RenMac's Head of Economics Neil Dutta on Recession Indicators

28:25They've been predicting that pretty much since 2022 and have consistently been way too dovish. What do you think the street has been missing over the past two or three years?

29:02at bloomberg.com forward slash Nokia.

29:08Well, I mean, I think the main story over the last two years, and I'm a little bit more cautious now, but I do think the main story over the last couple of years has just been how resilient the U.S. economy is. And that's basically been the main story, is that we've had very, very strong income growth. We've had, obviously, a lot of state and local governments spending, a lot of federal spending. But the main story, I think, has been very strong growth in real incomes, which has been supporting household consumption. And if you get the consumer right in the U.S., pretty much everything else will fall into place.

29:45So when we look out at the world today, we've seen a lot of volatility in policy. I hate the word uncertainty, but at least a lack of clarity, which seems to be affecting people's long-term travel plans, corporate CapEx plans. How significant is all of the back and forth on various policy issues out of the White House impacting your analysis? Well, I do think that when uncertainty is high, it just makes sense to kind of double down and look at the data as it's coming in, right? I mean, you shouldn't try to make a big sweeping forecast if the uncertainty is high. But you should kind of think about what's like, just look at what's happening in front of you.

30:33And that's kind of what I've been trying to do. And, you know, when I look at what's happening right now, I mean, I don't get a lot of optimism. I mean, you have, it looks like the labor markets are continuing to cool off. Still positive, but certainly at much lower levels than we saw two, three years ago. I mean, I think to me, momentum matters, right? We talk about better or worse, right? I mean, the labor markets are clearly getting worse. And, you know, is it nonlinear? No, it's not. But, you know, one of the points that I've been making this year is that all recessions begin with a slowdown.

31:09Not all slowdowns end in recession, but we know that all recessions start with a slowdown. And it's pretty clear that the labor markets are slowing down. You have a very narrow kind of breadth of industries adding jobs. A lot of it is in kind of acyclical industries like education and health. So sort of the cyclical areas of the labor market are slowing down. You're seeing weakness in like white collar professional services. Recruiting intensity is low. So the labor markets, I think, are, to me, that's been my big theme for this year is that it's far more concerning than the consensus seems to appreciate.

31:47And I think also for the Fed, I mean, they keep talking about how the labor market is solid. And to me, that's basically a very surface level analysis. They're looking at, okay, the unemployment rate is 4.1 % and therefore the labor markets are solid. But I think you can make a very strong case that the unemployment rate of 4.1 % is really overstating the degree of health in the job market, right? Like when the unemployment rate is 4.1%, you typically don't see like the hiring rate as low as it is. You don't see the quits rate as low as it is. You don't see consumer confidence in the job market as bad as it is.

32:24You don't see, you know, even wage growth is slowing down, right? But it's still, it's slowing down from a pretty high level. Where, what is wage growth now? About 4 %? Is that about right? Well, it's actually slowing a bit more than that. I mean, it's running, if you look at over the last three months or so, it's around 3%, 3.5%. But again, if the labor markets were tight or tightening, then you wouldn't expect to see wage growth continuing to slow down. And you have ongoing increases in the number of discouraged workers, right? You have a lot of people exiting the workforce, going straight from unemployment to out of the labor force.

33:03I mean, these are not things that happen in a healthy or solid job market. How much of this is driven by the past five wacky years, including the pandemic and a giant decrease in people working, the recovery and people returning, plus the entire fiscal stimulus making its way through the system? it's not like 2025 is just one in a series of normal years it's one in a series of very unusual situations including what 525 basis points of fed hikes in 18 months or so so how do you contextualize this slowdown as the pig works his way through the python i mean so this is sort of the argument that like the whole thing was just one giant like bullwhip and we've kind of you know Now we're still normalizing from all of it.

