WEBVTT - Bloomberg Businessweek Weekend - August 4th, 2023 0:00:01.360 --> 0:00:05.720 This is Bloomberg Business. Wait inside from the reporters and 0:00:05.880 --> 0:00:09.440 editors who bring you America's most trusted business magazine, plus 0:00:09.520 --> 0:00:13.680 global business, finance and tech news. The Bloomberg Business Week 0:00:13.720 --> 0:00:18.640 Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio. 0:00:19.920 --> 0:00:23.320 Hi, everyone, Welcome to the Bloomberg Business Week Weekend Podcast. 0:00:23.560 --> 0:00:26.279 Tim Stanebeck, along with Madison Mills, who's filling in for 0:00:26.360 --> 0:00:29.400 Carol Masser. Well a busy week in the rearview mirror. 0:00:29.520 --> 0:00:33.480 This after Apple and Amazon's latest earnings, a surprise downgrade 0:00:33.560 --> 0:00:36.520 to the US government's credit rating, and former President Donald 0:00:36.520 --> 0:00:40.600 Trump's indictment in a third separate criminal case. Coming up 0:00:40.640 --> 0:00:42.640 on the program, we're going to learn why a former 0:00:42.680 --> 0:00:45.680 Fed official thanks for very own US recession gage. She 0:00:45.720 --> 0:00:48.440 may have created a monster. The CEO of the new 0:00:48.640 --> 0:00:51.120 bed Bath and Beyond says the brand may be shunning 0:00:51.159 --> 0:00:53.760 brick and mortar stores forever. And we'll learn why the 0:00:53.800 --> 0:00:55.880 record heat wave we saw in July could be an 0:00:55.960 --> 0:00:58.560 unwelcome sign of what's to come when it comes to 0:00:58.560 --> 0:01:01.680 the global fight against climate change. All of that to come, 0:01:01.720 --> 0:01:03.800 We begin with the cover story in the special double 0:01:03.840 --> 0:01:07.320 issue of Bloomberg Business Week, available now on newsstands, online 0:01:07.360 --> 0:01:10.720 at Bloomberg dot com, slash BusinessWeek and I'm the Bloomberg Terminal. 0:01:10.920 --> 0:01:13.720 Senior editor for the magazine. Matthew Campbell takes us back 0:01:13.720 --> 0:01:17.040 to the twenty seventeen killings of pharmaceutical magnate Barry Sherman 0:01:17.120 --> 0:01:19.679 and his wife Honey. They became two of the wealthiest 0:01:19.680 --> 0:01:22.440 people ever to be murdered, and while police still haven't 0:01:22.440 --> 0:01:26.160 identified the killers, there's no shortage of potential suspects and 0:01:26.200 --> 0:01:29.360 a family drama worthy of succession. Matt joins us now 0:01:29.360 --> 0:01:31.720 along with the editor of Bloomberg BusinessWeek, Joel Weber. 0:01:31.959 --> 0:01:37.120 It basically became just this bare knuckle drama between the 0:01:37.480 --> 0:01:43.560 Sherman kids over the empire, and we're talking billions of 0:01:43.600 --> 0:01:46.680 dollars here, and what was left at the end of 0:01:46.720 --> 0:01:52.200 that fight was basically the company sold. The whole strategy 0:01:52.720 --> 0:01:55.800 that Barry had sort of tried to put in place 0:01:56.880 --> 0:02:01.160 was basically kind of brushed aside, and those siblings basically 0:02:01.200 --> 0:02:04.520 aren't even talking to each other. And the mystery of 0:02:04.560 --> 0:02:09.560 the murder remains unsolved. There's one lead, but part of 0:02:09.560 --> 0:02:13.720 the drama of the story has been because the family 0:02:13.760 --> 0:02:16.440 had so much money they were able to actually do 0:02:16.800 --> 0:02:20.720 their own investigation, which created all kinds of tension with 0:02:21.040 --> 0:02:22.360 the Toronto Police Department. 0:02:22.720 --> 0:02:25.800 One thing that was really shocking to me is Barry, 0:02:25.880 --> 0:02:28.960 for despite being a billionaire many times over, was a 0:02:29.000 --> 0:02:32.280 relatively frugal person for most of his life. What our 0:02:32.320 --> 0:02:35.480 reporting found was that he spent hundreds of millions of 0:02:35.560 --> 0:02:38.880 dollars in loans over many years, not just given to 0:02:38.960 --> 0:02:41.359 his family, but to other people who came to him 0:02:41.360 --> 0:02:42.960 for money. Talk a little bit about that. 0:02:43.200 --> 0:02:46.760 Yeah, So part of the drama that Matt and or 0:02:47.080 --> 0:02:49.200 get into here is actually just kind of following where 0:02:49.280 --> 0:02:52.440 some of this money went. And some of these loans 0:02:52.560 --> 0:02:56.119 ended up actually going to his son, for one, who 0:02:56.240 --> 0:02:59.040 at a storage facility that he ran with a co owner. 