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I am Chris William and is this feel good summer season unfolds.

Business still rolls on and between whatever plan trip you have and having to work to support that trip, the normal course of business does pound along.

And of course we will talk about it and we will start with our expected expert panelists.

And later on, what is normally thought of is the chief executive officer of sorts for a state.

Joining this dialog later is the newly elected North Carolina State Treasurer, Brad Briner.

Stay with us.

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On this edition of Carolina Business Review, Ben Kenny from Business North Carolina, Alan Smith of One Spartanburg, Inc., and special guest Brad Briner, North Carolina State Treasurer.

(upbeat rock music) Hello.

Happy summer, gentlemen.

Good to have you here.

Nice to see you and to be having us.

Ben, I have to ask you this and sound kind of just off the cuff, but what is what is the deal with the Savannah bananas and the success that they've had?

I mean, it's pretty amazing when you look at the numbers are posting.

And this is a, I mean, for lack of a better way to just triple a baseball team out of Savannah, guy in Gastonia that owns it.

And they are they put 150,000 people.

Bank of America Stadium two nights in June.

That I mean, how do you describe that?

A firsthand, witness on that.

Our office is, very close to, uptown Charlotte and, that Friday, the first Friday that they were there, 12:00.

You would have thought that it was a metallica concert or something like that because it was packed.

Traffic was, you know, gridlocked, right around the stadium.

And unbeknownst to me, I totally forgot about it and ran right into it.

So I got a firsthand thing.

But I think it's the entertainment value, Chris.

I think it's basically, you know, baseball, there's there's always going to be a certain audience for baseball that's going to love it and love the love of the game.

Right?

But there's other folks that, you know, just they they don't have the patience for it.

You know, the Americans are getting just more impatient.

Impatient.

And I think that this gentleman who is from, against union, basically kind of tapped into the entertainment value of it, you know, and having, you know, that audience participation, right?

You know, full audience participation.

Oh, yeah.

All that, and just, you know, just different little shows within shows to create an incredible, entertainment, package.

And it, I mean, Bank of America stadium was packed.

I mean, the Panthers don't do that, right?

Major league teams don't do that.

They did this down in Clemson, didn't they?

They did.

They did.

And make no mistake about it, I mean, minor league baseball is really enjoying its heyday right now.

In fact, we just opened a $71 million minor league baseball stadium in downtown Spartanburg, hub city, Spartanburg, South Park, really leading the nation in merchandise.

Spartanburg has caught on.

So it's big business, tremendous economic impact for our area.

You know, in general, let's switch a little bit to economic impact, economic development.

Just when you think North Carolina, start with North Carolina, been I'm pointing to you because you kind of represent the old Tar Heel or North North state, old North State to some degree, but in business, North Carolina magazine, it was about 2 or 3 or maybe a month ago now.

Biggest economic development ever $10 billion Amazon.

And then right on the heels of it, there's a $14.5 billion.

What why are these dominoes keep falling in such big deal with these big projects?

What's going on?

Yeah.

It's interesting.

We're, we're our July issues coming out, and it features the top economic, project of last year.

And as the editors, we are all getting together talking about do we have it, you know, got the year before was this huge.

Are we gonna be able to top it?

We looked at it.

Yeah.

Yes.

You know 2 or 3 Excel it.

Yeah.

Yeah.

Exactly.

And so this year with the you were talking about Amazon which was $10 billion.

The important thing about that is it's going into an area that it really needs it, Richmond County and Rockingham County, most people know it.

And our major metro areas, if you're in Charlotte, you drive through it on 74 on the way of the beach.

Right.

But it's it's it's a rural area, $10 billion investment from a company like guy who means a lot, 500 jobs.

It's not that much.

But to have rural North Carolina and rural areas in both states in the game in terms of these announcements, is a game changer.

You know, used to be major metro areas.

Charlotte, you know, Apple in the RTP.

To have that in this area is great.

And then of course we're talking about jet zero 14,500 workers announced that's the biggest announcement in North Carolina history.

Who would have thought.

Right.

And that's also goes to the triad.

And that area is becoming a little bit more of a player.

It just become more of a plan, especially in terms of aerospace.

Think about the companies that are at that airport now out there.

And this is PTI.

