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Speaker 1: Brought to you by Bank of America. Merrill Lynch seeing

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Speaker 1: what others have seen, but uncovering what others may not.

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Speaker 1: Global Research that helps You Harness disruption voted top global

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Speaker 1: research firm five years running. Merrill Lynch, Pierce, Fenner and

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Speaker 1: Smith Incorporated. This is Masters in Business with Barry Riddoles

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Speaker 1: on Bloomberg Radio this weekend. On the podcast, I bring

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Speaker 1: an old friend into the studio to chat about all

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Speaker 1: things economics. Martin Barnes is the chief economist at bc

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Speaker 1: A Research, where he has been a senior editor, managing

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Speaker 1: partner and essentially grand popa more or less for the

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Speaker 1: past thirty years. I know Martin for a long time.

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Speaker 1: He's a fishing buddy. He's somebody I've been friendly with

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Speaker 1: um personally for for a while. I am not only

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Speaker 1: entranced by his thick scott his brogue. I wish I

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Speaker 1: could have gotten him to eurse uh. It is hilarious

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Speaker 1: when you hear him dropped the occasional bomb uh in

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Speaker 1: a heavy Scottish accents. It's he wants to be taken

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Speaker 1: seriously when he curses, but it's just so hilarious when

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Speaker 1: you hear it. If you're a friend of here is

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Speaker 1: and you managed to make him curse, We just fall

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Speaker 1: off our seats laughing. He is an incredibly insightful person

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Speaker 1: when it comes to the inner workings of the Federal Reserve.

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Speaker 1: He has been, if not an insider, so certainly someone

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Speaker 1: with the inside track as to the thought process of

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Speaker 1: various FED governors and various FED chair people. Uh. He

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Speaker 1: is just one of those folks that has been around

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Speaker 1: long enough and and been in the right place at

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Speaker 1: the right time to have really learned a lot of things.

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Speaker 1: So if you are interested in various economic thoughts, if

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Speaker 1: you're interested in what drives the FED and and perhaps

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Speaker 1: what the that should be doing instead of what they

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Speaker 1: are doing, Martin Barnes is your guy. With no further ado,

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Speaker 1: my conversation with Martin Barnes. This is Masters in Business

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Speaker 1: with Barry Ridholds on Bloomberg Radio. My special guest today

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Speaker 1: is Martin Barnes. He is the chief economist at bc

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Speaker 1: A Research, which he joined in eighteen of those years

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Speaker 1: was as the managing editor of the well regarded Bank

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Speaker 1: Credit Analyst, which is their flagship publication. Uh. Martin Barnes,

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Speaker 1: Welcome to Bloomberg Thank you, Barry. Pleasure to be with you.

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Speaker 1: This is your first time in this building, it is

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Speaker 1: my first time. Very exciting building. So so let's jump

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Speaker 1: right into your background. You began your career as an

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Speaker 1: economist for British Petroleum for BP. Is that right? What

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Speaker 1: was that? That means I've been working as an economist

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Speaker 1: for forty three years, which means time. I've very confused person.

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Speaker 1: I was going to say, after forty three years, you

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Speaker 1: should be pretty good at it. You got in the

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Speaker 1: other direction, you go in the other direction, all right,

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Speaker 1: So so what was the job at BP? Like, what

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Speaker 1: did you do? Well? I joined their forecasting division, which

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Speaker 1: is part of their corporate planning department, trying to figure

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Speaker 1: out where global economic growth was going and then forecasting

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Speaker 1: energy demand and within that oil demand of course, and

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Speaker 1: that was a key and put into BPS planning process.

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Speaker 1: But of course I joined in January ninety three. Oil

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Speaker 1: was three dollars a barrel, had been for a long time,

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Speaker 1: and of course all future projections were based on the

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Speaker 1: assumption that oil would be three dollars a barrel, and

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Speaker 1: by the end of three guess what happened? We had

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Speaker 1: an oil embargo. When I recall oil spiked something like

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Speaker 1: mind and after twelve whatever, so everything was turned upside down.

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Speaker 1: So that was a wonderful learning experience, to say the least.

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Speaker 1: And then a few years later in nine d seven

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Speaker 1: you came to North America. No I. Then I was

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Speaker 1: with BP for five years and then I moved to

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Speaker 1: a brookeradge firm in the UK of Wall Street firm.

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Speaker 1: I was an economist with a UK broker firm, which

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Speaker 1: actually got me back to Scotland, which was nice because

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Speaker 1: their research was based in Edinburgh, so it would be

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Speaker 1: like moving from London, sorry, from New York to Boston

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Speaker 1: kind of thing. So how did you go from from

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Speaker 1: London to Scotland to Vancouver and here in North America? Well,

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Speaker 1: so five years in London with BP, then I came

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Speaker 1: across this opportunity to join this firm called Wood Mackenzie,

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Speaker 1: which was a brokerage firm research based in Edinburgh though

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Speaker 1: they traded in London. Was with them for ten years

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Speaker 1: and was headhunted by b C A chance to gosh,

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Speaker 1: come to Canada. Why the heck would I want to

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Speaker 1: do that? But after thinking about it, took the move

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Speaker 1: and never looked back. Really and you made that move

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Speaker 1: in was that anywhere near the eighty seven crash? Well,

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Speaker 1: I accepted the job before the crash. I accepted the

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Speaker 1: job job in August. The last piece of research I

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Speaker 1: wrote for my previous employer with Mackenzie was called after

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Speaker 1: the crash what would happen? And then I moved to

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Speaker 1: Canada in November, So just one month after the crash,

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Speaker 1: the seven Black Monday? Did it interfere? Did you say maybe?

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Speaker 1: I had? No, No, no, not at all. They were

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Speaker 1: excited about it. Yeah. Sure and um so so let's

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Speaker 1: talk a little bit about the work you've been doing

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Speaker 1: for bc A research for thirty years. You spent eighteen

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Speaker 1: years being the editor of the Bank Credit Analysts. Tell

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Speaker 1: us about that publication. Well, b c A is a

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Speaker 1: very interesting I think it's pretty unique firm. It's almost

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Speaker 1: unlikely firm because it's based in Montreal, which is of

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Speaker 1: course a financial backwater, but it's been a right since nine.

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Speaker 1: It's a pure research firm, doesn't manage money, doesn't trade,

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Speaker 1: there's no proprietary stuff going on. All we're selling this research.

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Speaker 1: So it's focused on trying to figure out where the

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Speaker 1: markets are going. And it's a pretty intense place. When

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Speaker 1: I joined, it was tiny. I was employee number fourteen.

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Speaker 1: Were more than ten times bigger that in terms of employees.

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Speaker 1: But the focus is still the same. We're still trying

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Speaker 1: to still thirty years later, still trying to figure out

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Speaker 1: where the markets are going. So so who are the

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Speaker 1: clients of BC, who's the typical describe what the typical

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Speaker 1: client is is. We're pretty much challenged to still these days,

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Speaker 1: which was not the case when I joined. When I joined,

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Speaker 1: maybe a third of the clients were behind it worth.

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Speaker 1: They're kind of been priced out of adopted a different

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Speaker 1: business model. So we're kind of institutional now. And it's

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Speaker 1: range everything from finger snapping hedge funds hiking you make

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Speaker 1: me money this afternoon to slow moving state pension funds,

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Speaker 1: know and everything in between. So that sounds interesting. So

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Speaker 1: and I'm very global, by the way, I should point out,

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Speaker 1: although we're based in Canada for historical reasons, that's just

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Speaker 1: where the company began and there's a very powerful force

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Speaker 1: and we just stayed there. But you know, half of

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Speaker 1: our client base is probably outside North America. Come for

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Speaker 1: the high taxes, stay for the miserable winters. That's the

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Speaker 1: that's the the marketing campaign for although where you are

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Speaker 1: I know live in Victoria Bridge, Columbia, but my spec

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Speaker 1: is still based in Montreal and that's where my job

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Speaker 1: is based. Your climate is quite delightful. You're you have

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Speaker 1: a very similar climate to Seattle and Portland's less rain,

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Speaker 1: less rain and just just as opposed to Scotland where

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Speaker 1: planning of rain you said you were You don't know

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Speaker 1: the day you were the exact whether of the day

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Speaker 1: you were born, but it's a fair case it was raining.

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Speaker 1: So what's the what's the your favorite part of your job?

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Speaker 1: What do you like that you what do you like

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Speaker 1: to do the most as part of BCA research? Oh gosh,

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Speaker 1: I mean I look, I've been there twenty nine years

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Speaker 1: and if there was anything I really didn't like, I

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Speaker 1: would have left a long time ago. So I write,

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Speaker 1: and that's always cool when you can come up with

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Speaker 1: a new angle on something. I enjoy writing. I enjoy speaking.

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Speaker 1: Standing up in front of a crowd of people giving

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Speaker 1: my views is is fun. Traveling, visiting, talking with clients.

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Speaker 1: I can't see this any part of it. I don't like.

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Speaker 1: I'm Barry Ridhults. You're listening to masters in Business on

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Speaker 1: Bloomberg Radio. My special guest today is Martin Barnes. He

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Speaker 1: is the chief economist at BC, a research affirm he's

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Speaker 1: been working at for let's round it up and call

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Speaker 1: it thirty years. Uh, and let's let's talk a little

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Speaker 1: bit about the global economy. So where are we? If

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Speaker 1: you have to pick one, is it inflation, deflation or disinflation? Well,

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Speaker 1: showing that I'm a true economist, I'm going to have

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Speaker 1: to give either the it depends out, sir, you know.

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Speaker 1: I mean, if you're in you know, the manufacturing sector,

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Speaker 1: or you're a taxi driver, you would say it's deflation

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Speaker 1: because it's tough, it's competitive, and prices in your business

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Speaker 1: are falling and in some cases may have been falling

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Speaker 1: for a while. Um. If you're a parent, um, you know,

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Speaker 1: paying for your kids kids college education, or you've got

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Speaker 1: a lot of health care expenses. You know, you you

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Speaker 1: just see the world as horrendously inflationary. And if your

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Speaker 1: wife is like my wife, she'll just laugh at you

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Speaker 1: any suggestion as deflation because she'll beat you up and

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Speaker 1: tell you how much everything is going up in price

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Speaker 1: since last time she went to the grocery store. So

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Speaker 1: it's different. We're not looking an aggregate, we are not

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Speaker 1: in a deflationary we don't have absolute deflation, but it

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Speaker 1: feels deflationary in a lot of places, and there's a

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Speaker 1: little pockets of of inflation. But it's a very different

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Speaker 1: world from the inflationary seventies. Of course. Sure, the joke

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Speaker 1: I've heard is we have inflation and the things we need,

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Speaker 1: and we have deflation and the things we want, which

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Speaker 1: I thought was kind of it. So it was like,

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Speaker 1: kind of got a cute way of putting it. Another

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Speaker 1: way of thinking about it is that the things that

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Speaker 1: we spend money on day to day or week to week,

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Speaker 1: month to month tend to have inflation, and the things

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Speaker 1: that we only buy occasion occasionally fallen price. You know,

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Speaker 1: so refrigerators, TVs. So you don't notice that, but you

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Speaker 1: sure as heck notice if you're parking fees are going up.

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Speaker 1: This so their small amounts of money to compared to

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Speaker 1: the price of refrigerators. So let's talk a little bit

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Speaker 1: about commodities. So two years ago the price of oil

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Speaker 1: was over a hundred bucks, and now here we are

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Speaker 1: with OPEC having a conversation and oil can barely maintain

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Speaker 1: a forty hands all. What's the commodity story? Is that

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Speaker 1: a dollar story or is that a supply story or

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Speaker 1: something else. One of the first lecguiliarity economics at school is,

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Speaker 1: you know, it's a supply demand curve, and you know,

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Speaker 1: increased supply alter to demand and price falls and vice versa.

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Speaker 1: So we have comi more than anything else. You know,

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Speaker 1: the respond to to price signals. Raise the price of week,

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Speaker 1: water farmer is going to do. They'll grow so much

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Speaker 1: week they'll be giving away in street corners after the

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Speaker 1: nick harvest. Some commodities, the cycles are a bit longer

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Speaker 1: because if you have to find the stuff and dig

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Speaker 1: the mines, et cetera, maybe it takes a few years.

