WEBVTT - Bloomberg Businessweek Weekend - September 14th, 2019 0:00:02.520 --> 0:00:06.240 This is Bloomberg Business Week from Bloomberg Radio. Hi, I'm 0:00:06.280 --> 0:00:08.680 Jason Kelley and I'm Carol Master. Welcome to the Bloomberg 0:00:08.720 --> 0:00:11.480 Business Week Weekend podcast. Well this week, Carol, it's a 0:00:11.560 --> 0:00:16.360 special show highlights from our broadcast this week from Columbia 0:00:16.400 --> 0:00:19.680 Business School. We went uptown and what a day. What 0:00:19.760 --> 0:00:21.880 a great day, smack in the middle of the Columbia 0:00:21.960 --> 0:00:25.079 University campus on College Walk, and we caught up with 0:00:25.079 --> 0:00:28.320 the school's dean, professors and also some of its many 0:00:28.440 --> 0:00:31.680 prominent alumni. And among the most prominent James Gorman. He 0:00:31.760 --> 0:00:34.479 is the chairman and CEO of Morgan Stanley. We caught 0:00:34.600 --> 0:00:38.040 him for a really interesting conversation after he had spent 0:00:38.080 --> 0:00:40.360 about an hour with a lunch and learned with students. 0:00:40.479 --> 0:00:42.920 If you're a Columbia Business school, so how cool is 0:00:42.960 --> 0:00:44.560 that to be able to sit down It was cool 0:00:44.600 --> 0:00:46.279 for us to sit down with him as well. It 0:00:46.320 --> 0:00:48.680 was indeed. First up, though, we begin with a preview 0:00:48.960 --> 0:00:52.040 with Joel Webber, the editor of Bloomberg Business Week. Well, 0:00:52.080 --> 0:00:56.040 and it appears, Joel Webber, that this is not your 0:00:56.080 --> 0:00:57.840 first time on campus. In the last couple of weeks 0:00:57.880 --> 0:01:00.640 you were here taking a class this week. Yeah. They 0:01:00.720 --> 0:01:04.080 let me attend a class last week business analytics too, 0:01:04.760 --> 0:01:08.319 with Professor Daniel Guetta, which did you take the pre record, 0:01:08.440 --> 0:01:11.040 which means I didn't have to take business and they 0:01:11.080 --> 0:01:13.440 just let you skip ahead. So that was great, except 0:01:13.560 --> 0:01:15.000 then you show up in the class and it's like, 0:01:15.040 --> 0:01:17.720 what's going on here? Are you ready for linear regression? 0:01:18.160 --> 0:01:20.679 And that's what I got to sit through an hour 0:01:20.720 --> 0:01:24.080 and a half of linear aggression. Honestly, it was amazing 0:01:24.200 --> 0:01:27.639 because of how well taught that class was. Professor Guerta 0:01:27.680 --> 0:01:31.360 made it all very approachable. The students were amazing. It 0:01:31.440 --> 0:01:34.240 was so there was such an ingred engaged group of 0:01:34.560 --> 0:01:38.720 intelligent people asking really insightful questions, and he would repeatedly 0:01:38.720 --> 0:01:40.399 be like, no, we're coming back back to that question 0:01:40.440 --> 0:01:42.560 in two weeks, just push pause in it right now. 0:01:42.840 --> 0:01:45.039 So you end up just having this little sneak peek 0:01:45.080 --> 0:01:48.480 of of what an amazing school to Columbia's. One of 0:01:48.520 --> 0:01:49.960 the things that wanted to make sure we talked to 0:01:50.000 --> 0:01:52.560 you about was this notion that we're coming up on 0:01:53.040 --> 0:01:56.560 sort of the second version candidly under your watch of 0:01:56.600 --> 0:02:00.760 the business school rankings, you have to be fair, like 0:02:00.920 --> 0:02:04.040 really expanded this franchise in a big way, invested heavily 0:02:04.560 --> 0:02:08.800 in an ongoing series of stories. Why, like, what what 0:02:08.840 --> 0:02:11.280 do you see in business schools that's so relevant to 0:02:11.320 --> 0:02:14.080 the business audience. The thesis here is that the nexus 0:02:14.160 --> 0:02:17.040 that you get between the business schools and alumni networks 0:02:17.080 --> 0:02:20.040 and the students that are coming through, that's why people 0:02:20.120 --> 0:02:22.639 come to business school. You get a crash course in 0:02:22.919 --> 0:02:25.359 the you know, the greatest business curriculum you can get, 0:02:25.600 --> 0:02:28.600 but then you also get the case study feeling that 0:02:28.680 --> 0:02:33.040 comes from real world applications. So for us, we look 0:02:33.080 --> 0:02:35.080 at that, we look at the stories we do in 0:02:35.120 --> 0:02:38.920 many ways as as case studies and and kind of 0:02:38.960 --> 0:02:42.040 making the world of business come to life via story 0:02:42.200 --> 0:02:44.519 is what we do in the page of Business Week, 0:02:44.520 --> 0:02:46.880 which is not that dissimilar from what's happening in a 0:02:46.919 --> 0:02:49.720 classroom setting either. So for us, this just feels like 0:02:49.760 --> 0:02:51.960 the water that we swim in and the air that 0:02:52.000 --> 0:02:55.760 we breathe in. And Columbia really embodies the spirit because 0:02:55.800 --> 0:02:58.440 of you know, we're we're witnessing it here with with 0:02:58.520 --> 0:03:01.840 Mr Gorman today, like this is a powerful place to play. Well, 0:03:01.840 --> 0:03:03.400 I think about the surveys that you guys do and 0:03:03.440 --> 0:03:05.200 you really kind of dice and slice what goes on 0:03:05.400 --> 0:03:08.040 in a business school community. But it is interesting because 0:03:08.080 --> 0:03:10.400 you figure out the nuances that kind of make each 0:03:10.560 --> 0:03:13.480 NBA program distinct. One of them about Columbia is you 0:03:13.520 --> 0:03:15.240 know here you are in New York City. Yeah, so 0:03:15.400 --> 0:03:17.160 New York City is part of it. I think the 0:03:17.200 --> 0:03:19.200 big thing that we really leaned into with the way 0:03:19.200 --> 0:03:21.840 that we've done rankings and really why you know, thirty 0:03:21.919 --> 0:03:24.360 years into this, we've doubled down on it and really 0:03:24.400 --> 0:03:27.680 found the our DNA with it, which is data, you know, 0:03:27.760 --> 0:03:30.320 and leaning into how do we make this data set 0:03:30.480 --> 0:03:34.200 be extraordinary? And you get that from talking to alumni, 0:03:34.280 --> 0:03:38.080 from talking to current students and and other business schools 0:03:38.080 --> 0:03:41.120 and all of that stuff together you get there's there's 0:03:41.280 --> 0:03:43.920 messages in that data, which frankly brings me back to 0:03:43.960 --> 0:03:49.160 that business analytics class too, that which is, look, you've 0:03:49.200 --> 0:03:52.000 got a data set, and maybe that data set is 0:03:52.040 --> 0:03:54.520 ever expanding because that's what you're going to be looking 0:03:54.520 --> 0:03:56.880 at if you're at a company, right, how do you 0:03:56.880 --> 0:03:58.800 make sense of it? And where are the little nuggets 0:03:58.840 --> 0:04:01.360 inside of that? That is a business leader you can 0:04:01.400 --> 0:04:04.800 have takeaways that apply and benefit from at your company. 0:04:04.920 --> 0:04:09.000 So between sitting in on that class level, let's point 0:04:09.000 --> 0:04:14.520 that out again, but also even being here today, like 0:04:14.720 --> 0:04:17.080 what's the ethos of Columbia? I mean I would put 0:04:17.120 --> 0:04:19.880 this to Carol as well, because you worked here and 0:04:19.920 --> 0:04:21.880 you have a great sense in just like what is 0:04:21.920 --> 0:04:24.160 it about Columbia? New York City obviously is a big 0:04:24.160 --> 0:04:26.640 piece of it, but what is it about this place? Well, 0:04:26.640 --> 0:04:28.920 I'll bring it back to their tagline. Have you seen 0:04:28.960 --> 0:04:31.840 that one yet? At the very center of business? Right? 0:04:32.120 --> 0:04:34.680 I think that really does embody it because here we 0:04:34.720 --> 0:04:37.679 are in New York. You can't imagine a better setting 0:04:37.760 --> 0:04:40.400 setting for a business school when you have the real 0:04:40.400 --> 0:04:43.200 world applications that are right outside your door. And that's 0:04:43.200 --> 0:04:45.839 what you saw in Professor Gudes class was case study, 0:04:45.880 --> 0:04:49.360 case study, case study, case study. It just is an 0:04:49.960 --> 0:04:52.880 ending experiment, right, and and to be able to harness 0:04:52.960 --> 0:04:55.839 that with the resources that a Columbia has, whether in 0:04:55.880 --> 0:04:59.560 the classroom or with the alumni network, gairly powerful place? 0:04:59.560 --> 0:05:02.400 Do you think as this Well, I was thinking about 0:05:02.400 --> 0:05:04.440 when I worked here. I got my undergraduate at bar 0:05:04.520 --> 0:05:06.080 right across the street, but I worked at the business 0:05:06.080 --> 0:05:08.520 schools an undergrad, and I just think also the connection 0:05:08.560 --> 0:05:11.520 with Wall Street and the role of money. And I'm 0:05:11.520 --> 0:05:14.760 not trying to you know, money makes things happen, and 0:05:14.760 --> 0:05:17.240 whether you're an entrepreneur and you start something and ultimately 0:05:17.279 --> 0:05:19.440 you need an investor, you know that helps you get 0:05:19.480 --> 0:05:23.360 that started. I just think that connection made this schools 0:05:23.480 --> 0:05:26.039 something really special. I think that's absolutely right, and that 0:05:26.200 --> 0:05:31.760 entrepreneurs entrepreneurship spirit here routinely. It's it's among the things 0:05:31.800 --> 0:05:34.240 that comes through in the surveys and the data that 0:05:34.279 --> 0:05:36.839 we see. Uh and and you see it, you know, 0:05:36.880 --> 0:05:39.520 in the classroom, because that's a place that people can 0:05:39.720 --> 0:05:41.920 harness it and take it out and apply it to 0:05:42.240 --> 0:05:44.719 whatever your big idea is. Why even the conversation we 0:05:44.720 --> 0:05:47.719 had with Senorico Marquetti, I mean he was a banker 0:05:47.760 --> 0:05:49.920 who then came here and said, Okay, I'm gonna start 0:05:49.920 --> 0:05:51.720 a company. I'm not sure what it is, but I'm 0:05:51.760 --> 0:05:54.680 going to learn about retail. I'm gonna learn about marketing 0:05:54.680 --> 0:05:57.720 and learn about entrepreneurship, and and then he scales it. 0:05:57.839 --> 0:05:59.680 Yeah and yeah, and you know, I don't know if 0:05:59.720 --> 0:06:02.320 somebody could scale that business idea or that business model 0:06:02.360 --> 0:06:04.320 as effectively as you might have had you had a 0:06:04.360 --> 0:06:06.760 linear regression class that it's like, you know, maybe you're 0:06:06.760 --> 0:06:08.760 not gonna do it every day, but you're gonna probably 0:06:08.839 --> 0:06:10.960 talking to somebody who can do it for you. And 0:06:10.960 --> 0:06:14.040 that's Joel Weber, the editor of Bloomberg Business Week, joining 0:06:14.160 --> 0:06:18.279 us at Columbia. He had actually gone to a class 0:06:18.320 --> 0:06:21.320 the week before. He's a pretty confident guy. I think 0:06:21.320 --> 0:06:23.800 he was a little humbled by his experience in that 0:06:23.800 --> 0:06:26.200 class room. We want to talk about the global economy. Now, 0:06:26.240 --> 0:06:28.800 I'm at Candle wall Is, Columbia Business School, Professor of 0:06:28.839 --> 0:06:32.359 International Development and Economics joining us. Now, I'm a you 0:06:32.520 --> 0:06:34.839 cover a lot in terms of what is so relevant 0:06:34.880 --> 0:06:36.720 to the world right now you're sitting down with a 0:06:36.760 --> 0:06:38.839 group of students. What are the things you want to 0:06:38.880 --> 0:06:42.320 bring into the classroom that relates to the real world 0:06:42.400 --> 0:06:46.520 and what's happening. Sure, So at Columbia, I teach two 0:06:46.600 --> 0:06:49.080 kinds of courses. So I teach one core course that 0:06:49.200 --> 0:06:52.480 all incoming NBA students will will take. UM. This is 0:06:52.480 --> 0:06:55.960 a core course in manageri economics. So what we do 0:06:56.040 --> 0:06:58.320 in this class, which is not so much global related, 0:06:58.320 --> 0:07:00.600 but our general principles that we UM that we try 0:07:00.640 --> 0:07:03.520 to instill UM is for students to learn the basics 0:07:03.640 --> 0:07:07.599 of how to take data on the market environment and 0:07:07.640 --> 0:07:09.880 try to figure out what prices they might be charging, 0:07:09.920 --> 0:07:13.240 how to how to manage their revenue and product lines. UM. 0:07:13.320 --> 0:07:17.880 We consider what are the implications of their business decisions 0:07:17.960 --> 0:07:21.600 when they are reacting in an environment with competitors and 0:07:21.600 --> 0:07:23.800 and and consumers who may be responding as well. So 0:07:23.840 --> 0:07:27.680 