WEBVTT - Wall Street Has Failed People of Color, Despite Pledges 0:00:01.400 --> 0:00:04.120 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, along 0:00:04.160 --> 0:00:06.240 with my co host of Bonnie Quinn. Every business day 0:00:06.240 --> 0:00:10.400 we bring you interviews from CEOs, market pros, and Bloomberg experts, 0:00:10.400 --> 0:00:13.600 along with essential market moving news. Kind the Bloomberg Markets 0:00:13.600 --> 0:00:17.000 Podcast on Apple Podcasts or wherever you listen to podcasts, 0:00:17.000 --> 0:00:22.200 and on Bloomberg dot com. Here's this, Just a tremendous 0:00:22.239 --> 0:00:24.639 story out on the Bloomberg terminal. Black and white on 0:00:24.680 --> 0:00:28.080 Wall Street, The unwritten code on race. Here. I'm just 0:00:28.080 --> 0:00:30.320 gonna start a couple of things here. Here are thirteen 0:00:30.400 --> 0:00:33.720 unwritten rules about being black on Wall Street, according to 0:00:33.720 --> 0:00:35.320 people who've lived in I'll just give you a couple. 0:00:35.880 --> 0:00:38.680 Never forget. This is number one. Never forget, despite all 0:00:38.720 --> 0:00:42.000 those promises about diversity, only about one percent of senior 0:00:42.040 --> 0:00:45.480 management is black. Number two. Be careful about pointing that 0:00:45.520 --> 0:00:49.000 out to mostly white, mostly male trading desk. At number three, 0:00:49.080 --> 0:00:52.600 get used to hearing about the supposed lack of qualified 0:00:52.800 --> 0:00:56.040 black applicants. So just a powerful, powerful start to a 0:00:56.080 --> 0:01:00.760 powerful story. Michelle Davis Bloomberg Finance Reported joins us. So Michelle, 0:01:00.760 --> 0:01:02.480 give us some of the key takeaway, some of the 0:01:02.600 --> 0:01:04.800 boy the way you started this article is very powerful 0:01:04.800 --> 0:01:08.080 with these thirteen unwritten rules. What kind of your key 0:01:08.160 --> 0:01:13.200 takeaways here? Thanks? So, you know, Wall Street, much like 0:01:13.319 --> 0:01:16.080 the rest of corporate America and the nation, is basing 0:01:16.120 --> 0:01:19.200 this huge reckoning over race right now, um, in the 0:01:19.200 --> 0:01:21.720 wake of you know, the killing of George Floyd and 0:01:21.720 --> 0:01:25.440 and for years decades, while Sterns been promising to confront 0:01:25.440 --> 0:01:28.480 some of these failures, um, and right now, lots of 0:01:28.480 --> 0:01:30.720 the banks are you know, has been hosting town halls 0:01:30.880 --> 0:01:34.440 about racism, asking workers to you know, weigh in and 0:01:34.480 --> 0:01:38.160 share their experiences. But after talking to dozens of boff 0:01:38.200 --> 0:01:42.360 workers across Wall Street, UM, what I you know heard 0:01:42.440 --> 0:01:44.759 from people is that while many are are hurtened by 0:01:44.760 --> 0:01:47.720 the fact that there are these open conversations happening right now, 0:01:47.760 --> 0:01:50.720 it's clear that Wall Street really has failed it's people 0:01:50.760 --> 0:01:53.720 of color, and there's a lot of skepticism that that 0:01:53.840 --> 0:01:56.840 any of the conversations are are you going to result 0:01:56.880 --> 0:01:59.800 in real change people. People are skeptical that, you know, 0:01:59.840 --> 0:02:04.960 the just bro white bro culture is gonna change because 0:02:04.960 --> 0:02:07.200 it's it's hard to appear. And let's point out that 0:02:07.240 --> 0:02:09.600 it's difficult to have open conversations at work a lot 0:02:09.639 --> 0:02:12.480 of the time, just in general. So this would be 0:02:12.520 --> 0:02:16.960 a very very difficult conversation to have openly. Michelle, any 0:02:17.000 --> 0:02:20.240 idea what the delay is why it's taking so long 0:02:20.440 --> 0:02:23.720 for Wall Street to up its ranks of black people 0:02:23.919 --> 0:02:27.240 in executive chairs, in C suites and even just among 0:02:27.320 --> 0:02:29.799 rank and file. It's not as if there really isn't 0:02:30.400 --> 0:02:35.720 enough of a pipeline. There are plenty of historically black colleges. 0:02:35.840 --> 0:02:39.160 There are plenty of candidates out there. What's Wall Streets excuse? 