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Season 3, Episode 18: Bubbles Lurk in Sovereign Debt, Financial Engineering

Last updated on August 18, 2021

With Michael Ehrlich, Director of Leir Research Institute at New Jersey Institute of Technology

Michael Ehrlich, director of the Leir Center for Financial Bubble Research at the New Jersey Institute of Technology, joins the podcast to discuss his views.

Dr. Ehrlich has identified two areas of concern: sovereign debt and financial engineering.

This is not his only area of interest however, as Dr. Ehrlich is passionate about early-stage venture/angel investing, which guides the discussion in the second half of the episode.

Content Highlights

  • It’s been a long time since the last sovereign debt crisis. Too long (1:47);

  • Keep an eye out for private equity as well (8:02);

  • Bubbles are part of the market and can even be viewed as a good thing. Until they aren’t (9:44);

  • SPACs and cryptos are two examples of financial engineering potentially gone awry (10:56);

  • Background on the guest (15:07);

  • Venture capital has historically controlled early-stage investing. But this is changing (18:07);

  • Financial technology, aka ‘fintech’ is one area Dr. Ehrlich likes a lot (20:20);

  • What about driverless cars? (23:35)

For More Information on the Guest

More Coverage of These Topics


Nathaniel E. Baker 0:02
Welcome everybody. I have here Michael Ehrlich, Professor of finance at NJIT, the New Jersey Institute of Technology. Professor Ehrlich is also at the Leir Research Institute’s bubble center. And we can talk about that a little bit. But this caught my attention because of course, financial bubbles are one thing that we always like to look for, not just as contrarians, but everybody to kind of keep an eye on what might pop and what potentially could lead to the next draw down in financial markets. And Professor Ehrlich you have here a couple of them that you’ve identified, which we’ll talk about in short order. One is sovereign debt. And the other are is financial innovation. So maybe let’s start with sovereign debt. First, talk to me about that, where the bubbles are, what’s caused it and where you see things going.

Michael Ehrlich 1:33
Sure. So. at the bubble center, you know, I should warn you that we’re better at identifying where bubbles are than knowing when they’re going to pop, that is always the hardest question, and we don’t have good answers for that. But having said that, it’s pretty easy to identify some of these bubbles. So we’re looking at a long term debt market where the US Federal Reserve has been artificially and aggressively lowering rates for some time now, that is not gonna last forever, and rates are gonna go up. Now in the US market that’s somewhat priced. And, you know, I don’t think that’s going to be catastrophic. The problem is for lots of investors who were who were on fixed incomes, they’re wondering, whatever happened to my 14% of 2011, treasury bonds, right, got this good coupon every every every six months, you know, they’re reaching for yield. And as they reach for yield, they reach for more and more risky securities. And so oftentimes, those are sovereign issues, or, you know, long term bond issues from other governmental entities, whether it be in Latin America, Africa, other parts of the world, and they’re reaching for that yield. And they basically drive that yield down. Of course, we haven’t seen any bad outcomes, really in the sovereign market since about the 80s. And so there’s been kind of a long time when it’s been reasonably good. And people forget kind of how bad it was then. And so so right now, they’ve kind of compressed credit spreads to a point where the credit spreads are not, I don’t believe compensating them for the risk they’re taking. And so eventually, there’s going to be a bad outcome and one or more of these places, that’s going to lead to defaults. And that’s going to lead people to recognize that, you know, to, to then to their run for the hills. And the problem is when they run for the hills, as you know, liquidity dries up on the downside a lot faster. And then then then then you people expect, and so when they want to sell, they’re going to be to whom. And so the mutual funds that have been loading up on some of these instruments in order to juice their yields, make them attractive to retail investors are going to find they have no place to go with these assets, it’s going to be it’s going to be off a cliff. And that’s going to be that’s going to be the popping of that bubble. You know, and again, it’s not just sovereigns, it could be other kind of, you know, high yield, you know, dead. So private equity debt is probably also quite vulnerable in the same way. So all of this kind of long term debt, though, I think, is vulnerable. And going the other way, by the way, you know, this is probably a great time to lock in a 30 year mortgage, fixed rate mortgage, and you could lock in a 30 year fixed rate mortgage at 3% or below 3%. In some cases, you know, and, you know, it’s very likely that rates are going to go up over those 30 years, and you’re gonna feel smart for having, you know, locked in your debt at such a such a low level. So, you know, so So I think there’s opportunities here for people to be proactive, both by avoiding some of these markets, and partly even by taking advantage of these things, of some of these rates themselves. So

Nathaniel E. Baker 4:31
yeah, interesting points, good points, although I would argue on the rates issue that if you’re looking to buy new property, good luck, because there is not much supply there, and you’re probably gonna have to overpay and I say that as somebody who was actually looking to buy property very recently myself, and decided not to after I was encountered with that reality. But going back real quick to the sovereign debt crisis. I do think that there, it’s been a little bit more recently than the 80s. You know, followers of this podcast and of course, Know about long term capital management, the 98 Russia crisis that up entered that and caused fed led bail out of the financial system at the time. But to your point it is that’s long ago enough that people especially younger investors certainly don’t remember it.

