Elliot Kallen: Good morning and good afternoon, everyone. I’m Elliot Kallen, and welcome to another exciting episode of Meet the Expert with Elliot Kallen. Different today, again, we’re going to interview an economist, somebody that works in a macro world, a chief marketing strategist. You’re going to get a perspective from a major company in New York life of what’s happening out here today, and then how you could react, and you could help us help you with your portfolios and your Money. And we’re going to be talking to Lauren Goodwin. I’ll tell you about her in a moment. Lauren, welcome to the show. 

Lauren Goodwin: Oh, thanks for having me. My pleasure. 

Elliot Kallen: If you want to reach me, I’m at Elliot, E-L-L-I-O-T, at prosperityfinancialgroup.com, 925-314-8503, or www.prosperityfinancialgroup.com. We build portfolios. We help people manage money. We help people build a Legacy. Come reach out. We’ll send you lots of information about what we’re talking about. And if you want to catch the 75 or so other episodes on our website, it’s called Meet the Expert with Elliot Callen, and it’s under Recordings and Resources. And I hope you love them as much as we love making them. Lauren is a graduate. She’s got a graduate degree from John Hopkins. She went to USC. Being from California, we try not to use that against her, from USC in Northern California. But that’s great. She’s obviously very well qualified. She works for New York Life, and she’s on every major money slash news program like the CNBCs of the world and the Fox Businesses of the world, and you can catch her all over the place. So she’s kind of got a famous face for business and economics, and so we’re thrilled to have her here. So Lauren, let’s get right into this. Can we do it?

Lauren Goodwin: Absolutely. 

Elliot Kallen: I want to do a brief economic update. We’re in a world now where for many years now, people have been rewarded for taking risk on assets, we call that. It’s slowing down a little bit out there. We can feel it. Our clients are telling us the Federal Reserve just last week, and I know this program is going to come out in a month or so, but just last week for the first time, maybe they’ll do it again in another month or two, but they lowered interest rates by half a point, 50 basis points, that call. And we’ll see how that affects the market. September is turning out to be a tremendous month for equities out there. So there’s an argument that they shouldn’t have done it because the markets are at an all-time high. They should have done it because it’s slowing down. Who knows? Why exactly did the Federal Reserve lower interest rates, and what does that mean for people in the bond market and the equity market world? So our most conservative investors are in the bond market world or variations on income producing instruments, and our most aggressive investors are going to be somewhere in the tech world. There’s kind of the two extremes or other areas that are growing. What do you think lowering interest rates does? And put on the future cap, that tells you what’s going to happen in the future because we’re all so perfect on how the economists get it right 100% of the time. By the way, I’m being facetious about that, the economists get it wrong as much as everybody else gets it wrong too. They just do, they’re better at it. They’re better than weather people, they’re just not as sharp as we’d like them to be on every kind of economic prediction. So what do you think, Lauren? 