0:02:40.680 --> 0:02:45.400 So workers that I talked to described having to abide 0:02:45.520 --> 0:02:49.720 by unwritten rules, like you know, measuring their passion and 0:02:49.760 --> 0:02:55.040 their directness. Um. They described double standards on pay or 0:02:55.120 --> 0:02:57.600 you know, having to code switch, which if you don't know, 0:02:57.760 --> 0:03:00.360 is the practice of you know, interacting and differ ways 0:03:00.360 --> 0:03:03.960 depending on a social context. And um, also having to 0:03:03.960 --> 0:03:07.720 live with double standards. So if you you know, are 0:03:07.760 --> 0:03:11.480 a black female trader or I mean even a black 0:03:11.480 --> 0:03:14.000 tree trader is something that is very rare in the industry. 0:03:14.040 --> 0:03:16.240 But if you have to act a different way than 0:03:16.400 --> 0:03:20.240 your white male colleagues just to you know, exist or 0:03:20.280 --> 0:03:22.280 have a role, and that is something that is going 0:03:22.360 --> 0:03:26.280 to hold you back from actually rising up the ranks. 0:03:26.400 --> 0:03:28.800 So it was a lot of this, you know, having 0:03:28.840 --> 0:03:31.520 to abide by these unwritten rules. And some of the 0:03:31.520 --> 0:03:34.880 people I talked to, you know, mentioned that there there 0:03:34.880 --> 0:03:38.960 are some parallels between you know, maybe uh the plight 0:03:39.080 --> 0:03:42.000 of black workers and also the experiences that other you know, 0:03:42.200 --> 0:03:45.320 non white UM individuals experience on Wall st. But really 0:03:45.480 --> 0:03:47.800 this is in this moment, especially like this is about 0:03:48.760 --> 0:03:51.960 it's especially hard to be a black worker on Wall Street. 0:03:53.040 --> 0:03:56.480 So it's intering. Michelle, having spent twenty years on Wall Street, 0:03:56.520 --> 0:03:59.320 I know the importance of having a mentor kind of 0:03:59.360 --> 0:04:01.920 guide you through your career and also sponsor you for 0:04:02.400 --> 0:04:05.640 you know, assignment, sponsor you for promotion, and maybe ultimately 0:04:05.640 --> 0:04:09.160 the managing director and or partner title talk to us 0:04:09.160 --> 0:04:15.600 about the mentor situation for UH minorities on Wall Street. 0:04:16.800 --> 0:04:19.200 So you're right, a lot of the people I talked 0:04:19.200 --> 0:04:22.360 to you said that they attributed a lot of their 0:04:22.400 --> 0:04:27.400 success to having these sponsors within their organizations. That you know, 0:04:27.560 --> 0:04:30.880 even if they would have typically you know, wanted to 0:04:30.880 --> 0:04:33.400 sponsor someone that looks like them, they these people described 0:04:33.520 --> 0:04:36.360 them having taken a chance UM and said that they 0:04:36.440 --> 0:04:39.279 really you know, sponsorship and mentorship is something that really 0:04:39.360 --> 0:04:44.320 is critical to um, you know, black representation on Wall 0:04:44.360 --> 0:04:48.160 Street and uh, based on the conversations I I've been 0:04:48.200 --> 0:04:50.720 hearing about that are happening up at the banks, UM, 0:04:50.760 --> 0:04:53.920 you know, it seems like there is some change happening. 0:04:54.320 --> 0:04:58.000 I know Goldman's Back has now required more biased training 0:04:58.040 --> 0:05:01.279 by its employees. They're thinking about formalizing a sort of 0:05:01.920 --> 0:05:06.440 sponsorship program. But yeah, I mean it is a very 0:05:06.520 --> 0:05:10.920 it's something that's very critical, UM, in order to uh, 0:05:10.960 --> 0:05:13.479 you know, make the work plays better. Just to point 0:05:13.480 --> 0:05:15.760 out some of the numbers that we haven't brought up yet, 0:05:16.920 --> 0:05:20.119 there have been diversity unierships on Wall Street for decades now, 0:05:20.160 --> 0:05:24.520 but um, the industry has actually been getting whiter in 0:05:24.600 --> 0:05:27.760 recent years. At JP Morgan Banks, Ammigrant and City Group, 0:05:27.839 --> 0:05:32.080 the percentage of black workers overall has been falling, not rising. Uh. 0:05:32.240 --> 0:05:34.960 Just to point out one bank at JP Morgan, the 0:05:35.080 --> 0:05:42.159 number has dropped from from in a little over a decade. Michelle, 