think about kind of your classics supply and demand market conditions. UM. 0:07:27.760 --> 0:07:28.720 One of the things that we try to do with 0:07:28.760 --> 0:07:33.600 Columbia is to not only show when the market kind 0:07:33.600 --> 0:07:36.320 of can provide the allocation of resources that we think 0:07:36.360 --> 0:07:38.560 is efficient, but also to kind of think very carefully 0:07:38.560 --> 0:07:40.760 about what are the conditions under which the market may 0:07:40.920 --> 0:07:43.520 not be living up to what we think should be 0:07:43.520 --> 0:07:46.440 going on. So that would be your your examples of 0:07:46.640 --> 0:07:51.560 um uh just issues of fairness UM or should we 0:07:51.600 --> 0:07:54.120 have things like search pricing. It can lead to an 0:07:54.160 --> 0:07:56.680 efficient outcome, but it may not be very fair for 0:07:56.800 --> 0:07:59.760 some consumers. UM. What happens in the market when a 0:08:00.000 --> 0:08:03.560 fire and a seller arrive uh into a marketplace where 0:08:03.600 --> 0:08:06.120 they've got differences in information um. And so this is 0:08:06.120 --> 0:08:09.640 actually very relevant for very important markets like healthcare, where 0:08:09.680 --> 0:08:11.680 the provider of the service has different information than than 0:08:11.680 --> 0:08:14.120 the buyers the service, and and we know that classic 0:08:14.120 --> 0:08:17.000 economics of the market outcomes can actually can maybe not 0:08:17.080 --> 0:08:20.360 deliver UM the best outcomes in those situations. Uh. And 0:08:20.400 --> 0:08:24.119 we also consider things UM related to strategic decision making 0:08:25.080 --> 0:08:29.480 game theory, which is a very uh common set of 0:08:29.480 --> 0:08:31.480 tools that are taught in an NBA program. But we 0:08:31.520 --> 0:08:35.200 also discuss things like auction auction designs UM for instance, 0:08:35.200 --> 0:08:37.920 so Google and Facebook now made the vast majority of 0:08:37.960 --> 0:08:40.600 their revenues off of designing auctions. We will go through 0:08:40.640 --> 0:08:42.600 the very basics of of how you would bid in 0:08:42.600 --> 0:08:44.400 an auction like the one that Google sets up, How 0:08:44.400 --> 0:08:46.640 would you set up an auction and so so that's 0:08:46.720 --> 0:08:48.600 very much a kind of a set of things that 0:08:48.600 --> 0:08:50.760 we do in the in in in my core course. 0:08:51.800 --> 0:08:54.160 And then you also look at the international sort of 0:08:54.160 --> 0:08:56.840 trade landscape as well. That's correct. So I also teach 0:08:56.880 --> 0:08:59.440 a an elective course on doing business and emerging markets. 0:08:59.520 --> 0:09:01.520 And there's a starting point if you think about what 0:09:01.720 --> 0:09:04.480 is different about an emerging market relative to to to 0:09:04.559 --> 0:09:06.920 a develp country like the US is really the one 0:09:07.000 --> 0:09:09.480 which the markets are not working as as well as 0:09:09.520 --> 0:09:11.560 we think. So the capital markets might be broken down, 0:09:11.640 --> 0:09:13.719 the labor markets might be broken down, this weak rule 0:09:13.760 --> 0:09:16.040 of law. And what I try to do is to 0:09:16.080 --> 0:09:22.439 walk through, UM the core strategies that a company UM 0:09:22.480 --> 0:09:24.720 that's maybe based in the US would need to consider 0:09:24.840 --> 0:09:27.440 as they enter these environments. UM. What are the parts 0:09:27.480 --> 0:09:30.800 and products and services that might be very beneficial in 0:09:30.840 --> 0:09:33.559 these environments where the market is broken down? UM? As 0:09:33.600 --> 0:09:36.120 well as to think about what are the UM what 0:09:36.240 --> 0:09:38.000 is the role of a business in a society where 0:09:38.160 --> 0:09:41.480 we where the corruption levels very high, UM and so forth, 0:09:41.520 --> 0:09:44.680 and what should be under I want to make sure 0:09:44.720 --> 0:09:47.120 we ask you about this this bit of research, didn't 0:09:47.120 --> 0:09:49.040 you did? That caught a huge amount of attention, including 0:09:49.080 --> 0:09:50.960 on the Bloomberg which was about the effects of the 0:09:50.960 --> 0:09:55.560 trade war. UH. And I think some, if not unintended consequences, 0:09:55.559 --> 0:09:58.559 some surprising consequences tell us about that, right, So outside 0:09:58.559 --> 0:10:00.720 of the classroom, I I as you said, I'm an 0:10:00.720 --> 0:10:04.280 international trade economist. UM. I recently was involved in a 0:10:04.320 --> 0:10:07.680 project where we UM, we're looking at the impacts of 0:10:07.720 --> 0:10:10.320 the tariffs on on the U S economy. UM. If 0:10:10.320 --> 0:10:12.000 you think about what are the tariffs should do? So 0:10:12.160 --> 0:10:15.199 imagine a country like the US imposted the tariff UM. 0:10:15.240 --> 0:10:17.040 There's kind of a sequence of events that happened. So 0:10:17.080 --> 0:10:20.440 one is that the tariffs are a tax on imports. UM. 0:10:20.559 --> 0:10:23.959 Consumers are gonna start to see potentially rising prices on 0:10:24.080 --> 0:10:27.160 imported goods, so they should kind of switch towards domestic 0:10:27.160 --> 0:10:30.360 goods UM. And so that means that there's going to 0:10:30.400 --> 0:10:33.959 be a transfer from US consumers wore potentially paying higher 0:10:33.960 --> 0:10:36.800 prices to US producers who are potentially benefiting from higher 0:10:36.800 --> 0:10:39.400 prices UH. And then the government collects the tariff revenue. 0:10:39.600 --> 0:10:41.360 And so one of the goals of this exercise was 0:10:41.400 --> 0:10:44.040 to kind of calculate what is the overall effect and 0:10:44.040 --> 0:10:46.280 and what are the transfers that that are going on. 0:10:46.280 --> 0:10:48.280 One of the surprising things that we found in in 0:10:48.760 --> 0:10:50.840 in this in this research was when you look at 0:10:50.840 --> 0:10:53.280 the at the data UM and you kind of charted 0:10:53.320 --> 0:10:57.280 the time path of what happens to goods that are 0:10:57.320 --> 0:10:59.320 being targeted with terriffs as they come into the US. 0:10:59.760 --> 0:11:02.240 Is a really important number for an economist is to 0:11:02.320 --> 0:11:05.800 understand what happens to the prices of those goods UM. 0:11:05.840 --> 0:11:09.680 And we have heard from from the President, for instance, 0:11:09.720 --> 0:11:12.760 to say who says that the that the Chinese, that 0:11:12.840 --> 0:11:14.880 the Chinese will be paying for the tariffs. And in 0:11:14.880 --> 0:11:17.040 principle that is possible. And the way that could work 0:11:17.080 --> 0:11:19.640 is that if the U S imposes a tariff, the 0:11:19.720 --> 0:11:23.520 Chinese exporter may lower her price down to such a 0:11:23.520 --> 0:11:26.800 point so that the post tariff price actually doesn't change 0:11:26.800 --> 0:11:28.600 for the U S. Consumer. And that's possible, and that 0:11:28.840 --> 0:11:31.920 would be a consider a condition under which the Chinese 0:11:31.960 --> 0:11:34.520 is essentially eating the tariff um. And but when we 0:11:34.520 --> 0:11:36.160 look at the data, we in fact that's in fact 0:11:36.200 --> 0:11:38.920 not what's going on. UM. The split, of course, could 0:11:38.960 --> 0:11:41.400 be anywhere between zero percent and percent, and what we 0:11:41.480 --> 0:11:44.120 find is that the U S consumers or the U 0:11:44.160 --> 0:11:47.560 S economy is actually bearing the full incidents of the tariff. 0:11:47.679 --> 0:11:50.600 So that's am it. Candlewall, of course, professor of Global 0:11:50.600 --> 0:11:54.120 Business at Columbia love getting his perspective because I think, 0:11:54.240 --> 0:11:57.680 you know, we constantly have conversations about US China different 0:11:57.679 --> 0:12:00.880 perspectives from investors, from politics, ships, but I think it's 0:12:00.960 --> 0:12:03.240 nice to go back to academia and see how they 0:12:03.240 --> 0:12:05.480 see it. Well. And I'm glad you said that because 0:12:05.559 --> 0:12:07.240 one of the things that I was thinking throughout our 0:12:07.280 --> 0:12:11.640 time at Columbia Business School was a business degree is 0:12:11.720 --> 0:12:15.960 only as good as its applicability in a lot of ways. 0:12:16.040 --> 0:12:18.240 And I do think one of the things we heard 0:12:18.320 --> 0:12:20.880 throughout our time at Columbia. We heard it, dare I say, 0:12:20.920 --> 0:12:23.920 from Stanford. We heard it, dare I say from Harvard 0:12:23.960 --> 0:12:27.959 as well, is these deans, these faculty, they're under a 0:12:28.000 --> 0:12:29.880 lot of pressure to us. And you say, yeah, cool, 0:12:30.040 --> 0:12:33.600 that's some interesting theory. How does this apply in the 0:12:33.640 --> 0:12:35.760 real world? So, and I think what's interesting. You'll hear 0:12:35.800 --> 0:12:38.240 this later on in some of our conversations. This point 0:12:38.360 --> 0:12:43.080 of so many different disciplines that are crucial and having 0:12:43.080 --> 0:12:48.120 a successful business. So whether it's psychology, whether it's technology, marketing, 0:12:48.559 --> 0:12:50.280 you know, all of it kind of has to be 0:12:50.320 --> 0:12:53.079 in the room when you're putting together a business plan 0:12:53.200 --> 0:12:55.040 or running a business. It's also one thing to read 0:12:55.080 --> 0:12:58.400 a book. It's another thing to have a conversation with someone. 0:12:58.600 --> 0:13:00.640 And another thing. Later on the show, we're going to 0:13:00.679 --> 0:13:04.760 hear about from a very well known yogurt maker, Ziggy. 0:13:05.280 --> 0:13:08.000 He talks about the idea of some of the people 0:13:08.080 --> 0:13:12.040 he was exposed to. We hear from Federico Marquetti. He 0:13:12.160 --> 0:13:15.160 started you he got to spend some time back in 0:13:15.200 --> 0:13:17.400 the day with Mickey Drexeler, you know what I mean, 0:13:17.480 --> 0:13:19.120 the guy who worked at the Gap, who who helped 0:13:19.160 --> 0:13:21.320 create Ja grew. Well, it's such an important aspect of 0:13:21.360 --> 0:13:23.360 this because one of the folks that we talked to, 0:13:23.440 --> 0:13:26.880 of course, is James Gorman. He's the chairman and CEO 0:13:26.960 --> 0:13:30.240 of Morgan Stanley, a Columbia Business School alumnus. He spent 0:13:30.360 --> 0:13:33.439 time in the class before coming to talk with us 0:13:33.800 --> 0:13:37.000 at our special broadcast. But that's what's neat about these 0:13:37.000 --> 0:13:40.200 business schools. You have access to folks that are out 0:13:40.240 --> 0:13:43.480 in the business world, out in the financial community, folks 0:13:43.520 --> 0:13:45.600 who have learned things at the school but have had 0:13:45.640 --> 0:13:47.720 to put it to work, and so that's just a 0:13:47.720 --> 0:13:57.640 great asset. So everything we do at Homeworker Play has 0:13:57.640 --> 0:14:00.199 a digital element to it because it Mets is that 0:14:00.280 --> 0:14:04.640 assistant professor Business that the management group within Columbia Business 0:14:04.640 --> 0:14:08.480 schools focusing on manager he focuses to on all things digital. 