Scarsdale High School Alumni Association president Zach Harrison believes those from his alma mater are “leaders in their careers, leaders in their fields and leaders in their communities,” and used the words “curious, smart, civic-minded, entrepreneurial, hard-working” to describe them. With that in mind, he knew just what to do for the alumni association’s annual spring event.
Harrison, a 1991 SHS graduate, put together an expert panel of alums who could speak on the second thing on people’s minds after their health during the pandemic: the economy.
Harrison, the managing director at Compass real estate locally, on Wednesday night moderated a Zoom discussion, “The Economy and Financial Markets in the World of COVID-19 and the Road Ahead,” featuring Scott Eichel (global head of securitized products at Barclays, ’93), Elizabeth “Biffy” Flisser Rosman (head of investment management at Cowen, ’91) and Ty Wallach (chief investment officer of credit at Atlas Merchant Capital, ’89).
Some heavy and light topics were packed into the 60-minute discussion from the economy now and what it will look like going forward to the impact on the travel and hospitality industries to the future of mortgage rates to the graduates’ memories of the schools and growing up in Scarsdale in the 1980s.
“We wanted to give our alums some of the top people who work in finance and economics and a sense of where the markets are, where they’re going, what they should or shouldn’t be doing with their 401K, those types of things,” Harrison said. “We wanted to do a big in-person event this spring, but unfortunately COVID intervened on that.
“I’m just trying to give our alums some guidance from some of our people who are experts in this area for what to expect and what they should or shouldn’t be doing from an economic perspective. It’s something to bring everyone together.”
With a multitude of businesses large and small shuttered or working on limited capacity due to the pandemic and unemployment reported at 15%, many are left wondering how the economy and markets aren’t in a worse spot than they are right now.
Wallach said “we are in a recession” and that the pandemic was a “catalyst” that “upended the entire global economy.” He said the pandemic “triggered some problems that were going to be problems,” but that “no one projected this to be the catalyst.” He called it a “double whammy.”
“Everybody is excited about the world reopening, but the numbers and the impact this is having on the economy are bigger than we’ve seen in prior recessions, certainly in my career, and I don’t think they’re necessarily reflected in what I would call a pretty optimistic looking market today,” he said, adding, “I think this is a really tough economy and I think the markets are not necessarily reflecting how tough it is.”
Rosman is hopeful based on current markets, data and predictions, noting that every financial crisis is unique and history doesn’t necessarily repeat enough to know what will happen going forward and when.
“Where we are right now there does seem to be a lot of hope in the markets and the movements in the market, but… we have some data and statistics on the macro side that suggest that we really don’t know what is to come,” she said.
This is Eichel’s seventh economic crisis and as Rosman said, they’ve all been different in their cause. Past ones have been the “poor underwriting, overleveraging” from 2008-09, or storms like Irma and Harvey wreaking havoc on specific regions.
“This was a crisis we couldn’t handle from the health care system, from many different systems,” Eichel said. “As social distancing and other measures have worked, people will go back and it won’t be as bad, but again where the dislocation of the markets are, we’re basically… up on the NASDAQ, we’re basically at higher levels on the S&P than May 30 of 2019 and I don’t think any of us can say we’re in better shape than May 30 of 2019. I think it will just be a very long recession. I do think you need to see some sacrifices and to see some real bankruptcies happen. It’s going to be interesting to see who the government thinks is systematically important.”
Eichel’s read on the market is that “people are going to get back to work” and that the Federal stimulus money from the CARES Act is working, noting, “I will say that vs. past crises there’s a ton of liquidity out there. I think the Federal Reserve is very in tune with the markets. They’re calling daily and asking where the problems are and they are immediately trying to fix certain parts, which is very different from ’08-’09. You have a very receptive Fed right now, which I think is very impressive.”
One piece of good news, which Harrison was excited for as a real estate partner with his wife, Heather, a fellow member of the class of ’91, is Eichel’s assessment of the mortgage rates, which he said could drop to about 2.5% in the near future.
“Right now the reason why they are higher is really the only mortgages that are being produced are refinancings... Mortgage originators are making a tremendous amount of money right now,” he said. “As soon as we get back to work or people open their offices or geographies open up, we’ll see that spread collapse a lot and that will get all passed back to the consumer. That’s where I see rates probably in the next couple of months, 2.5% for a mortgage.”
One virtual attendee was particularly interested in hearing Wallach’s take on the future of hospitality and travel. Wallach said it could be among the last industries to regain momentum.
“The short term does not look great to my mind,” he said. “A lot of these businesses have closed. Ramping them back up is not going to be easy. It’s going to be expensive because you need a certain base level of staff to keep the hotel open and if you don’t have the occupancy there you’re not going to be covering costs. Until the operators have confidence they’re going to get occupancy up to past a minimum threshold level, it’s hard to see them making the financial commitment to rehiring all those people who had been either furloughed or fired.”
Wallach said one of the biggest signs of recovery will be when Las Vegas reopens and people are comfortable to go there for pleasure or business and make some deals over drinks and gaming tables.
With Memorial Day weekend approaching, about three months into the crisis, the question was raised about what things might look like a year from now. Eichel said when it comes to investing he’s looking more like three to six months ahead, not a year, but noted a lot depends on the development of a vaccine. “I do think maybe it’s not Memorial Day, but it’s maybe 18 months from now — I easily can see markets being at all-time highs just because of this interest rate environment and I think the bubble will keep getting bigger with the amount of government support,” he said.