0:05:42.160 --> 0:05:44.960 it's really a fantastic story of but everybody to read it. 0:05:45.200 --> 0:05:48.559 It's Michelle Davis, finance reporter for Boomberg. Black and White 0:05:48.560 --> 0:05:51.760 on Wall Street, the unwritten code on race. It's absolutely 0:05:51.880 --> 0:05:57.520 mandatory reading. Today, well, a number of massive companies, from 0:05:57.520 --> 0:06:00.680 Starbucks to Union Leaver, Code Cola and PEPs See Verise 0:06:00.720 --> 0:06:04.040 and Levi's and many many more, have decided that they 0:06:04.080 --> 0:06:07.640 are executing an exodus from Facebook. They don't like the 0:06:08.120 --> 0:06:10.920 talk that's on Facebook, the partisanship that's on Facebook, the 0:06:11.000 --> 0:06:14.720 highly targeted ads on Facebook, and so they have pulled 0:06:14.760 --> 0:06:18.599 the plug at least for on advertising. Let's bring in 0:06:18.640 --> 0:06:20.760 someone who knows a lot about this now. Mark Douglas 0:06:20.839 --> 0:06:24.600 is CEO of Steelhouse based in Los Angeles, California, and 0:06:25.560 --> 0:06:28.520 steel House is a partner with Facebook, also a leader 0:06:28.520 --> 0:06:32.159 in highly targeted ads on you know platforms from connected 0:06:32.200 --> 0:06:36.119 TV to the social media platforms. Mark, welcome and thanks 0:06:36.160 --> 0:06:39.400 for joining. Why now? These companies have been threatening to 0:06:39.400 --> 0:06:41.719 do this for a long time. Facebook has engaged in 0:06:42.240 --> 0:06:45.600 incremental self betterment. But now the companies have decided enough 0:06:45.680 --> 0:06:49.520 is enough. Yeah. The one thing to keep in mind 0:06:49.600 --> 0:06:52.160 and it answers the question is Facebook has two types 0:06:52.200 --> 0:06:57.680 of averagises, brand advertisers and direct response averageiser. Direct response 0:06:57.800 --> 0:07:02.080 or basically e commerce company needs Internet repailers. Companies like that. 0:07:02.080 --> 0:07:06.400 That's too. Facebook depends upon um. Those companies also dependent 0:07:06.440 --> 0:07:10.000 on Facebook. So those companies are not boycotting yet. The 0:07:10.120 --> 0:07:14.320 brand advertisers are concerned about what they call brand safety. Basically, 0:07:14.320 --> 0:07:16.480 they spend a lot of money a company like Pepsy, 0:07:17.000 --> 0:07:19.080 some of the examples you've you've given, they spend a 0:07:19.120 --> 0:07:21.960 lot of money to build those brands, and they are 0:07:22.080 --> 0:07:24.600 always very concerned with brand safety. And so that's what's 0:07:24.680 --> 0:07:27.640 driving the boycott. Is better to boycott or be out 0:07:27.640 --> 0:07:31.320 of Facebook than the risk damaging your brands, and so 0:07:31.400 --> 0:07:35.000 that's what's driving it. Yeah, so Mark, you know, Facebook 0:07:35.000 --> 0:07:39.080 has more than eight million advertising clients here, as you mentioned, 0:07:39.080 --> 0:07:42.320 that direct a lot of of their small advertisers direct 0:07:42.360 --> 0:07:45.840 response advertisers. So if there's and you know to the 0:07:45.840 --> 0:07:47.560 extent that they're not following suit with some of the 0:07:47.600 --> 0:07:50.920 high profile names we've seen, where is the risk to 0:07:50.920 --> 0:07:53.360 to Facebook? Really here is they try to deal with 0:07:53.400 --> 0:07:57.040 an issue that seems to be resonating not only with advertisers, 0:07:57.040 --> 0:08:00.320 put with a lot of their users. Yeah, so the 0:08:00.320 --> 0:08:04.120 the near term risk, the immediate risk is plastic financial 0:08:04.200 --> 0:08:08.080 risk is actually not that significant for Facebook because those 0:08:08.120 --> 0:08:11.360 brand advertisers just don't really account for a lot of 0:08:11.440 --> 0:08:15.720 Facebook's revenue. Seventeen billion dollars last quarter. But there's a 0:08:15.840 --> 0:08:19.040 there's kind of a bigger risk looming for Facebook, which 0:08:19.080 --> 0:08:23.400 is data. So Facebook relies on Facebook log in um 0:08:23.600 --> 0:08:26.440 for a lot of data and so and as people 0:08:26.480 --> 0:08:30.080 have used Facebook itself left um you don't get as 0:08:30.160 --> 0:08:33.280 much