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Speaker 1: As Democrats be a power in the republicist President Trump

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Speaker 1: was secure to smash conventional norms. I would rather see

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Speaker 1: congresstional solution pitched part of my DNA. This is Bloomberg

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Speaker 1: Sound On on Bloomberg two. I'm Kevin Cirelli, Chief Washington

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Speaker 1: correspondent for Bloomberg Television and Bloomberg Radio. And we've got

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Speaker 1: a lot to get through the guidelines for reopening the economy.

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Speaker 1: What's the barometer. We're gonna get a firsthand account, and

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Speaker 1: we're gonna kick things off with Justin Sink, who's a

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Speaker 1: Bloomberg White House reporter. And then we're gonna touch on

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Speaker 1: oil with Vincent g. Piazza, who's Bloomberg Intelligence Oil and

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Speaker 1: Guests senior analyst. You gotta catch up with Vincent. He's

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Speaker 1: our go to energy sector guru. Especially, I can't get

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Speaker 1: enough of this story story since oil plunged below zero

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Speaker 1: for the first time, the first time in an unprecedented wipeout.

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Speaker 1: But we kick things off with Justin Uh. The White

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Speaker 1: House has ordered federal agencies justin to begin preparing to

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Speaker 1: return workers to offices, telling them to align their coronavirus

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Speaker 1: reopening plans with those of the states and municipalities where

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Speaker 1: they are located. I think this is interesting because that's

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Speaker 1: a giant step in the reopening direction, and especially for

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Speaker 1: a city like Washington, d C, which is doesn't such

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Speaker 1: an industry driven town based upon politics and federal workers

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Speaker 1: on not just in Congress, not just the White House,

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Speaker 1: but obviously defense contractors and whatnot. This is a massive deal.

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Speaker 1: And and and and justin I want to read for

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Speaker 1: you the statement not from the President but from Russ Vaught.

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Speaker 1: And everyone in town knows who Russ Vaught is, the

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Speaker 1: Office of Management and Budget Director. He wrote in a

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Speaker 1: memo that they distributed to the heads of federal departments

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Speaker 1: and agencies the followings. In partnership with state, local, tribal,

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Speaker 1: and territory a real governments, and the private sector, the

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Speaker 1: federal government is actively planning to ramp back up government

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Speaker 1: operations to the maximum extent possible as local conditions. Warrant

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Speaker 1: agencies are encouraged to allow federal employees and contractors to

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Speaker 1: return to the office in low risk areas. Justin stink,

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Speaker 1: Is Washington, d C a low risk area? Yeah? So

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Speaker 1: obviously I think DC is not quite ready to reopen itself.

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Speaker 1: Mayor Bowser here in the city is said that she's

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Speaker 1: going to reevaluate on May fifteenth, where the city is at.

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Speaker 1: And so it's unlikely that we're gonna see federal workers

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Speaker 1: returning to their desks, you know, in the next week

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Speaker 1: or two. That being said, you know, you're right, this

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Speaker 1: DC is definitely a company town and it's going to

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Speaker 1: have a huge impact here in Washington, But more than

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Speaker 1: three quarters of the federal workforce is not in the Washington,

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Speaker 1: d c. Area, and you know, they're spreading offices and

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Speaker 1: bureaus all across the country. And so I think with

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Speaker 1: the really sort of represented was an effort by the President,

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Speaker 1: by the White House, who have obviously been eager to

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Speaker 1: reopen the economy of the signal that the federal workers

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Speaker 1: are going to be part of this first wave of

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Speaker 1: workers going back. And we're already seen today the governor

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Speaker 1: of Georgia announcing his steps to push forward with the reopening.

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Speaker 1: We know that there's some other governors who want to

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Speaker 1: start the sort of at least month long three phase

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Speaker 1: uh process at the White House laid out last week,

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Speaker 1: and so this is part of that push, you know,

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Speaker 1: and my and my show prep I underlined this. Justin

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Speaker 1: reporting on this has been ahead of folks, So Justin's

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Speaker 1: our White House reporter, but I I wanted to highlight it.

