YouSaid · the spoken record

David Woo

lines on the record: 46
first: 2021-08-19
most recent: 2021-08-19
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

“Not at all. I mean, thanks for putting up with me. And I love coming out to Bloomberg because I know that you guys are willing to contemplate there are other alternative views out there than the mainstream media.”
2021-08-19 · Odd Lots · David Woo on What the Economists Got Wrong About the Stimulus · IDENTIFIED FROM THE TRANSCRIPT · source
“And that is if you tell me, if that's what you want to basically start building all these expensive plants outside China and hire people, yeah, you're going to create some jobs, but you're going to create a lot of inflation.”
2021-08-19 · Odd Lots · David Woo on What the Economists Got Wrong About the Stimulus · IDENTIFIED FROM THE TRANSCRIPT · source
“Trump is a great man. These are Chinese people telling me Trump is a great because they're saying, you know what, reforms had been stalling in China for the last 10 years under Xi Jinping. And thanks to China, thanks to Trump, the pressure is on China to once again accelerate reform. And that's what Trump did. And this is what people don't realize. In the end, China agreed to the Phase 1 agreement because ultimately the reformers got back into the driver's seat because of pressure from Trump. And I thought that this was going to lead to a basically a happy ending for both sides. Because at the end of the day, you know what? That's what we all want. I mean, Tracy, you're listening in Asia. But now with Biden, it's like, wow, gloves are off. So from that point, we're now moving from an economic conflict that was ultimately well defined under the pre-ministration that we were getting close to basically resolving to now ideological contests, which can never be resolved at this point.”
2021-08-19 · Odd Lots · David Woo on What the Economists Got Wrong About the Stimulus · IDENTIFIED FROM THE TRANSCRIPT · source
“Concession between Chinese. And from that point of view, that's why I always thought that the first agreement, the phase one agreement, was a very significant agreement. I was probably the only person on Wall Street to have read the entire 100-page document to me is still a spectacular agreement. I think it should go down in history as one of the most important milestones. Unfortunately, Trump lost the election, and that agreement is now worth nothing. But the point here is that that had a very defined objective, which could potentially still put the US and China into win-win position vis- ⁇-vis each other. I can tell you for the last all throughout 2018-19, when I was going to China, in big corporate offices and government offices, people will come up to me and whisper in my ears, no, David.”
2021-08-19 · Odd Lots · David Woo on What the Economists Got Wrong About the Stimulus · IDENTIFIED FROM THE TRANSCRIPT · source
“Okay, so now you're telling me who cares about that? Who cares about the disinflation? Let's embrace a little bit of inflation. Then what happens to asset prices, you tell me? Okay, so from that point of view, the debt, the wealth basic explosion of the last 20 years was all thanks to globalization, which is about the integration of the Chinese economy and the global economy that kept global prices low, that allowed interest rates to allow the kind of, you know, you could argue the globalists, the elites basically benefited from that because they're the ones who sitting on, they own most of the wealth that benefit from the price appreciation of these assets. But nevertheless, we got to be very, very careful to think. That's why Trump, even though he started the trade war with China, he had a very defined objective. He wanted China to play fair. He wanted China to respect US intellectual property rights. He wanted, you know, all.”
2021-08-19 · Odd Lots · David Woo on What the Economists Got Wrong About the Stimulus · IDENTIFIED FROM THE TRANSCRIPT · source
“You don't think that's going to be very expensive. I mean, sure. I mean, you know what? You got to basically think about that from that point of view, which is relative to where we are. Because again, this comes back to the whole inflation story. Okay. The only reason why the stock market is trading where it's trading right now. The only reason why house price has gone up so much, we're not even talking about today, yesterday, we're talking about the last 20 years. We've seen a massive rally in the stock market in basically home prices and wealth in general. And that's all because of this inflation as a result of globalization that has allowed central banks around the world to really cut interest rates to unbelievably low level. And by cutting interest rates to very low level, you are reducing the discount rates that price is all risky assets because by reducing the future discounted cash flows today, that's why you've seen this massive asset price appreciation.”