data from Instagram, which Facebook are also owned. So 0:08:33.640 --> 0:08:38.000 with the defining usage of Facebook itself, more um less 0:08:38.120 --> 0:08:42.760 data available from Instagram. If people start boycotting Facebook log in, 0:08:43.000 --> 0:08:47.080 that would actually be a huge threat. Is the Facebook 0:08:47.080 --> 0:08:48.840 logging Is that when I'm logging into a different app, 0:08:48.880 --> 0:08:50.880 I just say, hey, use my Facebook information to log 0:08:50.920 --> 0:08:54.280 in for me, exactly. That seeds a lot of data 0:08:54.360 --> 0:08:57.840 in the Facebook and Facebook uses that data to make 0:08:57.880 --> 0:09:02.000 those smaller advertisers to give them performance the revenue that 0:09:02.080 --> 0:09:05.000 they're looking for. So if you thread that that's a 0:09:05.400 --> 0:09:08.480 much much bigger risk of Facebook, then you know, Peppsy 0:09:08.600 --> 0:09:13.000 boycotting Facebook. So how much of this, the fact that 0:09:13.000 --> 0:09:15.320 it is happening in has to do with the pandemic 0:09:15.360 --> 0:09:18.560 as well? Curious because obviously this is something that the 0:09:18.559 --> 0:09:21.360 company's you know, really believe in. And you know, once 0:09:21.640 --> 0:09:24.680 once you know, dropped advertising, the dominos kind of fell 0:09:24.720 --> 0:09:26.480 and more and more and more doing it right now, 0:09:26.760 --> 0:09:28.440 but has something to do with the fact that it's 0:09:28.480 --> 0:09:30.960 it's sort of handy to have to pare back on 0:09:31.120 --> 0:09:35.760 spending this year. Well yeah, I mean the the that's 0:09:35.800 --> 0:09:38.800 a that's a really good point. The if if you 0:09:39.000 --> 0:09:42.400 boycott Facebook, you might have already been cutting back your 0:09:42.400 --> 0:09:45.880 budgets anyway. So now you can basically put those cut 0:09:46.000 --> 0:09:49.880 cut backs in the context of taking a social stance, 0:09:50.080 --> 0:09:54.160 of doing something that maybe a lot of your customers 0:09:54.600 --> 0:10:00.640 may agree with. So it's super convenient as in and um, 0:10:01.080 --> 0:10:04.559 how sincere it is? Um? I think some of these 0:10:04.640 --> 0:10:07.480 large companies, you know, they're driven by the bottom line. Obviously, 0:10:07.520 --> 0:10:10.800 they're driven by brand tafety concerned. So I think, yeah, 0:10:10.840 --> 0:10:13.760 this year has a lot what has a lot to 0:10:13.800 --> 0:10:16.040 do with it. It's also an easy choice to them. 0:10:16.280 --> 0:10:20.400 Most of those bigger customers rely on television, not social Um, 0:10:20.559 --> 0:10:24.120 so they're not really losing that much by boycotting Facebook, 0:10:24.120 --> 0:10:27.160 and it's perfect year to do it. So Mark, you 0:10:27.240 --> 0:10:29.480 do some some work with Facebook. I'm sure you know 0:10:29.559 --> 0:10:33.280 some a lot of folks at Facebook. What why do 0:10:33.360 --> 0:10:36.160 you think Zuckerberg is taking this stance here? Hey, I'm 0:10:36.200 --> 0:10:38.559 just a platform im media. I'm not a media company, 0:10:38.600 --> 0:10:42.240 I don't have any editorial responsibility. He seems to be 0:10:42.400 --> 0:10:46.040 on at least the least the less popular side of 0:10:46.080 --> 0:10:48.079 this question, if not the wrong side. What do you 0:10:48.120 --> 0:10:52.120 think he's really thinking here? Um, well, it's a difficult question. 0:10:52.160 --> 0:10:56.360 I get a bit political. So essentially, any form of 0:10:56.400 --> 0:11:00.400 extremism is is probably not a good thing. Right, So, 0:11:00.520 --> 0:11:04.520 whether you're extremely progressive or extremely conservative, I think Mark 0:11:04.760 --> 0:11:09.240 is Stuckerberg is trying to avoid either extreme and the 0:11:09.280 --> 0:11:12.400 world is asking people to take side there. There's just 0:11:12.520 --> 0:11:16.040 no doubt about it. And and so I mean, and 0:11:16.240 --> 0:11:19.400 I think logically he's doing the right thing by saying 0:11:19.480 --> 0:11:23.200 it's not my position to judge what you know, content 0:11:23.320 --> 0:11:26.439 is good, what content is bad. But we're living in 0:11:26.440 --> 0:11:28.880 