1 00:00:00,800 --> 00:00:04,040 Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside 2 00:00:04,040 --> 00:00:06,920 Speaker 1: my co host Matt Miller. Every business day, we bring 3 00:00:06,960 --> 00:00:11,520 Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along 4 00:00:11,560 --> 00:00:15,600 Speaker 1: with essential market moving news. Find the Bloomberg Markets Podcast 5 00:00:15,600 --> 00:00:18,479 Speaker 1: on Apple Podcasts or wherever you listen to podcasts, and 6 00:00:18,480 --> 00:00:21,440 Speaker 1: at Bloomberg dot com slash podcast. All right, let's check 7 00:00:21,480 --> 00:00:24,079 Speaker 1: in with an expert here, Brent Shooty, chief investment strategist 8 00:00:24,120 --> 00:00:28,880 Speaker 1: for Northwestern Mutual Wealth. About two forty seven billion under management, 9 00:00:28,880 --> 00:00:30,920 Speaker 1: So they've got a couple of shekels in the game here, Brett. 10 00:00:31,080 --> 00:00:35,720 Speaker 1: When you see a number like that this morning, you know, exceptional, 11 00:00:35,880 --> 00:00:40,000 Speaker 1: Miss What did you make of that this morning? Well, 12 00:00:40,120 --> 00:00:42,320 Speaker 1: I think it's gonna be a blip that's largely forgotten 13 00:00:42,320 --> 00:00:44,879 Speaker 1: in a few weeks. I mean, everything else is pointing up. 14 00:00:45,200 --> 00:00:46,880 Speaker 1: I mean even on the labor force, you have strong 15 00:00:46,960 --> 00:00:49,600 Speaker 1: labor front, you have strong data and other places, and 16 00:00:49,640 --> 00:00:51,960 Speaker 1: the economic backdrop is incredibly strong, and so you're gonna 17 00:00:52,000 --> 00:00:54,440 Speaker 1: have more hiring in the coming funds. You know, I 18 00:00:54,480 --> 00:00:56,480 Speaker 1: think there could be some season of justice in here. 19 00:00:56,640 --> 00:00:59,160 Speaker 1: So the unadjusted number not to confuse your audience, is 20 00:00:59,200 --> 00:01:01,720 Speaker 1: actually one million. So data is seasonally adjusted, and when 21 00:01:01,720 --> 00:01:03,680 Speaker 1: you have all the back and force that you've had 22 00:01:03,680 --> 00:01:06,320 Speaker 1: over the past few past year or something that could 23 00:01:06,360 --> 00:01:08,480 Speaker 1: actually cause the seasonal adjustments to make this look a 24 00:01:08,520 --> 00:01:10,720 Speaker 1: little bit different. The other thing is that you have 25 00:01:10,959 --> 00:01:13,839 Speaker 1: some level unemployment benefits keeping people back and possibly COVID 26 00:01:13,840 --> 00:01:16,640 Speaker 1: fille fears. But I think you're gonna get stronger numbers 27 00:01:16,680 --> 00:01:18,760 Speaker 1: in the future and that's not going to change, and 28 00:01:18,800 --> 00:01:20,240 Speaker 1: so I think the market will look past it like 29 00:01:20,280 --> 00:01:23,319 Speaker 1: it is today and continue to push higher because as 30 00:01:23,319 --> 00:01:26,000 Speaker 1: you mentioned, you're likely to have monetary policy stay strong, 31 00:01:26,360 --> 00:01:28,320 Speaker 1: and I know you mentioned President Biden coming on talking 32 00:01:28,360 --> 00:01:31,560 Speaker 1: about fiscal policy. This only makes that more likely that 33 00:01:31,640 --> 00:01:34,280 Speaker 1: it actually goes through. And so all in all, Um, 34 00:01:34,319 --> 00:01:37,240 Speaker 1: I would largely strug it off if I were an investor. Yeah, 35 00:01:37,280 --> 00:01:40,760 Speaker 1: he's we're expecting many moments. So if we cut you off, 36 00:01:40,800 --> 00:01:42,640 Speaker 1: we cut you short. Then just know that you're being 37 00:01:42,640 --> 00:01:45,399 Speaker 1: bigfooted by the President of the United States. It's not 38 00:01:45,600 --> 00:01:47,680 Speaker 1: in any way. It might be just a bit more important, 39 00:01:47,720 --> 00:01:50,120 Speaker 1: So that's that's okay by me. Well, we're not sure, 40 00:01:50,200 --> 00:01:53,600 Speaker 1: you know, I have to say you went to um Illinois, right, 41 00:01:53,720 --> 00:01:56,440 Speaker 1: and then the University of Chicago Booth School for your 42 00:01:56,560 --> 00:01:59,680 Speaker 1: m b A with high honors. I want to point out, 43 00:02:00,400 --> 00:02:02,840 Speaker 1: but I'll just say quickly. I don't want to get 44 00:02:02,880 --> 00:02:05,600 Speaker 1: off on too much of a tangent. But um, here 45 00:02:05,600 --> 00:02:08,280 Speaker 1: in Germany we would pronounce your name shitta, which means 46 00:02:08,480 --> 00:02:16,280 Speaker 1: archer or shooter. Just yeah, you're a target hitter, you know, um, 47 00:02:16,320 --> 00:02:19,919 Speaker 1: a shot caller as we as we might say, Um, 48 00:02:20,760 --> 00:02:23,720 Speaker 1: what do you think about the trajectory right now the economy. 49 00:02:23,760 --> 00:02:26,760 Speaker 1: I've talked to so many European economists here who look 50 00:02:26,760 --> 00:02:29,119 Speaker 1: at the US UM and look at the global economy 51 00:02:29,160 --> 00:02:31,840 Speaker 1: and say, man, you know we're we're peaking right now, 52 00:02:31,880 --> 00:02:34,200 Speaker 1: even in terms of corporate earnings, Like this quarter. Next 53 00:02:34,240 --> 00:02:36,400 Speaker 1: quarter is going to be the peak. And that doesn't 54 00:02:36,400 --> 00:02:38,560 Speaker 1: mean we're not seeing growth ahead, but it's just not 55 00:02:38,600 --> 00:02:42,040 Speaker 1: going to be as strong as it has been this quarter. Yeah. 56 00:02:42,080 --> 00:02:43,280 Speaker 1: I think that's a big debate, and I think we 57 00:02:43,320 --> 00:02:45,120 Speaker 1: still have a few more strong quarters than what you 58 00:02:45,200 --> 00:02:47,080 Speaker 1: just mentioned. I'm not for sure when the peak comes, 59 00:02:47,080 --> 00:02:49,120 Speaker 1: but you have a strong tale one behind you. You 60 00:02:49,160 --> 00:02:51,560 Speaker 1: have two point two trillion dollars in excess consumer savings, 61 00:02:51,600 --> 00:02:55,320 Speaker 1: your monetary policy designed to continue pushing the economy in 62 00:02:55,360 --> 00:02:57,880 Speaker 1: the market tiger as well as fiscal policy. Uh. And 63 00:02:57,919 --> 00:03:00,600 Speaker 1: so I do think you are in a sick lit upswing. UH. 64 00:03:00,600 --> 00:03:02,960 Speaker 1: And you mentioned that Germany. I think that's going to 65 00:03:03,000 --> 00:03:05,280 Speaker 1: be a global upswing. And so one of the areas 66 00:03:05,320 --> 00:03:07,240 Speaker 1: that's been left behind just a bit they actually had 67 00:03:07,240 --> 00:03:10,079 Speaker 1: negative GDP in the first quarter was the Eurozone. Um. 68 00:03:10,160 --> 00:03:12,600 Speaker 1: You're going to be adding Germany in the Eurozone to 69 00:03:12,800 --> 00:03:16,359 Speaker 1: the strong commentary and the coming future because the vaccinations 70 00:03:16,400 --> 00:03:18,520 Speaker 1: catching up, and so I think you have plenty of 71 00:03:18,560 --> 00:03:20,880 Speaker 1: time left in the economic cycle. I think the question 72 00:03:21,000 --> 00:03:23,320 Speaker 1: is is it too strong? And that's where I'm telling 73 00:03:23,680 --> 00:03:25,840 Speaker 1: investors that they need to hedge that risk the first 74 00:03:25,880 --> 00:03:28,200 Speaker 1: time in what fifteen or twenty years, And so you 75 00:03:28,240 --> 00:03:30,120 Speaker 1: need to own things like commodities, you need to own 76 00:03:30,160 --> 00:03:32,840 Speaker 1: things like tips um as a just in case, because 77 00:03:32,880 --> 00:03:34,720 Speaker 1: I think the only thing that would throw this off 78 00:03:35,120 --> 00:03:38,280 Speaker 1: is an inflation rises too high and becomes more permanent. 