YouSaid · the spoken record

Campbell Harvey

lines on the record: 89
first: 2021-09-17
most recent: 2021-09-17
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“That could take two or three days from my bank to my broker. So that delay doesn't make any sense in the age of the internet and gigabit broadband. So with decentralized finance, everything is linked together and it's seamless in terms of the transfers are pretty well immediate. And the number five issue is opacity that you're dealing with a bank, you don't really know the health of the bank. You're relying upon the government, the FDIC to basically assure you, but there's limits to that insurance. And the FDIC and the regulators have a checkered record of detecting problems in advance. Whereas in decentralized”
2021-09-17 · Masters in Business · Campbell Harvey on the Future of Finance (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“About also with this 2.5 or 3% all over the place. A ridiculous lending rates on credit cards. There's definite progress that decentralized finance makes. What we haven't talked about is lack of interoperability as a problem in our current system where for me to transfer some funds to my broker”
2021-09-17 · Masters in Business · Campbell Harvey on the Future of Finance (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“There are five things that I mention in the book, centralized control. So basically you're at the mercy of your bank because they are holding your funds. And there's various other aspects. Whereas decentralized, you are in total control. You own the bank. Effectively, the bank is in your pocket. And you can do what you want. Limited access we've already talked about where this is a technology of financial democracy. It doesn't matter who you are. You're treated equally as a peer. There's no retail customer, broker, banker sort of relationship. Everybody is the same. It might be a banker, but that bankers appear. You're a peer. Inefficiency, we've talked about...”
2021-09-17 · Masters in Business · Campbell Harvey on the Future of Finance (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Fully versed on the risks, this is definitely not a risk-free situation. This is disruptive. There's going to be many ups and downs, but it's important to go in with your eyes wide open, recognizing the sort of risks that you face. But this is basically my way of trying to explain what's going on. When you're early in on a technology, it is difficult to see what's really going on. And people in the media often see Bitcoin or Dogecoin and things like that. It's all about the price of those two tokens. And decentralized finance has very little to do with Bitcoin.”
2021-09-17 · Masters in Business · Campbell Harvey on the Future of Finance (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“And this is a highly disruptive technology. It will change finance as we know it. And I thought it was important to take that message outside of the confines of a single university and put a book together that is accessible to anyone. The language is somewhat different than the language of traditional finance, but everybody going through the book can figure out the linkages between some of the things that I talk about and traditional finance and see the advantages. And of course, it's also crucial with any new technology for the reader to be”
2021-09-17 · Masters in Business · Campbell Harvey on the Future of Finance (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“So the book is written for the millions of people that either work in the field of finance or are interested in that field. And they've heard of crypto, maybe they own some crypto, maybe they don't, but they want to learn more. And indeed, the motivation for actually writing this book is something that I tell my students at the end of my crypto course. And basically I say to them that I want them to be disruptors, not disruptees.”
2021-09-17 · Masters in Business · Campbell Harvey on the Future of Finance (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“For Coursera, that takes the viewer or the student through four different stages of understanding decentralized finance from the infrastructure, the primitives, and then a deep dive on some of the key protocols in decentralized finance and go through the mechanics of those. And then the fourth course is about the risks and opportunities in the space. So it is difficult. And I kind of come to the realization that, well, I might have a couple hundred students at Duke University. I want to have a broader impact. So I'll be putting this stuff up for everybody to learn.”
2021-09-17 · Masters in Business · Campbell Harvey on the Future of Finance (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, it is confusing right now, and this is one of the reasons that I'm doing what I'm doing. So I teach this. I think it's important for the future, but it's very confusing. And initially, it was even more confusing because very little material other than some computer scientists writing about various protocols. Today there's a huge amount of information on the internet about this, but you need to be very careful because some of the information is basically selling our product. You need to go somewhere that's kind of highly rated. I am working on a four-course sequence.”
2021-09-17 · Masters in Business · Campbell Harvey on the Future of Finance (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“And effectively, you've done the same thing that you've protected yourself against a hyperinflation in that country. And effectively, what will happen if that country continues on its course is that people will essentially abandon the native currency. So why do I need it? I can pay with a US dollar token. And it doesn't have to be US dollars. It could be anything. It could be a traditional currency like the dollar or the euro, but it could be a token that's backed by gold. So as many possibilities here, and this is just an example of how to effectively bank the unbanked and the underbanked.”
2021-09-17 · Masters in Business · Campbell Harvey on the Future of Finance (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“So who is hit the hardest? It's the average person in Venezuela where they don't have the opportunity to set up that bank account outside or the amount of money that they've got isn't that large. So again, the world of decentralized finance comes in very conveniently here where if you've got a mobile phone, a smartphone, then... That serves as your bank. And you can hold token and you might choose to hold token that is backed by US dollars.”
