YouSaid · the spoken record

David Kotok

lines on the record: 94
first: 2015-07-11
most recent: 2015-07-11
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

“And George Tachekos, who is the former dean of the business school at Drexel, is also chairman emeritus. I was the program chair and I chaired the central banking series. John Sylvia at Wells Fargo's now chairing central banking. Michael Drewery and McVane trading in Memphis is now chairman and Don Rismiller in Strategis is now the program chair. And I'm just the old goat getting in the way and stir in the pot.”
2015-07-11 · Masters in Business · Cumberland Advisors David Kotok: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Our offices are in Philadelphia Federal Reserve building. Actually, I'm program chair, past program chair, no longer the program chair, and Dunkelberg is the chairman emeritus.”
2015-07-11 · Masters in Business · Cumberland Advisors David Kotok: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“I think so. And I think the second part is that if you walk by a conversation and you hear something, you really shouldn't have heard. You ignore it. Now you may remember it. This is like telling the jury to disregard the testimony. But you don't go quote it in the newspaper because you walked by a conversation and there's Barry Ritholtz talking to somebody in a private conversation. You heard something that Ritholt said. That's nobody else's business. So by agreement we apply a modified version of the Chatham House rule and the Jackson Hole rule. And therefore, whatever is Public from the weekend is by agreement with the permission of the person who said it.”
2015-07-11 · Masters in Business · Cumberland Advisors David Kotok: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“People are Well, I think the conversations are great, and the people who come have a basic platform of information so you can cut right to the issue and dissect it immediately. And we do this. I mean, there's media that cover it. So as you know, If you have somebody's permission, you can quote them, you can interview them, but if you don't, then you can take the takeaway from the group, but you can't quote somebody unless you get their permission first.”
2015-07-11 · Masters in Business · Cumberland Advisors David Kotok: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“All summer. Yeah, people joke. They say you're 10% of the GDP of the whole county. I don't know what it is, but it would be, you know, and I think, by the way, we do good things. We spend money. We pay people. They have jobs. We make donations.”
2015-07-11 · Masters in Business · Cumberland Advisors David Kotok: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“And it's protected. There's a huge complex, a huge acreage which is in a land trust. So that'll never develop, and it adjoins the Pasimaquati Indian Reservation. It's impossible to see the kind of resort erosion, the inroads of resorts that would take away this setting.”
2015-07-11 · Masters in Business · Cumberland Advisors David Kotok: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Don't enact my policies, otherwise, all these things would only listen to you, Barry. So it's a great discussion in an environment which is informal. It's in pristine water, in a watershed, in forests with wildlife.”
2015-07-11 · Masters in Business · Cumberland Advisors David Kotok: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, his name is from, and we'll have a debate on some issue probably on Saturday night. and we'll have gatherings. Now the gatherings are discussions. You've been in the thick of them. You solved the world's problems in the morning. Repeatedly. Repeatedly. At the end of the weekend, they're still there.”
2015-07-11 · Masters in Business · Cumberland Advisors David Kotok: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Showed up. Governor's coming back this Friday. This is his fourth year on Thursday. We've got a congressman who's on the House Financial Services Committee. And he was the state treasurer. His Bruce Polliquin, you may remember, he was up.”
2015-07-11 · Masters in Business · Cumberland Advisors David Kotok: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, it's a collection of people who, like economics, financial markets, geopolitics, government, who have diverse views, who are Democrats, Republicans, liberals, conservatives, we've had last year we had Gary Schilling with his views, Paul McCully, with his views, Jack Rivkin with his views, Natalie Cohen from Wales, who's got expertise in municipal credit. We have men and women from around the world. Martin Barnes comes from Vancouver, Paul O'Brien came from Abu Dhabi. So you have a mix of people from all over the world. And what do we do? We have no PowerPoint.”
2015-07-11 · Masters in Business · Cumberland Advisors David Kotok: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“With death changes your perspective. It sure did, and that changed it. And the group the following year was the largest ever, which might have been 12. And it has grown ever since. And you know what it's like if you've been there? Sure. Give us some names.”
