Moody's Talks - Inside Economics - Bonus Episode: Ask Us Anything

Episode Date: April 26, 2022

Colleague, Emily Mandel, economist at Moody's Analytics, moderates this Q&A session to get to know Mark, Ryan, and Cris a little better.Full episode transcriptFollow Mark Zandi @MarkZandi, Ryan Sweet @RealTime_Econ and Cris deRitis on LinkedIn for additional insight.  Questions or Comments, please email us at [e-mail]. We would love to hear from you.  To stay informed and follow the insights of Moody's Analytics economists, visit Economic View. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Welcome to Inside Economics. I'm Mark Zandi, the chief economist of Moody's Analytics. And this is a special podcast. I don't know why it's special, but we're going to figure that out somehow, some way. I'm joined by three of my colleagues, my two co-hosts, Ryan Sweet, Mr. Sweet. How are you doing? I'm good. How was the Jim? Jim was good. We did a podcast earlier today. This is Friday, April, what, 22nd. And after the podcast, I went to my, I called my, I'll be nice, my gym. We were just talking about that. I, I just discovered guns and roses.

Apparently, that was a big deal when I was in my 20s. But, you know, I was in the library in my 20s. You know, I don't what you guys were doing in your 20s, but I was in the library. So I miss Guns and Roses somehow. Do you know Guns and Roses, right? Yes, of course. It's not a trick question. I actually saw them in concert.

Wow. Yeah, I saw them in Philly. Really? You good? Good? They're very good. Phenomenal. Yeah, there was moments where I'm like, I don't know if I'm going to get out of here alive, but it was good.

It was one of those really, yeah, it was a good concert. Yeah, I was just telling Ryan, I was listening to this, the, I had this gym where I can go in 24-7, and it's a grunge gym. I mean, it's a really, you know, old equipment, that kind of thing. But the thing I love about it is. is that it's 24-7. I go in, and half the time I'm the only person in there. And I can turn on the music. I open up the doors.

And so I turn on the music. And I frankly don't know how to really find the right music. So I just, whatever's playing, I play. Today they had this medley of classics, I guess. And then I heard, Welcome to the Jungle. And I go, who is that? You know, and I go, that is fantastic. I didn't look, I don't, maybe, I'm not sure that reveals too much.

I'm just saying it's a good tune, you know, a really good tune. And so it upsets me that they're labeling it as a classic. Yeah, I think it's a classic. I think it's a classic. No. Yeah. Yeah. Anyway, we got Mr.

DeRis, Dr. DeRides. Chris, how are you? I'm doing well. I'm worried, though. Is this like a fight club situation you got going on there? Is this some?

We need to intervene? No, no, no, no. Fight club would then be between me and myself because I'm the only one in there. Well, that's what I'm thinking. Oh, that's a good. Jim there. You're all alone. Good point. Good point. Wow. I hadn't thought of it that way. Yeah, it's a little scary now that I think about it. Yeah. No, but you're okay. All right, good.

Yeah, yeah. I have to be a little careful because, you know, if I drop a weight like on my neck, I'm a dead man, you know, because I literally am the only person in there, you know, at times. But so do you like guns and roses? I've heard of guns and roses. Oh, geez. I'm a big fan. Not exactly, but, oh, okay. It's okay. Okay, what about-

I've got some good hand, good songs. I think actually this is the purpose of this podcast to get to know us a little bit better, so it's okay that I'm asking these questions, right? Okay. Oh, yeah. Okay, so what about counting crows? Do you like them?

Yeah. Yeah, they're good. Yeah, they're good. What about red hot chili peppers? What about red hot chili peppers? Sure. Yeah. Yeah.

They're good, too. Yeah. Absolutely. Okay, very good. What about the Beatles? I love the Beatles. But, you know, the problem with the Beatles, and it's just a problem that's not going to ever be solved, is I've listened to them so many times that, you know, it just doesn't have the same kind of feel.

Like when you hear Welcome to the Jungle for the first time, you go, oh, you know, that's pretty cool. And after the fifth time, you're going, this is not so good. By the 10th time, you don't want to hear it again. With the Beatles, after the 50th time, you know, then you say, I don't want to listen to it again. Although I did hear, hey, Jude the other day, and I really liked it. There you go. Yeah. Anyway, I got Emily.

Emily Mandel. Emily, welcome. Thank you. Happy to be on this. Well, okay. Do you know guns and roses? I do. I think you're definitely in the minority.

Really? Yeah, I'm not much more than you and I. Chris really hadn't heard of guns and roses. Okay. Oh, come. I've heard. You recognize. You know, I'm always in the hunt for tunes.

You know, why? Because, you know, when I run, I need tunes, you know. or, you know, I go to the gym, I need tunes. And I have a hard time getting tunes out of my kids. They won't really, like, tell me what they're listening to, which scares me. I don't know what that means exactly. You know, what are they listening to? But I need tunes.

So what should I be listening to? Wait, wait, wait, wait, what? You're not listening to the Inside Economics podcast while you run? Actually, sometimes I do. Not when I run. That, no. Okay. But when I'm, you know, trying to, you know, pump a little iron, as they say.

And by the way, don't get the wrong impression. I have like no muscle mass whatsoever. I just do this to survive. I will listen to the podcast. Actually, it's a good weightlifting. Recommendation to listener, you know. If you aren't going to the gym, go to the gym and put on this podcast. It really helps out.

Ryan's laughing. I'm just picture my wife now. Here's my wife at the gym listening to this. The fault of treadmill. I mean, I don't make this stuff up. I mean, this is true. This is true, right? Emily would, no, Emily, this is a critical question.

