YouSaid · the spoken record

Paul McCulley

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157
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2015-08-28
most recent
2015-08-28
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1
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  1. “The concept of work life balance. Is but a concept. Which actually financially works out well for you because all you do is work. But with time and maturity, you recognize that time is your most viable asset and that I've never seen a tombstone that read, I wish I had put more hours in at the office.”

    2015-08-28 · Masters in Business · An Interview With Paul McCulley: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source

  2. “Yeah, yeah, actually, you don't think in terms of the fact that you may get old because that's way off in the future. Finite lifespan.”

    2015-08-28 · Masters in Business · An Interview With Paul McCulley: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source

  3. “Exactly. And that's what. I deeply appreciate now, and I'm not beating myself up on it, but looking back, I wish I'd had a deeper appreciation for that. At a younger age, is there any rational reason that a man has been to Beijing 26 times and not seen the wall?”

    2015-08-28 · Masters in Business · An Interview With Paul McCulley: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source

  4. “That's a concept that will get roots in the emerging markets over the next two to three decades. And there's a lot of money to be made in that space.”

    2015-08-28 · Masters in Business · An Interview With Paul McCulley: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source

  5. “And an immersion emerging market. Whereas, of course, we think now here in America, you know, somebody gets out of college, he's probably already got a college loan, he gets a loan or lease on a car. He borrows money from his dad for a down payment on a house. So we think in terms of essentially borrowing forward income As a young person and paying it back as you get older.”

    2015-08-28 · Masters in Business · An Interview With Paul McCulley: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source

  6. “It's underserved in part because of barriers to entry, but that is a frontier for a kid with a 30-year career is to be the king of consumer finance.”

    2015-08-28 · Masters in Business · An Interview With Paul McCulley: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source

  7. “And also think in terms of bringing credit effectively to the growing middle class. Of the emerging market. She thinks in terms of”

    2015-08-28 · Masters in Business · An Interview With Paul McCulley: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source

  8. “And if a kid wanted to go into finance. Where I would say is over the next 20 to 30 years. Asia, in particular China, but I think the emerging markets at large, if they're going to shift to more domestic demand, are going to have to construct Household sector finance. Sector that is meaningful, and so that would be the area you think in terms of here in America.”

    2015-08-28 · Masters in Business · An Interview With Paul McCulley: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source

  9. “Is ripe for government itself, transportation, lots of areas. So I think the application of technology in a general economic sense is where the growth is besides, you know, really wise guys who can figure out what to make my smartphone do, though I reaches its limitations, I think. That's a fun.”

    2015-08-28 · Masters in Business · An Interview With Paul McCulley: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source

  10. “What technology we have now and applying it to core businesses, whether it's education, the medical care system, the DMV, all sorts of areas, information management. Now, sitting here in Bloomberg's building, obviously you have the best of it all on technology.”

    2015-08-28 · Masters in Business · An Interview With Paul McCulley: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source

  11. “What I do know is there's a lot of America that hasn't gotten, hasn't exploited the technology that we have. That's interesting. And the area that my son's in, which I think is really a growth industry, is just taking...”

    2015-08-28 · Masters in Business · An Interview With Paul McCulley: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source

  12. “Not No, he's not going into finance. He is in the technology business. He's a gamer and a programmer. And you think this technology?”

    2015-08-28 · Masters in Business · An Interview With Paul McCulley: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source

  13. “Exactly. But it's really hard to say, I bought it at 10 and now it's at 30. So therefore, wow, I made a potload of money over the last five years. I can't possibly sell this stock. And it's going to go to 60. And then it's going to go to 90. Human nature is to extrapolate. That's simple.”

    2015-08-28 · Masters in Business · An Interview With Paul McCulley: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source

  14. “But Marcus decided it's worth a 30 multiple. Still just making $1. The stock has gone from $10 to $30. Are you a genius? Should you buy more at 30?”

    2015-08-28 · Masters in Business · An Interview With Paul McCulley: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source

  15. “And by the way, 40 years or so. This was all about having to use monetary policy alone to get out of a liquidity trap, which means that there's a revaluation of all long-duration assets with equities being the longest. And so it has been an absolute marvelous time to be in the markets because you've been revaluing assets. Now you simply have lofty asset prices.”

    2015-08-28 · Masters in Business · An Interview With Paul McCulley: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source

  16. “Yeah, more modest returns. And the difficulty of doing that is the rearview mirror effect. And the last... Five to seven years have been absolutely glorious investment. Spectacular.”

    2015-08-28 · Masters in Business · An Interview With Paul McCulley: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source

  17. “No, it doesn't mean anything. Right, it's Something nefarious. Yeah, yeah, absolutely. And it's like, you know, I remember one of the British phrase that struck me is frequently when something is good, they will say brilliant.”

    2015-08-28 · Masters in Business · An Interview With Paul McCulley: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source

  18. “Yeah, maybe I just, you know, Pimco, I was around the British too often. Oh, okay. Schemes. That's a British phrase. Right.”

