YouSaid · the spoken record

Rebecca Patterson

lines on the record: 83
first: 2022-02-04
most recent: 2022-02-04
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

“So then it starts launching more quantitative easing. So we call that balance sheet usage plus interest rates MP2. When we got to the pandemic, okay, the Fed went big and it went fast. We cut rates. We did huge amounts of quantitative easing, but it wasn't enough to fill the hole in incomes that the pandemic meant when we shut down the economy. And so fiscal had to play a bigger role. Fiscal became the dominant policy lever driving growth. And the Fed facilitated it. Obviously, the Fed's still independent, but the Fed by keeping yields low, by buying the bonds, was allowing the government to borrow and spend like this. And so we're in a world we called it a MP3. But what's important is that we not only fill the income holes that were created by the pandemic, we overfilled them. We started building little mountains. People are wealthier.”
2022-02-04 · Masters in Business · Rebecca Patterson on Global Macro Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, it's the one two punch of monetary and fiscal. So Barry, when you and I were mere children, it was all about interest rates, right? The Fed was using short-term rates to affect economic conditions. We'll call that monetary policy one. And then in 2008, rates hit zero. The Fed needs to ease more.”
2022-02-04 · Masters in Business · Rebecca Patterson on Global Macro Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“But then look at the demand side. The demand from U.S. consumers today is about 20% higher than the end of 2019. And you see similar patterns across a lot of things, whether we're talking about industrial metals, where supplies today are high, but the demand is much higher. That's pushing down inventories. Ships, we have more ships on the ocean today than we did pre-pandemic, but it's just not enough. labor markets. We've got no shortage of jobs today. We just have such high demand for jobs. And so, yes, there are supply constraints here and there. I'm not saying there aren't. I'm just saying the bigger deal this time and what makes this so different from the 1970s is this absolute boom in demand.”
2022-02-04 · Masters in Business · Rebecca Patterson on Global Macro Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Sure. So when we look at where we are today with inflation in the United States, it's very easy to quickly go back to the late 1960s, early 1970s, and say, okay, high and rising inflation, high gas prices have said that's behind the curve. Yeah, okay, there are similarities that are worth noting. But back then, what was driving the high inflation were supply shortages. That was the key ingredient. Today, obviously there's things on both sides of the demand supply equation, but the bigger deal is the surge in demand, which is just overwhelming the supplies. So let me give you a number here to make this feel more real. If you look at the supply of goods for U.S. consumers that comes from around the world, so produced everywhere. In the US, it's China, outside, et cetera. It's running about 5% above where it was before the pandemic.”
2022-02-04 · Masters in Business · Rebecca Patterson on Global Macro Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yep, and if you looked at the speeches, they had been given months in advance, you would have known that something was coming, maybe not the day or the magnitude, but you knew something was coming just like today in the United States, the Fed will say, hey, we're thinking about tapering or we're thinking about quantitative tightening. We know to read those tea leaves. I think as global investors, we all need to get on the bandwagon and get up the curve on China as well, because the economy is going to continue to be a major force for global markets.”
2022-02-04 · Masters in Business · Rebecca Patterson on Global Macro Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Through the Supreme Court, et cetera. In China, if you wanted to see that there was going to be a clampdown on the tech companies, maybe you didn't know the exact timing or the exact details, but directionally, they telegraphed that in advance. I even think about 2015 when China decided that they were going to have more flexibility around the Remimbi and the Chinese currency weakened. I think it was August that year. Fairly. I remember that.”
2022-02-04 · Masters in Business · Rebecca Patterson on Global Macro Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“As we look at China, I think honestly, given China's size today and the fact that in our lifetimes, there's a very good chance it will be the largest economy in the world. It will have a currency that's probably in the top three, maybe five in the world in terms of trading volumes. We need to develop that level of understanding with them as well. And that is not just how their economy works, but it's also the linkage between policy and the economy. If you look at Chinese policymakers and what they say, one thing that's kind of beautiful is that because of their political system, what the policymakers say is usually what happens. So if you're actually reading all their speeches and watching them, you usually have a decent heads up what's coming. Whereas in the United States, our policymakers say a lot of stuff, but it doesn't mean it becomes reality because it has to go through Congress.”