Critical. In fact, this is actually vital. Do you listen to the Inside Economics podcast? I have listened to Inside Economics podcast. Louise. She's like, you know, you're playing a key role here. You're like a moderator. You're going to moderate.

questions, you're going to fire questions at us. But we need a kind of a loyal listener. Would you consider yourself a loyal listener? From about a week ago on. Have you subscribed to the podcast? Have you subscribed to the podcast, Emily? Be honest now. Oh, that's all we're asking. That's all we're asking. I overloaded on podcasts a couple years back and I had to like stage an intervention for myself, so I don't have any current podcast subscription.

So it's not like you guys are in. Okay, that's fair. Fair enough. Yeah. Okay, Emily, before you ask us questions, we're going to ask you questions. Okay. In fact, this may take the entire hour. So I'm just saying.

So there's a couple. Oh, just a couple. Okay. All right. Okay. You run and think about all our state and local government work. And, you know, you've got this great mentor, Dan White, who we've had on the podcast.

before, but you've taken over a lot of the work on the state and local government side. How long have you been doing this? It's been more than, well, I can't even, I can't even remember. How long have you been doing this? Well, I've been with Moody's for about maybe six and a half years now. Okay, okay, very good. Close enough, I should probably stop counting the halves. And then I got more into the, I've kind of been ramping up my work on the government side since

then and probably started doing quite a bit more, maybe near the start of the pandemic, a couple of years before that. Oh, you know, you do a great job. Okay, you do know, or I'm assuming you know, you should know that as part of this podcast, we play a statistics game. Are you aware of this statistics game? I am, yes. Okay, very good.

Okay, I got a statistic for you. You ready? Oh, no. Okay. Now, come on. I'm listening. Ryan and Chris, you can't, you know, if you know the answer, you can just raise your hand, but you can't call.

it out loud. All right. All right. Emily, and this is Taylor made for you, Emily. That's a clue, by the way. Okay. 25%. 25%. It's from that chart. I sent you a little bit. Oh, very good. Ding, ding, ding, ding. Okay, what is the chart you sent me? Yeah, this is basically how much states have in reserves at the end of fiscal 2021. So their ending balances, plus the rainy day funds. I was just sure of their total revenues. They put this together. 25% nation. wide, right? 25%, which is absolutely huge by historical standards.

Like states have just socked away so much cash over the past couple of years. Yeah, exactly. So what's the average? Okay, here's a bonus question. You should know the answer to this. What is the average or typical ratio of Rainey Dane plus end-to-balance general funds over the general fund, which is, you know, basically how much cash do I, do I have? out there that I can use if I get into a scrape if I'm a state government typical I'm

gonna make this up maybe around 12 that ding ding ding ding ding ding yeah very good so it's double right now it's double right and that goes to I think well one just the strong economy all the revenues that are being generated because of income tax and capital gains and you know of course house prices and are going skywards of property property taxes, sales taxes, everyone's spending a lot of money. And then, of course, all the support from the federal government through the American Rescue Plan, right? That's got to be part of it, right? Yeah, definitely. I think also, like, states really slash their planned expenditures for fiscal

2021 because they didn't realize just how good everything would be. So that's also given them a bit more to play with. Yeah, great point. So right now, states are in great shape, great financial shape. Can I ask which states in the best position? Good question. Good question. I think we're going to have to hold off on this one for a week or two. I'm putting together our annual stress testing of states report, and that's going to give us a good sense of how they're going, because some have more cash on hand, but they might be, you know, a little harder.

Emily sent me especially with by state, and I just haven't had time to calculate it. I have that also. Yeah, it's usually your energy states that have the most actual cash on a hand, but that doesn't necessarily, they get stressed more. Yeah. Okay. Excellent.

All right. You did well on the game, just saying. Better than Ryan does. Jesus. I think that's a cowbell if you have it. You're a cowbell? Carl's going to take the way of lots of your cowbells if you're not careful. Okay, all right.

We need to get you a cowbell so you can stop going ding, ding, ding, ding. I should get you a cowbell. Well, you see, I innovate. So since I don't have a cowbell, I innovate. I like the ding, ding, ding thing, actually. But anyway. Okay, Emily, you're up. So what are we doing here?

You have a few questions for us. And can you just, so this is questions that are from our colleagues, are Moody's analytics colleagues, I guess Moody's more broadly. And these are a mix of questions that are econ-related, so kind of, you know, what's going on in the economy-related. And also, I guess, more... Personal. Personal?

They want to learn more about the folks on the podcast. Okay. All right. Yeah. These are also, we've got some here from outside listeners. So not just movies. Okay, okay, very great. Yeah, okay, very good.

But I think if you're, I'm just saying, Emily, if you're a regular listener, you know us pretty well by now. Like, you know, you know, we drink wah-waw coffee or I do, not Chris. I knew that before this podcast. Chris drinks shi-she, whatever. I don't know. I get the shishi wawa coffee. Shishi-waha coffee.

And you know that Ryan hangs out at Hershey Park, you know, regularly, blows us off. off, you know, on a, on a, you know, a pretty frequent basis, you know. It's one podcast, one podcast. It's the yield curve. He hates the yield curve. He's a denial. Oh, no, he's a skeptic. He's a skeptic.

He'll curve skeptic. Anyway, fire away, Emily. Okay. So to kick us off, and this is a question for Chris or Ryan, has Mark convinced either of you to increase your supply of power washers? Right. Someone's got to explain that. So why Chris is thinking, I'll explain it.

