Introduction
Robert Feldman is the Chief Economist of Morgan Stanley MUFG Securities, responsible for forecasting the Japanese economy, financial markets and policy developments. A key part of Morgan Stanley’s global economics team, he also works closely with the Japanese government as a member of several economic study committees.
Prior to joining Morgan Stanley in 1998, Robert was the chief economist for Japan for Salomon Brothers and has worked at the International Monetary Fund, the Federal Reserve Bank of New York and at Chase Manhattan Bank. He holds B.A. degrees in Economics and Japanese Studies from Yale University and a Ph.D. in Economics from the Massachusetts Institute of Technology.
Describe your current role at the firm and your responsibilities.
My primary role is to be a thought leader, for both the Japanese and the global economic debates. Of course, I spend a lot on time on monetary policy. But my job requires connecting macro to micro, Japan to the world. So, I write on major themes, such as energy, social security, agriculture, and demographics. And I converse with our clients, from New York to Nagasaki.
The key ingredient is teamwork. We are fortunate to have some great minds at Morgan Stanley, but more important is how we incubate ideas, and augment the insights.
You also have an interesting position as a TV commentator, what is that like?
I have been a regular commentator on World Business Satellite, the nightly business program of TV Tokyo, since 2000. The main newscaster on the show once taught me some magic: Make your point in one minute. It’s the difference between a lightning bug and lightning. The TV work is a powerful tool to spread the Morgan Stanley name, and to contribute both to clients and to the global debate.
The Japanese economy has been through quite an evolution during your tenure. What are your observations on Japan over the period and how has that influenced Morgan Stanley?
The most fascinating part is watching the interaction of markets and policy. In 2000, I developed the CRIC cycle in order to analyze how policy responded to the Japanese economic issues of the 1990s . CRIC stands for Crisis, Response, Improvement, and Complacency and describes the stages of how markets and policy interact. A sharp market drop is a crisis; the crisis spurs policymakers to a response; the response usually brings an improvement, then the improvement leads to complacency, which in turn leads to another crisis.
We have seen repeated CRIC cycles in Japan. My colleagues across regions use it to analyze their economies. It has been quoted in French, Italian, Korean, Chinese, and Hungarian, and applied to Europe, China, and global oil markets. The best part: Everyone knows that it comes from Morgan Stanley.
What are your thoughts on Abenomics, the program of Prime Minister Shinzo Abe to reinvigorate the Japanese economy?
Abenomics entails a number of elements, such as improving corporate governance and exiting deflation. Abenomics has rekindled the innate ability of the Japanese to take risks and invest in ideas. It has given new hope to the country.
Morgan Stanley has been instrumental in a number of investment banking deals that have illustrated this new attitude toward risk. New risk taking and globalization is creating a number of cross border M&A opportunities. There is growing interest among Japanese institutional investors to diversify globally. These policies have been highly valuable to the firm and to our clients.
What is the most fulfilling aspect of your work?
Contributing to the debates on the global economy and investment. Morgan Stanley helps clients understand the world economy. One day I meet a businessman from Niigata who claims to make the world’s most technologically advanced cat litter; the next day, a Saudi physicist; then an Ambassador; then a heart surgeon; then an owner of shale acreage; then …. When the Morgan Stanley galaxy of ideas bumps into their galaxies, new ideas emerge. It’s thrilling. I feel like a kid in a toy store.
What makes Morgan Stanley stand out from other investment banks?
Our culture is very different from other investment banks. We cooperate much more effectively. Recently, [Morgan Stanley CEO] James Gorman asked Tim Geithner, the former Treasury Secretary, to speak to the firm. When Sec. Geithner ran the Treasury, he had a hiring rule: “No jerks, no peacocks.” I think we’ve done a good job implementing Sec. Geithner’s rule. If you want to hog the credit you won’t last very long here.
I trace our firm culture back to Ben Franklin. In The Way to Wealth, Franklin outlined his personal philosophy of industry, frugality, prudence and humility. We have inherited and expanded these values at Morgan Stanley. Our culture is intense, but cheerful. When you focus and smile, things get done.
Tell me about the importance of “Giving Back” both at the firm and for you personally.
It’s vital. No man is an island. Morgan Stanley sponsors many charity efforts such as donating time to the Children’s Presbyterian Hospital, disaster relief, beach cleanup exercises, feeding the homeless, and a myriad more. Volunteering is good for society, but also creates bonds among Morgan Stanley employees. People from all parts and all levels of the firm meet and talk, and strengthen our ties to each other, as well as to the outside world.
Have you found mentors here at the firm? How have they shaped your experience here?
Stephen Roach [former Chief Economist of Morgan Stanley and currently a senior fellow at Yale University] was the best mentor ever. He exemplified a key principle for researchers: Honest disagreement is the ultimate form of respect. To disagree honestly; to test assumptions; to admit mistakes; to realize that being right last time does not mean that you are right this time; these are key elements of constructive debate. Steve’s rules form the foundation of the intellectual integrity that makes Morgan Stanley the premier trusted advisor for so many clients.