Lauren Goodwin: Let’s start from the top. And I use a framework with my team of economists that’s really simple, really straightforward. And though every economic cycle is a little bit different, it tends to evolve in a very similar way. And that framework is called the economic dominoes. So if you can picture in your mind a line of dominoes, just like you might have lined up as a kid to knock over, when the Federal Reserve or really any central bank raises interest rates, there’s a series of sectors in the economy that tend to fall as dominoes over the course of two to three years, typically, it takes a little bit of time. So first, we tend to see interest rate sensitive and liquidity sensitive sectors of the economy struggle. That’s housing, for example, or venture capital. After that, we tend to see the manufacturing sector experience some Stress. And when you have both manufacturing and services sector companies struggling at the same time, that’s when you tend to see earnings and profit margins in the economy move lower. And only after that do you begin to see the consumer or the labor market struggle. And anyone who might have taken an economics class in college or at any other point in life might say, well, if that process takes two to three years and the dominoes tend to fall in that type of order, it sounds a lot like the concept of leading versus lagging indicators. And that’s exactly what it is. And so over the course of this cycle, as the Federal Reserve has raised interest rates, we’ve seen housing, venture capital, manufacturing see some stress. And it’s only recently that we’re really starting to see the services sector and profit margins normalize and the labor market slow its roll. And so in terms of leading and lagging indicators, that doesn’t tell me a whole lot about where we’ll be six months from now, but it tells me that right now the economy has seen some sectors slow. And so when the Federal Reserve looks at the balance of risks like an overheating economy and inflation or like a labor market that’s losing steam, it looks at that series of economic dominoes across the data and tries to determine whether it needs to have a policy rate that’s really pushing down the dominoes quite so hard. And what they’ve seen over the course of this summer is that as the labor markets normalizing a bit, as these economic dominoes are not falling over, but let’s say wobbling, that they might not need to be blowing quite so hard on them. They might not be having to have that break on the economy quite so much. And so the reason the Federal Reserve is cutting interest rates now is not to stimulate the economy or to stimulate the stock market, although that can be a result, which I’m happy to talk about. But what they are saying is that we’ve been pushing this wind, pushing the dominoes down and it might be enough now. Inflation has come down quite a bit. The labor market and wage growth have normalized quite a bit. Maybe we could have a policy rate that’s not pushing the dominoes down anymore, but rather just letting them be. And so that’s really the Fed’s goal at this point. It’s not to stimulate the economy per se, but just to reduce that pressure. 

Elliot Kallen: So what is that? The second half of that question, thank you for that answer. The second half of that question is for the most conservative investors out there, which are the income-based investors, I don’t want to say the coupon clippers because that’s how it used to be. They used to be called in. The people that are saying, I want to be kind of a risk-off, I don’t want to be in a high risk. I can’t Sleep at night when I have this. So we buy a lot of bond funds, bond ETFs, things like them, that for people, this helps them. How? 

Lauren Goodwin: Well, as much as higher interest rates over the past couple of years have contributed to market volatility, it’s also provided investors with a real income generation opportunity. And you said maybe we won’t call them coupon clippers, but I think we all could have been coupon clippers over the past couple of years. When the Federal Reserve’s interest rate is close to 5.5% on the upper bound, that means that even just sitting in cash can get you rates close to that. And so of all the topics we could talk about today or at this time in the economy, what you’re asking is probably the most important thing. Because if the Federal Reserve is able to cut interest rates back to a level where they’re not quite so restrictive, that might be another percent and a half from here. And so if, let’s say then just as a starting point, that means that the federal funds rate is 2% lower in six or nine months than it was just a couple of weeks ago, then that’s an environment where your income generation opportunities have really shifted. For example, if you put a lot of money in the money markets earlier in 2024 and you just let it sit there, you might wake up in 2025 and say, oh no, that money that I had invested at 5.5%, I can now only invest at 3.5%. And so for even a conservative investor, it’s quite important to think about how might I be able to lock in a higher interest rate and clip those coupons at a more attractive rate over the next couple of years, rather than just the next couple of months while the Fed is cutting. And so I think that moving into bonds, which have more price risk than cash, can make sense in order to preserve that income generation opportunity. Now what type of bonds you invest in, the relative riskiness of those bonds, and how much interest rate risk you take, those are completely different questions. But the most important thing is that preserving higher interest rates while we have the opportunity, I think is really important. 

