Milken Institute

A Conversation with Larry King and Carlos Slim

Larry King, Carlos Slim

Carlos Slim, a telecommunications magnate known for his disciplined approach to business and extensive philanthropy, attributes his success to an innate curiosity and a belief that wealth should serve as a tool for social development rather than an end goal. His economic analysis highlights unsustainable Western fiscal deficits, prompting proposals for structural reforms such as privatizing state assets and rethinking labor models, while his foundation actively advances global health and digital literacy through massive infrastructure projects in Latin America and Indonesia. Despite facing criticism regarding market dominance, Slim maintains that his operations are driven by efficiency and competition, viewing his survival of multiple life-threatening health crises as a testament to his philosophy that happiness is defined by a continuous "love for life."

Central Banks: Is Quantitative Easing Becoming Quantitative Exhaustion?

James McCaughan, Cliff Noreen, Tad Rivelle, Aram Shishmanian, Kevin Warsh, David Zervos, Jim McLaughlin

A panel of financial experts consensus agrees that while aggressive quantitative easing was necessary to prevent a 2008 collapse, the policy subsequently shifted to generating diminishing returns and exacerbating wealth inequality. Speakers like Kevin Warsh and Jim McLaughlin warn that continued reliance on monetary stimulus has stalled structural reforms, distorted asset prices, and risked a deglobalization wave driven by competitive currency devaluations. Consequently, investors are urged to adjust strategies toward non-traditional fixed income and hedging instruments in anticipation of eventual rate hikes and an exit from the current era of central bank dominance.

Power Shift: The Changing American Electorate

Joel Benenson, Harold Ford Jr., Frank Luntz, Dan Schnur, Matt Miller

A panel of political analysts examines how demographic shifts and a generational divide have restructured the American electorate around a "freedom vs. fairness" conflict, fundamentally altering the dynamics observed in the 2012 re-election of President Obama. The discussion highlights how institutional structures, including primary mechanics and the Senate filibuster, incentivize extreme polarization while eroding trust in corporations and the political system. Looking ahead to the 2014 midterms and future governance, the experts argue that successful leadership must emerge from outside traditional congressional channels to navigate ideological silos and address the specific economic and social anxieties of women and Latino voters.

Debt and the Deficit: What's Really on the Table?

Steve, Bob Corker, Peter Hotez Jr., Dave Cody, Maya

A bipartisan panel of policymakers and business leaders, including Senators Bob Corker and Patty Murray and CEO Dave Coudy, warned that the U.S. fiscal trajectory is unsustainable due to entitlement costs and emphasized the urgent need for comprehensive tax and debt reforms before the September 15th deadline. The group outlined contrasting budget strategies from President Obama, Congressman Ryan, and others, ultimately agreeing that stabilizing the debt-to-GDP ratio requires eliminating tax loopholes and restructuring Medicare rather than relying on temporary sequestration cuts. Without direct presidential leadership to bridge partisan gridlock, experts predicted that failure to act by mid-September could trigger market instability and add trillions in future interest costs to the national debt.

Living to 1,000: Impossible or Within Reach?

Lorelei Mucci, Gary Small, Harvey Spivak

A panel of experts including Dr. Lorelei Mucci and Dr. Gary Small leveraged data from major Harvard cohorts to demonstrate that engaging in three hours of weekly physical activity can extend life expectancy by up to five years while reducing Alzheimer's risk by targeting modifiable lifestyle factors. The discussion detailed how functional training, strategic dietary shifts toward whole foods, and social walking interventions offer superior benefits over supplements or isolated cognitive exercises for preventing chronic disease. Furthermore, the panel highlighted industry adaptations by corporate leaders like Equinox to promote accessibility, ultimately concluding that combined lifestyle changes yield the most significant improvements in longevity and cognitive health.

Evolution of Hedge Fund Investing: Institutional Investors Go Direct

Francisco, Mattias, Ed, Jan

Major institutional investors including AXA Investment Managers, AP3, CalPERS, and PGGM are shifting billions in hedge fund allocations from traditional fund-of-funds structures to direct managed accounts to reduce costs, eliminate middle layers, and gain control over portfolio construction. This strategic transition addresses operational risks exposed by the 2008 crisis and allows these entities to negotiate favorable fee terms while demanding specific exposures like alternative credit or systematic risk premiums previously unavailable. Consequently, these pension funds are building internal teams of varying sizes to manage daily stress testing and risk budgeting directly, thereby moving toward "fund of one" structures that offer customized liquidity and concentrated positions.

Credit Markets: What's Next?

Maria Boyazny, Richard Cantor, Joshua Friedman, Tony Ressler, Steven Tananbaum, David Warren, Michael Milken, Steve Tannenbaum, Maria Boiasni, Mike Milken

Six prominent credit executives from firms like Ares, GoldenTree, and Moody's convened to analyze the current credit market cycle, balancing optimistic views on RMBS and European bank debt against warnings of rising leverage and potential defaults. The panelists identified specific undervalued opportunities in structured products and illiquid assets while debating the structural risks posed by re-leveraging and the Federal Reserve's balance sheet expansion. Ultimately, the discussion emphasized a shift toward dynamic tactical asset allocation to navigate an environment where investors face a trade-off between immediate compensation and anticipated market corrections.

The Rise and Decline of Nations and Civilizations

Jared Diamond, Niall Ferguson, James Robinson, William Bennett

This analysis applies a non-linear theoretical framework to evaluate the divergent trajectories of the United States and China, identifying personal health crises, environmental degradation, and extractive institutions as primary drivers of societal collapse. While the U.S. retains structural advantages in soil fertility and federal innovation, it faces severe risks from political polarization, regulatory complexity, and civic atrophy, whereas China's rapid economic rise is constrained by an inability to transition from authoritarian governance and critical resource scarcity. The discussion concludes that future instability may stem from cyber warfare, external shocks, or a shift in the global locus of innovation toward China rather than a sudden, total collapse of either civilization.