2021-08-19 · Odd Lots · David Woo on What the Economists Got Wrong About the Stimulus · IDENTIFIED FROM THE TRANSCRIPT · source
“You're right, I mean, it depends for who, but let's be very specific, right? Let's just say right now, you know, the US determined to basically shut down the entire semiconductor, basically production, okay, in China, right? I mean, the US decided that we don't want China to be in this business at all because it threatens the US hegemony too much, right? I mean, it's not even, at this point, it's not even about whether they steal from us, they don't steal from us, whether they spite from us. Now it's like, well, we don't want them to basically threaten our competitive, basically our technological hegemony in this space. Therefore, we don't want them to be in that space, period. Which means basically, you know what? You have to basically build these points somewhere else. Which means some companies will have to pour a lot of money into that, which means, can you imagine in the extreme case where everything that we're currently buying from China, we now have to basically build production capacity somewhere else to build the same thing.”
2021-08-19 · Odd Lots · David Woo on What the Economists Got Wrong About the Stimulus · IDENTIFIED FROM THE TRANSCRIPT · source
“Doing 2010 to 2010-2015 recovery. It's like, well, US was growing and then they were sucking all these cheap imports from China, therefore keeping basically prices very low. Now this is no longer the case. Okay. So basically what worries me much more is basically this kind of thing is a permanent supply shock that basically shifts the labor supply curve basically in. And then because of the disruption in global trade A lot of which has become so politicized that I don't see we're going to be able to overcome them anytime soon. That is also going to reduce the aggregate supply for the global economy. So from that point of view, a lot of the advantage. The inflation front.”
2021-08-19 · Odd Lots · David Woo on What the Economists Got Wrong About the Stimulus · IDENTIFIED FROM THE TRANSCRIPT · source
“Very close to getting back to what we wore before the crisis. Whereas people with only a high school degree, that is much less the case, which tells you that there's no doubt that it makes a big difference whether you can work from home or you cannot work from home. If COVID is transforming the economy in terms of the skill requirement, a very big part of our labor force may simply become unemployable. That's a negative basically supply shock. Other supply shock. Think about this. I think there's no doubt my mind. One of the things you know, Joe, like I really care a lot about is the US-China trade war. Okay. There is no doubt nobody wants to say this, but I think the U.S.-China relationship has gotten 10 times worse under Biden than under Trump, by the way. And there is no doubt, I mean, this is why it's actually interesting, like you were thinking the US economy is on fire. The Chinese basically is actually struggling to export. Now, in the past, including...”
2021-08-19 · Odd Lots · David Woo on What the Economists Got Wrong About the Stimulus · IDENTIFIED FROM THE TRANSCRIPT · source
“Comes the new normal, you know what? I do think many more women are going to end up staying home simply because I do think that starts with younger children, this is going to be a major issue. Okay. And then especially not before the vaccine becomes widely available, which may not be the case for many years, by the way. Who knows? Okay. I can tell you that from experience, because both of my basically daughters in Israel have very young children, my grandsons, you know, they have not been going to kindergarten for a very long time. As a result, both of my basically daughters having to quit their job was certainly kept back on their work in order to basically look after the children. That's one major issue. I think another major issue is that COVID, if it's going to be here to stay, is also changing the skills that are required by employers. Okay. You can see very clearly in the data, you know, unemployment rate for basically people with college education has pretty much gone back to, it's almost not exactly, but...”
2021-08-19 · Odd Lots · David Woo on What the Economists Got Wrong About the Stimulus · IDENTIFIED FROM THE TRANSCRIPT · source
“I think it's going to depend on different sectors. Obviously, for example, we all know that the supply crunch in semiconductors, right? That was one of the reasons why computer prices went through the roof. But computer prices starting to come back down a bit, right? That's one of the reasons why used car prices went through the room because there were no new cars because certain chips that were not available, so that certain new models were not available. And then actually what happened this week, this month is the reason why used car prices started to basically moderate prices is because new models are being rolled out. That's why like new car prices been going up. But I do think so, these are temporary shocks, by the way. These are temporary supply shocks. I'm not too worried about them. I'm much more concerned about potential permanent supply shock, negative supply shock. What are those? Let's think about this. Number one, as I said before, you know, if COVID is going to be here to stay, okay, if it becomes...”
