Torsten Slok Discusses the Complexity of Global Economics

He is to me the modern incarnation of ed Hyman of I s I. He he sees the world from a very holistic perspective. He looks at the world of markets and the economy just from a very very broad perspective, and I just find um, he's one of the few economists that I'll look at a chart and I'll look at what he writes and I kind of scratched my head and say, that's that's fascinating. How did how did

I not see that before? How do I not understand this relationship between what otherwise is thought of as a small little piece, a little corner of the economy, and it turns out to be much more complicated, much more

sophisticated and much more interesting. I think you'll find this a tour to force conversation not only on the world of economics, but how economics intersects with markets, with stock investing, with bond investing, and how we should think about uh, what drives the economy and what drives the longer term cycles that affect pretty much everything. So strap yourself in get ready my conversation with Torsten Slock. My special guest

today is torched In Slock. He is the chief economist at Deutsche Bank Securities, where he has been toiling away since two thousand and five. The Deutsche Bank team, led by Mr Slock, has been top ranked by Institutional Investor for both fixed income and equities for the past five years running. Previously, he worked at the Organization of Economic Cooperation and Development in Paris and and before that he was at UH the i m F. He is a member of the Economic Club of New York. Educated at

both the University of Copenhagen and Princeton University. Torsten Slock, Welcome to Bloomberg. Thanks for having me Berry. So your background is really quite fascinating. You worked at the I m F, you worked at the O E c D.

What was it like transitioning to Wall Street. Well, that's a very important, very good question, and it was a bit of a culture shock coming from the I m F and the O c D, where you have a lot of time to sit and think in close the door office about very complicated problems, and you need to write papers for committees, you need to write reports for managers and for board meetings, and that process of really having a lot of time and a lot of resources

available to investigate something. It was a real luxury review today in the sense that you had in some cases several months to come up with an answer to why did you have a crisis, Why did home prices go down in one country? Why did the healthcare system not work in one country? So the short answer is that then at the O c D and I MF you really have time and energy and a lot of very

smart colleagues that you can debate things with. And getting to Wall Street, of course, was quite a turnaround where you suddenly have clients asking twenty seven questions that you have to answer in a few sentences. So in that sense, it was it was quite a different But in my

view and in my personal opinion. I found it incredibly stimulating that you had to use what you learned and what you were taught at these d n A I m F to come up with answers to incredibly difficult questions with a very few number of sentences, very very so what I'm hearing from you is a very different sense of urgency and a emphasis on brevity. So a very busy fund manager trader fill in the blank can digest the response quickly and then either add, subtract, or whatever,

change the portfolio based on your take exactly. Because the whole problem is that the and this is really important when you think about how the financial service industry is organized, that the sales side is really offering services. And what I do and we do in my group, is that we offer the service of having a view on what the economy will do, what mark it will do. And we also have great colleagues I have in Deutsche Bank

who offer views on rates, effects equities. And the bottom line of that is that there's just a lot of competition for air space for customers. So clients get three emails every day. So if you in some cases righte long winded explanations that say there's fifty fifty change that something might happen. Many customers will just not find that

particularly helpful. So in some cases we have to shop in the pencil and come up with answers that are particularly helpful for saying, what is it exactly that you're asking about? And at all boys down at the end of the tract, here is the answer. Are we buying or are we selling? Which sometimes can be a frustrating process, but nevertheless it turns out to be very important for getting your message across to clients in terms of helping them. And I get your research in my office and I

notice two specific things. Just about every day you put out a specific chart, often not just here's the SMP five dred, but typically it's a somewhat unusual will aspect of the economy that also sheds a lot of light on what's going on. And I'm always fascinated how you find these really eclectic. Oh gee, I hadn't thought about that sort of thing, but they're very interesting and they make you stop and think, hey, what is what is

really going on at the thirty ft view level? As opposed to kind of getting lost in the weeds and getting too specific and and lacking the ability to show the context. But you also do the big context pieces, the big monthly and quarterly chart books. Tell us how you developed that approach. Yah. Know, that's a very important issue.

I mean too. In my view, to be successful, you need to you need to get people's attention, not by saying I think this in pill go to some extreme level, either higher or low, but rather to add some value to the thought process. And how do you add value to the thought process? If I just sent you a chart saying, oh, the unemployment rate is going down, it's four point one, you would say, okay, thank you very much. I already know that, So why should I open this email?

If I already know that the inflation code CPI is two point one and unemployment is four point one, so why should I care? So some of the goal, and I'm very pleased to hear what you're saying, some of the goal with what I'm doing is that it's supposed to be crazy. It's supposed to be a little bit wild and unusual, because there's a lot of things going

on that actually are very relevant. If I only sent you a chance with inflation unemployment, you would say, okay, I already know those things, but there's so many other things going on that are incredibly difficult to quantify and incredibly difficult to assess. The nevertheless actually play a role

for whether markets are going up or down. So yes, we try to have a mix of both, having things that are sort of punchy and informative and sort of factoys if you will, and tell you in a few sentences, this went up, and you can then say, well, why did this go up? And you could say this is obvious, I already knew that, or you could say I didn't

know that. But that whole process of getting you stimulated and getting some value to how you think about your investment process in your firm, it turns out to be quite important in terms of of the goal of what we're doing. And you're also an economist who sort of ventures into the worlds of equity and fixed income. A lot of economists, certainly fixed income is more common, but

a lot of economists steer a bit clear. I could think of three Rosenberg, Ordini, and ed Himan, But most of the economists whose work I see, they really want to talk about the economy and not necessarily the market. So so what led you to focus to a large degree on the intersection between markets and the economy. That was a lot driven by understanding who your customer is.

So certainly we also have quote unquote customers from the FIT and D E, C B and the I, M F and O C D who read our research, and all those of course have similar mindsets to when I sat down in my chair in two thousand five. But if the customer has to translate whatever we're saying about the economy into something that's useful for are we buying stocks, are we selling stocks? Are we buying rates or selling rates? It is it's all a going up or down? Is

all the prices? Is any other commodity price going up or down? I mean the input into that process. I feel that you can stop short of not giving invested advice, as much as that's very interesting on his own, because the problem is that the economy is just not only the driver or financial markets. There's so many other things

going on that are relevant. And just because our PSD economics models as interesting as they are, just because they are living their own life and have some limitations to what they can do and what you can talk about, that doesn't mean that that's the way that financial markets are functioning. There's so many things outside those PSD and fit models that actually it turns out to be quite important.