0:02:59.400 --> 0:03:02.280 And then there were, you know, some business decisions that 0:03:02.680 --> 0:03:06.160 Barry made that he seemed you know, I think one 0:03:06.200 --> 0:03:08.480 of the things that the frugality stands out to me 0:03:08.520 --> 0:03:11.160 he drove a car that was basically kind of a beater, 0:03:11.360 --> 0:03:14.960 even despite being a billionaire. But he also was I 0:03:14.960 --> 0:03:20.240 think pretty loyal. And there there's one individual in particular 0:03:20.320 --> 0:03:26.320 where he made he just kept handover fists supporting the 0:03:26.480 --> 0:03:32.720 gentleman's business decisions and endeavors for years, and actually part 0:03:32.760 --> 0:03:35.640 of the story was how eventually the family just had 0:03:35.680 --> 0:03:38.280 to write down all of those because there was no 0:03:38.320 --> 0:03:39.400 way to actually get any. 0:03:39.280 --> 0:03:40.040 Of that money back. 0:03:40.760 --> 0:03:43.960 And ultimately that was a person that Barry decided to 0:03:44.000 --> 0:03:46.839 cut off shortly before his death. 0:03:46.880 --> 0:03:49.680 Actually, that's really interesting and it reminds me of exactly 0:03:49.760 --> 0:03:52.680 what you were saying about the point that this is succession, 0:03:52.920 --> 0:03:56.040 e Joel. One thing that we haven't talked about without 0:03:56.080 --> 0:03:59.480 getting too gruesome here is how the murders happened. It 0:03:59.520 --> 0:04:01.400 feels like an important part of this story. Can you 0:04:01.480 --> 0:04:02.720 kind of walk us through what we know? 0:04:03.200 --> 0:04:06.200 Yeah, and so this is this kind of leans back 0:04:06.200 --> 0:04:09.120 into the first story because it was pretty gruesome scene 0:04:09.160 --> 0:04:14.400 and at that time it actually instigated what became this 0:04:14.480 --> 0:04:18.279 other investigation because the kids really just didn't believe in 0:04:18.480 --> 0:04:21.920 what the police department kind of laid out. But basically, 0:04:22.320 --> 0:04:25.920 the bodies were discovered in their home in Toronto near 0:04:25.920 --> 0:04:31.919 a swimming pool, and the Berrie's body was actually like 0:04:31.960 --> 0:04:34.560 it was, it was clear that Honey was murdered. Berries 0:04:35.000 --> 0:04:37.760 was sort of a little bit mysterious, and so that 0:04:37.880 --> 0:04:42.320 led to sort of an inconclusive and unsatisfactory a police 0:04:42.320 --> 0:04:46.400 response from the family because they basically felt like they 0:04:46.440 --> 0:04:51.000 implicated Barry in Honey's death. They pushed back on that hard. 0:04:51.040 --> 0:04:54.640 There was a second autopsy, and eventually it ended up 0:04:54.640 --> 0:04:59.080 being that basically viewed currently as a as a double homicide. 0:04:59.440 --> 0:05:03.240 But that handling of that is part of what led 0:05:03.760 --> 0:05:07.839 the Sherman kids to basically fund their own police investigation. 0:05:07.960 --> 0:05:09.680 That's where I want to bring in Matthew Campbell, who 0:05:09.880 --> 0:05:13.440 co wrote this story along with Ari Altstetter. I want 0:05:13.480 --> 0:05:15.200 to talk a little bit about where Joel left off 0:05:15.360 --> 0:05:19.760 and this private investigation, the private investigation, the private investigators 0:05:20.240 --> 0:05:23.839 that the family hired, talk a little bit about how 0:05:24.640 --> 0:05:27.000 they've worked with or have not worked with, the Toronto 0:05:27.040 --> 0:05:30.960 Police Department, and what's going on with these hard drives. 