YouSaid · the spoken record

Gary Shilling

lines on the record: 141
first: 2015-10-02
most recent: 2015-10-02
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

“Yeah, yeah, I remember an ad they had back in the day. That's a great time to buy. It's a great time to sell. It's always a great time. They didn't have it both ways. Right.”
2015-10-02 · Masters in Business · An Interview With Gary Shilling: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I think housing is probably going to limp along here, but I don't see anything really pushing it. I mean, we're the most overhoused country in the world, possible exception, maybe Spain. I mean, the National Association of Realtors would never tell you that. Well, it's always a good.”
2015-10-02 · Masters in Business · An Interview With Gary Shilling: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Or you can do a short sale where you basically sell the market and the lender forgives the difference. I mean, there are all kinds of variations. So”
2015-10-02 · Masters in Business · An Interview With Gary Shilling: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, and there are a lot of people, you know, it's just like stocks, the idea they take a beating in a stock and they say, I won't sell it till I get out even. It's irrational because the market is whatever the market is today. But I think there is that pool of people who own houses. They bought them. They're underwater. And they're basically saying, yeah, I want to sell, but I can't get out from under it. And of course, some people, they have, you know, they're upside down. The mortgage is worth more than the house. So if they sell it, they've got financial problems.”
2015-10-02 · Masters in Business · An Interview With Gary Shilling: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“No, because people they don't have the incomes, they don't have the credit scores. And of course it's become, you know, it's become a virtue out of necessity. Oh, I really don't want a house of my own. I don't want the responsibility. I'd rather live in a more urban environment. Chicken and egg there. Which way is the causality?”
2015-10-02 · Masters in Business · An Interview With Gary Shilling: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“It has not been new homeowners that normally are the basis of housing. They're the people who buy the starter houses from people that then move up the Latinx rung on the latter and on up in housing. Not really.”
2015-10-02 · Masters in Business · An Interview With Gary Shilling: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, of course, the question is under what circumstance does that happen? If you're in a very low inflationary environment, if you're in a slow growth, sure. Yeah. If you're in a slow growth environment, it has other characteristics. I mean, you look at housing, you mentioned housing. Housing, this recovery has been basically a rental market.”
2015-10-02 · Masters in Business · An Interview With Gary Shilling: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“And when you look at the convexity of this whole thing, if I'm right and you go from essentially 3% to 2% on a 30-year coupon bond, you make 30% on your money, which I think is going to be a lot better than whatever is in second place.”
2015-10-02 · Masters in Business · An Interview With Gary Shilling: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, on the 30 year bond. That's amazing. Now, somebody says, well, I mean, what does that do for you? And who would accept 3% yield? I couldn't care less what the yield is. I never have as long as it's going down because that means the price of the bonds is going up.”
2015-10-02 · Masters in Business · An Interview With Gary Shilling: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, 1981, the yield on the 30 year treasury was 15.21%. And I said in writing, we're entering the bond rally of a lifetime because I saw inflation unwinding and with lower inflation that would push down yields, push up bond prices. And I think we're still in that. I mean, yields now obviously have dropped a tremendous amount. They're more like under 3% for the 30-year bond. I think we're going to go to 2%.”
2015-10-02 · Masters in Business · An Interview With Gary Shilling: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Or even in the post. Yeah, that was the Great Depression in the aftermath, but there were a lot of other things going on there, a complete shift in policy from basically a laissez-faire to a much more government involvement in the economy, whether that helped or hurt, historians argue about that. I don't think there is a period right now where you can point to it and say, let's follow the script. That does happen from time to time. And I'm always looking for those periods because...”
2015-10-02 · Masters in Business · An Interview With Gary Shilling: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“That's a good question times when you're working off excesses, I suppose you could say that to a certain extent that's what was going on in the 1930s.”
2015-10-02 · Masters in Business · An Interview With Gary Shilling: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Be thrilled to death. But, you know, and people talk about equilibrium. Hey, I've been in this business a long time, Barry. And equilibrium is something you simply pass through on the way to going to excesses on the top or the bottom.”