a time right now where people are asking for judgments 0:11:28.920 --> 0:11:31.559 to be made, especially when you distribute contents over two 0:11:31.600 --> 0:11:36.120 billion people. And so, um, it's it's kind of like, um, 0:11:36.120 --> 0:11:38.319 a football game. You know, you might be the second 0:11:38.320 --> 0:11:39.719 person to throw a punch, but you're the one that 0:11:39.800 --> 0:11:43.520 Russ saw. So so you know he so that that's 0:11:43.520 --> 0:11:46.640 the position that he's in, And um, I think it's 0:11:46.640 --> 0:11:49.200 a it's a really difficult position. It's happy to make 0:11:49.240 --> 0:11:52.400 any It's hard for him to make anyone happy right now. Yeah, 0:11:52.400 --> 0:11:54.720 it really is. Uh, and that's seeing an impact on 0:11:54.760 --> 0:11:56.560 stock and stock was it a fifty two week high 0:11:56.720 --> 0:11:59.000 just uh, you know, a week or so ago, so 0:12:00.000 --> 0:12:01.280 back we've seen in the last couple of days. You 0:12:01.280 --> 0:12:04.080 have to take that in context. Mark Douglas, CEO of 0:12:04.160 --> 0:12:07.440 Steelhouse based in Los Angeles talking about Facebook here in 0:12:07.440 --> 0:12:09.840 a tough position they're in here is again over as 0:12:09.920 --> 0:12:14.000 as Mark was saying, over two billion users globally. Clearly 0:12:14.080 --> 0:12:17.280 they have an outsize impact on the global dialogue as 0:12:17.320 --> 0:12:20.640 relates to all issues, including political issues as well. We'll 0:12:20.679 --> 0:12:25.760 follow up on that story right now. Let's take a 0:12:25.800 --> 0:12:28.800 look at the market out look again, a strong market 0:12:28.840 --> 0:12:31.240 here as we opened a holiday shortened week. To get 0:12:31.240 --> 0:12:33.680 a sense of kind of where we are here in 0:12:33.760 --> 0:12:35.840 the market and how we should think about the second 0:12:35.920 --> 0:12:40.319 half of returned to Philow, Orlando, chief equity market strategist 0:12:40.400 --> 0:12:43.760 for Federated Hermes. Phil, thanks so much for joining us here. 0:12:43.800 --> 0:12:46.280 We have a strong day today. Uh, you know, a 0:12:46.320 --> 0:12:50.360 tremendous rebound in the market after that initial COVID selloff 0:12:50.559 --> 0:12:55.160 in March. What do you think about the second half here. Well, 0:12:55.400 --> 0:12:57.800 I think the easy money has been made in the 0:12:57.880 --> 0:13:03.160 sense that the stock market had this powerful rally from 0:13:03.160 --> 0:13:05.960 March twenty three into about the first week in June. 0:13:06.880 --> 0:13:09.120 Things are going to be a little choppier and not 0:13:09.200 --> 0:13:12.439 quite as easy going forward. You've got this tuggle war 0:13:12.640 --> 0:13:17.199 right now going on between uh, pretty good economic data, 0:13:18.559 --> 0:13:22.200 but you've had this spike in infections in some of 0:13:22.240 --> 0:13:26.680 the key southeastern and southwestern states. Um, we'll have a 0:13:26.800 --> 0:13:29.080 much better feel for how that tag war is going 0:13:29.120 --> 0:13:30.920 to play out over the next six weeks or so. 0:13:31.880 --> 0:13:35.000 But we we we took some chips off the table 0:13:35.600 --> 0:13:39.840 last week because we were a little bit concerned about 0:13:40.760 --> 0:13:44.000 how well the market may do here in light of 0:13:44.960 --> 0:13:47.480 some of these issues. Given the fact that we've had 0:13:47.480 --> 0:13:51.320 such a powerful rebound rally already, why on earth would 0:13:51.320 --> 0:13:53.360 anyone be scared At this point, the market seems to 0:13:53.400 --> 0:13:57.480 go up no matter what happens, including you know, cases 0:13:57.559 --> 0:14:01.440 spiking in a dozen states again, and this is not 0:14:01.559 --> 0:14:07.040 going away anytime soon. Well, the situation in the Northeast 0:14:07.080 --> 0:14:11.360 and the Midwest is pretty good in terms of the 0:14:12.200 --> 0:14:15.840 peaking of infections and mortalities back in the middle of April, 0:14:15.880 --> 0:14:18.800 and the fact that we've been able to execute a 0:14:18.880 --> 0:14:21.320 grind lower over the last couple of months, in part 0:14:21.400 --> 0:14:24.680 