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Speaker 1: But commodities respond to prices, and you know, we had

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Speaker 1: and sometimes these cycles are really long. So we had

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Speaker 1: a twenty year bear market, if you like, in in commodities,

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Speaker 1: from the early eighties into the early two thousands, to

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Speaker 1: the point where prices got so low, you know, open

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Speaker 1: a couper minor you nuts. So we starved to come

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Speaker 1: out the resource sector of resources. Who wants to be

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Speaker 1: a mining engineer when you can be an investment banker

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Speaker 1: who wants to open a copper mind. So when demand

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Speaker 1: picked up, particularly driven by China, the supply we just

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Speaker 1: wasn't there priced. So then we had this powerful bull market,

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Speaker 1: ten year blue market. Guess what that's prices went. It

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Speaker 1: became more attractive to find the stuff, so the supply

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Speaker 1: responded as it always does, and then we ended up

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Speaker 1: with too much supply and then prices went down. The

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Speaker 1: bull markets tend to be much shorter than the bear market,

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Speaker 1: so we had ten ten year bull market followed by

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Speaker 1: twenty year bear market. Historically has kind of been like that,

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Speaker 1: and if that is still true, um prices there were

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Speaker 1: only pretty early stage of a bear face. There's still

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Speaker 1: quite a lot of supply out there. Oil is a

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Speaker 1: little bit different, still a ton of supply fracts, still

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Speaker 1: the same. You you have a g political overlay with

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Speaker 1: oil that you don't have with other products, but it's

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Speaker 1: still the same story. And of course because of shale,

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Speaker 1: it's changed things. We believe, I guess most people you

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Speaker 1: know believe that once you get into the fifties, fifty

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Speaker 1: five and above, shale becomes very competitive again and turn

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Speaker 1: you can turn sheal on and off much more quickly

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Speaker 1: than deep water oil. So oil's capped. Shale puts a

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Speaker 1: cap a price cap on, so you don't see oil

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Speaker 1: going over sixty dollars a barrel anytime in the next

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Speaker 1: couple of some short term geo political stuff. And what

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Speaker 1: about natural gas, which it seems that we're just finding

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Speaker 1: endlessly supplies? Yeah, what was it a few weeks ago,

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Speaker 1: a couple of months ago. Wasn't they finally enormous reserves

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Speaker 1: in Texas? The biggest fuel Just it just seems like

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Speaker 1: it's an almost inexhaustible It's the whole shale technology hasn't

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Speaker 1: really been exploited aggressively outside the US. We're still early

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Speaker 1: stages of that. So so I wouldn't be a bull

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Speaker 1: of commodities. No, they're not going to fall forever, and

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Speaker 1: you can have short term moves, but you know the

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Speaker 1: very long term and b C. We love long term stuff. Um,

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Speaker 1: you know, you do a two hundred year chart of

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Speaker 1: real commodity prices and that just trends steadily down and

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Speaker 1: any spikes are short lived wars supply disruption. So is

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Speaker 1: that a story of of improving technology and exploration? So

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Speaker 1: your reference China earlier, I have to ask how significant

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Speaker 1: is China to the demand for commodities and when they

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Speaker 1: begin to cool off, how impactful is China on falling

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Speaker 1: commodity prices. It's not hugely impactful for oil, but has

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Speaker 1: been massively significant for medals, where some cases fifty of

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Speaker 1: global demand has come from China. Now the standard story

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Speaker 1: for MINA is it has to and has begun to

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Speaker 1: orientals orient itself away from manufacturing construction war towards services.

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Speaker 1: This is a long, slow process, but they still half

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Speaker 1: the country working on the farms, right some crazy should

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Speaker 1: I mean, their growth model should be a less commodity

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Speaker 1: intensive growth model going forward than it's been in the past,

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Speaker 1: but it will continue to be a big player. And

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Speaker 1: you've got India, You've got a bunch of other remerging

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Speaker 1: economies all want to industrialize more. So the commodity story

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Speaker 1: is an m story for sure, not just China. UM

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Speaker 1: and things like auto ownership, homeownership, things that are commodity

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Speaker 1: intensive are still at pretty little levels. And a lot

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Speaker 1: of countries like Vietnam, and then they are compared to

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Speaker 1: the Western levels, and you've got to assume, you know,

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Speaker 1: they want to get to where we are, So commodity

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Speaker 1: demand will go up. The issue is supply. You know,

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Speaker 1: there is a big moves in supply that that causes,

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Speaker 1: you know, the big moves in in commodity prices, not

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Speaker 1: demand as much more steady. We had that crazy train

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Speaker 1: of boom, but you know we're not going to have

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Speaker 1: that again. I'm Barry Ridholts. You're listening to Masters in

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Speaker 1: Business on Bloomberg Radio. My guest today is Martin Barnes.

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Speaker 1: He is the chief economist at b c A Research,

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Speaker 1: a pure research shop located up in Montreal, Canada, but

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Speaker 1: really they are a global institutional shop. Let's talk a

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Speaker 1: little bit about the state of the labor market here

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Speaker 1: in the United States. By the time this comes out,

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Speaker 1: we will have just had yet another non farm payrolls report. Um.

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Speaker 1: What do you see as the state of the labor

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Speaker 1: market in North America and globally? Well, it's pretty good.

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Speaker 1: In North America. Well, the US particularly, you've created, We've

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Speaker 1: created a lot of jobs. Unemployment rate is back down

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Speaker 1: to what most people would have called fool employment anytime

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Speaker 1: within the last ten years. Um. But if the labor

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Speaker 1: market was really tight, you would have expected wages to

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Speaker 1: be growing much more strongly than they have been, so

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Speaker 1: that suggests that there we're not there yet in terms

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Speaker 1: of a tight labor market. So I guess uncomfortably, I

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Speaker 1: have to side with Janet Yellen on this one um,

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Speaker 1: which is something I know you don't like to do.

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Speaker 1: So I want to get to wages. But before we

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Speaker 1: get two wages, I have to ask a related question.

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Speaker 1: So this The traditional measure of unemployment is you three

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Speaker 1: word at four point nine. The broader measure is you six,

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Speaker 1: which is around ten per and that's the measure of underemployment,

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Speaker 1: which which leads to this question how much underemployment meaning

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Speaker 1: either people working part time who want to work full

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Speaker 1: time or people taking low paying jobs when they're really

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Speaker 1: more qualified for a higher paying job. UB how underemployed

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Speaker 1: are we here in America? Your question that you know

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Speaker 1: gives the answer in a sense that broader unemployment rate

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Speaker 1: is still very high. Ten unemployment rate implies that there's

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Speaker 1: a lot of underemployment, you know, so you have a

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Speaker 1: lot of people who would like to be working full time,

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Speaker 1: who would like better paying jobs. So there is still

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Speaker 1: slack in the labor market, and underemployment is one component

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Speaker 1: of slack and I think you have a of a

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Speaker 1: large number of people who have been forced to take

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Speaker 1: jobs that are below their skill well blow blow with

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Speaker 1: what they would like. So you referenced a lack of

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Speaker 1: wage pressure UM. That seems to be a little bit

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Speaker 1: of a mixed picture. We had the Census Bureau report

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Speaker 1: not too long ago that showed so or a five

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Speaker 1: point three percent increase in wages. Even with that record

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Speaker 1: setting one year increase, we're still below wages and the

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Speaker 1: median income media family incomes. That's not wages, that's that

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Speaker 1: takes out. So how do you reconcile those two the

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Speaker 1: increase in wages and the median family income UM, we're

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Speaker 1: still being so far below where we were fifteen. It's

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Speaker 1: fifteen years and we're still not back to where we

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Speaker 1: were right. So again that's consistent with the slowest recovery

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Speaker 1: on record. And although we have created a lot of

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Speaker 1: jobs and brought the unemployment ratedown, a lot of these

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Speaker 1: jobs presumably are lower wage jobs, or people shifting from

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Speaker 1: high wage jobs do lower wage jobs full time to

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Speaker 1: part time, and that's kept family incomes depressed, not even

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Speaker 1: not and a more typically economic cycle. If you had

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Speaker 1: looked at what the unemployment rate had done, what overall employment,

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Speaker 1: and you would have fought median family incomes would have

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Speaker 1: done much better than they had. As you pointed out,

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Speaker 1: we're still below levels of ten years ago. So yeah,

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Speaker 1: they picked up last year. Great, that's one year. That's

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Speaker 1: one year. So let's let's let me ask the question differently.

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Speaker 1: So Ryan Hart and rogue Off in this time is different,

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Speaker 1: don't you use the financial folly make a distinction between

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Speaker 1: the usual um economic cycle and financial recessions. A credit

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Speaker 1: crisis gets a very different type of recovery. You agree

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Speaker 1: with their perspective, Yes, absolutely this, but it's actually been

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Speaker 1: worse than that. So this isn't just so. Rougoff was

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Speaker 1: the chief economis that the IMF for a while and

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Speaker 1: he did that. They did that research while still at

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Speaker 1: the IMF, so they actually published stuff on financial recessions

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Speaker 1: are different. Recoveries are weak. They knew that at the

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Speaker 1: IMF long before the right right right, So the I

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Speaker 1: m F cut bought into the idea that recoveries are

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Speaker 1: after for actual recessions. One of the charts I love

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Speaker 1: to show. I use it every time I give a

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Speaker 1: speech to as it clients, and it's a total damnation

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Speaker 1: of my profession, if you like. And I don't have

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Speaker 1: a copy with it with me to show you, but

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Speaker 1: it's incredible. You look at what the I m F

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Speaker 1: was forecasting for global growth in September twenty eleven. They

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Speaker 1: do their big forecasting grounds twice a year, but the

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Speaker 1: big one is in the fall to coincide with the

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Speaker 1: IMF beatings. So September twenty eleven global growth was they

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Speaker 1: were saying it's around four percent at the moment, and

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Speaker 1: it's going to get steadily better. So by now it

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Speaker 1: was going to be five. They were forecasting close to

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Speaker 1: five percent for so it's basically a line going up.

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Speaker 1: And look at their latest projections and we'll get some

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Speaker 1: new ones in a couple of weeks, and basically it's

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Speaker 1: a line that goes straight down. There now saying three

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Speaker 1: percent for this year, and it looks like the jaws

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Speaker 1: of death, you know what I mean. And it's not

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Speaker 1: just a one year forecast there, They've got every year

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Speaker 1: raw so you can plot all the intervening forecast and

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Speaker 1: it's just got every year was provided down, down down,

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Speaker 1: So it's the most egregious forecasting era I could ever

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Speaker 1: imagine because it persisted for five years, and you can

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Speaker 1: blame lots of one off things, euro crisis, earthquakes in Japan, laborship,

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Speaker 1: the government shutdown to the US, etcetera, um. But this

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Speaker 1: has been an absolutely awful, awful global recovery and I

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Speaker 1: think you can explain it. So and this is the

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Speaker 1: I m f knowing that recoveries were week after for

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Speaker 1: the actual recession, but they still got it horribly wrong.

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Speaker 1: And nobody in September twenty living by the way, was

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Speaker 1: saying time, if oh, you guys are too optimistic, you'll

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Speaker 1: know it's never going to be that good. That was

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Speaker 1: a box standard consensus view. So what's the problem. We

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Speaker 1: underestimated the dead weight of debt, We underestimated just the

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Speaker 1: legacy of that bad financial downturn, um, we underestimated how

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Speaker 1: cautious businesses would be about capital spending. And I guess

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Speaker 1: we had a lot of fiscal austerity plus the whole

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Speaker 1: series of shocks like the euro crisis. So the bottom

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Speaker 1: line is they really did a terrible job. Despite having

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Speaker 1: rogue Off warning them, hey, this is going to be

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Speaker 1: a really soft recovery. The whole profession did I wouldn't

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Speaker 1: focus just you see the FED, the U E c D,

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Speaker 1: and most private sector economists. I'm Barry rid Halts. You're

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Speaker 1: listening to Masters in Business on Bloomberg Radio. My guest

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Speaker 1: today is Martin Barnes. He is the chief economist at

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Speaker 1: b c A Research. They are the publishers of the

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Speaker 1: Bank Credit Analyst, highly regarded and well respected research shop.

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Speaker 1: Let's start talking about the Federal Reserve. You have been

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Speaker 1: visiting the FED for quite a long time. I think

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Speaker 1: I first started visiting FED people in LinkedIn seventy nine.

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Speaker 1: I was still living in in the UK at the time,

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Speaker 1: but part of my job was to follow the US,

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Speaker 1: of course, so I just started coming over to the

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Speaker 1: US and visiting the FED. And I was fortunate enough,

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Speaker 1: strangely to get to go to Jackson Hole eighteen times.

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Speaker 1: I think it's not too many people managed that. And

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Speaker 1: I used to go and visit governors. I got fairly

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Speaker 1: close to people like Dong Koan, etcetera. And I pretty

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Speaker 1: early on talking to the FED. Visiting the FED, I

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Speaker 1: I learned something that was made me feel good and

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Speaker 1: bad at the same time. You know we have this

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Speaker 1: the FED, is this aura of of you know omnipotence

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Speaker 1: around them. You know that got all these smart people,

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Speaker 1: they know what's going on. Um, yeah, well they used

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Speaker 1: to have that image anyway, So that you go to

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Speaker 1: the FED and there's so much more knowledgeable and smarter

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Speaker 1: than you. Well, I learned pretty early on that actually

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Speaker 1: that is not the case. They may have a lot

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Speaker 1: inside information and micro stuff, but when it comes to

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Speaker 1: the really big questions, you know, whence housing going to

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Speaker 1: peak or why our businesses, they have no more idea

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Speaker 1: than you or I. And that's kind of cool because

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Speaker 1: it means that your view is just as good as

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Speaker 1: their view, and they're actually quite interested to know what

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Speaker 1: you think. So I thought that was good. It kind

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Speaker 1: of levels the playing field so I could I could

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Speaker 1: have conversations with the FED and my views were just

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Speaker 1: as good as their's. But then I thought, oh my god,

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Speaker 1: this is not good because I don't know what's going on.

