WBUR - August 15, 2019

WithMeghna Chakrabarti

More and more economic indicators are pointing in the wrong direction and fears are growing that we are heading into a global recession. One economist calls this the "summer of fear."

Guests

Rana Foroohar, global business columnist and an associate editor at the Financial Times. Global economic analyst for CNN. Author of "Makers and Takers: How Wall Street Destroyed Main Street" and the forthcoming "Don't Be Evil: How Big Tech Betrayed Its Founding Principles — and All of Us." (@RanaForoohar)

Jay Foreman, CEO of Basic Fun! toys, the maker of, among other things, Lincoln Logs and Tinker Toys. (@basicfuntoys)

Win Cramer, CEO of JLab Audio, a maker of headphones and earbuds based in Carlsbad, California. (@wincramer)

Interview Highlights

Why Rana Foroohar is taking her money out of the stock market

"Shortly before I wrote my last column, this past Sunday, predicting that we were going to see a downturn very soon, I actually moved most of my retirement portfolio into cash, short-term fixed incomes and cash equivalents. So most of my net worth is now in that or real estate."

"It's interesting, because, as you probably know, whenever people like me come on programs like yours, we tend to tell people, 'Stick your money in an index fund and forget about it. S&P 500, it'll always go up. Worry about it in five years. Play the long game.' I actually think that we are at a paradigm shift, so I'm going to go out on a limb and say — we have been in a bull market for, certainly, the last 8 or 9 years, but, depending on where you put the marker, the last 40 years, with certain corrections, but pretty much an upward trajectory in stocks over that period. Stocks in America are at, roughly, the most expensive point in the last 150 years. So, if you believe in trend lines, if you believe in cycles, you have to think that prices are going to fall.

"Not only have I been willing to do that, but I'm saying it, which is also interesting. A lot of the smartest investors, and some of my peers have done it. Few will say it. I think that there is a good chance that we are in for a long-term slide, and I'll tell you why I think that. My last book, Makers and Takers, was really all about the shifts in our economy over the last 40 years where we became incredibly financial-ized. If you look out now — markets used to be supporters of other businesses. You went to the stock market to get money to run your business, or you went to the bank to get a loan to invest. Now, markets are an end in and of themselves. They are three times the size of the global economy that we actually live in. That, to me, is a cycle that has an end. ...
See full article and partial transcript at WBUR