33:56I think to me, that's possible, but it's just, again, the sectors that are slowing down are not the ones you want to see slow down. You're at a point now where it looks like housing market conditions are continuing to deteriorate. Prices are slowing. They're slowing in the markets where builders make homes. That's going to probably lead to job losses in the construction industry. They're not getting any help from the Fed in terms of rates, at least no time soon. Well, no, right. I mean, to the extent that the housing market is working, it's basically because sellers are capitulating, right? I mean, they're listing homes for market.

34:38They're willing to take price concessions. That's pushing up transaction volumes to some extent, right? So that's been okay. I mean, you have a little bit more elasticity coming into the housing market. But the fact that the labor markets are cooling down, what does that mean? Primarily, that's going to weigh on consumer spending. And that kind of sets in motion like a below trend growth outlook. So let me ask you what I think is one of the most perplexing issues. Consumer spending pretty close to record highs right now. And at the same time, consumer sentiment pretty much still in the dumper, off the lows, but still historically low.

35:18How do we reconcile the robust spending with the terrible sentiment? Are one of those indicators, one of those measures broken? in well i don't know that so this is like the vibe session kind of um story and i definitely um are you a vibe session person or no no i mean i think consumer sentiment um to me what's really interesting about what's happened with consumer sentiment is how the link between consumer sentiment and labor market views basically completely detached following uh 2021 2022 right i mean once inflation started going so for most of my career if you basically got like the labor market view right you pay you more or less would get the consumer sentiment number right you know what i mean like no more no more right i mean so it's just it's one of these things where um when you ask someone like, how do you rate the economy?

36:21It'll be like something like it would be a very low number. How do you rate the labor market? It'll be a very strong number. That's very perplexing, but it just, it just, it demonstrates that people don't look at the economy solely through the prism of the job market. What, what else is kind of fascinating is if you ask people, how do you rate the economy? And they're like, man, how do you rate your personal economy? Oh, I'm doing fine. It's like, how do you think of Congress? Oh, Congress is terrible. What about your congressman? Oh, he's great. Totally. So all of this brings me back to the question, is sentiment broken?

36:53When we look at the Michigan consumer sentiment, worse than the pandemic, worse than the GFC, worse than 9-11 and the dot-com implosion, worse than the 87 crash, it kind of makes me stop and think, are all of us missing how terrible things are? Or is just this methodology of asking people in 2025 what they think just doesn't work anymore? Well, the methodology for the U-Mish number in particular did change. I think they moved online. To me, it's like consumer sentiment is basically a function of what stocks are doing, what inflation's doing, and what jobs are doing. And if you think about it that way, the drop in consumer sentiment made a lot of sense because inflation went really through the roof.

37:41Right. And so that's why sentiment went down. Since then, you've seen some stability in inflation. And, you know, now that the stock market's back to all time highs, essentially, you've seen some recovery in consumer sentiment, not surprisingly. But what I'm what I've been focusing on, And it's, you know, there's this big debate about, you know, how useful survey measures of economic data are like consumer sentiment, ISM versus like hard economic data, like manufacturing production, jobs growth. So to me, I think the bigger question for people in my field is like, how much do you want to weigh survey measures of economic data in your process?

38:27And to me, there is still useful information in these surveys, right? So when you look at the conference board data, for example, it's another consumer confidence number. If you look at the labor differential, so what are consumers telling you about how plentiful jobs are? Are jobs hard to get or are they plentiful? That number still does a reasonably good job telling you or informing you about tightness in the job market. And if consumers are telling you that things are a little bit more slack, you should probably believe them. So to me, it's about looking at which pieces of survey data are important and which ones aren't.

39:06Even in regional manufacturing data, they ask the purchasing managers about their CapEx intentions. Again, it's another indicator. It does a reasonably good job mirroring the broad ups and downs in business investment, like core durable goods. So I think the purchasing manager seems to be that survey seems to be a little less out of sync with spending than consumer sentiment is with either labor or consumer spending. Fair statement? Yeah, I mean, the consumer sentiment number doesn't look like consumer spending. I mean, and that but that's that that is true. That is true. There are elements within the consumer sentiment stuff that kind of makes sense.