So to your good question, I think it's very important to come up with additional value then just talk about real bit the Psyger models or other complicated things. I mean, if I it's no problem for me to tell you something that's really complicated, but the whole challenge for me really is to tell you something that's easier to understand where you still will say wow. I actually find that

useful and also find that quite interesting. I want to talk a little bit about the many factors that go into the equity markets, but I have to lead with something you wrote. Um, I think it was late last year, thirty market risks for let's let's discuss that. Yeah, so we try at the beginning of very year to think hot about it. What are the risks both to the economy but the risks more broadly that market participants should

be worrying about. And we have been making a list for the last few years, and this year it actually grew to thirty because we thought that there were so many things going on and if we missed something out, it would be a shamed But it's clear that those risks can be categorized into different buckets. At one risk, of course, which is the traditional risk, or call it the organic risk, is it cannot make risks which have to do with where are we in the business cycle?

Is the higher risk of overheating? Is the higher risk of a recession. What sects us of the economy are out of balance? Is consumption out of balances, topics out of balance, our financial markets out of balances, the banking sector is in the case that you have the housing market out of balance, So that many of the risks we had on our list, we're really focusing first and of all on sort of the traditional old school macroeconomic risks in terms of where are we in the cycle?

What's next over thecoming quarters? Is it overheating? Is it recession? And the short answer to that first bucket was that we were still today a lot more about overheating and inflation than we were about recession. So those risks, of course are still slowly playing out. The second part of the list, well, let me let me stop you right

there before we get to the second part. So this is now five months, four months later we see the fattest saying um rates are going to continue to tick up, that we have a variety of indicate aations that if we're not at full employment, were certainly very very close with unemployment, you know, four percent, we may even see

a three handle sometime coming soon exactly. And yet inflation, while there are signs of inflation and slignes of signs of some wage pressure, it's slight and we haven't seen inflation tick up like you might imagine would happen in a full employment on the verge of overheating economy. How do you explain that? And what does that do to

the risk for of an overheating economy? Absolutely, this has been one of the big mysteries of this expansion that we have still not quite seen the inflationary upward pressure that we've been waiting for for so long. So the fit has been crying wolf, inflation is about to go up, Rates about to go up in the market pricing and fit fund futures, and mostly for that matter, what the

street expectations have been to long. Rates have also been crying both and say rates are going rates are going up, But race didn't go up for the last four or five years as expected, So you could certainly ask the question, why should we expect that to be now? Why are we still saying that this is a risk. What makes

today different from a few years ago The following things. Maybe, First of all, today the issue is that the unemployee is now so low ready tour it was a few years ago, So that's suggesting that we have an economy that's close to overheating. Relative to the Congressional Budget Office, we are at close to full capacity by some metrics, were actually a little bit above full capacity. So that's number one reason what's different today relative to a few

years ago. The second reason why also we see upward pressure on inflation is that the dollar is actually going down now. I remember, when the dollar goes down, you'll see inflation goes up. So that's also a second reason. Certainly, absolutely that's also adding to what's happening with the upward

pressure on inflation. The third reason why we still think that we will have inflation in two thousand eighteen and coming potentially already in the next few months, is that we just did an enormous physical expansion, and the physical expansion was also not something that we did a few years ago. That's your also be putting some upwear pressure.

And the fourth and final argument now why now is different and why we think the wolf will finally come, is that we do believe that all the discussion about trade war on tariffs will also be having some more modest upwear pressure on prices. So if I add these things together, off, we had full capacity, the dollars going down, we did a physical expansion. The trade war on tariffs

talk is also lifting prices modestly. We do think that by the end of this year, inflation and here we're talking about core PC will be well above the FITS two percent target. Because the FIT has a two percent target and we've been below for the last five years. So many people your medium rates say will be below the target for so long. Why should we over shoot where the risks are now that we could be getting

very close to that. The inflation data we just got from core CPI, which is a different inflation indicator, was two point one. But the bottom line is that the trend is not your friend when you look at what's

happening on inflation. So we do get worried about the FED actually raising rates as many times as they're saying, and potentially also resulting in the steepening of the yield curve later this year, which which would quiet down all the people who were saying the flattening is causing recession. But let's hold that and come back to it. I want to push back on inflation, not because I necessarily agree with this, but here's the here's the counter argument.

I want to hear your response. So three pieces. A. We have full employment, but compare the current full employment to twenty years ago and a lot of people who lost good, high paying or middle class jobs have been replaced with mediocre, low paying jobs in the hospitality industry, food and beverage service, the low end of healthcare. So while we have full employment, the wage picture has skewed dramatically across most of the middle class. That's that's bullet

point one. And then two and three is you still have technology driving the price down of everything. You have automation making things faster, cheaper, better, um. And lastly, even with the trade war, globalization can contain used to drive prices down and drive labor costs down. As we have a global labor arbitrage, how do you respond? And by lets just off the top of my head. I'm sure a real economist unlike myself who's a um follow economist, UH,

could give you even more. But how how credible is the counter arguments to inflation? Well, the first observation is that the FED is saying that they want to high rate three times this year and four times next year. You've gotta think really hard about what is their thought process. Why are they saying that race needs took up so much?

If they were worried that all these forces from globalization or Amazon other things could be holding inflation down more permanently, then they wouldn't have this firm view among these incredibly smart people on there from see that rates need to go up so much over the next few years. I think one thing that's really important to keep in mind to your very good points is to remember what the CPI is CPI inflation. The weight in the CPI two goods is about a third, and the weight in the