2015-07-11 · Masters in Business · Cumberland Advisors David Kotok: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“While we had come down and we were on the ground floor, very fortunate, so we were out in six minutes eight minutes. We were very, very lucky to get out. But during that time, up until then, I'd said, Harvey, come on, we'll go away somewhere. We'll be able to talk. I don't want to go fishing. I don't want to go in the woods. Hoffman, I don't want to go fishing. I don't want to go in the woods, all of them.”
2015-07-11 · Masters in Business · Cumberland Advisors David Kotok: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“On 9 11, when a group of us were at the Nab meeting and got out of the second tower. And in that group were people like Harvey Rosenblum from the Dallas Fed, Stu Hoffman. A lot of folks you know. And we were having this discussion. I had invited.”
2015-07-11 · Masters in Business · Cumberland Advisors David Kotok: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Pressure and I had been going to Grand Lake Stream, Maine. This is my 25th year. So I said, I know a place we can come fishing, we can stay in a was a different camp. It wasn't Lean Slodge at the time. I said, so let's go up there for a weekend. And that's how it started and it grew.”
2015-07-11 · Masters in Business · Cumberland Advisors David Kotok: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“That's what I'm open for. Look, we were a couple of guys saying we need to get away, go out in the woods somewhere and just think about the world, finance, economics, markets, without all the minute-by-minute interruptions.”
2015-07-11 · Masters in Business · Cumberland Advisors David Kotok: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“And Becky Quick put it up on a screen during an interview. So that's how it stuck. She originated the name has stuck and it's grown, I guess, now to become fairly commonly known.”
2015-07-11 · Masters in Business · Cumberland Advisors David Kotok: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“The Fed guy Wall Street Journal. Exactly. So, anyway, Hills and Wrath was there for a day and a half, and he coined that nickname. The Camp Kotok nickname came from Becky Quick.”
2015-07-11 · Masters in Business · Cumberland Advisors David Kotok: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“The Shadow Federal Reserve, Kansas City Fed shadow thing was a nickname that John Hilsenwrath gave us when he came up one time. And so that's how”
2015-07-11 · Masters in Business · Cumberland Advisors David Kotok: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Dead on he said We will lose the country if we have double digit inflations, and we must reverse it no matter what it takes. So he took the short term pain and within a year it turned within a year interest rates started the fall and they fell for the next thirty years, inflation went back to single digits and continued to decline, real growth and accelerated, and we've had a glorious story for the last thirty years.”
2015-07-11 · Masters in Business · Cumberland Advisors David Kotok: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“I lost all my hair, my beard turned gray. Look. Oh, so you look just like you do today. Exactly. I aged. I aged everything in 18 months. But that was...”
2015-07-11 · Masters in Business · Cumberland Advisors David Kotok: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Oh, yeah, for sure. Little did I know that at the end of the slam, when the bond market was in a free fall. That bond would trade below eighty cents on a dollar. It, by the way, bounced back, was then subsequently called, and everybody that we bought it for had a twelve percent income flow and got their money back on the call.”
2015-07-11 · Masters in Business · Cumberland Advisors David Kotok: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, we stood aside on the bond market and we entered the bond market in 1979 when Volcker came in and became chairman. I believe Paul Volcker meant what he said, that was my personal view. And I remembered the first bond I bought after years. It was a Pacific telephone and telegraph. Pactel was then a sub of AT&T. It was twelve point one five percent thirty year telephone bond rated AAA. That was the first bond that we had bought for clients in years. And you know, twelve percent on A?”
2015-07-11 · Masters in Business · Cumberland Advisors David Kotok: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, it went into double digits at the end. And every time you ratcheted up interest rates, they were a new high level, and people said, oh my gosh, I want to buy Bonsie's Bons I've never seen yields like this. In our shop we said wait a minute there's a force driving up these bonds and it is too soon. To buy bonds when you have an acceleration of inflation, you must be able to see the end of the tunnel because you have no idea where that is.”
2015-07-11 · Masters in Business · Cumberland Advisors David Kotok: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“And he's got autube manufacturers not making autos, people not flying on planes, and people not ordering planes, airlines not ordering planes, because the energy price is spiking up. So you have this cross current that was Burns and Period at the Fed, and he did some of each, but not enough to keep the inflation from rising. So in the mid seventies the economy started to recover. But the inflation rate was then accelerating, and it accelerated to above ten percent at the peak. Above ten percent above ten percent.”