39:48But, you know, broadly speaking, you're right. Consumer sentiment is dramatically understating how much consumers have been spending. That's true. So we're talking about all these different U.S. data series. How do you incorporate global macro trends and global economic data into your models? I'm going to be honest with you. I don't spend a lot of time focusing on the rest of the world. Really? That's probably to my own detriment. I mean, especially these days with Europe outperforming the U.S. and emerging markets doing well after underperforming the U.S. for 15 years. Yeah. I mean, what's interesting is that you look at, you know, it's right.

40:30I mean, that that has been notable, like the outperformance of the euro. You don't really see much outperformance in growth dynamics. So it kind of tells you like, you know, like sentiment in these towards Europe has been so depressed. So there's been some incremental improvements, some incremental narrowing in growth differentials, and everyone's thinking that Europe is off to the races. But I don't really see that in the data that we look at. I mean, if you look at purchasing manager surveys, for example, in Germany, I mean, they're still well below – I mean, they're still below 50. I mean, German manufacturing, French manufacturing have been in the kind of dumps for a while now.

41:03And Germany is in the middle of economic contraction, right? Yeah, I mean, it's, you know, there's been a lot of, it seems like a lot of like hopium based on like defense spending and fiscal reflation and so forth. Really, really interesting. Let's talk a little bit about the possibility of a recession in 25 or 26. What do you think is the most significant macroeconomic risk facing the United States right now? well i mean obviously the one that's getting the most attention is uh erratic trade policy but i don't think that by itself is what's going to cause a recession i think it's primarily like monetary policy is too tight you have you essentially you have nominal gdp slowing and the fed funds rate is not doing anything it's basically flat at four and a half percent so to me that represents a passive tightening of monetary policy, and that'll continue to build pressure on the economy, particularly on the labor market.

42:07So, you know, kind of go down the list, right? I do think that the left tail risk of the distribution has gone up. You know, number one, I mean, labor markets are cooling and income growth is slowing. That's probably going to weigh on consumer spending. That was true even before tariffs came into force. If you look at housing, residential investment is probably slowing because home prices are now declining, particularly in the places where the builders are making the homes, right, which is like the South, Florida, Texas, Arizona. That's weighing on construction activity. If you look at business investment, it's probably welcome that they just pass this tax law.

42:59That gives some certainty around the tax outlook, but at the same time some of that effect is going to be blunted by what's going on with trade. You haven't really seen much in terms of outside of AI, business investment's been quite sluggish. Then you have state and local governments cutting back, right? So it's just sort of, it's a very unstable kind of equilibrium, in my opinion. And I do think that, you know, as consumer spending is slowing, that creates risks for the U.S. economy. So is your base case that a recession in second half of 2025 or sometime in 26 likely, probable, possible? Yeah, I have it on the board.

43:49I mean, I definitely think that a recession is more likely than not. And specifically, I think you'll see a period of a quarter or two where you get a series of negative employment reports. And I think that'll push up the unemployment rate and probably bring in the Fed to cut more aggressively. So unemployment rate ticks up to 4.5%, 5%. Where do you see this going? Five and a quarter? I don't know it goes up that high, but I can easily see it getting it close to 5 % at some point over the next 12 months, you sure. And that forces the Fed to... So let's talk about the Fed for a second. Once the first CARES Act, which was, what,$2 trillion, 10 % of GDP, the biggest fiscal stimulus since World War II, once that was passed, it seemed like the Fed was increasingly behind the curve.

44:44We saw inflation start to tick up in 20, but really take off in 21. And they kind of sat on their hands until when did the cycle start? March or April of 2022? That's right. And by then, by June, it was inflation peaked and started heading down. And so it seems like they were late to recognize inflation. They were late to tighten. Now it seems like they're late to start cutting, at least in your assessment. is the Fed just a big, slow, ponderous institution, and they're always going to be behind the curve? You sound like Trump. Too late. Too late, Powell. By the way, you're the first person to ever accuse me of that.