So one of the early podcasts, we were talking about the American consumer and how we're buying a ton of stuff. And Mark mentioned that he owns two power washers. And Chris and I were puzzled. Why would you have two power washers? And Chris mentioned you have to have two to have one to watch the other one. It's true. It's true. Actually,

you know, the whole power washer thing, I now look at every structure through the prism of a power washer. Like, should this thing be power washed? It's really weird. It's like I've got a list of structures.

I would like to power wash. Don't do your car. They told you not to power wash your car. Really? You're not supposed to do your car. Yeah, you're not supposed to power wash your car. Wait, wait, wait, wait.

When you go to the car wash self-serve, it is a power washer, right? You got to be careful. Is that the same thing? Oh, yeah. Take that paint right off. That's why. It's good to know. It's good to know.

All right. Mark comes in and his car has got like a stripe. Right. I don't know. You try power washing you. But do you guys have power washers? Do you have a power wash? You do.

I do not. Chris does not. And Emily, do you have a power washer? I don't have a yard. So I would not. like to power wash the inside of my apartment. So no, I do not have to. Oh, so you don't, you're not a homeowner at this point.

No, not at this point. Oh, okay. Just wait. Just wait. Yeah. Power wash is crucial. Yeah, how are you thinking about all this, what's going on in the housing market, Emily, with the run-up and mortgage rates?

Is this, are you even thinking about buying a home or not yet? Yeah, I've been thinking about it. I moved to Massachusetts about a year ago and we were really looking about into the housing market here, into wanting to get something. when they moved, but at that point, like, the supply was pretty much all gone. And now, I don't know, kind of just settling into the apartment, I think, for a while. Yeah, I think Boston in particular, the inventory, there's like zero inventory. Yeah.

Nothing for sale. It's pretty incredible. It's crazy. Yeah. All right. Just wait. Obviously, I didn't convince anyone to get a second power washer. I'm actually thinking about getting a second one.

I'll wrench your mind, Chris. I mean. I was thinking I could just stop over if I ever need one. I think there's a good argument to have two, one for the front yard, one for the back, because wheeling that thing around with the hose is a good point. So I'm actually thinking two power washers might make sense. That is a good point, actually, because we are when wieldy things. I think I'm going to try to keep us moving on this point.

As you can see, we can talk about anything forever. It doesn't matter. It doesn't matter. I think this will be a shorter one. but a formal employee, Alex Lowy. And he would like to know everyone's view on the correct pronunciation of Precii. Yeah. Well, the one, the one, Pricy, how do you guys say it?

How do you say it, Emily? You said Phracy, right? Yeah. Yeah. And Ryan, how do you say it? You invented the word, I think. No, I didn't know. No.

You did not? Okay. I thought there's only one way to say it. Well, no. You know, forever clients would say, Pricy. I said, no, it's not P-R-E-C-I-S, and it's French. And I think there's a, and I don't, is it accent agenegu? Is that, or no, a circumflex. It's the circumflex over the, uh, uh, I'm having too much fun. Should we mention what crazy actually means? Doesn't Pricy

mean short report? Yeah, I mean summary, summary. The summary. Yeah. So that was the idea, right? We wanted to summarize, these were praises we did for metro area state economies. And so there's kind of a 600 word kind of pracy, you know, a summary of, you know, what our thought process was around what was going on and what the outlook was for these areas.

So the clients really got confused by that. They would call it pricey. And, of course, that's not what we wanted. That wasn't, you know, the marketing that we had in mind. It's a, it's a Precii, Precii. But Chris, were you the originator of the term? No, no, no, no. Paul.

Paul, Gettman. So, you know, Paul, I and Carl started our company, this company back in 1990. And Paul was, I think it was Paul. I was pretty sure as Paul that came up with the Preci. He was a big fan of value line. Does anyone know value line? Oh, yeah, sure. Yeah, for stocks.

So you, I don't know, is Value Line still around? I'm not even sure. But, you know, back in the day, Value Line would create a Precy-like analysis of companies for stock investors. So you could go look at IBM, for example, or GE or these are the, you know, GM. And on one page, you would get all this vital statistics and analysis. And his idea, and he was a great, he is a great stock picker. people don't know that, but Paul is like a fantastic investor and has done really well,

you know, investing in a lot of, you know, biotech and energy and infrastructure. And so he was really into these price, these value line reports. And he just said, okay, we should do that for economies. And I, now, that really was the product that drove enormous growth early on in the company's history back in the 90s and early part of the 2000s. That was the engine of growth at that time. It's still a foundation, right? It's still, it's very key.

And it's actually a very therapeutic way of writing because, you know, you can't just go on and on and on, you know, like Emily does when she writes about state and old government. She just like, you know, goes on and on and on. Or like this podcast. Or like this podcast. Yeah, like this podcast. Good example.

Like the Zandi guy. going on and on and on but yeah it's 600 words is it right it's still 600 words don't I haven't lost track is it right still 600 yes still 600 words I don't know why 600 exactly it's a good question I'm not sure I'm surprised Alex didn't ask that you know and you know well how's he doing by the way does that anyone know he like he went to the off to the University of Michigan to get an MBA he should be graduated by now he should be CEO some company by now no He's not?

I don't know. Yeah, we should find out. Yeah, anyway. All right. Okay. So shifting over to economics a little bit more here. What's your, and I guess this is each of you or whoever chooses you, what's your biggest worry for the economy five to ten years from now?