79 00:03:38,560 --> 00:03:39,800 Speaker 1: Now I don't think we're there yet, but I think 80 00:03:39,800 --> 00:03:41,640 Speaker 1: that's gonna be the big question over the coming quarters. 81 00:03:41,840 --> 00:03:43,440 Speaker 1: And we have investors that haven't had to do this 82 00:03:43,480 --> 00:03:45,520 Speaker 1: for twenty years. They've been trained to hedge downside risk. 83 00:03:45,880 --> 00:03:48,200 Speaker 1: I think you need to hedge upside risk. And one 84 00:03:48,240 --> 00:03:50,360 Speaker 1: of the reasons why the market probably likes what happened today, 85 00:03:50,360 --> 00:03:53,960 Speaker 1: as you mentioned, is because this could possibly be a 86 00:03:53,960 --> 00:03:55,840 Speaker 1: little bit of slowing in demand which will allow the 87 00:03:55,880 --> 00:03:59,040 Speaker 1: supply side to catch up UM. And so perhaps that's 88 00:03:59,080 --> 00:04:02,480 Speaker 1: the silver lining and days numbers all right, Brent. So 89 00:04:02,840 --> 00:04:05,800 Speaker 1: given that backdrop, what are some of the sectors that 90 00:04:05,840 --> 00:04:07,320 Speaker 1: you think are going to perform. I know there's a 91 00:04:07,360 --> 00:04:09,720 Speaker 1: kind of a push pool in the marketplace between the 92 00:04:09,760 --> 00:04:12,160 Speaker 1: folks that have just really relied on this tried and 93 00:04:12,240 --> 00:04:15,480 Speaker 1: true Amazon apples, you know, big growth stories, and those 94 00:04:15,480 --> 00:04:17,840 Speaker 1: that have really embraced that the rotation trade into more 95 00:04:17,839 --> 00:04:20,839 Speaker 1: cyclical names and which have in fact one very well 96 00:04:20,920 --> 00:04:23,520 Speaker 1: for several quarters. Now, what kind of where were you 97 00:04:23,560 --> 00:04:26,680 Speaker 1: in that discussion? Yeah, for much of the last year, 98 00:04:26,680 --> 00:04:29,520 Speaker 1: we've been pushing up portfolios towards cyclicals, towards value, towards 99 00:04:29,520 --> 00:04:32,159 Speaker 1: small apps, and we're not changing the market is today, 100 00:04:32,200 --> 00:04:33,880 Speaker 1: as you mentioned, going to towards tech, and I think 101 00:04:33,920 --> 00:04:37,839 Speaker 1: tech is the slower growth non cypical um growth asset 102 00:04:37,839 --> 00:04:39,440 Speaker 1: class right now, and so it has done well for 103 00:04:39,440 --> 00:04:41,640 Speaker 1: the past couple of years, largely because we had a 104 00:04:41,640 --> 00:04:44,320 Speaker 1: trade war, which knockout cyclicality. If you think about what 105 00:04:44,360 --> 00:04:46,240 Speaker 1: the trade war is designed to do, was designed and 106 00:04:46,279 --> 00:04:48,640 Speaker 1: knock out global growth, and it did so. If you 107 00:04:48,640 --> 00:04:51,000 Speaker 1: do that in economy, that translates to the markets, and 108 00:04:51,000 --> 00:04:53,400 Speaker 1: so that knocked out value, that knock to cyxicality. Because 109 00:04:53,440 --> 00:04:57,039 Speaker 1: tech was unimpacted. Then we had COVID head and COVID 110 00:04:57,080 --> 00:04:59,040 Speaker 1: did the exact same thing. And in many cases what 111 00:04:59,160 --> 00:05:02,880 Speaker 1: the tail went text story. As we continue to reopen, 112 00:05:03,000 --> 00:05:06,200 Speaker 1: as the globe reopen, as cyclical growth continues to push higher, 113 00:05:06,520 --> 00:05:09,040 Speaker 1: you will see value stocks, you will see small cap stocks, 114 00:05:09,200 --> 00:05:11,480 Speaker 1: you will see cyclical stocks move higher. And I think 115 00:05:11,520 --> 00:05:13,480 Speaker 1: the world is in such a hurry to end that trade, 116 00:05:13,600 --> 00:05:15,760 Speaker 1: which gives me a lot of comfort. Um, I still 117 00:05:15,800 --> 00:05:18,160 Speaker 1: think we have quite a room to run. And typically 118 00:05:18,400 --> 00:05:21,719 Speaker 1: if investors look back historically, those segments of the economy 119 00:05:21,760 --> 00:05:24,760 Speaker 1: are those sectors of the market don't begin underperforming until 120 00:05:24,760 --> 00:05:27,120 Speaker 1: the yield curve inverts or until the sud starts aggressively 121 00:05:27,200 --> 00:05:31,640 Speaker 1: raising policy, which we're not anywhere near yet. So you 122 00:05:31,880 --> 00:05:36,240 Speaker 1: advise or oversee retail investment strategy. And and one of 123 00:05:36,240 --> 00:05:39,560 Speaker 1: the things I often think about is a retail investor, 124 00:05:39,640 --> 00:05:42,160 Speaker 1: is I want to keep things fairly simple just because 125 00:05:42,720 --> 00:05:46,680 Speaker 1: I can't be rebalancing all the time. I can't look 126 00:05:46,680 --> 00:05:51,120 Speaker 1: at the fees constantly, and UM, frankly, I just don't 127 00:05:51,120 --> 00:05:53,880 Speaker 1: have the time to do it. I guess that's why 128 00:05:53,880 --> 00:05:56,000 Speaker 1: I'd hire someone like you. But what do you think 129 00:05:56,080 --> 00:05:58,720 Speaker 1: about retail investors keeping it a little simpler? I mean, 130 00:05:58,800 --> 00:06:01,640 Speaker 1: are there are there strategy ease that um take a 131 00:06:01,680 --> 00:06:05,120 Speaker 1: little bit more of the of the constant watching out 132 00:06:05,120 --> 00:06:09,440 Speaker 1: of it. Uh, you know, I mean, I guess I 133 00:06:09,480 --> 00:06:10,800 Speaker 1: try to make it simple too, And so we do 134 00:06:10,839 --> 00:06:12,600 Speaker 1: maintain a diverse, wite PORTFOLO, and then we tilt our 135 00:06:12,600 --> 00:06:15,600 Speaker 1: portfolio on the directions that we think, Um, there's opportunities 136 00:06:15,600 --> 00:06:17,800 Speaker 1: to add value above and beyond. And so I'm not 137 00:06:17,839 --> 00:06:20,440 Speaker 1: suggesting it's it's easy, but it's certainly not as difficult 138 00:06:20,440 --> 00:06:22,400 Speaker 1: as people what people make it out to be. Uh. 139 00:06:22,400 --> 00:06:24,320 Speaker 1: And certainly you can buy some mts and some mutual 140 00:06:24,360 --> 00:06:27,600 Speaker 1: funds and get a long way towards what any professional 141 00:06:27,640 --> 00:06:29,760 Speaker 1: institutional investor can do. And that's what we do here 142 00:06:29,760 --> 00:06:33,799 Speaker 1: at Northwestern Mutual. All Right. So one of the concerns 143 00:06:34,160 --> 00:06:37,799 Speaker 1: Brent and the equity markets is you know, I feeling 144 00:06:37,800 --> 00:06:40,200 Speaker 1: a little frothy, and they have been for a while. 145 00:06:40,279 --> 00:06:42,840 Speaker 1: And then you see you know, the maybe exacerbated or 146 00:06:42,920 --> 00:06:45,920 Speaker 1: highlighted by the mean stock frenzy that we saw several 147 00:06:45,920 --> 00:06:49,280 Speaker 1: months ago. And then people might point to SPACs as 148 00:06:49,320 --> 00:06:53,960 Speaker 1: another speculative aspect of this market. How do you how 149 00:06:53,960 --> 00:06:55,360 Speaker 1: do you kind of frame that up it in your 150 00:06:55,360 --> 00:06:58,440 Speaker 1: own analysis? Sure, and so I've compared this time period 151 00:06:58,440 --> 00:07:00,360 Speaker 1: of Night nine a lot, and I think that gives 152 00:07:00,360 --> 00:07:02,760 Speaker 1: people pause. But it shouldn't because other asset classes like 153 00:07:02,800 --> 00:07:05,800 Speaker 1: the ones I'm mentioning did well post M things like 154 00:07:05,839 --> 00:07:08,480 Speaker 1: small caps, of value stocks, things that were out of favor. Um. 155 00:07:08,520 --> 00:07:10,680 Speaker 1: I do think there is some froth and markets today. 