Michael Ehrlich 5:17
Well, and people have short memories, I mean, I hate to say that, but you know, they really

Nathaniel E. Baker 5:21
you’re absolutely right.

Michael Ehrlich 5:22
Short memories. And so you’re absolutely right. But in recent memory, they have not seen this kind of crisis.

Nathaniel E. Baker 5:29
Yeah, so your broader point absolutely stands out in recent memory. nobody’s seen anything like this. Now, have you looked at this little in any more detail? And have you looked at seeing any pockets where there could be kind of a canary in the coal mine for a potential sovereign debt crisis?

Michael Ehrlich 5:47
Yeah, so that’s interesting. So we’ve looked at, again, some of these fixed income mutual funds. And I think that that is a very much a source of vulnerability, because they’ve been the ones receiving the investments from the retail investors they’ve been trying to return produce a return for those retail investors, they compete with each other based on their stated yield. So therefore, they’re induced to reach for yield and return in order to kind of maintain those inflows when there’s a but and the retail investors kind of trust the mutual funds to sort of be working on their behalf, which they do. But again, I think that when we see when we see redemptions, when we see a surprise in the market, we start we start to see some redemptions from retail investors, that forces the mutual funds to sell, again, a mutual fund that might have taken down 20% of sovereign debt issue from somebody with, you know, a juicy would seem like a juicy yield relative to sort of, you know, treasuries, you know, the problem is, when they’re then trying to sell that 20% Who are they going to sell it to, and it’s Connecticut has a really high potential go down hard and fast as liquidity dries up, and, and there’s just not as much liquidity in the dealer market as there once was. And so yeah, I think there could be if there’s a real run for the exits, there’s going to be few that actually make it out the door, unscarred.

Nathaniel E. Baker 7:06
Yeah, and nothing happens in a vacuum. And these things tend to spread, because once you can’t generate liquidity from those investments, you have to sell others. And the whole thing feeds on itself. As far as parts of the world that you think might might kind of lead that are made potentially over leveraged, is there anything you’re watching there in particular,

Michael Ehrlich 7:24
um, you know, you could pick almost any place, I mean, whether that be you know, Southern Europe, Africa, Latin America, some of Asia, you know, it all the entire world has really kind of, you know, taken advantage, these very low rates and levered up very distinct between the other place by away from sovereign debt would be private equity, private equity has grown tremendously, and they they live or die by their ability to issue large amounts of low cost debt. And that is definitely another place where people have reached for yield and the mutual funds participated. And again, if they could could could have a dramatic jump upward in terms of in terms of credit spreads.

Nathaniel E. Baker 8:08
Yeah, that’s, that’s a big one, too, for sure. And a lot of them are borrow from, obviously, from banks, and they borrow from the Fed. So if you have higher rates, that could be something that that is a potential cause for concern, right?

Michael Ehrlich 8:21
Absolutely. What we saw it during the pandemic, that again, the big retail firms that have been bought by private equity, had no reserves had no kind of, you know, emergency funds to kind of tide them over to allow them to adapt to this online environment. And those that didn’t went out. And so we’ve seen, you know, again, a whole lot of people who, you know, private equity buys in this way that kind of levers up, but as soon as they’re going to keep generating cash flow, if there’s a bump and pandemic was a big bump, you know, basically right away there was there was there was a lot of failures in the private equity space, that retail space. And you could see that in other markets, again, with disruptions as well.

Nathaniel E. Baker 9:02
Good points, good points. Alright, speaking of private equity and financial engineering, let’s talk now about the second area of concern that you guys have identified, which is, yeah, financial engineering. And we’re, how does that translate itself right now?

Michael Ehrlich 9:18
So, so let’s take a step back and talk about bubbles in general.