2021-08-19 · Odd Lots · David Woo on What the Economists Got Wrong About the Stimulus · IDENTIFIED FROM THE TRANSCRIPT · source
“Like everybody else, there's going to be a learning curve. I think even Asia is going to get there, and when they get there, we're going to decide that maybe we can live with this. Now, of course, I want to say this one big, of course, which is I have no idea what's going to happen later this year. I mean, during the winter, because I don't tell you alpha, gamma, delta, and basically gamma all develop during late fall and early winter and early spring. The fact that Delta became more infectious, now you could basically define basically vaccination, I can tell you I'm in Israel right now. And then, you know, the immunity rate is now less than 40% among people who receive two shots. Okay. Is that going to basically become not only more contagious, but also more virulent? That is a different story. But right now, given if we're just talking about Delta right now,”
2021-08-19 · Odd Lots · David Woo on What the Economists Got Wrong About the Stimulus · IDENTIFIED FROM THE TRANSCRIPT · source
“Strategy that works now is to basically, and this is why I think the UK approach is going to be really, really important, because I don't tell you, UK saw massive increase in cases and they decided to basically reopen the economy, relax all restrictions because they decided, you know what, let's elimination strategy doesn't work. Let's just basically pursue a strategy of coexistence. Okay, if you get everybody vaccinated, you know what? Maybe we don't have to close if not many people are dying. And in fact, if you look at the mortality rate in the UK, it's about 0.2%, which is about double that of a flu. Okay, for vaccinated people. I think that's what it is. So I think it's basically Asian strategy worked in the beginning. It stopped working once Delta became much more contagious. And yet Asia continues to try to basically control it as though we were fighting the original virus.”
2021-08-19 · Odd Lots · David Woo on What the Economists Got Wrong About the Stimulus · IDENTIFIED FROM THE TRANSCRIPT · source
“You've got something like 20% vaccination. Okay. So that's pretty impressive. The numbers have completely collapsed in India. Let's look at the UK. UK is another good example. UK, you know, because of close ties with India, was the first Western country to get hit by Delta. And the number of cases basically went flying. And guess what? It's been coming down a lot, more than 70% is now stabilizing. This is also the reason why I think the US story is going to follow very similar pattern, which is that I think probably the next few weeks, we ought to see basically Delta cases also starting to peak. In Asia, I think the reason why the economy has been hit is because once again, these economies are still trying to deal with basically Delta using yesterday's medicine, which is by trying to shut down the economy, trying to basically limit it. That is not a winning strategy.”
2021-08-19 · Odd Lots · David Woo on What the Economists Got Wrong About the Stimulus · IDENTIFIED FROM THE TRANSCRIPT · source
“Basic elimination strategy doesn't work. And rightly so doesn't work. I never thought what's going to work because now you've got basically the delta, which is 50% more basic contagious than the alpha. The alpha was basically 100% more contagious than the Chinese. This is what's really going on. But I'm not terribly worried about this. And I'll tell you why I'm not terribly worried about this. If you look at the experience of alpha, gamma, beta, and delta delta, They all follow a very similar pattern and you have to look at the countries of origin for each of these basically varying. Okay. And basically in the UK, South Africa and Brazil following the outbreak of alpha, beta, and gamma, in India, which is the home of origin of Delta, the number of new cases collapsed. And it's pretty fascinating because even India”
2021-08-19 · Odd Lots · David Woo on What the Economists Got Wrong About the Stimulus · IDENTIFIED FROM THE TRANSCRIPT · source
“I've always said China got super lucky. I don't know if, you know, if the virus was biologically engineered or not, I don't really care. What I think is China got really insanely lucky last year because we all know the virus once it got out of China on its way to Europe became literally 100% more contagious. By the time it started to spread in Europe, it had already mutated. It was a much more infectious, basically virus than anything the Chinese had to deal with in last January and February in China. And ironically, you know, the mutation that has been happening now, you know, from basically in Europe and then with the alpha, the beta, the gamma in South Africa, Brazil, now the delta is now finally reaching Asia. And all of a sudden, you know, the Asian...”
2021-08-19 · Odd Lots · David Woo on What the Economists Got Wrong About the Stimulus · IDENTIFIED FROM THE TRANSCRIPT · source
“The difference between Asia and the rest of the world is very simple. Asia was fighting a different battle than the rest of the world during the entire COVID pandemic. And Asia was successful, you know, in terms of their strategy coping with COVID by simply pursuing an elimination strategy. And I'm going to tell you. Great example is Taiwan, right? And now Australia. I mean, they were just, they basically shut down their whole country so that it was impossible for anybody to even get in. I mean, I should know this. My parents live in Taiwan. I can tell you it was impossible. So as a result, Asia became too complacent. They were able to contain keep the basically COVID at bay by keeping it outside basically their countries. They didn't aggressively trying to get vaccines. And that's, of course, the big story, right? So, and then what is weird?”