Elliot Kallen: Thank you. I want to ask you, and we’re talking about Lauren Goodwin, who’s with New York Life Investments, and she’s the chief economist or chief marketing strategist, and she is definitely an economist with a master’s degree from Baltimore, John Hopkins. So a bright person, and I want to take advantage of you being here and ask you some macroeconomic questions for those who are asking, what does that mean? The microeconomic world is talking about particular companies like IBM or ITT and so forth and so on. The macro is what’s going on at a grand scale across the countries, across continents, across the globe, things like that. And we have some big issues because we’re in a presidential year right now, and we’ll get to that because that’s always interesting. I could talk politics with you all day and economics. But I want to talk about a few things, and let’s start with what you just brought up with the word inflation. Because we’ve all experienced, I live in California, you’re on the East Coast, we’ve all experienced everything costs more. And the way the Fed measures inflation is not always really based on the consumer’s pocketbook at all. And so we just spend a lot more money. I know what it is, and we spend, well, you’re on the East Coast, so you’re probably paying as much as California is for fuel. I was just in Texas the other day, it’s a dollar and a quarter less per gallon, without even question about it, it’s cheaper to live there, right? But the coast, the blue coastal areas are expensive to live and housing’s the same. So we look at inflation, one of the reasons that inflation has been coming down is because it is, I think, as an amateur economist, so you can correct me for sure, as a professional, I think that we have been very fortunate that oil peaked, the price of a barrel of oil peaked. And I think there’s a direct correlation between the price of a barrel of oil at a certain number and inflation. It raises fuel, trucking, and every piece of plastic on earth, just on the price of oil. And oil has come down from the hundred and something dollars a barrel, when at the end of Trump, well, at the beginning of the Biden administration, I don’t mean to put blame on Biden on that, just that’s what had happened. It’s come down now to the 70s, and it went over 80, came to 67, it’s kind of in a range right now, and that’s helping inflation. But that’s also not taking into account that there could be a pretty good war in the Middle East coming up. And if that happens, that oil just rockets, as it has in the past. What happens then to inflation with us? And then how does the Federal Reserve or the U.S. economy react to oil going back, or maybe even going up to $120 per barrel? 

Lauren Goodwin: Let’s talk about oil and energy first, and then I think there’s a really important element of the inflation conversation that we should address separately. When it comes to energy, one thing has changed in a huge way since the last time we had a big sort of war-related oil crisis, and that is that the U.S. has become the world’s largest oil producer. And not only is that the case, but the U.S. oil supply can be quite flexible because fracking rigs are much quicker to bring online, less capital-intensive than a traditional oil rig. It’s one of the reasons why we saw oil prices move so much lower so quickly in the teens about 10 years ago. And so an oil shock, let’s say, would certainly have an impact to the global economy, likely a negative one. Inflation is one of the mechanisms by which that type of shock impacts normal people like you and I. It, under both Democratic and Republican administrations lately, surprises some investors to know that oil production has continued to increase in the U.S. Now, what is that about? It’s a little bit about the Russian invasion of Ukraine and the war going on in Central and Eastern Europe because it brought a lot of investor and sort of market attention, policy attention, to the idea that energy could be scarce, right? That you could have disruptions in this market, even in a sort of much more modern economy. But I think the second reason is really what you’re asking, which is that inflation has been such a problem for American consumers, also for global consumers, that ensuring that oil production was up and running has been not just a national security issue, but also a domestic economic issue. So there’s a lot of policy common sense and political common sense that’s happening to maintain robust oil production, even in the United States. And so I don’t see an energy price shock as being as impactful, it would still be impactful, but I don’t see it as being as impactful as it might have been in the past. But if I dig then deeper into just inflation and why inflation has been moving lower, you’re right, energy prices have been a part of the story. But economists like myself, the Federal Reserve, and others also look at measures of inflation that exclude food and energy prices. Now there’s an important point to make here, which is that food and energy, if you added housing, those are the most important and biggest items on most of our household spending lists. And so it’s not to say that we ignore the cost of oil and gas to fill up our car, and food. It’s just to say that we also look at measures outside of those to identify whether inflation is picking up in a way that the Federal Reserve could have any control over. Because you pointed out, the Fed can’t really control oil supply, can’t necessarily control food supply either. But it can think about how policy impacts other parts of the market, like the housing market, like shelter costs. And so they focus on those as well. And those measures, I’m very happy to say, have also been moving lower very quickly over the course of the past couple of years. Now just one more thing I’ll mention, we have all seen prices move much higher. The inflation rate, which is the pace at which prices keep moving up and up and up and up, that has come down a lot. But the level of prices, the amount of money we’re spending at the grocery store is still quite high. And I see that as it continues to be a challenge for everyday families. 