156 00:07:11,000 --> 00:07:14,160 Speaker 1: The FED actually brought that up yesterday, which actually had 157 00:07:14,200 --> 00:07:16,680 Speaker 1: my inbox filled this morning. But I agree the Fed. 158 00:07:16,720 --> 00:07:19,120 Speaker 1: It's and things like SPACs and i pos and mean stocks, 159 00:07:19,360 --> 00:07:22,160 Speaker 1: maybe in some crypto areas, maybe in some technology companies 160 00:07:22,160 --> 00:07:24,560 Speaker 1: with no earnings um, and those aren't areas that I'm 161 00:07:24,600 --> 00:07:27,160 Speaker 1: recommending right now. We're pushing more towards the things that 162 00:07:27,160 --> 00:07:29,560 Speaker 1: will do better than see earnings growth given the economic 163 00:07:29,600 --> 00:07:32,280 Speaker 1: environment that we see in the coming quarters. Uh. And 164 00:07:32,320 --> 00:07:34,000 Speaker 1: so that would be my point number one. Point number 165 00:07:34,000 --> 00:07:36,200 Speaker 1: two is I know the FED mentioned it and people 166 00:07:36,200 --> 00:07:39,920 Speaker 1: are concerned, but the Fed isn't changing their stripes. Um, 167 00:07:40,080 --> 00:07:44,000 Speaker 1: They're going to continue pushing monetary policy. Uh. And to me, 168 00:07:44,200 --> 00:07:46,600 Speaker 1: their policy is actually causing some of this, but they're 169 00:07:46,640 --> 00:07:49,440 Speaker 1: not going to stop because they want to accomplish their 170 00:07:49,480 --> 00:07:52,880 Speaker 1: economic goals, and their economic goals involved not causing a 171 00:07:52,920 --> 00:07:55,440 Speaker 1: market crash, and so the two are interlinked right now. 172 00:07:55,640 --> 00:07:57,760 Speaker 1: But I would continue to advise investors to go to 173 00:07:57,800 --> 00:08:00,400 Speaker 1: things that are a little bit uh, I suppose left sexy. 174 00:08:00,440 --> 00:08:01,720 Speaker 1: I mean I don't go on calls and never have 175 00:08:01,760 --> 00:08:04,200 Speaker 1: anybody asking about the bank stock. They're usually asking me 176 00:08:04,240 --> 00:08:06,560 Speaker 1: about a technology stock. And so there are parts of 177 00:08:06,560 --> 00:08:09,320 Speaker 1: the market that are still relatively um well valued. In 178 00:08:09,360 --> 00:08:10,640 Speaker 1: those are the areas that we pushed towards, and I 179 00:08:10,680 --> 00:08:11,880 Speaker 1: think that's where you need to be for the coming 180 00:08:11,920 --> 00:08:15,600 Speaker 1: year or two. What are you telling your clients about crypto? 181 00:08:15,720 --> 00:08:18,200 Speaker 1: I mean, I'm sure that your inboxes is pretty full 182 00:08:18,240 --> 00:08:20,720 Speaker 1: with crypto questions or or at least you're you know, 183 00:08:20,840 --> 00:08:24,640 Speaker 1: friends are asking you about it constantly just due to 184 00:08:24,680 --> 00:08:27,160 Speaker 1: the FOMO, right if they if they've missed out on 185 00:08:27,280 --> 00:08:31,240 Speaker 1: this incredible rally. On the other hand, comparison can get 186 00:08:31,280 --> 00:08:35,640 Speaker 1: pretty scary. Yeah, I mean cryptocurrencies, I think we can 187 00:08:35,679 --> 00:08:39,120 Speaker 1: all go upon have a huge element of speculation to them, 188 00:08:39,200 --> 00:08:42,400 Speaker 1: and so you know whether that's good or bad is 189 00:08:42,559 --> 00:08:44,959 Speaker 1: up to the individual investor to decide. Just know that 190 00:08:44,960 --> 00:08:47,920 Speaker 1: there's high volatility. Uh. And they could be winners or 191 00:08:47,920 --> 00:08:50,679 Speaker 1: they could be absolute losers. Uh. And there's nine thousand 192 00:08:50,720 --> 00:08:52,000 Speaker 1: and I believe, and so which one is going to 193 00:08:52,000 --> 00:08:54,080 Speaker 1: win and which one is going to lose? For me 194 00:08:54,240 --> 00:08:57,199 Speaker 1: as an investment professional, UM, I don't know how to 195 00:08:57,240 --> 00:09:00,360 Speaker 1: value cryptocurrency. So it doesn't have earnings, at wan has 196 00:09:00,360 --> 00:09:04,360 Speaker 1: cash flows. Uh, and so therefore it's hard to value. Now. 197 00:09:04,400 --> 00:09:06,800 Speaker 1: I know there's the comparisons made to gold and things 198 00:09:06,840 --> 00:09:08,760 Speaker 1: like that, but keep the mind gold has a hundred 199 00:09:08,840 --> 00:09:11,440 Speaker 1: year history and was a monetary instrument. The other thing 200 00:09:11,520 --> 00:09:14,880 Speaker 1: that I'd say, um, is that um, I don't know 201 00:09:14,920 --> 00:09:17,680 Speaker 1: what moves the macro economically, and so we've run tons 202 00:09:17,720 --> 00:09:19,520 Speaker 1: of observations and tried to figure out what do they 203 00:09:19,520 --> 00:09:21,800 Speaker 1: move off award the inflation pages? Are they they move with? 204 00:09:22,040 --> 00:09:24,520 Speaker 1: Incredibly key point, I think, Brent, that's that's a huge 205 00:09:24,520 --> 00:09:26,319 Speaker 1: point that we don't hear anyone bring up. I think 206 00:09:26,320 --> 00:09:29,520 Speaker 1: that's a key takeaway because yeah, you know the fact 207 00:09:29,520 --> 00:09:32,920 Speaker 1: that there's no earnings and no income. We you get that, 208 00:09:33,080 --> 00:09:37,959 Speaker 1: but um, no one still can guess yet what's moving them, right, 209 00:09:38,240 --> 00:09:40,360 Speaker 1: and so you know there could be value here, But 210 00:09:40,400 --> 00:09:43,360 Speaker 1: I mean I don't know. I mean I can't foresee 211 00:09:43,360 --> 00:09:45,599 Speaker 1: everything perfectly by any Meannalwise, I wouldn't be talking to 212 00:09:45,600 --> 00:09:47,880 Speaker 1: do that on a Friday pointing, I'll be doing something else. Umm, 213 00:09:47,920 --> 00:09:49,240 Speaker 1: but from what I When I don't know how to 214 00:09:49,280 --> 00:09:51,440 Speaker 1: value something, and when I don't know, um what moves 215 00:09:51,440 --> 00:09:53,559 Speaker 1: in macro economically, I'm I'm apt to stay away. That 216 00:09:53,600 --> 00:09:56,160 Speaker 1: doesn't mean other investors shouldn't. Possibly if they want to 217 00:09:56,200 --> 00:09:58,240 Speaker 1: invest in it, just know that they could lose all 218 00:09:58,240 --> 00:09:59,560 Speaker 1: their money or they could make a lot of money. 