0:05:31.640 --> 0:05:35.120 Well, what ended up happening was, as Joe alluded to, 0:05:35.160 --> 0:05:39.279 the Sherman children, whose parents had just been killed, ended 0:05:39.360 --> 0:05:42.280 up hiring a bunch of retired cops actually which hired 0:05:42.320 --> 0:05:48.080 police detectives to conduct private investigation, which ended up coming 0:05:48.120 --> 0:05:50.479 to a very different conclusion from the one the police 0:05:50.600 --> 0:05:54.680 appeared to be at least heading toward, which was that 0:05:54.760 --> 0:05:57.919 it would a murder suicide committed by Barry Sherman. The 0:05:57.960 --> 0:06:00.760 private investigation came with the conclusion that, in fact, this 0:06:00.880 --> 0:06:06.800 was a double murder that ultimately was accepted by the police. 0:06:07.040 --> 0:06:10.120 But then we had this rather odd situation of two 0:06:10.240 --> 0:06:16.440 parallel investigations with considerable tension between them, the police really 0:06:16.440 --> 0:06:20.120 not appreciating having this private team, as they saw it, 0:06:20.240 --> 0:06:25.120 second guessing them, a very chilly relationship, a somewhat dysfunctional relationship, 0:06:26.200 --> 0:06:30.000 and then ultimately coming to an end in twenty nineteen 0:06:30.040 --> 0:06:33.600 when the private investigation was terminated for reasons we can 0:06:33.640 --> 0:06:34.000 get into. 0:06:34.920 --> 0:06:37.000 Well, I wonder if you want to get into those 0:06:37.040 --> 0:06:38.600 now with us, now that we have you on the line. 0:06:38.640 --> 0:06:42.000 Matthew, sure, yeah. So look what ended up happening was 0:06:42.720 --> 0:06:47.719 there was a significant split within the four Sherman children, 0:06:47.880 --> 0:06:52.000 and specifically there was a split between Jonathan, the one son, 0:06:52.640 --> 0:06:56.680 and Alexandra, his sister. And we understand from people familiar 0:06:56.720 --> 0:07:01.600 with this situation that Alexandra came to think that her 0:07:01.640 --> 0:07:04.240 brother Jonathan had something to do with this crime, that 0:07:04.279 --> 0:07:07.680 he was somehow involved with this double murder. And you know, 0:07:07.920 --> 0:07:10.920 according to our reporting, the police never really thought there 0:07:10.960 --> 0:07:15.320 was any evidence behind that suspicion. But nonetheless that is 0:07:15.360 --> 0:07:18.800 the view that Alexandra had of her brother Jonathan in 0:07:18.880 --> 0:07:22.640 those conditions. As you can imagine, the idea of conducting 0:07:22.640 --> 0:07:26.320 a private investigation together kind of fell apart, and the 0:07:26.440 --> 0:07:29.720 siblings had this big rift to merge between them, which 0:07:29.840 --> 0:07:33.360 led to the end of this private investigation and in parallel, 0:07:33.880 --> 0:07:36.440 a battle over the future of the family business, the 0:07:36.440 --> 0:07:37.440 family fortune. 0:07:37.960 --> 0:07:39.840 So, Matt, you know, one of the things that I 0:07:39.880 --> 0:07:43.800 think is just so. It's both the thing that transfixes 0:07:43.840 --> 0:07:46.880 you but also ultimately just leaves you wanting more in 0:07:46.920 --> 0:07:50.280 the story is where did the investigation end up and 0:07:50.720 --> 0:07:53.400 what is the closest thing to a suspect that anyone 0:07:53.560 --> 0:07:54.680 was able to determine? 0:07:54.920 --> 0:07:57.640 Well, from our reporting we understand there are a few 0:07:57.640 --> 0:08:02.040 individuals the police were very interest get in. One was 0:08:02.200 --> 0:08:05.680 a man named Carrie winter At, Barry Sherman's cousin, who 0:08:05.760 --> 0:08:09.560 was in a long running financial dispute with him. Another 0:08:09.840 --> 0:08:12.320 was Jonathan, the son who had been one of the 0:08:12.320 --> 0:08:16.880 principal financial beneficiaries of his parents dying. And a third 0:08:17.040 --> 0:08:20.760 was Frank TAngelo, who was a businessman and entrepreneur who 0:08:20.880 --> 0:08:24.840 Barry had really quite lavishly funded hundreds of millions of 0:08:24.840 --> 0:08:30.480 dollars in financing for his various businesses before