CPI to services is about two thirds. So what's really critical about that It is that it's true that China is holding US inflation down, is true that Amazon is holding US inflation down very modestly. But it's also true that Mexico and other countries are having competitive pressure holding inflation down in the US, but goods only make up a third. In other words, tradeable goods only make up a third of the index, whereas non tradeable stuff in

the index, meaning services, makes up two thirds. And what is services that is, first of all housing and housing is not under downward competitive pressure globally. Housing makes up of the CPI overall cost CPI, so that means that it actually is a very important part of our consumption. Healthcare makes up about the CPI, so that's also not something Healthcare costs also at the moment of now going up, so also it's not under globalization pressures or Amazon pressures

as such. And finally, education costs also make up a significant share of CPI. So they complain that you often hear among heads funds and others that well, prices will never go up except on healthcare, education and on housing. Well wait a minute, but those components make up two thirds of the CPI. So I think the reason why if you look at the actually inflation rates for services have been around two and a half three percent now almost for the last decade, where as inflation for goods

has indeed been negative. So a very important part of the arguments you you just listed on, a very critical part of the discussion with customers about whether we'll ever see inflation is that the weight to goods only being a third. Think about how much of your money you actually spent going to strip modes and going to Amazon and going elsewhere and shopping. The share you spend on goods is actually resively small compared to how much you spend on your mortgage or your rent, how much you

spend on healthcare, so we'll you spend on education. So what I'm hearing from you is deflation in the things we want and inflation in the things we need. That's a good way to put it. Let's jump into the rest of your thirty market risks for we talked about the economic risks before. What are some of the non economic risks that you're considering um for for this year to the market. Well, they basically fall in very big bucket,

which is called political risk or deal political risks. This includes everything that we're talking about in markets and have been talking about for a while, from what is happening in US politics, what's happening in European politics, more recently we also discussed quite intensively what's happening in Japanese politics. We have also been debating for quite some time what's happening, of course with North Korea. More recently we started debating

again the serious situation. All those risks are incredibly difficult to quantify, but nevertheless turned out to be pretty important for how markets are moving. So the the problem is that nobody really has a great toolbox for political risks. We have a great toolbox, we have a great light post to give us a lot of light under the economics problems. Therefore, we spend enormous amounts of time trying

to look at the individual economic indicators. But the end of the day is certainly something very unquantifiable comes in political risk from just left field, and we just didn't expect it, and suddenly we need to have a view on is this good news? Is a bad news? How big is this story? Is it a big story? Is it is most story? What can I quantify? Just like more recently we've got the trade wall. Stuff has coming to the radar screen. Is that a big deal? Is

that not a big deal? We have discusses with equity investors who think that's a big deal. Rates investors think this is not a big deal because the macro implications are ready to be limited. So the whole non economic list of risks that we have is just has the distinguished features that we just don't really have a good understanding and good way of really assessing this, which actually, in some cases makes it very exciting to discuss. So

I completely agree with you, it's fascinating to discuss. But I always find myself pushing back on the here the political risk from the market, and I want to throw a couple of ideas that you uh and get your your thoughts on it. So two thousand and seventeen was by most measures, the most politically violent year, certainly in recent memory, certainly in my memory. Um, I don't I didn't live through the thirties, I didn't live through War two, so I can't tell you what the politics were like that.

Buteen was just a relent It was like the campaign never ended and it just got louder and more volatile. And yet at the same time, the market volatility was the lowest we've seen in like thirty years. It was just a slow, modest grind up every day and at the end of the year, the SMP had gained um all in including dividends. That's a huge, huge contradiction to

how we should contextualize politics and and markets. So so if you could explain that, yeah, absolutely, I mean you're right to say that there were many predictions ahead of many elections, including the US election, that things would have gone completely different than what actually happened. It just tells you how difficult it is in some cases to get some good quantification and assessment of what's actually going to happen.

I think what's very important to keep in mind that from the economics broad a textbook, there are the politicians who really are accountable for what generally speaking can be called fiscal policy and structural policy. And then there is the central bank, in this case the FIT, which is basically only responsible for basically one thing, name the interest rates and monetary policy, but really keeping interest rates at a level that they think is relevant for where the

economy is. And what I think is the very important backdrop also to what happened in two Husands seventeen is that monetary policy has for many many years been very very easy. So in some sense, what's driving markets. It might not be fiscal policy or structural policy or just

what politicians are doing. It could be that the dominating force for many, many years has actually been the FIT and the ECB and the b o J, and maybe that was the reason why stock market did so well for so long since two thousand nine, essentially, equities have done incredibly well simply because the amount of support that has been coming not only from the FIT, also from the easy B b o j s and b even PBOC in China, we have seen significant money printing that

needed to find at home outside of fixed income in many cases, and outside of fixed income basically in most cases me equities and equities probably also benefited. And this was the intention from the significant amount of money printing.

So maybe even when the FED was tightening and quantitative easing was ending and their balance sheet was I don't want to say it was getting, it was shrinking, but it was certainly not expanding the way it had But the Global Central Bank, that's true, You're right to say that they FIT, it absolutely was pulling in liquidity. But if you look at the Global Central Bank Balanty d CP was still popularly speaking, printing money. The b o J was still printing money. Also what happened again, and

China was also supporting the economy. So let me ask you on that point. I apologize for interrupting, but this cycle globally seemed to be very much with the major economic centers very much out of step, out of sync with each other. Normally it's a global everybody cuts rates together,

everybody races. But it seemed like the US did what they did, and then Japan did albonomics, and Europe eventually said hey, these guys seem to be onto something and they started how unusual is that and what does this mean for the economy and the markets going forward? Well, what's really unusual about this cyclically, exactly to the way you just outlined it and sequenced it, is that remember

that the central banks are now buying assets. Specifically, of course, the US BE and the BOG still buying assets, and they fit that this. For many years, they're buying basically government bonds. I used to work at the I m F where we would fly to two countries and say, don't buy your own government bonds. That's crazy. Your money science in your own debt, and the market will not think that you're credible if you do it as a

central bank. And now the FATE has been buying their own going bonds, the e CP has been buying their own government bonds, the bug has been buying their own conming bands. And now we all sit here and say, oh yeah, now it's fine. They can get away with it. So the issue is that it really is true that markets are distorted by the very significant amount of asset purchases or que that has been carried out by the

three major central banks. And therefore the exit, which is what we're beginning slowly to go through with the FIT raising rates next year, the eusy B will race rates and eventually the BUJ will also raise rates. The exit will be associated some unwinding of those distortions. So a lot of my client discussions exactly about what you just said named what kind of distortions were created, and that's

sequencing that we saw. What would the endgame be as we get back to quote unquote a more normal situation, and is it possible to get back to a more normal situation where assetprises are not heavily distorted by central bank as it purchases are QUI So you mentioned ECB in the FED over in Japan, their central bank are actually buying equities. We don't. We don't see that in the US, and I don't believe we see a lot

of it in Europe. Absolutely. What is the Central Bank of Japan doing and what is the impact on on Japanese markets? Is albinomics working or is it just one joint distortion and we can't tell. Yeah. So abonomics has three arrows named monetary postsy, fiscal posts, and then structural posties, which is an attempt to say, let's make the economy more competitive, Let's make it easier to fire in Japan, miss let's make it easier to hire, let's get more women into the labor force, Let's try to get the