because I think people have done the right thing social distancing, 0:14:24.720 --> 0:14:28.080 wearing masks, washing your hands, that kind of thing. Um, 0:14:28.120 --> 0:14:31.000 that's not what's going on right now. In a couple 0:14:31.000 --> 0:14:35.560 of the key states Florida, Texas, Arizona, California, those numbers 0:14:35.560 --> 0:14:38.320 have spiked over the course of the last three or 0:14:38.360 --> 0:14:41.840 four weeks. And we don't have a vaccine yet. We 0:14:41.880 --> 0:14:46.440 may have one, uh for emergency use, perhaps as early 0:14:46.480 --> 0:14:49.600 as this fall, but we don't have one right now. Uh. 0:14:49.640 --> 0:14:53.320 And and certainly that's that's caught our attention. And uh, 0:14:53.800 --> 0:14:56.760 you run the risk of of do we shut these 0:14:56.880 --> 0:14:59.120 uh some of these key cities or some of these 0:14:59.200 --> 0:15:03.200 key states down again? Does that does that potentially extend 0:15:03.200 --> 0:15:05.800 this recession from the first half that we think is 0:15:05.880 --> 0:15:08.200 going to end at the end of June. But but 0:15:08.360 --> 0:15:11.840 does that does that lengthen the duration of this recession 0:15:12.080 --> 0:15:14.760 at some point in the second half. And given that uncertainty, 0:15:15.280 --> 0:15:17.640 and given the fact that the stock markets up forty 0:15:17.680 --> 0:15:21.280 seven percent in in you know, twelve weeks, we thought 0:15:21.280 --> 0:15:23.520 it was prudent to maybe take some chips off the table, 0:15:23.640 --> 0:15:26.600 just manage risk a little bit and see how events 0:15:26.640 --> 0:15:29.520 play out over the next month or so. So, Phil, 0:15:29.880 --> 0:15:33.560 how important is another round of fiscal stimulus? I know 0:15:33.600 --> 0:15:36.240 there's a trillion dollar number being thrown around Washington, but 0:15:36.280 --> 0:15:39.240 there doesn't seem to be any urgency to get another 0:15:39.320 --> 0:15:41.960 round of fiscal stimulus out there. How critical is that 0:15:42.080 --> 0:15:44.160 for the second half of this year from an economic perspective, 0:15:44.560 --> 0:15:48.040 I would disagree with that assessment a little bit. I 0:15:48.120 --> 0:15:50.880 think there's a tremendous sense of urgency, but it's not 0:15:50.920 --> 0:15:55.680 going to happen before we see Friday or Thursday's jobs report. 0:15:55.760 --> 0:15:59.720 And that was always the plan. So so Speaker Pelosi, 0:16:00.880 --> 0:16:04.080 the Democrats in the House past the Heroes Act in 0:16:04.160 --> 0:16:09.960 May roughly a three trillion dollar program um the I 0:16:10.000 --> 0:16:13.720 think the Republican Senate would like to pass a program 0:16:13.760 --> 0:16:17.400 that's about half that size, let's call it a trillion 0:16:17.440 --> 0:16:19.520 and a half dollars. But that's not going to happen 0:16:20.040 --> 0:16:24.880 until Congress comes back from vacation after the Independence Day holiday. 0:16:25.000 --> 0:16:28.040 Uh So, two things. Number One, they're on vacation. Number Two, 0:16:28.600 --> 0:16:31.360 they want to see how good or how bad is 0:16:31.400 --> 0:16:33.320 the June jobs report that we're going to see this 0:16:33.400 --> 0:16:37.160 coming Thursday, and then that will inform exactly how big 0:16:37.160 --> 0:16:39.840 the bill should be and what's the best way to 0:16:39.960 --> 0:16:43.560 craft the bill in terms of where should the incentives 0:16:43.600 --> 0:16:46.560 be and how large should the incentives be in terms 0:16:46.560 --> 0:16:49.479 of trying to encourage people back to work or protecting 0:16:49.480 --> 0:16:53.720 those individuals additionally who aren't able to go back to 0:16:53.760 --> 0:16:57.560 work because their businesses might might still be shuttered or 0:16:57.600 --> 0:17:00.680 because they're afraid of cutting coronavirus fellows. Just a little 0:17:00.680 --> 0:17:03.720 tonguentiak earlier. I mean, it really seems to me like 0:17:03.760 --> 0:17:06.960 this market is going higher and higher, and maybe it's 0:17:07.000 --> 0:17:09.760 not based on reality. I mean, what if, for example, 0:17:10.359 --> 0:17:12.840 you know, it takes weeks and weeks