45:25Yeah. But to be fair, hold aside the beef between Trump and Powell, for my entire professional career in finance, it has felt like the Fed is always late to the party. yeah i mean i think um they're just conservative and slow and they would rather be late than mistaken i think is a fair way you know i mean you know there are times when they're um i mean even by powell's own admission like last year he said that uh when they went 50 in september that even that was a little bit late um so yeah i mean they're you know it's a consensus building institution, you have to kind of corral your colleagues to your view.

46:10And so that to me might be one reason why it's a little bit slow. But as I say, I mean,

46:21so we've talked a little bit about, or you brought up how much uncertainty there seems to be around the tariff policy, especially on again, off again? What are the risks from the tariff policy? Could this be a factor in the recession? What other knock-on effects do you see from this new policy? Well, I think the main effect is that it freezes business investment in place, right? I mean, that to me is the big story. Nobody wants to commit hundreds of millions or billions of dollars until they know what the policies are. What trading relationships will be with all these other countries? Sometimes you're announcing tariffs with countries we may already have trading agreements.

47:01South Korea, we have 2012. Korea is a good example. Sort of bizarre. We don't, we have. So, yeah, I mean, and, you know, look, like this, this to me is like, it's the return of like the Trump collar strategy, right? I mean, one of the things that we thought very early on was that, you know, essentially he's going to be testing the market, right? I mean, if the market gets, you know, it's sort of bounded in a way, right? A strong stock market, maybe he pushes the trade dial up a little bit. Then if the market sells off, maybe he'll back off, right? So it's sort of he's trying to find an equilibrium for himself that he's comfortable with.

47:43And, you know, that to me, for businesses, right? Like, to me, it's as simple as part of his shtick is chaos. Mm hmm. And the business community doesn't like uncertainty. So that's a fundamental tension. But I think so that's going to weigh on investment spending. But I think in the background, you still have this kind of slow bleeding in the job market. You have this ongoing cooling and consumer spending. You have this slow sort of bleeding off, bleeding out in the housing market where that's weighing on construction. So and you have, you know, state and local governments cutting back. So you just don't have as many drivers for growth.

48:23And ultimately, that becomes a problem. So what is going to finally push the Fed into beginning cutting rates? What do you think is the most important data series they're looking at? I really don't imagine anyone cares whether inflation is two or two and a quarter. But if we see, as you mentioned, a negative non-farm payrolls print, that has to get their attention, doesn't it yeah i would think so what else might get their attention and start a new cycle to me the most important thing is seeing what happens with um you know essentially labor market slack right i mean if if wage growth continues to slow down then the ability for households to uh essentially absorb tariffs is non-existent which makes it very difficult to see where you get inflation from.

49:16So right now they've been kind of making this point that the labor markets are not a source of inflationary pressure. If you get further slack in the labor market at this point, like at that point, maybe the labor markets become a source of disinflationary pressure. And so I think that's something they have to keep an eye on. What else might capture the Fed's attention and say, hey, we're really behind the curve? What do you look at in the housing market, is it just new home starts or? Well, prices are slowing, right? I mean, that to me, so it's interesting. But they're still, they're not negative, especially in the coasts, in the big cities and in...

49:53Well, prices aren't negative in the Northeast, but if you look at like California, like inland California. Florida also. Prices are down. They're contracting outright in places like Texas, Florida, inland California, Arizona. But they've experienced giant booms over the past five years. They have, but at the same, I mean, I would just, that's true. But to me, again, it's about what's happening at the margin. At the margin, prices are contracting. And that matters. And that matters, and inventories are rising. And, you know, to me, that's the main asset on the most households balance sheet. And if you look at home prices, I mean, there is an important link between home prices and actual price inflation, right?

50:31I mean, you can just look at the data. The cities across the country that are experiencing the most home price deflation are also the places where you don't see much consumer price inflation. So I think that's notable. So in one of your more recent research pieces, you talked about the importance of the U.S. dollar. Why is this such a huge factor on a macro level? What are we down 10 % year to date in the dollar? How significant is the dollar to the rest of the economy? And let me know if I'm if I get if I'm talking, if you didn't say that, I have so much stuff in my head, I can't keep it all straight.