This is a this is not a major airport that's, they're becoming a major airport in the sense of bringing business in there.

A major economic developer that's probably the most PTI is the economic a major economic developer in Guilford County in South Carolina, not to be outdone, but did, at least in this last announcement with the scout announcement down in Richland County, right in the center of the state, probably needs a shot in the arm more than the upstate.

Alan, sorry to say that, but they probably need a little bit of wind at their backs.

But that's not a small deal either.

And that was the biggest in the state history.

Not at all.

And then, just a few months ago in Spartanburg County, we announced the second largest investment ever in South Carolina.

It was a $2.8 billion North market strategy.

Announcement.

So again, I think both states are incredibly positioned.

I think the Port of Charleston is a major asset for us.

The inland port and Spartanburg County is really a player as well.

So good times to be in the Carolinas.

So let me bring all of this into a question that says because of that, in this it's not meant to be negative, but will the Carolinas are the Carolinas at risk to losing that affordability matrix that they've had?

All of a sudden?

You've got people and money piling in because it's been affordable, because it's easy to get to because of all of the amenities that are close in.

Does this become now all of a sudden, maybe the dark side of growth?

I think that, there's certain areas that may be a factor.

I think the cost of living in Charlotte, is it higher than the national average?

Possibly.

I think I think it might be, but I never thought I'd see that.

Gotta be close.

Yeah, but, it's an opportunity for rural areas.

Once again, I keep going back to these places where there's plenty of land.

There's, you know, there's there's folks that want the business, their cost of living still way down there.

And we're to a point now, with our infrastructure where you can get to a major metro area if you need to, a lot quicker than you used to be able to.

What about what about the upstate?

Well, people follow jobs and affordability, period.

And it's why we are the 10th fastest growing county in the United States of America.

29 people a day are moving to Spartanburg County.

And so, what's an asset now?

I think that's a great question.

Could be a liability in the future.

We are seeing more proactive policy around affordable housing.

I think that's critically important.

But we're also in a position to where we can prioritize quality over quantity.

You know, we're not incentivizing companies anymore that don't pay competitive wages.

And that's incredibly important.

We've got about a minute and a half left.

I want to talk about manufacturing, because a lot of these project or manufacturing base or making something at these plants.

Ben, what's the state of manufacturing in North Carolina?

Great timing, because we have that our next issue as well.

We did.

I promise that wasn't it.

That wasn't a topic.

It, of manufacturing is a little bit uncertain now.

The tariffs are still kind of an uncertainty.

Some people don't see it as a big deal.

Does that have a long tail on it.

That uncertainty is yeah I of your guess is as good as mine.

We're in uncertain times from that standpoint.

And it's I think that's the that's the given right now.

Yeah.

Yeah.

As well, but also, I's a big thing.

The workforce, of course, is always going to be, on people's minds in terms of finding qualified workers to fill those jobs.

Heavy manufacturing in the upstate.

What is the state of manufacturing?

Red, yellow, green.

How would you describe, if we could blend some of those colors again until you the answer as well.

You know, Mr. Navarro, a few months ago made a comment about, BMW plant Spartanburg and Mercedes-Benz and how these assembly plants don't really work for the United States and don't work in our best interests.

And we really hit back hard on that 43,000 direct jobs or derived from BMW plant Spartanburg.

These are good as we talked about high paying jobs.

So manufactories incredibly important.

Makes up a majority of our, our job composition in the upstate.

And so, I'm still bullish on manufacturing, although there are some headwinds.

I would rather be more concentrated in that sector than some others at this point.

Not to put you on the spot, Alan, but since you're sitting here and this is an easy question to ask, Scott Keogh from Scout Motors was on on this program, and I had asked him if he thought that the Scout Motors flag in the ground manufacturing facility in Blythe would just north of Columbia.

Could be a lot like what BMW did all those years ago with Carol Campbell.

After the announcement, he sounded pretty bullish that it could be at least that.

Would you agree with that?

Well, our local officials have been in touch with the local officials there.

We've been exchanging some stories as to how both of how our community has evolved in the 30 years that BMW has been there, and so they're thinking the right things.

They're being proactive.

But absolutely, I think I think it could have the same impact.

Well, okay, guys, thank you.

We're going to bring our guest on in just a moment.