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Speaker 1: But I can't find anything. I've been cleaning my place

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Speaker 1: and I can't find anyway. But under the reopening I

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Speaker 1: know exactly, and I've locked myself out of my place

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Speaker 1: like twice during this pandemic. Enough of that. Under the

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Speaker 1: reopening guidelines, the White House issued, states can begin the

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Speaker 1: first phase of returning to normal economic and social life

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Speaker 1: after they record a decline in coronavirus cases for two

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Speaker 1: weeks and determined that their hospitals are prepared for a

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Speaker 1: potential rebound. So that's so important. So if you're tracking

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Speaker 1: the numbers every morning, like like all of us have

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Speaker 1: been doing in this, you're looking for a decline in

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Speaker 1: coronavirus cases for two weeks, and then federal agencies can

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Speaker 1: then lift their mandatory work from home requirements. But workers

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Speaker 1: who are able to perform their duties remotely as obviously,

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Speaker 1: are going to be encouraged to do so. So a

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Speaker 1: two week is that that's the magic math, I guess, Justin. Yeah,

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Speaker 1: Although so it's it's not only a decline in case cases,

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Speaker 1: but also that second component, which is that the city

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Speaker 1: or the local government feels like they've got the capacity

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Speaker 1: in case, uh, you know, coronavirus case or or a

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Speaker 1: group of cases explodes that they can both um make

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Speaker 1: sure that everybody that needs a hospital bed, needs intensive

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Speaker 1: care can can get that air in a in a

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Speaker 1: safe way, not in a sort of field hospital type

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Speaker 1: situation like we saw in New York during the height

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Speaker 1: of the crisis. And then you know, secondly that the

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Speaker 1: state feels like they can appropriately conduct contact tracing, so

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Speaker 1: anybody who came into touch or or was around somebody

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Speaker 1: who ended up getting the virus would be notified coming

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Speaker 1: for testing, UM to to sort of keep this from

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Speaker 1: from spreading out in the way that we saw early

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Speaker 1: in the crisis. So that that's the first two week period,

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Speaker 1: and it's each phase. Each of the three phases requires

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Speaker 1: sort of maintaining those conditions for another two weeks, and

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Speaker 1: so the ramp up that the federal government's envisioning is

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Speaker 1: pretty gradual and would only happen over um kind of

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Speaker 1: a month long timeline in the best possible case scenario.

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Speaker 1: You know, I kind of like it. I mean, this

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Speaker 1: makes sense. To me, folks that it's all we're all

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Speaker 1: in this together, and not not in the economic sense,

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Speaker 1: but in the sense of if we respect the social

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Speaker 1: distancing guidelines, even as their dually lifted, then we get

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Speaker 1: more and more of the because the social distancing works,

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Speaker 1: so then we get more and more back quickly if

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Speaker 1: if we continue to respect the easing of them. But

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Speaker 1: in a in a city like d C, I think

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Speaker 1: it's it's tough. I mean, good Luck Hogan, good Luck Bowser,

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Speaker 1: Governor Hogan, Mayor Bowser because of the the boundary lead,

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Speaker 1: the geographic boundary lines. So the Mayor Bowser, I mean,

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Speaker 1: has been working with the administration and government of federal

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Speaker 1: government officials just given the proximity to everything. But that

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Speaker 1: is a complex issue, is it not just him? Yeah,

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Speaker 1: And I think that there's a real tension that still

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Speaker 1: exists here right So everybody, I feel it is eager

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Speaker 1: to get back to work. Everybody wants to get back

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Speaker 1: to normal as quickly as possible. But the real kind

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Speaker 1: of concern and something that governors and Mayor Bowser and

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Speaker 1: others have voiced, even though they say generally working with

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Speaker 1: the settle government has gone fairly well in terms of

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Speaker 1: the distribution of of ventilators or pp or that sort

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Speaker 1: of stuff, is we're not sure that the testing platform

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Speaker 1: is online and available in the way that it needs

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Speaker 1: to be right now, so that if somebody, you know,

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Speaker 1: if there are these flare ups as we start to

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Speaker 1: open back up, that everybody can be tested. And secondly,

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Speaker 1: the idea of doing contact tracing, which is, you know,

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Speaker 1: you get sick, you create a list of everybody who

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Speaker 1: you came in touch with, and then somebody from the

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Speaker 1: government call all them and says, hey, you need to

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Speaker 1: come in for a test. Johns Hopkins says that that

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Speaker 1: could they could need a hundred thousand workers to sort

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Speaker 1: of do that in a in a comprehensive way on

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Speaker 1: a nationwide level. And that's going to be especially true

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Speaker 1: in cities like DC, like New York, where you know,