219 00:09:59,559 --> 00:10:01,559 Speaker 1: That's just what speculation is, and so that's why I 220 00:10:01,559 --> 00:10:04,079 Speaker 1: think it's appropriate for people who want to do that. 221 00:10:04,559 --> 00:10:07,360 Speaker 1: I think the price of coin at a moment shows 222 00:10:07,360 --> 00:10:09,160 Speaker 1: people that there's quite a bit of speculation here. I mean, 223 00:10:09,200 --> 00:10:11,040 Speaker 1: it's moving up and down, and it actually has some 224 00:10:11,080 --> 00:10:13,520 Speaker 1: mark up cap bigger than Twitter, bigger than General Motors, 225 00:10:13,559 --> 00:10:16,640 Speaker 1: bigger than Kraft, heinz Um. So you know it's it's 226 00:10:16,679 --> 00:10:19,719 Speaker 1: grown large. So all right, Brent, thanks so much for 227 00:10:19,800 --> 00:10:22,280 Speaker 1: joining us. We appreciate it as always, Brent Shooty. He's 228 00:10:22,280 --> 00:10:29,000 Speaker 1: a chief investment strategist for Northwestern Mutual Wealth Management. Let's 229 00:10:29,040 --> 00:10:32,120 Speaker 1: talk M n A here. You know, was a year 230 00:10:32,240 --> 00:10:34,880 Speaker 1: unlike no other. But what we have right now is 231 00:10:35,240 --> 00:10:38,840 Speaker 1: stock markets hitting all time highs, interest rates near all 232 00:10:39,000 --> 00:10:42,080 Speaker 1: time loads. That is usually a good recipe for M 233 00:10:42,080 --> 00:10:43,599 Speaker 1: and A. Let's check in with Rob Brown. He's a 234 00:10:43,640 --> 00:10:47,600 Speaker 1: managing director and CEO of North America for Lincoln International. Rob, 235 00:10:47,640 --> 00:10:49,400 Speaker 1: thanks so much for joining us here. I'd love to 236 00:10:49,440 --> 00:10:52,280 Speaker 1: just get the thirty thousand foot view from you and 237 00:10:52,559 --> 00:10:54,960 Speaker 1: M and A guy on what's going on in the 238 00:10:55,000 --> 00:10:58,680 Speaker 1: M and A market these days. So the thirty thousand 239 00:10:58,679 --> 00:11:02,640 Speaker 1: foot view is it's the busiest M and A market 240 00:11:02,880 --> 00:11:05,800 Speaker 1: of my lifetime. And I've been doing this for thirty years. 241 00:11:06,080 --> 00:11:10,160 Speaker 1: And I think there's kind of three factors. One and 242 00:11:10,160 --> 00:11:12,480 Speaker 1: you alluded to it in your in your comments a 243 00:11:12,480 --> 00:11:15,040 Speaker 1: few minutes ago. The amount of money that has been 244 00:11:15,120 --> 00:11:18,840 Speaker 1: raised in private equity funds and venture capital funds and 245 00:11:18,840 --> 00:11:21,960 Speaker 1: the amount of money sitting on corporate balance sheets is 246 00:11:22,000 --> 00:11:24,360 Speaker 1: at all time highs, and the fundraising has been that 247 00:11:24,400 --> 00:11:26,280 Speaker 1: way for years, and a lot of that's driven by 248 00:11:26,640 --> 00:11:30,360 Speaker 1: interest rates being so low and people allocating more assets 249 00:11:30,360 --> 00:11:33,640 Speaker 1: to classes like private equity. So we've had for a 250 00:11:33,679 --> 00:11:36,680 Speaker 1: while more capital that wants to be put to work 251 00:11:36,679 --> 00:11:38,880 Speaker 1: than there are high quality companies to buy. So that 252 00:11:38,920 --> 00:11:43,280 Speaker 1: creates a hot market. What's what's intensified that right now 253 00:11:43,520 --> 00:11:46,800 Speaker 1: is that you had deals that should have gotten done 254 00:11:46,880 --> 00:11:49,480 Speaker 1: last year that where COVID impacted in the second quarter 255 00:11:49,800 --> 00:11:52,720 Speaker 1: performance was COVID impacted and and people pull them off 256 00:11:52,760 --> 00:11:55,720 Speaker 1: the market. Those deals are springing back, particularly in areas 257 00:11:55,720 --> 00:12:01,280 Speaker 1: like industrials. And then with the anticipated increasing capital gains taxes, 258 00:12:01,800 --> 00:12:05,000 Speaker 1: you have sellers of businesses that in a normal gestation 259 00:12:05,080 --> 00:12:09,400 Speaker 1: period might be selling something in three saying, you know what, 260 00:12:09,520 --> 00:12:13,640 Speaker 1: if cap gains rates are going to go up, I'm 261 00:12:13,640 --> 00:12:16,520 Speaker 1: going to sell it now. So you have this perfect 262 00:12:16,520 --> 00:12:21,000 Speaker 1: storm that's creating unprecedented activity and unprecedented values of just 263 00:12:21,080 --> 00:12:23,760 Speaker 1: a great market with lots of capital, but intensified that 264 00:12:23,800 --> 00:12:27,280 Speaker 1: you've got deals pulled in from uh future years and 265 00:12:27,320 --> 00:12:29,360 Speaker 1: deals that should have got done last year hitting the 266 00:12:29,400 --> 00:12:33,320 Speaker 1: market now, which creates really incredible activity. Rob does it 267 00:12:33,400 --> 00:12:38,600 Speaker 1: also create um unprecedented prices because if you've got more 268 00:12:38,640 --> 00:12:41,959 Speaker 1: capital out there, too much capital for the amount of 269 00:12:42,000 --> 00:12:45,240 Speaker 1: high quality companies, then I guess you have to compete 270 00:12:45,240 --> 00:12:48,760 Speaker 1: more and you do that through raising your You're you're 271 00:12:48,960 --> 00:12:51,439 Speaker 1: exactly right. It's classics supply and demand, right, the the 272 00:12:51,920 --> 00:12:56,560 Speaker 1: demand to buy high quality businesses exceeds the supply, and 273 00:12:56,600 --> 00:13:00,160 Speaker 1: as a result, um, you're seeing incredibly high value and 274 00:13:00,200 --> 00:13:02,680 Speaker 1: not just you know values and technology and healthcare and 275 00:13:02,720 --> 00:13:05,920 Speaker 1: the secular growing industries have always been high and now 276 00:13:06,000 --> 00:13:09,120 Speaker 1: they're they're kind of off the charts high. But even 277 00:13:09,200 --> 00:13:12,439 Speaker 1: you know, industrials and certain elements of consumer particularly direct 278 00:13:12,440 --> 00:13:16,880 Speaker 1: the consumer things and business services, all of those are 279 00:13:17,760 --> 00:13:20,080 Speaker 1: are are also trading at high value. So a good 280 00:13:20,440 --> 00:13:24,520 Speaker 1: a good portion of it is exactly right, it is 281 00:13:24,800 --> 00:13:27,440 Speaker 1: and and quite frank, with all the stimulus coming into economy, 282 00:13:27,600 --> 00:13:30,920 Speaker 1: companies are performing well. So you have this capital and balance, 283 00:13:31,040 --> 00:13:34,240 Speaker 1: you have strong performance, and it's resulting in high activity 284 00:13:34,440 --> 00:13:37,920 Speaker 1: and high values. All right, Rob, talk to us about 285 00:13:37,920 --> 00:13:40,760 Speaker 1: the actually getting deals done. Guys like you, M and 286 00:13:40,840 --> 00:13:44,040 Speaker 1: A bankers, investment bankers. They've been known to spend most 287 00:13:44,080 --> 00:13:46,080 Speaker 1: of their weeks, most of their months most of their 288 00:13:46,160 --> 00:13:50,760 Speaker 1: years on a plane visiting clients. Yet you've most you 289 00:13:50,840 --> 00:13:52,880 Speaker 1: and your other bankers have been kind of stuck at 290 00:13:52,880 --> 00:13:55,360 Speaker 1: home for the most part. Yet we're still seeing record 291 00:13:55,520 --> 00:14:01,920 Speaker 1: volume of deals getting done. Is your business change forever? Uh, 292 00:14:01,960 --> 00:14:05,400 Speaker 1: that's that's a great question. What I can tell you is, 293 00:14:05,600 --> 00:14:07,600 Speaker 1: I think all of us in the M and A 294 00:14:07,679 --> 00:14:13,040 Speaker 1: ecosystem have were incredibly surprised at how quickly buyers and 295 00:14:13,080 --> 00:14:16,160 Speaker 1: sellers adapted to a virtual environment. And that's starting the 296 00:14:16,200 --> 00:14:18,480 Speaker 1: thaw right. We're now starting to have more meetings with 297 00:14:18,520 --> 00:14:21,360 Speaker 1: management teams in person when we're bringing buyers and sellers together. 298 00:14:21,720 --> 00:14:24,120 Speaker 1: We're starting to meet with clients more in person. But 299 00:14:24,240 --> 00:14:28,240 Speaker 1: for the last you know, fourteen months, thirteen months, it 300 00:14:28,360 --> 00:14:33,320 Speaker 1: was really incredible how quickly things went virtual, how comfortable 301 00:14:33,680 --> 00:14:37,120 Speaker 1: buyers got doing most of their diligence offsite, how comfortable 302 00:14:37,200 --> 00:14:42,800 Speaker 1: sellers got, you know, interacting with their ultimate buyers um virtually. 