Can Retailers Thrive in a Digital World?

Silas Chou, John Danhakl, Jim Fielding, Mindy Grossman, David E. Simon, Dottie Mattison, Jason Rapp, Justine Angeli, Adam Kalish, Ken Hicks

Retail leaders and investors from HSNI, Simon Property Group, and Claire's convened to discuss the industry's transition from multi-channel operations to a "boundaryless retail" model where digital and physical experiences merge into a single network. Participants highlighted key strategies such as leveraging data for customer intimacy, utilizing user-generated content to drive engagement, and repositioning malls as experiential destinations to counteract online price advantages. The dialogue concluded that while e-commerce continues to grow, pure-play sales face a ceiling comparable to historical catalog retail, necessitating a complementary focus on in-store sensory experiences and exclusive curation to satisfy modern consumer demands.

A Conversation with Barry Diller

Barry Diller, John Haskell, Jr., Brett Helen

Media veteran Barry Diller characterizes the internet as a radical revolution that will dismantle incumbent media bundles by removing intermediaries, a strategy he exemplifies by defending the legality of Aereo against broadcast lobbies. Diller distinguishes between surviving platforms like Netflix and HBO, which can thrive with standalone subscription models, and failing legacy structures such as newspapers and Best Buy that lack unique value propositions or pricing power. Ultimately, he argues that while established companies often resist change to protect closed systems, innovation driven by leaders who take massive risks remains the only viable path to survival in an increasingly open digital economy.

Pensions: The Real Fiscal Cliff

Brad Belt, Jeff, Brian Pellegrino, Larry Schloss, David Vila

This analysis contrasts the severe underfunding of U.S. public and corporate pensions, highlighting Illinois's $100 billion shortfall against Wisconsin's successful hybrid model that achieves 99.8% funding. While New York City struggles with governance failures and outsourced management costs despite rising contributions, the corporate sector increasingly adopts Liability-Driven Investment strategies and benefit redesigns to mitigate insolvency risks. Ultimately, the report concludes that investment returns alone cannot resolve multi-trillion dollar deficits, necessitating structural reforms such as COLA adjustments or increased contributions to prevent taxpayer bailouts or state bankruptcy.

Value and Values: Building a High-Performance Company

Mark Benioff, Ken Hicks, Walter Robb, Jay Rizzullo, Tom Wyatt, Willow

Salesforce CEO Mark Benioff, Whole Foods Co-CEO Walter Robb, Disney CFO Jay Rizzullo, Foot Locker's Ken Hicks, and Knowledge Universe CEO Tom Wyatt convened to discuss aligning corporate social responsibility with high-performance cultural strategies across their respective enterprises. The panelists detailed how empowering local decision-making, integrating philanthropy into operations, and enforcing ethical transparency have driven talent retention, brand loyalty, and financial resilience despite short-term investment pressures. Looking forward, the group emphasized that future market success depends on leveraging social technologies to rebuild legacy systems and maintaining radical accountability as consumer expectations shift toward ethical business models.

Financial Inclusion: Solutions for the Global 99 Percent

Rapid expansion in impact investing is evident as active funds surpassed 346 and assets exceeded $40 billion in 2011, driven primarily by institutional and public capital rather than retail sources. Emerging financial structures like Social Impact Bonds and the Endeavor Catalyst fund have introduced innovative mechanisms to transfer performance risk to private investors while generating social outcomes in sectors such as criminal justice and entrepreneurship. Despite these advancements, the sector faces significant scaling challenges due to fragmented intermediaries, regulatory hurdles, and a heavy reliance on philanthropic funding, prompting a strategic shift toward standardized measurement and institutional-grade vehicles.

The Future of Trading

Bart Chilton, Terry Duffy, Jamil Nazarali, Lou Salkind, Chris Brummer

CFTC Commissioner Bart Chilton and CME Group Chairman Terry Duffy led a panel discussing the regulatory "futurization" of swaps under Dodd-Frank and the complex role of high-frequency trading in equity and futures markets. While proponents like Citadel's Jamil Nazarali and DE Shaw's Lou Salkind argued that fragmented trading structures and algorithmic speed lower costs and increase liquidity, Chilton raised concerns regarding surveillance gaps, the profitability of proprietary traders at the expense of retail investors, and the risks of regulatory delays. The discussion highlighted the contrast between the centralized, circuit-breaker-protected futures market and the fragmented equity landscape, emphasizing the critical need for international harmonization to prevent regulatory arbitrage and maintain market stability.

Lunch Panel: Global Overview

Michael Klowden, Pierre Beaudoin, Scott Minerd, Nouriel Roubini, Geraldine Sundstrom, Paul Gigot

In a panel on global economic trajectories, IMF data and experts like Nouriel Roubini and Geraldine Sundstrom assessed the divergence between slowing advanced economies and emerging markets, which now drive 80% of global growth despite structural risks like state capitalism in BRICS nations. While some forecasters predict a 2008-style credit bubble within three years due to artificial liquidity, others highlight long-term opportunities in "MIPS" countries and specific emerging markets with valuations cheaper than post-Lehman crisis levels. The discussion concluded with a consensus on the fragility of the Eurozone as the primary tail risk, yet maintained that infrastructure investment and emerging market expansion remain central to the 2030 and 2050 global economic outlook.