2015-10-02 · Masters in Business · An Interview With Gary Shilling: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“I'm not sure we're in a conventional economic cycle, and of course everybody wishes we were. Everybody yearns for the idea of a very systematic cycle, and you can say, where are you? I go out and I see presentations. A lot of the big banks have their representatives out, and they say, oh, here's a circle and here's where we are on that. I don't think we're in that kind of world right now. We're going through this massive deleveraging. We're seeing slow growth. We're seeing commodity prices decline. We're seeing the strength in the dollar. We're seeing competitive devaluations against the dollar. There's a lot of things going on here that I don't think give you a very clear idea of a cycle per se. And one thing I think is, you know, there's this yearning for nostalgia. We all have that. And forecasters are just as subject to this as anybody else. And you always have this feeling, oh, boy, if we could get back to the days when it was a nice cycle. And I know that it's four years. If I could lay 170.”
2015-10-02 · Masters in Business · An Interview With Gary Shilling: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, that's right. And I think that that really has prolonged the agony. I think they probably went too far on this whole process. Tad a band it off, let some bad deck go. And they really have way overrated themselves in terms of what they can do. Look at the whole faction. Trillion-dollar deficits, huge quantitative easing, and what do we get? 2% real GDP growth. I mean, it's telling you that these forces of deleveraging are so great they're overpowering this. And these guys who constantly think that policy is going to overwhelm everything else and they're going to get the results they want. I think they're in a dream world.”
2015-10-02 · Masters in Business · An Interview With Gary Shilling: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“That's right. Post Christ. That's correct. That's correct. Well, bailing out Wall Street probably was necessary because we very well could have had a full-blown financial meltdown. What about...”
2015-10-02 · Masters in Business · An Interview With Gary Shilling: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“You haven't got any inflation. But of course, the other thing is if they start lowering that number, then they have to lower the other side, the discounting rate for the future liabilities, the punch and payments, to bring it back to the present value. And that greatly increases the lower the interest rate you're discounting with, that greatly expands the current value of those liabilities. So they get hit on both sides. So there's a great reluctance to face the reality.”
2015-10-02 · Masters in Business · An Interview With Gary Shilling: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Barely moving. And so it really hasn't had much effect. So the Fed is really, I think, pretty much on the sidelines. And the other thing about quantitative easing is that the effects of this lower interest rates, it's created a lot of distortions, a lot of zeal for yield. You see the rush into leveraged loans, into emerging market debt and equity, into commodities, into hedge funds and so on.”
2015-10-02 · Masters in Business · An Interview With Gary Shilling: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“The effect of QE on the overall economy has been surprisingly little. To say it has pushed up asset prices, but you haven't gotten the multiplier effect normally when the Fed gives the banks a dollar in reserves by lending and relending in what's called a fractional reserve system, they turn it into $70 of M2 money, $70.”
2015-10-02 · Masters in Business · An Interview With Gary Shilling: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“But basically, the Fed is, in my view, is pretty much irrelevant. And also, of course, in this slow growth period, the Fed keeps pushing off the day that they're going to raise rates. They're now a lot more concerned with the rest of the world. Their charter is strictly domestic, full employment and price stability. But they obviously now are expanding that because the rest of the world is it is a global economy. But I think all in all, the Fed is pretty impotent right now. It doesn't make much difference what they do.”
2015-10-02 · Masters in Business · An Interview With Gary Shilling: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, it changes over time, but right now the Fed is pretty much irrelevant in my view. I mean, you're looking at a period where the Fed has pushed out all this money, quantitative easing. It hasn't done much good. Why is that? Well, it's very simple. Basically, that money got into circulation, and people use it to buy assets, stocks. Right. But stocks are owned principally by high income people who don't adjust their spending much in relation to their assets. You got three cars on the driveway. You're not going to put a fourth one in there. So it never got beyond that and it didn't do much to help the basic economy. It's the pushing on a string, the Keynesian liquidity trap. You can use all the technical terms. Right.”
2015-10-02 · Masters in Business · An Interview With Gary Shilling: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, it was really at that point deciding that, at least at that time, it was a pretty sleepy operation. So I spent a lot of time trying to figure out what indicators led the stock market. Well, that was a, I thought that should be the way around. That was a stupid exercise because you think about it. The stock market tends to lead almost anything else. And if you could find something that consistently does the stock market, hey, you'd make a fortune. So that was a learning experience. That's what happens when you're young and naive.”
2015-10-02 · Masters in Business · An Interview With Gary Shilling: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“To see where they're wrong, yeah. I have two basic principles that have always been guided me. One is that human nature changes very slowly over time so people react to similar circumstances in similar ways. In other words, history is relevant. Now, you still have to find the right piece of history. Mark Twain says history doesn't repeat, but it rhymes. And the second one is that you don't add value by rehashing the consensus. It doesn't mean you are contrarian and then you buck the consensus regardless where we agree we pass over it lightly, but where we find something that's important is likely to happen because you're judged by your forecasting record ultimately. And third is not yet within the purview of the consensus. That's where we really get interested.”