Before we do that, we like to in the summer, we like to carve out some of the best dialogs that we've had over the past several months.

They're called Carolina, classic conversations.

And, they are the best of the best.

We're going to be doing that in the next few weeks.

I hope you'll make time to watch that.

And also, he is the president of the ninth district of the Federal Reserve.

Tom Barkin will be back on this program as well.

Hope you enjoy and tune in for that.

Don't let the boyish good looks of our guest fool you.

He has a storied background in finance, and he knows his way around a balance sheet, income statement, and more complex and structured vehicles of finance.

He will probably need every bit of that experience, as he is now treasurer of the State of North Carolina and responsible not just for prudently overseeing one of the nation's largest retirement funds at 127 billion and growing, but also the equitable balance in the stewardship of the Tar Heel State's health care plan that covers 750,000 or so teachers, state employees, retirees and their dependents.

We welcome now North Carolina State Treasurer Brad Briner.

Mr. Treasurer, welcome to the program.

Pleasure to be here.

Thanks for having me.

Thank you.

Thank you very much.

We didn't meant we talked about we're going to talk about North Carolina things in just a second, Your Honor.

But this idea that a few weeks ago, Moody's, which was one of the three large investor services, dropped their credit rating for United States debt from Triple-A down to Double-A minus.

Doesn't sound like a big deal, but if that happened in North Carolina, that would dramatically increase, borrowing costs, among other things.

How much of a of a watershed moment is that for the U.S. debt?

Unfortunately, not much of one.

So Moody's was the third of the three rating agencies to do that.

The first one occurred over a decade ago.

At this point, that was a watershed moment.

It was the first time that I think people woke up and said, well, gee, maybe we can't print forever.

So Moody's being the third out of three, was kind of shrugged off by the bond market as a result, saying, well, I kind of knew that was coming.

I'm surprised it took him so long.

I think we all understand, though, the state of federal finances is not great, and we really need to have a better path forward.

I really hope that they can figure that out, but I'm not all that optimistic.

Do you think there there is some tipping point in the near term for the cost of that debt in the United States, given the debt level in the US?

You know, in financial and financial markets, everything is relative.

And I think that's an important concept that gets lost in this discussion.

$37 trillion of debt is an enormous amount of money that maybe we'll never pay back.

But in the end, the global financial system rests on a single risk free liquid asset.

And that's the US Treasury market, the US dollar and until you can have something that can obviously replace that, I don't think we have that much to worry about.

I still wish we were on a better trajectory.

But, you know, I'm not jumping out the window quite yet.

Okay.

One question where, we we I'm calling in.

Brad, please.

We thought we talked a lot back in the green room, which is great, but we also, we've been, doing interviews with you since you took office.

Tell us a little bit.

And and I know you've got a real passion for financial literacy.

Yeah.

Which is extremely important.

Tell us a little bit about why that is important and what you're doing.

Yeah.

So for me, it's personal.

It kind of goes back to when I was a little kid and my dad lost his job.

And that was the waning days of the Carter administration.

So we're gonna blame that party.

Though that recession was probably equally shared.

And I was young, I didn't really understand what was happening, but I knew my parents were fighting, and I didn't like that.

And over the years, you figure out what's happening in your house and why it happens.

And financial literacy was a big part of that.

And it's just understanding how it all works and why it all works.

I have a number of friends who are otherwise very successful in getting their own way, with financial literacy, basic concepts that you would think that they'd understand by now.

And so for me, it's been a personal passion to try to make sure everyone is educated and really is able to live the life that they want to live and not get in their own way financially.

Do you think technology is, has a positive or negative factor on it?

Probably a little bit of both.

So, we were talking about this a little earlier.

I've got a bunch of teenagers in my house, and the first time one of your related to your you just end up with my wife tells me they are.

I think they are, but the first time that one of them brought up TikTok finance, I was a little bit disturbed.

It's TikTok after all.

But at the same time, it was finance.

So, you know, I'm a little bit of both minds about it.

You know, not all good.

Not not all knowledge is good knowledge.

But I think any, financial literacy knowledge is pretty good knowledge now.

So I was reading, you know, you were making some comments about the investment strategy being 5050, and you wanted to see the 7030 stock bond ratio.

Does crypto have, you know, any role and just and not even necessarily for South Carolina, but in governmental investment strategy, you know, eventually I think the answer is yes.