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Speaker 1: I need them to know. And the fact that they

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Speaker 1: don't know any more than me, but yeah, they're controlling

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Speaker 1: monetary policy was really scary. And I think we have

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Speaker 1: learned that their forecasting record has not been great. It's

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Speaker 1: been terrible. But then again, what economists forecasting, but we

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Speaker 1: need short of that, we need our monetary policy makers

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Speaker 1: to do better than us. We're we're not raising a

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Speaker 1: lowering interest rates. They are, So I would like them

430
00:25:55,000 --> 00:25:58,560
Speaker 1: to know more than me. So more important than their forecasting,

431
00:25:58,800 --> 00:26:03,520
Speaker 1: what how curate is their assessment of what's happening right now?

432
00:26:03,640 --> 00:26:07,480
Speaker 1: Do they have a good read on the here and now? Look,

433
00:26:07,560 --> 00:26:10,159
Speaker 1: nobody knows what a year looks like out in the future,

434
00:26:10,200 --> 00:26:12,520
Speaker 1: but well, their views on what's going on right now

435
00:26:13,280 --> 00:26:16,760
Speaker 1: should be as good as anybody else's, should be better

436
00:26:16,840 --> 00:26:20,480
Speaker 1: because they know, you know, these regional presidents talk to

437
00:26:20,600 --> 00:26:25,359
Speaker 1: their local business contacts, etcetera, etcetera. Um. The problem is

438
00:26:25,400 --> 00:26:29,640
Speaker 1: that the models that they have relied on have led

439
00:26:29,640 --> 00:26:31,360
Speaker 1: them astray. And that goes back to what I said

440
00:26:31,400 --> 00:26:34,679
Speaker 1: about the I m F forecasts. That's just a model.

441
00:26:35,400 --> 00:26:38,199
Speaker 1: You know, the world the past is not is not

442
00:26:38,240 --> 00:26:39,720
Speaker 1: as good a guid to the future as it used

443
00:26:39,720 --> 00:26:41,560
Speaker 1: to be in models are all based on the past.

444
00:26:42,040 --> 00:26:44,040
Speaker 1: So they've been led astray by the models. I think

445
00:26:44,080 --> 00:26:51,720
Speaker 1: they wrongly bought into this forward guidance commitment strategy. I

446
00:26:51,720 --> 00:26:54,720
Speaker 1: think that's been a mistake. I think that is in

447
00:26:54,800 --> 00:26:58,840
Speaker 1: that transparency and communication. Look I remember the day, maybe

448
00:26:58,880 --> 00:27:03,320
Speaker 1: you do, when the FED never even used to tell

449
00:27:03,400 --> 00:27:05,560
Speaker 1: you and it changed policy. Right, you would find out

450
00:27:05,640 --> 00:27:09,560
Speaker 1: rates and because the market, the whole industry economist analyzing

451
00:27:09,560 --> 00:27:12,480
Speaker 1: the weekly money supply numbers to what the FED was doing.

452
00:27:12,760 --> 00:27:15,720
Speaker 1: So that was to a paque, I mean, no sense.

453
00:27:16,560 --> 00:27:19,480
Speaker 1: But they have gone way too far in the other direction.

454
00:27:19,560 --> 00:27:21,879
Speaker 1: I don't think they should be publishing these dots. The

455
00:27:21,960 --> 00:27:24,400
Speaker 1: dad plots are a waste of time. I think they're

456
00:27:24,440 --> 00:27:27,240
Speaker 1: just wrong to do that. I think they talked too much.

457
00:27:27,600 --> 00:27:31,360
Speaker 1: They in their effort to create transparency and guide markets,

458
00:27:31,359 --> 00:27:33,920
Speaker 1: have just created confusion. So you think a little mystery

459
00:27:33,920 --> 00:27:36,720
Speaker 1: would actually help the markets. I would like to think

460
00:27:36,760 --> 00:27:38,560
Speaker 1: that they should be able to say, look, you know,

461
00:27:39,000 --> 00:27:41,000
Speaker 1: this is what we want to do. We're trying to

462
00:27:42,400 --> 00:27:46,840
Speaker 1: get inflation at two your decent economy, we will we

463
00:27:46,880 --> 00:27:50,120
Speaker 1: will keep policy at the appropriate level for as long

464
00:27:50,160 --> 00:27:54,760
Speaker 1: as necessary, and then just shut up. Really so, so

465
00:27:54,000 --> 00:27:56,760
Speaker 1: let me so when you set these we won't raise

466
00:27:56,880 --> 00:28:00,199
Speaker 1: rachel till the unemployment rate hit six and a half percent. Now,

467
00:28:00,280 --> 00:28:03,520
Speaker 1: how dumb was that? And now it's four point nine percent? Exactly,

468
00:28:03,520 --> 00:28:08,640
Speaker 1: why do you constrain yourself with these commitments? So much

469
00:28:08,720 --> 00:28:12,240
Speaker 1: uncertainty in the world. So let me ask you a question.

470
00:28:12,280 --> 00:28:16,840
Speaker 1: You've used the phrase financial repression in some of your writings. Yes,

471
00:28:17,119 --> 00:28:18,840
Speaker 1: for for some of the listeners who may not be

472
00:28:18,920 --> 00:28:24,200
Speaker 1: familiar with that brands of criticism, what is financial repression?

473
00:28:26,560 --> 00:28:30,639
Speaker 1: I've used it in a context of of, oh, of

474
00:28:30,720 --> 00:28:33,480
Speaker 1: how do we deal with high levels of debt? You know,

475
00:28:33,760 --> 00:28:37,240
Speaker 1: b c A. Over the years, debt has been a

476
00:28:37,280 --> 00:28:40,239
Speaker 1: big part of what we write about. We we I

477
00:28:40,280 --> 00:28:44,000
Speaker 1: think we were the ones that created the debt supercycle term.

478
00:28:44,040 --> 00:28:46,000
Speaker 1: You know. I joined in eighty seven, we'd already been

479
00:28:46,080 --> 00:28:49,040
Speaker 1: using it for probably ten years at least before that,

480
00:28:49,840 --> 00:28:52,200
Speaker 1: and the debt supercycle was just a story about ever

481
00:28:52,320 --> 00:28:55,080
Speaker 1: rising levels of debt, etcetera, etcetera. I think that is

482
00:28:55,160 --> 00:28:58,479
Speaker 1: over now, but I still get asked, probably more than

483
00:28:58,520 --> 00:29:00,760
Speaker 1: any other question. When I was at client, it's how

484
00:29:00,800 --> 00:29:02,840
Speaker 1: what's the endgame here of all this debt? Well, it's

485
00:29:02,880 --> 00:29:05,760
Speaker 1: private debt, government debt. How do we ever get rid

486
00:29:05,800 --> 00:29:09,160
Speaker 1: of it? And it is interesting that debt two GDP

487
00:29:09,360 --> 00:29:14,160
Speaker 1: ratios have continued to rise pretty much everywhere, even though

488
00:29:14,400 --> 00:29:17,560
Speaker 1: people are trying to de leverage. You cannot easily deleverage

489
00:29:17,560 --> 00:29:21,880
Speaker 1: when growth is weak. Um, So what's the end game?

490
00:29:21,920 --> 00:29:26,040
Speaker 1: Is it default? Is it inflation? Can you grow out

491
00:29:26,080 --> 00:29:28,800
Speaker 1: of it? Um? I think it's gonna be hard to

492
00:29:28,880 --> 00:29:35,320
Speaker 1: grow out of it. Nobody wants to default, unless your Greece. Perhaps, um,

493
00:29:35,480 --> 00:29:40,360
Speaker 1: maybe inflation is the end game, but mm hmm, nobody

494
00:29:40,440 --> 00:29:42,760
Speaker 1: really wants to truly inflate it away. So if you

495
00:29:43,240 --> 00:29:45,560
Speaker 1: if you can't get rid of your debt, you just

496
00:29:45,600 --> 00:29:47,920
Speaker 1: make it easy to live with. And how do you

497
00:29:47,920 --> 00:29:50,280
Speaker 1: make it easy to live with your very low interest rates?

498
00:29:50,760 --> 00:29:54,160
Speaker 1: And you can you can sustain extraordinary higher levels of

499
00:29:54,160 --> 00:29:57,440
Speaker 1: debt for a very long time if your debt, if

500
00:29:57,480 --> 00:30:00,560
Speaker 1: your interest rates as close to zero. So financial pressure

501
00:30:00,640 --> 00:30:03,960
Speaker 1: is really about keeping the costs of your debt down,

502
00:30:04,160 --> 00:30:06,920
Speaker 1: and perhaps through regulatory pressure is forcing people to buy

503
00:30:06,920 --> 00:30:09,240
Speaker 1: your debt as well. In terms of sovereign debt, so

504
00:30:09,320 --> 00:30:14,440
Speaker 1: you can do that by forcing painted funds or banks

505
00:30:14,480 --> 00:30:18,520
Speaker 1: to buy government debt higher capital ratios, So for ntural

506
00:30:18,640 --> 00:30:22,920
Speaker 1: pressure is artificially keeping down interest rates. We're speaking with

507
00:30:23,000 --> 00:30:30,560
Speaker 1: Martin Barnes of BCA Research. You mentioned GDP to debt ratio. Nobody,

508
00:30:31,640 --> 00:30:36,040
Speaker 1: at least no, no solvent government has a higher debt

509
00:30:36,040 --> 00:30:41,360
Speaker 1: to GDP ratio than Japan now over two, and yet

510
00:30:41,640 --> 00:30:44,600
Speaker 1: people are lending to them at negative interest rates. They

511
00:30:44,640 --> 00:30:48,680
Speaker 1: have no problem borrowing what seems like an infinite amount

512
00:30:48,720 --> 00:30:52,200
Speaker 1: of cash. How do you reconcile those two, Well, you're

513
00:30:52,240 --> 00:30:54,200
Speaker 1: not lending to them, and I'm not lending to well,

514
00:30:54,320 --> 00:31:00,560
Speaker 1: somebody is. So the pad fractual system is effectively closed

515
00:31:00,600 --> 00:31:02,280
Speaker 1: in a way in the sense that it doesn't rely

516
00:31:02,400 --> 00:31:05,920
Speaker 1: on foreigners because I'm not sure any foreigners would buy

517
00:31:05,960 --> 00:31:10,400
Speaker 1: it UM, So it's just in its internally financed. What

518
00:31:10,480 --> 00:31:13,200
Speaker 1: the Bank of Japan has actually been buying all the

519
00:31:13,280 --> 00:31:19,040
Speaker 1: net issuance. They've got a very aggressive qui program that

520
00:31:19,120 --> 00:31:22,880
Speaker 1: they're buying. But prior to that, UM, you know, their

521
00:31:22,920 --> 00:31:28,920
Speaker 1: Postal Savings Bank was buying pretty much huge numbers of bonds,

522
00:31:29,400 --> 00:31:34,080
Speaker 1: and they're real bond yields. Of course, they've had mild deflation,

523
00:31:34,240 --> 00:31:36,560
Speaker 1: so they're real bond yields were higher than their nominal yields,

524
00:31:36,560 --> 00:31:40,080
Speaker 1: So bonds actually weren't as unattractive as their low nominal

525
00:31:40,120 --> 00:31:45,959
Speaker 1: yields would have suggested. UM and the stock market crash

526
00:31:46,040 --> 00:31:49,280
Speaker 1: in Japan, I mean the nick I peeked at close

527
00:31:49,320 --> 00:31:54,360
Speaker 1: to forty you know, so here we are many years

528
00:31:54,480 --> 00:32:00,920
Speaker 1: later that so the the retailer vistas of Japan. I've

529
00:32:00,960 --> 00:32:03,200
Speaker 1: been out of the stock market for a very long time,

530
00:32:03,840 --> 00:32:07,640
Speaker 1: so they're probably happier owning bonds than than these risky

531
00:32:07,680 --> 00:32:11,200
Speaker 1: things called equities, even they know they've had no trouble

532
00:32:12,680 --> 00:32:17,600
Speaker 1: financing their deficits so at all. So let's stay in

533
00:32:17,840 --> 00:32:21,080
Speaker 1: that same part of the world. We look at China,

534
00:32:21,200 --> 00:32:23,680
Speaker 1: where a lot of people are suggesting is the next

535
00:32:23,760 --> 00:32:27,200
Speaker 1: dead bomb to blow up? How bad is the situation

536
00:32:27,240 --> 00:32:31,560
Speaker 1: in terms of China's being so heavily leveraged and carrying

537
00:32:31,560 --> 00:32:36,080
Speaker 1: some much What people are worried about in the case

538
00:32:36,120 --> 00:32:39,000
Speaker 1: of China is the very rapid increase in their corporate

539
00:32:39,040 --> 00:32:42,200
Speaker 1: debt re show. The b I S have warned about it,

540
00:32:42,280 --> 00:32:44,640
Speaker 1: the I M F of worried about it. It's not

541
00:32:44,800 --> 00:32:47,959
Speaker 1: that the level of debt even as is that how

542
00:32:48,080 --> 00:32:51,040
Speaker 1: I mean, there's other countries. Overall debt in China is

543
00:32:51,080 --> 00:32:53,120
Speaker 1: still notice hig as it is another country. It's just

544
00:32:53,160 --> 00:32:57,840
Speaker 1: going up so fast so quickly. So the question there

545
00:32:58,160 --> 00:33:03,480
Speaker 1: is um how much of it is kind of within

546
00:33:03,520 --> 00:33:06,680
Speaker 1: the quasi public sector because you were a lot of

547
00:33:06,720 --> 00:33:11,760
Speaker 1: state owned enterprises, A lot of it is local authorities UM,

548
00:33:12,600 --> 00:33:15,360
Speaker 1: related to local authorities, activities in the real estate sector.