2022-02-04 · Masters in Business · Rebecca Patterson on Global Macro Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“So I agree there is a different level of understanding around China than the US. I mean, most of the capital in the world that gets invested is in America. The bulk of banks are in the America. The bulk of analysts are in America. So we understand our system incredibly well, someone from the outside looking at the U.S. could say, what the heck is going on in the United States? What is a contested election, et cetera, et cetera? Is there going to be more regulatory scrutiny in the U.S. around tech companies? We understand it.”
2022-02-04 · Masters in Business · Rebecca Patterson on Global Macro Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Major hindrance to that supply chain. You think about Taiwan, you don't think about Malaysia, but you have to think about every country in its role, not just the big guys.”
2022-02-04 · Masters in Business · Rebecca Patterson on Global Macro Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“And being proposed for a third term, how is that going to factor into the policy response today? What's already priced in? And so going overseas, I think, has helped me understand how all these different things connect. If China slows down, that has a lot of implications for Germany. It has implications for Italy. People will say, well, I don't want to have China in my portfolio. You already do. Even if you only owned U.S. stocks and bonds, everything is integrated. And so making sure you're thinking about how what happens in one country affects the others is hugely important. People say, well, we just focus on the big economies. Last year, Malaysia had such an important role in chips, in semiconductors, because it was one of the key countries that assembled these things. And so the fact that they were under lockdown was it.”
2022-02-04 · Masters in Business · Rebecca Patterson on Global Macro Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, going all over the world, again, and we talked about this a little earlier, I try to connect the dots. And so if I'm seeing, for example, China's economy slowing down and policymakers are starting to react. We saw just recently a small cut in interest rates giving a little more monetary stimulus. But if I'm seeing the slowdown in China, immediately my mind goes not just the first order consequence, which is how does this affect any Chinese positions we have in the portfolio, but immediately second, third, fourth order? So what does it mean for supply chains? What countries, if we can't ship out of Chinese ports, where do we ship it from? How does it affect producers across emerging Asia? How does it affect commodities? How does it affect inflation in the United States? How long is this going to last? And then you have to overlay the policy. If President Xi is thinking about the fall and”
2022-02-04 · Masters in Business · Rebecca Patterson on Global Macro Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Been on at JT Morgan or Bessemer is just the bar to get an idea into the portfolio is incredibly high. It can take you several months to get through the gauntlet to make sure you haven't missed anything before an idea gets in the portfolio.”
2022-02-04 · Masters in Business · Rebecca Patterson on Global Macro Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“At the end of the day, if they get it wrong because I didn't push back and we don't make as much money as we could have, that's my fault. That's on me. But the meeting itself, the investment committee that we have, we started that about a year ago, maybe a bit before, because Ray, as I think, has been widely reported in the press, has been transitioning for some time, lessen the day-to-day of the company and more into a mentor CIO role. And with that move, we felt we needed to expand the group of key decision makers. And so the investment committee was formed. And it's a place where we're going to review positions in the portfolio. We're going to pose questions to each other and about positions, new learnings, things that might be going against us. Do we feel like it's a short-term blip, a wiggle in the market, or something that maybe we're missing and we need to go dig into more makes it different from other investment committees I've”
2022-02-04 · Masters in Business · Rebecca Patterson on Global Macro Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I think having my first job in Washington and having an interview members of Congress and leaders and then later in a private bank, working with CEOs and people who owned hedge funds and former policymakers, you realize people are people, so you shouldn't be intimidated. You should be respectful of everything they've achieved. So I don't get intimidated, but I am respectful. I mean, these people have created an amazingly successful company with great cincom.”