economy more flexible and dynamic. And the answer is that on the fiscal side, the dead level is just enormous monstery policy has now tried many different things and that hasn't really created a significant amount of success stories. Unfortunately, despite that, we're now almost twenty years and plus and counting, and that's like to g DP something like that. This is the dead to GDP level exactly, which makes them

very vulnerable to high interest rates. So the answer today to your question is that it just hasn't really worked quite yet, and of course it opens up a lot of questions. Is the US also going down the road of being Japan eventually? We don't think so at all, because the problem in Japan is that the economy is just not dynamic enough, and they are just some very

ingrained reasons why it's been very difficult to create inflation. Whereas, as we spoke about earlier, we're already seeing some signs of inflation in the US in the CPI and pc it's only very small upward moves. But as I mentioned, the list of reasons why we think that now is a bit different. Also, the labor market is more dynamic in the U S which is why the employment cost in diction trading higher. We've seen media weekly learnings trending higher.

We've seen even UNI labor costs they've also started moving up a bit. So I get it that average are learnings hasn't really moved up as much, at least more recently. But and then as they we do think that we will get more wage pressure, we will get therefore get a different situation in the US with higher rates, which is why the FIT is hiking. And also a different level of interest rates compared to what Japan has been with.

When you discussed the structural issues in Japan, are you referring to the kuritsure, You're referring to their post office essentially being their retirement accounts. What how How is Japan so different than the US? We know it's very different, So but what do you mean structure? What One extremely important difference is demographics, that the Japanese population is aging, and therefore you actually have a shrinking labor force, whereas in the US we actually still have a growing labor force.

It may grow a little bit less quickly than it did earlier, but we still have a significant of immigration,

we still population growth in the US. So one very important structural, very in very simple terms structural difference is that the amount of taxpayers in Japan is falling, whereas in the US the amount of taxpayers is still growing because we're adding in the labor force, more people that pay taxes that can help for the aging population, help for paying for retirement payments and transfers to older generations and Medica and Medicaid, whereas you don't really have that

in Japan, which is really weighing both on the government finances but also weighing on the economy more broadly. You know, I want to talk a little bit about your career because your path is somewhat um I don't want to say unusual, because lots of people go from government institutions and banks to Wall Street, but yours meandered through Europe,

through Paris to New York. Tell us right out of graduate school that was Princeton, correct, Yeah, so I did get my ps D from Copenhagen, but this spending in Princeton where I got the americanized and opened up my eyes for what this wonderful tree can do. So where tell us about the career path. Did you go from Copenhagen to the O E C D. Yeah, though, so, first I did my PSD in Copenhagen, and as part of the program in most European countries they ask you

to go to a U S university. Let's just say the way it is that the quality of the PSD programs in several European countries, if not most, is nowhere near what you can get in the US. So that's why they encourage people to say go and take a year somewhere and the government said we'll pay the tuition, will pay your room and board. Why don't you go this? And I'm sorry, I'm sorry. Your tuition and room and board was paid at graduate level, absolutely was paid by

Education is free and actually all Nordic countries. But what else is free? County healthcare is also free? Its help us off course are higher, but how much higher? So average tax rates are roughly around the it's not that it's about ten percent points high. Then here you do get free healthcare, free education, which I was so lucky to benefit from, which brought me Therefore in my one year to New Jersey to Princeton, where I got to work with the various professors. I worked with Michael Potle

who was visiting at the time. Barry I agree, was actually also being there. I was a resources system for them, and they basically said you should go and try and get an internship at the I m F. And I said, okay, that could be fun. And I did an internship at the I m F the following summer, and I figure out quicker than internships in this country is about figuring out if you want to do that job more permanently, if they want to keep you and I'm al so

lucky that they offered me a job. So I started in the Economy's program with the PSP program at the at the I m F. And by the way, if memory serves, Princeton's Economics department was a powerhouse well at the time of the department. And yeah, and you also had Ken Rokoff was also there at the time, and I didn't interact with them all the time, but I mean they were there, and as you know, professors want to talk to PSD students, which I was so incredibly

lucky that they also wanted to talk to me. So yeah, that's true. It was a really interesting ground for just getting again at academic overview of what's going on in different areas and specializing in the in the areas that I wrote about. So the I m F two O E C D was at the next step. Yeah, I did spend a year at the Bank of America here in New York. But after that then I did go to the ODE in Paris, and then there was Dan Paris.

Some of my former managers from the I m F had moved to Deeutgia Bank, and specifically David fog Atlanta, who I still have the pleasure of working with today, and my great colleague being each other asked if I wanted to come to work for Tougia Bank in New York, and in two thousand and five I said yes to that, And I've been sitting in that chair for the last twelve thirteen years and counting and enjoying every moment of it. So that's pretty fascinating. So you're now on Wall Street

for a dozen years. How different is it today than it was when you joined right in the middle of the credit and housing boom. Well, I think one very important difference is that then in two thousand five and two thousand six, obviously there was much fewer worries about all the things that actually turned out to be really important.

We have gotten much more humble, first of all in terms of our forecasting ability, but also in terms of what is it actually that we need to look at, which also gets back to why do I have my little business model today of just sending a child in a few sentences. Well, some of the idea is that I cannot just only look at a certain small set of indicators, because if I do that, I risk that I'm missing something that actually could turn out to be

extremely important. So the straw that breaks the cameras back here is not only necessarily inflation unemployment, but could be something coming out of the blue that I had just not appreciate it enough. So inflation risks can come from different sources, but most important, recession risks can now come

from a whole range of difference. So also so I would say that over the last at least decade, very important change in the way and that the economics profession on the street is working is that you've got to open your eyes more too, risks that out there and asking constantly are these risks important? How are these risks playing out? Is this something I should be spending more time on. So so let's delve in that into that

a little bit. What do you think I'm gonna ask this question in a little bit of a skewed way. What do you think are potential risks that much of either the investor class or the economist class might be overlooking. Well, I think that the sort of the number one organic risk that we spoke about earlier is that there's some upside risk to inflation. You can then say we economics profession and also the fet have been crying both all

these years and inflation, why should it come now? So maybe there's some uncertainty about that risk, but that too also other risks that I think are very important. First of all, the fiscal expansion requires lot of net issuance of treasuries. And if you expand the amount of safe assets in the world, if you expand the amount of treasuries that are outstanding, you are basically beginning to compete