2015-10-02 · Masters in Business · An Interview With Gary Shilling: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Oh, yeah. Left or right. Matter of fact, I talked to a friend of mine who was trained as a sniper, and I call him up after I've seen this movie, the American sniper. And I ask him about that, and he explained that that shot that guy made when he took out the bad guy said, that was impossible because his sandstorm was coming. The thousand yard. Well, and with the winds going in and out of the buildings, it would cause the bullet to drift. And even with all the power of that 50 caliber rifle, you're still going to get something. That shot would happen. I have a t-shirt.”
2015-10-02 · Masters in Business · An Interview With Gary Shilling: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“That's a Midwestern term for hunches. Okay, Kentucky windage. I like that. Well, that's when you're shooting. And those guys are really sharp. They were really sharp. So they're just taking a guess. Well, you have to know the win because a wind pushes the bullet.”
2015-10-02 · Masters in Business · An Interview With Gary Shilling: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Forecashing, in my view, is a whole combination of things, and it really can't be quantified in any precise way. It's certainly looking at various leading indicators. What's the Federal Reserve? What leading indicators do you think are the Federal Reserve doing or not doing? What's the state of consumers? Right now, we think we're in this age of deleveraging, working off excess debt from the 80s and 90s. And that I put out this book, The Age of Deleveraging in 2010, and I said, I thought we were going to have 2% real GDP growth. And of course, the Fed and most people said, oh no, it's going to pick up. Well, where are we?2% since this recovery started in the middle of 2009. But it's looking at history. It's Kentucky windage. It's a whole host of things.”
2015-10-02 · Masters in Business · An Interview With Gary Shilling: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Assumptions for us. You know, that's a very good question, and I don't think anybody has really ever completely answered that. I thought I just But the problem is you have to keep going in and plugging in. And by the time you get all through, you might as well exceptions and variants. You might as well do it from scratch. But at that time, there was this hope that somehow you could devise a model of the economy. It would be unsullied by human hands. You put in the inputs and out comes the solution, and that's all you need to know.”
2015-10-02 · Masters in Business · An Interview With Gary Shilling: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, let me say this, Barry. Just going into this, that, as I mentioned earlier, forecasting, in my view, is an art, it's not a science. Now, I was trained as an econometrician. When I got to Sanford, I'd had, you know, if you're a physics major, you're a math major too, whether you want to be or not. And I was working there under Ken Arrow, Nobel Prize winner, econometrician, and I'd had only one undergraduate economics course. So the math side, the econometric side was easy. The economic stuff I had to learn. But I have found less and less interest in these big models. They simply do not work. They blow up. They produce nonsensical. Why is that?”
2015-10-02 · Masters in Business · An Interview With Gary Shilling: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“It was a lot of fun in many ways. They had a very good sales staff, particularly the institutional salesman. These guys were hungry for input. I was very willing to trot all over the world, not only the US, but Europe and Japan. And it was great working for these guys. Of course, they would really get their money's worth. I remember one salesman in Minneapolis where this guy had scheduled meetings with institutions every hour on the hour throughout the day, went to the lunch meeting, and I get my fork ready for the first bite of lunch. And he says, well, Gary, tell us about the economy. And so the entree comes and goes and goes. We rush out there to the next one and I say, wait a minute, I didn't get anything. He says, don't worry, I got a sandwich you can eat it on the elevator on the way down.”
2015-10-02 · Masters in Business · An Interview With Gary Shilling: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well. And how Another recession forecast. No, that was automatic. As a matter of fact, I found out later that when Regan, the first meeting between Don Regan and Paul Hallingby was head of White Well, that Regan said, if we get together, I want it known that there's one employee of White Weld who will not be invited to join the combined firm. So I was out before I got in. But anyway, that was inducement to do what I really had in mind, which was set at my own firm.”
2015-10-02 · Masters in Business · An Interview With Gary Shilling: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“You also have. I went there in 1967, and there had not been a recession in the US really since 1966. Now, I forecast a recession for 6970, which did occur, but it was so different from Merrill Lynch because Merrill Lynch at that point was buy-listed stocks only. That was the whole rationale of the firm. And the idea of a recession was very upsetting. Don Reagan, who was running the place, and I had a difference of opinion, obviously he won. I took my entire staff, left, ended up at White Weld, another Wall Street House with no idea 1978 Merrill Lynch would buy White Weld. So the story in the street, which is literally true, was Schillings, the only guy fired twice by Don Regan. So we come back.”
