Lots More with Kyla Scanlon on the Economic Vibes

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1:09Bloomberg Audio Studios. Podcasts, radio, news. Tracy, do you think that the reason it's so hard to buy a house is because of BlackRock is buying all the houses? There's a loaded question. That's like, what's that famous Disloaded question. Maybe this is more well-known in Britain, but the when did you start beating your wife? Yeah, no, no. We have that here. Okay, okay. It's a little different. Yeah, a little different. It's also when did you stop, by the way. Oh, I'm sorry. Yeah, yeah. Okay. Yes, that makes more sense. Yeah. Oh, dear. This conversation has already gone off the rails. I did a deadlift.

1:48One, two, three. Hegemony. Hegemony. Okay, good. What to? Hegemony. Barges. This is an after-school special, except... I've decided I'm going to base my entire personality going forward on campaigning for a strategic pork reserve in the U.S. Where's the best squid ink pasta? These are the important questions. Is it robots taking over the world? No, I think that, like, in a couple years, the AI will do a really good job of making the Odd Lots podcast. And people will say, I don't really need to listen to Joe and Tracy anymore. We do have... Cha-ching. The perfect guest. You're listening to Lots More, where we catch up with friends about what's going on right now.

2:27Because even when the odd lots is over, there's always lots more. And we really do have the perfect guest. Didn't we learn that big factoid, that really interesting factoid in one of our conversations that actually the single family institutional ownership includes like individual landlords in addition to huge firms like BlackRock? I just feel like this is what I think about all the time. TikTok macro, which is like BlackRock is controlling all of the market. No, sorry. BlackRock is controlling all the market. Blackstone is why you can't buy a house. All people in Congress are insider traders.

3:05What else is there? What else is there, Kyla?

3:13In terms of TikTok and what people talk about on there? What are the sort of pillars of modern beliefs about how the public needs to be educated? Yeah, I mean, it's always the system is working against you, right? I mean, I think there's so many misbeliefs about the economy, which is it makes it really hard to talk about the economy. Like inflation going down doesn't mean that prices are going down. I think that's a really big one. And then the BlackRock thing really takes hold. That's very, very popular. That's like a big pillar of how many people see the problems with the economy these days.

3:44Yeah, like ETFs own the world. ETFs, yeah, own the world. Okay. I'm trying to think what else. There's a lot. I should say we are speaking with Kyla Scanlon, our good friend, who has just published a new book called Fittingly, I have to say. I love this title. In This Economy, How Money and Markets Really Work. She's also a Bloomberg Opinion contributor. She's been on the podcast before. And congrats on the book, Kyla. Oh, thank you. Yeah, it's super exciting. Thank you for coming to chat with us. Oh, no, thank you all for having me. Also the creator of the word Vibe Session. Yeah. It just like become, it is, but it is you, right?

4:19Like you said it first, right? Yeah, no. And now everyone says it and I was like, oh, JP Morgan. I know, I saw that. Or claiming this is a Vibe session, but you created that. Yeah, no, I did back in July, 2022. But yeah, I know other people have taken credit for it, which is fine, you know. No, it's not fine. No, it's not. It's just how it works. But this is sort of the amazing thing about the Vibe session, because when you first wrote about it, it was because the hard data was still coming in relatively strong. But all the survey data, people seemed really, really downbeat on the economy. And now, a couple years later, that's still the case, more or less.

4:53Yeah, people are still feeling really bad. I mean, I think about the Harris Guardian poll, which was like 56 % of people think that we're in a recession. 49 % of people think the stock market is down. 49 % of people think unemployment's at a record high. And it's like, man, you know, there's an element of the vibe session that is structural affordability issues, right? Like housing crisis, elder care, child care. But then there is an element of the vibe session, which is media, right? And TikTok, as we were talking about with the BlackRock ETF and how it's buying up single family homes, apparently.

5:24But yeah, it's complicated. Where do you think this comes from? So this sort of, I don't know, people talk about trust and this sort of, you know, people just not believing things that are objective facts, this sort of deep skepticism or antipathy maybe towards large institutions or conspiratorial beliefs. Like, where do you think, is it like a social media thing? Like, what do you think it's all about? Yeah, I mean, I think a lot of it's information overload. Like we just have way too much going on all of the time. And I don't think we're kind of built to process all of that. And then just the framing of things really can be impactful.

5:55Like if a media headline is negative, that increases the click through rate by 2.3%. If it's positive, it decreases it by 1.9%. So the incentives are very clear there. But I also think, you know, if you're not freaking out, it means that you don't care. And so I think the overall idea is that you have to be anxious and worried. And there are things to be anxious and worried about, but I think it's exacerbated by the way that we engage with one another online. What sort of engagement do you see on a platform like TikTok? Because I feel like I'm not on TikTok, but I am on Twitter slash X. And one rule of social media seems to be if you say something negative about the economy, it's almost guaranteed to get more retweets and engagement than something that's positive or nuanced or educational.