51:12Well, I mean, the dollar is important. You know, typically, when you have a weaker dollar, right? I mean, you should assume that you get some upward pressure on core inflation. I think what's notable about what's happened with the dollar is that it kind of went the other way in terms of what people thought, right? Remember the big line? The line was that, you know, we're going to put these tariffs on. A lot of the shock is going to be neutralized because the dollar is going to get stronger. Didn't actually happen. Yeah. Well, I mean, it did for a day, mainly against EM, but most of the weakness in the dollar actually was against G10FX.

51:50But at any rate, yeah, I mean. So what's the significance of the dollar to the economic cycle, to things like foreigners buying U.S. homes is a big driver in a lot of cities? How significant is the dollar to either a recession, coal, inflation, or real estate? Well, so I mean, I think it depends. I mean, so it's interesting how you're framing this question. I mean, I think, remember, in macro, everything is correlated, right? So if the dollar, to me, it's really about why the dollar is moving the way it is. So if we were actually, let's say I'm right, and we go into a recession, I would assume the dollar to be strengthening in that environment, right?

52:35Because it's a safety play, right? So if the US economy is weakening, then people are going to seek out safety, and that should push the dollar value up. You mentioned in April that it was potentially a worst case scenario. And in that month after the big trade policy, tariff policy announcement on April 2nd, we saw bonds weaken, we saw stocks weaken, and we saw the dollar weaken. Right, this is the wholesale America trade. But if you go back to that, though, right, Barry? I mean, if you look at the number of times where that combination of things happened, I mean, you could probably count on one hand how many days that happened.

53:15So it was like it was one of these things where the narrative kind of got way out in front of what was actually happening. And now here we sit a couple of months later and we're talking about U.S. equities at all time highs. And, you know, so I mean, I think, you know, maybe part of it is maybe there's a little bit more enthusiasm around what's going on in Europe. Right. I mean, Europe is taking steps to reflate their economy. That's good for the euro. you know you have at the margin like people are a little bit more optimistic about emerging markets emerging market currencies have been doing better so um you know there's there's there's this train of thought that like the dollar is purely a function of like the uh the trump moron risk premium but that but that to me it doesn't i don't think that goes um that might be some of it, but I don't think that's nearly all of it.

54:08I've heard taco. I can't say I've heard more on risk premium before. That's a new phrase. Don't send your hate mail to me. Let me throw a curveball question at you before we get to our favorite questions. What do you think investors are not talking about, but perhaps should be? And it could be any topic assets geography policy what data point is getting overlooked um but is important and people should be paying attention to well i think what's interesting is this sort of um the trump apprentice show with the fed chair i think that's becoming i mean you mean scott besant there's a lot of right i mean there's this there's this whole talk about a shadow fed chair right if you get into a situation where by trump doing what he's doing do you actually get him naming a chairman in name only like kevin has it yeah or no but basically in other words what i'm saying is these guys are trying to get this done early essentially to kind of create a condition for some sort of shadow fed chair right with no authority no power no ability to move rates well that but also maybe someone that's but then if this person ends up becoming the chair does he actually become a chair in name only because powell is still sticking around right i mean that that to me is what's interesting is when does powell's term end well his term as chair ends next may but his term as a governor doesn't end for another two years after that oh really so that to me is something that you know um that's a pretty uh that's a card he can play Right.

55:48And the way they go, they're going about this. You know, you talk about, you know, we talk about like Supreme Court justices and like litmus tests when you name. Right. Like there's they have a litmus test for judges. Trump is creating a litmus test in a way for Fed for for monetary policy officials. Right. He wants someone that's going to cut rates. Someone who's not going to be independent. Exactly. And so if so, I do think that this desire to have this kind of like big show, like the Apprentice Monetary Policy Edition and this sort of like, you know, shadow Fed chair, you know, trying to kind of undercut Powell before he's done with this term.