Elliot Kallen: So you mentioned the housing market. That’s not really counted. The Fed doesn’t really count the housing market as part of this formula here. But we know, you and I know, that at least on the East Coast where you are and on the West Coast where I am, we know that the average young family is priced out of the market. They can’t afford to buy a new home. And I know in some places like Texas and Florida, prices are starting to come down a little bit. Austin, Dallas, places that were so hot, the Nashville area, that they were on fire. And they already tripled from what they were, let’s say, a decade ago. But they’re coming back. But they’re coming back, and the numbers are already so high to begin with. There are two questions here on the housing market. Let me ask you the first one, and I’ll tell you what the second one is. The housing market needs to come down, but nobody wants to own a house that’s coming down in value. I don’t care who you are. Because we saw what happened in 2008 when people just walked away from their homes. And that was bad for everybody, particular banks. And that was just snowballed across the economy. 2008 was a really bad year, led by people walking away from their mortgages. So we don’t want that to happen again. On the other side, if they don’t either come up with a way to make housing affordable, and I don’t mean low-income housing. I mean just affordable. Then we’re going to have an entire generation unable to buy, and then we’d better be building apartments and condos for rent for them. So that’s the first part of my question is, how do we deal with that? How does the Fed, the macroeconomic deal with that? The second part of my question is about the Depression or the recession that’s beginning to happen in the office building market. So there is a cold happening in the office building market. We all know that major cities have big bolts of emptiness going on, big vacuums of emptiness going on. That has a cold. If that gets the flu, then the entire housing market gets a cold. And that’s related to question number one, does that put pressure on everybody that owns a house today that begins to see their equity evaporate, and uh-oh, now what? What do you think? 

Lauren Goodwin: Well, first, just a clarification, the Fed does look a lot at housing prices. That’s one of the things that they do consider as a core element of inflation. And so it is a big focus. But to your very point, let’s talk a little bit about housing, and then we’ll talk about commercial real estate, because they are somewhat distinct markets and both very important. In terms of housing affordability, I do not know how this movie ends. I really don’t. And the reason is, there’s a big difference between the housing market today and the housing market of just before the financial crisis. And that big difference is that back then, almost 80% of mortgages were floating rate to some degree. So what I mean is, if interest rates moved higher, your payment on your mortgage might have moved higher. And if interest rates moved lower, then that would help, your payment would move lower. Since the financial crisis, fixed rate mortgages have become much more popular. Now the ratios are skewed where a large majority of homeowners either own their homes outright or they have a mortgage that has a fixed interest rate. And so even as interest rates have moved higher, if you wanted to buy a new home, then a mortgage rate above 7% was really challenging relative to what it’s been in recent history. But if you already owned a home, then that rate moving higher likely didn’t impact you at all. And so the good news is that it’s kept the housing market from collapse, especially in urban areas where there was a lot of movement in and out related to the pandemic. But the potentially challenging news is twofold. One, as you mentioned, house prices are high. And two, it means that as rates move lower, those folks with fixed rate mortgages, they still have a fixed rate mortgage. It still might be closer to 3% than 5% or 7%. So it’s not sure that the housing market picks up in volume the way that it has as the Fed has cut rates in previous cycles. And so how does housing affordability shift? I think it has to be a mix of improving supply in high demand areas and likely some weakness in prices over the medium term to make housing more affordable. And I’m just not sure that’s likely to be the focus of policy because so many families hold the bulk of their wealth in this asset, their home. And so that’s a long way of explaining why I’m just not sure what’s likely to happen in the housing market. Where I do feel sure or some level of confidence is that I don’t think we’re likely to see major weakness like we did in the financial crisis because of this stability in mortgage rates. But let’s then think about the commercial real estate environment like office. Because as you mentioned, just as there have been folks who have moved to different parts of the country, there’s been a lot of demand in the Sunbelt states because of the pandemic, more flexible work arrangements. Now four, four and a half years later,] there’s a dearth of occupancy in office buildings, especially in places like New York where I live. But a couple of things are happening that I think are really interesting. The first time is passing. People are going back to the office, not to the same extent as they used to, hybrid work arrangements are much more common, but we are seeing office space occupancy start to move a bit higher. But perhaps more importantly than that, commercial real estate is about quite a bit more than office space. If you think about all the commercial real estate, what that really means is any type of property that’s bought and held or rented for different uses. It includes things like warehouses, logistics, data centers, malls, all different types of real estate. And we’ve seen weakness or big drawdowns in some sectors in the past, like in brick and mortar Retail, for example, as the internet became more popular. And so we’re seeing an environment where office space is likely worth less and potentially a lot less than it was in certain geographies. But in those same geographies, the owners of commercial real estate are also seeing some of their assets worth a lot more because of the shipping, the way shipping has changed with on-demand purchases, companies like Amazon or Target that ship right to your house and very quickly. Data centers with Artificial Intelligence and machine learning becoming more in high demand. So there are areas of the commercial real estate market that have seen a lot of buoyancy. And so for the most part, we expect that while there might be some sales with some big losses in areas like office, it’s not likely to prompt a major crisis and especially not for the housing market, which we see as a different market with different ownership. And again, it’s not to say that there’s no risk in this market, especially for investors that might own in that space, but it is to say that it’s becoming less of a big bump in the night or something that keeps me awake as a major risk for the market. 