2022-02-04 · Masters in Business · Rebecca Patterson on Global Macro Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Those and more again, that's when I say the research we do is deeper than anything I've ever seen every time I get up in the morning and I read the financial press and I read my aggregators and I look at my Bloomberg screen and I see some snippets, some little thing and I think, oh, that's interesting. I send it off to a colleague on the equity team or the fixed income team 99.5% of the time they're like, oh yeah, we studied that X years ago. It is amazing the breadth and depth of what we look at to make sure we're capturing all the players, all the flows, all the inputs that can affect economies and flow through to markets. It's really extraordinary.”
2022-02-04 · Masters in Business · Rebecca Patterson on Global Macro Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Would agree with everything you just said, and I would add one very important factor that I'm sure you know of, and you just didn't mention, but I think we need to, which is that they not only had the technological ability to do this, they also had the financial ability. And I think we'll probably talk about it later, but it is really incredible the level of wealth at different socioeconomic cohorts that's been created during the pandemic thanks to this massive, massive surge in liquidity from the Fed and fiscal transfers from the government. So these folks, like you said, were bored, locked at home, but they also had this money. What are you going to do with it? Well, if I can't go see my friends at a restaurant, I can't go to a sports game. Here's something else I can do. And by the way, a lot of them I think made some decent money over the last year and a half or so.”
2022-02-04 · Masters in Business · Rebecca Patterson on Global Macro Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“When we think about equities, we're always looking at all the buyers and sellers of every asset class, including equities. And we've seen in the pandemic a huge increase in the amount of retail investing we're seeing versus before the pandemic. Obviously, retail investors are something we've always tracked. What's a little different today is the amount of activity and options with retail investors. And I think that's the result of changes in technology, changes in cost, the ability of people to be able to use options at a retail level. And so that's something that we want to make sure we're capturing appropriately in our thinking. And that'll feed through into investments we make if it becomes a material force driving the equity markets.”
2022-02-04 · Masters in Business · Rebecca Patterson on Global Macro Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“And review that, what did it mean? We already know that. We've already studied that. We've tested it. So it frees us up to spend our time in research looking at what's different. What's a new thing that maybe we haven't captured in the past or what are we getting wrong? I mean, unfortunately, we don't get everything right. And so if we get something wrong, we want to understand why. What did we miss? Did we appreciate some variable incorrectly or underappreciated, et cetera? So we really focus our research on those two things. What did we get wrong and why? And let's fix it. And then what are things evolving in the world today that are new? And maybe Barry, I can give you one super quick example of that.”
2022-02-04 · Masters in Business · Rebecca Patterson on Global Macro Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Will codify those rules and those are going to shape the investments we make. Once we understand the rules of how the economic machine works to borrow Ray Dahlio's term, then we put it into our systems. And we can't afford to miss something. Not that we can't pull it out of the systems and improve it, but we don't want to be doing that. So we want to make sure we get it right up front. And that means doing this unbelievably deep amount of research upfront to understand how the world works. So I say that's pretty different about us. And the other thing is that because Ray has had this approach since he started Bridgewater, so he founded the firm 50 years ago coming up. And he's always been doing this, figuring out what he thinks, testing it, writing down the rules, and that lets him compound. So when inflation pops as it's doing this year, we don't have to say, oh my gosh, okay, it's been a while and go back to the 70s.”
2022-02-04 · Masters in Business · Rebecca Patterson on Global Macro Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“That's a lot of questions, Barry. I'll wrap into one. There's a couple things about Bridgewater and how we do research that I think are fairly unique in the industry. One is just the depth of research we do. I've been in research and investing most of my adult life, and I've never seen anything like it. And I think the reason we take so long and go so deep on everything to make sure we truly understand it and understand it not just at a moment in time, but over cycles and different economic environments. So we'll go back often 50, 100 years in our analysis. We'll look across countries to see if something is universally true. It doesn't just work here, but it works in different places. And once we get that level of confidence that we understand a cause-effect linkage in economies or markets, then we're going to create rules. If this happens, then that. If that happens, then this.”