Barry Sherman 0:08:30.520 --> 0:08:33.520 concluded he didn't want to do that anymore. So we 0:08:33.640 --> 0:08:38.280 understand the police did investigate these three individuals, but they 0:08:38.280 --> 0:08:41.280 weren't able to find hard evidence linking any of them 0:08:41.320 --> 0:08:43.960 to the crime. They did end up, however, with someone 0:08:44.000 --> 0:08:46.960 who they did describe as a suspect, and that is 0:08:46.720 --> 0:08:52.160 this individual known as the walking Man, who was captured 0:08:52.200 --> 0:08:55.520 by surveillance cameras outside the Sherman's home on the night 0:08:55.520 --> 0:08:59.600 they were killed. Spent a suspicious amount of time right 0:08:59.600 --> 0:09:02.320 in the entity of the house during the relevant period. 0:09:03.000 --> 0:09:06.040 But the footage is terrible. You really can't make anything 0:09:06.080 --> 0:09:09.400 out about this person aside from the fact that he 0:09:09.440 --> 0:09:11.839 appears to be male and appears to be of sort 0:09:11.880 --> 0:09:15.200 of average height. So the cops kind of ended up 0:09:15.200 --> 0:09:20.440 nowhere we are, five plus years on, without identified suspects 0:09:20.520 --> 0:09:22.200 and without charges, and. 0:09:22.400 --> 0:09:24.800 So let's talk about what happened to the business empire 0:09:24.800 --> 0:09:26.040 a little bit more, because I mean, one of the 0:09:26.080 --> 0:09:28.800 things that's so fascinating about Barry is like he bootstrapped 0:09:29.280 --> 0:09:32.280 this empire basically a self made billionaire. 0:09:33.320 --> 0:09:34.520 He was highly. 0:09:34.320 --> 0:09:38.360 Litigious and you know, basically was self made. But what 0:09:38.600 --> 0:09:41.880 has happened to his fortune and the business since. 0:09:42.400 --> 0:09:46.679 That's right, Choel, So Barry built this very large pharmaceutical 0:09:46.679 --> 0:09:51.320 company Apptect, never taking outside money, never going public, so 0:09:51.559 --> 0:09:56.360 he was in pretty much complete control. That control then 0:09:56.640 --> 0:10:00.280 passed to his children, but his children ended up being 0:10:00.360 --> 0:10:03.840 at odes. And this goes back to this rift between 0:10:04.160 --> 0:10:07.600 Jonathan and Alexandra that I mentioned earlier. Around the same 0:10:07.600 --> 0:10:11.040 time that Alexandra had begun to suspect that her brother 0:10:11.120 --> 0:10:14.880 had something to do with these murders, Jonathan ended up 0:10:14.920 --> 0:10:17.959 clashing with the manager of the family holding company, a 0:10:18.200 --> 0:10:22.880 man numed alex Glassenburg. The sisters, including Alexandra, ended up 0:10:22.960 --> 0:10:28.800 siding with Glassenburg. While in this dispute and what became 0:10:29.640 --> 0:10:34.360 sort of legal threats bouncing back and forth, everyone threatening 0:10:34.360 --> 0:10:37.439 to sue each other. Ultimately they ended up in professional 0:10:37.440 --> 0:10:41.400 mediation which resulted in the installation of a new board 0:10:41.880 --> 0:10:46.680 to smooth out this crisis, and then the company eventually 0:10:46.720 --> 0:10:51.160 was sold to a private equity FIRMSK Capital, something that 0:10:51.400 --> 0:10:53.840 I think a lot of people we spoke to feel 0:10:53.840 --> 0:10:56.959 would have horrified Barry Sherman Habitects with his baby. He 0:10:57.080 --> 0:11:01.200 built it, as Joel alluded to, really from not but 0:11:01.880 --> 0:11:05.080 his kids wanted to sell it and get the cash, 0:11:05.240 --> 0:11:06.440 and that's what they've now done. 0:11:06.679 --> 0:11:09.320 That was Bloomberg Business Week's Matthew Campbell on this week's 0:11:09.320 --> 0:11:12.080 cover story. Joe Weber is sticking around for our next segment. 0:11:12.320 --> 0:11:15.400 Coming up, we examine why a contemporary measure of US 0:11:15.400 --> 0:11:19.439 recession is so highly regarded and why it's creator wants 0:11:19.440 --> 0:11:20.800 to see your own rule broken. 