303 00:14:42,840 --> 00:14:45,920 Speaker 1: In fact, we've had several companies in the last year, 304 00:14:45,960 --> 00:14:48,360 Speaker 1: several deals in the last year where the buyers and 305 00:14:48,440 --> 00:14:51,920 Speaker 1: sellers never met in person ever until the deals were closed. 306 00:14:53,000 --> 00:14:55,760 Speaker 1: It's amazing and I'm sure that to some extent, your 307 00:14:55,800 --> 00:14:58,080 Speaker 1: your wives or your husbands or your kids are gonna 308 00:14:58,120 --> 00:15:00,320 Speaker 1: get used to that and say, like Dad, you don't 309 00:15:00,320 --> 00:15:02,360 Speaker 1: need to travel this much anymore. This is Is it 310 00:15:02,400 --> 00:15:04,800 Speaker 1: a permanent change to some extent? Is there something? I 311 00:15:05,440 --> 00:15:07,240 Speaker 1: think some of it is. You know, it's interesting. We're 312 00:15:07,320 --> 00:15:09,160 Speaker 1: looking to bring all of our people back, and you know, 313 00:15:09,200 --> 00:15:11,600 Speaker 1: we've got twenty three We've got twenty three office in 314 00:15:11,680 --> 00:15:15,239 Speaker 1: seventeen countries, We've got hundreds of employees around the globe 315 00:15:15,360 --> 00:15:18,640 Speaker 1: and we're starting to talk about re entry because we 316 00:15:18,840 --> 00:15:21,720 Speaker 1: value the cultural effect of being together and being in person, 317 00:15:21,800 --> 00:15:24,320 Speaker 1: and our clients value it. But what's clear is we 318 00:15:24,360 --> 00:15:26,880 Speaker 1: survey our employees and they value that. They want to 319 00:15:26,880 --> 00:15:29,840 Speaker 1: come back and be in person, but they want more flexibility. 320 00:15:29,880 --> 00:15:31,640 Speaker 1: They don't want to be in person as much as 321 00:15:31,640 --> 00:15:34,280 Speaker 1: they were, And I think employers are gonna have to 322 00:15:34,320 --> 00:15:37,000 Speaker 1: listen to that. I think there's gonna be some sort 323 00:15:37,000 --> 00:15:39,760 Speaker 1: of hybred and I think it's going to be unlikely 324 00:15:40,080 --> 00:15:42,440 Speaker 1: that we go back to the level of travel and 325 00:15:42,520 --> 00:15:44,880 Speaker 1: the level of in person meetings that we had pre pandemic. 326 00:15:44,880 --> 00:15:46,400 Speaker 1: All right, Rob, thanks so much for joining. So we 327 00:15:46,400 --> 00:15:50,720 Speaker 1: always appreciate getting your update market red hot. As Rob said, 328 00:15:50,720 --> 00:15:52,600 Speaker 1: he has never worked harder in his thirty year career. 329 00:15:52,640 --> 00:15:56,000 Speaker 1: That's really fascinating. Rob Round, Managing director and CEO of 330 00:15:56,040 --> 00:16:00,080 Speaker 1: North America for Lincoln Internationally. Getting an update on the 331 00:16:00,200 --> 00:16:05,640 Speaker 1: M and A market. Now, let's bring in Lauren Sour 332 00:16:06,080 --> 00:16:10,120 Speaker 1: She is an associate professor at Johns Hopkins University of 333 00:16:10,200 --> 00:16:13,920 Speaker 1: Emergency Medicine, to talk a little bit about the vaccine 334 00:16:13,960 --> 00:16:16,760 Speaker 1: or LOOT. We just got UM uh what we call 335 00:16:16,800 --> 00:16:20,680 Speaker 1: a red sticky headline here, Lauren, which means it's bright 336 00:16:20,720 --> 00:16:22,920 Speaker 1: red on your Bloomberg terminal and it stays there for 337 00:16:22,920 --> 00:16:25,800 Speaker 1: a little while because it's very important. The w h 338 00:16:25,880 --> 00:16:31,240 Speaker 1: O has approved emergency use of Sino farms COVID nineteen vaccine. 339 00:16:32,120 --> 00:16:36,800 Speaker 1: How much does this help UM? I think any vaccine 340 00:16:36,800 --> 00:16:40,840 Speaker 1: that has added helps. I think understanding the efficacy data 341 00:16:40,880 --> 00:16:43,240 Speaker 1: that we have so far is really important for every 342 00:16:43,320 --> 00:16:48,360 Speaker 1: vaccine that we bring on UM in the Sino farm situation. 343 00:16:48,480 --> 00:16:50,560 Speaker 1: I think looking at what's happening in the space shows 344 00:16:50,600 --> 00:16:52,480 Speaker 1: looking at a couple other places where we might be 345 00:16:52,520 --> 00:16:55,200 Speaker 1: seeing vaccine breakthrough. It's going to be really important over 346 00:16:55,200 --> 00:16:58,800 Speaker 1: the next few months. And then taking those data and understandings, 347 00:16:58,840 --> 00:17:00,680 Speaker 1: do we need to add booster is do we need 348 00:17:00,760 --> 00:17:03,200 Speaker 1: to get additional coverage for people who receive sign A 349 00:17:03,240 --> 00:17:06,280 Speaker 1: farm or is it, you know, equally as effective. Um, 350 00:17:06,320 --> 00:17:08,520 Speaker 1: and we can continue to move forward with it. But 351 00:17:08,640 --> 00:17:12,440 Speaker 1: any vaccine with with with efficacy is going to be 352 00:17:12,480 --> 00:17:18,920 Speaker 1: a valuable tool in our toolkit right now. So it's interesting. Uh. Yeah, 353 00:17:18,920 --> 00:17:20,919 Speaker 1: I'm just thinking about the Mets and the Yankees. They 354 00:17:20,960 --> 00:17:24,000 Speaker 1: are giving out shots to people that come to the game, 355 00:17:24,040 --> 00:17:25,600 Speaker 1: and I think it's gonna be the COVID one. I 356 00:17:25,640 --> 00:17:28,400 Speaker 1: mean the one shot J and J shot, And well 357 00:17:28,440 --> 00:17:32,280 Speaker 1: that's great. I'm thinking, isn't the COVID isn't that type 358 00:17:32,280 --> 00:17:36,560 Speaker 1: of supply better used in another market like India that 359 00:17:36,760 --> 00:17:40,159 Speaker 1: really really needs it? So I guess my question to you, 360 00:17:40,200 --> 00:17:43,560 Speaker 1: professor is just how do we think about dealing with 361 00:17:44,160 --> 00:17:47,159 Speaker 1: India and some of these other countries like Brazil and 362 00:17:47,440 --> 00:17:50,480 Speaker 1: other parts of Latin America that are just desperate need um. 363 00:17:50,520 --> 00:17:54,399 Speaker 1: It just seems like it's such a difficult problem. Yeah. Absolutely, 364 00:17:54,440 --> 00:17:57,160 Speaker 1: it is a difficult problem, and I think, um, anything 365 00:17:57,160 --> 00:17:59,680 Speaker 1: we can do to contribute to the global allocation of 366 00:17:59,760 --> 00:18:03,600 Speaker 1: that scenes is is something that we should be considering, 367 00:18:03,640 --> 00:18:06,520 Speaker 1: not just in the future once we're totally vaccinated but 368 00:18:06,640 --> 00:18:10,359 Speaker 1: right now, in the immediate present, sharing vaccines with the 369 00:18:10,400 --> 00:18:13,480 Speaker 1: world is good practice. UM, it's good, it's good safety 370 00:18:13,520 --> 00:18:15,520 Speaker 1: for US as a nation, and and it is good 371 00:18:15,520 --> 00:18:18,800 Speaker 1: diplomacy as well. But right now it's an important public 372 00:18:18,840 --> 00:18:21,560 Speaker 1: health problem that we should be contributing to. I mean, 373 00:18:21,840 --> 00:18:26,200 Speaker 1: I think Johnson Johnson has real utility in our own communities. 