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Speaker 1: you interact with tons of people on a metro train

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Speaker 1: coming in and out of work, at a restaurant or

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Speaker 1: a bar that you might go to, in an open

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Speaker 1: plan office where you see people all day. And so

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Speaker 1: you know, while I think we're gonna see some of

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Speaker 1: the more rural states, some of the more spread out

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Speaker 1: areas places where the virus hasn't kicked up be able

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Speaker 1: to start moving towards the openings. There's a real question

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Speaker 1: of whether the infrastructure exists yet and how long it's

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Speaker 1: gonna take for especially for cities, and especially for a

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Speaker 1: federal city like DC. Alright, good stuff. Justin. By the way,

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Speaker 1: I was on my one of my daily walks, I

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Speaker 1: went to Ted's bulletin how to get a pop start,

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Speaker 1: how to get a cup of coffee This morning, after

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Speaker 1: I got all fair, guess what I saw? Justin? I

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Speaker 1: saw someone with the Philadelphia Eagles mask on. It was

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Speaker 1: a sign. It was a beautiful day. There was no

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Speaker 1: wind for the first time and ever it felt like

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Speaker 1: the wind calmed down, and I thought, you know what,

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Speaker 1: maybe a glimmer of hope. The eagles have landed on

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Speaker 1: a mask in the nation's capital. I'm Kevin SI. Really

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Speaker 1: much more on the energy sector coming up. You can

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Speaker 1: download the Bloomberg som On podcast on applelichians, Bloomberg dot

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Speaker 1: com or by download to the Bloomberg Business app. This

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Speaker 1: is Bloomberg's sound On with Kevin on Bloomberg and one

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Speaker 1: or five point two. I'm Kevin Sireley, Chief Washington correspondent

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Speaker 1: for Bloomberg Television of Bloomberg Radio, and I'm just trying

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Speaker 1: to get a Philadelphia Eagle's face mask for when I

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Speaker 1: go to the grocery store. If you can tell me

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Speaker 1: where I can get a Philadelphia Eagles face mask, I

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Speaker 1: will wear it. I will wear it down by the stadium.

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Speaker 1: I will wear it down by the wharf, because that's

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Speaker 1: in a weird way gonna help me want to wear

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Speaker 1: a mask that I say too much. Oil plunged below

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Speaker 1: zero for the first time and unprecedented white the unprecedented,

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Speaker 1: I'm reading from the Bloomberg terminal. Of all of the wild,

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Speaker 1: unprecedented swings in financial markets since the coronavirus pandemic broke out,

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Speaker 1: none has been more jaw dropping than Monday's collapse in

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Speaker 1: a key segment of US oil trading. Joining me on

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Speaker 1: the telephone line is our go to energy guru, Vincent g. Piazza,

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Speaker 1: Bloomberg Intelligence Oil and Gas senior analyst, Vincent. What happened today? Well,

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Speaker 1: you have the double shocked, Kevin of both demand degradation

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Speaker 1: and SEV your demand degradation along with continuing elevated production

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Speaker 1: from the US so UM. What we're tracking here is

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Speaker 1: storage capacity, and we're filling storage extremely quickly here in

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Speaker 1: the US, so we are now roughly seventy seven seventy

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Speaker 1: filled on storage UM, and we still have an abundance

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Speaker 1: of production coming through. Because of the way the US

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Speaker 1: production operates, it will take some time for that to

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Speaker 1: come on off given the severe production the capex cuts

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Speaker 1: to rein in production, so we'll likely continue to build

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Speaker 1: out on storage. From what we discussed over the last

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Speaker 1: month or so, we think we roughly have anywhere between

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Speaker 1: three or four months left given the pace of production

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Speaker 1: and the pace of builds, so we could be filled

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Speaker 1: somewhere around June UM. But it is a severe uh

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Speaker 1: significant issue because of this double shock of severe demand

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Speaker 1: degradation and also ongoing production. So you know, I got

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Speaker 1: I got some family members who know a thing or

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Speaker 1: two about refineries, and I mean they were explaining it

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Speaker 1: to me this way. So there's too much unused oil.

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Speaker 1: They've got nowhere to store it, I mean, and they

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Speaker 1: explained it pretty good in the on the terminal. With

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Speaker 1: the pandemic bringing the economy to a standstill, there is

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Speaker 1: so much unused oil slashing around that American energy companies

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Speaker 1: have run out of room to store it a k A.