But maybe the immediate moment the jury's out.

There are a lot of pieces to crypto.

But let's go back to investment strategy first.

You know, we've had a constitutionally limited ability to take risk.

And I mean, that lower lowercase, you mean state.

Yes, in the state, in North Carolina.

And that has cost us a lot.

We've got a $16 billion pension deficit.

And it's frankly, because we have chosen to have that by having cash and Treasury bonds instead of equities over, you know, decades now.

So we've got to evolve that to what, is a great question as it relates to crypto.

I think there's a lot of interesting innovation there.

I'm a personal investor in Bitcoin, but it is a very high risk, high return investment over time.

And as a state, we actually just need to make 6.5%.

If we can do that consistently, that's the right answer for our retirees.

It's the right answer for our taxpayers.

And so I'm not quite sure that crypto and that goal are a great match at the moment.

But I think you fast forward 5 to 10 years and this will evolve.

It will probably evolve to the lower risk, lower return category in the fall of time.

Bitcoin is already $1.7 trillion.

And so I think I hear a lot of people out there thinking that this is a fad and it's going to go away.

And certainly there are some digital assets that's true of.

But Bitcoin is not one of them.

You know, the fed argues when when I asked central bankers about the idea of cryptocurrency or bitcoin, they just look at me with a blank stare and say, well what do you need that for?

We already have cryptocurrency people take your pick.

So if it's if you choose, not to mention other central banks, if they don't endorse it somehow isn't doesn't it keep it kind of out in the wilderness?

I think it would require regulation to stand in its way, not, endorsement per se.

That would matter.

So you've seen this in a number of countries where they banned cryptocurrencies.

We have not will not be that country.

I think the real question around crypto is kind of goes back to its genesis.

The point is that you have no central authority who can ruin it.

People, I think rightly in many cases, feel like the federal government's finances are ruining the dollar.

And you can't do that with Bitcoin.

So that's the appeal fundamentally for folks, is it's peer to peer.

It's trustless.

And I don't have a central government who can debase its value by printing it and going back to the growth of the investment plan, if and also bringing the health care plan, you're going to have a half $1 billion in debt as you said, you had inherited day one, an office.

So between that and the growth of the investment plan, when you have more people taking retirement benefits that are paying into it now is just growing revenue and growing the size of the corpus of the investment portfolio.

You're going to cover that.

It is.

So, you know, we run elaborate models looking at a lot of things.

And we'll do one of those, this fall.

It's called an experience study.

So we look at every assumption that goes into these pension systems.

The idea that more people are taking out than are going in is not a new one or a surprise.

We expected that.

Yeah.

What we expected, though that hasn't come true, is making 6.5%.

We've been making 5.2.

And it's that 1.3% that's led to our problem.

We've got a $16 billion hole to fill in the pension system.

And if we can make that 1.3%, that hole will get taken care of, and we'll be able to get back in the position of giving cost of living adjustments to our retirees.

That's the hardest call I get by far as treasurer from a retiree who says I haven't gotten the cost of living adjustment in a decade, I'm having trouble affording my bills.

Whose fault is it?

The answer is it's the treasurer's office.

So the legislature has done its share.

They've sacrificed by not getting a Cola that's on us, and we got to fix that.

Okay.

All right.

That, so 25 years prior to you taking this position, it was private sector.

Yeah.

What is, and thrown into state treasurer?

How is that that tell us a little bit about that change.

And has it been a big change?

Not as big as you might think.

In the end, this is an investment job.

You know, by and large, I spend my days thinking about the investments in the state, either the long term ones in the pension system or cash, or investing in people's health or the health care system.

And that language, that familiarity is deep in my background.

There's some political nuances that you got to manage.

And those are new and, frankly, small.

Because in the end, numbers are numbers.

And I got a $16 billion deficit.

I make 5.2%.

We can try to caveat those things all we want, but they're on our website.

They are what they are.

We hopefully will do better.

Oh, I didn't know we're going to be talking about baseball, but, three a curveball in cryptos.

Let me give you a softball.

Now that, as you said, the target 6.5.

How do you get there?

What's funny about it is that that's easier than it's been in about 20 years, in terms of the amount of risk you have to take to get there.