2015-07-11 · Masters in Business · Cumberland Advisors David Kotok: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“7374. We just talked about it. So you think of yourself, there you are as a Fed chairman. Your economy goes into a recession. The price of oil has gone up fourfold. People are in gas lines. People aren't flying. There are no airplanes. No automobiles. The U.S. economy has been clobbered on the head by this rising energy. We were very energy dependent since the end of World War II, and we had a massive adjustment. Interest rates are up, inflation is rate. How do you balance all of this with monetary policy? That is what Burns faced. Critics would say Burns tried to do everything, balance the middle, and therefore accomplished some of each and not enough of any. And that's easy to do in retrospect. It's always easy to judge the game on a Monday as you know, huh?”
2015-07-11 · Masters in Business · Cumberland Advisors David Kotok: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Or he was a real Martin. I never met McChesney Martin, and I never met Miller, who was there for a very short period of time in the Carter administration. He was replaced quickly by Volcker, which was a good thing. I met Arthur Burns. Arthur Burns really was a smart economist, very skilled, knew his history, and he takes on the chairing of the Federal Reserve when the first energy shock happened in the seventies.”
2015-07-11 · Masters in Business · Cumberland Advisors David Kotok: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, we had a big inflation. Rates went up. They were double digits. Inflation went to double digits. It was the end of the Carter regime. In comes Paul Volker, who deserves a medal as a national hero for the United States, he said in nineteen seventy nine, I will stop this inflation, no matter what I have to do, and he did it. Bonds peaked, and the long bond rally started in nineteen eighty one”
2015-07-11 · Masters in Business · Cumberland Advisors David Kotok: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Not a gallon. I was in this business managing portfolios when that happened, and the rate of inflation in the seventies went to double digits. It was remarkable. Interest rates had been at levels and at the time of the first shock. They hit the highest interest rates since the Civil War in the United States. Can you imagine a hundred year period and now you have a new all time high interest rate? The prime rate hit twelve, never thinking that six or seven years later it would be higher.”
2015-07-11 · Masters in Business · Cumberland Advisors David Kotok: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“The seventies the seventies were remarkable. You started out in a rocky period at the end of the sixties. You got into the seventies, then you had the war in the Middle East. The price of oil went from three bucks to twelve. I remember well a barrel. We're talking a barrel. Not a bargain.”
2015-07-11 · Masters in Business · Cumberland Advisors David Kotok: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Absolutely. And we now have extraordinary central bank action, unlike anything we have in the history of man in modern financial times. So”
2015-07-11 · Masters in Business · Cumberland Advisors David Kotok: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Because you know a negative interest rate is not a sustainable model, even though it is being applied in one of the largest economic blocks in the world. So”
2015-07-11 · Masters in Business · Cumberland Advisors David Kotok: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“To borrow money. That's right. We're accustomed to saying to a bank, here's my money, pay me interest, and give it to me when we agree either tomorrow or a year from now. Now we have a new concept. Here's my money. Store it for me electronically. I will pay you a fee, and at the end of the term you're going to give me back less than I gave you. That is counterintuitive to any saver or lender. We don't think that way. We never have, and so this is a negative interest. Now you say to yourself, is that going to go on forever? The answer is no. It's not a sustainable system. So can you use the negative interest rate in the marketplace today to discount the value of something? I don't think so. Therefore you have to guess. at what the Interest rate ought to be if it reflected as much as you know, and you would get something other than”
2015-07-11 · Masters in Business · Cumberland Advisors David Kotok: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“All the buyers and sellers, anybody who's a player has a way to buy or sell at a price every second, and they all have information. How does this whole mass clear? In the end it clears because it reverts to some basic discounted price, and the basic discounted pricing mechanism is the interest rate. Now, the market interest rate may be below or above what would be some natural rate. We don't know. So therefore, the market interest rate may be influenced by other forces, and they have to be examined. A good example right now is you have this crazy idea in Europe of a negative interest rate.”