2022-02-04 · Masters in Business · Rebecca Patterson on Global Macro Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Me, I don't want to speak for everyone in the firm. For me, it becomes more of a this is in the background and it's a way just to get a regular check-in on how I'm doing and how people are perceiving I'm doing. Where are there areas that I can improve? But I would say, especially in the beginning and even now, it's in the back of my mind and maybe it makes me that one extra degree more thoughtful. About how I'm going to present something, but it certainly doesn't slow you down. You can't let it, right? There aren't enough hours in the day to worry about how you might get dotted. So it's just, it's a tool really to help you think about what am I doing well at? Where are areas that I might not see myself that I can do better?”
2022-02-04 · Masters in Business · Rebecca Patterson on Global Macro Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Kind of grateful it happened because I realized that evening when I got home and I was reflecting on it, I'm okay with it. I might not always agree with every grade I get, but I certainly prefer to know where I stand than not know. I don't want people to talking behind my back. I want them talking to my face. So that really helped me actually make the decision that I wanted to join the firm.”
2022-02-04 · Masters in Business · Rebecca Patterson on Global Macro Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Is the most important thing to think about in the world today. Go. Okay. Go, right, go. And I did not know that was coming. Fortunately, I'd live and breathe thinking about the market. So I just launched and did my thing. And then afterwards, he said, okay, everybody.rebe. Now, for those of you who aren't familiar with Bridgewater, dotting is a form of real-time grading. So we give feedback to each other all the time. And one dot or grade doesn't make or break your career. It's really the wonderful picture of you that develops over time sort of a George Surrat view of you that evolves over time, but I had never been dotted before. And suddenly all these people are whipping out their computers and iPads and putting in little dots next to my name, grading my insights. And this is how Bridgewater is. It's radically transparent. And I thought, okay, how do I feel about this? Because this will be my life.”
2022-02-04 · Masters in Business · Rebecca Patterson on Global Macro Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Sure. So I joined in January 2020, but I was interviewing in 19. And I think the process for a lot of folks is even more detailed, let's say, than mine was. My process was long. I met a lot of people. I had to come up with ideas on how I would allocate capital to this and that. I think the most interesting piece of my interview, though, and kind of a good window into Bridgewater, Ray had asked me to come join a weekly morning meeting they have where they talk about what's going on in the world. I thought, yeah, that sounds great. I can learn about the people, see what the discussions are like. And I showed up at their office in Connecticut, sat down at the table several dozen people in the room, and it's being videoed. And Ray introduces me and says, okay, Rebecca, let's kick off the meeting. You tell us for the next 10 minutes what you think.”
2022-02-04 · Masters in Business · Rebecca Patterson on Global Macro Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“So I've always been close with the New York Fed during my career. I started out doing foreign exchange lessons for junior central bankers and training. And then later on I was on their foreign exchange committee. And then I got pushed into the investor advisory committee, which I felt initially like the kid at the Thanksgiving table with all the grown-ups because these were all the masters, truly the masters of the universe and then me. And I'm not trying to be self-deprecating. That's how I felt. But we took turns presenting in front of the New York Fed officials and then we debate different topics. And I met Ray Dahlio there. And after several meetings where, you know, he saw me presenting on a variety of topics. He saw me holding my own against whoever it was, Jim Cheno's Paul Tudor, Jones, Bill Ackman.”
2022-02-04 · Masters in Business · Rebecca Patterson on Global Macro Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Know about wealth today in the United States. Some of the people I was dealing with, you really thought about their portfolios like you would an endowment or a pension. Right, it's perpetual capital.”