with the risk free asset with more risky assets. This is exactly what we're seeing in some sense with the T bill issuance that's competing with light BOLB, that's competing with commercial paper, probably even competing with I G. That if you suddenly offer to investors a lot more risk free assets, meaning assets that have basically no risk associated with them, in this case US treasuries, then investors will of course, I would rather have a risk free asset

rather than have a risky acid with a credit risk that has the worst credit rating. So the more that the amount of risk free assets is expanded, the higher ist the risk that investors will start to pick risk

free as is right to risky as. It may sound very abstract, but what It means, in very practical terms, is that if the U. S. Government needs to essentially double the issuance of treasuries over the next eighteen months, which is what is in the pipeline from two seventeen two nineteen, the risks associated with that for risky acids

meaning i g. High yield loans, clos even mortgages. The risk for those fixed income ass' is begin to increase simply because there will be a crowding out of other spread product fixed in commem asces readily to what's happening in treasuries. There has been a line of thought that's existed for a while that suggests there's been a shortage of high quality sovereign debt over the past ten or

twenty years. Isn't this new set of issuance kind of getting back to a more normal supply, And that seems to be a theme normalizing rates, normalizing inflation, and normalizing sovereign treasury supply. Absolutely, But think about it. Let's say that the you and I were a pension fund or an insurance company, and we have been begging for high interest rates for many many years. Now, high interest rates suddenly begin to appear because tenure. Treasury rates have moved

up modestly the consensus. If you look at your Bloomberg screen, you'll see consensus expected to move through three later this year. All this suggests that if the risk free assets suddenly gives a high return, then the question becomes, well, how does that crowd out the willingness to invest in investment grade credit and other risk here assets. And therefore the risk is in my view that yes, it's true that

we need to see some normalization. But in two thousands seven, in round numbers, total US government dead was around nine trillion, and we are going towards that the total amount of government dead outstanding will be twenty one trillion, Meaning we have expanded dramatically over the last decade the amount of treasury is outstanding, and that's beginning again to compete. And this is where you really will test the market. This is really I m F Page one. Is there enough

demand for U? S treasuries? Will we get into some so of course this is a bit extreme, but we'll get into some situation like Venezuela or Zimbabwe or other emerging markets where you certainly have problems financing your government finances. Obviously, the US will nowhere near any of the problems that many emerging markets have. But you really are beginning to ask em s questions to the US, namean, what happens to countries that expand the fiscal situation as much as

the US has been doing. What happens with the credit rating, what happens to the exchange rate with the dollar go down mall, what happens to interest rates, and what happens for that matter, politically when you have a situation where you're something needs to have such an incredible increase in financing needs, and if you have a recession, of course the financing needs will go up because then we also need to pay more on unemployment. But if it's etcetera.

So so the short answer to your question is that it's true that you want to see some normalization in treasury issues and for that matter, and treasury yields, But that normalization is now coming at the same time while we're doing a big expansion, which I think is at a very significant risk to financial markets over the coming quarters. So earlier you referenced um possibility of a trade war.

Let's let's discuss these tariffs and and that issue. Lots of folks have looked at these new tariffs on steel and aluminum, and uh, the arguments back and forth with China, almost as if it's a big surprise. But come on, let's be honest. Then, Candidate Trump campaigned on protectionism. His whole slogan, make America First, every whistle stop was We're gonna erect tariffs, and we're gonna get rid of NAFTA,

and we're gonna throw out all of these trade agreements. Um, can we really say we're surprised and we know this process takes like a year to implement. Can we really say the markets are surprised by a president who campaigned on this, talked about it consistently, still talks about it constantly, actually did what he said he was gonna do. I

completely agree with what you're saying. It's not a surprise in the sense that globalization has been benefiting tremendously people in China and Mexico and emerging markets because they benefited tremendously from a more open use economy and a more global,

open trading system. You also saw tremendous benefits to consumers and US living in the US who buy goods and people in Europe who buy goods, and you saw cheaper goods that what you who had ever seen before on so many different fronts basically anywhere in anything that you

bought in the good spectrum. But what we also need to recognize, and this, of course, what's very important part of this, is that there were certainly some people in West Virginia and in Pennsylvania and Ohio who basically lost out because they didn't produce these goods anymore, they didn't produce steal anymore. And this is what this political process

is now telling us and what we're going through. How do you put up on the scale the benefits that you might have had from cheaper goods and someone in China who got a job because they had to produce goods for us buying stuff redditive to the unfortunate situation that many people in the US and in Europe lost their jobs because of open trade and because of globalization. So it's in some sense not a surprise that we've gotten to where we are, and that's of course the

main problem that the politicians are struggling with. How do we compensate those who lost out in the shame of globalization in Europe and in the US and how do we make sure that they don't fall through now that we have gotten to a point where it looks like

it's point of no return. But politicians are doing everything they can, not only the US but also in Europe to try to find some solutions to making sure that those who lost out in the global trading system that was so open and benefiting so much in cheaper goods, that that that was hurting them so much. I recently had a conversation with someone who started their career in the nineteen seventies, and I had to ask them, how

did that period scar them? In terms of uh inflation and you know, low returns in the stock market and spiking interest rates. So you started your career at least on Wall Street, right in the midst of what would later turn out to be a credit bubble and a housing collapse. How has that colored your view of the

world or or has it not? Yeah, I would say that going through now, having spent most of my time on the street um in a period of crisis or basically a period of trying to figure out what was wrong with the economics textbook, what was wrong with the financial system, what was wrong with the way that we

analyze things and why didn't why couldn't we predict this better? Um, we did in Deutche Bank have a number of warning pieces out ahead of the crisis, but the reality is that there was really nobody anywhere who predicted this crisis would be coming in, particularly not the force and the

magnitude of what actually happened. So a lot of the way that we think about things, and a lot of their agenda for how we think about things and how we try to help clients think about what's going on is very much colored by the fact that they there

cannot be as stone unturned. We have to make sure that we lift every area, that we cover every base, so we are actually absolutely sure that there's nothing in terms of risks that we are missing out over the waall that has also created, i mean, let's just say, the way it is in markets, a much more stressed situation.