56:33that could potentially backfire in them because it would just mean that it's possible that if they put in it if they actually get whoever they want across the finish line once they're there they're actually a quite they're a very weak chair because Powell decides to stick around um that's really quite fascinating I haven't heard anybody talk about that so that is very much an under the radar uh answer so let's in our last few minutes let's talk about um Our five favorite questions we ask all of our guests, starting with, tell us what you're streaming these days. What are you listening to or watching?

57:07What am I watching? I just finished The Handmaid's Tale. Oh, really? They had their last... Did it hold up through all these seasons? I thought the last season was actually pretty good. So I like that. I just watched Netflix, The Poop Cruise. That was pretty fun. Oh, really? Yeah. That's people stuck on the boat in the beginning of the pandemic? Yeah, it was a good, like, sort of quick. It's such a horrible title. It was a quick documentary, but I kind of enjoyed it. And, yeah, those are the two things that are sort of top of mind for me. Those are very eclectic, not at all similar. I walked in on my wife watching The Gilded Age, and somehow I got sucked into this, and it's really quite fascinating because all the issues that we argue about today, wealth inequality and new money versus old money and economic strata and economic mobility, themes of the Gilded Age 150 years ago.

58:09It's amazing that everything's changed and nothing's changed. It's kind of fascinating. Let's talk about mentors. Who were some of your early mentors who helped shape your career? You know, it's interesting. I mean, I think about, I mean, I remember you asked me this question the last time I was on, and I probably said, you know, Ethan Harris. Right. I think I'd put Drew Mattis in that category of mentor. But I'm also at the point now, I feel like in my career where the people that I idolized early on are now actually like my rivals, right? They're my competitors in some respects, right? I mean, you talk about Rosie.

58:46I mean, he and I are both in the research business, You know, I mean, so it's sort of it's interesting if you're bearish the same year he's bearish or at least the same quarter. That's an unusual alignment, because for as long as I might be true right now, because for 15 years, you've been fairly, fairly constructive. And you can't say the same of Rosie. This could be the first time second half 2025. five we're aligned right but but you know that just means you've shifted because he's been sort of but um so now it's more about like not so much mentors but like who am i who am i talking to to kind of help me work through my process as like an analyst and um yeah i mean some names that come to mind like connor sen your bloomberg bloomberg opinion colleague i i i like talking to him about about the economic outlook we sort of think about and come out come at things the same way.

59:42Luke Kawa is another one. I like, so these are sort of like, you know, I guess you could call them like geriatric millennials like myself, like we sort of, another one. Geriatric millennials. Again, another phrase I've never heard before. Skanda Amarnath is another one. I mean, he's sort of in like more of like the public policy space, but I mean, I'm kind of glad he doesn't do it, but he'd make a great business economist himself. But I mean, these are people that I just like talk to, to kind of stress test my own views. And I think that's, at this point in my career, like that's what I need more than mentors is sort of smart people that will help me, you know, kind of think through an outlook and stress test.

1:00:27Sharpen your focus. Yeah. Or just like, where are you wrong? Like, what are you missing? That's interesting. So that's sort of how I think about it now. Let's talk about books. What are some of your favorites? What are you reading currently? You know, I don't read books. I'm not a book reader. We talked about this last time. We did. I read the news. Right. I can tell you who are the people that I like reading in journalism. Give us some names. Like Nick Timmeros, Wall Street Journal. Sure. Love reading his stuff. The Fed Whisperer these days, too. Well, I mean, it's not just that, but he thinks about things very thoughtfully, too.

1:01:10And he does a little data watching himself. So I kind of like reading what he has to say. Jonathan Levin, Bloomberg Opinion. So, you know, those are the – your colleague Josh Brown, I read his stuff. He's a very thoughtful writer. Yeah. So to me, it's really – you know, I don't have time to read books because I'm too busy reading the news, reading opinion pieces. The most interesting Fed paper that I came across recently is just, we talked a little bit about Ed Leamer before, but the Fed recently published a paper just looking at the housing channel of consumer spending, right? So they were basically making a fairly obvious point that if housing transactions or new home sales are down, that's going to have effects on housing-related consumer spending, and that's something that we should be thinking about.