549
00:33:16,800 --> 00:33:20,880
Speaker 1: It could all be socialized. Very Chinese government has the

550
00:33:20,960 --> 00:33:23,800
Speaker 1: capacity to socialize at all. I mean they can absorb

551
00:33:23,920 --> 00:33:26,640
Speaker 1: the just treated it as all as one big giant

552
00:33:26,680 --> 00:33:29,560
Speaker 1: public sector, and their overall public sector debt is actually

553
00:33:29,600 --> 00:33:32,600
Speaker 1: quite low in China. So so let me let me

554
00:33:32,640 --> 00:33:35,840
Speaker 1: bring this back to the FED UM, and let me

555
00:33:35,960 --> 00:33:39,320
Speaker 1: let me ask you a counter factual. What would the

556
00:33:39,440 --> 00:33:42,840
Speaker 1: US economy, what would the global economy look like if

557
00:33:42,880 --> 00:33:46,560
Speaker 1: there wasn't the FEDS program of quantitative using and there

558
00:33:46,640 --> 00:33:49,640
Speaker 1: wasn't zero interest rate policy, what would the world look

559
00:33:49,680 --> 00:33:56,120
Speaker 1: like today? Well, most people would pat them on the back,

560
00:33:56,200 --> 00:33:59,560
Speaker 1: and I would to for for their actions during the downturn.

561
00:34:00,040 --> 00:34:04,360
Speaker 1: You know, if they if if credit intermediation that is

562
00:34:04,400 --> 00:34:08,040
Speaker 1: totally frozen, you know, the globe just shuts down. And

563
00:34:08,080 --> 00:34:11,320
Speaker 1: it did. You know. You also the stories about the

564
00:34:11,480 --> 00:34:13,920
Speaker 1: ships backed up at the Singapore Harbor that could be

565
00:34:14,000 --> 00:34:16,880
Speaker 1: unloaded because there was no trade, credit, etcetera, etcetera. So

566
00:34:17,080 --> 00:34:19,680
Speaker 1: they had to do whatever was necessary to free to

567
00:34:19,880 --> 00:34:24,040
Speaker 1: free up the credit system. UM, and they did that.

568
00:34:24,239 --> 00:34:29,640
Speaker 1: So que one absolutely, que two maybe a little less,

569
00:34:30,920 --> 00:34:33,799
Speaker 1: a little less, but you know, the economy was kind

570
00:34:33,800 --> 00:34:37,279
Speaker 1: of still looking a bit dodgy, and yeah, that was

571
00:34:37,320 --> 00:34:41,279
Speaker 1: probably okay. Q Que three not so much. I think

572
00:34:41,360 --> 00:34:45,600
Speaker 1: that was probably not necessary. Um twists you have twist

573
00:34:45,680 --> 00:34:51,880
Speaker 1: after that. Yeah, they've been in central backs generally, and

574
00:34:51,880 --> 00:34:54,320
Speaker 1: I wouldn't just pick out the FED obviously, the ECB

575
00:34:54,480 --> 00:34:58,479
Speaker 1: saying just getting increasingly desperate to to try and get

576
00:34:58,520 --> 00:35:02,880
Speaker 1: economic growth higher and doing more and more desperate things.

577
00:35:04,640 --> 00:35:07,080
Speaker 1: It's unfortunate. And I'm one of those who would agree

578
00:35:07,120 --> 00:35:10,440
Speaker 1: that monetary policy has been asked to do more than

579
00:35:10,480 --> 00:35:12,520
Speaker 1: it should have been asked to do. And it's meaning

580
00:35:12,520 --> 00:35:14,960
Speaker 1: that there should have been some fiscal policy at a

581
00:35:15,000 --> 00:35:18,640
Speaker 1: certain point taking over from Congress should have stepped in

582
00:35:18,680 --> 00:35:21,680
Speaker 1: and said, okay, we got it from here, Federal Reserve,

583
00:35:21,760 --> 00:35:23,920
Speaker 1: you've done your share. I mean, that's a sort of

584
00:35:24,000 --> 00:35:27,239
Speaker 1: hair shirt part of me that would argue. I think that, Look,

585
00:35:27,280 --> 00:35:30,640
Speaker 1: we had thirty years, three decades of rapid credit growth,

586
00:35:30,640 --> 00:35:33,560
Speaker 1: and I'm talking to the private secty years, which in

587
00:35:33,640 --> 00:35:37,799
Speaker 1: a sense stole growth from the future, and this is

588
00:35:37,800 --> 00:35:43,600
Speaker 1: payback time. Um, so we've got this slow recovery, but

589
00:35:43,640 --> 00:35:45,600
Speaker 1: it is any kind of recovery. We're kind of growing

590
00:35:45,600 --> 00:35:49,760
Speaker 1: at trend and to try and force force it higher

591
00:35:51,000 --> 00:35:55,640
Speaker 1: by creating, you know, distortions and asset markets. Trying to

592
00:35:55,880 --> 00:35:59,359
Speaker 1: restart a credit cycle when debt levels already still too

593
00:35:59,400 --> 00:36:02,080
Speaker 1: high might not be the right thing to do, and

594
00:36:02,160 --> 00:36:04,920
Speaker 1: maybe we should just accept Look, we're in a slow recovery.

595
00:36:05,320 --> 00:36:07,799
Speaker 1: That doesn't mean that government shouldn't do anything and just

596
00:36:07,840 --> 00:36:10,279
Speaker 1: set back. We've got issues of an equality and as

597
00:36:10,280 --> 00:36:12,640
Speaker 1: parts of the economy they're depressed. There's a lot we

598
00:36:12,719 --> 00:36:16,000
Speaker 1: could do in the US and overseas to make policy

599
00:36:16,040 --> 00:36:19,840
Speaker 1: about growth friendly without relying on monetary policy. Taxes, tax

600
00:36:19,880 --> 00:36:24,520
Speaker 1: reform obviously, I think regulations have become a big burden

601
00:36:25,200 --> 00:36:27,920
Speaker 1: on a lot of small businesses. So we could do

602
00:36:28,040 --> 00:36:31,160
Speaker 1: things to try and get a better economic outcome without

603
00:36:31,200 --> 00:36:33,920
Speaker 1: just continuing to rely so much of monit policy to

604
00:36:34,000 --> 00:36:39,120
Speaker 1: finracial markets and economists generally are way too obsessed with

605
00:36:39,200 --> 00:36:41,960
Speaker 1: monet to policy. If there's anything that drives me nuts

606
00:36:42,000 --> 00:36:44,879
Speaker 1: these days, among many things do, but it's just this

607
00:36:45,320 --> 00:36:51,279
Speaker 1: obsession with with when the federal raise rates and if

608
00:36:51,360 --> 00:36:53,880
Speaker 1: the nuance of every utterance that comes out of these

609
00:36:53,880 --> 00:36:58,520
Speaker 1: policymakers mouse, it doesn't matter that much. We've been speaking

610
00:36:58,520 --> 00:37:02,320
Speaker 1: with Martin Barnes. He's the chief economist at b c

611
00:37:02,560 --> 00:37:06,200
Speaker 1: A Research. If you enjoy this conversation, be sure and

612
00:37:06,280 --> 00:37:09,200
Speaker 1: stick around for our podcast extras, where we keep the

613
00:37:09,239 --> 00:37:14,720
Speaker 1: tape rolling and continue chatting about all things regarding the economy.

614
00:37:14,880 --> 00:37:18,400
Speaker 1: Be sure and check out my daily column on Bloomberg

615
00:37:18,480 --> 00:37:21,480
Speaker 1: View dot com. You can follow me on Twitter at

616
00:37:21,640 --> 00:37:25,000
Speaker 1: rid Halts. I'm Barry Rid Halts. You've been listening to

617
00:37:25,160 --> 00:37:28,839
Speaker 1: Masters in Business on Bloomberg Radio, brought to you by

618
00:37:28,880 --> 00:37:32,480
Speaker 1: Bank of America. Merrill Lynch committed to bringing higher finance

619
00:37:32,520 --> 00:37:35,600
Speaker 1: to lower carbon named the most innovative investment bank for

620
00:37:35,640 --> 00:37:39,320
Speaker 1: climate change and sustainability by the Banker. That's the power

621
00:37:39,360 --> 00:37:43,040
Speaker 1: of Global Connections. Bank of America North America Member f

622
00:37:43,120 --> 00:37:46,439
Speaker 1: D I C. Welcome to the podcast extra. I'm I'm

623
00:37:46,440 --> 00:37:49,279
Speaker 1: actually here with somebody who I think I know you

624
00:37:49,360 --> 00:37:54,080
Speaker 1: for a decade. Right. You've been going to Camp Coo

625
00:37:54,239 --> 00:37:57,920
Speaker 1: Talk up in Maine since I've been going since oh six,

626
00:37:58,440 --> 00:38:02,480
Speaker 1: you have to have been going be seven or something, So,

627
00:38:02,600 --> 00:38:04,680
Speaker 1: I mean that's where I first met you. I think

628
00:38:05,360 --> 00:38:07,319
Speaker 1: it was the first year you and I want first

629
00:38:07,400 --> 00:38:11,160
Speaker 1: years were there where we're there together, that's always a

630
00:38:11,200 --> 00:38:14,600
Speaker 1: ton of a ton of fun um before we get

631
00:38:14,600 --> 00:38:19,120
Speaker 1: into our standard questions. I have a handful of um things.

632
00:38:19,160 --> 00:38:22,600
Speaker 1: I have to uh, I have to get that that

633
00:38:22,719 --> 00:38:29,560
Speaker 1: I missed. Um on QUEI. So you said QUEWI one

634
00:38:29,920 --> 00:38:33,200
Speaker 1: and maybe QUI two was successful. Beyond that it was

635
00:38:33,440 --> 00:38:39,080
Speaker 1: it's been diminishing returns from monetary stimulus generally. I think

636
00:38:39,120 --> 00:38:43,879
Speaker 1: we're at the point here, yeah, where whatever problems are

637
00:38:43,880 --> 00:38:46,720
Speaker 1: out there facing the global economy or the U S economy,

638
00:38:46,760 --> 00:38:48,640
Speaker 1: I don't believe it's anything to do with the level

639
00:38:48,680 --> 00:38:51,280
Speaker 1: of interest rate. So when do you see those rates

640
00:38:51,600 --> 00:38:59,760
Speaker 1: returning to normal? And what would you describe normal? Well, um, yeah, gosh,

641
00:38:59,760 --> 00:39:03,720
Speaker 1: we used to think in the old days that five

642
00:39:04,440 --> 00:39:07,320
Speaker 1: four five was normal for the funds rate. How about

643
00:39:07,320 --> 00:39:09,360
Speaker 1: the ten years? Maybe it's two to three. Well, the

644
00:39:09,400 --> 00:39:14,080
Speaker 1: all rule of thumb was ten year plus inflation just

645
00:39:14,239 --> 00:39:17,359
Speaker 1: the normal nominal growth of the nominal GDP growth was

646
00:39:17,600 --> 00:39:21,239
Speaker 1: kind of a ballpark. And if trained growth was two

647
00:39:21,280 --> 00:39:23,600
Speaker 1: and a half and two to half percent fla there

648
00:39:23,600 --> 00:39:26,200
Speaker 1: for four to four and a half fish would would

649
00:39:26,239 --> 00:39:30,440
Speaker 1: be the right level for bone eels. Um, Well, growth

650
00:39:30,480 --> 00:39:33,319
Speaker 1: is lower now, maybe we might still get the two

651
00:39:33,320 --> 00:39:37,759
Speaker 1: percent flation eventually. Um, But it's probably you know, three

652
00:39:37,800 --> 00:39:42,080
Speaker 1: and a half to four or even or even three. Yeah,

653
00:39:42,160 --> 00:39:44,160
Speaker 1: And so let me put you on the spot, because

654
00:39:44,160 --> 00:39:48,400
Speaker 1: you're in the forecasting business. So what's the date when

655
00:39:48,560 --> 00:39:53,960
Speaker 1: when the FED funds rate hits three nine? How far

656
00:39:54,040 --> 00:39:56,640
Speaker 1: out do you see that happening? Well, let me ask

657
00:39:56,680 --> 00:40:00,640
Speaker 1: you different this way. Are we gonna see an increase

658
00:40:00,719 --> 00:40:04,080
Speaker 1: before the years over we're having this? This is late September.