Also on the bye side, because people are now seeing crisis everywhere constantly, someone is saying, oh my god, there's something happening over here, and we've got to make sure that this is not turning everything down and creating an next recession. The older, the old expression is every general

fights the last war. And that's so true. And I don't know how many times over the last ten years, essentially the two thousand nine when we left the recession, I have not received emails from clients saying, oh, the next recess is just around the corner, And it wasn't

And now we're sitting here, well maybe you shouldn't. And this is a really important invest in implications of in my view of how you should think about things today, is that the risks of overheating today are much higher than the risk of recession, most importantly because of the significant tail when from the fiscal expansion. So yes, we're still watching, and to your question, we're still watching a lot of different risks and I think we need as

investors to constantly monitor everything that's going on. But that's just also created that much more confusing environment where we just in some cases just don't have whatsoever any toolbox for understanding that type of risk. We have been speaking with Torsten Slack. He is the chief international economist for Deutsche Bank Securities. If you enjoy this conversation, be sure and check out the podcast extras, where we keep the

tape rolling and continue discussing all things economic wonkery. You can find those wherever finer podcasts are sold iTunes, Bloomberg dot com or overcast. We love your comments, feedback and suggestions right to us at m IB podcast at Bloomberg dot net. Be sure and check out my daily column on Bloomberg dot com. You can follow me on Twitter at rit Halts. I'm Barry Hults. You're listening to Masters in Business on Bloomberg Radio. Welcome to the podcast, Torsten.

Thank you so much for doing this. I've been I've been look and forward to having this conversation. I've mentioned I'm a fan of your research. I have to figure out a way with the new miffed rules, I'm only getting some of it now. I have to figure out a way to get back on the full Um, the full plan. We'll talk about that afterwards. I have so many questions, but I only have so much time. UM, so let me let me choose the ones that I think are really worthwhile. UM, tell us about your favorite

economic indicator. What do you think is most important? And then I'll ask you what's most underrated? And what's what what's most overrated? So I think the I M has historically proven to be the highest correlation with GDP, so I would say that from despite that is only every month, it's a long time to go and wait for another

economic indicator. That's the definity at the top of the list, of course, non fine payrolls and how many jobs were creating and what the on plan right is doing is a close I can in terms of the employment report just has a wealth of information about what's going on in the economy and what sextors are doing better, what sextus are doing worse. So not the headline numbers, but

what's beneath the head I think there's more value. So the headline has some value, but I think it has more value underneath in terms of informing you about where is the US economy going. And a third and finally indicator, of course is the thing that we worry most about at the moment, amy various indicators of inflation, specifically co PC, which is the first preferred mention of inflation, because that tells you are the indicators we spoke about first name

I S M unemployment, are they overheating? Do we need more stimulus? Where are we in the business cycle? And informing you about where you are in the cycle turns out to be quite important. So from a pure macro perspective, those we three areas and the three indicators that we look most at. What do you think is an indicator that people rely on too much and is probably overrated? Well, I think that they. I mean there's a number of

things that people pay a lot of attention to. I mean one area at least, the general is speaking where people pay maybe too much attention, as jobless claims. Some indicators like jobless claims are really derived of how many people show up, which is what jobless claims measures. A new jobless claims is how many people show up at the unemployment office this week and ask for claims for the first time. As that is that affected by weather, is that affected by holidays? Many things drives to that.

But I mean the general trend and that is generally helpful. But I still think that it does get a good deal of attention, mainly because it's high frequency. But I still think that it doesn't have anywhere near the amount of wealth of information that you get in the employment report. So I'm willing to wait for another month to see where the economy is. Maybe it's just my long term patience as an economy is relative to someone who is

managing money. So so let's talk about equities a little bit. Um. You mentioned, uh, you look in the world as a continuous cycle. Where are we in the mark cycle? Yeah, so it's clear that first of all, the business cycle is indeed getting old. The problem with that argument is that the business side doesn't run on the clock. It's not the case that after six years or ten years,

then the business side starts to die out. For the business i ecle to slow down, you need some imbalanced to roll over, and the normal three imbalances that starts recessions and starts the business sidus will slow down and therefore starts to have a big impact on equities. Is either because we have too much consumption or because we have too much capics meaning imbalances the consumption, imbalances in

capics or imbalances in financial markets. And if you look at consumption at the moment, we don't really have much imbalance. In the contrary, we really don't understand why consumption is still on the more weak side. Likewise, with topics and business fixed investment meaning private investment for companies, we don't

really have imbalances there either. And finally, for financial markets, the big question, which essentially what you're asking about, is do we have imbalances and equities to have imbalances in rates to having busances in credit, or do we have imbalances in effects. Generally speaking, I think the answer to that is no, and I think that the fact that we've got a huge fiscal tale with more recently suggest that we should see solid GDP growth for the rest

of this year. We should see solid consumption growth for the rest of this year. We should see solid capex growth because capics also got incentivized by the designer of the fiscal package to also grow continuously. So the answer to your question is that we still think equities will do well. We still think rates will slowly go higher,

the FED will gradually high rates. We think because of all these problems we spoke about earlier with trade, because of some of the issues generally on the reads, the value of of assets in the U S. And we do think the dollar will go down, but the generally speaking,

equities should continue to do well. The Peero show got some adjustment more recently do the downside, so there's definitely still more room for equities to rise from here, mainly because the economy is not about to answer research and if anything, the risks are that they can the economy is about to overheat. So I heard trade wars are a good thing and they're easy to win. I don't recall where I read that, but I read that somewhere recently.

How how true is that? And what does the trade war with China or a possible trade war with China, what what might that mean? The risk from a market perspective is really interesting because a trade war is putting on essentially higher prices on either things that you import or higher prices on things that you export if the in this case, the Chinese retaliate. But think about what

that means. That means first of all, that if prices of things that you import start to go up, and if you don't know where they're going, then what does the whole question become for corporates is well, what does the playing feel look like in the future, What are the prices of my inputs? What are the prices of the products I'm selling? What kind of inputs can I buy? And kind of substitute for things that might have gone

up because of terrorists? Coming in, So the uncertainty associated with we don't know which kinds of terrorists are coming next, and even if we do know the list of terrorists that already are coming, we don't know what they italiation will be. And all that is probably for companies, meaning that they're holding back with a little bit with hiring, holding back a little bit with investment as a result of uncertainty. What does the playing feel look like for

me as I plan ahead as a corporate? So the downside to trade wars really is that equities and particularly equity names when it comes to airplanes, cars, soybeans, you suddenly have very specific names in equities that benefit and some who doesn't benefit. So from an equity perspective, it makes sense that equities go down when trade wars come in.