6:43Is that something that you experience as well? Yeah, I mean, I think the whole thing is doomnerism can absolutely take over. Doomers sound really smart. Like if you're like the world's ending, everyone's like that guy knows what he's saying. And I think that that is just a great way to sell a newsletter. And so you see a lot of people selling newsletters by selling a narrative. And I think it's the same on TikTok. Like all the algorithmic incentives are for you to post very negatively. And it's hard as a creator because you know that. But there's one of my favorite sayings right now is nuance doesn't sell.

7:15And I think that's a big part of what we see on social media is people feel like they have to take a clear side on what they're talking about. By the way, I see your book In This Economy, number one bestseller in the business encyclopedias category. version of Amazon. The number two is the audiobook version. And then three and four are both Robert's Rules of Orders. And then five is, again, is the Kindle edition. So congratulations on your absolute dominance of the business encyclopedias category on Amazon. Oh, thank you so much. Yeah, it's funny what they end up categorizing you on Amazon. It's also doing well in the money and monetary policy section, which is fun.

7:53Yeah, yeah. But I didn't know it was a business encyclopedia, so it's good to know that it is. That's very cool. What was one of the things that you sort of learned through writing the book? So I was flipping through it. And first of all, I love the little cartoons and the drawings and the diagrams. They're very, very sweet and also very illustrative of some of the points that you're trying to make. But I'm curious, is there one thing that sort of stood out to you when you were researching the book? Oh, yeah. I mean, I think that for me, like there was two things, right? Like how do you structure a book?

8:26And then what should a book be about? This is important for me and Tracy, by the way, because every once in a while we talk about writing a book together and we're not very close. So we're going to listen very intently to learn how it's done. Well, this is how I did it. I don't know if it's how it's done. But yeah, I learned, you know, you have to have a flow to a book and the structure of it really matters. Even though each chapter can be read separately, you kind of have to tell a narrative throughout it. And that's a little bit difficult with something as big as the economy. Right. Because your book is quite wide ranging.

8:52It's basically everything that you find interesting about markets and the economy. Yeah. No. And I rewrote it three times. So the structure of the book was a big one. And then I think, too, I spent a lot of time trying to understand the history of the economy because I felt like that was really important to include in some of the beginning chapters. Like, how did we get here? And so the beginning of the book is kind of like the tapestry of the economy, the economic kingdom. So the Federal Reserve Castle, the monetary policy castle, the fiscal policy, inflation. Oh, I like the inflation pizza, by the way.

9:23Yeah. Thank you. Yeah. And all the diagrams are meant to sort of guide people throughout the book. And I guess like the biggest lesson learned for like writing an econ book, and it was an interesting lesson to learn is the structure really matters and how you guide people through something as hairy and confusing and big as the economy is important. You say people don't click on nuance. They don't click on. And yet you're into nuance yourself. And so like as someone who has been a successful financial system educator and now a successful author, it's apparently possible. It's apparently possible to be successful and nuanced at the same time.

10:00Yeah, yeah, yeah. I think it totally is. I just think it's much easier to be dumeristic. And so I think it's super important to have nuance because that's what the economy is all about. You know, everything has an opposite and equal reaction and it's the same in the economy. But I think it's just easier to tell lies. Yeah, Tracy, the last, so my last job, like about 10 years ago at Business Insider, I sort of wrote, my last post there was about why I really like covering markets. Like I sort of thought about the blind man touching the elephant, except the elephant keeps moving. So not only do you never really get the full picture, like at any given time, by the time you think you're getting the full picture, it's like there's still, there's another data point.

10:38The elephant has already evolved. The elephant is already evolved into a new species. It's not easy. But you know what I think, well, I'm not an authority on this subject by any means, but you know what I think the solution is to nuance is like comedy and entertainment in some respects. And that's kind of what you've been doing on TikTok, right? Like you make informational videos, but they're fun and engaging to watch. And so you can still provide nuance, but you still command the attention of the audience because they want to watch them. Yeah, yeah. That's the goal with like making, and that's why the book has illustrations too.

11:11It's like if you make things fun, people are more likely to pay attention. It's like a game of human behavior, right? And so, yeah, if you can like tell jokes about things that are inherently kind of funny, like a lot of stuff in the economy, even though some parts of it are very serious, like unemployment and inflation, like some parts of it you can have fun with. And I try to do that as much as I can, because I think that's how you engage people, people who think they're outside of the economy within economics education.