Good one. Chris, you want to go? Ryan? I guess worry for the economy in terms of, well, I guess I would. If you're thinking long, yeah, five, ten years. It's, you know, and for that time frame, for me, it always comes down to demographics and productivity, right? So those are the two that come to mind. And of the two, I'm actually more worried about the demographics, right?

Because as I think about, say, the housing market, my population growth is slowing here. The number of household formations I expect to slow down significantly. While you have a lot of house prices or stress today, 10 years from now, I think we could very well have the opposite. more supply than demand. Yeah. That's a good one. Ryan? Yeah, I always think demographics,

and I think increasingly I'm getting more concerned about inequality. Inequality. Anything in particular? Yeah, gaining even worse over the next five to ten years. Really? Why do you think so? I mean, just, you know, we're going to have another recession at some point, and then, you know, the stock market corrects,

but then comes roaring back, and my doubt is that inequality is going to get worse. worse before it gets better. Yeah, I'll take the other side of that, actually. Okay. Yeah. So I hope you're right. Yeah, yeah. In my, in my view, the increasing inequality, wealth and income inequality we've seen since the,

really since the late 70s, early 80s is a function of a lot of things, but three key things. One is in no order of importance, globalization, right? And particularly China's entry into the WTO. back in the early 2000, that kind of, you know, opened up the labor market for very low-paid workers in the rest of the world. That wiped out a lot of jobs here in the U.S. Second is technology targeted towards more routine kinds of labor activities, particularly for low, middle-income workers kind of hollows out the middle, and people who lose their

job in the middle due to technology tend to go down the income distribution, not up the income distribution. And third, demographics that, you know, in the 80s, 90s, 2000s, really up until recently, we had a, the demographics were favorable for lots of labor, you know, strong labor force growth and also increases in participation because of female participation rates increasing quite dramatically in that period. And of course, the boomers in immigration. Now, Now, if those are the, that's the diagnosis for what's behind the increase in income inequality. Now think about what's happening going forward.

Globalization is going in reverse. We're de-globalizing. And by the way, that would be my answer, Emily, as to what I worry about the most. Because even though globalization is a key factor in driving income inequality, it's also been a boon to overall economic growth. It's been bad policy that has failed to make sure that the benefits of that globalization doesn't accrue to everyone more equally. It's really accrued to folks like us at the top end of the income distribution because we

can sell what we produce to the rest of the world. But that's going in reverse. Second, Chris said it. On the labor market side, we're in a world of incredibly abstracting from the vagaries of the business cycle, a very tight labor market. has got the upper hand here, and I think they're going to continue to have the upper hand going forward, and they're going to grab more of the benefits of increasing improvements in technology and labor productivity, the reverse of what happened, you know, in the 80s, 90s, in 2000, 2010,

when most of the benefits of the improvement and productivity and technological progress went to upper income households. The only thing that would continue to weigh on, I was going to say one more thing. The only thing on technology, that will continue to be a source of pressure on the income in wealth distribution. But I don't see that getting any worse than it has been in the last 20 or 30 years. So I'll stop right there. What are you going to say? I mean that the labor share of income really hasn't changed.

So still most of it's going towards corporations and labor share of income is still where it was pre-pendemic. So for your argument, when you argue that that needs to improve? Well, the labor share is down from where it was in the 70s and 80s, right? I mean, it's actually... There's been no improvement since pre-pendemic. I thought we're talking about this kind of longer term, though. I'm not... Right?

My argument is if we were going to see... We would have to start seeing some seeds that labor share of income, given this tightness of the labor market. Oh, it's going to happen. It's too early. It's going to happen. Too early. That's what I'm saying.

I'm saying 10 years from now? Because the question was 10 years from the other? The other thing is going to be much higher than it is today. Yeah. Yeah. Interesting. So usually we think of the three T's when it comes to inequality, right? Trade technology and taxes.

But you didn't imagine you shouldn't taxes and changes to tax policy. Well, it's hard to see change. I mean, tax policy certainly helped. That actually helped to exacerbate the. Exactly. I don't see that changing, though. I don't think any worse going forward. I don't think any better.

I don't think any change. I mean, I don't expect any change there. Yeah. Do you? Well, no, if anything. If anything is going to be higher taxes on high income households, right? Because that's where the money is. And if you've got a fiscal problem, I guess.

Well, it's how you read the political tea leaves then, right? Right. Yeah. That's a good point, though. Yeah. Because certainly the Trump tax cuts were exacerbated to the income and wealth distribution problems. Right. And income earned income tax credits and child tax credits work in the other direction.

Yeah, work in the other direction. Yeah. Yeah. Okay. So this one's from, now that we have some stuff to, you know, worry about now. This one's coming from Tim Daly. And he wants to know what is your favorite or least favorite metric to forecast and why. Ooh, that's a great question.

Tim being, he used to be head of sales for our economics unit in the Americas. He's gone on to bigger things. But Tim is a really wonderful. sales, marketing, strategic thinker. And we definitely miss him. He's now in the banking unit, I believe, of Moody's helping with sales and marketing. So that's a great question. What do you think?