to bring down 0:17:13.040 --> 0:17:16.399 the coronavirus cases in the states that are sort of 0:17:16.520 --> 0:17:18.600 more southern and more westerly right now, but by then 0:17:18.880 --> 0:17:20.560 it's already back in New York City. I mean, there 0:17:20.640 --> 0:17:22.560 is a virus on the loose out there is the 0:17:22.600 --> 0:17:26.840 market pricing it at all well? And And that's that's 0:17:26.880 --> 0:17:30.840 a very astute assessment, because the fact that the markets 0:17:30.880 --> 0:17:35.040 up in the last three months is not based upon 0:17:35.359 --> 0:17:38.600 how well and how poorly things are going right this 0:17:38.760 --> 0:17:42.919 second in terms of either combating the disease or in 0:17:43.119 --> 0:17:45.239 terms of what corporate earnings are going to look like 0:17:45.320 --> 0:17:48.320 in the second quarter. What the market is doing is 0:17:48.359 --> 0:17:53.240 a traditional approach as a forward looking discounting mechanism. It's 0:17:53.280 --> 0:17:55.760 looking out deep into the second half of this year 0:17:55.920 --> 0:17:59.520 or even into calendar twenty one and saying, okay, um, 0:17:59.600 --> 0:18:03.560 we've got this thing under control, We've got a vaccine. Uh, 0:18:03.600 --> 0:18:06.600 we're starting to get back to normal. Let's look at 0:18:06.640 --> 0:18:09.879 what normalized durings are and then attempt to discount that 0:18:10.000 --> 0:18:14.159 back and and establish what we think as an appropriate price. 0:18:14.560 --> 0:18:18.400 So there's something of a disconnect there between some investors 0:18:18.480 --> 0:18:21.119 who think that the market is ahead of itself because 0:18:21.119 --> 0:18:23.880 the numbers don't support where it is right now, as 0:18:23.880 --> 0:18:27.360 opposed to those investors that recognize, I think that what 0:18:27.400 --> 0:18:30.080 we're looking we're attempting to do is looking out six 0:18:30.200 --> 0:18:32.960 or twelve months and then pricing it back based upon 0:18:33.040 --> 0:18:35.440 where we think things are going to be, perhaps six 0:18:35.560 --> 0:18:38.800 or twelve months from now. So, uh, Phil, just about 0:18:38.800 --> 0:18:41.000 thirty seconds or so, you said you mentioned that you're 0:18:41.000 --> 0:18:43.200 taking some some chips off the table. Are there still 0:18:43.240 --> 0:18:44.920 some areas where you maybe see some value in some 0:18:45.000 --> 0:18:49.159 opportunity here given the run up, well, international certainly is 0:18:49.200 --> 0:18:54.560 looking more attractive here. Developed international is as cheap compared 0:18:54.640 --> 0:18:57.919 to developed US or large cap US as it was 0:18:57.960 --> 0:19:00.120 in the bottom of the Great Recession in oh seven 0:19:00.160 --> 0:19:04.480 oh nine. Uh. Small cap still looks interesting to us. Uh, 0:19:04.520 --> 0:19:10.119 there's some attractiveness and emerging markets UM value is cheaper 0:19:10.119 --> 0:19:13.960 than growth, so there are pockets of opportunities here. But 0:19:14.160 --> 0:19:16.760 right now we're in a bit. I think we're in 0:19:16.760 --> 0:19:19.160 a little bit of a June swoon, and we need 0:19:19.200 --> 0:19:22.280 to see how this thing plays out. Phil, thanks always 0:19:22.280 --> 0:19:24.040 great to speak with you. The S and P five 0:19:24.080 --> 0:19:26.560 hundred up nine tenths o resent right now, and over 0:19:26.600 --> 0:19:30.080 the last week it's a point six percent, so I'm 0:19:30.200 --> 0:19:32.920 still waiting to see that tune soon. The Dow Jones 0:19:32.960 --> 0:19:35.600 industrial leverage of one point six right now, mostly on Boing. 