About this Video

• Video Title: Citadel's Griffin Says He Probably Should Have Sat in Cash Over the Last Month
• Channel: Bloomberg Television
• Speakers: Ken Griffin
• Duration: 00:08:19

Introduction

This Bloomberg Television interview features Ken Griffin, discussing the challenges of navigating current economic uncertainty. He analyzes the impact of inflation, the difficulties faced by Fed Chair Powell, and the feasibility of reshoring American manufacturing. Griffin also shares his perspective on investing strategies during volatile market conditions.

Key Takeaways

• Inflationary pressures: Griffin highlights the inflationary impact of reshoring manufacturing and expresses concern about the ongoing effects of inflation on the American standard of living. He emphasizes the President's need to prioritize controlling inflation.
• Fed Chair Powell's predicament: Griffin describes the challenging position of Fed Chair Powell, who faces the difficult choice of cutting rates despite inflationary risks. He emphasizes the inherent difficulties and scrutiny associated with Powell's role.
• Reshoring manufacturing: Griffin questions the practicality of easily transitioning the American economy to a manufacturing-based one, citing a Dave Chappelle video and the American preference for consumption over production. He advocates for focusing on high-value-added manufacturing jobs instead of low-skilled ones.
• Investing in volatile markets: Griffin reveals that the recent market volatility has presented significant challenges for his portfolio managers. He reflects that, in retrospect, holding cash would have been a wiser investment strategy than attempting to actively create value during this period of instability.
• Deregulation's impact: Griffin notes the positive impact of deregulation in halting the onslaught of new regulations, allowing businesses to focus on growth. However, he acknowledges that thoughtful and time-consuming evaluation is needed before deregulating existing policies.

Investors are grappling with two competing arguments: The risk of pulling back from the United States due to anxiety about investing in America given the changing stance on areas like trade, versus the realization that no other country enjoys the same rate of innovation and commercial development as the U.S. In short, the reliability of the U.S. as an economic ally is weighed against its unmatched potential for innovation and growth.

Griffin cites a Dave Chappelle video illustrating the American preference for consuming Nike products rather than manufacturing them. He argues that bringing back low-skilled manufacturing jobs isn't a societal priority, and that Americans desire high-value-added jobs instead. He further points out that China is actively moving low-cost manufacturing jobs to even lower-cost countries, making the pursuit of these jobs in America questionable.