374 00:18:26,280 --> 00:18:28,639 Speaker 1: We have a lot of people who, um, we know 375 00:18:28,800 --> 00:18:31,800 Speaker 1: are not able to easily get two doses of vaccine, 376 00:18:31,840 --> 00:18:34,280 Speaker 1: who may not have the capacity to come back for 377 00:18:34,359 --> 00:18:36,800 Speaker 1: that follow up visit. So anything we can do to 378 00:18:36,880 --> 00:18:40,040 Speaker 1: get an effective vaccine into someone's arm is important here 379 00:18:40,080 --> 00:18:44,600 Speaker 1: and abroad UM in India, in places where they're having um, 380 00:18:44,760 --> 00:18:49,200 Speaker 1: these massive outbreaks UM and these crushing caseloads. It's it's 381 00:18:49,240 --> 00:18:52,200 Speaker 1: about getting the additional health care resources that they need 382 00:18:52,280 --> 00:18:55,879 Speaker 1: right in this immediate present. So um, you know, things 383 00:18:55,920 --> 00:18:59,280 Speaker 1: like oxygen, things like additional bed capacity, UM, maybe even 384 00:18:59,400 --> 00:19:02,439 Speaker 1: personnel to support the response there is going to be 385 00:19:02,480 --> 00:19:05,080 Speaker 1: what's important in saving lives right now. I think getting 386 00:19:05,160 --> 00:19:08,840 Speaker 1: vaccine to India is crucial. UM. Making sure that we're 387 00:19:08,880 --> 00:19:13,239 Speaker 1: vaccinating populations there while responding to this immediate disaster is 388 00:19:13,280 --> 00:19:16,520 Speaker 1: going to be very very important. But what their current 389 00:19:16,560 --> 00:19:18,880 Speaker 1: needs are are the ability to take care of their 390 00:19:18,920 --> 00:19:24,080 Speaker 1: crushing health care volumes. So having said that, I wonder 391 00:19:24,160 --> 00:19:28,280 Speaker 1: what your thought is on the i P debate right now. UM, 392 00:19:28,440 --> 00:19:32,520 Speaker 1: the Biden administration has suggested that it could wave i 393 00:19:32,680 --> 00:19:37,480 Speaker 1: P protections so that uh more producers could get these 394 00:19:37,600 --> 00:19:42,919 Speaker 1: vaccines out and ostensibly into arms. I'm Glamericle here in Germany, 395 00:19:42,960 --> 00:19:45,960 Speaker 1: on the other hand, has pushed back pushed back against that, 396 00:19:46,040 --> 00:19:48,840 Speaker 1: saying that the plan would create severe complications for the 397 00:19:48,880 --> 00:19:52,960 Speaker 1: production of vaccines, especially be a future pandemic. Drug makers 398 00:19:52,960 --> 00:19:55,919 Speaker 1: not want may not want to work as aggressively on 399 00:19:55,920 --> 00:20:00,000 Speaker 1: on on developing them. How do you feel about this? Yeah, 400 00:20:00,119 --> 00:20:02,600 Speaker 1: I have mixed feelings on the IP issue. I actually 401 00:20:02,600 --> 00:20:05,400 Speaker 1: don't think that i P is the number one biggest 402 00:20:05,440 --> 00:20:07,600 Speaker 1: barrier or even three or four or five of the 403 00:20:07,600 --> 00:20:11,440 Speaker 1: biggest barriers. UM. The i P piece is a very 404 00:20:11,520 --> 00:20:15,679 Speaker 1: specific part of um the efficacy you know, of getting 405 00:20:15,680 --> 00:20:19,320 Speaker 1: these vaccines into arms. And UM, I think a lot 406 00:20:19,400 --> 00:20:22,480 Speaker 1: of the vaccines are new technologies and so just turning 407 00:20:22,480 --> 00:20:25,400 Speaker 1: off the I T protections is not going to mean 408 00:20:25,520 --> 00:20:28,240 Speaker 1: that another vaccine maker or producer is going to be 409 00:20:28,280 --> 00:20:31,600 Speaker 1: able to just quickly flip the switch and and create 410 00:20:31,640 --> 00:20:35,280 Speaker 1: these vaccines. I think the bigger issue is UM scaling 411 00:20:35,359 --> 00:20:37,840 Speaker 1: up all the additional elements, looking for the people who 412 00:20:38,240 --> 00:20:42,199 Speaker 1: UM who can actually give the vaccines, making sure that 413 00:20:42,240 --> 00:20:45,280 Speaker 1: we have the populations to receive the vaccines. So I 414 00:20:45,280 --> 00:20:48,200 Speaker 1: think this is a little bit of a distracting conversation 415 00:20:48,320 --> 00:20:51,639 Speaker 1: right now, I don't think I think it's an important conversation. 416 00:20:51,680 --> 00:20:54,199 Speaker 1: But in the in sort of the emergency phase, I 417 00:20:54,200 --> 00:20:57,960 Speaker 1: think the bigger pieces how can we actually scale up vaccines, 418 00:20:58,000 --> 00:21:02,480 Speaker 1: sharing and production in ways that UM don't require you know, 419 00:21:02,600 --> 00:21:07,399 Speaker 1: lengthy core battles or massive amounts of international diplomacy to 420 00:21:07,400 --> 00:21:09,880 Speaker 1: get everyone on the same page. UM. We can make 421 00:21:09,880 --> 00:21:12,720 Speaker 1: production facilities more readily available. We can use the Defense 422 00:21:12,800 --> 00:21:15,800 Speaker 1: Production Act. UM. We can give the companies that are 423 00:21:15,800 --> 00:21:19,160 Speaker 1: already making the vaccines the resources to scale up UM 424 00:21:19,280 --> 00:21:22,080 Speaker 1: rather than just insisting that they share their their i 425 00:21:22,240 --> 00:21:25,960 Speaker 1: P and and release their their relax their patents. And 426 00:21:26,400 --> 00:21:30,199 Speaker 1: I think UM having that conversation and emergency can be 427 00:21:30,240 --> 00:21:34,240 Speaker 1: really risky because it can it can make companies hesitate 428 00:21:34,359 --> 00:21:37,280 Speaker 1: to put I P forward in a time where we 429 00:21:37,320 --> 00:21:41,439 Speaker 1: need it, you know, urgently, Lauren, in this country, what 430 00:21:41,520 --> 00:21:44,040 Speaker 1: are we seeing in terms of vaccine hesitancy. I know 431 00:21:44,119 --> 00:21:47,359 Speaker 1: that was a concern early on. What's the data actually 432 00:21:47,359 --> 00:21:53,520 Speaker 1: showing you? I think, UM, I think we're still making progress. 433 00:21:53,680 --> 00:21:57,040 Speaker 1: I think we've all seen you know that vaccine uptakes 434 00:21:57,040 --> 00:22:00,320 Speaker 1: slow down UM in the US. I think are our 435 00:22:00,359 --> 00:22:03,160 Speaker 1: focus is really gonna have to be to target these young, 436 00:22:03,280 --> 00:22:06,800 Speaker 1: healthy people who don't necessarily feel like they need vaccine 437 00:22:07,240 --> 00:22:09,160 Speaker 1: UM to go out and live their lives right now, 438 00:22:09,280 --> 00:22:12,040 Speaker 1: and and they are going to be at higher risk, 439 00:22:12,080 --> 00:22:15,840 Speaker 1: and they're also going to create additional risk for vulnerable populations, 440 00:22:15,920 --> 00:22:18,640 Speaker 1: and so that hesitancy has to be addressed readily so 441 00:22:18,680 --> 00:22:22,600 Speaker 1: that we can um really create that path to hurt 442 00:22:22,640 --> 00:22:25,800 Speaker 1: immunity and too UM good vaccine coverage that we know 443 00:22:25,880 --> 00:22:29,159 Speaker 1: will allow us a path out of the pandemic. I 444 00:22:29,200 --> 00:22:32,919 Speaker 1: also think that UM, when we're thinking about hesitancy, we 445 00:22:33,000 --> 00:22:35,480 Speaker 1: also have to couple it with access. And I sort 446 00:22:35,480 --> 00:22:37,399 Speaker 1: of feel like a broken record in this space. But 447 00:22:37,800 --> 00:22:40,840 Speaker 1: if we reduce someone's hesitancy and convince them to get 448 00:22:40,880 --> 00:22:43,679 Speaker 1: a vaccine, we have to make cash are ensure that 449 00:22:43,720 --> 00:22:46,119 Speaker 1: they have a direct path to that vaccine, because