Ken Griffin

Bloomberg Markets & Finance · Ken Griffin on AI, Midterm Elections and Fiscal Policy

• Why Does Citadel Keep Each Team in One Place?

  Dani Burger asked Ken Griffin how Citadel holds a team together when the center of gravity sits somewhere in the middle of the Atlantic Ocean. She noted that at COVID he was one of the first leaders to say people need to be together. Griffin says the first rule is to keep teams within Citadel in one geographical location as much as possible.

  From the top of the business down through the verticals of what Citadel does, Griffin says the verticals stay geographically centered because teams should work together physically whenever possible. Nothing beats a whiteboard and a good debate. His office has a big whiteboard, the boardrooms have big whiteboards, and the walls around neighboring offices

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• What Is the Only Way Out of the Deficits?

  Ken Griffin says growth is the only direction out of the deficits, and he is worried about bond yields at multi-decade highs. The bond market is telling the House and Senate to put the fiscal house in order. Griffin says the market does not say as clearly that the house gets in order by getting productivity up, and he says Washington is not listening yet.

  Voters get to say their piece through the House and Senate in a few weeks, and Griffin says the bond market is speaking pretty loudly now too. He says every talking point from Washington should be about entrepreneurism, about productivity gains, and about growing an economy where everyone feels they are getting ahead.

  If the House and Sen

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• Why Did Ken Griffin Say Tax Cuts Lacked Room?

  Ken Griffin says the person who cut taxes circa 2018 was spot on. The view then was that cutting taxes would reignite American productivity and entrepreneurism. Playing that playbook a year and a half ago had one huge difference from 2018: the spending orgy of the pandemic. Ken Griffin says the country did not have the fiscal space to renew the tax cuts a year and change ago.

  People forget, Ken Griffin says, that the United States spent as much money during the pandemic, as a percent of GDP, as the country spent to win World War Two. He calls that bill the cost of sitting on couches. With a federal deficit of 40 trillion dollars, crowding out is now front and center again. Ken Griffin asks

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• Are There Bubbles in AI Right Now?

  Ken Griffin says there are almost certainly bubbles within the present moment, and any radical transformation of the economy is generally intertwined with a bubble.

  He remembers 1999 and 2000, and the metrics used to value Internet companies. Some Internet companies had pretty fanciful business models. He wishes he had kept his Amazon stock from that moment. The Internet was the great bubble, he says, and he asks whether it could be more of a part of daily life today than it is. A few years ago he was updating an Xbox for his son, who was 13. His son looked at him and said, Dad, you lived before the Internet existed. Ken Griffin answered that he was born after the dinosaurs disappeared, but

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• Why Does Ken Griffin Still Credit People for Citadel's Returns?

  Ken Griffin says the vast majority of the alpha Citadel creates is still a testament to the creativity, the ingenuity, and the analysis of the people who conduct fundamental research. AI can help shed light on bits and pieces of the work. A person still assembles the narrative.

  About a year and a half ago, Ken Griffin said AI cannot produce or deliver alpha. Asked whether his thinking has changed, he says most of the business is fundamental based investing and the core is research, almost like journalism: getting the story right and getting the narrative right. Trading is how Citadel monetizes the research. The team has to understand the business model, the economics, and management incenti

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