But what's also important about that is that remember that the size of terrorist is about fifty and total imports in the US is about two point two trillion, So the total magnitude of terrorists actually ratively small from macro perspective, So that's probably why rates haven't moved. That's probably also why and some says the dollar hasn't moved as much simply because rates really don't move much because it's only the macro economic conditions that would have to change for

race to move. So it makes sense in my view in summary, that equities are not liking trade walls, whereas you're not really seeing much movement on the rates front. Meeting interest rates really haven't moved much because the macro impact of terrifs is probably going to be racively small. And you mentioned earlier that PE ratios are coming down, which makes me ask, we're at pretty much record high corporate profits. Is that sustainable? Why are profits so high?

How much of it should be credited to really low borrowing costs. What do you see the future of corporate

profits are looking like over the next couple of quarters. Yeah, Companies have become extremely efficient in so many ways since the financial crisis, and we have seen significant amounts of cost cutting, which has been a very important part of why they have becomes so efficient, so across sectors in the s increased efficiency in the form of cost cutting basically making things more lean and mean and generally more competitive,

both domestically Newest but also globally have certainly benefited corporate America tremendously. So a very important first angwer to your question is that costs have come down and companies have

become more efficient. So looking ahead, of course now with the tail wind of the Trump text cut that we got in December for corporates, that's gonna boost earnings even more so if we from the In fact, we just saw that in in a lot of the early earnings that have been released over the past few weeks makes complete sense. Big surprise like I wasn't expecting a upside surprise for Bank of America, or there's a hand the

financial seems to be doing well. A number of other companies seem to um be doing much better than expected, and a lot of that goes to the the new lower corporate rate. Absolutely very because we just lowered the corporate race to from thirty five at a high level that we just had been struggling with for many years.

So in that sense, we've gotten into a situation where corporates are both benefiting from being incredibly efficient and lean and now also getting a huge tail wind from higher profits and on top of that, of course repatriation and incentivizing them to invest. So the key conclusion is earning his growth to continue to be strong at least for the rest of this year. Wow, that that's quite a statement.

All right, let me jump to my favorite questions. Uh, these are what we ask all of our guests and it creates a sort of interesting frame of reference when we look across a variety of different people. So what's the most important thing that most people don't know about you? Um? Well, one very important secret to what I do is that we have a team in India that actually produces all the charts and all the work that I do. Business perspective,

this has been extremely efficient and extremely helpful. When I go to bed every evening, I think about what should the chat be, what should I write about tomorrow? I send an email to the team in India, and when I wake up and look at my phone and I see the chat right there. In most cases it looks perfect. In some cases I need to work a little bit more. But when I get to the office is really right there,

ready to send out. And that's, at least from a business perspective, something that has been incredibly helpful and very efficient. That they work in a different time zone. Are these are these things done? Are these economists, data analysts or chart people or everything? Five people on our team and they have master's degree in economics. We even have people that have PSD in economics from the Daily School of Economics, and they are incredibly helpful. So if they're listening here,

thank you very much. Guys. It's hugely appreciated what you do every day. That that's what I did not know that about you, and that's quite fascinating. Um, tell us about your mentors who helped shape your career. So, I mean your adviser, if on on the PSD thesis would always be someone who is very important in my case professor and Copenhagen called Nils Tigison. But when I came to Princeton, of course I got hugely inspired by Ken Rogoff.

Also I didn't communicate much with Ben Bananke, but a number of the prince and professors where just the way that they spoke about things and the way that they discuss things that most importantly very generally speaking. And now I may offend someone in Europe, but in Europe a lot of the PSD economics programs are fairly theoretical and conceptual and live their own life in models that are somewhat disconnected from the data, whereas in USPSD programs. The

effort is constantly to try to make it relevant. In many cases you don't succeed, but at least you try constantly to plug it into what is exactly the problem that you see on your Bloomberg screen, on your Bloomberg website, and how can I try to understand these things better.

So those people, including people also at the i m F Mike Mussa and a guy called Fleming Lassen who have been also very helpful, and of course at the Deutsche Pink Pink each other and day before Atlanta, have really been very informative for me in terms of how do you succeed and how do you adjust whatever you're doing to be more successful and refine your own skills and constantly learn and get better and better at what you do. What about investors who influence influenced your thought

processes about the markets? So the issue is that in my job I have about four client meetings every year, so I sit down and discuss the outlook and also on conference calls with people every day constantly, both in the US, Europe, Asia, Latin America, so I meet a lot of very very smart people also people that are not known at all. Some people want to fly under

the radar screen. So that's a number because they don't They don't have any ambition in terms of getting even on the front pit of any Wall Street journal of that matter, on as a top story in Bloomberg. They basically want to be very good at what they do and they want to discuss these things that are going on.

But that's a number of people who shall remain unnamed in the investment community who are extremely skilled, including at a number of hedge funds, and of course most importantly here in Manhattan and in London, who are really really good at what they do, but just just have very little ambition in terms of becoming public names. Totally understandable. Let's talk about books. What are your favorite books, be

they finance non finance, fiction non fiction. What are you reading now and what have you really enjoyed reading in the past. Well, one book that humped me a lot was Super Forecasting by Tetlow, who basically told you that you gotta update your prize and update your forecast constantly, which is also again in a a humbling experience, because that is basically telling you that you've gotta revise constantly as

new information comes in what your forecast is. Sometimes it's tempting for seal side analysts to just have a forecast and stick with that for a long long time. But as investors and again helping customers, think about what will equities do well. I can't just walk around and say, oh, equities will go up, and then play golf for twelve months and come back and see if they went up or down. I gotta have constant evaluation, constant thinking every day, what is the reasons why I'm right? What are the

reasons that have come in today why I'm wrong? So books around forecasting and books around what's happening on, how do you refine your forecasting skills? It turns out to be very very important. At least that's been very important spy for me. Any of the books, anything else you want to mention. Unfortunately I don't have as much time

to read the fiction as I really wanted to. But I would say that that's the main thing that I've been and and of course I spent a lot of time reading newspapers and again Bloomberg stories and everything that's going on, but it's not as much as I I wish I used to read the Kicker Guard, which as you know, is a very important Danius philosopher. But sure I haven't done that then now for a little while.