Elliot Kallen: Interesting point of view on real estate on that. By the way, we’re talking with Lauren Goodwin, who is an economist with New York Life Investment Management. And you’re listening to Elliot Callan. This is Meet the Expert. If you wanna hear more episodes, it’s on prosperityfinancialgroup.com. And you could reach me at 925-314-8503. So this has been great because we deal with people with high net worth that are Investing and they’re learning something here about whether they should get into the real estate business because it’s not as bad as they thought, whether they should think about what’s the market and how interest rates are affecting them. We’re in a presidential year, and I’m not looking for you to predict or tell me who the next president is or anything like that. I think at the moment, they’re pretty much neck and neck. And we’ll see, I hope they’re neck and neck going right into the last day because it makes it more interesting on that. But the next president’s gonna have to face a couple of major hurdles that none of them are talking about. $35 trillion deficit. There is a number that’s just too large that nobody wants to admit. Social Security, which is simply out of control. Medicare that needs to be revamped. These are big macro issues. I’m not sure either side is even willing to discuss this for fear of alienating social security and alienating seniors. $35 trillion alienating, I don’t wanna cut defense spending or I don’t wanna cut entitlements. There’s always a reason why not to do it. None of them, of the two people that are running, have talked about how to balance the budget, get the budget in line, how to lower deficits, how to cure social security ailments. None of them are talking about these gigantic macro dollar issues on there. At some point, these debts are gonna be just unsustainable. Do you agree or disagree? Is the next president gonna have to face this or do those cans get kicked down the road again? 