0:14:08.720 --> 0:14:11.080 It's so nice to have you here on Bloomberg. Tell 0:14:11.160 --> 0:14:13.840 us a little bit about um. What's the typical class 0:14:13.880 --> 0:14:17.120 for you in terms of what you're teaching. It's interesting 0:14:17.120 --> 0:14:19.920 because the class that I'm teaching is not that much 0:14:19.920 --> 0:14:22.240 related to everything digital that I study, And so I 0:14:22.280 --> 0:14:25.680 teach managerial negotiations, which is really trying to help students 0:14:26.000 --> 0:14:28.800 make the most of the interpersonal relationships that they have 0:14:28.880 --> 0:14:32.760 obviously negotiating at work, negotiating with customers, their colleagues, their boss. 0:14:33.040 --> 0:14:35.680 They personally are using data to do that, right, they 0:14:35.720 --> 0:14:38.200 do that, and so I think it's it's part of 0:14:38.240 --> 0:14:40.120 the class. So it's trying to figure out, how can 0:14:40.160 --> 0:14:42.360 I learn about my counterpart, how can I learn what 0:14:42.400 --> 0:14:45.040 they care about and use that in my negotiation. And 0:14:45.080 --> 0:14:47.080 I think to some extent, you could actually do that 0:14:47.240 --> 0:14:49.480 looking at what is it that they do online, stalking 0:14:49.480 --> 0:14:52.480 their Facebook profile, looking at their company website, so all 0:14:52.480 --> 0:14:55.920 these things could technically go into the decisions that you make. Well, 0:14:55.960 --> 0:14:57.960 And it's interesting that this is an offering in it 0:14:58.080 --> 0:15:00.560 in part, it's not surprising at think we talked to 0:15:00.600 --> 0:15:03.480 the dean you know earlier, who was talking about how 0:15:03.760 --> 0:15:06.440 this isn't just sort of like six MBAs who sort 0:15:06.440 --> 0:15:08.280 of all look alike getting in a room and making 0:15:08.280 --> 0:15:11.040 a decision. This is, you know, a couple of managers, 0:15:11.080 --> 0:15:14.440 a couple of engineers. You've got to be not just 0:15:14.880 --> 0:15:17.440 you know, sort of conversive but almost fluent in the 0:15:17.520 --> 0:15:21.440 ability to to talk to lots of different types of 0:15:21.480 --> 0:15:24.960 folks from different backgrounds, etcetera. And I hope that's the 0:15:25.000 --> 0:15:27.280 experience that the NBA is actually get out of this class, 0:15:27.320 --> 0:15:30.240 is that not the same strategy isn't always successful. It's 0:15:30.240 --> 0:15:32.360 not always the same situation that you can use the 0:15:32.400 --> 0:15:34.840 same strategy, is not the same person that you would 0:15:34.880 --> 0:15:36.840 use the same strategy. And I think the NBA actually 0:15:36.840 --> 0:15:39.920 gives them a good overview of like diverse people to 0:15:39.920 --> 0:15:42.040 to talk to. Psychology comes into this big. I think 0:15:42.080 --> 0:15:44.920 about my sister who studied psychology for years and years 0:15:44.920 --> 0:15:46.320 and years, and I think everybody was thought that was 0:15:46.400 --> 0:15:48.800 kind of like a a side form of study, right, 0:15:49.040 --> 0:15:51.600 but it is being you know, being incorporated into so 0:15:51.680 --> 0:15:54.000 much of what we do, and that includes the business world. 0:15:54.640 --> 0:15:56.880 So I actually get that question a lot when people 0:15:56.880 --> 0:15:59.120 ask me, well, your degrees in psychology, what are you 0:15:59.160 --> 0:16:01.240 doing in a business school? And I think my answer 0:16:01.280 --> 0:16:04.080 is usually well, like, there's people working in organizations. Not 0:16:04.120 --> 0:16:06.600 sure if you've noticed, but there's it's groups. Is like 0:16:06.640 --> 0:16:09.240 there's group dynamics. It's interesting to see how do people 0:16:09.240 --> 0:16:12.080 select into organizations, what makes them happy at the job 0:16:12.120 --> 0:16:14.320 where it makes them productive. So there's a lot of 0:16:14.360 --> 0:16:17.600 psychologists trying to understand like the dynamics that are going 0:16:17.640 --> 0:16:20.360 on within organizations. So give us a sense of an 0:16:20.400 --> 0:16:23.480 assignment or an exercise that you might give in this class. 0:16:23.520 --> 0:16:25.280 So we do a lot of cases, and I think 0:16:25.360 --> 0:16:28.160 that's what students benefit the most from is we throw 0:16:28.240 --> 0:16:30.240 them into a situation. We tell them just this is 0:16:30.280 --> 0:16:32.880 a role, take it on, assume that those are your 0:16:32.920 --> 0:16:35.760 own preferences, and now go and negotiate. And I think 0:16:35.760 --> 0:16:38.000 the biggest learning that they get is really the feedback 0:16:38.000 --> 0:16:40.240 from the other students. So they're like, wait, like I 0:16:40.280 --> 0:16:42.360 lost so much money on the table. I actually felt 0:16:42.360 --> 0:16:44.840 pretty good about the outcome, like after the negotiation, but 0:16:44.880 --> 0:16:46.680 now that I see what the case was actually about, 0:16:47.000 --> 0:16:48.800 maybe I see I could have pushed a lot harder. 0:16:49.120 --> 0:16:50.880 So I think it's this feedback that they get from 0:16:50.920 --> 0:16:53.120 from the students and also just seeing like how well 0:16:53.120 --> 0:16:55.840 did I actually perform in the negotiations and so is 0:16:55.920 --> 0:16:59.880 there It feels like in some of these cases, because 0:17:00.040 --> 0:17:03.240 it's not so clinical that there are some emotional aspects 0:17:03.360 --> 0:17:05.040 to it. Are you are you pushing students out of 0:17:05.040 --> 0:17:07.160 their comfort zones a little bit. So that's the that's 0:17:07.200 --> 0:17:08.919 the plan, Like you could. I mean, you have this 0:17:09.000 --> 0:17:11.840 saying that experience alone is a great teacher, and I 0:17:11.880 --> 0:17:13.879 think to some extent it's true. So I always encouraged 0:17:13.920 --> 0:17:16.280 them to go out there and while negotiate, But the 0:17:16.320 --> 0:17:18.159 problem is that you don't get the feedback and you 0:17:18.200 --> 0:17:20.760 don't experiment. I would not recommend to any of my 0:17:20.800 --> 0:17:23.320 students to go into the next sceleery negotiation and try 0:17:23.320 --> 0:17:26.359 out something entirely different, something that is completely outside of 0:17:26.400 --> 0:17:28.600 their comfort zone. So that's what we do in class, 0:17:28.600 --> 0:17:30.320 and it's just kind of providing the safe space for 0:17:30.359 --> 0:17:32.679 people to experiment and to say, like, well this is 0:17:32.680 --> 0:17:35.200 what I usually do, but maybe there's another strategy that's 0:17:35.280 --> 0:17:37.239 much more successful. I have to ask you about one 0:17:37.240 --> 0:17:38.600 of the studies that you did. I got a lot 0:17:38.600 --> 0:17:40.520 of media attention. Um, I think you do this with 0:17:40.560 --> 0:17:42.720 a colleague, and it basically found out that when it 0:17:42.720 --> 0:17:46.960 comes to finances, nice guys and gals fall short. What 0:17:47.080 --> 0:17:50.000 exactly is going on? So do you What we showed 0:17:50.320 --> 0:17:53.040 is basically that people who have a certain personality trade 0:17:53.119 --> 0:17:55.359 which we call agreeableness. So that's the idea of people 0:17:55.359 --> 0:17:58.720 are nice, trusting, caring and pathetic, that those guys have 0:17:58.840 --> 0:18:01.520 fewer savings. I a debt and I'm more likely to 0:18:01.600 --> 0:18:04.720 default on loans and everything. Why is that so? I 0:18:04.760 --> 0:18:06.520 think one of the reasons is that they just care 0:18:06.560 --> 0:18:09.080 more about other people. And I think society has this 0:18:09.119 --> 0:18:11.720 image of well, you can either care about money or 0:18:11.760 --> 0:18:14.800 you care about other people. So there seems this almost 0:18:14.880 --> 0:18:17.600 a false dichotomy saying, well, if you care about other people, 0:18:17.840 --> 0:18:19.879 you should not care about money because that makes you 0:18:19.920 --> 0:18:23.000 a lesser person. And I think agreeable people just place 0:18:23.320 --> 0:18:25.879 almost too much emphasis on the people's side, where they 0:18:26.000 --> 0:18:29.400 like neglecting their finances. Just think of someone will be agreeable, 0:18:29.440 --> 0:18:32.399 basically is the left. I think it's a different lesson 0:18:32.520 --> 0:18:34.720 so that that would be the sad news. I think 0:18:34.760 --> 0:18:37.400 it's because like, agreeable people are the people who keep 0:18:37.440 --> 0:18:40.119 society together. And I think it's the way that we 0:18:40.200 --> 0:18:42.960 think about money as a society is just the wrong way, 0:18:43.040 --> 0:18:45.600 because technically, if you care for your loved ones and 0:18:45.640 --> 0:18:46.960 if you really want to make sure that they have 0:18:47.000 --> 0:18:49.080 a good life to some extent, you should be caring 0:18:49.080 --> 0:18:51.320 about finances because if you default and if you go 0:18:51.359 --> 0:18:54.360 into debt. It's not just you suffering, but also your 0:18:54.440 --> 0:18:57.480 loved ones. And that's Sandra mac is a system professor 0:18:57.680 --> 0:19:01.159 of business, and we talk so much about technology and 0:19:01.200 --> 0:19:03.760 how it plays in that clearly is on her mind, 0:19:04.040 --> 0:19:06.640 but what's really on her mind is the mind and 0:19:06.680 --> 0:19:09.520 how people are interacting with each other as human beings. 0:19:09.560 --> 0:19:11.800 I love it. So while we were at Columbia Business 0:19:11.840 --> 0:19:14.240 School this week, as you said Carol early in the show, 0:19:14.359 --> 0:19:16.800 right there on College Walk in the midst of it, 0:19:16.800 --> 0:19:19.600 it was like college game day for business schools. We 0:19:19.640 --> 0:19:22.280 had a chance to sit down with James Gorman, he 0:19:22.320 --> 0:19:26.560 is the Morgan Stanley chairman and CEO, back to the 0:19:26.600 --> 0:19:28.760 campus where he was thirty years ago. Right. I love 0:19:28.800 --> 0:19:31.000 to hear about his experience because he came from Australia, 0:19:31.080 --> 0:19:33.480 was already a lawyer. But he talked about so many 0:19:33.480 --> 0:19:35.480 different things. We of course did speak about the I 0:19:35.600 --> 0:19:38.840 P O market, very timely, interest rates and as I said, 0:19:39.040 --> 0:19:41.240 his time at Columbia. Yeah, it's like Columbia in the 0:19:41.280 --> 0:19:43.399 mid eighties, and uh it was, you know, it was 0:19:43.400 --> 0:19:45.119 a great experience. So it was it was fun. I 0:19:45.160 --> 0:19:47.080 just did a lunch and loan Claus for about and 0:19:47.160 --> 0:19:50.440 fifty kids and they had kids there. They went BOM 0:19:50.480 --> 0:19:52.359 when I was a business school here. What do you 0:19:52.400 --> 0:19:53.960 want to know from them when you're talking with them, 0:19:54.000 --> 0:19:56.000 because I feel like the world that so many different industries, 0:19:56.040 --> 0:19:57.960 your industry also going through lots of changes. What do 0:19:58.000 --> 0:20:00.159 you want to hear from them? Well, it's what kind 0:20:00.160 --> 0:20:02.560 of cultural what kind of company they're really looking to 0:20:02.640 --> 0:20:05.040 work out? I mean, what what what matters to this 0:20:05.080 --> 0:20:07.600 generation different from my generation? You know, I grew up 0:20:08.560 --> 0:20:11.320 at a time when Solomon Brothers and Drexel and you know, 0:20:11.400 --> 0:20:13.119 that was all the rage on Wall Street is a 0:20:13.320 --> 0:20:17.560 very sort of hyper intense environment. I mean, these uh, 0:20:17.720 --> 0:20:20.680 young folks there are much more interested in social impact, 0:20:21.119 --> 0:20:24.880 um in the values of the organization and just trying 0:20:24.920 --> 0:20:27.280 to share in exchange how we think about our role 0:20:27.320 --> 0:20:30.840 in society as as an obviously global bank. Well let's 0:20:30.840 --> 0:20:34.520 go all the way back to your arrival here on campus. 0:20:34.760 --> 0:20:38.119 This was after that so long ago, but it was 0:20:38.160 --> 0:20:41.000 a big move. I mean there it was defining in 0:20:41.040 --> 0:20:44.200 a lot of ways. What do you remember most about 0:20:45.280 --> 0:20:47.600 arriving and then what did you take Because you came 0:20:47.640 --> 0:20:50.280 from Australia and you were a lawyer, already, right, yeah, 0:20:50.440 --> 0:20:52.440 I can. I came here to sort of change careers. 0:20:52.520 --> 0:20:54.919 What I remember most is the interest rate on my 0:20:55.000 --> 0:21:01.239 student loan, which I think is a world record, right. 0:21:01.359 --> 0:21:03.200 And I thought I'd died and gone to heaven because 0:21:03.240 --> 0:21:07.399 America welcomed me to come here to learn to grow, 0:21:07.520 --> 0:21:10.480 and and I just it was unbelievable. I arrived on 0:21:10.480 --> 0:21:14.719 a very hot August day. August was that classic New 0:21:14.760 --> 0:21:17.720 York's sweltering heat, and it just it was on you. 0:21:17.800 --> 0:21:19.800 It was just it was so exciting on the campus 0:21:20.440 --> 0:21:25.320 this university, which is you know, extraordinary. Um, I couldn't 0:21:25.359 --> 0:21:28.119 I couldn't have been happier, honestly to be given that chance. 