Wallach said he “can’t give a real confident answer” and has “a lot less confidence.”
“The amount of uncertainty in everybody’s lives today is really unprecedented and everyone I talk to — the personal, professional, financial uncertainty is prevalent everywhere,” he said. “We don’t even know when we’re going back to our office.”
Rosman credited people with being “resilient” and also stressed the importance of science and a vaccine. “I think that we’re going to slightly change the way we do business,” she said. “I don’t think we’re going to go back to the normal.”
The pandemic has changed how businesses operate. Rosman said her company was already part of the Zoom and work-from-home cultures for various reasons. One reason they were ahead of that curve was to accommodate working parents. Now many people are getting to experience that, even though their companies had been against it in the past.
“We’re still able to operate our business and in some ways accelerate what it’s like to be a working mom,” she said. “Now everyone kind of gets it a little more. It’s hard to close the door when you’re home and get your work done.”
Harrison said his three main goals for the alumni association are to connect at events — both in-person and now virtually — to help Scarsdale students and alumni network for career opportunities and to increase scholarship funding for SHS students in need.
When talking about growing up in Scarsdale, all three panelists agreed the sense of community was the No. 1 takeaway. Eichel and Wallach both stressed the impact the educators had on them, particularly former basketball coach and physical education teacher Jack Kaminer. Rosman told the story of growing up with a neighborhood “bicycle gang” — she rattled off the names of all the kids like it was yesterday — and how “the community took care of all the kids.”
Asked their advice for upcoming SHS grads and those early in their careers, the panelists were succinct in their messages.
“I’m pretty passionate about [what I do] and that’s what it is — it’s passion,” Eichel said. “Find what you love doing and be great at what you’re good at.” He urged grads to be an “expert” in one’s field, “not a tourist.”
Wallach said, “Everybody I know who is not happy is generally unhappy because they don’t like what they do or they don’t like whom they do it with… Figure out what you like to do, work your butt off to get better at it and be as good as you can, and do it with people you like, respect and trust. I think if you can do all that you’ll be in great shape.”
Rosman said, “Life is about chapters,” that you won’t find your life in that first summer job or internship. Her message was to do a good job and “then figure out what you like to do.”
“It’s just about asking questions and learning your skillset,” she said. “You don’t have to get there Day 1. Just remember it’s a journey.”
Scott Eichel ’93, global head of securitized products for markets and member of the Markets Executive Committee, Barclays
Eichel joined Barclays in August 2018. He has more than 22 years of sell-side and buy-side experience in securitized products. Prior to Barclays, Eichel was a partner at HPS Investment Partners running securitized credit strategy. Before that, he was a partner and portfolio manager at Brevan Howard, focused on trading U.S. asset-backed and mortgage-backed securities. Between 2008 and 2015, Eichel was global head of asset-backed products and credit trading at Royal Bank of Scotland. He started his career at Bear Stearns in 1997 as a trader, rising to co-head of mortgage-backed and asset-backed trading.
Elizabeth (Biffy) Flisser Rosman ’91, head investment management, Cowen
Rosman joined Cowen in September 2017. Previously, she was managing director and partner at Reservoir Capital Group, a private investment company, where she led the firm’s efforts in identifying, seeding and incubating hedge fund managers for Reservoir Strategic Partners. She co-founded and served as CEO for Message Protocols LLC, a financial services technology company. Prior to that, Rosman was president and partner at Capital Z Asset Management. She joined Capital Z in July 1999 and was responsible for sourcing, evaluating and structuring the firm’s hedge fund investments and monitoring sponsored funds and strategic investments. Before that, Rosman was at Goldman Sachs & Co in the financial institutions and equity capital markets groups.
Ty Wallach ’89, chief investment officer of credit, member of investment committee, Atlas Merchant Capital
Wallach joined Atlas in September 2019 and is based in New York. He previously spent 10 years at Paulson & Co., where he was a partner and co-portfolio manager of Paulson’s global credit funds. Prior to joining Paulson in 2008, Wallach was a partner at Oak Hill Advisors, serving most recently as co-head of European Investments. He joined Oak Hill in 1994 and co-founded the firm’s London office in 2005. Wallach began his career as an investment banker at Kidder, Peabody & Co. He currently serves on the board of directors of International Seaways Inc. and Overseas Shipholding Group Inc. He serves on the boards of two nonprofits, Focus for a Future Inc. and New Heights Youth Inc. Wallach is a CFA charterholder.
Zach Harrison ’91, president, Scarsdale Alumni Association, Managing Director, Compass
In 2006, Harrison co-founded Platinum Drive Realty and grew the company from two agents in one office to more than 110 agents and five offices serving Westchester County and Connecticut. The company was honored in Inc. Magazine as one of the fastest growing private companies in America for four straight years. Platinum Drive was acquired by Compass in 2018. In 2015, 2016 and 2017, Harrison was recognized along with his colleagues in the REAL Trends/Wall Street Journal “Top Thousand” as one of the top real estate teams in the country and the No. 1 real estate team by sales volume in Westchester County. He has successfully closed more than 1,000 transactional matters during the course of his career in management and sales, and ensures his agents handle all matters promptly and professionally, with the utmost care and discretion. Prior to his career in real estate, Harrison worked in New York City in the investment banking division of one of the world’s largest banks, and as an attorney for an international law firm, where he handled substantial transactional matters, including the sale and financing of real estate and other assets. Harrison also successfully litigated various complex commercial disputes on behalf of major clients in state and federal courts in New York and throughout the United States.