2015-07-11 · Masters in Business · Cumberland Advisors David Kotok: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, markets move up and down. They represent the consensus pricing view of all the agents in the market at any given minute.”
2015-07-11 · Masters in Business · Cumberland Advisors David Kotok: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Or something that is essentially risk free. And the fact is every single financial decision has to be compared with the risk free rate and the maturity that coincides with the financial decision you're making. So if you're buying stocks, for example, you have a very long-term asset pool. If you take all the stocks and lump them together and call them stock market and you bought one share of stock market, it's a very long lived pool. The same thing might be true with a very long term bond, so you say to yourself, okay, do I expect the long term bond maturity or the outcome of the long term share of stock market to produce a result? What is the result I expect? And how do I discount that result to today to decide whether or not to do it? That discounting mechanism is an interest rate.”
2015-07-11 · Masters in Business · Cumberland Advisors David Kotok: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“The valuation of every financial asset is a discounting mechanism some sort of Attempt to estimate what it's going to be worth tomorrow and at what rate do you discount tomorrow to today? And that is the fundamental interest rate. Now you can argue is it the nominal interest rate? Is it the real interest rate? You have to adjust for risk. But what about the bottom line is an interest rate.”
2015-07-11 · Masters in Business · Cumberland Advisors David Kotok: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, we think so, Barry. The yield curve, the distribution of interest rates over maturities. Shifts all the time, so it by itself is active for a variety of reasons having nothing to do with the bond buyer's daily activity. Those are functions of government and central banks and economic activity. But because they're there, you can take advantage of them in an active bond approach rather than just buy a bond, hold it, collect the interest, and get the principal when the bond matures. So the yield curve shift is one of the issues. The directions of each of those policy pieces, central banks, governance, deficits are also big pieces.”
2015-07-11 · Masters in Business · Cumberland Advisors David Kotok: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, we have a 40 year plus history in active management of bonds. We do our own credit work. We look at what rating agencies do, but we do our own credit work as well. And we also have a pretty good ETF segment. Although that has a lot of growing prominence, but we're known for a long time as a bon shop.”
2015-07-11 · Masters in Business · Cumberland Advisors David Kotok: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“We saw it and we also saw the absence of it. And therefore the structure of a new government is to try to create order in the transition you have chaos, creating order out of chaos is always a difficult thing to do and that's what the world's about. So my prior experience helped me in both transition teams. You set up a new government, you have a lot of new personalities. There's a very rapid change in personalities and the leader at the top, the new governor is like an electronic machine with people banging at them and pinging at them every second. Trying to put together. And in New Jersey's case, the governor of New Jersey, very powerful. So there are a couple of thousand appointed positions in the government, and so it was a lot to do. It was great experience, Jensen. Teams.”
2015-07-11 · Masters in Business · Cumberland Advisors David Kotok: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Sure, because the experience is not only the textbook experience and the study of organizations and businesses. But in the Army, you have somebody above you and somebody below you have to transmit a directive and you have to see it through and accomplish something. So it's very helpful to me.”
2015-07-11 · Masters in Business · Cumberland Advisors David Kotok: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“So that's the Dorothy Well, there you go. That's right. And the thing about that the army experienced, a military experience that helps me is it creates a hierarchical structure in your thinking. A reporting system, a system in which you follow directives. And so when you think in terms of that structure, it helps you in a business environment. And it actually helps me when I look at businesses and I look at governance and I look at situations around the world in terms of investment advice and decisions because I can measure them in the context of their structure.”
2015-07-11 · Masters in Business · Cumberland Advisors David Kotok: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“The army is a great experience under most circumstances, most people would not repeat it. But they would also say, and many of my friends would say, I'm glad I did it, and number two, I'm glad I'm here.”
2015-07-11 · Masters in Business · Cumberland Advisors David Kotok: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Then got out and came back to New Jersey. And in 1970, I became registered as a solo investment advisor under the Forties Act.”
2015-07-11 · Masters in Business · Cumberland Advisors David Kotok: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Barry, it's so nice to be with you. We've chases for a while, and here we are, and we don't have fishing rods in our hands. I know”
2015-07-11 · Masters in Business · Cumberland Advisors David Kotok: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source