I got one in mind. Chris, before you answer this, he has explicitly excluded housing starts. So we did? I like forecasting housing starts. actually Ryan's good at forecasting everything yeah he's pretty pretty much everything's a star so what's yours mark uh I two I'll mention two

should I mention two things or one thing two things first thing is home ownership rate good good luck with that it's like impossible and you would think oh how hard could it be to you know model the home ownership rate I defy you to model the home ownership rate very very difficult we were just talking about this the other day And, you know, because, you know, you would think it's a function of demographics, a function

of affordability, in policy to some degree, but actually estimating econometrically an equation that fits the homeownership rate data incredibly full. Again, that's a challenge, you know, someone figure that out. The second is the Mannheim Use Car Index. that is like painful. Although I think Brisson, Mike Brisson, our colleague who knows his own

use car price indices and forecast probably has done a much better job than I have. But I have a really hard, I've had a very hard time modeling those two things. Those are my two difficult ones. What about you guys? I'd say the stock market. Oh, right?

Which everyone instantly, right? Meet someone new. What do you do? I'm an economist. Oh, what's the stock market going to do? Can I get some investment advice? Yeah. Right?

So it's always out there, but I don't have any more insight than you do. And then kind of related to your homeownership, anything policy related, right? Because it's really a political calculation at that point. So trying to understand what's actually going to pass or not pass or how it's going to flow in. Right. Yeah. It's a there's no econometric. framework there. It's a bit more just guesswork or trying to understand, read those political

tea leaves. Hey, Ryan, you forecast near term a lot of different economic rules and you do a great job at it. You're very accurate at it. And by the way, where are you, are you still following the ranking in terms of accuracy around the monthly series? And how are you doing this year so far? Number two. Who's that guy who's always, is number one? Jim O'Sullivan. Is he still number one? No, he changed jobs, so.

Oh, he's not doing it anymore. He got the boot out of the, no, he saw, I think he's doing it, but the way Bloomberg does the ranking is that if you're, you have to be in it for a consistent amount of time. Oh. So who's number one right now then? I don't know. I got to check. Okay. All right.

He's, whoever it is probably taking your forecast. That's a joke, by the way. Yeah. Yeah, there's a joke. I've just made that up. But of all the near-term forecast that you produce, which one or two is the most difficult to get right? In right means, like, say employment is coming out for the month of April in early May,

you come up with a forecast for that number, and then right means that you're, you get close to the employment estimate or the unemployment rate or whatever it is you're forecasting. Which variable is or variables was particularly hard? Well, it's definitely changed since the pandemic. So pre-pendemic, I would never have said this one because we're actually pretty good at doing it. But since the pandemic, monthly changes in non-farm employment have been very difficult. Very difficult, yeah. Yeah, because there's issues, there's changes to seasonal adjustment process.

It's just a lot of moving parts because the models that we have are built to forecast employment based on the main. whereas supply is a key part of the strength of monthly job growth now, and we don't have a lot of good high-frequency data on that. So it makes it very, very difficult. Yeah, that makes sense. Are you annoyed by the revisions, right? I think if we look back, your forecasts are actually more accurate if we actually compare them to the revised day.

But no one ever does that, right? No, you're correct. Accuracy is based on the first, and then when the second, third prints come out, and get closer and closer, just you're like, I knew. Because it's, it's interesting. Every forecast is a learning experience.

But sometimes you're just like, that number just can't be right. And then to get revised, you know, closer to- It's revised away. Right. Yeah. Well, this last set of revisions to the employment data were pretty bizarre, I thought, right? Because they felt like the employment gains were somewhat consistent or even reasonably consistent with the waves of the pandemic when the pandemic.

Originally, yeah. Yeah, right? Before the revision. And then we get this big. comprehensive revision. It revises away all of that. And now it looks like the liver market's nothing but a machine, you know, producing. Yeah, you get a forecast of a ruler.

Yeah, which doesn't make any sense, right? Do you think it's just seasonal adjustment or just smoothing out everything? I guess. I don't know. You don't know. It's bizarre. We'll find out, I guess. Well, who knows.

Yeah. Anyway. Okay. The next one should be a question. All of you should be able to answer more easily. personal question what was everyone's first job I was a caddy I you know a catty is like golf course I'm not kidding I'm not kidding well I mean you're not counting like the lemonade stand when you're in third grade right I think we can leave that one out okay we can leave that one

out okay uh I wasn't very good at selling lemonade I got a great story though no I won't I won't tell it though I won't tell it about my lemonade do you want to hear my lemonade story no no probably not I've got a good one, though. I want to elaborate. I'll let you guys go first. So I'll come back to my caddy, caddying, which by the way is, no, anyway, go ahead. That's a hard job.

Cattying is hard. It's very hard. Pays well, though. At least in my day. So what was your first job, Chris? That was mowing lawns. Ah. Yep, that's a good one.

Did you have your own lawn mowing business? I would hardly call it a business, but yeah, in the neighborhood. Do you pay your taxes? Oh, my gosh. I'm almost certain I did. My father was a stickler for that. Oh, was he? Oh, okay.

Yeah. Okay. Where did you grow up, Chris? Where was- I grew up in Michigan, a little town called Jackson. I think I, where's Jackson? It's south central. It's kind of near Ann Arbor?

Yeah, about an hour west of Ann Arbor, south of Lansing. You don't have any Midwest accent whatsoever. Can you, Emily, does he have an accent? I don't think so. I've been on the East Coast longer than in the Midwest. I see. Okay, good. Well, lots of lawns to cut in Jackson.

For sure. Ryan, what was your first job? It was a busboy at a high-end restaurant. Ah. Do you remember what you got paid? No, at the time it was like $2 an hour, but you get tips. Tips. And you had a claim or tips.

Oh, as a bus boy, you get tips too. I didn't realize that. Yeah, at the end, the waitresses and waiters to you out. I see. Yeah. Oh, yeah, so I was a caddy. And I was great. I had this golf course, golf mills golf course.