659
00:40:05,760 --> 00:40:07,959
Speaker 1: Is it going to be uh? I mean I think

660
00:40:08,040 --> 00:40:11,080
Speaker 1: they should. Percially, I don't think it matters a whole

661
00:40:11,080 --> 00:40:14,919
Speaker 1: lot of twenty five basis point halfe is neither here

662
00:40:14,960 --> 00:40:18,919
Speaker 1: nor there. The economy doesn't really need it. I think

663
00:40:18,960 --> 00:40:21,759
Speaker 1: they should do it just just to get it over

664
00:40:21,800 --> 00:40:24,759
Speaker 1: with so well. I mean, unfortunately, if if they do,

665
00:40:24,840 --> 00:40:26,800
Speaker 1: we'll still have the will they won't really just appreciate

666
00:40:26,960 --> 00:40:33,640
Speaker 1: they've got to um break this perception of their slaves

667
00:40:33,640 --> 00:40:36,960
Speaker 1: to the market. Yes, and of the market's not discounting it.

668
00:40:37,040 --> 00:40:40,000
Speaker 1: We can't do it, and they've got to get over that.

669
00:40:39,840 --> 00:40:42,239
Speaker 1: That traces back to green Span, and I think it's

670
00:40:42,239 --> 00:40:45,480
Speaker 1: a huge mistake the FED mad and they've enough dissension

671
00:40:45,840 --> 00:40:50,000
Speaker 1: within the FED I think just in terms of keeping

672
00:40:50,120 --> 00:40:53,640
Speaker 1: some of the discontents happy to do it that way

673
00:40:53,680 --> 00:40:55,640
Speaker 1: as well. I think they're a little bit out of

674
00:40:55,680 --> 00:40:59,840
Speaker 1: control U in terms, Janet has lost control of the

675
00:40:59,840 --> 00:41:04,480
Speaker 1: the group. Just because there were three descents. That's that.

676
00:41:04,480 --> 00:41:07,840
Speaker 1: That looks like healthy generally, just about talking goes on

677
00:41:08,280 --> 00:41:13,719
Speaker 1: and different opinions. This would never happen with Vulker, well

678
00:41:13,800 --> 00:41:16,400
Speaker 1: now he pa, and it wouldn't even have happened with

679
00:41:16,440 --> 00:41:19,200
Speaker 1: Ben BERNANKI actually, and what about green Span? What it

680
00:41:19,280 --> 00:41:23,719
Speaker 1: happened with green Span? Remember green Span? I mean there

681
00:41:23,800 --> 00:41:27,799
Speaker 1: was a big difference between Greenspan's first half first half

682
00:41:27,800 --> 00:41:29,640
Speaker 1: of his term. In the second half there was a

683
00:41:29,640 --> 00:41:32,719
Speaker 1: reasonable number of descents. So the first half, second half

684
00:41:32,719 --> 00:41:35,839
Speaker 1: of them, you did not dare contradict the maestro. They

685
00:41:35,840 --> 00:41:40,360
Speaker 1: became very anti democratic, and I think Burnanky changed that

686
00:41:40,480 --> 00:41:43,719
Speaker 1: for the better. But Burnanky wasn't as democratic as many

687
00:41:43,719 --> 00:41:47,000
Speaker 1: people think. I mean, I was chatting, we just had

688
00:41:47,000 --> 00:41:49,120
Speaker 1: our conference here and we had a former Fed governor

689
00:41:49,160 --> 00:41:52,880
Speaker 1: there and he was Burnanky ruled the Fed with a

690
00:41:52,960 --> 00:41:57,280
Speaker 1: much stronger film than is the popular perception. That's very interesting.

691
00:41:57,600 --> 00:42:00,919
Speaker 1: A lot of people are unaware that member green Spin

692
00:42:01,000 --> 00:42:04,560
Speaker 1: started in eight summer of eighty seven, and I think

693
00:42:04,640 --> 00:42:09,120
Speaker 1: was either ninety or nine one. In between meetings on

694
00:42:09,200 --> 00:42:12,799
Speaker 1: his own, he raised he lowered interest rates. That was

695
00:42:12,880 --> 00:42:15,880
Speaker 1: something the FED chair was allowed to do, and the

696
00:42:15,960 --> 00:42:19,719
Speaker 1: f O m C slapped his wrist and removed that authority. Uh.

697
00:42:19,880 --> 00:42:22,680
Speaker 1: That was very early in his career. As you said

698
00:42:22,680 --> 00:42:25,840
Speaker 1: in the latter half, he was the maestro and no

699
00:42:25,920 --> 00:42:28,400
Speaker 1: one challenge was on such a high pedestal, which was

700
00:42:28,440 --> 00:42:32,759
Speaker 1: unjustified by the way. I completely agree, highly highly overrated.

701
00:42:32,800 --> 00:42:36,640
Speaker 1: So let me ask you a related question. Who do

702
00:42:36,640 --> 00:42:39,120
Speaker 1: you think was the most effective FED chair and who

703
00:42:39,120 --> 00:42:42,680
Speaker 1: do you think is the is the person who really

704
00:42:42,760 --> 00:42:48,160
Speaker 1: understood the job the best? Well you have to see Vulcari,

705
00:42:48,560 --> 00:42:52,400
Speaker 1: I don't, but I want you to. I agree with

706
00:42:52,440 --> 00:42:55,680
Speaker 1: he did the hard work. He did the hard work.

707
00:42:55,840 --> 00:42:58,960
Speaker 1: We're gonna crank up rates, cause a recession, break the

708
00:42:58,960 --> 00:43:02,200
Speaker 1: back of inflation, and begin a thirty year bondman. I

709
00:43:02,320 --> 00:43:05,439
Speaker 1: just spent an hour into having this kind of chat

710
00:43:05,480 --> 00:43:07,960
Speaker 1: with him actually at our conference which we had earlier

711
00:43:08,000 --> 00:43:11,839
Speaker 1: this week. And I mean, he is a product of

712
00:43:11,920 --> 00:43:15,640
Speaker 1: his time, and any inflation at all to him is

713
00:43:15,680 --> 00:43:20,200
Speaker 1: still anathema. Absolutely, and also to the idea that the

714
00:43:20,200 --> 00:43:23,319
Speaker 1: center back should raise their inflation targets from two now

715
00:43:23,400 --> 00:43:26,200
Speaker 1: to three or four. He thinks it's just crazy. Negative

716
00:43:26,200 --> 00:43:29,200
Speaker 1: interest rates don't make any sense to him, So for him,

717
00:43:29,239 --> 00:43:33,719
Speaker 1: inflation is still evil. Um. I don't have quite as

718
00:43:33,080 --> 00:43:36,160
Speaker 1: a stronger view as he does, but he he was

719
00:43:36,200 --> 00:43:40,240
Speaker 1: the guy that said in motion a sea change in

720
00:43:40,239 --> 00:43:43,560
Speaker 1: in the global economic environment for the better. So so

721
00:43:43,640 --> 00:43:47,439
Speaker 1: let's let's follow up on that. We we've seen both

722
00:43:47,440 --> 00:43:51,279
Speaker 1: in the United States and especially in the UK and

723
00:43:51,480 --> 00:43:55,920
Speaker 1: parts of Europe, the austerity movement movement. I think it

724
00:43:56,600 --> 00:43:59,920
Speaker 1: precisely the wrong time where where there's a need, when

725
00:44:00,040 --> 00:44:04,240
Speaker 1: private sector demand is soft, as as Lord Kin's had

726
00:44:04,239 --> 00:44:07,560
Speaker 1: has taught us, the government should step in and replace

727
00:44:07,640 --> 00:44:10,759
Speaker 1: that demands, and when it's strong, the government should step

728
00:44:10,800 --> 00:44:12,920
Speaker 1: out of the way. Do you agree with that? Do

729
00:44:12,960 --> 00:44:16,560
Speaker 1: you think the Austerians had it all wrong? And have

730
00:44:16,800 --> 00:44:23,240
Speaker 1: they been a drag on the economic recovery in some places?

731
00:44:23,280 --> 00:44:28,520
Speaker 1: But don't forget we had massive stimulus during the downturn

732
00:44:30,200 --> 00:44:34,720
Speaker 1: nine so the austerity in the sense was just pulling

733
00:44:34,800 --> 00:44:39,520
Speaker 1: back from that dream levels of stimulus that we had

734
00:44:39,920 --> 00:44:45,120
Speaker 1: in terms of the Eurozone. Yeah, absolutely, it was bad. Yes,

735
00:44:45,440 --> 00:44:48,640
Speaker 1: I mean, knew made a bad situation worse. You know,

736
00:44:48,920 --> 00:44:51,600
Speaker 1: when countries are already on their knees, you know, just

737
00:44:51,640 --> 00:44:54,520
Speaker 1: trying to to to force a sterity on them just

738
00:44:55,520 --> 00:45:01,759
Speaker 1: takes a bad situation, have they Has anybody in Europe learned? So?

739
00:45:02,000 --> 00:45:06,880
Speaker 1: I think? So, I mean the Europe. Yeah, the Europe

740
00:45:06,920 --> 00:45:11,320
Speaker 1: has now loosened the constraints on fiscal policy to some degree.

741
00:45:11,360 --> 00:45:13,839
Speaker 1: So I think we've turned the corner on that. I mean,

742
00:45:13,880 --> 00:45:18,080
Speaker 1: we're not radio anywhere really to launch massive fiscal stimulus,

743
00:45:18,640 --> 00:45:22,480
Speaker 1: but we're past the austerity for sure. Alright, So now

744
00:45:22,719 --> 00:45:26,400
Speaker 1: let's jump into my favorite podcast questions that I asked

745
00:45:26,400 --> 00:45:29,760
Speaker 1: all my guests, and I have people prep for so,

746
00:45:29,760 --> 00:45:32,120
Speaker 1: so tell us about some of your early mentors, who

747
00:45:32,760 --> 00:45:37,200
Speaker 1: who guided your career along. Well this might be a

748
00:45:37,360 --> 00:45:42,600
Speaker 1: slightly strange way to answer, but in a sense, my

749
00:45:42,640 --> 00:45:45,960
Speaker 1: mentors were more events than people. And by that I mean,

750
00:45:46,800 --> 00:45:49,680
Speaker 1: you know, I had a lot of Look, I've been

751
00:45:49,719 --> 00:45:51,600
Speaker 1: do this for over forty years, so I've been through

752
00:45:51,600 --> 00:45:54,680
Speaker 1: a lot of regime shifts in various areas where even

753
00:45:55,520 --> 00:45:57,800
Speaker 1: the people that might have been my mentors experienced people

754
00:45:57,880 --> 00:46:00,600
Speaker 1: were struggling along with everybody else what this all meant.

755
00:46:00,680 --> 00:46:03,640
Speaker 1: So it was new for everybody. So you know, we

756
00:46:03,719 --> 00:46:06,439
Speaker 1: talked earlier about how I joined BP in nineteen seventy three.

757
00:46:06,760 --> 00:46:10,279
Speaker 1: So going through that first oil crisis when everything had

758
00:46:10,320 --> 00:46:14,239
Speaker 1: to be shifted was there was nobody the technic to

759
00:46:14,400 --> 00:46:17,160
Speaker 1: mentor me through that because they hadn't been through themselves either.

760
00:46:17,360 --> 00:46:21,120
Speaker 1: That was a received shift. Living through the inflation of

761
00:46:21,160 --> 00:46:26,080
Speaker 1: the UK in the seventies UM where the unions were

762
00:46:26,280 --> 00:46:28,960
Speaker 1: running them up. We had the so called Winter of Discotheque.

763
00:46:28,960 --> 00:46:33,000
Speaker 1: There was strikes constantly. Even the labor government that was

764
00:46:33,040 --> 00:46:36,319
Speaker 1: empowered had lost control. That was a lesson in the

765
00:46:36,320 --> 00:46:40,520
Speaker 1: evils of steak your excessive socialism, if you like. And

766
00:46:40,560 --> 00:46:45,239
Speaker 1: then living through the Vulcar Thatcher years where we saw

767
00:46:45,280 --> 00:46:49,200
Speaker 1: a complete reversal. That's very interesting. You call it bringing

768
00:46:49,200 --> 00:46:52,920
Speaker 1: inflation back down again. You call it the Vulcar Thatcher years.

769
00:46:53,000 --> 00:46:57,240
Speaker 1: Everybody usually calls those the Reagan Thatcher years. You're giving

770
00:46:57,239 --> 00:47:01,080
Speaker 1: more credit to Vulcan than I guess I. I don't

771
00:47:01,080 --> 00:47:03,279
Speaker 1: disagree with you. I just think it's interesting. I never

772
00:47:03,320 --> 00:47:08,560
Speaker 1: hear people describe it that way. Who else was Look,

773
00:47:08,600 --> 00:47:11,640
Speaker 1: I've been lucky over the years, and it's partly because

774
00:47:11,680 --> 00:47:14,400
Speaker 1: b c A is a very well respected firm for

775
00:47:14,440 --> 00:47:17,080
Speaker 1: a very long time, to have met many, many smart people.