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Speaker 1: If you have too much can't like I rent if

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Speaker 1: you if your pandemic shopped and you bought too many

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Speaker 1: can goods and you're shoving them in your cabinet somewhere

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Speaker 1: you got no place to put anything? Is that? Is that?

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Speaker 1: Is that? Is that? What's happening? Yeah? I mean we

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Speaker 1: basically have such a severe degradation in demand, you know,

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Speaker 1: think about it. Um, gasoline usage down, diesel usage down,

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Speaker 1: jet fuel usage down. And of the twenty some odd

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Speaker 1: million barrels a day that we consume as an economy,

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Speaker 1: you roughly have somewhere between two thirds seventy of that

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Speaker 1: transportation focused. So if no one's going anywhere, if no

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Speaker 1: one's delivering anything to anyone, and no one's flying anywhere, Um,

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Speaker 1: that those barrels have to find a home. Those crude

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Speaker 1: barrels have to find a home, and they're rushing into

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Speaker 1: storage quite quickly, and we're filling up rather quickly. Let

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Speaker 1: me say something. We all want the oil chart. We all,

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Speaker 1: I'm sorry, we all want the COVID nineteen chart, the

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Speaker 1: flatten the curve chart. Thing. We want it to look

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Speaker 1: like the chart that happened today with the oil because

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Speaker 1: it just goes. That's talking about flattening the curve. There

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Speaker 1: is no more curl. What does it mean? So that's

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Speaker 1: what's actually going on on the policy standpoint, Vincent. What

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Speaker 1: does that mean in terms of the in terms of

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Speaker 1: three months out, six months, OULD, nine months OULD for

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Speaker 1: geopolitics and domestic politics. Well, we need to reopen this economy, UM,

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Speaker 1: and the faster we can flatten that curve, the faster

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Speaker 1: we can open in phases, UH, this economy and also

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Speaker 1: the global economy because crude and the various refined products

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Speaker 1: from crude our global seaborne commodities that travel. So we

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Speaker 1: need the global economy to open up. We need people

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Speaker 1: to get back on the road. We need people to

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Speaker 1: get back in the air and and truckers to get

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Speaker 1: back on the road as well, to reopen this economy

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Speaker 1: and to generate additional demand and bring back some some

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Speaker 1: demand for these services, for these transportation services. So, I mean,

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Speaker 1: last week we had the Energy Secretary on and UH

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Speaker 1: Secretary Roulette, and you know they had that OPEC plus

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Speaker 1: deal about a week ago. I believe, I mean, but

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Speaker 1: I guess I guess that was really that didn't really

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Speaker 1: do anything. So What it really does is it delays

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Speaker 1: the inevitable. Um, you roughly took off nine point seven

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Speaker 1: million barrels of production, but the demand side overwhelms the

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Speaker 1: amount you've taken off in production. Global storage capacity is

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Speaker 1: also quite significant. UM. It's running about three four months

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Speaker 1: until they hit storage capacity as well. So it's the

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Speaker 1: same issue globally as we're seeing here in the US

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Speaker 1: where capacity is filling. Storage is filling up pretty quickly

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Speaker 1: and coming close to full capacity. Okay, so here's a

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Speaker 1: very political question for you. Come November, we'll get what

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Speaker 1: will the price of gas be? Well? Are we talking

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Speaker 1: gasoline or natural gas? I guess for Americans, for Americans

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Speaker 1: paying at the pump to fill up their tank in

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Speaker 1: their cars, is it going to be cheaper? Is it

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Speaker 1: going to be expensive come election day? Um? I think

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Speaker 1: it will because this issue won't go away very quickly.

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Speaker 1: It will be relatively inexpensive compared history in other elections.

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Speaker 1: So that's what's so weird about this is that this

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Speaker 1: isn't necessarily a good economic development that we're discussing with

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Speaker 1: the Vincent Piazza or Bloomberg in tell oil and gas

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Speaker 1: sing analysts, But politically, come November. If if gas is cheap,

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Speaker 1: it's bad for the President's donors, but it could be

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Speaker 1: weirdly good for his voters, if you hear what I'm saying, Vincent. Yeah, absolutely.