And I had to walk to it, right, from my home. And it was about a mile walk, up downhill, uphill, that kind of thing. And it was really hard, particularly in the dead of summer, you know. And I remember this one couple, the Dimmesdale's. I'm not lying, that's their name, the Dimmesdale's. The Dimmesdale's would come, husband and wife. And I, you know, I was, I don't know how old I was, say 15 or 16. And they looked ancient to me.

They might have been 35, 40, for a line. but they looked ancient, right? And they came to the golf course every day. And the golf, did I tell you this story? Did I ever tell you this story? Brian or Chris? Yeah, I think you told Chris and I this story once. Oh, yeah, the Dimstales,

well, I'll tell the rest of the podcast. The Dimstales went there to exercise. That was their exercise. So they would have one bag, and they would literally run. They hit the ball and they would run. And me, the caddy, had to run. with the bag and go to each of them, you know, here Mrs. Dimsdale, here Mr. Dimsdale.

It's not like they hit the ball in the same place, right? These are two guys, you know, hitting all over the place. So this is, you know, on an 85, 90 degree day at the 18th hole, and the 18th hole at golf mills is straight uphill because the clubhouse is the top of the hill. I go to Mrs. Dimsdale before she tees off. I go, Mrs. Dimsdale, can we just take one minute break before you run off this hill? she got very nervous and called up to the caddy shack and said my the caddy is fainting he's gonna faint so they'd rush down all these people to help me out uh that was highly embarrassing um but uh you know

anyway that was the first job how much did you get paid i got 12 bucks six bucks a bag yeah and then it got you know by the time i left i think it was like 18 bucks a bag you know that's not bad actually right Of course, so now I think about it. When you adjust it per hour? Yeah, that's four hours. Everyone liked the dimsdale. Oh, yeah. An hour and a half for 18 holes, you know, as opposed to four hours because you can do it.

Work up for that, though. Yeah, exactly. I've got a few, like, more softball questions. Aren't you having fun, Emily? Do you see ways she said that? Oh, I can keep going with us all day. Oh, we're almost at the end of the hour. So, oh.

You know, I've got like another 20 of these. So we've, however you long want to stick around. Just, I'm going to pick in shoes. And so. How is that an overhanded softball or an underhand? Oh, yeah. The first one. Okay.

So if you have a flight schedule to take off at two o'clock. That's an inside joke. That was an inside. I'm going to see. Emily, I just went right over your head. I know. But, you know, that was like,

you didn't listen to the first few podcasts. First three podcasts. I didn't. I've tuned in more to the more recent ones. I went to a conference a couple years back. Well, what's your favorite podcast? Emily, what was your favorite podcast? Oh, I like the politics ones.

like politics and things. Yeah. They're good. Okay. Question. Sorry for missing the, you know, softball joke here, but I'll go later. No, no, no. Don't worry about it.

If you have a flight scheduled to take off at 2 o'clock, what time are you getting to the airport? Are you a one hour to advance, three hours in advance? Are we all assuming Philadelphia International? Yeah, let's go. Yeah, I think we should. Okay. All right. Just making sure.

That's good. That's good. That's a good question. Okay. So what's the answer? So the flight takes off at two? Yeah. Okay.

All right. I'm going to be the outlier here. Really? What are you? You're like 45 minutes before the flight takes off. No, no, no, no. I would be at the airport. Yeah.

Through security by 11 a.m. Oh, well, that's a low early. That's early. No, I can't do the stress. You can't take it. No. Yeah. I'd probably get there and set up the computer.

and do work, but know that I'm there. Do you have the pre-check? I do have the pre-check. Wow. Still. Do you have a club membership? Do you have the American Express? So do you go into the MX?

Where is the MX club in Philly? Do you have one in Philly? If you go through the right by the international gate, it's like the first door. Oh, that's right. I know where that is. Right there. Yeah. Yeah. Between A West and A East.

Yeah. Correct. Yeah. Right. You guys are. Right next to the British Airways. Exactly. Yeah.

I can tell you the, no, the kiosk next. So Chris, how would you, that's a great question actually. I leave my house two hours before take off. It's an hour to get to the airport and I'm an hour there at a time. Enough time to pass by, get the coffee and go to the gate. The shishi coffee. Yes, yes, in that case. That case is the shishi coffee.

Definitely. You do realize Philadelphia International is off 95, and that could take 45 minutes to go 0.2 miles. You're cutting to close there, Chris. Have you ever missed a plane? I've not missed a plane yet. They've got, there are a lot of options. You don't have to stick with 95. Yeah.

Well, for me, I prefer getting there as early as possible. I'd go there at 9 a.m. if I could. Because I see no difference between working in the, I have the American Airlines Club, right? And they've got, well, they've got really good ones. They're really good. They, you know, you got your, you got your, not Wawa coffee, but they got reasonably good coffee, you know, there. They got a banana, you know. They've Wi-Fi.

They got Wi-Fi is great, yeah. And, you know, nice view. You got a nice view with a big windows. And so why not hang out there well in advance if you can and not worry about a thing, right? So I'm all for that. And that's a beautiful thing about remote work. You can work anywhere, right? And actually, I like going to the airport now because I'm tired of my bedroom, you know, working in my bedroom.

So I like going to the, I can hang out in the American, U.S. Air, I call it U.S. Air, it used to be U.S. Air, America Club, American Airlines Club. So I'll go early. I'll go as early as I possibly can. Yeah. The only problem is they get a little annoyed if you're zooming. You know, that's a little bit of an issue. They need to work on that. You know what to do for private rooms?