2021-08-19 · Odd Lots · David Woo on What the Economists Got Wrong About the Stimulus · IDENTIFIED FROM THE TRANSCRIPT · source
“This is the fourth month in a row. The hospitality and leisure created more jobs than all the other private sectors combined, my friend. Because Americans are rushing out to basically eat out and basically hit the road on vacation and so on and so forth. So from that point of view, again, what I'm saying is this. I'm not saying that any fiscal response is wrong. I have no doubt that last year the aggressive fiscal response was correct. It was calibrated and I love the PPP program because that made a lot of sense to me. And on top of that, there was also more assuasion placed on the banks not to foreclose. Okay, on basically businesses, well, for that matter, mortgages, these were supply-side response that was basically pushed by the last administration. This administration came in the first thing they want to do is spend more, to give people who didn't need the money to spend more. That's what I've got problems with.”
2021-08-19 · Odd Lots · David Woo on What the Economists Got Wrong About the Stimulus · IDENTIFIED FROM THE TRANSCRIPT · source
“9% 10. You know, if people had that kind, were sitting, if you look at average saving rate has never been higher. So Americans were sitting on some savings. If they're not spending it, it was not because they didn't have the money. Presumably because, you know what? There was no place to spend it. Because, you know what? They wanted to go out to restaurant. The restaurants were closed. Maybe they bought all the computers they had. And you can see what's happening right now, by the way. This last month, you know, you saw the non-phone payroll number last week.”
2021-08-19 · Odd Lots · David Woo on What the Economists Got Wrong About the Stimulus · IDENTIFIED FROM THE TRANSCRIPT · source
“Therefore, the whole PVP, the payroll basically program, was to help small business survive the shock. And then you also understood that, you know what? There will be some money that was going to be stolen in that process, right? Because as we know, like a lot of companies basically fake their whatever, you know, payrolls and basically got the money that they shouldn't have. But it doesn't really matter. But that was a good example of a supply response to help basically mitigate the real basically the long-term cost of the crisis by preventing a large number of businesses from simply going bankrupt. That was the right policy. But what happened earlier this year when Biden and with he basically endorsed Yallan Senate checked everybody again for $1,200, that is not the supply-side policy, especially at the time already, U.S. household savings was like 8%.”
2021-08-19 · Odd Lots · David Woo on What the Economists Got Wrong About the Stimulus · IDENTIFIED FROM THE TRANSCRIPT · source
“You asked a very good question. And again, I don't want to sound overly political. I would argue, in my humble opinion, I think Secretary Marnewton was probably the best secretary of U.S. treasury we've had for a long time. Okay. One of the reasons, I mean, he did a lot of great things. He's just someone who is just obviously a bit of an introvert. He didn't know how to basically do his own PR. Now, and because his association with Trump, people didn't want to give him any credit for anything he did. But he was the one who came up with PPP. If you think about PPP, okay, PPP was basically a supply side response by the last administration, right? Because the whole idea was, well, these businesses are going to go bankrupt, you know, and there's a cost to companies going bankrupt because it's easy for companies to go bankrupt, but it will be difficult for these companies to come back.”
2021-08-19 · Odd Lots · David Woo on What the Economists Got Wrong About the Stimulus · IDENTIFIED FROM THE TRANSCRIPT · source
“No, I don't think so because I would say that they were following his blueprint. In fact, if you actually read his Washington Post article, it was pussyfooting around. It was like, it was nothing. It was not like, you know, he really came out forcefully. He felt that he had to basically say something. That's the feeling I got. Certainly, again, go back to read an article and see if you actually Larry somewhere is not someone who pussyfoot arm. He basically make sure that you hear him when he speaks. And in the way he wrote that article, I thought there were too many ifs. Anyway.”
2021-08-19 · Odd Lots · David Woo on What the Economists Got Wrong About the Stimulus · IDENTIFIED FROM THE TRANSCRIPT · source
“Can we just basically answer that question? If you read, for me, Larry Summers has no credibility whatsoever when it comes to this because he has been, if you, I don't have to tell you, I don't have to remind you, Joe, you remember this as well as I do. For the last 10 years, he's been advocating massive fiscal stimulus. Remember, he was the one who was talking about stagnation.”
2021-08-19 · Odd Lots · David Woo on What the Economists Got Wrong About the Stimulus · IDENTIFIED FROM THE TRANSCRIPT · source
“On Wall Street is that Wall Street is about the celebration of differences. Just think about this. Every day people are going on your show, you know, debating about A and B is inflation going up, inflation going down. You know what? Wall Street is about the celebration of differences. If somebody today is buying Tesla stock, it's because somebody else is selling it. So I wonder basically, I decided to set out my own in order to basically bring this very important lesson from Wall Street that I become has been a very big part of my success to basically the general public. That's what I want to do.”