And that's just based interest rates.

So if you go get a mortgage on your house today, you're paying about 7%.

Well, someone's making 7%.

That should be us.

So we're not talking about getting into the real speculative ends of the capital markets.

We're going to do a lot more in credit.

We had a statutory prohibition until a couple weeks ago on how much of that we could do, but it's pretty low risk stuff.

It's not that exciting.

But it really delivers on what we're trying to do.

And that's just make six and a half as low risk as possible.

So you'll see us in places like that, much more than we've ever been.

You're going to get the backing of the General Assembly to make that you think of the House and the Senate are both going to say, go get them, Brett.

Not only will we, we have.

So our bill that reforms fundamentally how we make investments, was passed unanimously by the House, unanimously by the Senate and signed by the governor.

And so we're off to the races and rebuilding the entire way we do investing in the state.

And what does that look like without too much detail?

Obviously.

Sure.

So historically, it's been the treasurer who can kind of do whatever they want within some statutory limitations going forward.

Once we have it in place, we'll have a five member board appointed by the treasurer or the governor or the speaker, the president pro tem and then the treasurer ex-officio, to make those decisions.

They'll hire and fire chief investment officer of that pension organization.

The truth is, what we've built looks like most every other state does this.

Well.

I think South Carolina does a really good way.

And we learned a lot from them.

Virginia, Florida, Texas, pick your favorite state.

And the model coalesces around those.

We just had a model that was about a hundred years old.

We needed update.

You've got and I hate to keep asking these questions, but these are I think these are kind of key.

So it has been said, about 25 years ago, you were a private sector running a private family office for one of the richest individuals in the country.

But the idea of valuations, capital market valuations, is that worry you now?

Of course.

So I'm sorry to interrupt you, sir, but how do you deploy the allocation with 127 plus billion and and not worry about valuations and volatility.

Oh you do and by the way it's 132 billion now.

So we've had a good year.

And we pay out a couple of billion.

So you know we've made a real amount of money so far.

And credit to my team for doing that.

We have a lot of degrees of freedom, so we don't have to go chase the equity market.

In fact, we've been selling equities the last several weeks.

We've been buying more mortgage and other spread product where there's excess return available relative to a really low risk security.

So, we have done a lot of movement in the portfolio, but it's not just taking more risk.

It's hopefully just getting more return for similar risk.

I am skeptical of where we are in the US.

Equity valuations.

I think it sounds like as you are, that doesn't mean they're not spots you can pick.

But we don't have to lean into the whole market right now because there are other places to deploy that meet our return objections.

We have about a minute left.

You have a quick one?

Yeah, a real quick one is a softball.

You wouldn't believe.

Summertime.

Where is your.

What's your favorite North Carolina vacation spot?

Favorite?

North Carolina's vacation spot is mountains.

My wife's from Asheville, and so we spent a lot of time up there over the years, and we don't get back as often as we want to.

But, Jason, for kids around state who are all doing different things, but hopefully we'll get up there this summer and enjoy a bit of a cooler weather, given that it's, you know, 90 something to that, you know, as a quick one since, you know, western North Carolina.

So well, does that does the office have any interest in helping rebuild.

Is there a specific.

And we've got about 30s.

So we were asked to help with administering a loan program for all the counties, municipalities.

We do local government finance already through the Local Government Commission.

So we're deeply familiar with all the municipalities, and we get we're given that program in mid-December, and we fully deploy that program in six months.

We'll see if we get more, but we're happy to do that and excited to have played a small role in helping to rebuild the West, Your Honor.

Thank you.

I mean, it's a lot of information.

10 pounds of information in a 5 pound bag.

Thank you.

Thank you.

Nice to see you.

And please come back I appreciate it.

Good to see you.

Good to have you on the program.

Come back.

It's been too long but I have you here.

We'll call you, I promise.

Alan, thanks for making the trip.

I know 85 between Spartanburg.

It's always painful, but thank you.

We're working it out.

Thank you, thank you.

It's all next week.

I'm Chris William.

Happy weekend - [Announcer] Gratefully acknowledging support by, Martin Marietta, Truliant Federal Credit Union, Foundation for the Carolinas, Sonoco, Blue Cross Blue Shield of South Carolina, High Point University, and by viewers like you.

Thank you.

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