Well, actually, they closed down the private rooms in the pandemic. They haven't opened them up, at least not the last time I asked. So. You have headphones on or is it? Can everyone hear? Well, I have my headphones on, but you know, you're talking. Yeah, yeah. Yeah.

So they get annoyed at you. And I go like into the corner. over here and they still hear me somehow. I don't know how that happens. But yeah, that's the only issue. See how we think, Emily, on this podcast, we think deeply about all these questions. They're very, very, you know, you can see how deep we go. Connecting it to broader economic trends.

Yeah, exactly. I mean, you see how we did that? That's good. Okay. Another couple. Another couple. Okay. Are you can fire away.

Or if you've got a, we can jump off. No, no, no, no, no. Go for it. Okay. Two more. Two more. I'm tired. Okay.

This one is courtesy of Dan White. Oh, no. And she would like to know which Zandi brother would win in an arm wrestling match. Carl, hands down. Carl, okay. Despite the, you know, Carl's vicious or whatever you go to. Yeah, he's vicious. He's like, he goes for the jugular.

Yeah. Are you kidding me? He won't even get us, he won't even let's have budget for a cowbell, Emily. Are you kidding me? that guy's ruthless. It's ruthless. No, he's actually great shape. He's an excellent athlete. He played college soccer, and he was really, really good. And now he has his own gym in his basement.

It's like a professional gym. He showed it to me the other day. It's like, you know, everything you'd ever want in a gym, except he doesn't play Guns and Roses there. That's the only problem. And you're not allowed. And I'm not allowed. You're not allowed in.

I'm not allowed in. But are you kidding? Carl, Carl would win that hands down. Yeah. Actually, my other brother would beep to both of us, though. Not Peter.

Richard. Richard. I didn't even know you have on that. Oh, yeah, we got many Zandis. We got many Zandis. So you got to learn something.

Okay. Another quick one. What is your, hopefully quick, who knows with you guys? Where is your favorite place to grab lunch in Westchester? Oh, that's just a bad question.

I mean, there's a lot of options. But if we're trying to, like, get people to come back to the office, then maybe this will remind them all the good times they used to have in these places. Do you guys have favorites? Chris has a favorite for everything. I rarely have lunch. You don't have one? I go to the gym.

Oh, you go to the Y? Go to the Y. See, everything he does is shishi. Sheishi Y. Shishi Y. Shishi Y. Shish Y. She Y.

Not that. Well, have you seen the Y? why in Westchester, it's pretty shishi. On airport road? No, no. So I'm in the office probably, right? Is it the one caddy corner to our office? No, not that one.

That one's okay. That one's okay. The one on airport road is legit. It's got like a children's playroom. Yeah. What playroom? No, I see Chris there every once in a while. Oh, you belong to that gym too?

Yeah, you can drop the kid. That's the Y. Right. You can go to any why. And you take them to the pool, the other two. What about you, Ryan? you have a favorite? I don't know if I remember.

It used to be three little pigs, that little sandwich shop right down. Oh, yeah. But they closed down. Yeah. I mean, what about you, Mark?

I don't go out to lunch. You guys just don't eat. Okay, we'll skip that one. I just left an answer in itself. Yeah. I mean, I have gone out to lunch,

but, you know, I don't really, so I'm not a really bad person to answer that question. Yeah. Okay. So then I'll end this with an easy one.

When is the date of the next recession. That is a good question. That lunch question was a bad question. This was a good question. This is a really good question. Now, do you want the day? Yeah, give us the day.

You want the day? Oh, this is interesting. Okay, just to preface this, Ryan is on the record in our last podcast, 75% probability of recession within the next, what was it? 18 months? 12 to 18 months. 12 to 18. Chris was at 55%.

And I think I was at 40%, wasn't I, for the next 12 to 18 months. I'm one third over the next 12 months, 40%. So I don't have a recession in the next 18 months. You guys do. So great question, when do you think it's going to happen? Start. I like this question. That makes it tough, huh?

If it happens. Well, you said 55%. Yeah. Still not guaranteed. I'm going to go with Saturday, September 23rd. Are you going to give us a year? 2023. Oh, wait.

This year? You think this year? No, no. Next year. Oh, you said 23. I thought you said 2022. I am so puzzled by this because is the NBR you want to make an announcement? on a Saturday that we entered a recession?

Oh, no, this goes beyond the, we provide more value than the NBA arc. They'd say September, 2023. You know, as Chris is really crafty, he, like, picks 18 months from now. You know, exactly 18 months from now. Is that exactly? You know what's that? Yes, it is. Yeah.

Yeah, it's the exact last month for you to be right. You should be right. But that's pretty crafty. Yep. Why the 23rd? Oh, that's the equinox. Equinox? Yep.

Yeah. I do like the zodiac economics from time to time. Okay, okay, that's fair enough. The economics astrology. Astrology, thank you. Yeah, that's. Yeah, right. Got it.

I've been there. I've done that. Makes a lot of sense to me. All right. Ryan, what are you saying? I think there's a full moon, too. Yeah, right. Yeah.

New section on the website. Emily, what do you say? What do you think? What's the next recession? Do you have a view? Every economist should have this, have a view on this, I think. Well, what do you think she's up in a new station? I think she's actually fairly pessimistic on this.

Oh. Actually, I think people are going to get stressed pretty soon. I'm like, I don't know. Everything's heating up just so incredibly quickly. So what are your odds? What are you in the next 12 to 18 months? We're going with that long. Ryan's at 75%. I'm sticking with two-thirds, maybe.