2021-08-19 · Odd Lots · David Woo on What the Economists Got Wrong About the Stimulus · IDENTIFIED FROM THE TRANSCRIPT · source
“Economists, okay, really spoke up, with the exception of a few honest and courageous people, they didn't mind to be canceled because either they were already in retirement or they were already basically in North Pole. They've already been canceled. So from that point of view, this is what it was a wake-up call for me. Because then I realized that the whole cancel culture has gone much too far. I can tell you so many of my professor friends, you know, classmates at Columbia who are now basically teaching a major university, Ivy League, who tell me they do not dare to speak up today because they might lose their job, they might lose their tenure, they might have students basically complaining about them. That is the climate today in America. And it is starting and it was getting onto Wall Street. And I said, you know what? I got to do something about this because I benefited from Wall Street. I mean, I've spent 20 years on Wall Street. One thing I learned more than anything else.”
2021-08-19 · Odd Lots · David Woo on What the Economists Got Wrong About the Stimulus · IDENTIFIED FROM THE TRANSCRIPT · source
“The one point, whatever $6 trillion fiscal stimulus package that got through very quickly in January as soon as the new administration was sworn in. Now, that $1.6 trillion. I can tell you any reasonable economists will tell you it was not just excessive, it was probably unnecessary. Now, it's very interesting to me how many economists came out speaking up against it. Obviously not a single one on Wall Street, but literally the people who spoke up against it are like Olivia Blanchard, who is a former chief economist at the IMF, who's now retired, who doesn't care anymore. He doesn't have to pay the political price for saying things that may not be politically correct. I can tell you who other person can, John Cochran, who used to be at Berkeley, who's now at Hoover Institute, who's been banished already to the North Pole, if you like, who basically wrote about it. In other words, to me, what we're shocking in January and February was that we just decided to write this massive check that was completely unnecessary. And yet, not a single academic”
2021-08-19 · Odd Lots · David Woo on What the Economists Got Wrong About the Stimulus · IDENTIFIED FROM THE TRANSCRIPT · source
“Tracy, you know, let me tell you something. You know what really basically sort of like the day of reckoning for me at Bank America? You know, by the way, I don't want to say I have only good things to say about Bank America. I was there for 10 years. I did great. The bank treated me great. I couldn't be any happier. That's the honest truth. So my leading bank America has nothing to do with how the bank treated me or anything like that. I've always thought that they pay me much more than actually I was worth. But nevertheless, you know what? I'm not going to complain now. I'll tell you what really got to me. It's a sort of sequence of events, one of which was what happened in January, February this year. Now, I don't have to remind you.”
2021-08-19 · Odd Lots · David Woo on What the Economists Got Wrong About the Stimulus · IDENTIFIED FROM THE TRANSCRIPT · source
“Inflation story. The reason why Yellen, and this is why I have no respect for people like Yellen, she keeps talking about, oh, well, if interest rates are zero, If the interest rate is zero. But she's assuming that inflation is never going to go back up. I just told you if COVID turns out to be a negative supply shock, then everything they're doing right now is going to be pushing up inflation and pushing up inflation unless they want inflation to go out of control, which I don't think they do. The Fed will have no choice but the raise interest rate. When it starts to raise its interest rates, that's when that's the day we start paying for basically the cost. And it's going to be a big cost.”
2021-08-19 · Odd Lots · David Woo on What the Economists Got Wrong About the Stimulus · IDENTIFIED FROM THE TRANSCRIPT · source
“Cause of last year is basically foregone GDP and the fiscal cost is enough to make the world a much better place. In other words, the way I think about this is, okay, is that now as though before the crisis, there was nobody when hungry at night, nobody went without clean water, all the children went to school, animals live in total peace. And now guess what? After COVID just one year, 700 million people are going hungry every night. More than a billion people don't have any safe water. Basically, about 500 million people are not going to school when they should. And then guess what? Animals are dying left and right. That is the cost just in 2020. Not to mention beyond. Now, I can tell you something else. You might say, well, when are we going to pay this price? That obviously, you know, is immediately tied to the whole.”