2015-10-02 · Masters in Business · An Interview With Gary Shilling: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, and of course, there's a difference too. The data then, I mean, at that point, every economist would have a couple of researchers say since you get the data by mail, they laboriously draw these charts, they were hardly any computers. There was no copy machines. I mean, it was, and of course that made you think a lot more.”
2015-10-02 · Masters in Business · An Interview With Gary Shilling: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“A stockhouse back then. I think I was the first economist at a stockhouse. Merrill Lynch. And at that point, economists were relatively new. I can remember Bill Freud, who was the economist for the New York Stock Exchange, remains a good friend, and he would have what he called Freud's friends. All the economists from Wall Street over for monthly lunches at the New York Stock Exchange. And we all fit comfortably in one of those wonderful ornate rooms. There couldn't have been more than 20 of us. Now, how many dozens, hundreds of economists are there on Wall Street”
2015-10-02 · Masters in Business · An Interview With Gary Shilling: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, that's an interesting story because at that point, the Bond houses on Wall Street had economists. Henry Kaufman was at Solomon Brothers, Al Osenauer at First Boston, Lynn Santau at Aubrey G. Lampson. But Maryland was”
2015-10-02 · Masters in Business · An Interview With Gary Shilling: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“As an economist with Standard Oil, New Jersey, now ExxonMobil, as you pointed out, Barry. And while the aggressive story is we lived in a New York apartment for two years, moved to the suburbs, commuted for 25 years, but in 1990, I moved our shop out to suburban New Jersey. And it's a mere coincidence. It's 1.4 miles from our house in Short Hills, New Jersey.”
2015-10-02 · Masters in Business · An Interview With Gary Shilling: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“So I told my wife there are two things I never, never do. One is work in New York and the other community to work. Well, that was the beginning of a great forecasting career because I took a job.”
2015-10-02 · Masters in Business · An Interview With Gary Shilling: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, it was interesting at that time, when I came out of Stanford, my wife and I would like to have stayed on the West Coast. I met her. She was a physiology major at Stanford. Weather is spectacular graduate school. But there were only three places of PhD economists could work in the Bay Area. One was the San Francisco Fed and I spent a summer there, and that was a pretty laid-back place. The second one was Bank of America when it was Bank of America California, the Gianini origination. And they sponsored my PhD research, and that wasn't really quite active enough. And the third one was Stanford Research Institute, and they didn't pay anything.”
2015-10-02 · Masters in Business · An Interview With Gary Shilling: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“And he said, Well, how about Stanford? And I said, The climate's fine. How about the economics department? Oh, it's one of the top two or three in the country. So he called up, set it up. I got a teaching assistantship, a resident assistantship. I never filled out an application. It was one of these things where somebody really did something for me. We all have that went out of his way. Well, as I say, the rest is history.”
2015-10-02 · Masters in Business · An Interview With Gary Shilling: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“So I decided to move on. And, you know, it's one of these great developments where I was thinking about going to graduate school in economics and I talked to Amherst as a small school about a thousand students at the time and talked to the president of the college and he suggested business school and a couple of other people and I talked to the head of the economics department who I'd happen to have when I had an elementary economics course and the sections were taught not by graduate students because there were none but by the faculty and we talked about it and he suggested a couple of places and then he said what's your academic record and I told him he said oh you can get anywhere you want to go where you want to go and I said well I grew up in Ohio I'm here in Massachusetts I've been in allergic sense birth I'd like to get into a decent climate”
2015-10-02 · Masters in Business · An Interview With Gary Shilling: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Actually, derive a conclusion. That's a little oversimplified, but the whole idea is that there is a discipline to any natural science, physics, chemistry, math, all these things. They don't have quite the fuzziness that economics has. Now, you get into economics, and economic forecasting is an art. It's not a science, but that discipline... I think it's important because it kind of keeps you on this straight and narrow. But anyway, I started off there, and then my senior year, I had an attack of common sense and decided I wasn't cut out to be a research physicist”
2015-10-02 · Masters in Business · An Interview With Gary Shilling: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I like the discipline of physical sciences. And there is a yearning for closure on things. You want to fit things together. It isn't just kind of a flash here, a flash there. You want to see how things come out in terms of a total. Take some very...”
2015-10-02 · Masters in Business · An Interview With Gary Shilling: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source