Nathaniel E. Baker 9:22

Michael Ehrlich 9:22
right. Bubbles fundamentally are part of the financial process. If you want to make financial progress, part of that package is there bubbles are going to exist because bubbles generally are formed when there’s kind of a kernel of a good idea. Some smart people pile into it. They do quite well. Some other people see the smart people piling into it, they kind of follow along. And but they don’t necessarily fully understand what they’re getting involved in. There’s kind of a euphoria phase is is kind of the the greater fool buys buys it because they don’t know. They don’t know why it’s going up but they see it going up and then at some point Somebody recognized the emperor has no clothes, the smart guys get out. And then something something happens, which disturbs the status quo or the equilibrium of the less sophisticated investors with these with these innovations in the marketplace. And the market then precipitously drops because once they decide to sell the smart guy, so I, I was out of that, at that at that price, and nobody else steps in. And so there’s really, really a crash. And, and by the way, this particular pattern goes way, way back. This goes back to the to the Dutch tulip crisis, you know, I mean, you know, I mean, this, this, this is this is the pattern for bubbles, right? So, so what we’re observing here is a series of financial innovations now that I would name two, one of them is specs, where people are piling in, they’re very enthusiastic about this a quick way to market it’s a quick way to liquidity for these, you know, very promising startups by that I’m not saying that they’re not. But again, the issue is not what they’re promising startups questions, what’s the price that they’re trading at? And then, of course, cryptocurrencies, the other one, which people are again, piling in without really knowing what they’re piling into. And so, you know, again, all it would take is something to disrupt people’s equilibrium. recent examples have been, again, during the, you know, during 2007/8, there was the financial innovations of subprime mortgages, credit default swaps, collateralized debt obligations, you know, structured investment vehicles, you know, so so you know, and even before that there was the there was the investments in auction rate preferred stocks, again, these innovations are not fundamentally bad. The problem occurs when people get involved who don’t really understand what the innovations are, they don’t have experienced the downside, there’s not a deep market with liquidity. And so when they get shaken, they want to sell they want to head for the exit, but there’s no liquidity and basically, suddenly, and they can really gap down in a very significant way. And that’s what I’m expecting where we’ve already certainly seen a little bit of in the cryptocurrency market. And my guess we’ll see more, especially as more unsophisticated investors start to get involved. And then and then and then SPACs we haven’t seen it yet, but only a matter of time.

Nathaniel E. Baker 12:17
I do think SPACs have perhaps sold off a bit. One could argue the bloom is off the rose, but certainly haven’t imploded in the way that we saw anything close to the subprime mortgages or, or anything like that. And with kryptos, you know, there’s the argument against it is that there’s no real fundamental underlying asset, right? It’s just an algorithm. So that kind of meets your definition head on pretty much, right?

Michael Ehrlich 12:41
Pretty much. So there’s even bigger problems with crypto. You know, the US government, governments around the world hate anonymous money. They don’t even like their own anonymous money in the US, the biggest bill was $100 bill, which is actually not a big bill these days. Yeah. And it’s because they don’t like anonymous money. They don’t want to make it easy to do anonymous transactions, they’d like to be able to follow and tax and regulate the transactions. And so the government has had a real interest in opposing anonymous transactions. We’re seeing it in well, and of course, some governments are showing a strong backlash like China, you know, that are making it quite difficult. They’re really, really opposed to cryptocurrency because they lose their control. So in addition to the pure technological problems, there’s actually headwinds from the government that the governments around the world that I think are going to continue to put pressure on crypto

Nathaniel E. Baker 13:36
for sure, yeah. All right, for sure, like I want to take a short break and come back and ask you some more about your background, how you got into bubble research, and discuss some other things. But let’s first take a quick break to hear from our sponsors. And if you’re a premium subscriber, do not touch the dial, you will not get the break. And we’ll be right back.

Welcome back, everybody here with Professor Ehrlich, from nj IIT, the Leir research Institute’s a bubble center. Professor Ehrlich, this is the section of this show where we ask our guests more about themselves and how they came to this stage of their careers. So what interests you in financial bubbles? And how did you come about to this stage?