2021-08-19 · Odd Lots · David Woo on What the Economists Got Wrong About the Stimulus · IDENTIFIED FROM THE TRANSCRIPT · source
“$70 billion compared with the $24 trillion I just told you is the sum that cost the world basically from COVID just in 2020. Do you know you can buy all of Manhattan's land for $1.7 trillion? Again, COVID costs us $24 trillion. Do you know what it is? I figured it out. You know what $24 trillion really mean? With $24 trillion, we can basically feed the $700 million people in the world who suffer from chronic nourishment. We can provide clean water and basic sanitation for everyone in the world. We can provide education for all the children in the world who are not able to attend school. On top of that, we can protect all the endangered species from extinction, okay? Which only cost us about $76 billion a year. In other words, just to...”
2021-08-19 · Odd Lots · David Woo on What the Economists Got Wrong About the Stimulus · IDENTIFIED FROM THE TRANSCRIPT · source
“Realize this, but you know what? If you look at the combined wealth of the 2755 billionaires in the world, so if you take all the billionaires in the world, you add up all their money, it's only $13 trillion, by the way. Okay, so even if we were the confiscate all the money from all the richest billionaires in the world, not enough to basically even fill the hole. Now, another way to look at this, you say, well, what can you buy with $24 trillion? You must put it that way. Now think about this. You know, you could argue today the most, you know, the ultimate symbol of wealth these days is to buy sports teams and luxury real estate. But you know, you could buy the 50 most valuable teams in the world. I'm talking about like from the LA Lakers to, I don't know, United, you know, basically Manchester United. You can buy the 50 most valuable teams in the world for just 100.”
2021-08-19 · Odd Lots · David Woo on What the Economists Got Wrong About the Stimulus · IDENTIFIED FROM THE TRANSCRIPT · source
“Let's look at the numbers here. So forget about anything else. Let's look at 2020, right? 2020, the global economy contracted by 3.6%. The economy was growing about 6% before that. So the forgotten output last year was about 10% of global GDP, which comes to about $9 trillion, right? That was how much global GDP foregone basically lost, if you like. On top of that, based on the IMF's number, $15 trillion of fiscal spending has now been taken out by governments around the world to finance whatever they're firefighting. So $15 billion, $15 trillion, plus $9 trillion is $24 trillion. Not just for 2020. You say, well, what's $24 trillion these days we talk about trillions as though they were nothing? Let's put that in perspective. Okay, let's put that in perspective. I don't know if people are...”
2021-08-19 · Odd Lots · David Woo on What the Economists Got Wrong About the Stimulus · IDENTIFIED FROM THE TRANSCRIPT · source
“To make sure, I mean, think about this. I mean, the amount of benefits that people were getting, including the enhanced benefit, most of the people who lost your jobs were actually getting more money from the benefits than what they were earning before. So you telling me which American has actually lost out? Sure, some people have lost their family. That kind of thing is all very sad. But economically, yeah. Basically, because of policy, which I think we're going to have to pay for dearly down the road, has made sure everybody's better off. So against this backdrop, yeah, I'm not surprised Americans are basically are about to basically spend some serious money.”
2021-08-19 · Odd Lots · David Woo on What the Economists Got Wrong About the Stimulus · IDENTIFIED FROM THE TRANSCRIPT · source
“Let your money, credit card for people who have no money is at all time high right now. On top of that, you know what? If you really do have any money, you know what? Biden has promised to basically make sure you do not miss the party right now. You know, I don't have to tell you the big news the last two weeks was the fact that, you know what? Biden has decided to suspend the moratorium. I mean, basically extend the moratorium on eviction. Again, if you cannot pay rent, no problem. You can stay on and go on a vacation. Meanwhile, okay, and worry about paying rent down the road because we're going to make sure you don't get evicted. Meanwhile, last week, of course, they also came under pressure from the liberal weight of the Democratic Party. Now you cannot pay your student loans. They've also extended the student loan moratorium until basically October. And then now there's talk about maybe possibly extending the enhanced benefits, federal basically unemployment insurance benefits.”