0:21:28.160 --> 0:21:31.640 And that's why I think, you know, immigration, welcoming foreigners, 0:21:31.640 --> 0:21:34.400 giving them an opportunity to contribute. And I'm still here, right, 0:21:34.520 --> 0:21:37.080 you know, thirty past years later. Because you had an 0:21:37.080 --> 0:21:40.960 experience living in International House, I believe, and so many 0:21:40.960 --> 0:21:42.800 people are exposed to many different cultures. I mean, you 0:21:42.840 --> 0:21:45.320 were living in it in a lot of ways. How 0:21:45.320 --> 0:21:48.040 did that affect sort of your world view? I used 0:21:48.040 --> 0:21:51.600 to play chess every Sunday night with a Danish guy 0:21:51.640 --> 0:21:54.560 who listened to Frank Sinatra with candles on, you know, 0:21:55.000 --> 0:21:57.280 in the dark, and it was so you know, and 0:21:57.560 --> 0:22:00.600 one of my closest friends, uh I was from leon 0:22:00.680 --> 0:22:04.520 in France and another guy from Morocco. Uh. So you 0:22:04.520 --> 0:22:08.080 you you learned to experience the cultures and the diversity 0:22:08.160 --> 0:22:09.880 that this world has. And one of the great things 0:22:09.880 --> 0:22:13.040 about a university like this is it brings people like 0:22:13.200 --> 0:22:16.679 that together who all motivated, they're all they're obviously uh 0:22:16.720 --> 0:22:19.560 they're talented, uh and they want to move forward. So 0:22:19.680 --> 0:22:23.080 I thought it was a tremendous experience. Well, having said that, James, 0:22:23.119 --> 0:22:24.800 I do wonder what you think about kind of the 0:22:24.800 --> 0:22:28.000 pushback that we're getting, um from the current administration when 0:22:28.000 --> 0:22:30.439 it comes to folks coming in from other countries to 0:22:30.480 --> 0:22:33.200 study here, maybe start companies here. But it's not that 0:22:33.400 --> 0:22:37.280 happy an environment or hospitable environment for them right now. Yeah, 0:22:37.280 --> 0:22:41.439 I mean I think, um, this country has always been 0:22:41.440 --> 0:22:45.720 a country of immigrants, and uh celebrating and welcoming those 0:22:45.720 --> 0:22:48.600 immigrants and seeing how they've contributed to this society here. 0:22:48.640 --> 0:22:51.439 I mean, it's it's been one of the great elixas 0:22:51.480 --> 0:22:55.040 of what's made America different is most countries people trying 0:22:55.040 --> 0:22:57.240 to move out of to get a better life. This 0:22:57.320 --> 0:22:58.840 is one of the few countries in the world in 0:22:58.880 --> 0:23:00.800 Australia was like that where a lot of people are 0:23:00.800 --> 0:23:04.440 trying to get into and I think welcoming those immigrants, 0:23:04.440 --> 0:23:07.880 providing opportunities for them, obviously having sensible border control, which 0:23:07.920 --> 0:23:11.480 I support. People shouldn't come here illegally, right I didn't 0:23:11.520 --> 0:23:14.240 you come through passport control. You earn your way into 0:23:14.280 --> 0:23:17.120 this country, you set the tests, you I became a citizen. 0:23:17.160 --> 0:23:19.080 I mean, you do it the right way. But having 0:23:19.080 --> 0:23:21.400 as many people as you can bring in talent into 0:23:21.440 --> 0:23:22.840 the US I think has been one of the great 0:23:22.880 --> 0:23:26.200 hallmarks of the success of last century. When you think 0:23:26.240 --> 0:23:28.960 about talent as well, you know, it used to be 0:23:29.000 --> 0:23:31.240 a much more prescribed path. That feels like at a 0:23:31.280 --> 0:23:33.960 business school, you went to a big consulting company, you 0:23:34.000 --> 0:23:36.040 went to Wall Street. You know, you talked about hearing 0:23:36.080 --> 0:23:38.480 from the students, going to have a social impact. What 0:23:38.560 --> 0:23:41.240 do you draw in terms of student and talent from 0:23:41.240 --> 0:23:44.439 a business school like Columbia, And what's the case you 0:23:44.480 --> 0:23:46.720 make to them for working on Wall Street right now? Well, 0:23:46.720 --> 0:23:49.399 they're they're they're great tourism Wall Street. There always have been, 0:23:49.440 --> 0:23:51.960 I mean, things out and flow. I think the largest recruiter. 0:23:52.520 --> 0:23:54.280 I don't know for sure, but I think Amazon might 0:23:54.280 --> 0:23:55.840 be the largest or one of the largest at the 0:23:55.880 --> 0:23:58.679 business school now. So at different points, the sort of 0:23:58.720 --> 0:24:02.960 cadence and flow and focus changes as society is changing, 0:24:02.960 --> 0:24:06.879 in as business opportunities are changing. Listen, Wall Street is 0:24:07.600 --> 0:24:13.080 highly sophisticated, very intellectually interesting, very dynamic because you're in 0:24:13.119 --> 0:24:15.280 the markets. As you guys know, this is what you do. 0:24:15.880 --> 0:24:18.760 Um So for a lot of people, not everybody, for 0:24:18.800 --> 0:24:21.879 a lot of people, who remains an extremely attractive career option. 0:24:22.359 --> 0:24:24.399 So let's talk about the market you're in it. We 0:24:24.440 --> 0:24:26.119 obviously watch a day in and day out. There's so 0:24:26.119 --> 0:24:29.240 many big macro stories that are out there, whether it's Brexit, 0:24:29.280 --> 0:24:31.280 whether it's US China trade. How do you see the market, 0:24:31.320 --> 0:24:34.080 the global market environment right now, Well, you know, it's 0:24:34.160 --> 0:24:38.360 it's a conundrum. At one level, We've got record low unemployment, 0:24:39.119 --> 0:24:42.119 we do still have global growth. The US economy, the 0:24:42.119 --> 0:24:45.840 most important economy in the world, is performing strongly. China 0:24:45.920 --> 0:24:50.080 is still performing strongly. Um Europe. Europe is obviously mixed, 0:24:50.080 --> 0:24:53.439 but it's been mixed for two decades now. Um So, 0:24:53.640 --> 0:24:57.080 one level, the fundamentals are actually quite strong. Uh. At 0:24:57.119 --> 0:24:59.480 the other level, the sense of confidence there isn't the 0:24:59.520 --> 0:25:02.080 confidence and there's a sense of inevitability where at the 0:25:02.160 --> 0:25:04.720 end of a cycle, you know it doesn't have to 0:25:04.760 --> 0:25:07.880 be you don't. I mean, statistically there is a recession 0:25:07.880 --> 0:25:09.960 every seven years, right, each year you begin with the 0:25:09.960 --> 0:25:13.000 fifth percent chance of recession, but it doesn't have to be. 0:25:13.080 --> 0:25:14.840 You know, in Australia they haven't had a recession for 0:25:14.880 --> 0:25:17.919 twenty eight years in a row. So why is there 0:25:18.040 --> 0:25:20.200 so much pressure though then on the Federal Reserve to 0:25:20.320 --> 0:25:23.720 continue cutting race? Does that make sense? Well, because the 0:25:23.720 --> 0:25:26.359 economy is slowing. The economy is slowing, and you know 0:25:26.400 --> 0:25:28.199 the job of the Fed is to sort of balance 0:25:28.240 --> 0:25:32.840 monetary policy with economic outlook and fiscal policy, and you 0:25:32.880 --> 0:25:35.680 know they should feather rates obviously when the economy is 0:25:35.680 --> 0:25:37.879 getting hot, their job is to raise raids, slow it 0:25:37.920 --> 0:25:40.879 down and the reverse. So you know, I've supported the 0:25:40.960 --> 0:25:44.560 latest FED rate cut, and I suspect they'll do one 0:25:44.680 --> 0:25:47.960 or two more, but then it's time for pause and 0:25:48.040 --> 0:25:51.000 really absorb this because the problem with cutting is it's 0:25:51.040 --> 0:25:53.280 one of the few tools you've got. So if you 0:25:53.320 --> 0:25:55.719 give it away too easily, what do you have If 0:25:55.760 --> 0:25:57.560 we have a real problem. I want to go back 0:25:57.560 --> 0:25:59.080 to something you said a minute ago. It sort of 0:25:59.119 --> 0:26:02.160 squaring some of the different elements out there, and especially 0:26:02.800 --> 0:26:07.440 businesses that certainly seem more cautious with a consumer that 0:26:07.760 --> 0:26:11.479 isn't showing much signs of caution at all. How do 0:26:11.520 --> 0:26:14.719 you square those things as you talk to your customers 0:26:14.720 --> 0:26:16.400 and what do you see out there that that could 0:26:16.400 --> 0:26:19.639 help explain that dichotomy as it were, Well, we're you know, 0:26:19.680 --> 0:26:21.560 we're we're in a bit of an echo chamber. If 0:26:21.600 --> 0:26:24.159 you're a business leader, you go to business leadership meetings, 0:26:24.160 --> 0:26:25.840 we all talk to each other. We sort of, you know, 0:26:25.880 --> 0:26:27.840 we bounce off each other. So a little bit of 0:26:27.840 --> 0:26:30.119 it is, Gee, we must be at the end of 0:26:30.160 --> 0:26:32.720 the cycle, the Feds cutting rates, we must be about 0:26:32.720 --> 0:26:34.439 to have a recession. By the way, we've had an 0:26:34.440 --> 0:26:37.840 inverted Yolka, which has been highly predictive of a recession. 0:26:38.200 --> 0:26:41.639 So there's some hard evidence that things are more likely 0:26:41.720 --> 0:26:43.800 to slow down than accelerat at this point. I don't 0:26:43.800 --> 0:26:46.119 think there's any doubt about that. So as executives, his 0:26:46.280 --> 0:26:48.639 job is to think about capital investment of a multi 0:26:48.760 --> 0:26:52.520 years you would be prudent and being cautious at this point. 0:26:52.520 --> 0:26:55.359 There's nothing wrong with that. Consumers aren't yet experiencing that 0:26:55.440 --> 0:26:58.720 they've got very cheap dead housing is starting to recover 0:26:58.760 --> 0:27:02.760 their consumer consumer read apart from student loan sadly is 0:27:02.800 --> 0:27:05.879 in very strong shape. So the consumer balance sheet is 0:27:05.880 --> 0:27:08.159 still very strong and that's why it's lagging where the 0:27:08.200 --> 0:27:11.400 corporate balance sheet and corporate attitudes are. There implications though, 0:27:11.440 --> 0:27:15.359 from having rates at such a low level for such 0:27:15.400 --> 0:27:19.879 a protracted time. I mean, it's it's all about funding 0:27:19.920 --> 0:27:23.680 equilibrium between economic growth and the cost of money. So 0:27:24.400 --> 0:27:27.480 I mean there are only implications if it creates a bubble, right, 0:27:27.560 --> 0:27:31.000 that's a cheap money eventually will create a bubble. We're 0:27:31.040 --> 0:27:33.120 a long way from that now. Don't see any of that. 0:27:33.640 --> 0:27:36.600 I'm seeing no bubbles. And how do you manage your 0:27:36.680 --> 0:27:40.800 business given all of those different inputs and and outputs 0:27:40.840 --> 0:27:44.640 that Where do you hire? Where do you maybe stay steady? 0:27:45.280 --> 0:27:50.440 Where do you invest? Across the empire of Morgan Stanley empire, 0:27:52.200 --> 0:27:58.360 never thought about it. We're just a simple business, um, 0:27:58.400 --> 0:28:02.440 you know. Firstly, very long the US our wealth management 0:28:02.440 --> 0:28:06.800 business is I think percent us UM and at least 0:28:06.800 --> 0:28:09.439 half a securities business here. So that's a good thing, right. 0:28:09.480 --> 0:28:12.480 This is an eighteen tree in dollar economy, strongest economy 0:28:12.520 --> 0:28:14.600 in the world, most important economy in the world. I'm 0:28:14.640 --> 0:28:18.240 happy to be along in the US, where obviously, you know, 0:28:18.280 --> 0:28:21.200 we've been aggressively building our Asia business, which is now 0:28:21.240 --> 0:28:24.000 i think fourteen percent or sell of the company. With 0:28:24.040 --> 0:28:28.000 the trade talks, things have slowed clearly across parts of Asia, 0:28:28.680 --> 0:28:30.800 so let's be played out. But our job is to 0:28:30.840 --> 0:28:36.480 try and look past one three six months hiccups or slowdowns. 0:28:36.480 --> 0:28:39.880 Our job, certainly, my job is to think out five 0:28:39.920 --> 0:28:43.480 plus years. And you know, traders are thinking every five minutes. 0:28:43.640 --> 0:28:46.160 I'm trying to think five years and can do that 0:28:46.240 --> 0:28:48.720 in this environment though, because it does feel like we've 0:28:48.760 --> 0:28:51.680 been going back and forth on let's you've got to 0:28:51.760 --> 0:28:53.840 we've been around three d five years. I mean, we're 0:28:53.880 --> 0:28:57.880 managing two point six three in people's money. They're not 0:28:57.920 --> 0:29:00.840 all selling into the market on day and all buying 0:29:00.880 --> 0:29:03.840 on the next day. No. Things things actually move in 0:29:03.840 --> 0:29:07.000 in small increments. It's it's small things like the public 0:29:07.040 --> 0:29:09.600 markets and companies going public that you know or m 0:29:09.640 --> 0:29:12.680 and A transactions happening or not. But most about core 0:29:12.760 --> 0:29:17.080 businesses are relatively immune to what's going on right now, 0:29:17.240 --> 0:29:19.640 you wouldn't see the impact on that wealth management business 0:29:19.640 --> 0:29:23.160 greatly at all. That's James Gorman, Columbia Business School alum, 0:29:23.400 --> 0:29:26.520 also the CEO and chairman of Morgan Stanley. And that's 0:29:26.560 --> 0:29:28.600 not all we've talked to him about. Well. More of 0:29:28.600 --> 0:29:31.160 that conversation part two coming up in the next hour, 0:29:31.280 --> 0:29:34.040 and for the full interview, download Bloomberg Business Week Extra 0:29:34.120 --> 0:29:37.400 wherever you get your podcasts. We caught up with Kastee 0:29:37.480 --> 0:29:40.760 mclara's He is the new dean of Columbia Business School. 