My Amazon Review of Jon Hilsenrath's "Yellen: The Trailblazing Economist....."

Always Prepared

Wall Street Journal economics reporter Jon Hilsenrath has written a deservedly hagiographic biography of Janet Yellen, perhaps the most consequential economic policy official of the past twenty-five years. Yellen is the only person in history to have served in all three top economic policy posts of our Nation, Chair of the Council of Economic Advisors (under Clinton), Chair of the Federal Reserve Board (Under Obama) and Secretary of the Treasury (under Biden). Along the way she was President of the San Francisco Fed. Hilsenrath’s book is written along three strands: a biography of Yellen, a love story between her and her fully supportive husband Nobel Laureate economist George Akerlof, and a history of the macroeconomic policy debates from the 1960’s to the present.

 

Born into a 1946 Jewish middle class family in Brooklyn where education was the highest priority, Yellen excelled in school. She was always well prepared and from the vantage point of this less than stellar kid from adjacent Queens you might say she was a “goody two shoes.” She went on Brown University and then on to an economic Ph.D. from Yale under the very distinguished Keynesian economist, James Tobin. Harvard hired her, but ultimately did not give her tenure. Too bad for Harvard.

 

Yellen then goes on to work for the Fed in Washington, D.C. There she meets her husband to be in that well known singles meet-up place, the Fed cafeteria. It was almost love at first site and they were very sympatico with their soon to become New Keynesian outlook. You could call title it, “nerds in love.”

 

After leaving Washington, D.C. the couple ends up teaching at UC Berkeley in the 1980’s. Before too long with her growing acclaim as a labor economist, Yellen is appointed to the Federal Reserve Board in 1994. It was there where I met her at the infamous Fed consultants meeting in late 1996 on the roaring bull market in stock prices. Although our conversation was brief, I found her to be a kind, friendly and caring person. Those three attributes come though in Hilsenrath’s writing. 

 

In 2004 she was named President of the San Francisco Fed and from that vantage point she warned of the growing housing bubble that would soon almost take down the entire economy. From there she moved back to the Federal Reserve Board and in 2013 became its Chair where she became a strong advocate of bringing down unemployment. To her the unemployment rate was not a statistic, but rather represents real people struggling in life. However, with the arrival of Trump, unlike Greenspan and Bernanke, she was not reappointed. I guess a five-foot grey-haired woman was not what Trump had in mind to be Fed chair.

 

Biden, on the other hand, leaped at the chance to appoint her as his Secretary of the Treasury. Just as in her role as CEA chair Yellen was uncomfortable be in a political role as Secretary of the Treasury. She went along with the $1.7 trillion rescue plan, despite misgivings, but still she underestimated the inflationary fires that were being kindled underneath the economy. Thus, part of her legacy will be the path of inflation over the next few years.

 

There is far more to Hilsenrath’s wonderful tribute to Yellen. Indeed, Yellen has paved the way for female economists in the 21^st Century, a notable accomplishment.  One more thing, I commented on Yellen on several occasions in my Shulmaven blog including one where I noted that she was not the fairy godmother for the stock market.(See:Shulmaven: Yellen, Yellen You Got Tapering on Your Mind*, Shulmaven: Two History Lessons for Janet Yellen, Shulmaven: Memo to the Stock Market: Janet Yellen is not Your Fairy Godmother ) When I presented it, I pictured her with in a fairy godmother outfit with a magic wand in her hand. In her own way Janet Yellen always had a magic wand in her hand.

For the full Amazon URL see: Always Prepared (amazon.com)

My Amazon Review of Ivy Zelman's "Gimme Shelter........."

 

Housing Maven

 

Ivy Zelman overlapped with me at Salomon Brothers. She has written a short autobiography discussing her improbable rise in male dominated Wall Street and the complications that arose with her being a mom for her three children. In many respects her autobiography has much in common with national security professional Fiona Hill’s, a book that I recently reviewed. (Shulmaven: My Amazon Review of Fiona Hill's "There is Nothing for You Here")

 

Ivy was a scrappy kid from suburban Long Island who after a short stint at New York’s Baruch College, she ended up graduating from northern Virginia’s George Mason University with a degree in accounting. This was and is hardly the profile for a starting analyst on Wall Street, yet Ivy talked her way into Salomon Brothers investment banking. After being harassed in the transportation group at Salomon she ends up in the research department where there was an open position for covering the homebuilding industry. She was an unlikely hire, but with Salomon in the midst of its treasury scandal, internal opportunities opened up.

 

From 1993 to 1997 she rose from being a nonentity to being ranked Number 2 by the all-important Institutional Investor survey. However, with Salamon’s merger with Travelers and its Smith Barney subsidiary she was fired because the Smith Barney homebuilding analyst was ranked Number 1.  I too left Salomon that year for a hedge fund. Ivy quickly found a home at Credit Suisse and was treated like a star and was quickly ranked Number 1 in the survey.

 

While there she understood better than almost everyone that the asbestos litigation was going to destroy such building products companies as U.S. Gypsum and Owens Corning. By then she had picked up coverage of that industry. She later made the biggest call of her life in 2004 turning bearish on the homebuilders accurately foreseeing the debacle to come. However, she was early and was subject much ridicule as the stocks ripped higher in her face. She lost her Number 1 ranking and many in the industry called he “Poison Ivy.” Her conviction was based on the fact that she developed a coterie of private homebuilders who were far more candid than the public homebuilders she covered. 

 

Along the way she married her husband David who was a salesperson at Salomon. David talked her into moving to Cleveland and she received the blessing of Credit Suisse to make the move. In the Cleveland suburbs they quickly had three children. Believe me having three children and a Wall Street travel schedule is no easy task.

 

In late 2006 she breaks with Credit Suisse to form Zelman and Associates to better monetize her contacts and her still very strong franchise value. Remember she does this with three small children under the age of seven. In a way it was perfect timing as the housing boom began to unwind with vengeance. Within the year because of her prescience, her views were thought out by lenders, the entire mortgage securities industry and government.

 

While basking in her new prestige she was stricken with breast cancer that required a double mastectomy and many subsequent surgeries. Nevertheless, she plowed on with the support of family and a host of friends. Her book brings how caring and curious person she is. She has friendships ranging from CEOs to secretaries to drivers.

 

This is a short and easy book to read, but do not mistake it for a work of literature. I may too close to it, but there is much to be learned in her book. I am going to give it to my youngest daughter who works for a major securities firm.

For the full Amazon URL see: 

Amazon.com: Customer reviews: Gimme Shelter: Hard Calls + Soft Skills From A Wall Street Trailblazer