0:11:21.200 --> 0:11:22.800 She just feels that it's getting caught up in the 0:11:22.800 --> 0:11:25.240 maelstrom of his whole self lamming debate. 0:11:25.520 --> 0:11:28.839 You're listening to Bloomberg Business Week. This is Bloomberg. 0:11:29.360 --> 0:11:32.920 You're listening to the Bloomberg Business Week Podcast. Catch us 0:11:32.960 --> 0:11:36.440 live weekday afternoons from three to six Eastern Listen on. 0:11:36.360 --> 0:11:39.160 Bloomberg dot com, the iHeartRadio app, and. 0:11:39.080 --> 0:11:42.959 The Bloomberg Business App, or watch us live on YouTube. 0:11:43.760 --> 0:11:45.720 First, we're going to put our economist hats on. 0:11:45.840 --> 0:11:48.520 Tim I brought mind today, did you I did? Yeah? 0:11:48.840 --> 0:11:50.720 Took it on the train with you, on the train 0:11:50.760 --> 0:11:51.000 with me. 0:11:51.800 --> 0:11:54.640 Here's the thing, A simple economics rule that helps us 0:11:54.640 --> 0:11:57.280 suss out whether the US is in a recession. It's 0:11:57.320 --> 0:12:00.640 getting called into question by its own creator. It's called 0:12:00.679 --> 0:12:04.080 the Psalm rule, and it's architects. The architect rather is 0:12:04.120 --> 0:12:07.280 worried that her creation has become a monster. That's the 0:12:07.320 --> 0:12:10.199 headline of the Business Week story we're focusing on today, 0:12:10.200 --> 0:12:12.360 which you can find on the terminal, of course, at 0:12:12.440 --> 0:12:15.439 Bloomberg dot com. Here to discuss the breakdown with us 0:12:15.480 --> 0:12:18.280 is Bloomberg BusinessWeek editor Joel Weber and the reporter on 0:12:18.320 --> 0:12:21.640 this story and occurr in Joel, what's this? 0:12:22.080 --> 0:12:24.640 It's all in the Did you describe this as a 0:12:24.679 --> 0:12:26.400 simple economic rule? 0:12:27.080 --> 0:12:30.440 Is there such a thing? I just want to clarify it. 0:12:30.520 --> 0:12:31.360 Is there such a thing? 0:12:32.160 --> 0:12:34.360 I won't pretend simple. I won't pretend I even fully 0:12:34.440 --> 0:12:37.040 understand the mechanics of it. So that's a brave call. 0:12:37.160 --> 0:12:39.880 Okay, all right, So what does it feel better? And 0:12:40.080 --> 0:12:41.040 that makes me feel better? 0:12:41.320 --> 0:12:44.280 I honestly I had never heard of the sam rule. 0:12:44.480 --> 0:12:47.679 So break it down for us, and what uh, you 0:12:47.679 --> 0:12:49.360 know what everybody's talking about here? 0:12:49.559 --> 0:12:52.439 So the Clode's, first of all, she's a very accomplished economist. 0:12:52.480 --> 0:12:54.960 She had a long career at the FED. She had 0:12:54.960 --> 0:12:56.959 a stint in the White House as well, and at 0:12:56.960 --> 0:12:59.600 her time at a fed. In twenty nineteen, she published 0:12:59.720 --> 0:13:02.920 this now this rule or this measure, which essentially looks 0:13:02.960 --> 0:13:06.719 for increases in unemployment in a real time way and 0:13:07.120 --> 0:13:09.800 looks for how it looks for the increased relative to 0:13:09.920 --> 0:13:12.160 the average, the three month average compared to the low 0:13:12.200 --> 0:13:14.560 point of the year before point being it's a real 0:13:14.600 --> 0:13:17.000 time weight to gauge. Oh, look, the job market might 0:13:17.000 --> 0:13:20.120 be turning. Jobs are being lost. And the second part 0:13:20.160 --> 0:13:22.959 of it is that that's a warning sign to governments or 0:13:23.000 --> 0:13:25.320 the US government in particularly, that they're we're in a 0:13:25.320 --> 0:13:27.360 recesion and so it's time to start getting money out 0:13:27.520 --> 0:13:29.880 to those who need it fast. So that's the key 0:13:29.920 --> 0:13:32.760 point about it. It's a real time gauge. It looks 0:13:32.800 --> 0:13:35.400 at the labor market, and that's much faster than the 0:13:35.400 --> 0:13:38.640 current system of gauging when there's a recession, which is 0:13:38.679 --> 0:13:41.320 an eight member committee that come together and often don't 0:13:41.360 --> 0:13:43.160 diagnose it until a year after the event. 