0:29:40.960 --> 0:29:43.880 We chatted about the cost of higher education. We started 0:29:43.880 --> 0:29:46.920 by asking about what he's learned since taking the top job. 0:29:47.240 --> 0:29:53.000 A few things to UH to say about that. I 0:29:53.000 --> 0:29:55.080 I have been embraced with a lot of enthusiasm from 0:29:55.080 --> 0:29:59.000 my colleagues, and we're actually working on some very interesting 0:29:59.000 --> 0:30:02.080 initiatives here at this pol both to sort of improve 0:30:02.200 --> 0:30:06.880 and change education UH and UH and also sort of 0:30:06.920 --> 0:30:10.320 talk to business leaders that have been sort of flocking 0:30:10.400 --> 0:30:12.760 in to meet the new deane and see how they 0:30:12.760 --> 0:30:15.640 can be involved in help. So I think it has 0:30:15.680 --> 0:30:19.920 been exciting first three months. That seems like a very 0:30:19.960 --> 0:30:23.920 long day for McLaren's I mean he talked to us 0:30:23.920 --> 0:30:26.960 about the NBA because there's so much of a conversation 0:30:27.080 --> 0:30:30.280 right now about the cost of education, right, and I'm curious, 0:30:30.320 --> 0:30:33.360 how do you see the NBA of the future. How 0:30:33.400 --> 0:30:37.160 do you kind of justify you know, the education with 0:30:37.200 --> 0:30:42.240 the cost. Yeah, so, uh, a few things. First of all, 0:30:43.440 --> 0:30:45.960 we're constantly looking at the cost of the education, and 0:30:46.000 --> 0:30:48.840 we're always trying to take cost out of the equation. 0:30:49.680 --> 0:30:52.719 We're also working on providing good financial aid to our 0:30:52.760 --> 0:30:59.360 students to essentially uh facilitate that investment on their part. Uh. 0:30:59.400 --> 0:31:01.760 And we're really focusing on the value of the degree. 0:31:02.000 --> 0:31:05.400 So I think, actually, because business is undergoing quite a 0:31:05.400 --> 0:31:08.040 bit of change right now, it's it's a great opportunity 0:31:08.800 --> 0:31:10.920 for us to innovate in the value that we offer 0:31:10.960 --> 0:31:14.480 to our students. And in fact, I actually believe that, uh, 0:31:14.960 --> 0:31:19.480 the NBA degree now it's a fantastic investment, both in 0:31:19.560 --> 0:31:24.480 terms of time and return, uh, simply because you know, 0:31:24.520 --> 0:31:27.480 you need new skills to succeed in practice, uh, and 0:31:27.600 --> 0:31:29.840 that's what we're trying to do here. So I actually 0:31:29.880 --> 0:31:33.920 think that the degree free to robust uh. And and 0:31:33.960 --> 0:31:36.200 I think, in fact, because of the change we're undergoing 0:31:36.520 --> 0:31:39.120 is actually more valuable now than it potentially was five 0:31:39.120 --> 0:31:42.239 ten years ago. So as those business leaders, especially here 0:31:42.240 --> 0:31:45.360 in New York City alum include James Gorman from more Etainly, 0:31:45.360 --> 0:31:47.520 he's going to be with us later on when he 0:31:47.640 --> 0:31:51.520 and his friends and and Phillo olam Or are visiting 0:31:51.520 --> 0:31:53.959 with you. What are they asking you for that may 0:31:54.000 --> 0:31:56.160 be different than what they've been getting in the past 0:31:56.200 --> 0:31:58.800 in terms of what you're teaching or the types of 0:31:58.880 --> 0:32:03.480 students that you're turning out. Yeah, So I think when 0:32:03.480 --> 0:32:07.840 you talk to business leaders, you realize that they're encountering 0:32:08.320 --> 0:32:12.120 two things. First of all, technology data analytics is really 0:32:12.200 --> 0:32:15.200 changing the way their business is being transacted, so they 0:32:15.320 --> 0:32:18.200 leave that for quite some time. They also understand that 0:32:18.240 --> 0:32:21.200 the nature of the NBA jobs, the types of jobs 0:32:21.240 --> 0:32:24.240 that our graduates are going to do, is itself changing 0:32:24.760 --> 0:32:28.000 over time. So they want to see in what way 0:32:28.040 --> 0:32:30.360 are we going to best prepare students in order to 0:32:30.400 --> 0:32:32.920 really participate in the digital future. So they ask what 0:32:32.920 --> 0:32:35.200 are we doing in the curriculum, what are we doing 0:32:35.200 --> 0:32:38.920 in experiential learning? How do we bring NBA students together 0:32:38.960 --> 0:32:41.760 with engineering students so that they learn how to collaborate 0:32:41.840 --> 0:32:43.400 because that's what they're going to do when they go 0:32:43.840 --> 0:32:45.920 out to work. So these are the types of things 0:32:45.960 --> 0:32:48.120 we talk about. I'm also cures how much you talk 0:32:48.200 --> 0:32:51.080 about the U. S. China trades spat and what that 0:32:51.120 --> 0:32:53.160 has done to students who want to come to the 0:32:53.200 --> 0:32:55.479 clumby business goal to get a degree, but they're nervous 0:32:55.520 --> 0:32:58.000 about what does this mean. Can I stay in the country, 0:32:58.200 --> 0:33:01.000 can I create a company? You know? So I'm just 0:33:01.040 --> 0:33:04.520 curious if you're seeing pushback or a decline in students 0:33:04.520 --> 0:33:07.600 from overseas that you know want to apply. So for 0:33:07.800 --> 0:33:12.080 now at Columbia, we haven't actually experienced that, uh, no 0:33:12.240 --> 0:33:15.520 change at all, almost almost no change. We continue to 0:33:15.560 --> 0:33:21.080 have about international students, uh about two thirds of them, 0:33:21.120 --> 0:33:24.880 about six of them that just graduated that wanted to 0:33:24.880 --> 0:33:27.240 stay in the US actually found jobs in the US, 0:33:28.120 --> 0:33:31.080 uh And of that left, I think a lot of 0:33:31.080 --> 0:33:33.360 them actually wanted to go back in different areas of 0:33:33.400 --> 0:33:38.160 the world. Having said that, you know, our service economy 0:33:38.200 --> 0:33:41.280 here in the US depends on really high skilled human capital. 0:33:41.400 --> 0:33:43.720 So this is a problem that we need to solve, 0:33:43.760 --> 0:33:48.960 not just for business education, but for essentially training any 0:33:49.000 --> 0:33:51.959 type of high skilled labor that we would like to 0:33:52.000 --> 0:33:54.680 retain in the country and hopefully we'll get to have 0:33:55.040 --> 0:33:58.320 the dialogue and then move to a solution. Well, I'm 0:33:58.360 --> 0:33:59.760 curious that that's where I wanted to go. Are you 0:34:00.040 --> 0:34:04.160 being a dialogue with folks in Washington about this issue? 0:34:04.920 --> 0:34:07.720 There are there is some dialogue that is going on. Yes, uh, 0:34:08.080 --> 0:34:12.440 you know, but early steps. I mean, people understand that 0:34:12.480 --> 0:34:17.440 this is an opportunity for the US to actually do better. Ah, 0:34:17.480 --> 0:34:21.040 and people understand the value of high skilled human capital, 0:34:21.239 --> 0:34:25.560 which is how we actually helped build companies, start companies, 0:34:25.960 --> 0:34:30.040 create new ideas, new technology. So you know, they recognize 0:34:30.080 --> 0:34:34.239 the value and I think, you know, hopefully we'll keep 0:34:34.239 --> 0:34:36.920 talking about it and resolve. And that's coach Us mcglaura's 0:34:36.920 --> 0:34:40.040 Columbia Business Schools New Deane. What's interesting is he's been 0:34:40.040 --> 0:34:42.320 at the school for a long time as a professor. 0:34:42.440 --> 0:34:47.000 He focuses on operations, research, data analytics, and he focuses 0:34:47.040 --> 0:34:50.520 on the increasingly larger and larger role of technology in 0:34:50.520 --> 0:34:52.880 our world at large and of course in the business community. 0:34:52.880 --> 0:34:55.799 So fun conversation, interesting to talk to him about, you know, 0:34:55.840 --> 0:34:57.719 teaching there for a while, but then you become the 0:34:57.760 --> 0:35:01.200 boss it's a whole different scenario. Lulu Wong, she is 0:35:01.239 --> 0:35:03.600 definitely a pioneer when it comes to Wall Street. She 0:35:03.680 --> 0:35:06.600 graduated from the Columbia Business School back in eighty three 0:35:06.800 --> 0:35:09.839 on the executive program, but she's been doing financial money 0:35:09.840 --> 0:35:12.080 management since about nineteen seventy two, so she's seen a 0:35:12.080 --> 0:35:13.920 lot of up and down cycles. And we want to 0:35:13.960 --> 0:35:18.040 start by talking with you about coming to Columbia in three. 0:35:18.360 --> 0:35:21.040 Columbia was different, New York City was different. What drew 0:35:21.080 --> 0:35:24.480 you here? I came to Columbia because um I had 0:35:24.480 --> 0:35:26.399 already been working in Wall Street for a number of years. 0:35:26.640 --> 0:35:30.960 Um I had developed a good um practice, but I 0:35:31.440 --> 0:35:34.600 knew that in the future was a firm of my own, 0:35:34.960 --> 0:35:37.279 and I really want to have the best credentials. I 0:35:37.320 --> 0:35:41.360 had gone to Wellesley uh College undergraduate strong credential, but 0:35:41.400 --> 0:35:43.880 I thought I needed to have the credentials of a 0:35:43.960 --> 0:35:47.640 great university like Columbia. So I came really for that reason, 0:35:48.120 --> 0:35:50.520 but found that it was far more than that. Well, 0:35:50.760 --> 0:35:52.839 talk about that specifically, because you were working and doing 0:35:52.840 --> 0:35:55.160 the executive program right, which was like Friday's for a 0:35:55.200 --> 0:35:58.239 long time. Tell us about what you got from being here, 0:35:59.040 --> 0:36:02.359 I found, but coming to Columbia that everything I've been 0:36:02.400 --> 0:36:06.279 doing and observing as an investor on Wall Street, it 0:36:06.360 --> 0:36:09.560 all began to come together in the context of theory 0:36:09.680 --> 0:36:12.680 and practice. And I believe that when you take practice 0:36:12.680 --> 0:36:15.759 from experience and then putting it into some sort of 0:36:15.760 --> 0:36:19.040 a structure and theory it really works. Then it all 0:36:19.080 --> 0:36:22.080 makes sense. And one of the things that you quickly 0:36:22.120 --> 0:36:26.160 identified was the ability both as an investor and a leader, 0:36:26.200 --> 0:36:29.280 a business leader, to make stronger connections between the US 0:36:29.440 --> 0:36:32.000 and China. That clearly has been a big part of 0:36:31.840 --> 0:36:34.280 what you've been doing. That has never been more relevant 0:36:34.320 --> 0:36:37.480 than it is today. Tell us what you see right now, 0:36:37.640 --> 0:36:41.319 especially headlines every day about Hong Kong. Maybe maybe we 0:36:41.360 --> 0:36:43.360 start there. What do you make of that situation? I 0:36:43.400 --> 0:36:46.520 think it's it's a very fraught situation, and I hear 0:36:46.560 --> 0:36:50.520 from friends and colleagues on both sides and they're both 0:36:50.560 --> 0:36:54.160 equally grieved of And I think the way it works 0:36:54.160 --> 0:36:57.920 out is that, um, I don't think Beijing realized it 0:36:58.000 --> 0:37:00.560 was going to go this far. I think they certainly 0:37:00.600 --> 0:37:02.520 do not want to have a tantemous square. It's a 0:37:02.600 --> 0:37:05.360 very different world we live in social media. They cannot 0:37:05.400 --> 0:37:08.160 have that, So they have to find some face saving 0:37:08.200 --> 0:37:14.560 way to begin to come the crowds. Um. I think fortunately, 0:37:14.680 --> 0:37:17.480 the beef that's the demonstrators have is really more with 0:37:17.520 --> 0:37:20.480 the Hong Kong government than with Beijing. So I think 0:37:20.520 --> 0:37:22.799 if you can work through Carrie Lamb where she has 0:37:22.800 --> 0:37:25.840 already withdrawn the Tradition Bill, and if she can begin 0:37:25.880 --> 0:37:29.640 to negotiate on the three other conditions that the the 0:37:29.719 --> 0:37:33.439 protesters have set up, there is a potential to work 0:37:33.480 --> 0:37:37.120 through some understanding. Lulu, is there a role for folks 0:37:37.200 --> 0:37:39.640 outside of Hong Kong and outside of China, because there's 0:37:39.640 --> 0:37:42.440 certainly been some push among the protesters to involve the 0:37:42.520 --> 0:37:45.480 United States. What's your role on that or well, I 0:37:45.520 --> 0:37:48.120 do think there is a role um Um. In my 0:37:48.400 --> 0:37:51.799 uh not day job, I'm also on the board of 0:37:51.840 --> 0:37:56.640 Asia Society, which is really the u foremost nonpartisan group 0:37:56.880 --> 0:37:59.680 trying to bridge US and Asia, and we have been 0:37:59.760 --> 0:38:04.080 very busy talking to both sides about the issues. Um. 0:38:04.239 --> 0:38:07.799 I think if we can find ways the Chinese are 0:38:07.880 --> 0:38:12.000 very big unface, they cannot be humiliated, and there's a 0:38:12.000 --> 0:38:15.440 way in which they can continue to stay with the 0:38:15.480 --> 0:38:20.680 one country two systems, begin to exert some some control 0:38:20.719 --> 0:38:23.440 over Hong Kong, but not with the heavy heavy handedness 0:38:23.440 --> 0:38:27.520 we've seen. I think there will be a solution. Business 0:38:27.600 --> 0:38:31.440 leaders and certainly investors are talking increasingly of a decoupling 0:38:31.800 --> 0:38:35.160 between the United States and China. Given you've spent decades 0:38:35.719 --> 0:38:39.439 coupling in the US and in many ways, how much 0:38:39.480 --> 0:38:42.800 do you worry that that that may become a reality. 