2021-09-17 · Masters in Business · Campbell Harvey on the Future of Finance (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, in the world today, there are 1.7 billion people that are unbanked. And there's probably, we don't have the exact number on this, probably more are underbanked. And my example that I gave you with the entrepreneur, that entrepreneur had a personal bank account, but they were not able to get a loan. And that, again, is under banking. So it is a very large proportion. One example I'd like to give, and a lot of the action here is happening outside of the US. So think of a country like Venezuela that's in a hyperinflation situation. If you're really well off in Venezuela, that hyperinflation really doesn't impact you that much because you've got a US dollar bank account in Miami or somewhere outside of Venezuela.”
2021-09-17 · Masters in Business · Campbell Harvey on the Future of Finance (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“And given the situation that we're facing today, where we've got so many people underbanked, so underbanking is the example I gave where you're not able to get that loan, even though you've got a good idea, that that is a drag on economic growth. So in my opinion, if we take these frictions out or reduce the frictions and allow people to be treated equally and the judgment is basically on the quality of the idea rather than how much you've got, then that opens up the possibility of substantially increased growth in our economy. And we really need that.”
2021-09-17 · Masters in Business · Campbell Harvey on the Future of Finance (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“The project is in pursuit. And when the project isn't pursued, you've got like a high growth project that isn't pursued. That's exactly what our economy needs. We're stuck in 2% real GDP growth. And given the size of the obligations that the government has taken on, there are not many good options. So you could inflate by increasing the money supply. You could tax, and that's not great for growth. But the best way out is to increase growth.”
2021-09-17 · Masters in Business · Campbell Harvey on the Future of Finance (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“So again, the advantage of centralized is that we're familiar with it. It appears to work. It does work to some degree with our system, but it imposes these costs. And these costs lead to, in my opinion, opportunities that are not pursued that we really need to pursue. And if I could give an example of this. Sure. You're a small entrepreneur. You've got a great idea. You think the return on investment is going to be 24% a year. And you go to your bank and basically ask for a loan to get this going. And the bank says, well, you're too small. We prefer larger customers So, we're not going to do the loan, even though we like the idea. But, oh, here's a credit card. And we've extended the credit limit on it. And you can just borrow on your credit card. And we know what those rates are. 24%.”
2021-09-17 · Masters in Business · Campbell Harvey on the Future of Finance (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Then they quoted me the rate. And I said, well, that rate is 2.5% off the market rate. And I said, sorry, that's the best we can do. So to send the wire transfer was like swiping a credit card. No different. And they think they're convincing the customer that, oh, well, this is a favor that we're doing. No. So they have got control. They've got market power. So these large financial institutions, it doesn't matter who I go to. It's going to be the same thing where they're going to quote 2.5% off the market rate. And I got to pay it. So it's very direct and very large cost. So they've got the power to actually do that. When you go peer to peer, it's nothing like that at all. You're just interacting with your peer. Somebody is buying somebody is... And we're done. There's no spread.”
2021-09-17 · Masters in Business · Campbell Harvey on the Future of Finance (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“The owners of the governance. So that could take a longer period of time. The throughput in terms of the number of transactions per second, much greater if you've just got one centralized clearinghouse. So there are trade-offs here. But with centralization, these institutions can do what they want. And we were talking in the previous segment about credit cards. Well, what about a wire transfer? I did one last week. And I had to send some euros to Europe for some repair bill. And my bank said, oh, well, you're a good customer. We're going to waive the wire transfer fee.”
2021-09-17 · Masters in Business · Campbell Harvey on the Future of Finance (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“So it is a trade off. And I think that people in decentralized finance understand these trade-offs. And there's nothing that's perfect. There's always going to be some risk. But decentralization is, again, putting people together. So you deal peer-to-peer without this thick middle layer. And there's some advantage to doing that. You're correct that centralization does have some advantages. So one advantage is that you can move very quickly. Whereas a decentralized protocol, if there's a change, the necessary in that protocol has got to go to a vote of the users or”
2021-09-17 · Masters in Business · Campbell Harvey on the Future of Finance (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“But it is much more secure, and that's a major cost. The insecurity is a major issue with not just credit cards, but banking in general.”
2021-09-17 · Masters in Business · Campbell Harvey on the Future of Finance (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“So at the beginning, I wasn't clear that they really understood. So it seems like, well, instead of getting 3%, we got to take a haircut to 2.5. And maybe there was an expectation that the regular credit card would have better biometrics. Or a minimum, a pin. But given that we don't have that, it is way more secure to use something like Apple Pay, where you either use a pin or use the facial recognition. So it's much more difficult to use Apple Pay if you've stolen somebody's phone. For example, so the security cost that's attributed to those that use the credit card on Apple pay is way lower. So we have seen a lot of growth. This is not my area of expertise, like credit card mechanics and the amount of sales that's Apple Pay or Android versus just a regular swipe.”