0:13:43.440 --> 0:13:45.480 So how did she create a monster, because that's the 0:13:45.480 --> 0:13:46.960 fun part exactly. 0:13:47.040 --> 0:13:47.400 Yeah. 0:13:47.520 --> 0:13:51.080 So the issue here is that it's got it's got 0:13:51.200 --> 0:13:53.800 two things. First of all, people are kind of talking 0:13:53.800 --> 0:13:56.640 about it in the sense of forecasting this much wanted 0:13:56.640 --> 0:13:59.240 the US recession while it won't it. And our point 0:13:59.280 --> 0:14:02.360 is it's not a tool for forecasting sessions. It's an 0:14:02.360 --> 0:14:05.320 indicator to say when we're in a recession. And the 0:14:05.360 --> 0:14:07.440 second point of it is, it's just got tied up 0:14:07.480 --> 0:14:10.160 in this whole broader tug of war of will the 0:14:10.240 --> 0:14:11.280 US fall intercession? 0:14:11.440 --> 0:14:11.880 Will it not? 0:14:12.080 --> 0:14:15.559 What's the rule sam Room Rule telling us when her 0:14:15.600 --> 0:14:18.280 point is that this was meant to be an indicator 0:14:18.320 --> 0:14:20.560 that look, people are losing their jobs and the governments 0:14:20.560 --> 0:14:23.840 need to get money out straight away because that mitigates offsets, 0:14:23.880 --> 0:14:26.480 whatever damage your a session might be coming. So she 0:14:26.760 --> 0:14:28.640 just feels that it's getting caught up in the maelstream 0:14:28.760 --> 0:14:30.560 of this whole seft lamming debate. 0:14:31.040 --> 0:14:34.600 Well, she said to you, the whole point of it was, Okay, 0:14:34.800 --> 0:14:36.800 we need to get people help, because if you can 0:14:36.840 --> 0:14:39.520 get in at the beginning of a recession, you can 0:14:39.560 --> 0:14:42.960 do so much to soften the blow. The issue is 0:14:43.600 --> 0:14:47.160 the consumer has been so resilient, The American consumer has 0:14:47.160 --> 0:14:51.320 been so resilient. So yeah, this has been pretty humbling, 0:14:51.360 --> 0:14:54.520 not just for her but for for so many economists. 0:14:55.120 --> 0:14:57.080 Yeah, so in terms of you know the rule itself, 0:14:58.040 --> 0:15:01.440 you know this policy ad that she was giving say 0:15:01.480 --> 0:15:04.600 pre pandemic. Ultimately, it's what the Trumpet administration did is 0:15:04.640 --> 0:15:07.400 that when people are losing their jobs, they put money 0:15:07.400 --> 0:15:10.040 into people's households to upset the worst of their session. 0:15:10.080 --> 0:15:12.600 So it kind of did follow the policy prognosis. But 0:15:13.000 --> 0:15:16.200 you're right, the real crooxy this is where we are now. 0:15:17.040 --> 0:15:20.480 You know, the job market is softening somewhat. There's a 0:15:20.520 --> 0:15:22.840 lot of tok that the economy will soften with claudiusam 0:15:22.960 --> 0:15:25.760 is making the point that, look, if unemployment was to 0:15:25.760 --> 0:15:29.480 go up somewhat and you know, mechanically trigger her rule, 0:15:29.520 --> 0:15:32.760 that suggests it's passing a threshold that the economy might 0:15:32.760 --> 0:15:35.080 be going into her session. So the jobless rate was 0:15:35.080 --> 0:15:36.920 to go up, but the actual economy doesn't go into 0:15:36.920 --> 0:15:40.120 her session, She'll be fine with that. She doesn't mind 0:15:40.160 --> 0:15:43.160 if her rule is proven, is tested, so to speak, 0:15:43.160 --> 0:15:45.360 are even proven to be inaccurate in this occasion, as 0:15:45.400 --> 0:15:47.400 long as it means the US pulls off of self landing. 0:15:47.400 --> 0:15:50.680 And she's in the camp that there doesn't need to 0:15:50.720 --> 0:15:53.160 be your session to bring down inflation. At the moment 0:15:53.200 --> 0:15:55.440 she thinks inflation is on a glide path lower. You 0:15:55.520 --> 0:15:57.960 don't need to blow up the job's market. She said, 0:15:58.000 --> 0:16:00.840 it's still possible that happens, but she thinks it's a 0:16:00.880 --> 0:16:02.640 path for self lanning, and that's her whole that's her 0:16:02.680 --> 0:16:04.520 whole point about it. If her rule is proven wrong 0:16:04.560 --> 0:16:06.600 this time, that the jobbles rate goes