    2015-08-28 · Masters in Business · An Interview With Paul McCulley: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source

  19. “First and foremost, I think, is fiduciaries, you know, whether it's endowments or defined benefit pension schemes or colleges. So we want to call them to define.”

    2015-08-28 · Masters in Business · An Interview With Paul McCulley: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source

  20. “It could be wrong. Essentially saying, you know, when bad news is fully discounted and I hear about it from the guy who shines my shoe at the bus station. Probably it's time to go the other direction”

    2015-08-28 · Masters in Business · An Interview With Paul McCulley: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source

  21. “Yeah, you did. Yeah, you did. And he gets back to chapter 12 of his famous book. He was a behavioral economist. He understood that markets are not always rational.”

    2015-08-28 · Masters in Business · An Interview With Paul McCulley: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source

  22. “It can get really deep into the weeds. Now, if you like really deep in the weeds That's fine, but I wouldn't recommend that to stabilizing and unstable economy would be the one book on Minsky.”

    2015-08-28 · Masters in Business · An Interview With Paul McCulley: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source

  23. “I don't need to talk to Harry about where the ATTs are trading. I know and I can hit a button. And Harry doesn't make $300,000 a year anymore.”

    2015-08-28 · Masters in Business · An Interview With Paul McCulley: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source

  24. “Not a bad joke. It has an element of truth to it. But now it's the guy on the buy side who has this chance to shoot the moon financially. Right. And the guy on the sell side has been replaced by one of those machines over there. Because remember, back 30 years ago, you actually had the direct lines. And you didn't have electronic trading. You didn't have price discovery. It was, you know, Harry, I want to buy $5 million of, you know, the ATTs. Where are they trading? Other 98, 98.5.”

    2015-08-28 · Masters in Business · An Interview With Paul McCulley: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source

  25. “So essentially it was the guy who was selling the bonds was making the big bucks. The guy who was buying the bonds was considered to be a necessary nuisance.”

    2015-08-28 · Masters in Business · An Interview With Paul McCulley: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source

  26. “And I think back to the mid 80s Your average sell side bond salesman would make maybe $300,000 a year. Whereas the guy that he was selling the bonds to would be making $95,000 a year.”

    2015-08-28 · Masters in Business · An Interview With Paul McCulley: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source

  27. “The one that's most significant. Because I've thought a lot about this. When I first got in the business, and again, I came to Wall Street in 83. Being on the sell side of the street was the cat's meow.”

    2015-08-28 · Masters in Business · An Interview With Paul McCulley: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source

  28. “So that is a new gym that I would recommend to anybody who wants to consider themselves informed in what makes Washington work.”

    2015-08-28 · Masters in Business · An Interview With Paul McCulley: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source

  29. “Yeah, I mean, you and I could write a book about Wall Street for the last 30 years because we lived it. You're a little younger than I am. Not a whole lot younger than you. But, you know, I.”

    2015-08-28 · Masters in Business · An Interview With Paul McCulley: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source

  30. “Bernstein, and I will give you a fourth, and it's a very recent addition to my list literally in the last... Six, nine months”

    2015-08-28 · Masters in Business · An Interview With Paul McCulley: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source

  31. “Pater Bernstein against the gods would. Be right at the very top of my must read list when young graduates are asking. And Peter was a dear personal friend of mine. We lost him a few years ago. And amazing sweetheart man and brilliant. And essentially he had the best, he was a wonderful writer. He also...”

    2015-08-28 · Masters in Business · An Interview With Paul McCulley: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source

  32. “And so therefore in fixed income, your alpha is, your potential alpha is not huge to begin with. And so therefore, there's a lot of risk to both the growth of your business and your profit margins if you actually don't size your bets right. So the philosophy of gamblers run holds, even though the stakes are different, because the stakes are idiosyncratic to that business.”

    2015-08-28 · Masters in Business · An Interview With Paul McCulley: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source

  33. “A key issue on the fixed income side is that you're playing for a small alpha versus the benchmark. You can't get 10 baggers in fixed income very easily. So actually, it's not like you're going to be taken out of the game because you lost all of your clients' money. It's if your alpha shrinks, then in your next competition to get a client, you're not going to be as successful. And also there's a very pragmatic matter is defending your fees is a function of”

    2015-08-28 · Masters in Business · An Interview With Paul McCulley: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source

  34. “Of the game longevity matters. And that philosophy is a humbling philosophy because you can say this one, no, I got this one. But never make a mistake that can take you about the game. And Bill Gross was the guy who fundamentally drove that into my head incising of bets, of sizing in a portfolio. And no tears that if you should have made it bigger, no, you shouldn't have made it bigger. Because if you were wrong, it would have taken you out.”

    2015-08-28 · Masters in Business · An Interview With Paul McCulley: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source

  35. “I don't have the objective of winning all the time, and I want to calculate the odds in real time. And also, I want to avoid Gambler's run. Never let a mistake take you out”

    2015-08-28 · Masters in Business · An Interview With Paul McCulley: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source

  36. “And Bill's general philosophy, and I'm sure he's been public about it, so I'm not talking out of school whatsoever is it's a bit like gambling, and I simply want to win more than I lose.”