2021-09-17 · Masters in Business · Campbell Harvey on the Future of Finance (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“You're just swiping a credit card. There's no pin, right? So in the United States, we don't use the pin for the credit cards in Europe, a different story But it's really much more secure. So we see the fees being bid down a little bit, but that's the reason.”
2021-09-17 · Masters in Business · Campbell Harvey on the Future of Finance (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, it's remarkable. The example I use on my book is not 100 years. It's 150 years. And I show this Western Union wire transfer from 1873. And it's for $300. And then there's another line for the fees. And the fees are $9. So that's like 3%. And I tell my students that. Basically, nothing has changed. And this particular example, nothing has changed. It's a 3% fee. So the reason that the fees for credit cards are so high, there's many reasons, but the leading reasons are the lack of security. So if somebody steals your credit card, then a credit card company is good for it, right? So you're not going to lose anything. They cover. Which is a great deal for the credit card company. So instead of getting 3%, they get 2.5 and Apple gets 0.5.”
2021-09-17 · Masters in Business · Campbell Harvey on the Future of Finance (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“That they are using the same centralized infrastructure, in my opinion, the current web of fintech is fleeting. I had a speaker in my course very prominent person in the world of DeFi, who basically at the end of his talk to my course, he said that the current way of fintech is like putting lipstick on a pig. And if you think about it, what he's saying is, yeah, it's an improvement, but you've got the same constraints of that centralized infrastructure. And what DeFi is doing is not doing an incremental improvement on the current infrastructure. It's actually building something that's fresh and new. So I see looking forward that FinTech will definitely disrupt the current financial system, but then eventually the centralized fintech will be disrupted by decentralized algorithms.”
2021-09-17 · Masters in Business · Campbell Harvey on the Future of Finance (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Totally offside. So as for the cash apps, yeah, there's many things that have happened to make it a little more efficient to actually do the transactions. But I point this out in the book. The current wave of fintech Largely uses the banking infrastructure that exists today, the centralized banking infrastructure. And I make the case in the book that, look, the traditional financial institutions, they are being continuously disrupted. And one way of that disruption is the fintech, so the neobanks, things like that that make it much more friendly for the user. But given”
2021-09-17 · Masters in Business · Campbell Harvey on the Future of Finance (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“That is, it is true that transaction costs have decreased. It is not true to believe that if you trade on Robinhood, you're trading for free. That's just not the case. And then number three, more importantly, for me to take ownership of a share of stock to transfer the ownership, that takes two days. So even in this age of the internet, in the age of digitization, it takes two days to transfer the ownership of, let's say, 100 shares of IBM. And that's just a completely unsatisfactory, unrealistic. And yet it's better in 1920s. It was like five days. And then we've had a change to three days and two days. But that's just to me.”
2021-09-17 · Masters in Business · Campbell Harvey on the Future of Finance (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“And that's the key. So you're dealing with your peer directly or a portfolio peers. And through an algorithm. And that's the key. So the algorithm basically takes the place of the functioning of a bank or a broker. And when you do this, when you've just got an algorithm out there, it makes things much more efficient. So without that middle layer, you're able to get this efficiency gain that's very important for the economy. So as many different aspects of this, but the key idea is let's deal with the algorithm directly. And when we do that, it's going to reduce cost. It's going to make transactions much more transparent, secure, efficient. All of these things.”
2021-09-17 · Masters in Business · Campbell Harvey on the Future of Finance (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Leads to transactions that are more expensive. So think of putting your money in a savings account. That rate is maybe lower than if you didn't have all of that middle layer, the back office and all of this stuff. And the same with lending, that the rates are higher. And there's a spread that's effectively taken by the centralized player. So what decentralized finance is about is essentially returning to where we began in market exchange. And that's Barber. Peer to peer.”
2021-09-17 · Masters in Business · Campbell Harvey on the Future of Finance (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“It's kind of interesting to me that the financial system really isn't that much different today than it was 100 years ago. The exception is digitization. But the basic infrastructure is the same. And I don't think that it's specific to finance. We kind of know that technology will transform a number of businesses. And right now the way that we interact and finance is with a brick and mortar intermediary. So you've got a bank in the middle. You've got a broker in the middle. And that middle layer.”
2021-09-17 · Masters in Business · Campbell Harvey on the Future of Finance (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Basically, what's happened is a lot of students didn't give back and we're trying to remind them to do that because it's a couple of hundred thousand dollars and kind of lost donations to the school.”