if 450 00:22:46,160 --> 00:22:49,080 Speaker 1: they have to then go looking for it, UM, we 451 00:22:49,160 --> 00:22:52,040 Speaker 1: might lose them again, and then that conversation door might 452 00:22:52,080 --> 00:22:55,359 Speaker 1: be closed. All right, Lauren, thanks very much for joining 453 00:22:55,440 --> 00:22:59,240 Speaker 1: us on this issue. Hopefully things getting better, but out 454 00:22:59,240 --> 00:23:02,639 Speaker 1: of here there are still m hurdles which we have 455 00:23:02,720 --> 00:23:06,320 Speaker 1: to overcome. Lawrence Sour is an associate professor of emergency 456 00:23:06,320 --> 00:23:12,240 Speaker 1: Medicine at the Johns Hopkins University. Now we have a 457 00:23:12,240 --> 00:23:15,000 Speaker 1: great new vertical. Do we call it a vertical? I'm 458 00:23:15,000 --> 00:23:17,000 Speaker 1: not always sure I'm using that work right, but I 459 00:23:17,040 --> 00:23:19,680 Speaker 1: think that's right in any case. Um, if you type 460 00:23:19,880 --> 00:23:23,679 Speaker 1: ni big take on your Bloomberg terminal, Um, we have 461 00:23:23,720 --> 00:23:28,840 Speaker 1: a fantastic new sort of cross platform big story UM 462 00:23:28,880 --> 00:23:32,439 Speaker 1: that we're all following today. The big take is about 463 00:23:32,560 --> 00:23:37,119 Speaker 1: Vancouver becoming, at least for now, the capital of anti 464 00:23:37,200 --> 00:23:40,800 Speaker 1: Asian hate crimes. It's it's a real problem. Joining us 465 00:23:41,320 --> 00:23:45,359 Speaker 1: for that is Natalie Obeko Pierce and she's Bloomberg Vancouver 466 00:23:45,520 --> 00:23:50,199 Speaker 1: Bureau chief. Um, so how did this happen? Natalie? Mean, 467 00:23:51,080 --> 00:23:54,080 Speaker 1: I wouldn't think of Canadians in this way? I guess 468 00:23:54,480 --> 00:23:58,160 Speaker 1: you know, I don't actually know that many Canadians. But um, 469 00:23:58,200 --> 00:24:02,040 Speaker 1: what's going on there that makes it so dangerous for Asians? Well, 470 00:24:02,080 --> 00:24:04,080 Speaker 1: You're absolutely right. I think it's actually going to come 471 00:24:04,119 --> 00:24:06,240 Speaker 1: as a shock to the city as well, because not 472 00:24:06,359 --> 00:24:08,639 Speaker 1: only is this Canada, but this is the most liberal 473 00:24:08,680 --> 00:24:12,760 Speaker 1: corner of Canada, supposedly the most progressive and multicultural. But 474 00:24:12,920 --> 00:24:16,360 Speaker 1: what's really happening here is, um, you know, like many places, 475 00:24:16,440 --> 00:24:19,280 Speaker 1: COVID was the trigger, but something had been going on 476 00:24:19,400 --> 00:24:22,840 Speaker 1: for decades before that. There had been a resentment attention 477 00:24:22,960 --> 00:24:27,160 Speaker 1: that was building in this city because few cities, I think, 478 00:24:27,200 --> 00:24:31,560 Speaker 1: have been so visibly and dramatically transformed by Asian immigration 479 00:24:31,880 --> 00:24:35,320 Speaker 1: as Vancouver has in recent decades. It went from being 480 00:24:35,359 --> 00:24:39,199 Speaker 1: this sort of struggling industrial backwater into this sort of 481 00:24:39,200 --> 00:24:44,880 Speaker 1: glittering cosmopolis of shiny condos and designer boutiques and supercars, 482 00:24:44,920 --> 00:24:49,720 Speaker 1: and that has created attention here. Um, I would say, 483 00:24:49,720 --> 00:24:54,880 Speaker 1: you know, an Asian traditionally perceived as like an immigrant underclass, 484 00:24:54,920 --> 00:24:59,280 Speaker 1: suddenly became perceived as these wealthy elites, like with like 485 00:24:59,440 --> 00:25:02,920 Speaker 1: rank orp inducing types of riches, and so I think 486 00:25:02,920 --> 00:25:05,800 Speaker 1: when COVID came along, it's sort of tipped tapped into 487 00:25:05,880 --> 00:25:09,480 Speaker 1: these underlying sentiments, and so that's why he's gotten this 488 00:25:09,560 --> 00:25:12,920 Speaker 1: huge spike. Yeah, So not only I'm glad you brought 489 00:25:12,920 --> 00:25:15,560 Speaker 1: that up because you know, the first time I've visited 490 00:25:15,640 --> 00:25:18,679 Speaker 1: Vancouver for business maybe years ago, I was shocked to 491 00:25:18,720 --> 00:25:21,600 Speaker 1: see how many agents were in fact in the city 492 00:25:21,640 --> 00:25:24,159 Speaker 1: and how well they seem assimilated. But was that just 493 00:25:24,520 --> 00:25:27,399 Speaker 1: the surface, and as you're suggesting, there are some some 494 00:25:27,520 --> 00:25:31,000 Speaker 1: tensions underneath that I've always been there, and I think 495 00:25:31,040 --> 00:25:33,840 Speaker 1: that's precisely it. I mean, visibly it is. It is 496 00:25:33,880 --> 00:25:36,960 Speaker 1: an incredibly multicultural place. I mean, there are parts of 497 00:25:36,960 --> 00:25:41,440 Speaker 1: the city, you know, where the ethnic Chinese component is 498 00:25:41,480 --> 00:25:44,320 Speaker 1: fifty four percent. There's sort of this running joke that 499 00:25:44,359 --> 00:25:46,120 Speaker 1: if you go south of the city to this place 500 00:25:46,160 --> 00:25:49,040 Speaker 1: called Richmond, it's like going to Hong Kong without having 501 00:25:49,080 --> 00:25:50,760 Speaker 1: to pay for the air fair. You know, you step 502 00:25:50,800 --> 00:25:53,199 Speaker 1: off the train and there's Asian signs everywhere. It's sort 503 00:25:53,240 --> 00:25:55,960 Speaker 1: of difficult to spot English on the store shop fronts. 504 00:25:56,280 --> 00:25:59,239 Speaker 1: The food is incredible, um but I think you know 505 00:25:59,359 --> 00:26:02,320 Speaker 1: that that that's sort of the good side of it. 506 00:26:02,359 --> 00:26:05,560 Speaker 1: But the flip side was that it really has changed 507 00:26:05,600 --> 00:26:08,679 Speaker 1: the demographics in the city over just probably two to 508 00:26:08,760 --> 00:26:12,199 Speaker 1: three decades UM and especially this sort of wealth that 509 00:26:12,400 --> 00:26:16,480 Speaker 1: came in. UM, it drove up housing prices. It it 510 00:26:16,600 --> 00:26:19,919 Speaker 1: sort of made the city unrecognizable to a lot of people. 511 00:26:21,920 --> 00:26:24,320 Speaker 1: So what can be done about it? I mean, especially 512 00:26:24,400 --> 00:26:27,720 Speaker 1: now that we are I guess a silver lining of 513 00:26:27,760 --> 00:26:31,600 Speaker 1: this pandemic, certainly in the US, has been that we've 514 00:26:31,640 --> 00:26:37,159 Speaker 1: shown a light on um, the the racism that in 515 00:26:37,240 --> 00:26:40,240 Speaker 1: this exists inherently institutional racism. And I guess it's not 516 00:26:40,280 --> 00:26:42,600 Speaker 1: really the pandemic as much as it has been the 517 00:26:42,680 --> 00:26:46,560 Speaker 1: killing of George Floyd. Um is that being mirrored in 518 00:26:46,640 --> 00:26:51,679 Speaker 1: Canada as well? Is this incredible concern for social justice grow? 519 00:26:51,760 --> 00:26:54,600 Speaker 1: Has it grown there as well? Yeah? I think you know, 520 00:26:54,680 --> 00:26:57,320 Speaker 1: this is actually I think a real cautionary tale because 521 00:26:57,520 --> 00:27:00,280 Speaker 1: I would say that, you know, Canadians are very like 522 00:27:00,400 --> 00:27:03,879 Speaker 1: sort of social justice. Um, it is very much front 523 00:27:03,880 --> 00:27:06,280 Speaker 1: and center and sort of Trudeau when he was when 524 00:27:06,320 --> 