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13:07It's built to grow with your business, whether you are just starting out or already scaling up. Plus, it's easy to use, customizable, and designed to streamline every process, so you can focus on what really matters, running your business. Thousands of businesses have made the switch, so why not you? Try Odoo for free at odoo.com. That's O-D-O-O dot com. You know what I don't know? How did you realize what your career was? Oh, yeah. That's a good question. It's like, you know, people tweet and people post, and then suddenly it's like, oh, like, people listen, and this is what I do now. Like, it took me – it was not until a couple years of being a journalist that I realized, like, oh, I guess this is what I'm going to be.

13:48I'm a journalist. Like, at what point did you realize that this is what you do? It was really – around GameStop is kind of when the video started. and then I spent probably six months being like I don't know what's happening and I was just making these videos and I didn't know if anything would work and then I kept on writing my newsletter and then in July 2022 uh the vibe session kind of took off and I think that was kind of when I was like oh okay I'm saying things and people are listening and I had the New York Times opinion piece which was really awesome and that's kind of when I was like oh okay wow whoops you know so Why do you think vibe session took off as a term?

14:26I think people were just really, or this has been feedback that other people have given me. I think people were just looking for something to explain this discrepancy between consumer sentiment and economic data. Like so many of my conversations are about why do people feel the way that they do? And I think the vibe session word was at least a step in the direction of addressing, you know, why there is such a big gap and why people were a little bit worried about why that gap existed. So neither Tracy and I are on TikTok. Are we like at risk of just becoming completely irrelevant? Like I don't even use reels.

14:59All I do is like do the podcast and post tweets and stuff. How separated am I from actually the real world of where people actual people are actually getting their information? I don't know if TikTok is the real world. But yeah, I mean, I think TikTok is at risk of being banned in the United States. Which I don't, I'm biased, but that, you know, that was like, okay, well, that's fine with me. Yeah, that's fine with me. It's like level the playing field for me because I'm so far behind. No, but I have no opinion on this. I'm a journalist, but go on. No, a lot of young people do get their news from social media.

15:27And that's why I made my videos on social media. It was because I was like, this is where people are. They need information about the economy, where they are. And so that's what I set out to do. But yeah, it's definitely where people, it's like the watering hole of the internet in a big way, but not like Twitter. Twitter's a little bit different. It's very direct on Twitter. You know who I blame for TikTok being a massive hole in our consciousness, Joe? Ironically, I kind of blame Sam Rowe because he amalgamates the best of TikTok and then posts it on Instagram, which means I never have to go on TikTok because he just does all the aggregation.

16:03Shout out to Sam Rowe. Yeah, it's a public service for sure. Kyla, I want to talk more about like the vibe session and where we are in the economy now. So inflation has been coming down a little bit, and yet the sentiment surveys are still coming in pretty – I mean, I'm generalizing here. No, they're dismal. Yeah, they're bad. If this is a structural problem with some of the surveys, if people are too polarized because of the media or if people are reflecting on the longer-term outlook and just thinking, I'm never going to be able to buy a house or I'm never going to be able to retire. And that's feeding into some of the shorter term responses.

16:42Is this discrepancy ever going to go away? Or is this something that we and economists are going to have to learn to accept and kind of analyze and digest? Yeah, that's something I've been wrestling with quite a bit ever since the Harris Guardian. And you've got to take all surveys with a grain of salt. But ever since the Harris Guardian survey came out where it was about more than just vibes, like it was a clear disconnect from reality. yeah right like it was like we're not believing in in truth which is the stock markets up unemployment's down right we're not in a recession i do think that because of information being a playing field for foreign adversaries that there is more and more of an incentive to um push consumer sentiment down people are getting their information from all sorts of disparate sources and so there really isn't a cohesive way to consume information like how you know we used to when it is just like one cable TV show.

17:34So I do think that sentiment will be impacted just because of the way that we get our information now is so confusing. But I am very optimistic that it'll improve, but I'm not sure yet how it will. I think it has something to do with transparency and trust and rebuilding that, but that is a big project to undertake. That seems like a really big project. Why can't everyone just do what I do, which is just fire up the Bloomberg terminal, type out top and look at the most credible selection of news stories related to business in the world it's easy i never get any misinformation i know don't don't respond i've learned the best thing to do is just don't respond to joe and then you have your information firehose solved there's this crazy statistic about and i so then it sort of refutes what i was just saying about media being a way that people get confused is like the average American spends like five minutes a month on the top 25 news sites.