Lauren Goodwin: Well, look, there’s no reason, no matter what you or I might think, there’s no reason for a government to care so very much about the debt unless voters are saying it’s their most important issue, which right now isn’t the case, but I’m gonna come back to that because I think it’s going to increasingly become the case. Or two, the bond market is telling them that it’s a big issue. So let’s break each of those down because I think when it comes to when and why would any government, regardless of who’s in charge, really tackle this issue, it comes down to these two things. So one of the reasons I mentioned domestic voters like you and I are not putting this as their top issue is that the really multifold, but a lot of the areas where the government has been spending in the past couple of years, at least for many households, have felt essential. It’s stimulus checks, keeping folks going during the pandemic. We can debate the efficacy of that, but for a while that felt important. Investing in the semiconductor supply chain or the technological competitiveness of the US. So all these things that at least on the surface the country needs. So when does it become a problem for normal voters? Typically, historically, when we look at when there have been big efforts to balance the budget, it’s come when the interest payment on our debt starts to exceed important budget line items. And right now that’s just about happening. The cost of financing our debt is starting to look the same or higher as important areas of the budget like education or defense. That’s when everyday voters start to say, that just doesn’t make sense to me. Everyone knows that the government spends more than it takes in. But for a government like the US who has the world’s reserve currency, you don’t have to balance your budget every year the way you or I would, because you can borrow in 30 year terms in a way that can keep that going for quite some time. But again, domestically, the fact that these interest payments are moving higher than some important budget line items, I think is an important turning point. And then the second is, does the market start to signal to the government that things have gone too far? And this is a bit complicated because there is simply no alternative to the US and the US dollar when it comes to safe haven assets. The entire global financial system, even with some of the recent hits on the US dollar and some of the growth of other countries, the financial system is overwhelmingly run in US dollars. And so when something goes wrong, people flock to dollar assets. And so what would cause that to change? There it’s a little bit of licking your finger, sticking it up in the air and seeing which way the wind is blowing. It’s not an exact science. There’s a lot of concern that it might’ve been a debt level of 100% of GDP. We and many other countries in the world have blown right by that without any issue. And so I think really with respect to the US, one of the key concerning indicators I would see is when other central banks start to hold non-dollar reserves at a rising level, that’s not happening very quickly, but it’s something that we watch as an indicator. And then another is, does the US dollar remain the world’s global reserve currency? Historically, it’s not been a country rising in importance that makes it a global currency. It’s really that it has the most efficient system. And so if there was a more efficient system that came up besides the system that we have now, which is dollar-based, then I think that we might see more concern about that. So it’s really not an exact science. It’s not something that I expect to be a big risk in the near term. But those are the two triggers that would make a real reckoning on Medicare and social security, just government spending in general, more of a concern for the government. And I expect that it would have to be a bipartisan effort. You would have to have both sides of the aisle taking the credit and the blame in order to really move the needle on the debt and deficit. And that’s one of the reasons why, unfortunately, I think we’ll have to get in trouble, either with ourselves or with the global bond market before we really see that type of effort. 

Elliot Kallen: This has been great. I’ve got one more question I’d like to end on, if that’s okay with you. Sure. Lauren. And that is, I want to talk about China for a moment. So almost a decade ago, I took all my clients’ investments out of China. And we’ve been out of China. We continue to be out of China. We have a little bit in the South Pacific, which is really a backdoor China play. It’s, and I’ve said, as a student of history, that I like to think that I am, I look at China today as a 1920s Japan, where we sold all of our scrap metal to Japan in the 1920s. They were an easy market for us. We didn’t quite understand it. It was a basic dictatorial market in those days as well. And they took all that scrap metal, all those wonderful things of iron and iron cast and steel things, and they created bombs and planes and used them against us in World War II, 15 years later. And I kind of see China in that world of what Japan used to be, that they take our money and they convert them to enemies of the United States, things that can destroy us. And, you know, I don’t want to be a gloom and go bar and say the world can be destroyed in 30 seconds or one minute, because it can be, but we won’t have that conversation about that one. But I am really concerned about the fact that as they get more aggressive, because I have so much money and so much play, and they, we can’t even, if we got into a war with China, we don’t even make antibiotics in this country. They all come from China. We wouldn’t have basic antibiotics for our soldiers and for us. That’s how bad manufacturing has happened since the Clinton administration, when they became the most favored nation, everything moved there basically. So what has to happen for us as a country to not have to plow this huge amount of money to defense, because China’s building up and we’re gonna have to keep up with them and catch up with them in our Navy and Air Force and things, that’s gonna build up a huge pressure on the federal government to build up defense. Manufacturing, we’re gonna have to put huge tax credits to get manufacturing back from China to the U.S. That’s pressure on the U.S. government again to do that. And then you’ve got both sides talking about embargoes and dollars that they’re gonna hold up or get, you know, whatever they do to make, how does that, how does this play out with China? 