0:38:43.400 --> 0:38:45.520 I think there are many people who concerned that this 0:38:45.600 --> 0:38:49.080 is going to be uh uh, one win, one lose. 0:38:49.640 --> 0:38:51.440 I still am a believer that it can be a 0:38:51.480 --> 0:38:55.239 win win situation. UM. I think right now we have 0:38:55.320 --> 0:38:58.000 two leaders who are both under short term pressure to 0:38:58.120 --> 0:39:01.720 try to resolve some of the problems for their economy's crumble. 0:39:02.440 --> 0:39:04.840 I think the advantage that she has is that he 0:39:04.920 --> 0:39:07.600 also is playing the long game, and I think he 0:39:07.680 --> 0:39:11.480 believes that the long term future of China is very 0:39:11.520 --> 0:39:17.640 conditioned on China retaining economic political, not necessarily military, but 0:39:17.719 --> 0:39:22.400 geo political power. UM. The question is does the economy 0:39:22.400 --> 0:39:25.759 crumble before he can achieve this. But he has many 0:39:25.840 --> 0:39:30.200 lovers that are not present in America which he's been pulling. 0:39:30.400 --> 0:39:34.359 Especially there's absolutely he has been pulling levers. He's um 0:39:34.400 --> 0:39:38.200 moving more liquidity into the system. UM. He's getting some 0:39:38.320 --> 0:39:42.880 of his UM companies, both multinational and Chinese, to begin 0:39:42.920 --> 0:39:46.759 to try to UM do more investing in the economy. 0:39:47.080 --> 0:39:51.160 He's trying to bring more capitals UM investment back into China. Well, 0:39:51.320 --> 0:39:53.359 I'm curious that what you are hearing is that, well, 0:39:53.400 --> 0:39:57.640 there ultimately are the expectations from US folks that you're 0:39:57.640 --> 0:39:59.840 talking to folks in China that there will be some 0:40:00.040 --> 0:40:02.359 kind of a trade deal that's done. Or is the 0:40:02.400 --> 0:40:04.440 fear that I think we keep hearing is that we're 0:40:04.440 --> 0:40:06.480 going to see China kind of go off with their 0:40:06.520 --> 0:40:08.960 plans and have its allies, and the US will go 0:40:09.000 --> 0:40:11.080 off on its plans. And when it comes to trade 0:40:11.080 --> 0:40:14.360 and developing technology, what do you expect. I think it 0:40:14.360 --> 0:40:17.160 would be very difficult for there to be two fortresses. 0:40:17.480 --> 0:40:21.080 The world is too connected, the supply chain of the markets, 0:40:21.400 --> 0:40:24.080 we are interdependent, so I don't think we can truly 0:40:24.080 --> 0:40:28.160 exist separately. UM. I do think that some of the 0:40:28.239 --> 0:40:31.160 reforms that the US is pressuring China to make are 0:40:31.200 --> 0:40:34.480 not actually bad for China. Some of the progressive in 0:40:34.600 --> 0:40:37.799 China have been militating for them all along, but they 0:40:37.800 --> 0:40:40.880 had been sort of outnumbered by the Hawks. But I 0:40:40.920 --> 0:40:44.920 think with this current situation where she's under pressure internally 0:40:45.440 --> 0:40:50.239 for UM having managed it UH in an indelicate way, 0:40:50.640 --> 0:40:54.479 it's going to provide some opportunity for the progressive to say, look, 0:40:55.160 --> 0:40:57.839 it makes sense that we open our markets, it makes 0:40:57.880 --> 0:41:01.279 sense that we liberalize, and so let's do some of this. 0:41:01.640 --> 0:41:04.320 We will make it appear that it is our own initiation. 0:41:04.400 --> 0:41:07.200 We're not being bullied into it. That's very important. The 0:41:07.280 --> 0:41:10.759 West has to not play the bully hand. I think 0:41:10.800 --> 0:41:13.600 that will be very difficult for SHEET overcome. But if 0:41:13.600 --> 0:41:18.040 there can be UM sensitive diplomatic accommodations on both sides, 0:41:18.480 --> 0:41:21.400 I think it could come out better for both countries. 0:41:22.120 --> 0:41:25.080 One of the biggest concerns for investors, sort of broadening 0:41:25.080 --> 0:41:29.040 to the entire world, Lulu, is this notion of negative yields, 0:41:29.239 --> 0:41:32.759 a world where pensions and other huge institutional investors are 0:41:32.920 --> 0:41:36.080 just not making the money they need. Do you see 0:41:36.120 --> 0:41:39.160 a short term change in that You're so involved in 0:41:39.440 --> 0:41:42.839 so many of these big institutions as customers and as 0:41:42.880 --> 0:41:45.400 an advisor, right well, I think there's a lot of 0:41:45.880 --> 0:41:49.600 liquidity around. There is money to be invested, and in 0:41:49.640 --> 0:41:53.399 a way, that's why many UM bears on the US 0:41:53.480 --> 0:41:56.680 market a puzzled and frustrated that they've been shut and 0:41:56.680 --> 0:41:58.759 the market continues to just want to work this way 0:41:58.840 --> 0:42:01.839 up so that money wants to find a place. And 0:42:01.920 --> 0:42:05.680 in this very troubled world, um the U S and 0:42:05.719 --> 0:42:08.960 the U S Dollar seems to be a relative, relative 0:42:09.080 --> 0:42:11.680 safe haven. That's Lulu Wong, founder and CEO of two 0:42:11.719 --> 0:42:14.160 Below Capital Management. She has been on Wall Street for 0:42:14.200 --> 0:42:16.600 a long time, been an investor for a long time. 0:42:16.640 --> 0:42:18.799 But I also thought, what a great time to be 0:42:18.840 --> 0:42:23.360 sitting with her because of her experience and understanding really 0:42:23.400 --> 0:42:25.440 both the United States and China as well as we 0:42:25.480 --> 0:42:29.000 sit in this trade war. She brought nuance to an 0:42:29.120 --> 0:42:32.319 issue that I think far too often is painted in 0:42:32.520 --> 0:42:42.359 very broad brush rokes. Yummy, I got loving my perfect song. 0:42:42.440 --> 0:42:45.040 And before we wrap up our day here at Columbia 0:42:45.080 --> 0:42:47.799 Business Going one more treat. The founder of ciggis who 0:42:47.800 --> 0:42:49.720 when he came to the United States, I think, first 0:42:49.719 --> 0:42:52.040 for an interview at the Clumbia Business School and then 0:42:52.200 --> 0:42:54.719 to actually go to school here, he kind of missed 0:42:54.719 --> 0:42:58.319 something from home. Yeah, and that was yogurt. And so 0:42:58.400 --> 0:43:01.640 now his yogurt it's available in tens of thousands of 0:43:01.719 --> 0:43:06.880 locations around the world. The founder is Siggy Hillmerson. He 0:43:07.120 --> 0:43:11.280 is here with us at Columbia Business School, your alma mater. Welcome, 0:43:11.719 --> 0:43:14.799 Thanks to you, Thanks for having me. Alright, So what 0:43:14.840 --> 0:43:16.799 are your feeling sort of coming back here. What do 0:43:16.840 --> 0:43:20.319 you remember most clearly about your time in Columbia. Uh, 0:43:20.640 --> 0:43:22.520 it's great to be back on campus. I love the campus. 0:43:22.560 --> 0:43:24.360 It's beautiful and it's uh, you know, I live in 0:43:24.400 --> 0:43:27.400 the festivaliy now, so it's like pretty close. It's awesome 0:43:27.400 --> 0:43:29.200 to just jump on the subway and come up here. 0:43:29.800 --> 0:43:33.600 Uh what I miss. What I remember most vividly about 0:43:34.320 --> 0:43:37.000 Columbia was to come here and all the amazing people 0:43:37.040 --> 0:43:40.880 that would come through campus. I'm a big basketball buff 0:43:41.000 --> 0:43:43.279 and uh, as a kid used to wake up in 0:43:43.280 --> 0:43:45.440 the middle of the night to watch, you know, the 0:43:45.480 --> 0:43:50.240 Bulls play Michael Jordan's And I remember very vividly coming 0:43:50.280 --> 0:43:52.920 to campus one day and David Stern, who was the 0:43:53.000 --> 0:43:55.960 NBA Right Commissioner, was giving a talk to the students. 0:43:56.000 --> 0:43:58.920 And I when I was a kid that the whole 0:43:58.920 --> 0:44:02.800 world felt so distant and then you come to Columbia 0:44:02.800 --> 0:44:05.080 and these people are just there giving you advice, and 0:44:05.080 --> 0:44:07.120 it was just my mind was blown, and I felt 0:44:07.160 --> 0:44:09.840 so lucky I got to be here, and I was 0:44:09.880 --> 0:44:13.280 just I remember it very vividly. I was so grateful 0:44:13.320 --> 0:44:15.640 and it was just kind of amazing, you know. Well, 0:44:15.640 --> 0:44:17.400 and what's interesting is, I mean, obviously you started your 0:44:17.440 --> 0:44:19.520 own business when you initially went to business school. I 0:44:19.520 --> 0:44:22.000 mean you started at a consulting from did you think 0:44:22.040 --> 0:44:23.920 at some point while you were studying, man, this is 0:44:23.960 --> 0:44:26.759 what I want to do, is have my own company. No, 0:44:26.920 --> 0:44:29.640 I didn't have like a clear vision of what I 0:44:29.640 --> 0:44:32.520 wanted to do post business school. I'm sort of like 0:44:32.600 --> 0:44:36.640 a stubborn guy and I have an independent streak in me, 0:44:36.719 --> 0:44:39.280 so I knew I would probably do something by myself. 0:44:39.800 --> 0:44:43.760 I just wasn't quite sure what it was. And after 0:44:43.800 --> 0:44:47.719 business school, I actually uh started working in management consulting. 0:44:48.400 --> 0:44:52.040 But I think I was a very poor consultant, you know. Uh, 0:44:52.080 --> 0:44:55.279 you know, I couldn't consult very well. So I was 0:44:55.320 --> 0:44:57.760 sort of thinking about what to do with my life. 0:44:57.880 --> 0:45:00.279 And I had started making the yogurt, you know, the skier, 0:45:00.360 --> 0:45:02.520 which is sort of the classic iceland at yogurt from home. 0:45:02.920 --> 0:45:06.080 I sort of started making it as a hobby, uh, 0:45:06.120 --> 0:45:08.760 and sort of long story short, I had had a 0:45:08.760 --> 0:45:11.719 professor at business school who I was friendly with, and 0:45:11.760 --> 0:45:14.200 he sort of encouraged me to explore it and started 0:45:14.200 --> 0:45:17.320 as a business and that's sort of how it came about. 0:45:17.400 --> 0:45:20.200 And he backed you. Yeah, and so Michael, Michael Lambiema 0:45:20.520 --> 0:45:23.200 is his name. He basically became my business partner and 0:45:23.200 --> 0:45:26.239 first investor and and and was on the board, uh 0:45:26.840 --> 0:45:28.799 all the way until we sold the company last year. 0:45:28.840 --> 0:45:32.160 So as a rich Columbia connection there, What was it 0:45:32.200 --> 0:45:34.760 that though you learned at at the at Columbia Business 0:45:34.800 --> 0:45:37.360 School in terms of now running your own company and 0:45:37.400 --> 0:45:40.600 starting because it's not always easy in the beginning. Yeah, 0:45:40.680 --> 0:45:42.359 it's actually it's a it's a funny story. And it's 0:45:42.360 --> 0:45:44.880 another sort of one of those serendipitous events is that 0:45:45.400 --> 0:45:49.000 my background was econ and I sort of opted out 0:45:49.000 --> 0:45:50.919 of some classes when I started Columbian and I needed 0:45:50.920 --> 0:45:53.560 to film my schedule and I had never done anything 0:45:53.560 --> 0:45:56.680 in supply chain, and Columbia has a great supply chain 0:45:56.719 --> 0:45:58.840 program and and and great professors there, so I just 0:45:59.160 --> 0:46:01.359 took a bunch of those last is not having any 0:46:01.360 --> 0:46:04.000 idea that would ever use it. But one of the 0:46:04.000 --> 0:46:07.320 most important things when you run a consumer products business 0:46:07.320 --> 0:46:13.200 CpG company is supply chain and logistics, right. A business 0:46:13.200 --> 0:46:16.279 in that industry can be broken if you don't have 0:46:16.320 --> 0:46:18.840 your supply chain correct. So one of the most important 0:46:18.880 --> 0:46:21.399 things that I learned from Columbia was actually supply chain. 