2021-08-19 · Odd Lots · David Woo on What the Economists Got Wrong About the Stimulus · IDENTIFIED FROM THE TRANSCRIPT · source
“Because the honest truth, Tra Which is that somehow after the biggest basically crisis that hit the world in 100 years, that somehow U.S. household balance sheet has improved and their cash flow has improved. I don't have to tell you, US household net worth as a share of disposable income is now all-time high because we've seen a massive rallying in the stock market, unbelievably. We've seen a massive appreciation in home prices. So as a result, Americans who own stocks in the houses are far richer today than they were a year ago, ironically. At the same time, COVID has driven down interest rate as a result. Debt payment as a share of disposal income for American is basically at an all-time low at the same time. Meanwhile, if you don't have any money, guess what? You know what? For one thing, the banks are begging you to borrow. If you look at answer the senior loan officer survey, the willingness of Banksfield”
2021-08-19 · Odd Lots · David Woo on What the Economists Got Wrong About the Stimulus · IDENTIFIED FROM THE TRANSCRIPT · source
“Your supply curves move to the left, it push down employment, it push up prices. So when you are basically, when the Fed and the US government unleash massive fiscal stimulus to try to offset a negative supply shock, all it's going to do is basically push up inflation. That is, by the way, and I'm telling you this, this is why the neoclassical school framework thinking about recession, about prices is the more relevant framework in this particular point in time because of COVID. I would say, I'm not saying that COVID is only its negative supply shock because maybe there's a little bit of negative demand shock, at least in the beginning when it first hit, when her confidence and so on and so forth. But I think the longer this thing drags out is becoming more of a negative supply shock. And then yet the Fed and the Biden administration continue to respond to COVID as though it were a negative demand shock.”
2021-08-19 · Odd Lots · David Woo on What the Economists Got Wrong About the Stimulus · IDENTIFIED FROM THE TRANSCRIPT · source
“You're going to see a large part of labor force basically disappearing. That's a negative supply shock. Let me tell you this. If you look at a very basic economics supply and demand chart, which all your viewers have carted about, and that's why they're listening to this program, a negative demand shock is deflationary. But guess what? A negative supply shock is inflationary.”
2021-08-19 · Odd Lots · David Woo on What the Economists Got Wrong About the Stimulus · IDENTIFIED FROM THE TRANSCRIPT · source
“The world are being stranded at their ports not being able to offload their cargoes, not to mention the sailors, the crew. Now, that's a negative supply shock to the extent that COVID is actually has basically reduced ability of the economy to basically to respond to increased demand. Now, what else is basically a negative supply shock? Think about this. All these women, we have seen a massive drop in labor participation rate of women in the United States in the last basic 18 months. Why is that? They're not even looking for a job. These women who just simply left the labor force because it's very simple. Because as long as COVID right now, it's like, well, there's no vaccine for children. As a result, women are now having to stay home to look after their young children who cannot go to school. Now, if COVID is going to be here today, you know what? Or that for that matter, if we don't have vaccine anytime soon for children, guess what?”
2021-08-19 · Odd Lots · David Woo on What the Economists Got Wrong About the Stimulus · IDENTIFIED FROM THE TRANSCRIPT · source
“It so well was because one after another all these shocks, as I said, the thought come bubble bursting, September 11, 2008 were all negative demand shocks. Now guess what? What is COVID, you might ask? I can tell you if COVID is anything at all, it's not a negative dimension shock. In my view, it's a negative supply shock. And by the way, just think about this. I mean, how is it affecting supply? I don't have to tell you. Right now, for example, you look at global freight prices. Global freight rates for containers going through the roof right now. It went basically double last year. It doubled already this year, showing no signs of moderation. You know why? Because right now in Asia, we are basically the pandemic is basically breaking out. Once again, and then countries are not allowing, okay, these containment ships to offload their cargoes. So as a result, thousands of ships right now around.”
2021-08-19 · Odd Lots · David Woo on What the Economists Got Wrong About the Stimulus · IDENTIFIED FROM THE TRANSCRIPT · source
“What is a negative demand shock? Negative demand shock is like the dot-com bubble bursting in 2000. Okay, which unleash this massive negative wealth effect. The band shock is like, oh, September, you know, basically 11 that crushed confidence and caused people to pull back their spending. Negative demand shock is like what happened in 2008 following the collapse of Lehman Brothers, which basically caused all the banks to pull back in terms of their credit lending, which basically forced a negative demand shock. And then the Keynesians argue, and rightly so, when you have a negative demand shock, the right thing to do is to basically engage in proactive fiscal and monetary expansion to offset the negative demand shock in order to bring the economy back to fully employment equilibrium. This is why the last 20 years, the reason why Keynesian economic”
2021-08-19 · Odd Lots · David Woo on What the Economists Got Wrong About the Stimulus · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I mean, Joe, you asked that's the right question. That's exactly the right question. And I'm going to tell you the answer. I mean, for his worth, you know, I write about it actually in my own blog, which is this, right? The last 20 years I don't have to tell you, Keynesian School of Economics has been on the ascendancy. I can tell you this wasn't always the case because 20 years ago when I got my PhD at Columbia in economics, you know, at the time, it was the neoclassical school of economics that was invoked. And these had been the main schools of economics that had been, you know, in rivalry for much of the last 50 years, you could argue. Now, what is the essential difference between the Keynesian school versus the neoclassical school? Neoclassical school, by the way, is the Chicago school, you can think about it that way. The main difference is the Keynesian school emphasizes negative demand shocks, whereas the neoclassical school emphasizes negative supply shock.”