Okay. Two-thirds, okay. Yeah. Yeah, it's a good one. Okay, Ryan, what day? What's your day? July 7th, 2020, 23. July 7th.

So even earlier than Christens. That's 7 p.m. Eastern time. 7 p.m. Eastern time? Any particularly reason why 7 p.m.? What could happen? up at 7 p.m. to even trigger this also. Yeah. That's interesting. Huh. Okay. Well, you do recall, you just think about the catalyst, I think about the catalyst. Guys, is there a meeting? No, I mean, you get an emergency fed rate cut. Oh. That's that starts everything.

Hmm. What was I going to say? Oh, uh, before the pandemic, you, uh, before the pandemic, you, You will recall I was picked I had a recession date right and everyone was laughing at me. I said June of 2020 well before June of 2020, right? Emily knows this. I remember this. 2018, 19. And you guys were mocking me and I was off by four months maybe. Right?

Yeah. We've talked about this. There's a big asterisk that goes next to it. What's the asteris? A pandemic. You did not predict a pandemic. I did not. But if it wasn't a pandemic, who knows, you don't know the counterfactual.

It could have been something else. I do know the counterfactual. There would have been no recession. I don't know. I'll never forget. I was in the hospital. Katie had just given birth to Reagan. And this is when the cases in Seattle started developing.

Oh, yeah. I turned to the nurse. And I was like, how bad do you think this is going to get in the U.S.? And she's like, why? I was like, because healthcare-wise, I'm really concerned, but also Zandy can't be right about a recession. This really intensifies. We're going to get a recession. Wow.

Well, you do to recall one of the reasons why I was, and of course I was tongue in cheek, obviously, but the yoke curve had inverted, right? And that's a good leading indicator of, and, of course, the economy was struggling with the trade war with China. President Trump had put tariffs on China, and we were kind of in a pitched battle, and manufacturing was clearly in recession. It was contracting. Agriculture was clearly contracted. So the economy was soft and weak. And so anything that came along, and of course I didn't, you know, obviously predict the pandemic, but I did think the economy was vulnerable to anything else that could come along. But, you know, I don't, I think the, in terms of the future recession, I do concur that the next 12 to 18 months are pivotal.

that, you know, that's going to be tricky to kind of navigate through rate for the Fed to raise interest rates enough, fast enough to quell, help quell the inflation and get inflation expectations down, but not raise rates so far so fast that it undermines the economic recovery. And that process, that normalization of policy is going to happen in the next 12 months, you know, 18 months. And to get that right is hard. So I would say that the probabilities of recession in that 12 to 18 months, and I'm saying 40% over the 18 month period, that is very high and uncomfortably high.

And, you know, I wouldn't argue with you, if you said we're going to have a recession in that period. It's very possible. How would your odds? You and Chris's odds change if on Monday we come to the office and Europe has put a full oil embargo on Russia. Because it's a recession. Recession. That's a recession, right? Because oil prices will jump. I agree. That's not our baseline. That's not what I'm assuming. But if that happened, and once oil prices jump here from where we are now and how fragile things are, we're done. We're going in. Yeah. So I'd say, yeah, that would be catalyst. But I don't expect that. And that's not in the base, you know, kind of the most likely scenario, because it would push us into recession. And I think the Europeans would know that. And I think they would view that, you know, They certainly don't want it to push the economy into recession because once you do that, I think you'll undermine, you potentially undermine the support from the population for putting pressure on Russia to do the right thing.

And you certainly don't want to do that. It's very counterproductive. So I'm guessing they won't do that. But I do think if we get through the next 12, 18 months, I think we will have a period where recession risks are pretty low because the fundamentals of the economy are pretty good. So we could go on for a while before we get to the next recession. I mean, it's not. If we survive the next 18 months. Yeah.

If we survive the next 18 months. Yeah, that's what I'm saying. So I'm going to answer, I don't know. I, Emily, I don't know. I don't have a recession date. I'm very careful, as you can tell, about picking recession dates. You know, I only give you a recession date when I, confident that I can give you the recession date. These guys, I don't know, they're, you know, they're two thirds probability.

Yeah, there, two thirds probability. Yeah. Anyway, very good. That was great. The great questioning. I really appreciate it. I don't know about you guys, but that was great. It was great. You did a nice job, Emily. Very good. Anything else you'd like to say? What do you think? Do you know us any better after this? Yeah, I know. Do you like us more or less as a result of all this? I'm concerned about the hanging out in the airports part of things. Oh. But otherwise, otherwise better. Yeah. Right. Right. What's up with that? I don't know. I never thought of life choice. Yeah. I never really thought of it.

with you more. I'd be in the airport right away. Very good. All righty. Well, I guess I am supposed to call this a podcast. And, of course, no podcast ends without at Marks Andy. At Marks Andy. I'm just saying.

And Ryan, what's your Twitter? At real time underscore econ. And Chris is, he's not active on, is there some kind of thing like a handle or something in LinkedIn? like some identifier just look up my name just look up his name okay very easy very good Emily Emily do you have a Twitter I do but I'm just a lurker oh a lurker do you follow Ryan I don't think I follow Ryan I follow you what is going on I is going on

I will I'm new to this I'm new to this game what about me do you follow I do actually okay okay that's good answer answer Yeah. Very good. Okay, well, we'll call this a podcast. Very, very well done and really appreciate the opportunity to chat with everyone. So thank you.