1:02:04Horrible goods straight across the board. Yeah, absolutely. Housing has always been a big driver of the economy. What's been so shocking about this economy is we've seen home transactions drop significantly just because there's no supply, but the economy has been so resilient. It's really been kind of fascinating watching that happen. Yeah, I mean, it's interesting. I mean, so again, like housing is one of the reasons why I'm cautious on the economic outlook. And, you know, I think what's different about this time with respect to housing versus, you know, early 2022 is that now units under construction are coming down.

1:02:40You're in a situation where starts are running below completions, which means that units under, I mean, essentially units under construction will have to keep falling. And that's not what you had last time, right? Back then, units under construction were going up. So to me, that construction piece of it is different this time versus last time. Our final two questions. What sort of advice would you give to a recent grad interested in a career in either economics or investing? I mean, to me, it's just get a foot in the door, you know, figure out the details later. you know it's sort of um it never works out the way you think but you just have to put yourself in a position where you have the best chance of succeeding and and that to me is the most is the best advice i can give someone so in my case that manifested itself in get your foot in the door at a bulge bracket firm i mean you literally were working in hr before you moved into 100 yeah it doesn't like to me it's about again it's about putting in yourself in a position where you can succeed and it's but and i think that that's definitely true i mean for me it's a number of ways that happened right i went to nyu i went to nyu because i knew that if i stayed in new york i'd probably have a better chance at things than if i left um and um and it's just you know i mean nyu you know it's not like the best school it's not like princeton or harvard but a pretty good school it's a pretty good school and it's like business stern is a great yeah and if you're in New York, you're going to, they're going to, recruiters are going to come after you if you went to NYU.

1:04:20Right. Right. It's just that simple. And so you just need the a hundred K a year. Well, yeah. I mean, it wasn't that much when I was going, but, um, but I, but my advice would just be, you have to put yourself in a position to succeed and just let the chips fall, fall where they may. I mean, that, that to me is, you know, and if that means taking a job that maybe not the best job, but it's at a firm that you have a lot of, you know, respect for, or it's a good firm, good brand name, take it. Our final question, what do you know about the world of investing today you wish you knew 20, 25 years ago when you were first starting out?

1:04:57That's a tough one. I mean, I think my favorite thing, to me, what's important is, and just trying to relay this back to my seat, is it's important to understand the time horizon of the person that you're talking to and you're providing analysis for because a lot of people live in the short run but if you're sort of a typical investor you can you can tune out a lot of the stuff that we're talking about to be perfectly honest because to quote my friend sam row stocks usually just go up and so um you know it's sort of you see all this analysis that comes out on the street like you after the ism goes to 40 percent like to 40 you know usually the stock market's higher six months later and 12 months later.

1:05:39Well, yeah, obviously, because the stock market - But that's a default set. Depending on the decade you're looking at, it's three out of four or four out of five years. Yeah. So to me, it's sort of, yeah, I would tell myself back then, like, don't worry so much about making big market calls. Just give people your thought process. Really, really interesting. Neil, thank you for being so generous with your time. We have been speaking with Neil Dutta, head of economic research at RenMAC. If you enjoy this conversation, well, check out any of the 550 we've done over the past 11 years. You can find those at iTunes, Spotify, YouTube, Bloomberg, wherever you find your favorite podcast.

1:06:23And be sure and check out my new book, How Not to Invest, The Bad Ideas, Numbers, and Behavior That Destroys Wealth and How to Avoid Them. how not to invest at your favorite bookseller right now. I would be remiss if I did not thank the crack team who helps me put these conversations together each week. My audio engineer is Peter Nicolino. Anna Luke is my producer. Sean Russo is my researcher. I'm Barry Ritoltz. You've been listening to Masters in Business on Bloomberg Radio.

1:07:03Thank you.