2021-08-19 · Odd Lots · David Woo on What the Economists Got Wrong About the Stimulus · IDENTIFIED FROM THE TRANSCRIPT · source
“The truth is economists know much less than anybody give them credit for. If there's one thing they know and they're afraid of is basically inflation expectation is like a So, this is why if inflation starts to edge higher, forget about the whole idea of inflation, averaging inflation target, the Fed will go. They will have no choice but to go because they realize what will be at that stake. Because if they don't go and inflation expectation goes up, and then having to bring it down down the road is going to be that much more costly. This is why I think the whole inflation averaging business was nothing more than just empty talk at the end of the day.”
2021-08-19 · Odd Lots · David Woo on What the Economists Got Wrong About the Stimulus · IDENTIFIED FROM THE TRANSCRIPT · source
“No, honestly, I think the whole averaging inflation was a gimmick. And I'll tell you what the gimmick was. The gimmick was to basically help them convince the market to drive interest rates lower, right? Because they're going to tell you, oh, well, even when the inflation goes above 2%, we're not going to hike rates anytime soon. Therefore, the market, so in some sense it was stronger for guidance than what Yellen introduced, whatever, five, six years ago. The point here is inflation really starts to go up from 2% to 3%, 3% to 4%. You think the Fed is going to be sitting there twitting their thumbs? Because they're going to be very nervous about the return of inflation expectations. You know, it took, just think about what Volcker had to do to crush inflation expectation in the early 1980s. It had to basically bring the engineer a recession, U.S. economy, to crush inflation expectation. Inflation expectation, I mean, you know, anything, economists don't know that much. Honestly.”
2021-08-19 · Odd Lots · David Woo on What the Economists Got Wrong About the Stimulus · IDENTIFIED FROM THE TRANSCRIPT · source
“With this very accommodative stance. If inflation just goes above 2%, if it just goes to 3%, the world is going to have a huge problem.”
2021-08-19 · Odd Lots · David Woo on What the Economists Got Wrong About the Stimulus · IDENTIFIED FROM THE TRANSCRIPT · source
“And more recently. So I would say that forget about basically whether it's whatever, six or seven. The fact that it is even running at 3%, 4%, that's a problem because the point here is that the whole world economy is currently calibrated on the assumption that the Fed funds rate is going to remain very, very low for a very long time. The only way that's going to be possible is if inflation doesn't become a problem. You don't need inflation at 5% or 6% to become a problem. All you need is inflation at 3% and the Fed has got a huge headache ahead of them and so will the market. So let's not beat around the bush. I don't really, I'm not one of these people behind the table saying, oh, we're going to see double digit inflation anytime soon. Given that the whole entire market has been gotten used to the idea that inflation was always going to remain somewhere below 2%, allowing the Fed to basically carry on.”
2021-08-19 · Odd Lots · David Woo on What the Economists Got Wrong About the Stimulus · IDENTIFIED FROM THE TRANSCRIPT · source
“I think we have to first of all put things in perspective. I don't think anybody in their right mind thought that the sort of 6%, 7% inflation was sustainable. Everybody knew that it had to do with these one-off factors like used cars, computers, things that have been affected by supply chain basically breakdown. So therefore the spike in price ought to be temporary a supply chain basically came back on track. So the question really is, you know, so if it's not six or seven percent, what is it? Now, the fact is that notwithstanding, you know, basically the sharp drop in basic inflation for used car prices this month, if you look at the core inflation, it was still up 0.3%. I mean, that is an annualized rate of close to 4%. I mean, that's like higher than anything we've ever seen, you know, basically, you know, basically in a run up to”
2021-08-19 · Odd Lots · David Woo on What the Economists Got Wrong About the Stimulus · IDENTIFIED FROM THE TRANSCRIPT · source