Michael Ehrlich 14:22
So I love financial markets, I’ve loved financial markets all my life, I think they’re fascinating. And in general, markets work extremely well. We take things for granted. I mean, you know, when you want to buy a pair of shoes, you know where to go, you go to a shoe store, they have the right shoes, they have a right and a left matching in the color, approximate the price you want and there they are just waiting for you. It’s amazing, actually, you know, hundreds of people literally coordinated to do that. And you is seamless and you just take it for granted. So what I what I focus on actually is market failures. So my specialty is actually financial markets, failures and so I look at where they went. They don’t work. And so one of the places they don’t work is in this area of financial bubbles. And so that’s been sort of a focus and financial innovations that where we look we look at, I look at financial regulations, and it kind of how regulations get co opted by the regulate teas. But you know, the regulatory is get copied or by co opted by the regulate teas, and so that they Yep, so there’s lots of places where this where this happens. One of the markets that I focus a lot on actually is in the early stage startup space. And so I call that a market failure, because it turns out that the matching up of money, and good ideas is a really hard problem. It’s a really hard, wicked hard problem. And even the people that are best at like venture capital firms fail at least 50% of the time. And now now in return for that there’s there’s good rewards for people that can do it and put together a portfolio that makes sense. And we’ve certainly seen seen that as well. And so that’s a space that I participate in quite quite actively as well. So, so so there’s, again, I’ve given you a range of things, but basically, so my research mostly focused on kind of this bubbles or traditional failures as you think about them. But then also looking at this new early stage investing, how do you match up, in particular, the earliest arm’s length money with the earliest ideas? And so angel investors and things like that, I’ve done some, some research on looking at kind of how do we, how do we how do we match them up? How do we, how do we get them together? My, my most famous publication actually, is how entrepreneurs seduced business angels, you know, and and, you know, and so really, really, really, it’s kind of a process where they try to, you know, find a meeting of the mind and try to find a way to communicate and develop trust, when there’s no track record, right? I mean, again, there’s no, there’s no track record to back, there’s no, you know, you’re you’re, you’re selling your story, as an entrepreneur. And how do you make a How do you put together a compelling story for investors?

Nathaniel E. Baker 17:04
Interesting, very interesting. Yeah. This is a space that, as you mentioned, is controlled historically by venture capital. Are there other ways that that you think that this might be ripe for disruption or ways that you could see this change in the future?

Michael Ehrlich 17:19
Sure. So there’s, so there’s been a big move towards angel investing. And angel investing has proliferated, it’s very, it’s widely out there. There’s an angel capital Association, people that want to get engaged, there’s, there’s also there’s also crowdfunding. So you can actually do this, even if you’re not a qualified investor, although these days to be a qualified investor is not so crazy, you don’t need to have as much. The standards haven’t changed for many, many years. And so therefore, being a qualified investors, more and more people qualify, every every dentist in America is probably a qualified investor, you know, so so there’s really a lot of people out there and they can be they can participate as angel investors. And what I would say to anybody that was thinking about getting started, is join a group. If you look at, again, Angel capital Association, or gusto comm, you can find groups that you can within your region that you could join, you can put in relatively modest amounts of money pooled with some other people. And again, you want to think about this as a marathon, not a sprint. Yeah, you want to think about this as a diversified portfolio and a marathon, not a sprint. But again, I think there’s rewards for people that are willing to give up the liquidity you’re absolutely absolutely forfeiting liquidity, there’s no question that you are. But if you have kind of enough resources that you can think of as a long term buy and hold portfolio is definitely good, good returns that you can reasonably expect.

Nathaniel E. Baker 18:44
Yeah, I’ve actually seen studies that show that early stage, VC investing is the most generates the most returns when you compare it to, you know, anything, including private equity and things like that.

Michael Ehrlich 18:58
It’s also the riskiest. So, there’s always that risk reward trade off

Nathaniel E. Baker 19:02
Yeah, of course. Of course. True. True. True. Yeah. Speaking of, you know, early stage and technology, are there any particular technologies or things that you’re particularly excited about right now?