18:34So people are really just scrolling headlines. And so I think it's like all of these things. And also, I think the decline of local papers, everything has become very big and national and algorithmically designed, which sounds very doomer of me. But I think we're in a weird, weird spot. And there's so much uncertainty going into the election, too. I think it's just going to be a funky few months. What's your creative process like for creating the TikTok videos. And I have to say at this point, sometimes when I'm imagining like the FOMC meeting around like a big table in a boardroom, I sometimes have visions of like you talking to yourself the way you do from like different camera angles and Jerome Powell going, I think we should do this.

19:16And then Kyla responds like, no, we should do this. Anyway, that's just me. That's so funny. Yeah, the creative process is kind of like whatever I'm into that day on it. I get a lot of inspiration from other videos, all sorts of like movie makers and video creators. And that is how the creative process is driven. What I try to do is a multidisciplinary approach. So in the book, I have a lot of poems and philosophy and literature. And I feel like that's really fun because I feel like with economics, we kind of stay in one line most of the time, which is like money. But you can really you can have a lot of fun just talking about how all this stuff relates to everything else.

19:52Totally. I mean, I think this is one of the things we've learned on Odd Lots. There are very few topics that can't fit in in some way, like in some way. Yeah. You just sort of realize in some way it's all business and economics. One of the questions that people ask me, like, well, what should I read or what should I, what do you like to consume? What's your, both, what other books that you like, a media diet, or like someone said, like, I want to learn more about the economy or I want to learn more about markets what should i read what do you tell people well i have a great book out you can read in this economy but um yeah i love reading books that aren't about the economy um but like kind of an economics angle so i'm reading this book called paved paradise right now which is very good it's about parking lots and like the history of parking lots and that's been really fun i feel like that's right up your guys's alley yeah single topic history books are so good yeah yes yeah and then i just finished cultish which is about like cults and how they started up And then I'm reading The Material World by Ed Conway, and that's been really fun.

20:51Oh, yeah. Yeah, that's a good one. But yeah, I basically read everything. I read a lot of philosophy during the pandemic, which I think a lot of people did. And now I'm kind of on this like real world kick where I really am obsessed with like geology and materials and stuff like that and how that can be applied to the economy. So you mentioned, you know, things sort of taking off for you during GameStop. And I think the last time we had you on was to talk about meme stocks. And maybe we did a little bit of crypto then as well. But, of course, in recent weeks, we have seen the return of some meme stocks, although it seems to have kind of gone away relatively quickly.

21:31We're recording this May 29th. It was up like 25 % yesterday. Yeah, it was a lot, but like not quite on the scale of the first round of meme mania. And it's dropped again. But what do you think is happening there? Why does it seem to resonate, you know, even two years later? Yeah, I mean, I think Rory and Kitty returning probably had something to do with it. But, you know, one topic I've thought a lot about is financial nihilism. So people sort of not believing in markets. But I also think like GameStop is sort of fun. Like it is a casino in the way that if you throw some money at it, you could make a lot of money.

22:08and so I think people view it that way but then I do think there's an element of financial nihilism which we I know that you all just covered sports gambling I think that is maybe sort of in the same bucket Connorson also from Bloomberg Opinion has a great theory where he's like because millennials and young people can't buy a home they sort of have this extra cash that they're going to throw at things like GameStop and sports gambling and I think that all of those things are simultaneously sort of true. Eventually, somehow, you know, even the most online Gen Zers, like eventually they'll get old, like we are, and eventually some of them will own homes and eventually some of them will have kids.

22:50Do you think that for younger generations, they're just going to permanently see the world differently than many other people? Or do you think it's going to be like, no, the constraints that inevitably happen as people get older and having to save and pay for child care and pay for elder care will be a sort of forcing mechanism for having, I guess, views or media diet that we sort of see as a little bit more normie. Yeah. I mean, I think the mean reversion, I suppose, is normie, as you might say. Yeah. I think that as you get older, you just have more responsibility. So you're more likely to become more normie, to say it again.

23:28But people aren't having kids like they used to. Everybody knows. And, you know, it's really tough to get a home. So I think that that will be something that we see. I just think that's something that happens over time. But it'll be interesting to see how the Gen Zers move throughout the world. I wrote this piece for Fast Company this time last year or a little bit earlier about how Gen Z thinks about work, which is very, very different. Like all the media terms are more. It's like quiet quitting and all that stuff. All right. They just had something where it was like a quiet lunch or something where people were like going to lunch and they were like, why would you do that?

24:02When you could work for a corporation and not take lunch and just work all day. So I think that there is more of a desire for work-life balance. And, you know, corporations don't provide perhaps the same support that they used to, like when there was pensions and, you know, more supportive health care possibly. So I think it's just a totally different relationship with work. And I don't know if that will carry through to the future, though.