But sometimes it is important to think really hard about what is it that we do, you and I in our finance industry, and think about what is it exactly the psychology behind what we're doing, because it is really not rocket science. It really is just stories that come around. And as those stories come around, the question becomes how important is this story? Why is this story getting so much weight? And the stories come and go. Sometimes it is important to lean back and think about what is

the story? And it's almost sounds like fiction, But what is the story that we're telling each other at the moment. What are the questions that we're asking each other and those other things that get the most attention. That's that's fascinating. One of the things that I'm was impressed with in the Tetlock book is questioning what your assumptions are and questioning what you already know that might apply to figuring

out um some sort of forecast. As you know, and some of your former guests have also said that the most significant skill you can have as a market participant is that you gotta be willing to change your mind. Absolutely, and if you just stick to a view this is so tempting, both as a sales side analyst and also on the buy side. Stick to you that something is going up, It's gotta go up, it's gotta go up. If it's not happening, you've gotta back down and say

this is not happening. I gotta revise and I gotta change my mind why this is not going on? So what excites you right now? What are you looking at in the world and saying this is just amazing, Well, one of the other than inflation, which we've spoken about now at great length. And I do still think that this very broad concept of what is it that we

just have been through? If you really take a cup of coffee and sit in your chair, as you all ways say, and think hard about what is it that we've been through in terms of what central banks have been doing? What is the endgame to this? And I know it sounds very fluffy and like hot air arm wavy stuff to say, what do you mean by endgame? But how do we get out of easy money? How

can they fit race interest rates? What are the implication of these distortions that were made by negative insust rates in the your area, which should never have happened, that created an enormous amount of distortions. How can we reverse this? And can we just snapping around and say, okay, you know what, we'll just go to positive industrates and we'll just stop doing quee or will there be more profound implications?

So I spent a lot of time at a very thirty feet level thinking about what what are the implications in terms of the exit? And how should I think about acid classes? What was docs do? What race do? What will effects do as we get closer to the exit, when the easy p will be raising race next year and the BOG ultimately also will be raising rates. What would the new economy, meaning what would the economy and the global financial market picture look like on the other

side of that exit. That is a really difficult question and quite fascinating. Tell us about a time time you failed and what you learned from the experience. So this is really tough. But I mean anyone of course, who not only in the financial service industry, but anyone who works hard and works in what you and I do very well. Of course, at some point realize, well, there's only twenty four hours a day. So you come to the conclusion, am I spending too much work on the

right things? Should I be working as much as I do? Should I be working harder? So everything that has to do and what I have done in my career with the right work life balance. And I have been through a number of different jobs who have seen a number of different things. At the O c D and the I m F, things were relatively slow paced and you had a lot of time to think about things. So there's a different set of problems in terms of how

you spend your time and what you do. For the last two or thirteen years in the job I have today, it's tempting to say this guy is the limit. I can travel around the world and do something twenty five hours a day, But I would say the failure would be and what I also have done myself is that if you spend too much time on your job and too little time on other things, which can be and I'm not the only talking about family and and spouse and children likewise, but also on friends and sports and

doing things that are fun. It's very important and one very important lesson that has taken me some time to learn. Is that you've gotta have a balanced life. It's not only a balanced diet, but also a balanced life in terms of what do I think is fun? Because I love talking about inflation, on employment and markets. But I can't do that like you and we have these conversations often, you and I, but we can't do that like all

day long. You've got to do other things and sometimes you also gotta go and I play soccer once a week on Brooklyn Bridge Pre five. That was my next question. So what do you do for fun? I tried to have fun with some good friends and go and do something else just freshen your mind. You're playing full contact

soccer once a week. Yeah, so it is. We're completely hopeless, but it is fun and where we played to win, I should say that, But but it is to get some exercise, to hang out with some good friends and get to do something else that I think is a lot of fun other than just otherwise. I mean, I'm not kidding. I get emails seven I wake up in the morning. I respond to emails from people in Asia and Europe. We want to discuss things. Sometimes I just

respond with a sentence or two. But that constant flow. You could look at your phone literally seven and that's just no end to to how many people want to talk about whether inflation is going up, whether the fit were high rates, or whether the dollar is going down. So for a recent college grad or a millennial came up to you and said, I'm thinking about pursuing a career in economics, what sort of advice might you give them? I would say, which would be general career advice, not

only for economics. You've gotta get good at something that you are just really good at. Once you're really good, like you at investing, once you're really good at whatever, if it's playing saga, Once you're really good at a certain type of economics, then you just got to figure out how can I translate this skill into something that I both find its interesting but also someone else might find valuable. I could sit in my chair and close my door and say, oh, I'm so smart, you can

ask me any question. But if I didn't get out on the dance floor myself and try to reach out to people and talk about things and discustings and have an approach of saying, let me be open minded to what it is that I'm good at and how I can maneuver at in a changing world, then I wouldn't be doing well. So the answer to your question is, as as again difficult as it is to respond directly to that kind of discussion, is still find out what you're really good at and do that really, really well,

and then find out who can use the skill. How can I get this skill translated into something that I think it's fun for the rest of my life, and also that others might be willing to even pay me a salary form? And then lastly, what is it that you know about the world of markets, economics, investing today that you wish you knew twenty plus years or so

ago when you first started your career. I think that they on the financial crisis, I wish I had understood better in two thousand eight and nine the significant importance of what the central banks were doing. In other words, asset prizes for the last since two thousand nine, for the last nine years in particular, including also equities, but rates in particular have been driven very, very importantly by central bank action, which is why this issue of the

exit becomes so important. So I wish that I had spent less time, if you will, on my old school economic sex books and has spent more time reading literally Rokov's books. This time is different because this time is

not different. This was exactly the same thing. What's difference was that the sheer size of easing, the sheer size of money printing that central banks were winning to throw at the system just happened to be absolutely, by far the most important driver of stock prices, interest rates, and exchange rates for a very very long period. And that's

what we're exiting now. And that's why that issue of the power of what central banks did, it turned out to be a much more significant drive off markets, and I wish I had appreciated that earlier. Quite quite fascinating. We have been speaking with Torsten Slock. He is the

chief international economist at Deutsche Bank Securities. If you enjoy this conversation, be sure to look up an inch or down an inch on Apple iTunes or overcast Bloomberg dot com and you could see any of the other two hundred or so such interviews that we've conducted over the past four years. We love your comments, feedback and suggestions right to us at m IB podcast at Bloomberg dot net. I would be remiss if I did not thank the Crack staff who helps to put together this podcast each week.

Michael bat Nick is my head of research. Taylor Riggs is my booker, producer Medina Parwana is our producer engineer. I'm Barry Ritults. You've been listening to Masters in Business on Bloomberg Radio.