0:46:21.680 --> 0:46:24.560 But that was kind of almost by luck. You know 0:46:25.000 --> 0:46:28.640 that that happened, so um, very thankful. It feels like 0:46:28.719 --> 0:46:32.960 you did when you created this company anticipate a place 0:46:32.960 --> 0:46:35.160 where we are now when when it comes to food 0:46:35.280 --> 0:46:40.440 and ingredients and people's willingness candidly to pay up for 0:46:41.160 --> 0:46:44.360 high quality and to really care about where their food 0:46:44.560 --> 0:46:47.200 is coming from. What did you see sort of looking 0:46:47.200 --> 0:46:49.440 around the corner that that convinced you that this was 0:46:49.480 --> 0:46:52.200 the way to go. Oh, that's that's pretty easy to answer. 0:46:52.520 --> 0:46:55.880 I when I came here, I not only missed Skier, 0:46:55.920 --> 0:46:57.520 the Iceland, the yogurt. I noticed that a lot of 0:46:57.520 --> 0:47:01.160 the yogurts here are very sweet, and the most popular 0:47:01.239 --> 0:47:03.920 yogurt in America at the time had more sugar proounds 0:47:03.960 --> 0:47:07.080 than a koind of coke. And the difference between coke 0:47:07.160 --> 0:47:10.240 and yogurt was that, you know, people drink Coca cola 0:47:10.320 --> 0:47:12.040 and they kind of know it's not healthy, but they 0:47:12.080 --> 0:47:15.240 do it. Anyway. Right with yogurt, it had the halo 0:47:15.360 --> 0:47:18.880 of health products, so people were totally indiscriminating of eating it, 0:47:18.920 --> 0:47:21.080 even if it contained more sugar than the coke. Right, 0:47:21.680 --> 0:47:23.920 So I thought, this is like a contradiction here, like 0:47:23.960 --> 0:47:25.279 people need to know about this and I need to 0:47:25.320 --> 0:47:28.120 do something to fix it. So when we started the company, 0:47:28.239 --> 0:47:30.239 I wanted to make the yogurt but not make it 0:47:30.640 --> 0:47:33.680 so sweet that it was equivalent to candy or soda. 0:47:34.200 --> 0:47:36.839 And that was a challenge. People were sort of not 0:47:37.000 --> 0:47:40.680 super receptive at first, but then it really took off 0:47:41.840 --> 0:47:45.000 two and twelve and why do you think it Why 0:47:45.000 --> 0:47:46.759 do you think it took off? And why do you 0:47:46.800 --> 0:47:48.680 think that sort of mega trend really set in and 0:47:48.800 --> 0:47:51.200 people just finally realized, how that's terrible for me. I 0:47:51.239 --> 0:47:53.440 shouldn't be eating so much sugar. Like what what was 0:47:53.480 --> 0:47:56.080 the catalytic moment? Well, I think I think it was 0:47:56.160 --> 0:47:59.160 just sort of generally people came to realize this. I 0:47:59.200 --> 0:48:03.440 think people have been so focused on fat as the enemy, uh, 0:48:03.480 --> 0:48:08.320 and not focused enough on sugar and all the suddenly 0:48:08.400 --> 0:48:11.760 sort of the drumbeat of a lot of dietitians doctors 0:48:11.760 --> 0:48:15.759 who work in diabetes, you know, personal trainers, also some 0:48:15.840 --> 0:48:18.760 people who work in health. That sort of started trickling 0:48:18.760 --> 0:48:21.120 off to mainstream media and getting a lot of attention. 0:48:21.480 --> 0:48:24.759 And that really helped us as well because we've been 0:48:24.760 --> 0:48:27.839 around for a while when that started happening and had 0:48:27.880 --> 0:48:30.040 been saying the same thing. So so we were lucky 0:48:30.080 --> 0:48:33.120 to catch that wave. I do feel like there's been 0:48:33.160 --> 0:48:35.520 an enlightenment when it comes to food right in terms 0:48:35.600 --> 0:48:37.719 of absolutely what's in it? Because I was talking with 0:48:37.760 --> 0:48:39.600 you before we get started. I mean I loved the 0:48:39.680 --> 0:48:41.920 video online. I mean there's not a lot of ingredients 0:48:41.920 --> 0:48:43.319 in it. And I think more and more people we 0:48:43.320 --> 0:48:45.279 talk about it about our kids are turning around the 0:48:45.280 --> 0:48:49.560 containers and saying, Okay, what's in something so fast forward 0:48:49.560 --> 0:48:51.839 you've got this company, People are like, yeah, I don't 0:48:51.880 --> 0:48:54.240 need all that sugar. I need just kind of healthy 0:48:54.320 --> 0:48:57.480 ingredients in something. There's more competition, So how do you 0:48:57.520 --> 0:48:59.960 continue to get the shelf space and set yourself upon 0:49:00.000 --> 0:49:02.600 a right Well, we were we were very lucky in 0:49:02.600 --> 0:49:06.800 that regard because when we started, nobody was focusing on that. Uh. 0:49:06.840 --> 0:49:10.600 And the weirdest thing I actually found was that, uh, 0:49:11.480 --> 0:49:14.200 we didn't get a lot of competition. We heard sort 0:49:14.239 --> 0:49:16.319 of rumors that some of the big companies looked at 0:49:16.320 --> 0:49:19.000 our space and said, yeah, people are not gonna like that. 0:49:19.239 --> 0:49:20.840 You know, Oh, this is a cool little brand, but 0:49:20.880 --> 0:49:23.399 people are not gonna like it. It's not sweet enough. Uh. 0:49:23.440 --> 0:49:25.560 And then all of the suddenly we we sort of 0:49:25.600 --> 0:49:27.920 are starting to have a meaningful share of the U. S. 0:49:27.920 --> 0:49:30.719 Grocery market. First one percent, then two percent, then close 0:49:30.760 --> 0:49:33.480 to three percent, and then sort of the competition came in. 0:49:33.760 --> 0:49:35.799 So I think our luck in that regard was a 0:49:35.800 --> 0:49:39.319 little bit that we managed to establish ourselves before the 0:49:39.320 --> 0:49:43.440 competition first over advantage. Yes, so that makes a difference exactly. 0:49:43.480 --> 0:49:45.799 So that kind of helped fight the fact that we 0:49:45.840 --> 0:49:47.760 don't have as much fun to some of the bigger 0:49:47.760 --> 0:49:51.120 players got and and and and they're like why you know, 0:49:51.360 --> 0:49:53.520 I just think, is somebody who runs a company just 0:49:53.560 --> 0:49:57.600 twenty seconds, um, you know, your advice to other entrepreneurs 0:49:57.760 --> 0:50:01.839 and just quickly planned for success. There's nothing worse than 0:50:02.400 --> 0:50:05.719 having the demand and having the things out there that 0:50:05.760 --> 0:50:08.440 people watch your product and not being able to supply them. 0:50:08.520 --> 0:50:11.840 So build the infrastructure. And that's Siggy Ellmerson. He's the 0:50:11.880 --> 0:50:14.920 founder of Siggy's I Love his story about you know, 0:50:15.120 --> 0:50:17.480 studying at school and the things he was interested and 0:50:17.480 --> 0:50:19.719 he took a class on supply chain management. He's like, 0:50:19.880 --> 0:50:21.640 I don't know if I'm into it, but it turned 0:50:21.680 --> 0:50:24.040 out he needed it in running and developing his company. 0:50:24.160 --> 0:50:26.560 Super important when you're growing a big brand like that. 0:50:26.719 --> 0:50:29.680 Last hour, we caught up with James Gorman about the 0:50:29.719 --> 0:50:32.440 FED his view on interest rates. He admitted to getting 0:50:32.800 --> 0:50:35.040 it wrong when it came to how the ten year 0:50:35.239 --> 0:50:38.160 is trading Now. We talk about how tech has been 0:50:38.239 --> 0:50:41.440 driving Wall Street and also about how folks are getting 0:50:41.440 --> 0:50:44.879 realistic with I p O valuations. But some of those 0:50:44.920 --> 0:50:46.719 that have come public this year, whether it's an uber, 0:50:46.719 --> 0:50:49.200 whether it's a lift, you know, came out with a bang, 0:50:49.239 --> 0:50:51.160 but then I pulled back. So it's the market telling 0:50:51.160 --> 0:50:52.920 you will wait a minute, you weren't worth that much 0:50:53.000 --> 0:50:54.759 or or what is it? Does? It take some time 0:50:54.800 --> 0:50:56.440 with these companies that have been around for a while 0:50:56.480 --> 0:50:58.520 that are still not profitable. But I've been around for 0:50:58.560 --> 0:51:00.960 a long time, how do you make sense that? Uh? 0:51:01.000 --> 0:51:03.759 You know, the market can be very stupid in the 0:51:03.800 --> 0:51:06.919 short run, um in the medium term and occasionally gets 0:51:06.960 --> 0:51:08.840 things wrong, and the long term you're the one is stupid, 0:51:09.120 --> 0:51:13.720 right right? So, uh, you know when facebo yeah totally. 0:51:13.800 --> 0:51:17.040 When Facebook went public, Um, I went on TV. I 0:51:17.040 --> 0:51:19.040 can't remember if it was with you guys or not. 0:51:19.120 --> 0:51:22.920 Let's just say what it was obviously was you know, 0:51:23.040 --> 0:51:26.080 I said, this is a great, great new company that 0:51:26.120 --> 0:51:29.760 has been formed by incredibly innovative people who have created 0:51:29.800 --> 0:51:32.719 something that didn't exist before. That should be celebrated. The 0:51:32.760 --> 0:51:34.880 fact that traded at a value in the weeks and 0:51:34.920 --> 0:51:37.520 months after went public below what people wanted on the 0:51:37.560 --> 0:51:40.360 day of the issue. Okay, that happens, but look at it. 0:51:40.400 --> 0:51:42.719 Give it time, give it a year, and now it's 0:51:42.840 --> 0:51:45.400 it's something like six times the valuation, you know, in 0:51:45.440 --> 0:51:47.640 a relatively short prade of time. So we should all 0:51:47.680 --> 0:51:51.000 wish to have Facebook's problem. So I give this, I 0:51:51.120 --> 0:51:52.840 give this a little bit of time. I'm not I 0:51:52.840 --> 0:51:55.480 wouldn't be too too wound up about it. Are you 0:51:55.520 --> 0:51:59.279 seeing more issues that your team? Are you talking to 0:51:59.320 --> 0:52:01.680 more people who to bring more companies to public? How 0:52:01.719 --> 0:52:04.319 active is it right now? Are they? Are they not 0:52:04.400 --> 0:52:06.560 bringing them public because of this? I think it's making 0:52:06.719 --> 0:52:10.719 people more realistic about valuations, you know, for some of 0:52:10.719 --> 0:52:13.319 these unicorns. I think there's a little reality check has 0:52:13.360 --> 0:52:16.160 gone into the system, and that's that's okay, this is 0:52:16.200 --> 0:52:18.120 what the market does. You know. In fact, to my point, 0:52:18.160 --> 0:52:20.360 the market in the long run gets it right. The 0:52:20.480 --> 0:52:23.200 short run is how you find opportunities when you think 0:52:23.239 --> 0:52:27.080 about this, uh, maybe overstate the little bit. This negative 0:52:27.120 --> 0:52:30.680 yield world that that we're living in. How does that 0:52:30.920 --> 0:52:34.000 change your view of the market. How does it change 0:52:34.000 --> 0:52:36.880 the way you may deploy some assets and may deploy 0:52:36.920 --> 0:52:39.600 some of your teams around the world. Well, I firstly, 0:52:39.600 --> 0:52:41.840 I've been very surprised at where rates are. I'll just 0:52:41.840 --> 0:52:44.080 say that up front. I felt the tenure at this point. 0:52:44.360 --> 0:52:46.160 I'd expected by the end of this year the tenure 0:52:46.160 --> 0:52:50.280 would be around three I was dead wrong. Okay. Um, 0:52:50.480 --> 0:52:54.400 so you know, a negative yield curve has been historically 0:52:54.560 --> 0:52:57.440 highly predictive of recession. But as Janet Yellen, former chair 0:52:57.560 --> 0:53:01.280 Yelling said, uh, it's not necessary really, so it doesn't 0:53:01.280 --> 0:53:04.520 necessarily lead to a recession. Uh So, how does it 0:53:04.600 --> 0:53:07.680 change our business? It doesn't. You know, We're we run 0:53:07.719 --> 0:53:10.200 our business based upon what we see going on in 0:53:10.239 --> 0:53:12.759 the broader economy rather than where rates are trading on 0:53:12.800 --> 0:53:15.080 any particular day. And I think in the last week, 0:53:15.160 --> 0:53:17.960 you've seen the tenure recover about ten fifteen basis points, 0:53:17.960 --> 0:53:20.640 so you know, we'll see you know, I'm curious to 0:53:20.880 --> 0:53:24.480 about the role of technology and finance. We see it increasingly, 0:53:24.560 --> 0:53:26.879 so talked to a little bit about, you know, the 0:53:26.960 --> 0:53:29.879 incorporation of it at Morgan Stanley and where you see 0:53:29.920 --> 0:53:31.759 it kind of all going, because it's certainly a big 0:53:31.800 --> 0:53:33.440 part of what they're being you know, taught at the 0:53:33.480 --> 0:53:36.120 Columbia Business School and more and more so, whether it's algorithms, 0:53:36.320 --> 0:53:39.480 whether it's engine engineers coming in and coding, where do 0:53:39.520 --> 0:53:41.319 you see it all playing out. It's interesting. I just 0:53:41.400 --> 0:53:44.160 came from our monthly Risk committee meeting to our meeting 0:53:44.239 --> 0:53:46.680 this morning, and we had a whole section on electronic 0:53:46.719 --> 0:53:49.680 trading and um, what we're doing in that space and 0:53:49.719 --> 0:53:53.640 how it's bleeding from equities into the fixed income space. Um. 0:53:53.680 --> 0:53:56.279 You know, the technology has been driving Wall Street dirty 0:53:56.360 --> 0:53:59.239 little secret for a very long time. You know, we 0:53:59.280 --> 0:54:02.280 set up our electronic trading businesses in the mid nineties, 0:54:02.880 --> 0:54:07.160 and it's like everybody suddenly discovered technology because of fintech. Um, 0:54:07.200 --> 0:54:09.640 there's a lot of innovation going on in the fintech sector, 0:54:09.680 --> 0:54:12.240 for sure, and we're partnering with a lot of those companies. 