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Speaker 1: I mean, look, people have to get on the road

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Speaker 1: and they have to fill up their tanks, and if

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Speaker 1: they can fill it up UM more cheaply UH in

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Speaker 1: in four Q it will make a big impact on

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Speaker 1: their wallet, especially if we're still dealing with UH some

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Speaker 1: of these potentially phased reopening of the economy. Is there

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Speaker 1: anything that Congress or the administration or can Is there

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Speaker 1: anything that the administration can negotiate with OPEC plus uh

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Speaker 1: TO to to address this or that Congress can do

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Speaker 1: to address this? Well, I think there was a request

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Speaker 1: not long ago to help the e MP companies as

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Speaker 1: well with some type of bailout similar to what was

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Speaker 1: experienced by the airlines, and I think that was resoundingly rejected. UM.

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Speaker 1: You know, the energy the energy business does still have

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Speaker 1: a black eye, right. It's not exactly um the one

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Speaker 1: business that UM Democrats favor, but look, you know we

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Speaker 1: the industry employs significant personnel in key states across the country. Ohio, Pennsylvania,

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Speaker 1: battle other states, battleground states, and and there's also a

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Speaker 1: knock on effect to we're gonna have to leave it.

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Speaker 1: They're much more coming up next. I'm Kevin Cirelli che

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Speaker 1: Corps for Bloomberg TV. You're listening to Bloomberg Sound On

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Speaker 1: with Kevin Surrele on Bloomberg and one or five point

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Speaker 1: seven f M H D two. I gotta be honest,

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Speaker 1: I really maybe I shouldn't say this, but I am

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Speaker 1: so great and filled with so much gratitude that that

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Speaker 1: wind died down last week. You could not step outside

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Speaker 1: without getting whacked by augusta wind. I mean, it was insane.

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Speaker 1: Matt Brooks is on the line. Here's someone who I

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Speaker 1: know would get a Philadelphia Eagles face mask if he

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Speaker 1: could get his hands on one. Matt Brooks is a

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Speaker 1: good friend of the program. Uh and of course he's

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Speaker 1: also the the guy at the Republican Jewish Coalition. UH,

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Speaker 1: and we're appreciative to have him on. Have you been

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Speaker 1: able to find a Philadelphia Eagles face mask? Oh, I've

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Speaker 1: got I've got face masks, pajamas, sweatpants, sweatshirt hats. What

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Speaker 1: do you need? Well, I could use a Philadelphia Eagles,

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Speaker 1: uh face mask for when I go to get my

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Speaker 1: coffee every morning. Done, all right, I appreciate that. Look

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Speaker 1: at that. I'm gonna listen. That's not that's not on ethical,

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Speaker 1: that's just you know. There it's a Philadelphia Eagles. Even

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Speaker 1: though we're were in Washington, were allowed to you know. Uh,

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Speaker 1: you know, I'll make my own. How about I'm gonna

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Speaker 1: I'm gonna correct the record right now so I don't

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Speaker 1: get myself in trouble. I if you send me week

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Speaker 1: this is the story of my life. I dig myself

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Speaker 1: a deeper hole, a deeper ditch every single day. My friend, Okay,

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Speaker 1: there is some breakaware. Oh wait, let's look in the

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Speaker 1: video chat and let's see it's it's on a delay,

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Speaker 1: but there it is. Yeah. She's rolling her eyes. She's like,

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Speaker 1: walk it back, keV, walk it back. Um, what I

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Speaker 1: want to ask you about? Uh? The Map Brooks, Republican

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Speaker 1: strategist and executive director of the Republican Jewish Coalition, headlines

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Speaker 1: crossing on the Bloomberg terminal. Uh literally as we speak

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Speaker 1: about the new developments in Israel and their government. Uh.

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Speaker 1: And just to read it, Net and Yahoo seals power

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Speaker 1: share deal with rival to tackle virus is rarely Prime

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Speaker 1: Minister Benjamin Neton Yahoo and rival Bennigans have reached an

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Speaker 1: agreement to share power and provide emergency cover for an

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Speaker 1: economy pummeled by the coronavirus and a health system pushing

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Speaker 1: its limits. What is this for geopolitics in the Middle East? Well,

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Speaker 1: I think it you know, it takes some uncertainty and

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Speaker 1: and moves it to to some certain I think everybody

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Speaker 1: in the region. Look, it took a global pandemic for

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Speaker 1: Israel to get out of this, this spiral of you know,