up a touch, 0:16:06.800 --> 0:16:08.840 but there is no recession, she'll be fine with that. 0:16:09.440 --> 0:16:12.760 She also just sounds funny to me. She said that 0:16:12.800 --> 0:16:15.240 she created a monster. She said she never she was 0:16:15.280 --> 0:16:17.640 surprised she ended up at the FED, even though she's 0:16:17.680 --> 0:16:21.280 obviously genius and created this rule. She would love to 0:16:21.320 --> 0:16:24.080 see this break. What were your impressions of her? 0:16:25.480 --> 0:16:28.440 Very Clothly's very accomplished the columns, like you just mentioned, 0:16:28.440 --> 0:16:31.200 a long career in the public sector, a lot of 0:16:31.240 --> 0:16:35.240 academic research, PhD from Michigan. She's proved, she has a 0:16:35.320 --> 0:16:39.520 proven track record behind her. Clodly also was on the 0:16:39.520 --> 0:16:42.280 front line of pushing for the diversity debate at the 0:16:42.280 --> 0:16:44.400 FED when she was there. We spoke a lot about that. 0:16:44.440 --> 0:16:47.040 She said, the institution has come a long way compared 0:16:47.040 --> 0:16:49.000 to the time she was there. And of course we 0:16:49.040 --> 0:16:51.360 got into the world of social media, because that's also 0:16:51.400 --> 0:16:54.160 a big part of this story that the economic debate 0:16:54.200 --> 0:16:56.960 has moved from say the wholes of universities and maybe 0:16:57.000 --> 0:16:59.640 the opinion pages of newspapers into this real time back 0:16:59.640 --> 0:17:02.720 and forth sort of punch bowl on Twitter, et cetera. 0:17:03.200 --> 0:17:04.240 And Clonia herself. 0:17:04.000 --> 0:17:06.479 Him like thinks he knows what he's talking about. I know, 0:17:07.320 --> 0:17:08.719 that's when you know we've got a problem. 0:17:08.840 --> 0:17:12.600 Just wait till the Stenevec rule. Just wait until that happens. 0:17:12.640 --> 0:17:14.960 Dye rules called five and I'm out of. 0:17:14.920 --> 0:17:18.040 The area six six. But and you bring up a 0:17:18.040 --> 0:17:20.359 really good point, because she is, she's huge on Twitter, 0:17:20.760 --> 0:17:23.240 and she she does such spent she's I mean, I 0:17:23.400 --> 0:17:25.719 haven't I must confess I have taken a break from 0:17:25.760 --> 0:17:30.000 Twitter lately. But X whatever it's called. She she's and 0:17:30.040 --> 0:17:32.000 she writes for Bloomberg Opinion. I mean, she's out there. 0:17:33.480 --> 0:17:35.720 He used to be very out there as well, very vocal. 0:17:35.760 --> 0:17:37.959 I mean, she wrote a blog post in twenty twenty 0:17:38.000 --> 0:17:41.480 that was highly critical of some very senior peers in 0:17:41.480 --> 0:17:45.159 the Eglomis field and she named them. So that caused 0:17:45.320 --> 0:17:47.040 a big star at time. And you know, she was 0:17:47.080 --> 0:17:49.359 on the front edge of a lot of sharp exchanges 0:17:49.400 --> 0:17:53.280 on Twitter as well. But you know, Clodia has pulled 0:17:53.280 --> 0:17:54.960 back from Twitter. She made that point. She took a 0:17:55.000 --> 0:17:56.560 couple of breaks, a couple of months off of it. 0:17:56.640 --> 0:17:58.520 She's back on it now just to publish her research. 0:17:58.560 --> 0:18:00.880 She's not interested in getting involved in the back and 0:18:00.880 --> 0:18:03.679 forth the hot take debates. In fact, she said she 0:18:03.760 --> 0:18:06.360 stays off Twitter and the hot take days. The hot 0:18:06.359 --> 0:18:08.439 take day will obviously be the jobs Day on Friday. 0:18:08.840 --> 0:18:11.400 She's hearing well clear of that. 0:18:12.119 --> 0:18:14.200 She's got all these rules. I wouldn't know the rest 0:18:14.240 --> 0:18:14.800 of the rules. 0:18:14.840 --> 0:18:18.760 Actually, Okay, so you rate that if she gets get 0:18:18.760 --> 0:18:23.520 it right in economics, textbooks will be rewritten, get it wrong, 0:18:23.640 --> 0:18:25.720 and the credibility of central bank will be damaged in 0:18:25.760 --> 0:18:27.320 the US economy, doomed to stagflation. 