeah, to absorb as much as possible, but then
Speaker 1: make sure you're digesting it by repeating it back to yourself,
Speaker 1: whether through writing, videos, etc.
Speaker 2: And our final question comes with a little bit of
Speaker 2: a caveat. So I always share the last five questions,
Speaker 2: partly because they require a little recall with our guests
Speaker 2: in advance. And I asked you, what do you know
Speaker 2: about the world of investing today that you wish you
Speaker 2: knew twenty five years ago? And you hilariously wrote back
Speaker 2: twenty five years ago I was one, don't bite the cat.
Speaker 2: I mean, I think that's so funny. I don't know
Speaker 2: if you said that or Dave Knadi said that, and
Speaker 2: our back and forth. I shared your answer with him
Speaker 2: and he think I think he said don't bite the cat. Yeah, yeah,
Speaker 2: But what do you know today that might have been
Speaker 2: helpful earlier in your career.
Speaker 1: I think for me, there's so many facets to finance,
Speaker 1: Like I was very much like, oh, there's one thing
Speaker 1: I can do, and it's portfolio management. But there's so
Speaker 1: much that you can do. Education, you can look into
Speaker 1: ira spaces, you will do you can do media like,
Speaker 1: there's just and there's so many different worlds within finance, commodities,
Speaker 1: fixed income, equities. It's really massive. And so I think
Speaker 1: the advice that I would give to my one year
Speaker 1: old self is to, you know, just keep on learning.
Speaker 1: In similar to the device I give previous, but really
Speaker 1: just know that the world is so big and there's
Speaker 1: so much opportunity within these segments that are just fascinating
Speaker 1: to explore you to spend a lifetime doing it.
Speaker 2: Well, thank you, Kyla for being so generous with your time.
Speaker 2: I'm gonna have to have you sign this.
Speaker 1: Oh, thank you.
Speaker 2: We have been speaking with Kyla Scanlon. She is the
Speaker 2: author of In This Economy, How Money and Markets Really Work.
Speaker 2: If you enjoy this conversation, well, check out any of
Speaker 2: the five hundred or so we've done over the past
Speaker 2: ten years. You can find those at iTunes, Spotify, YouTube,
Speaker 2: wherever you find your favorite podcasts, and check out my
Speaker 2: new show At the Money, short ten minute discussions about
Speaker 2: specific topics in finance, earning money, spending it, and most
Speaker 2: importantly investing it At the Money, wherever you find your
Speaker 2: favorite podcasts, and in the Master's in Business feed. I
Speaker 2: would be remiss if I did not thank the Crack
Speaker 2: staff who helps us put these conversations together each week.
Speaker 2: A Teak of Albron is my project manager. Anna Luke
Speaker 2: is my producer. Sean Russo is my head of research.
Speaker 2: Sage Bauman is the head of podcasts at Bloomberg. I'm
Speaker 2: Barry Ritolts. You've been listening to Masters in Business on
Speaker 2: Bloomberg Radio