2022-02-04 · Masters in Business · Rebecca Patterson on Global Macro Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“A lot of money, yeah. It is a lot of money. My mom still giggles a little bit when I mention that. At JP Morgan, I had gone from research to running a trading desk and I realized quickly I liked running risk. I liked touching the money. I was doing that during 0809 and I also learned about myself that I can handle the pressure of things not going up all the time. And so I knew that was a direction I wanted to go in. And at JP Morgan, while I loved the firm, the opportunity wasn't there when I was ready. And when Besssemer reached out and recruited me, I thought, all right, I still have friends at JP Morgan, but this is the moment to make the leap. And it was great. The firm gave me a ton of autonomy. I was able to develop new solutions for clients, build a fantastic team. The clients themselves were really interesting.”
2022-02-04 · Masters in Business · Rebecca Patterson on Global Macro Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Completely. So for many years, if you wanted to know what was going on with German industrial production, you would look at Belgium because they did a lot of the assembly of goods that were eventually sold out of Germany. Today, I think that's changed a little bit, and you look at some of the Eastern European countries. understanding those global supply chains, understanding those linkages even back in the 90s when I was getting going in this business were really important to do.”
2022-02-04 · Masters in Business · Rebecca Patterson on Global Macro Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“That gives me a leading indicator for U.S. industrial production. Having that holistic take on what's going on in the world can be really important to have the right views in one specific country.”
2022-02-04 · Masters in Business · Rebecca Patterson on Global Macro Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so JPMorgan definitely helps me see the world and get a better understanding of it. I feel like you join the military and see the world. I joined the bank and saw the world. From London, I moved to Singapore in early 1999. I was still doing currency, but now also fixed income research. And that was a great experience to understand that even if all economies and markets have the same drivers, how you think about them is going to change a lot depending on how the economy is made up. I was just getting the hang of Europe and suddenly I'm dealing with remittance flows in the Philippines and reserve adequacy in South Korea. And so it was humbling, but it was a great education. And I think I also learned from that that you can use data from completely other parts of the world to develop your view. So even today, I look at new export orders from Taiwan or Korea.”
2022-02-04 · Masters in Business · Rebecca Patterson on Global Macro Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yep, yep, Russian ruble As soon as we were getting out of those, then we had the run up to the euro. It launched in Jan 99, and I was one of those folks who were putting together these calculators to understand what would be the conversion rate between the Deutschmark and the Italian Lira and the Peseta. So it was quite an education those first couple years. But that's how I got into banking. They read my stuff and thought I had it, whatever it is.”
2022-02-04 · Masters in Business · Rebecca Patterson on Global Macro Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“From New York to London with Dow Jones, and was still covering FX, but also politics and policy in the mid 1990s when J.P. Morgan reached out and said, hey, we read your stuff in the paper. We think you get it, whatever it is, and we want to hire you. And I told him, hey, I don't know anything about banking, but they said I knew more than I realized and I could learn the rest. So I thought, well, why not, right? Why not try? And my first few years there were challenging beyond belief, not just because I had a vertical curve to get up, but the time. I joined JP Morgan in September 1997. Barry, you and I are both old enough that you probably immediately know what I'm talking about. So, my first two years doing currency research for the investment bank, I had the Asian currency crisis”
2022-02-04 · Masters in Business · Rebecca Patterson on Global Macro Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source
“Sure. So I'm definitely an accidental banker. I didn't set out to have a career in finance. I loved researching. I loved writing. I loved connecting the dots. And so my first job at my hometown paper, the St. Petersburg Times in Washington, was great because I got to do all those things. You know, I got to see how policy goes from idea to reality and maybe more importantly why. At Dow Jones, one of my first assignments was writing the Daily Foreign Exchange column for the Wall Street Journal. And I had studied currencies during grad school at Johns Hopkins, but obviously reality is very different from academia. And I learned very quickly that to understand currencies, you kind of have to understand everything else, you know, trade and capital flows, relative trends in economies and markets, psychology. So that was great. That was a great education.”
2022-02-04 · Masters in Business · Rebecca Patterson on Global Macro Investing (Podcast) · IDENTIFIED FROM THE TRANSCRIPT · source