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Speaker 1: election after election after election. Uh, and and had this

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Speaker 1: not happened, I think there was a good chance they

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Speaker 1: were they were going to a fourth election. Uh. That's

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Speaker 1: no way to run a country, and it's certainly no

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Speaker 1: way to run a country in the middle of an

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Speaker 1: international global crisis like we're like we're seeing today. And

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Speaker 1: so this was a good catalyst U. Current Prime Minister

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Speaker 1: Benjamin Netan Yahoo will serve eighteen months and continuing his

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Speaker 1: role for the next eighteen months, uh with Benny gant

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Speaker 1: Uh in the minority. And then in eighteen months they

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Speaker 1: will they will switch and Gainst will become the prime minister.

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Speaker 1: So they've established a power sharing arrangement. Uh. And I

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Speaker 1: think that's uh. I think that's good on many many fronts.

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Speaker 1: So it's it's good to have, you know, a leadership

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Speaker 1: team in place and and Israel to be able to

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Speaker 1: get out of this circle of repeated elections and and

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Speaker 1: bring some stability to the government. All right, let's bring

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Speaker 1: it back home now as the small business administration has

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Speaker 1: been wrapped up, and the congressional back and forth, the

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Speaker 1: left and the right, the end fighting. I spoke with

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Speaker 1: Congressman uh Gottheimer uh earlier today. He's a Democrat from

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Speaker 1: New Jersey, Northern Jersey, and he was enraged. I mean,

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Speaker 1: and listen, I don't think it's fake. I've interviewed Republicans

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Speaker 1: and Democrats over the weekend and this morning, and just

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Speaker 1: my my general sense is the rank and file members

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Speaker 1: are enraged at at leadership on both sides that this

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Speaker 1: has not been handled. Then do you get this report

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Speaker 1: about shake shack? Matt, did you hear about this both sides?

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Speaker 1: Do you mean yeah? But by both sides do you

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Speaker 1: mean House and send it or you mean leadership of

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Speaker 1: Republicans and Democrats? Leadership of Republicans and Democrats. I think

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Speaker 1: that's a little misplaced. I think the you know, the

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Speaker 1: the the PPP funds ran out on Thursday. Leader McConnell

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Speaker 1: is ready willing and able to bring a vote to

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Speaker 1: replenish those funds any day now. They're going to be

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Speaker 1: in proformer session tomorrow. And it's it's Schumer and Pelosi

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Speaker 1: that are that are basically putting uh small businesses out

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Speaker 1: of business uh and ruining people's lives by trying to

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Speaker 1: use this as a way to leverage their own policy agenda. Well, okay,

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Speaker 1: so that I hear you on that, and just to

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Speaker 1: I mean, in full disclosure, when I talked to Democrats,

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Speaker 1: they say, you know, they gotta you gotta fund municipalities

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Speaker 1: and state workers and whatnot. I want to cut through

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Speaker 1: the partisanship right now, because you're a straight shooter and

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Speaker 1: this is insane that this hasn't gotten done and that

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Speaker 1: this hasn't been And Congressman Godheimer said this to me

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Speaker 1: earlier today on Bloomberg Television. I mean the notion that

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Speaker 1: companies like shake Shack are having to return ten million

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Speaker 1: dollars in emergency loans to the US government because journalism

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Speaker 1: called them out on it. It's these either these loans

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Speaker 1: are for big businesses or there for main street, and

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Speaker 1: that's got to be secuted flawlessly. Am I right? No,

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Speaker 1: even under perfect conditions with lots of lead time, ramping

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Speaker 1: up a program of this magnitude is a perculean task

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Speaker 1: to to take what they've done, the amount of money

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Speaker 1: that they have they have tried to inject in the

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Speaker 1: system and do it in a matter of days and

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Speaker 1: weeks as opposed to months and years. Is Uh, it's

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Speaker 1: impressive they've gotten this, but but they need to get

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Speaker 1: the system right. And I think you know that is

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Speaker 1: that is first and foremost. You see the state of

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Speaker 1: the shakes. The shake shack uh cases a perfect example,

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Speaker 1: But there's just others that are just so grossly out

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Speaker 1: of whack. You know, Uh, Harvard University getting money when

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Speaker 1: they have a forty billion dollar endowment. Uh, I mean,

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Speaker 1: that's just wrong. When the guy at the local Hogi shop,

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Speaker 1: UH business going