776
00:47:17,840 --> 00:47:20,160
Speaker 1: You know the Henry cow legends, if you like the

777
00:47:20,160 --> 00:47:23,839
Speaker 1: Henry Kaufman's Biggs is. I've met all these people who've

778
00:47:23,880 --> 00:47:26,799
Speaker 1: had them speaking our conferences. I've learned from them. I

779
00:47:26,840 --> 00:47:29,399
Speaker 1: guess if I had to pick one person, I mean,

780
00:47:29,480 --> 00:47:32,319
Speaker 1: obviously I've learned from lots of people. Tony Beck, who

781
00:47:32,480 --> 00:47:34,200
Speaker 1: was the principle of b c A, he's a guy

782
00:47:34,239 --> 00:47:38,400
Speaker 1: that hired me almost thirty years ago. What did I

783
00:47:38,480 --> 00:47:44,120
Speaker 1: learn from him? Well, BCS focus has always been, you know,

784
00:47:44,200 --> 00:47:47,840
Speaker 1: helping our clients. There's a big difference working for a

785
00:47:47,880 --> 00:47:50,680
Speaker 1: firm that's selling research to working from a broker which

786
00:47:50,719 --> 00:47:53,520
Speaker 1: just turns out bits of paper. So you have to

787
00:47:53,520 --> 00:47:56,359
Speaker 1: add value when people are paying hard cash for what

788
00:47:56,400 --> 00:47:59,680
Speaker 1: you're you're doing, and you have to pass the soapwat

789
00:48:01,200 --> 00:48:04,360
Speaker 1: because a lot of economists just write stuff just for

790
00:48:04,400 --> 00:48:06,560
Speaker 1: the sake of talking about the economy, as if the

791
00:48:06,560 --> 00:48:11,120
Speaker 1: economy is the end point? Who cares what the economy

792
00:48:11,160 --> 00:48:13,560
Speaker 1: is doing if there's no market significance to it. So

793
00:48:13,600 --> 00:48:16,799
Speaker 1: I very much learned to try and always have some

794
00:48:16,880 --> 00:48:20,919
Speaker 1: market implications of everything we wrote about, not necessarily short

795
00:48:21,000 --> 00:48:23,480
Speaker 1: term could be very long term, but bring it make

796
00:48:23,520 --> 00:48:27,319
Speaker 1: it relevant and I that's very much a lesson I

797
00:48:27,440 --> 00:48:29,880
Speaker 1: learned a b. C. A. So what son't you? So

798
00:48:30,400 --> 00:48:33,560
Speaker 1: you give an economic analysis and if the client says, so,

799
00:48:33,600 --> 00:48:37,560
Speaker 1: what test and if there there isn't a good answer,

800
00:48:37,640 --> 00:48:40,480
Speaker 1: then that's a bad analysis. Yeah that's not that's not

801
00:48:40,640 --> 00:48:44,239
Speaker 1: not maybe great analysis, it's just not value added. Yeah

802
00:48:44,360 --> 00:48:46,759
Speaker 1: what do I do with this? How doesn't help me

803
00:48:47,400 --> 00:48:49,640
Speaker 1: make my investment decisions? So that that was a good

804
00:48:49,760 --> 00:48:54,000
Speaker 1: lesson that from B. C. A. So let's talk about investors.

805
00:48:54,000 --> 00:48:58,279
Speaker 1: When investors do you admire and have influenced the way

806
00:48:58,320 --> 00:49:06,359
Speaker 1: you think? Um? Okay, look I'm very conservative. Um maybe

807
00:49:06,400 --> 00:49:11,080
Speaker 1: it's big Scottish whatever, um so I I'm not a

808
00:49:11,120 --> 00:49:14,560
Speaker 1: momentum high flying following fads. Get a guy, So I'm

809
00:49:14,560 --> 00:49:18,040
Speaker 1: watch more attracted to the the old style Peter Lynch

810
00:49:18,719 --> 00:49:21,000
Speaker 1: kind of view of investing, you know, investing for the

811
00:49:21,040 --> 00:49:26,520
Speaker 1: long term. While you um, so people with that perspective,

812
00:49:27,239 --> 00:49:29,120
Speaker 1: you know, I guess you would put warm Buffett in

813
00:49:29,160 --> 00:49:34,640
Speaker 1: that category much more than the short term. Very clever traders.

814
00:49:35,520 --> 00:49:39,280
Speaker 1: John Paulson making a killing in the mortgage back wonderful.

815
00:49:39,360 --> 00:49:41,440
Speaker 1: I'd love to be able to do that. But it's

816
00:49:41,480 --> 00:49:45,720
Speaker 1: not gonna happen. But what happened. So let's let's shift

817
00:49:45,960 --> 00:49:48,880
Speaker 1: gears a little bit and talk about your favorite books,

818
00:49:49,760 --> 00:49:53,080
Speaker 1: whether it's investing, were lated or not, fiction or not fiction?

819
00:49:53,560 --> 00:49:56,640
Speaker 1: What books, um do you enjoy? What books would you recommend?

820
00:49:57,640 --> 00:50:00,600
Speaker 1: I was brought up with in a household where books

821
00:50:00,600 --> 00:50:05,280
Speaker 1: were everywhere, so I've always enjoyed reading um trash as

822
00:50:05,320 --> 00:50:09,839
Speaker 1: as well as inter quality stuff. So give us an example. Well,

823
00:50:10,080 --> 00:50:12,480
Speaker 1: forget the trash, but I mean, you think my favorite

824
00:50:12,520 --> 00:50:15,600
Speaker 1: book from going back to the most serious investment stuff

825
00:50:15,640 --> 00:50:20,520
Speaker 1: that I think anybody going into our business should should read.

826
00:50:21,239 --> 00:50:23,080
Speaker 1: It was written quite a while ago now as Charles

827
00:50:23,160 --> 00:50:26,640
Speaker 1: gound Berger's Manias, Panics and Crashes. Sure, it's a wonderful

828
00:50:26,680 --> 00:50:31,840
Speaker 1: read and just describing, you know, how these market overshoots

829
00:50:31,840 --> 00:50:36,399
Speaker 1: and crashes occurred. It wonderful anecdotes, It's easy to read.

830
00:50:36,440 --> 00:50:39,799
Speaker 1: It's not a huge home he said to reading. That's

831
00:50:39,840 --> 00:50:44,480
Speaker 1: one of my favorites. Another kind of freely obscure book

832
00:50:44,520 --> 00:50:46,759
Speaker 1: that nobody paid any attention to when it first came out.

833
00:50:47,120 --> 00:50:49,160
Speaker 1: It kind of got popular a few years ago when

834
00:50:49,239 --> 00:50:54,800
Speaker 1: Quee started was buy an obscure Scottish guy called Adam Fergus.

835
00:50:54,880 --> 00:50:57,520
Speaker 1: He wrote this book called When Money Dies, and it

836
00:50:57,560 --> 00:51:01,160
Speaker 1: was about German hyper inflation. Yes, I again, not particularly

837
00:51:01,200 --> 00:51:05,719
Speaker 1: well written actually, but wonderful anecdotes. Um, I actually have

838
00:51:05,800 --> 00:51:08,319
Speaker 1: them on my bookshelf and I've never read it. It's

839
00:51:08,880 --> 00:51:13,399
Speaker 1: it's got great anecdotes. Yeah, as it's not. He wasn't

840
00:51:13,440 --> 00:51:15,879
Speaker 1: a gifted writer, but it's it's not a big book.

841
00:51:16,680 --> 00:51:23,080
Speaker 1: But in terms of understanding the destructiveness of inflation, um, yeah,

842
00:51:23,600 --> 00:51:26,200
Speaker 1: that's good. I think in terms of what we've been

843
00:51:26,239 --> 00:51:29,120
Speaker 1: we went through the crash. There's so many books about

844
00:51:29,120 --> 00:51:32,279
Speaker 1: the crash, and of course somebody called Barrier It Holds

845
00:51:32,480 --> 00:51:36,120
Speaker 1: wrote one about bailouts Bailout Nation. Yes I've heard of that,

846
00:51:36,160 --> 00:51:38,840
Speaker 1: but yeah, you've heard of that one. But I liked

847
00:51:39,239 --> 00:51:42,919
Speaker 1: David Wessel's book and Fed We Trust in terms of

848
00:51:42,960 --> 00:51:47,040
Speaker 1: again it's a very easy read. It kind of takes

849
00:51:47,080 --> 00:51:49,440
Speaker 1: you into what it must have been like at the

850
00:51:49,440 --> 00:51:52,880
Speaker 1: FED during that period, with a sleepless night and the

851
00:51:52,960 --> 00:51:55,080
Speaker 1: panic and every day you go into the office and

852
00:51:55,640 --> 00:51:59,000
Speaker 1: something some other ghastly thing has happened. So that's I

853
00:51:59,040 --> 00:52:01,439
Speaker 1: find that's a good way of capturing what it must

854
00:52:01,440 --> 00:52:03,520
Speaker 1: have been like to be in affair at that time.

855
00:52:04,040 --> 00:52:07,319
Speaker 1: A very recent one that I read is Mervin King,

856
00:52:07,440 --> 00:52:10,960
Speaker 1: the most recent governor of the Bank of England. It's

857
00:52:11,000 --> 00:52:14,239
Speaker 1: called End of Alchemy. The only in it's a little

858
00:52:14,239 --> 00:52:18,400
Speaker 1: bit self serving. Um. I think it's a good, good book.

859
00:52:18,400 --> 00:52:20,480
Speaker 1: But I wish he had kind of said those things

860
00:52:20,760 --> 00:52:22,879
Speaker 1: publicly when he was Governor of the Bank England. Why

861
00:52:22,960 --> 00:52:25,400
Speaker 1: is he seeing them now? I mean it's kind of

862
00:52:25,440 --> 00:52:27,920
Speaker 1: written as if he had always known this stuff. And

863
00:52:27,960 --> 00:52:30,040
Speaker 1: if he did always know this stuff, he didn't certainly

864
00:52:30,080 --> 00:52:32,880
Speaker 1: act on a part of it. It's supposed to be

865
00:52:33,080 --> 00:52:36,120
Speaker 1: a good breed too. It's good. It's good little ms

866
00:52:36,120 --> 00:52:40,239
Speaker 1: of non I guess you know. In the UK they

867
00:52:40,239 --> 00:52:42,759
Speaker 1: have this wonderful thing called desert Desert Island discs. If

868
00:52:42,760 --> 00:52:44,520
Speaker 1: you have to go to the island, so you could

869
00:52:44,520 --> 00:52:47,280
Speaker 1: say that a Desert Island book for me. I suppose

870
00:52:47,280 --> 00:52:51,400
Speaker 1: it would be Catched twenty two Joseph Heller. That's some catch.

871
00:52:51,440 --> 00:52:57,200
Speaker 1: That catch just a good way of capturing the insanity

872
00:52:57,239 --> 00:53:01,640
Speaker 1: of life. Sometimes you just can't win in life, the

873
00:53:01,680 --> 00:53:05,640
Speaker 1: insanity of war, of military organizations, of large institutions. The

874
00:53:05,680 --> 00:53:07,880
Speaker 1: only way to get out is you're insane. But if

875
00:53:07,920 --> 00:53:10,319
Speaker 1: you see you're insane as a way of getting out,

876
00:53:10,360 --> 00:53:12,279
Speaker 1: then you're obviously not insane for figuring that one out.

877
00:53:12,320 --> 00:53:15,000
Speaker 1: So you're screwed. Part I'm not supposed to say that. Well,

878
00:53:15,000 --> 00:53:16,560
Speaker 1: now we're in the podcast, so we could get a

879
00:53:16,600 --> 00:53:20,080
Speaker 1: little O. The FCC limits what we can say on

880
00:53:20,120 --> 00:53:24,880
Speaker 1: the broadcast portion. But since used that word, very bad. Um,

881
00:53:25,920 --> 00:53:29,360
Speaker 1: actually that was mild. We've had people O. My reading

882
00:53:29,400 --> 00:53:33,320
Speaker 1: tastes are very clctic much. A slightly bizarre trilogy is

883
00:53:33,320 --> 00:53:37,760
Speaker 1: called the Gorman Gas Trilogy by Mervin Peak Gorman Gas.

884
00:53:37,920 --> 00:53:40,880
Speaker 1: I've never even heard. It's a kind of slightly fantasy.

885
00:53:41,000 --> 00:53:43,040
Speaker 1: I was gonna say it's sound sci fi. It's not

886
00:53:43,120 --> 00:53:45,920
Speaker 1: sci fi, but it's fantasy that the less. It's a

887
00:53:46,000 --> 00:53:51,839
Speaker 1: sort of medievally kind of. I think that the descriptive

888
00:53:51,920 --> 00:53:55,759
Speaker 1: writing is hard to beat. I mean, you're almost feel

889
00:53:55,760 --> 00:53:59,440
Speaker 1: as if you're there. But he describes scenes and environments

890
00:53:59,480 --> 00:54:03,240
Speaker 1: and character her is. It's the most brilliant descriptive really,

891
00:54:03,640 --> 00:54:07,440
Speaker 1: and it's kind of a it's a gripping thing to

892
00:54:07,440 --> 00:54:12,120
Speaker 1: read as well, very obscure. Um, that's probably enough books.