0:18:28.440 --> 0:18:30.360 Which way is it trending so far? And when will 0:18:30.400 --> 0:18:30.679 we know? 0:18:31.480 --> 0:18:31.879 We got to? 0:18:31.920 --> 0:18:35.600 You know, textbooks require some you know, forward planning. 0:18:36.720 --> 0:18:39.160 Right here, right now, there's this window that the US 0:18:39.240 --> 0:18:41.360 can pull this off, that they can get inflation down, 0:18:41.400 --> 0:18:43.520 that Dad has been heading in the right direction. Inflation 0:18:43.600 --> 0:18:46.359 is coming off, and maybe they can navigate some sort 0:18:46.400 --> 0:18:48.840 of a soft landing without the kind of massiver session 0:18:48.840 --> 0:18:51.800 that some people were warning about. Now, if that happens, 0:18:52.240 --> 0:18:56.040 that puts your own Powell in the whole of legends 0:18:56.119 --> 0:18:58.719 up there with Vulkar in terms of global central bankers 0:18:58.760 --> 0:19:02.639 who pulled off the impossible. But there are a lot 0:19:02.680 --> 0:19:05.160 of people who push back and say it's too soon 0:19:05.200 --> 0:19:09.119 to say mission accomplished. We don't yet know what the 0:19:09.160 --> 0:19:11.520 full impact of these rate hikes will be. We don't 0:19:11.560 --> 0:19:13.200 yet know if inflation is going to come all the 0:19:13.240 --> 0:19:14.879 way back down the word it should be in people 0:19:14.920 --> 0:19:17.200 on the street. They're feeling the impact of these price 0:19:17.280 --> 0:19:19.640 rises over the past few years. So there's another camp 0:19:19.680 --> 0:19:22.080 out there saying hang tight for another six months or 0:19:22.119 --> 0:19:23.040 so and see where we are. 0:19:23.040 --> 0:19:24.959 Then wait, you just didn't vote to Volker. 0:19:25.680 --> 0:19:29.920 I'm actually curious if pulls this off, who becomes more 0:19:29.920 --> 0:19:31.240 of a legend, Volker or Pale. 0:19:32.280 --> 0:19:35.320 It's an interesting question. I think if Powell pulled this off, 0:19:35.400 --> 0:19:37.680 it would be seen to be quite a feat because 0:19:37.880 --> 0:19:40.200 there's a backstory. You could say, hang on, central banks 0:19:40.200 --> 0:19:42.760 missed how all this inflation was building up anyway, But 0:19:43.119 --> 0:19:45.320 when they went they went very hard to federally doing 0:19:45.359 --> 0:19:47.760 all those massive rate hikes seventy five bass points at 0:19:47.800 --> 0:19:49.719 a time. A lot of people being very critical, you're 0:19:49.720 --> 0:19:51.480 going to blow up the economy. Don't need to do this. 0:19:52.000 --> 0:19:54.719 And if they do pull this off and get inflation 0:19:54.800 --> 0:19:57.119 an on a glide path, it looks like, you know, 0:19:57.160 --> 0:19:59.080 would put the US in pretty good order compared to 0:19:59.080 --> 0:20:01.880 some of its peer around the world. Pray of what's 0:20:01.880 --> 0:20:05.760 going on Europe, for example. And I think Powell then 0:20:06.160 --> 0:20:08.199 would maybe take something up a victory lot. 0:20:08.200 --> 0:20:10.960 But I just retire just like I'm doone. 0:20:11.240 --> 0:20:13.000 I think Joel brings up a good point end. I mean, 0:20:13.000 --> 0:20:16.399 because you know, Vulcar had to raise rates to what 0:20:16.960 --> 0:20:20.119 close to twenty percent in the early nineteen eighties, and 0:20:20.160 --> 0:20:23.480 if Powell pulls this off with rates around five percent. 0:20:23.920 --> 0:20:27.359 And unemployment went to eleven percent, yeah, the Vulgar I mean. 0:20:27.480 --> 0:20:30.480 And you know under Powell, unemployment fell to three point 0:20:30.480 --> 0:20:32.680 four percent in February, which was the lowes since nineteen 0:20:32.720 --> 0:20:35.919 sixty nine, So fairly different circumstances. Maybe we're seeing the 0:20:35.920 --> 0:20:38.240 birth of the Powell rule here. We don't yet know. 0:20:38.480 --> 0:20:40.520 Did you just coin that that's good? 0:20:40.960 --> 0:20:44.520 Still original? I fear that I just jinxed everything. 0:20:44.600 --> 0:20:49.680 Oh yeah, great, Joel crash Landing, Oh Weber, I would love. 0:20:49.720 --> 0:20:52.520