0:19:35.680 --> 0:19:38.159 It may be able to restart testing today, which of 0:19:38.200 --> 0:19:41.080 course many many companies have been waiting on, not just 0:19:41.119 --> 0:19:44.720 the market and Boing itself. And we have the nastac 0:19:44.800 --> 0:19:47.960 for once. It is actually the lagguage today up four 0:19:48.000 --> 0:19:51.160 tenths of one percent. But thanks to Phil Orlando Federated 0:19:51.560 --> 0:19:58.160 Herme's investors for speaking with us there Florida positivity rates 0:19:58.160 --> 0:20:00.400 have been rising, and it's not the only date where 0:20:00.440 --> 0:20:03.160 that's happening. It's happening in several states in the South 0:20:03.400 --> 0:20:07.760 and the Midwest, and the outlook is pretty pretty dire 0:20:07.840 --> 0:20:12.119 for certain states, including Arizona. Next guest says that it's 0:20:12.240 --> 0:20:15.840 not like a wildfire where you can't just put it out, 0:20:16.080 --> 0:20:18.920 and it's a really dire situation. According to our next guest, 0:20:18.920 --> 0:20:22.480 who is Dr David Engeltaler, co director and Associate Professor 0:20:22.520 --> 0:20:25.960 of the pathogen and Microbiome Division at Tejon North, he 0:20:26.080 --> 0:20:29.359 was also Arizona is a state epidemiologist for a time. 0:20:29.800 --> 0:20:33.320 Dr angel Faler, thank you for joining, explained to us 0:20:33.400 --> 0:20:37.639 why you're so pessimistic about the outlook for Arizona and 0:20:37.640 --> 0:20:41.880 other states. Good, good morning, goney. Yeah, So I think 0:20:42.240 --> 0:20:46.040 you know what's happening with this pandemic. It's it's doing 0:20:46.080 --> 0:20:49.440 what pandemics do. They cause a lot of disease in depth, 0:20:49.480 --> 0:20:53.160 and it's going to have ebbs and flows and waves, 0:20:53.720 --> 0:20:56.960 and we can certainly affect that with public policy and 0:20:57.040 --> 0:21:01.119 public participation in recommendations. Uh. And right now it looks 0:21:01.160 --> 0:21:04.639 like we're maybe not following recommendations enough and and this 0:21:04.880 --> 0:21:08.600 viruses is happened a heyday. So dr you know, one 0:21:08.640 --> 0:21:10.240 of the things that I've kind of toyed about and 0:21:10.600 --> 0:21:13.360 asked a lot of experts about, is, you know, here 0:21:13.359 --> 0:21:15.639 in the New York metro area, we had Governor Andrew Cuomo, 0:21:15.680 --> 0:21:17.600 followed by Governor Murphy of New Jersey and some others, 0:21:17.680 --> 0:21:20.440 but really led by New York Governor Cuomo really take 0:21:20.480 --> 0:21:25.199 an aggressive stance on shutting down quarantining and then you know, 0:21:25.320 --> 0:21:28.639 on the reopening, doing it very gradually and focusing on 0:21:28.680 --> 0:21:32.640 social distancing and masking and all that good stuff. Does 0:21:32.680 --> 0:21:35.919 there need to be a federal response as opposed to 0:21:36.000 --> 0:21:38.399 state by state because we've seen now the states that 0:21:38.520 --> 0:21:40.840 did not take it seriously are the ones that are 0:21:40.880 --> 0:21:44.679 paying the price. Yeah. I think what we're seeing is that, 0:21:44.920 --> 0:21:46.960 you know, obviously this virus doesn't care if you're in 0:21:46.960 --> 0:21:49.080 a red or a blue state, and I'm pretty sure 0:21:49.119 --> 0:21:51.480 it doesn't really care who your governor is. It. We 0:21:51.520 --> 0:21:56.880 are definitely seeing different epidemiological patterns in different regions. So 0:21:57.880 --> 0:22:00.119 for instance, in the Northeast and the New Jersey. In 0:22:00.160 --> 0:22:02.960 New York, um, you know, when they were having their 0:22:03.119 --> 0:22:07.240 giant upswinging their their their case. Batality rates were really 0:22:07.280 --> 0:22:09.480 off the chart, you know, more than seven percent, and 0:22:09.640 --> 0:22:11.680 in in a number of those states and out west 0:22:11.760 --> 0:22:15.320 it's been very different. Uh and and typically around one 0:22:15.359 --> 0:22:19.000 to two and a half percent in Arizona, California, Texas, 0:22:19.000 --> 0:22:22.680 and Utah. But the numbers right now are skyrocketing across 0:22:22.760 --> 0:22:27.200 the southern states, uh and And it could be um 0:22:27.280 --> 0:22:29.160 a large part do the fact that there's a lot 0:22:29.240 --> 0:22:32.840 of twenty somethings that are out there thinking that opening 0:22:32.920 --> 0:22:35.200 up the state means that somehow they were invisible and 0:22:35.480 --> 0:22:38.840 a lot of interactions and in public places without people 0:22:39.480 --> 0:22:42.480 social distancing or wearing masks. Uh And. I think that's 0:22:42.520 --> 0:22:44.560 adding a lot to it. But I also think the 0:22:44.600 --> 0:22:46.920