893
00:54:12,320 --> 00:54:14,200
Speaker 1: All right, I'm gonna ask you a question. I don't

894
00:54:14,200 --> 00:54:17,600
Speaker 1: get to ask many guests, what are your favorite Netflix

895
00:54:17,640 --> 00:54:22,120
Speaker 1: shows that you've been watching? Just finished watching the second season.

896
00:54:22,160 --> 00:54:25,160
Speaker 1: And Arcles, which is you know, Pablosco Bar, which I

897
00:54:25,200 --> 00:54:27,880
Speaker 1: thought everybody seems to love. That is very well done.

898
00:54:29,200 --> 00:54:31,960
Speaker 1: There's violence in there, but I don't think it's protuitous,

899
00:54:32,080 --> 00:54:36,040
Speaker 1: because that's what happened, you know, like that. There's some

900
00:54:36,239 --> 00:54:42,440
Speaker 1: great BBC or British um detectively kind of ones. Is

901
00:54:42,440 --> 00:54:51,120
Speaker 1: one called Happy Valley, which is superb excellent series. Uh,

902
00:54:51,360 --> 00:54:55,799
Speaker 1: Swedish Danish co production called The Bridge. There's three seasons

903
00:54:55,840 --> 00:55:00,160
Speaker 1: of it. Bridge. It's called The Bridge. Is that they

904
00:55:00,200 --> 00:55:02,640
Speaker 1: might have done a US remake of it. I don't know.

905
00:55:02,760 --> 00:55:06,279
Speaker 1: I would watch the original. It's subtitles, but the characters

906
00:55:06,360 --> 00:55:10,359
Speaker 1: are so fantastic. There's a principal woman characters that she's

907
00:55:10,400 --> 00:55:14,040
Speaker 1: amazing and it's a great gripping story to very watchable.

908
00:55:14,239 --> 00:55:17,840
Speaker 1: The Bridge is that Netflix or Amazon Prime. Netflix. There's

909
00:55:17,920 --> 00:55:21,399
Speaker 1: three seasons of that. Give me give me one more,

910
00:55:23,160 --> 00:55:31,880
Speaker 1: um god, one more Silk. There's another British one about Lawyer. Uh.

911
00:55:32,920 --> 00:55:36,319
Speaker 1: You know it's funny you mentioned um Happy Valley. When

912
00:55:36,360 --> 00:55:39,279
Speaker 1: I moved out of the city to Suburbia. I don't know.

913
00:55:39,760 --> 00:55:45,240
Speaker 1: Fifteen years ago, I was aghasted that the local cable

914
00:55:45,320 --> 00:55:49,719
Speaker 1: company did not carry BBC America. So and I was

915
00:55:49,760 --> 00:55:51,640
Speaker 1: a big fan of Doctor Who when I was a

916
00:55:51,640 --> 00:55:54,960
Speaker 1: big fan. So everybody knows about top gear today, but

917
00:55:55,120 --> 00:55:59,360
Speaker 1: fifteen years ago, other than a few Anglophiles, most Americans

918
00:55:59,400 --> 00:56:02,360
Speaker 1: didn't know what top gear was. So I started hunting

919
00:56:02,400 --> 00:56:04,920
Speaker 1: for how the heck can I get top gear? And

920
00:56:04,960 --> 00:56:09,560
Speaker 1: it turned out that Dish Satellite Networks offord top gear.

921
00:56:10,000 --> 00:56:13,239
Speaker 1: So as long once I moved out of Manhattan, I've

922
00:56:13,280 --> 00:56:16,640
Speaker 1: had satellite TV. And now I think you get BBC

923
00:56:16,680 --> 00:56:20,839
Speaker 1: America just about everywhere, but for a long time it

924
00:56:20,920 --> 00:56:25,839
Speaker 1: wasn't available of American Well, I see Star Trekkers on it,

925
00:56:26,480 --> 00:56:28,600
Speaker 1: but but there's a ton of science fiction and there's

926
00:56:28,640 --> 00:56:32,040
Speaker 1: a ton of really interesting stuff on it. And half

927
00:56:32,080 --> 00:56:37,279
Speaker 1: of the United States television is influenced by There was

928
00:56:37,320 --> 00:56:39,919
Speaker 1: a show that was so funny called Coupling. I don't

929
00:56:39,920 --> 00:56:43,400
Speaker 1: know if you recall that. It was like it was Friends,

930
00:56:44,000 --> 00:56:48,640
Speaker 1: but funnier and so hilarious. By the way, I mean,

931
00:56:49,160 --> 00:56:51,880
Speaker 1: the Netflix in Canada is different. We don't get the

932
00:56:51,920 --> 00:56:56,000
Speaker 1: same content, much less content, So I assume that the

933
00:56:56,080 --> 00:56:59,160
Speaker 1: series I mentioned are available in the US. Obviously Narcos is.

934
00:56:59,280 --> 00:57:03,600
Speaker 1: But so so let's let's turn back to your career

935
00:57:03,640 --> 00:57:06,759
Speaker 1: for the last few questions. What what is the most

936
00:57:06,760 --> 00:57:10,719
Speaker 1: significant change you see in economics since you joined the

937
00:57:15,880 --> 00:57:21,080
Speaker 1: information overload data overload? Look, when I started, so when

938
00:57:21,080 --> 00:57:23,160
Speaker 1: I was in BP DE sivties and even when I

939
00:57:23,160 --> 00:57:27,080
Speaker 1: was in with Mackenzie in the eighties, I had to

940
00:57:27,080 --> 00:57:31,840
Speaker 1: follow the U S economy. Um there was no Internet,

941
00:57:31,880 --> 00:57:35,200
Speaker 1: of course, the data we had to do, the forecasts

942
00:57:35,200 --> 00:57:38,160
Speaker 1: and analys we had to wait for stuff to come

943
00:57:38,160 --> 00:57:42,240
Speaker 1: into mail. Really called the Survey of Current Businesses by

944
00:57:42,280 --> 00:57:44,560
Speaker 1: the Department of Commerce with all the GDP data in it,

945
00:57:45,040 --> 00:57:47,200
Speaker 1: which is forms the basis of any understanding of the

946
00:57:47,200 --> 00:57:50,640
Speaker 1: economy that came out in the mail with an enormous lag,

947
00:57:51,880 --> 00:57:55,200
Speaker 1: enormous lag, you know, in terms of the monthly inflation data,

948
00:57:55,240 --> 00:57:58,040
Speaker 1: employment data. Didn't really focus too much on that. You

949
00:57:58,120 --> 00:58:01,560
Speaker 1: might get some headlines from the from the newspapers, but

950
00:58:01,640 --> 00:58:05,280
Speaker 1: there's no way of getting all the detail of that. UM.

951
00:58:05,920 --> 00:58:09,840
Speaker 1: So now now we're just BESIEG. You can get any

952
00:58:09,920 --> 00:58:12,920
Speaker 1: data you want from anywhere in the world instantly, in

953
00:58:13,000 --> 00:58:15,800
Speaker 1: more detail than you can get time to analyze. And

954
00:58:15,840 --> 00:58:19,240
Speaker 1: I would ask you this, has our understanding of how

955
00:58:19,280 --> 00:58:24,040
Speaker 1: the economy works improved or are the quality of our

956
00:58:24,160 --> 00:58:28,440
Speaker 1: forecast any better despite having all this data, And I

957
00:58:28,480 --> 00:58:32,720
Speaker 1: would say unequivocally absolutely not. And I spoke earlier about

958
00:58:32,760 --> 00:58:36,320
Speaker 1: this egregious policy era over the last few years. So

959
00:58:36,400 --> 00:58:39,240
Speaker 1: we're having all this data and that's all this information.

960
00:58:41,480 --> 00:58:44,080
Speaker 1: In some industries, big data allows you helps you do

961
00:58:44,160 --> 00:58:46,760
Speaker 1: things better. It's not obvious in the world of forecasting

962
00:58:46,840 --> 00:58:50,360
Speaker 1: that we have done a better job despite because we've

963
00:58:50,400 --> 00:58:55,040
Speaker 1: become so short term. People will spend more time parsing

964
00:58:55,480 --> 00:58:59,960
Speaker 1: the employment data than thinking about what are the really

965
00:59:00,120 --> 00:59:03,560
Speaker 1: important big issues here. So we've become way too short term,

966
00:59:04,160 --> 00:59:08,600
Speaker 1: way too focused on micro analyzing data, and not enough

967
00:59:08,600 --> 00:59:14,200
Speaker 1: focused on catching the big, secular structural shifts of what's

968
00:59:14,240 --> 00:59:17,000
Speaker 1: going on. And I think that applies to policy makers,

969
00:59:17,080 --> 00:59:21,800
Speaker 1: applies to economists, and it's too bad. And I'm not

970
00:59:21,880 --> 00:59:24,320
Speaker 1: confident that that's ever going to change now because we've

971
00:59:24,360 --> 00:59:28,840
Speaker 1: created this big data world and that's that's what it is.

972
00:59:29,280 --> 00:59:32,760
Speaker 1: I don't doubt that you might be right. I'm hoping

973
00:59:33,040 --> 00:59:38,000
Speaker 1: that that comprehension is simply coming with big lag, so

974
00:59:38,120 --> 00:59:42,360
Speaker 1: that will eventually adapt to the era of big data

975
00:59:42,520 --> 00:59:46,160
Speaker 1: with some understanding. But it's it's great. I love data

976
00:59:46,280 --> 00:59:49,720
Speaker 1: as I set up a junkie data and in some industries,

977
00:59:49,960 --> 00:59:52,040
Speaker 1: you know the retail industry, if you've got a minute

978
00:59:52,040 --> 00:59:56,600
Speaker 1: by minute information on what's selling and what's not great.

979
00:59:58,240 --> 01:00:02,360
Speaker 1: But in the research side, just like a deluge of numbers,

980
01:00:03,120 --> 01:00:06,080
Speaker 1: you spend all your time pouring over all these numbers

981
01:00:06,080 --> 01:00:09,240
Speaker 1: instead of just pushing them to the side and sitting

982
01:00:09,240 --> 01:00:11,520
Speaker 1: back and actually just thinking about things a bit more.

983
01:00:11,840 --> 01:00:14,040
Speaker 1: I'm with you on that. You know my thoughts on

984
01:00:14,080 --> 01:00:17,840
Speaker 1: non farm payroll. I think it's wildly overrated. And every

985
01:00:17,880 --> 01:00:20,080
Speaker 1: month we have the spasm and then a month later

986
01:00:20,120 --> 01:00:22,680
Speaker 1: than numbers are just it's just that we have access

987
01:00:22,800 --> 01:00:28,760
Speaker 1: to whatever this data times all over the world, so

988
01:00:28,800 --> 01:00:31,000
Speaker 1: if it's there, you gotta look at it and spend

989
01:00:31,040 --> 01:00:34,560
Speaker 1: all your time just looking at data and not enough

990
01:00:34,640 --> 01:00:37,800
Speaker 1: time thinking about stuff. Let me let me change up

991
01:00:38,080 --> 01:00:40,240
Speaker 1: gears a little bit on you. This is a question

992
01:00:40,320 --> 01:00:44,440
Speaker 1: that that comes from a couple of readers. Have you

993
01:00:44,480 --> 01:00:47,600
Speaker 1: know I asked the same eight or nine questions to

994
01:00:47,720 --> 01:00:51,080
Speaker 1: all my guests, and then a couple of readers have

995
01:00:51,160 --> 01:00:54,200
Speaker 1: come up with some suggestions and these are Uh, this

996
01:00:54,280 --> 01:00:58,240
Speaker 1: question I thought was interesting enough that I've worked it

997
01:00:58,280 --> 01:01:00,880
Speaker 1: into our regular questions. And so what do you do

998
01:01:01,080 --> 01:01:02,880
Speaker 1: to relax? What do you do when you're not in

999
01:01:02,920 --> 01:01:08,200
Speaker 1: the office looking at a numbers. I like being outdoors,

1000
01:01:08,320 --> 01:01:11,520
Speaker 1: which is great given that I live on the Pacific Northwest,

1001
01:01:11,560 --> 01:01:13,960
Speaker 1: so I try not to fall off. I did fall

1002
01:01:14,000 --> 01:01:15,520
Speaker 1: off two years ago and broke my hip, but I

1003
01:01:15,600 --> 01:01:19,200
Speaker 1: remember that's another story. I mean to hiking and biking.