Michael Ehrlich 19:14
So I saw I’m, I’m kind of wide ranging, early stage investor. But, but but I like the FinTech area. I think that you know, finance is an area where there’s always room for improvement, even look as a leading indicator, how well some of the Chinese companies anthem particular has done in terms of helping that country advance through financial innovations. Of course, they’re now facing some headwinds from financial regulation. But I think there’s really not a lot of upside opportunities and you live in other parts of the world and say financial innovations in other parts of the world, including United States, by the way, are have have significant potential. Other areas that are really promising a courses is but you need to really be prepared to take a lot of risk. But but certainly in turn There’s been a huge advances in drug development and drug discovery and treatments. And whether that and whether that be in the on the medical side. But then there’s also area which I love, which is health tech, which is less about treatment, more about sort of management of health care and whether you can kind of manage the electronic health records and make it easy for doctors and easy for patients. I don’t know if you’re pursuing these things, but I you know, of course, with electronic health records, you booked your appointments online, you don’t need to work with receptionist anymore. That’s kind of like, it’s kind of like the modern version of like ATMs. I mean, I don’t go to bank anymore. I just work from either the app or the ATM, right? I mean, you know, and really don’t need to talk to tell her more than once a year for something or other you know, so. So financial innovations, I think, you know, so So, so those kinds of, you know, FinTech healthtech you know, our top spaces right now. Yeah, that no, but but, but you can find opportunities in a million places. So, you know, again, look at how well Tesla’s done with battery tech. Yeah, and battery tech is actually very hot right now to again, people are discovering new things in the labs. And of course, that’s one of the great things because I’m at NJIT, which is a, you know, Polytechnic University in New Jersey, in fact, it’s to technology, I mean, this School of Management, I get to work with my colleagues all over the university, on all their cool ideas. And so I get grants from the National Science Foundation through their icore program, innovation core program. And then I’m able to give up mini grants to my faculty, student, team colleagues, and help them to explore the commercialization of whether it be solar tech, or micro fluidics, or architecture or, you know, you know, our chemistry, cat environmental, environmental cleanup technology, you know, teams were using, you know, micro ozone bubbles to clean the water these days. And, you know, this is just a million things, technology used for concrete. You know, again, there’s a million people, again, it’s exciting to work with my colleagues where we get to work, I get to help them, support them to start exploring the commercialization and start thinking about not just writing papers, but actually how do you make How do you bring this into the world?

Nathaniel E. Baker 22:13
Yeah, really interesting. Yeah, you mentioned a bunch of things there, that people can look up and research some more if they’re interested. But one thing we didn’t mention was driverless cars, you have any thoughts on that?

Michael Ehrlich 22:24
I do. So I’m a big fan of driverless cars, I’m getting to be of an age where at some point, that’s gonna be very convenient, right? But, but so so driverless cars, I think are great. And I think they’re gonna be out there eventually. But it’s gonna take longer than people expect. It always does. Because particularly with driverless cars right now, I’m highly confident that the driverless cars are better than human drivers on average already. I mean, I mean, not to be rude. Human drivers are kind of terrible, if you really want. And so so that’s kind of a low bar to set. The problem is that when a driverless car makes a mistake, it’s a headline. And so even if one in a million makes a steak, where’s one and 100,000 human drivers make mistake, humans are mixed race people just I made a mistake. And it’s an accident and boom, boom, we you know, we ignore it. It’s one in a million for the driverless cars, it may be actually that they’re right now, or they’re already maybe 10 times better than humans. It’s a headline, and it’s a problem. And so it’s so the adoption is going to take a little longer for people to kind of get past that. I saw a proposal for driverless cars. And you know, people were in favor them as long as it’s not in my neighborhood, they don’t want it like now in their street, because their children might be playing and they don’t want, you know, they don’t want a driverless car down their street. And so you know, so even smart, sophisticated people who are in favor of driverless cars, this kind of this, this kind of NIMBY thing. And it’s gonna take some time to get past that. That’s, those are not technical issues. Those are sociological issues. But as you know, sociological issues are usually tougher than technical ones. In any case,

Nathaniel E. Baker 23:52
yeah, they are all those a lot of them are at some point, you figured they would break. I mean, weren’t elevators originally operated by hand? And probably 100 years ago, that concept of going in there and pushing a button would have seemed crazy, but

Michael Ehrlich 24:05
no, no, I and I agree with that entirely. No, no, I think driverless cars are in our future for sure. But it’s more like, again, is more like five years, then one or two years. Just because I think people need to get their heads around adoption of new technology. Now, there’s gonna be clever ways that people do it. I actually talked to some people who are thinking about creating a driverless fleet specifically for elderly and disabled people in the community specifically for elderly and disabled. And and it would travel kind of at a slow speed would have like a light and, you know, kind of like that, like the new driver on board. You know, so we we sort of know to be a little bit careful of it. But on the other hand, though, seeing people who in the in the suburbs who don’t necessarily want to have the drivers driving down their street, well, if they’re bringing grandma or helping their disabled child get to her from school, you know, suddenly suddenly socio sociological Barriers can be broken down. And so there’s gonna be ways that, you know, people get to adopting some of these technologies. So it’s definitely in our future, it’s just that Elon is probably more optimistic about getting it out there quickly than I am.

Nathaniel E. Baker 25:17
Not at all for self serving purposes, of course, on his part. Yeah. Do you have any thoughts about urban development? We’ve seen a lot now with, you know, you’re close to New York City. as am I and, you know, a lot of people have left, they said to have come back. But there’s a lot of talk about, you know, the office list, future office list present, we’ve certainly had over the past year and a couple months. Do you have any thoughts on that? And how that might develop?