    2015-08-28 · Masters in Business · An Interview With Paul McCulley: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source

  37. “Yeah, I, um... In that category. It wouldn't be a large group of people. And Bill Gross would be so much in a league by him. He's the son and the son.”

    2015-08-28 · Masters in Business · An Interview With Paul McCulley: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source

  38. “I like the word fellowship in that you're not having a fight. You're not having an argument. You're having an intellectual fellowship. And that can be fishing, you could be bowling, whatever the case may be, or a fine meal, and that you enjoy each other's company. It's not about the process of tit for tat. I got this one right. You got that one wrong. It's just, do we enjoy each other's fellowship?”

    2015-08-28 · Masters in Business · An Interview With Paul McCulley: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source

  39. “From the standpoint of debate and discussions. It's all about wanting to gather with people who help you think. It's not a matter whether or not they're right or wrong, but who challenge your intellectual horsepower. We see that with the guys we hang out with fishing over the years. And we have vehement disagreements. But part of having a disagreement is it forces you to think, did I miss something? I'll tell you. Did I miss something?”

    2015-08-28 · Masters in Business · An Interview With Paul McCulley: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source

  40. “Correctly, Actually, he's expanded his relationship with Pimco since I retired the second time, so I actually don't exactly the nature of it. He does a lot of asset allocation as well as his fundamental indexes. Very, very smart man. And actually, I've known Rob for a long, long time. We go back to, I don't know, 20 years or something of that nature, you know, just as fellow wonks. And even when he and I vehemently disagree on something, we enjoy having a discussion because we learn from each other. And that's the fun part of this business.”

    2015-08-28 · Masters in Business · An Interview With Paul McCulley: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source

  41. “Exactly. It's a genius, and I use the word on purpose, genius of what Rob has done with his fundamental indexes. Oh, I forget.”

    2015-08-28 · Masters in Business · An Interview With Paul McCulley: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source

  42. “And then you get into the paradox of aggregation of everybody is selling book to make book. Where's the bid? Where's the bid?”

    2015-08-28 · Masters in Business · An Interview With Paul McCulley: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source

  43. “Exactly. Yeah. I guess around what we were talking about fire sales, but I just always love that Minsky phrase, you have to sell book to make book. Otherwise, satisfy your margin. Right. In order to say,”

    2015-08-28 · Masters in Business · An Interview With Paul McCulley: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source

  44. “You know, lather, rinse, and repeat. So essentially a Minsky journey is essentially lather, rinse, and repeat until something goes wrong. And when something goes wrong, it goes wrong. Disastrately wrong. And Minsky had a nice phrase for it, is when essentially the guy who's become the most risk-seeking has to sell book to make book.”

    2015-08-28 · Masters in Business · An Interview With Paul McCulley: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source

  45. “Risk appetite. Risk appetite. So I would say he's one of the founders of behavioral economics in contrast to the Chicago school that every decision or every transaction you make is based upon a full calculus of rationality. I don't know anybody of that. Nature that your decisions are a function or path dependent are a function of what has happened previously and that human beings tend to put an extraordinary amount of focus on bad things having happened. So therefore if nothing bad has happened for a while Life has been stable, nothing bad's happening. Then they ramp up their risk. But interestingly, when they're ramping up their risk, that means they're borrowing more money and driving up asset prices. So everyone says, well, that was really smart. More leverage is good. So therefore, rents.”

    2015-08-28 · Masters in Business · An Interview With Paul McCulley: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source

  46. “Minsk Thank you. I really appreciate that. Minsky built upon what Keynes did. In fact, I can find most of what Minsky wrote about in chapter 12 of the general theory. That's one of my fun sort of things to ask people. What is your favorite chapter of the general theory? Mine is obviously chapter 12. We're effectively founded behavioral economics. And Minsky financial instability hypothesis is very straightforward, which is, as you put it, stability breeds, instability because it changes behavior.”

    2015-08-28 · Masters in Business · An Interview With Paul McCulley: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source

  47. “Yeah, they have. And the word mentor is a very special word for me that I would not want to burden a lot of people with or saying you've been a mentor. There have been a lot of people who've been influential in my thought process that I know personally. And so I'm not suggesting that there are not others as well. I have benefited enormously over a long period of time from From Paul Krugman's work. Really?”

    2015-08-28 · Masters in Business · An Interview With Paul McCulley: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source

  48. “He obviously was on the wrong side of the Minsky moment. but now is living a story of redemption and doing exceedingly well.”

    2015-08-28 · Masters in Business · An Interview With Paul McCulley: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source

  49. “Mentored me and being able to fluently move back and forth between valuation in the bond market and valuation in the equity market. So I learned a great deal from Bill Miller. I don't know if you've ever had Bill on as one of your guests, but you should.”

    2015-08-28 · Masters in Business · An Interview With Paul McCulley: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source

  50. “Obviously, I never knew either John Maynard Keynes or Hyman Minsky. But they had a profound impact on me intellectually. Bill Miller of Lake Mason fame is a close personal friend.”

    2015-08-28 · Masters in Business · An Interview With Paul McCulley: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source