1004
01:01:19,680 --> 01:01:24,840
Speaker 1: Um taking up bridge again, which I would play pretty badly,

1005
01:01:24,920 --> 01:01:27,760
Speaker 1: but I'm getting slowly better. Don't know if you could

1006
01:01:27,760 --> 01:01:31,240
Speaker 1: play with Bill Gates and warm but league. And I've

1007
01:01:31,240 --> 01:01:35,240
Speaker 1: started playing this game which you don't I think no about,

1008
01:01:35,240 --> 01:01:37,480
Speaker 1: called pickle ball, but some of your listeners will know

1009
01:01:37,560 --> 01:01:39,560
Speaker 1: what this is. It's actually one of the fastest growing

1010
01:01:41,040 --> 01:01:43,880
Speaker 1: games in North America. And it's played with it like

1011
01:01:43,920 --> 01:01:46,480
Speaker 1: a cross between table tennis and real tennis. And it's

1012
01:01:46,520 --> 01:01:50,200
Speaker 1: played indoors, outdoors with a bat and a bat not

1013
01:01:50,280 --> 01:01:54,280
Speaker 1: a rattle. Yeah, a bat or paddle if you like. Um,

1014
01:01:54,280 --> 01:01:56,320
Speaker 1: So we have that a whiffle kind of a whiffle ball,

1015
01:01:56,360 --> 01:01:57,960
Speaker 1: and it's basically getting the ball over the net and

1016
01:01:57,960 --> 01:02:00,680
Speaker 1: win the points. But it's it's less a head, it's

1017
01:02:00,680 --> 01:02:02,840
Speaker 1: not as fast moving as tedor so it's for aging

1018
01:02:02,880 --> 01:02:04,800
Speaker 1: people like me. It's easier on your body, but it's

1019
01:02:04,800 --> 01:02:10,240
Speaker 1: still demanding. It's fun. Pickleball, pickleball. All right, we'll have

1020
01:02:10,320 --> 01:02:12,320
Speaker 1: to check it out. We'll have to take a look

1021
01:02:12,320 --> 01:02:15,920
Speaker 1: at that traveling. I've got four grandkids. Now that's you know,

1022
01:02:16,800 --> 01:02:19,520
Speaker 1: so you take your mind off the market. Where where

1023
01:02:19,520 --> 01:02:23,120
Speaker 1: are your grandkids? What parts of the world? A married

1024
01:02:23,200 --> 01:02:27,440
Speaker 1: son in Toronto with two and a married daughter in Edinburgh,

1025
01:02:27,440 --> 01:02:30,320
Speaker 1: Scotland with with two. You are you back and forth

1026
01:02:30,360 --> 01:02:33,880
Speaker 1: to Scotland frequently? Yeah? She only relocated there from Switzerland

1027
01:02:33,920 --> 01:02:36,080
Speaker 1: at the beginning of this year. So I will be

1028
01:02:36,120 --> 01:02:40,360
Speaker 1: going back, yes, absolutely. And you you went to school

1029
01:02:40,400 --> 01:02:42,920
Speaker 1: not in Nninburgh, glass in Glasgow, so that's where I'm

1030
01:02:42,960 --> 01:02:45,880
Speaker 1: from originally was born in Glasgow. Yeah, So how often

1031
01:02:45,880 --> 01:02:48,480
Speaker 1: you get back to Scotland? Well, I will be going

1032
01:02:48,560 --> 01:02:52,000
Speaker 1: back at least twice a year, I would thinks there.

1033
01:02:52,800 --> 01:02:55,360
Speaker 1: So my last two questions and and these are my

1034
01:02:55,400 --> 01:02:59,080
Speaker 1: two favorites. I've saved for best for last. So if

1035
01:02:59,120 --> 01:03:02,200
Speaker 1: a millennial or recent college graduate came to you and

1036
01:03:02,240 --> 01:03:06,280
Speaker 1: said I'm interested in a career in economics, What sort

1037
01:03:06,320 --> 01:03:13,960
Speaker 1: of advice would you give them? Well, the profession has changed. Um,

1038
01:03:14,000 --> 01:03:17,120
Speaker 1: you know a lot of corporations have done away with

1039
01:03:17,160 --> 01:03:24,040
Speaker 1: the economics departments, and but you know that's still a

1040
01:03:24,120 --> 01:03:29,800
Speaker 1: good job, and go for it. But UM, be curious,

1041
01:03:31,040 --> 01:03:34,640
Speaker 1: don't be so short term, you know, don't get spent

1042
01:03:34,720 --> 01:03:37,160
Speaker 1: all your time poring over the employment data. Try and

1043
01:03:37,200 --> 01:03:41,800
Speaker 1: figure out what the big friends are. Be disciplined, read

1044
01:03:41,800 --> 01:03:46,320
Speaker 1: a lot, don't get locked, don't get locked into a view.

1045
01:03:46,480 --> 01:03:49,200
Speaker 1: Don't think you've got it figured out, because you haven't.

1046
01:03:49,640 --> 01:03:51,200
Speaker 1: I've been doing this for over forty years and I

1047
01:03:51,240 --> 01:03:54,520
Speaker 1: certainly haven't got it figured out. That that sounds like

1048
01:03:54,560 --> 01:03:58,960
Speaker 1: some pretty stupid advice. And our last question, what is

1049
01:03:59,000 --> 01:04:02,880
Speaker 1: it that you know about out economics and investing today

1050
01:04:02,920 --> 01:04:05,160
Speaker 1: that you wish you knew forty years ago when you

1051
01:04:05,200 --> 01:04:13,080
Speaker 1: were beginning. Oh gosh, well in terms of investing. Um,

1052
01:04:13,200 --> 01:04:16,680
Speaker 1: a simple one, I guess, And I know it's out

1053
01:04:16,720 --> 01:04:19,680
Speaker 1: there anyway. But keep your winners and get rid of

1054
01:04:19,680 --> 01:04:22,320
Speaker 1: your losers. And I remember we had a one of

1055
01:04:22,320 --> 01:04:27,000
Speaker 1: our conferences in and we had at least two speakers

1056
01:04:27,040 --> 01:04:31,160
Speaker 1: talking about tech h and they blew me away. They

1057
01:04:31,160 --> 01:04:33,960
Speaker 1: were just all the exciting things going on in tech

1058
01:04:34,040 --> 01:04:37,640
Speaker 1: and cell phones, and I thought, wow, this is really

1059
01:04:37,680 --> 01:04:40,760
Speaker 1: really cool stuff. I completely bought into it. I went

1060
01:04:40,800 --> 01:04:42,680
Speaker 1: out as soon as the conference was over and I

1061
01:04:42,720 --> 01:04:47,240
Speaker 1: bought Nokia, Microsoft and a O L. So you're almost

1062
01:04:47,240 --> 01:04:50,560
Speaker 1: back to break, even a Microsoft smart move. You're almost

1063
01:04:50,560 --> 01:04:54,600
Speaker 1: back to break. It was really smart. You went up

1064
01:04:54,640 --> 01:04:57,840
Speaker 1: in nine, you know, after I bought them, and more

1065
01:04:57,920 --> 01:05:01,480
Speaker 1: in ninety six and ninety seven they kept going up.

1066
01:05:01,520 --> 01:05:04,240
Speaker 1: And I can't remember when. In ninety seven in the

1067
01:05:04,280 --> 01:05:06,200
Speaker 1: first half, I thought, wow, they're going up a lot

1068
01:05:06,240 --> 01:05:08,840
Speaker 1: and made a bit of money here, so I sold them.

1069
01:05:08,880 --> 01:05:11,560
Speaker 1: I sold them before the real big game. I mean

1070
01:05:11,680 --> 01:05:14,840
Speaker 1: they went parabolic. Now I probably would never have been

1071
01:05:14,880 --> 01:05:16,520
Speaker 1: smart enough to get out at the top, but I

1072
01:05:17,280 --> 01:05:20,640
Speaker 1: just because I had made a a bit I sold.

1073
01:05:21,400 --> 01:05:22,880
Speaker 1: You should have held him another. I should have held

1074
01:05:22,920 --> 01:05:28,200
Speaker 1: them for longer. So keep your winners. I mean speak

1075
01:05:28,960 --> 01:05:31,920
Speaker 1: obviously sensitive to sides that things are changing. You can

1076
01:05:31,920 --> 01:05:35,800
Speaker 1: put technical stop losses and things and and you I

1077
01:05:35,880 --> 01:05:38,680
Speaker 1: have been in the past guilty of getting attached to losers.

1078
01:05:38,920 --> 01:05:42,120
Speaker 1: Oh well, maybe they'll come back. I've already lost so

1079
01:05:42,240 --> 01:05:46,120
Speaker 1: much as honestly, which is stupid again, not being disciplined.

1080
01:05:46,280 --> 01:05:48,960
Speaker 1: Nobody wants to admit that they're wrong, so they hold

1081
01:05:49,000 --> 01:05:52,080
Speaker 1: on to them. So I've been guilty of that classic problem,

1082
01:05:52,160 --> 01:05:55,160
Speaker 1: not being disciplined enough. And what about why I give

1083
01:05:55,240 --> 01:05:57,960
Speaker 1: most of my body to outside money management for him

1084
01:05:57,960 --> 01:05:59,520
Speaker 1: to look after because they do a better job than me.

1085
01:05:59,720 --> 01:06:01,840
Speaker 1: So what about on the economic side? What have you

1086
01:06:01,920 --> 01:06:06,040
Speaker 1: learned on the economic side that you wish you knew

1087
01:06:06,320 --> 01:06:10,920
Speaker 1: when you began? M hmm, that's a harder one to answer. Um,

1088
01:06:11,080 --> 01:06:17,600
Speaker 1: will wait, well, just again, uh would you say after

1089
01:06:17,880 --> 01:06:22,000
Speaker 1: that to your early question? Not to get locked into

1090
01:06:22,040 --> 01:06:28,040
Speaker 1: a view. Um, you know, forecasting is kind of all

1091
01:06:28,080 --> 01:06:33,480
Speaker 1: about looking to the past for guidance of you know,

1092
01:06:33,680 --> 01:06:36,600
Speaker 1: you're looking for sip piers or that look vaguely similar.

1093
01:06:36,800 --> 01:06:39,960
Speaker 1: This is what happened, then you assume, well, maybe that's

1094
01:06:39,960 --> 01:06:41,760
Speaker 1: what happened next time. And models are all based on

1095
01:06:41,800 --> 01:06:46,320
Speaker 1: past relationships. But we've been through such incredible structural shifts

1096
01:06:47,320 --> 01:06:50,080
Speaker 1: over the years that the past isn't a very good

1097
01:06:50,120 --> 01:06:52,120
Speaker 1: guide to the future, and that's why the models have

1098
01:06:52,160 --> 01:06:57,120
Speaker 1: all broken down. So be more sensitive to the fact

1099
01:06:57,240 --> 01:07:03,240
Speaker 1: that we're rapidly changing world and relying too much on

1100
01:07:03,360 --> 01:07:07,520
Speaker 1: what worked in the past is a mistake. I think

1101
01:07:07,600 --> 01:07:10,360
Speaker 1: that's a great answer, Martin. Thank you so much for

1102
01:07:10,400 --> 01:07:16,120
Speaker 1: being so generous with your time. I hope this wasn't

1103
01:07:16,160 --> 01:07:19,360
Speaker 1: all we have been speaking with Martin Barnes. He is

1104
01:07:19,400 --> 01:07:23,240
Speaker 1: the chief economist at bc A Research. He is also

1105
01:07:23,360 --> 01:07:27,240
Speaker 1: an amateur fisherman and a professional eel skinner. If you

1106
01:07:27,600 --> 01:07:30,800
Speaker 1: enjoy these conversations, be sure and look up an Inch

1107
01:07:30,880 --> 01:07:32,760
Speaker 1: or down an Inch on Apple iTunes and you can

1108
01:07:32,760 --> 01:07:36,080
Speaker 1: see any of the other hundred and seven or so

1109
01:07:36,480 --> 01:07:40,200
Speaker 1: podcasts we've done. I would be remiss if I did

1110
01:07:40,240 --> 01:07:46,000
Speaker 1: not mention a few things. We love your comments, feedbacks, suggestions, etcetera.

1111
01:07:46,440 --> 01:07:50,000
Speaker 1: Be sure to write to us at m IB podcast

1112
01:07:50,120 --> 01:07:53,680
Speaker 1: at Bloomberg dot net. I have to thank my booker

1113
01:07:53,720 --> 01:07:58,440
Speaker 1: Taylor Riggs, my producer Charlie Volmer, my engineer Reggie and

1114
01:07:58,520 --> 01:08:01,880
Speaker 1: my head of research Michael batt Nick. I'm Barry Ridolts.

1115
01:08:02,080 --> 01:08:05,680
Speaker 1: You've been listening to Masters in Business on Bloomberg Radio,

1116
01:08:06,320 --> 01:08:09,440
Speaker 1: brought to you by Bank of America. Merrill Lynch committed

1117
01:08:09,480 --> 01:08:12,480
Speaker 1: to bringing higher finance to lower carbon named the most

1118
01:08:12,560 --> 01:08:16,479
Speaker 1: innovative investment bank for climate change and Sustainability by the banker.

1119
01:08:16,840 --> 01:08:20,160
Speaker 1: That's the power of global connections. Bank of America North

1120
01:08:20,200 --> 01:08:21,840
Speaker 1: America member f D I C