00:27:08,680 Speaker 1: when these reports were coming out of Vancouver last year, 525 00:27:08,720 --> 00:27:10,919 Speaker 1: was like, this is not Canada, Like, this is not 526 00:27:11,000 --> 00:27:14,040 Speaker 1: who we are and people will very publicly condemn it. 527 00:27:14,119 --> 00:27:15,800 Speaker 1: But if you kind of look at what happens in 528 00:27:15,840 --> 00:27:21,320 Speaker 1: this city, it's very much so. Um. The government policies 529 00:27:21,480 --> 00:27:25,199 Speaker 1: help and and the media here helped stoke these sentiments, 530 00:27:25,400 --> 00:27:29,040 Speaker 1: and you realize how easy it is for certain narratives 531 00:27:29,080 --> 00:27:32,840 Speaker 1: to take hold and to be fueled because of very 532 00:27:33,000 --> 00:27:36,800 Speaker 1: very tricky issues like a housing affordability crisis, which has 533 00:27:37,160 --> 00:27:39,560 Speaker 1: so many things playing into it. You know, it has 534 00:27:40,080 --> 00:27:43,919 Speaker 1: interest rates, and it has UH supply issues and all 535 00:27:43,960 --> 00:27:46,040 Speaker 1: the rest of it. And when you don't have an 536 00:27:46,080 --> 00:27:49,720 Speaker 1: easy answer, it's very easy to sort of turn to 537 00:27:49,880 --> 00:27:53,080 Speaker 1: escapegoat somebody something that can explain what's happening. I think 538 00:27:53,119 --> 00:27:55,560 Speaker 1: that's precisely what happened here, and so there's probably gonna 539 00:27:55,560 --> 00:27:57,399 Speaker 1: be I would say a fair amount of soul searching. 540 00:27:57,400 --> 00:28:01,600 Speaker 1: In fact, the Attorney General uh US recently apologized for 541 00:28:01,640 --> 00:28:04,159 Speaker 1: comments he had made in recent years in which he 542 00:28:04,240 --> 00:28:07,760 Speaker 1: sort of helped create this um sentiment, this sort of 543 00:28:07,800 --> 00:28:11,679 Speaker 1: anti Chinese money sentiment, and regrets sort of because some 544 00:28:11,760 --> 00:28:15,680 Speaker 1: of the things that he said. So Natalie was suggesting 545 00:28:15,720 --> 00:28:18,080 Speaker 1: that the COVID maybe you know, one of the catalysts here, 546 00:28:18,160 --> 00:28:21,040 Speaker 1: was that a byproduct of perhaps President Trump and his 547 00:28:21,320 --> 00:28:25,280 Speaker 1: characterization of the COVID, that the pandemic the virus as 548 00:28:25,359 --> 00:28:29,639 Speaker 1: that China virus. Was that some blowback there? Yeah, I 549 00:28:29,920 --> 00:28:32,639 Speaker 1: mean I think you know, one hand, Canadian sort of 550 00:28:32,640 --> 00:28:35,760 Speaker 1: looked at the U S under Trump, aghast and and 551 00:28:36,240 --> 00:28:38,280 Speaker 1: you know, cent ourselves at partents that we would never 552 00:28:38,400 --> 00:28:41,200 Speaker 1: call it the China virus. And yet I think there 553 00:28:41,240 --> 00:28:45,680 Speaker 1: were reasons geographically where people thought that we might be 554 00:28:45,720 --> 00:28:49,400 Speaker 1: particularly vulnerable to becoming an epicenter here, in part because 555 00:28:49,520 --> 00:28:53,800 Speaker 1: you know, the virus very early in was first spreading 556 00:28:53,960 --> 00:28:57,520 Speaker 1: beyond China, and we have the most international flights to 557 00:28:57,960 --> 00:29:01,520 Speaker 1: mainland China out of any airport in the Americas or Europe. 558 00:29:01,680 --> 00:29:04,280 Speaker 1: So just you know, not not a not a racist thing, 559 00:29:04,320 --> 00:29:07,600 Speaker 1: but just by purely geographic seeing people people wondering is 560 00:29:07,600 --> 00:29:09,840 Speaker 1: it going to be coming across and landing in Vancouver 561 00:29:09,880 --> 00:29:12,440 Speaker 1: because of all these flights, it hasn't been coming without 562 00:29:12,520 --> 00:29:15,840 Speaker 1: us realizing it. Uh. It actually turned out later if 563 00:29:15,880 --> 00:29:19,160 Speaker 1: you looked at the epidemiological studies that the variants that 564 00:29:19,240 --> 00:29:21,760 Speaker 1: spread here didn't come from that route. It was coming 565 00:29:21,800 --> 00:29:25,880 Speaker 1: from eastern Canada and Europe and from Washington State. But 566 00:29:26,080 --> 00:29:29,200 Speaker 1: that was sort of the sentiment. It's pretty amazing, I mean, 567 00:29:29,200 --> 00:29:33,160 Speaker 1: considering the virus did originate in Wuhan, China. It does 568 00:29:33,480 --> 00:29:36,120 Speaker 1: come from China, so the fact that it didn't spread 569 00:29:36,160 --> 00:29:41,120 Speaker 1: there when you have so many flights is is pretty interesting. Um. Nonetheless, 570 00:29:41,280 --> 00:29:44,680 Speaker 1: the issue remains that it could be one of those 571 00:29:44,720 --> 00:29:49,440 Speaker 1: things that stoked more anti Asian hate and more of 572 00:29:49,520 --> 00:29:53,160 Speaker 1: the crime. That's just even difficult to read about. Frankly, 573 00:29:53,640 --> 00:29:57,080 Speaker 1: in the story, Um, what kind of response have you gotten? 574 00:29:59,200 --> 00:30:02,040 Speaker 1: I think this is actually going to come as a shock, Like, 575 00:30:02,120 --> 00:30:04,680 Speaker 1: I don't think people it's been reported that their hate 576 00:30:04,680 --> 00:30:07,520 Speaker 1: crime incidents here's but nobody's yet put it in perspective 577 00:30:07,560 --> 00:30:09,840 Speaker 1: that we are actually the hate crime capital of the world. 578 00:30:09,880 --> 00:30:12,720 Speaker 1: So I'm expecting the response later today when people wake 579 00:30:12,840 --> 00:30:15,920 Speaker 1: up to read it. That's right, all right, Natalie, thank 580 00:30:15,920 --> 00:30:18,400 Speaker 1: you so much for coming on and sharing this story 581 00:30:18,520 --> 00:30:22,360 Speaker 1: with us. Natalie Obigo Pearson, she's the Vancouver bureau chief 582 00:30:22,360 --> 00:30:24,880 Speaker 1: for Bloomberg News, out with a fascinating story here today, 583 00:30:25,400 --> 00:30:30,360 Speaker 1: a Bloomberg Big Take story entitled Vancouver becomes Capital of 584 00:30:30,440 --> 00:30:33,240 Speaker 1: anti Asian hate crimes. Uh. You know, obviously that is 585 00:30:33,320 --> 00:30:36,680 Speaker 1: a big issue here in the United States. But again, 586 00:30:36,720 --> 00:30:41,280 Speaker 1: as we see from Natalie's reporting from Vancouver, Vancouver is 587 00:30:41,600 --> 00:30:45,800 Speaker 1: a very has a very big Asian population, has for 588 00:30:45,880 --> 00:30:48,160 Speaker 1: some time now when they're starting to see uh, some 589 00:30:48,240 --> 00:30:51,480 Speaker 1: significant rising hate crimes there. So Natalie details that in 590 00:30:51,600 --> 00:30:54,280 Speaker 1: her very well reported story. We recommend you take a 591 00:30:54,320 --> 00:30:57,000 Speaker 1: look at that on Bloomberg dot com. Thanks for listening 592 00:30:57,040 --> 00:31:00,320 Speaker 1: to the Bloomberg Markets podcast. You can subscribe. I've been 593 00:31:00,360 --> 00:31:04,360 Speaker 1: listening to interviews with Apple Podcasts or whatever podcast platform 594 00:31:04,400 --> 00:31:07,680 Speaker 1: you prefer. I'm Matt Miller. I'm on Twitter at Matt 595 00:31:07,760 --> 00:31:11,280 Speaker 1: Miller three. Put on fall Sweeney. I'm on Twitter at 596 00:31:11,280 --> 00:31:14,160 Speaker 1: pt Sweeney before the podcast. You can always catch us 597 00:31:14,200 --> 00:31:15,600 Speaker 1: worldwide at Bloomberg Radio.