0:54:12.640 --> 0:54:15.600 But we are you know, we spend upwards of four 0:54:15.600 --> 0:54:18.440 b and all its on technology. We have centers of 0:54:18.480 --> 0:54:23.120 competence in machine learning, robotics, artificial intelligence, cloud computing, big 0:54:23.200 --> 0:54:27.880 data management. Obviously, our cyberspace is huge, so we have 0:54:28.000 --> 0:54:30.880 the resources and I think the intellectual horsepower to be 0:54:31.040 --> 0:54:34.240 at the forefront of a lot of the new technology development, 0:54:34.480 --> 0:54:36.320 but not all of it we want to do in house. 0:54:36.719 --> 0:54:40.360 So we're actively looking to partner with large and small companies, 0:54:40.760 --> 0:54:44.279 whether it's in software development, in data management in particular, 0:54:44.960 --> 0:54:47.520 and you know, embrace it. So it's it's very much 0:54:47.560 --> 0:54:49.719 a part of everything we do. Digital currencies as well, 0:54:50.600 --> 0:54:54.600 Uh we Yeah, we're helping clients hedge and manage their 0:54:54.600 --> 0:54:58.640 exposures to digital currencies. We haven't been um, you know, 0:54:58.719 --> 0:55:02.399 we haven't set up a digital business unit focused on 0:55:02.560 --> 0:55:05.480 you know, the various forms of cryptos. Per see much 0:55:05.520 --> 0:55:07.880 more interested in the blockchain technology. I don't know what. 0:55:08.120 --> 0:55:10.640 It's just another form of stored value to me. And 0:55:10.719 --> 0:55:14.200 I'm you know, people, maybe I'm dead wrong about this. 0:55:14.239 --> 0:55:17.360 I've been quite conservative on this for a long time. Um, 0:55:17.400 --> 0:55:20.320 I see much more value around the blockchain technology supporting 0:55:20.320 --> 0:55:23.360 the currency, in the currency itself. You mentioned sort of 0:55:23.400 --> 0:55:26.080 various partnerships, especially on the fin tech side. From a 0:55:26.080 --> 0:55:28.880 competitive standpoint, where do you see the most competition across 0:55:28.920 --> 0:55:35.040 your line of business at this point? Um, Well, in 0:55:35.360 --> 0:55:38.279 wealth management clearly, you know the online space, but but 0:55:38.440 --> 0:55:40.719 that's not new. I mean schwab and e Trade and 0:55:40.719 --> 0:55:43.440 merrit Trade being around an awfully long time. They've been 0:55:43.480 --> 0:55:47.400 doing online you know, digital business. It was just called 0:55:47.440 --> 0:55:50.919 something different, which was direct brokerage, right, had a different name. 0:55:51.840 --> 0:55:56.120 So that's always been competitive. I think. UM. In the 0:55:56.160 --> 0:55:58.880 asset management space obviously the challenge of a lot of 0:55:58.880 --> 0:56:04.520 the package t F indexing versus the traditional long earning 0:56:04.560 --> 0:56:09.000 active manage. But a lot of our businesses are very complex, 0:56:09.080 --> 0:56:13.160 require global capability, you know hedging, uh, you know a 0:56:13.280 --> 0:56:19.160 currency exposure in Japan, being long certain rate securities in Australia. 0:56:19.239 --> 0:56:21.680 I mean we're twenty four hours. It's a lot of 0:56:21.719 --> 0:56:25.799 it is um. It's it's not that it's not challenged competitively, 0:56:25.880 --> 0:56:28.480 but most of our challenge comes from our traditional competitors, 0:56:28.480 --> 0:56:31.279 the big banks. James, I'm always curious, you know, we 0:56:31.360 --> 0:56:35.080 spend our time so much talking about FED policy, yield curves, 0:56:35.640 --> 0:56:37.640 us trying to trade policy. What is it that you 0:56:37.760 --> 0:56:40.960 folks and Morgan are spending so much time having conversations about. 0:56:41.000 --> 0:56:43.320 What is it that we're not talking about that really 0:56:43.320 --> 0:56:49.360 deserve a little bit more attention? Leadership culture um creating 0:56:49.400 --> 0:56:53.840 an organization where diverse employees don't feel included, but feel 0:56:54.000 --> 0:56:57.560 not just included, but feel they belong. That's something I've 0:56:57.560 --> 0:57:00.719 felt very strongly about the whole diversity inclusion discussion in place. 0:57:00.760 --> 0:57:03.120 Somebody invited you into the room, Now I want you 0:57:03.200 --> 0:57:05.759 to belong. It's your room. So we talk about a 0:57:05.760 --> 0:57:10.800 lot of the qualities that get at. Do employees respect 0:57:10.880 --> 0:57:12.960 your institution, want to be part of your institution, want 0:57:12.960 --> 0:57:15.840 to make their careers and lives there? That the macro 0:57:16.120 --> 0:57:18.880 stuff okay, rates for two and a half percent, now 0:57:18.880 --> 0:57:21.360 they're one and a a half percent. Is Morgan sending fundamentally 0:57:21.400 --> 0:57:24.000 changing strategy because of that? Of course not. But if 0:57:24.040 --> 0:57:27.920 we can't attract really talented, committed people who do things 0:57:28.000 --> 0:57:29.720 the right way you have the right vegas, then then 0:57:29.760 --> 0:57:33.040 we're going nowhere. So I'm very Once your strategy is 0:57:33.080 --> 0:57:35.200 in place, and I think we have a really sound strategy. 0:57:35.640 --> 0:57:38.920 It's all about reaffirming the cultural values and putting the 0:57:39.000 --> 0:57:41.720 leadership in place for the next ten and fifteen years. 0:57:41.720 --> 0:57:43.560 Who can drive those vas? Are we making in roads? 0:57:43.600 --> 0:57:45.280 I want to ask about diversity because I feel like 0:57:45.280 --> 0:57:49.840 we've been talking about diversity, parody women, you know, issues 0:57:49.840 --> 0:57:51.960 on Wall Street for a long long time, and we're 0:57:51.960 --> 0:57:55.280 still struggling and we will be talking about it for 0:57:55.320 --> 0:57:57.880 a long long time. I share one fact with you, 0:57:58.680 --> 0:58:00.920 uh this year and this somebody design. It was an 0:58:00.960 --> 0:58:03.920 outcome this year for the first time ever, more than 0:58:04.000 --> 0:58:07.000 fifty of our intern class, which is a thousand interns 0:58:07.000 --> 0:58:10.800 globally with women, first time ever, ahead of China as 0:58:10.840 --> 0:58:13.520 a woman, Head of Europe, Middle East, Africa as a woman, 0:58:13.760 --> 0:58:15.640 cohead of Investment banking as a woman, the head of 0:58:15.640 --> 0:58:17.880 our bank as a woman. I mean, we have senior 0:58:17.960 --> 0:58:21.160 leadership women in multiple roles, but are they representative of 0:58:21.160 --> 0:58:24.240 the role of women in society? No, they're not. Right. 0:58:24.280 --> 0:58:28.440 So we've we've we've we've made steps, but it starts 0:58:28.440 --> 0:58:30.920 with the pipeline at the beginning, and then finding ways 0:58:30.920 --> 0:58:33.440 in which you can keep those folks through all the 0:58:33.480 --> 0:58:37.480 transitions we make in life. Have h terrific careers of 0:58:37.520 --> 0:58:41.840 Morgan Stanleys. Are those discussions and those efforts becoming easier 0:58:41.920 --> 0:58:45.200 or harder given the political climate we're in. We live 0:58:45.240 --> 0:58:47.960 in a pretty I think it's here to say, divisive time, 0:58:48.840 --> 0:58:50.920 hyper political time in a lot of ways. How do 0:58:50.960 --> 0:58:53.680 you cut through all that to make these sorts of decisions? 0:58:53.720 --> 0:58:56.640 I think from a diversity perspective, No, I think from 0:58:56.720 --> 0:59:00.160 what is the role of the corporation society? Yes, I 0:59:00.200 --> 0:59:03.760 think we're being called as CEOs into the public debate 0:59:03.880 --> 0:59:08.200 much more we're our our employees want us to express 0:59:08.240 --> 0:59:11.480 opinions on a wide range of issues, and it's very 0:59:11.520 --> 0:59:14.640 difficult because you've got to you you know, we all 0:59:14.680 --> 0:59:16.960 have personally. I mean, I'm I'm a voter, right, I'm 0:59:17.000 --> 0:59:20.320 a citizen. I have opinions on all these issues. And 0:59:20.480 --> 0:59:22.760 it can't be just what James Gorman thinks. I'm not 0:59:22.840 --> 0:59:25.520 the company. It's what what is for the greater good 0:59:25.560 --> 0:59:27.960 of the whole organization. And I think what a lot 0:59:28.040 --> 0:59:31.120 of companies are now struggling with is what is our 0:59:31.200 --> 0:59:33.400 role in society? And this is why the statement came 0:59:33.440 --> 0:59:36.960 out recently from the CEOs at the roundtable, which was 0:59:37.040 --> 0:59:42.280 basically two embrace the broadest stakeholders that we have. You 0:59:42.280 --> 0:59:44.160 can listen, you can be a bank and runner only 0:59:44.160 --> 0:59:48.240 for Shareholderbayou. But if society turns against you and nationalize 0:59:48.240 --> 0:59:50.560 as your bank, that didn't work out so well. All right, 0:59:50.640 --> 0:59:52.880 So I've always believed you have to operate in the 0:59:52.920 --> 0:59:57.240 ecosystem with respect for everybody in that ecosystem. But what's 0:59:57.240 --> 1:00:00.320 interesting isn't We had a very smart conversation with um 1:00:00.520 --> 1:00:02.640 like we're having right now, but with another individual in 1:00:02.640 --> 1:00:05.280 the financial community, but talking about no, not everybody has 1:00:05.320 --> 1:00:08.360 the same access to education, you know, and I do 1:00:08.440 --> 1:00:10.880 wonder you know what that has done in terms of 1:00:10.880 --> 1:00:13.960 creating the gaps within our society. So how do we 1:00:14.960 --> 1:00:17.640 deal with that? Well? There, I mean, there are gaps 1:00:17.640 --> 1:00:20.439 in in in every society and not everybody starts off 1:00:20.440 --> 1:00:22.240 with the same exus. I mean it's you know, you're 1:00:22.280 --> 1:00:24.280 like I was lucky. I was born in Melbourne to 1:00:24.320 --> 1:00:26.320 the family of his born with and given the education 1:00:26.360 --> 1:00:29.160 I was given. That's why I'm here. That's James Gorman, 1:00:29.240 --> 1:00:33.120 CEO and chairman on Morgan Stanley, a Columbia Business School alumnus. 1:00:33.200 --> 1:00:36.320 Great conversation, of course, we talked the obvious about the 1:00:36.360 --> 1:00:39.400 market environment, the business outlook. We talked about I P 1:00:39.480 --> 1:00:41.840 O S, but I really did also love the other 1:00:41.840 --> 1:00:44.360 areas we went Jason when it came to either diversity, 1:00:45.080 --> 1:00:48.240 UH and other issues inequalities that we're facing in our 1:00:48.280 --> 1:00:51.880 society right at politics too. Very thoughtful guy, obviously a 1:00:51.920 --> 1:00:55.120 big job, and he does echo back a lot to 1:00:55.320 --> 1:00:58.800 his time at Columbia. For the full interview, download Bloomberg 1:00:58.840 --> 1:01:01.960 Business Week Extra wherever you get your podcasts. And that 1:01:01.960 --> 1:01:05.040 wraps up Bloomberg Business Week's weekend podcast. Thanks for joining us. 1:01:05.040 --> 1:01:07.120 I'm Carol Masser and I'm Jason Kelly. Be sure to 1:01:07.160 --> 1:01:10.520 tune into Bloomberg Business Week Radio Live Monday through Friday, 1:01:10.560 --> 1:01:13.439 starting at two pm Wall Street Time. Catch us live well. 1:01:13.520 --> 1:01:16.760 Check out our daily podcast for the Ride Home at iTunes, SoundCloud, 1:01:16.800 --> 1:01:18.920 and at Bloomberg dot com. And you can get this 1:01:18.960 --> 1:01:21.880 week's edition of the magazine on newsstands now. We'll be 1:01:21.920 --> 1:01:24.800 back next week at the same time. This is Bloomberg