2021-09-17 · Masters in Business · Campbell Harvey on the Future of Finance (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Don't know where I'm going. Like, sometimes I get an odd email for, oh, I remember you gave me whatever it was, like 0.1 of a Bitcoin back in 2014. I forgot to give it back. And yeah, here it is. It's $4,000.”
2021-09-17 · Masters in Business · Campbell Harvey on the Future of Finance (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“So I discovered this one complication, and that is that once you give a crypto to somebody, there's no way to enforce giving it back. So many of the students didn't give back.”
2021-09-17 · Masters in Business · Campbell Harvey on the Future of Finance (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“What I did was to give $10 worth of Bitcoin to everybody and the deal was the following. They had to set up an account and at that time it was with Coinbase. I would give $10, and then at the end of the course, they would send it back to me, and then I would donate it to the university. So that would be my donation, my annual donation to the university. So it was basically just to get them set up with something in their wallet.”
2021-09-17 · Masters in Business · Campbell Harvey on the Future of Finance (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“I decided I was on the phone with a reporter from a leading media outlet who was covering crypto also. And I asked him whether he owned any Bitcoin. And he said, well, just a small amount because I'm worried about conflict of interest. And I was thinking maybe the same thing. If I'm teaching it, I'll have a small amount. And indeed, I was giving it out. So my student, what do you mean giving it out?”
2021-09-17 · Masters in Business · Campbell Harvey on the Future of Finance (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, no student had any Bitcoin. But I actually bought some and bought them, I think it's $300 a coin. Oh, my goodness. And this is one of the greatest investment mistakes of my life.”
2021-09-17 · Masters in Business · Campbell Harvey on the Future of Finance (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“And I'm standing there shell shocked because I worked so hard and for it to fail. It was very disappointing. But then students start to come to the front to talk to me. And they said, we are shell-shocked. Like this is a transformational topic. And a number of them said this was the most important lecture of their education. And that this cannot be just one lecture. It needs to be a broader learning experience. And so it deserves at least a full course. And that's where I started. So I developed the next year into a full course, which was the first blockchain-based course taught at a leading school. And then I've just continued it. And one thing with this space is changing all the time. So what I was teaching seven years ago is much different than what I teach today.”
2021-09-17 · Masters in Business · Campbell Harvey on the Future of Finance (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“We're just sitting there. And I thought, oh, well, maybe I ended the lecture. Way before I should have, but I looked at the clock and we were exactly at time. And I must have really bombed this lecture. It was a disaster, I guess.”
2021-09-17 · Masters in Business · Campbell Harvey on the Future of Finance (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, I kind of know what goes on in the practice. I'm very comfortable fielding questions for my students. And of course, I can't answer every single question, but I'm confident I could find somebody very quickly that could help me with the answer. But with this crypto stuff, I'm in the position where I'm giving a lecture and it's possible some of the students know far more than I do. So I sought some help. I practiced the lecture, all this stuff, and then I gave this lecture. Again, it was probably the most stressful lecture I've ever given. And you know the way it is. College where Right at the end of the lecture, everybody gets up and leaves, right on the minute that is supposed to end. Nobody stays late. They just get out of there. I've taught it for many years. That's exactly what happens. After giving this talk on crypto,”
2021-09-17 · Masters in Business · Campbell Harvey on the Future of Finance (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“And this is in 2014. So it was below the radar screen, definitely, but I'd heard about it. And I just, well, if I'm doing the euro, the pound, the dollar, the yen, why not add a cryptocurrency? So that's where I actually started and I began to research this idea. The more I researched it, the more I realized that this was something really big. And I spent a lot of time. It was a single like two hour lecture in my course. And I spent more time preparing that lecture than the sum of all of the other lectures in my course. And I was nervous because asset management, I researched this stuff for a long time. I've been very fortunate to have relationships with some of the leading edge firms.”
2021-09-17 · Masters in Business · Campbell Harvey on the Future of Finance (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Decentralized finance seems far away from inverted deal curves and luck versus skill and backtesting and things like that. So let me tell you the story about how I got involved in this space. And I've been involved in this space quite a while. I was on a seven-year teaching hiatus because I was editing the Journal of Finance and it was a full-time job. When I came back to my asset management course after seven years, I decided to scrap the syllabus and basically start over. But certain topics I had to include, like Forex. And I wanted to do the leading edge stuff. And I thought, well, there's this new thing I've heard of called Bitcoin.”
2021-09-17 · Masters in Business · Campbell Harvey on the Future of Finance (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“I'm not too sure a traditional finance guy. Indeed, five years ago, I announced that half of the empirical research and finance was likely false. So I don't think I'm traditional in any way, but I totally agree that”
2021-09-17 · Masters in Business · Campbell Harvey on the Future of Finance (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source