Michael Ehrlich 25:42
So if you’re looking at New York City, the commercial real estate market for like, offices is in big trouble.

Nathaniel E. Baker 25:50

Michael Ehrlich 25:52
I doubt we ever go back to everybody goes into the office five days a week, from nine to five, we’re gonna go in off hours, we’re gonna go in two or three days a week, maybe only one day, a week, you know, depending upon your job. And so a lot of people are going to be going in less. I mean, some people can’t, if you’re, if you’re selling lottery tickets to the bodega, you go in every single day. So you know, again, it’s not everybody, but, but a lot of people are going to be going in a lot less, that’s going to create less demand for that commercial space, there’s gonna create vacancies, they’re gonna create oversupply. But that oversupply is gonna get sucked up, because we’ve already seen in, in the lower part of Manhattan, there used to be tons of Wall Street office buildings, which are almost all residential these days. And so so they’re going to be conversions of a lot of that space into residential, that’s going to be beautiful new residential space, it’s going to create opportunities for people to live in the city. People like to live together, you know, if you look at where people have, you look at sort of maps of the world or any, any region, people could spread out all that open space, but they don’t, they all kind of gather together. So I think it’s a human impulse, that we want to live near one another. And we don’t have to be on the farm farming, we’d rather live near our neighbors, and, and socialize and take advantage of these social benefits together. And so we’ve seen this big global trend to orbit urbanization, we see it continuing in the United States. So I don’t see that I don’t see that, again, that strong underlying sociological effect, people are gonna move back to the cities. And again, from an environmental from a, from a, from a firewall perspective, the cities are actually much more efficient, right, and you can, you can eat one building, and you kind of heat everybody. And you know, there’s just just the economies of scale and sort of the environmental impacts that people who live in apartment buildings, as opposed to standalone homes are much lower. And so as we kind of tax carbon, or whatever, there’s gonna be lots of reasons to think that the cities are going to do fine. But there’s gonna be some transitions. Now the sector that’s doing really well is actually the industrial sector around cities, because what they’ve discovered is they don’t want to have all their manufacturing super far away some of it, they actually want to have somewhat a little closer. And so and so, you know, power generation, all sorts of things, people are trying to sort of, you know, build a little closer, so they don’t have to have huge transmission lines. And they’re, they’re hard, and they’re expensive. And there’s also environmental problems. And so you know, so we’re seeing, you know, rooftop solar, just all those kinds of things are going to be happening. And again, the cities are going to be really popular. Now, for cities like New York, which have quite developed transit systems. The obvious move, and you’re sort of seeing people doing it already, is where there are spur leading out of the city, good transit lines leaving out of the city, people are building popping up very nice residential facilities that are slightly lower cost, whether they’re, you know, and and, you know, it here in the New York area, there’s a organization called Irby that has kind of a few of them. And, you know, really, we should be thinking about rezoning and saying, wherever there’s, wherever there’s kind of a transit hub within 1000 feet, whatever, I’m just arbitrarily saying, they should say the zoning is you can you can build, you know, five or 10 or 15 storey apartment building. And if you did that, that would actually bring down the cost Haven’t we raised the supply would actually, you know, create and create new opportunities, but in the short run, the opportunities I think, are going to be converting this nexus commercial space into residential.

Nathaniel E. Baker 29:19
very interesting points. All right, Michael Ehrlich, thank you so much for joining the Contrarian Investor Podcast today. Maybe in closing, you can tell our listeners where they can find out more about you and I’ll put this information in the show notes as well.

Michael Ehrlich 29:32
So if you go to NJIT, Martin Tuchman School of Management, you can find info about my people page, and you can find information about me, my colleagues, I encourage you to do that. And also and also, you know, you could come to come to the Lair Research Institute page, where we talk about which is Institute for business, Technology and Society, where we look at some of these social issues. We’re having a conference coming up on FinTech. We had one on health tech, and we’re gonna be looking at kind of, you know, regulations and just options within these markets we bring in people, not just academics, but also people from the commercial space, you know, in business community as well as startups, government and government entities and non government entities as well. So we’re really looking to bring together a mix of people to make to to get this research that were great research, my colleagues are doing it at places like NJIT, out into the world and so people can take benefit from it.

Nathaniel E. Baker 30:23
Michael, thank you so much for joining us today. Thank you all for listening. And we look forward to speaking to you again next time.