Lauren Goodwin: Look, I think you were starting to ask, like, what does it take for this to roll back? And I don’t know that there is an answer for that, because this sort of positioning of East against West is well-entrenched and, it might’ve been avoidable at some point, but now there is a, I’m gonna put it in air quotes, war playing out, really mostly in terms of economic competitiveness. Just like we’ve seen competitiveness over energy resources in the past, like oil and gas, we’re now seeing a competitiveness over the inputs to semiconductors and the technology supply chain, as well as, and I think the pandemic made this very clear for the average everyday person, just acknowledging that really any supply chain being focused in any one country isn’t the best idea in case something goes wrong. So just to give a couple of examples of countries where, that are not China, 60% of the world’s vaccines are made in India, 75% of disposable gloves and other protective equipment is made in Malaysia. So you have lots of supply chains globally that are quite concentrated. And the idea that just in time, fast, most efficient manufacturing was the best thing for everybody, that logic is starting to unwind. The security of those resources and the access to things like antibiotics and vaccines, as well as computer chips and other sort of competitiveness inputs, that access to supply chains has become more important than the cost, at least to a point. And so, it is not just US-China, it is a global trend. And I think it’s a trend that’s likely to persist. And so for folks thinking about their medium or long-term investments, I think there’s a couple of important takeaways there. The first is that the age where prices were moving durably lower, it now depends on more than globalization because that globalization. I think it’s not that it’s being completely rewound, it’s that it’s becoming more regionalized or sort of based on friendships rather than truly global. And so that means that price pressure, it looks a little different now. There’s more of a bias towards inflation from that factor than anything else. And so if I think about a five, 10 or 20-year portfolio, I need to expect that I might need a little more return, even for a more conservative portfolio to keep up with inflation. That impulse is strong and I think it’s important. But the second takeaway is that not everything with respect to this sort of re-globalization dynamic or US-China competition is a threat. There certainly are threats, but there are also opportunities with respect to how these supply chains are moving, the type of energy and infrastructure investments that are being made. And again, whether we like or think that’s the most efficient option, it’s happening. And so it’s an area of opportunity where if I think about it, regardless of who wins the election, what are the sectors that are likely to continue to see investment? We talked about energy. I think both brown and green energy are gonna be important because we just need more and more energy demand. We need that supply chain. I think that competitiveness around the semiconductor supply chain, manufacturing capabilities are gonna continue to be important. And I think defense, again, it’s not just a US theme, it’s a global theme. These are sectors that are likely to continue to see support as a result of the dynamic you’re spelling out. 

Elliot Kallen: Well, this has been great. And I want you to, we take ideas from Lauren, who’s the chief marketing strategist of New York Life Investments and about a hundred other economists. I get these reports every day and I spend about 30% of my time being an economic wonk and reading this stuff and actually digesting it and coming up with ideas. And that’s how we build portfolios for Prosperity Financial Group, which is touching on $500 million of assets, of client assets. So very exciting what we’re doing. And Lauren, if people wanna read what you put out there, which people like me wanna read or send you a note, how do they do that? 

Lauren Goodwin: There’s two ways. The first is that if you’re a LinkedIn person and you like following people in that environment, you can find me there, Lauren Goodwin. I have a CFA after my name in case there’s lots of Lauren Goodwins in the world, which I think there are. So Lauren Goodwin at New York Life Investments. I post all of our investment ideas and research there. Or if you’re really just interested in the research and reading some of the reports that you get, Elliot, you can find them on our website, newyorklifeinvestments.com. The quickest way to get there is to add a backslash global-markets. They get you past all the product stuff and straight to the research. And there we have ideas about the economy, about supply chain re-globalization, artificial intelligence, sort of longer term themes as alongside the economic ones. 

Elliot Kallen: Outstanding. Thank you, Lauren, so much for being part of this. And I hope the people listening to it came off with some great ideas and input and aren’t afraid to reach out to me at 925-314-8503 and see how this affects their money. You know, the last part of what Lauren just said, with the three areas of growth in economy over the next few years, irrespective of what’s going on around us in the small side, are gonna be U.S. defense or global defense, as you said, but certainly these large companies in the U.S. that make defense or defense contractors. I agree with you on that. They’re gonna be the semiconductor or the tech industry or Cybersecurity because they are gonna be employed bigger and bigger because that’s the world we live in. And what was the third one? Defense, 

Lauren Goodwin: Energy, supply chains. 

Elliot Kallen: That’s great. So we love that. Lauren, thanks so much for being part of this. 

Lauren Goodwin: Thanks for having me. 

Elliot Kallen: Have a great day, everybody. We’ll see you again.