1 00:00:02,640 --> 00:00:05,320 Speaker 1: Welcome to the Bloomberg Penel podcast on Paul Swing You. 2 00:00:05,360 --> 00:00:07,760 Speaker 1: Along with my co host Lisa Brahmas, each day we 3 00:00:07,880 --> 00:00:10,440 Speaker 1: bring you the most noteworthy and useful interviews for you 4 00:00:10,520 --> 00:00:12,640 Speaker 1: and your money. Whether at the grocery store or the 5 00:00:12,640 --> 00:00:15,960 Speaker 1: trading floor. Find a Bloomberg Penl podcast on Apple podcast 6 00:00:16,120 --> 00:00:18,040 Speaker 1: or wherever you listen to podcasts, as well as at 7 00:00:18,040 --> 00:00:21,200 Speaker 1: Bloomberg dot com. As we sit here and we track 8 00:00:21,440 --> 00:00:24,840 Speaker 1: the spread of the coronavirus, there is a realization that 9 00:00:24,920 --> 00:00:27,240 Speaker 1: even if developed nations are cracking down on trade, the 10 00:00:27,240 --> 00:00:29,520 Speaker 1: world is still getting more global, at least when it 11 00:00:29,520 --> 00:00:32,839 Speaker 1: comes to people and viruses moving around, and there's a 12 00:00:32,880 --> 00:00:36,720 Speaker 1: growing concern that we are ill equipped to handle another pandemic. 13 00:00:36,840 --> 00:00:40,239 Speaker 1: Joining us now is Robert Langrith, healthcare reporter for Bloomberg News, 14 00:00:40,280 --> 00:00:43,680 Speaker 1: who are an incredibly interesting and frightening, frankly story for 15 00:00:43,680 --> 00:00:47,879 Speaker 1: Bloomberg Business Week about a potential pandemic. I just want 16 00:00:47,920 --> 00:00:50,880 Speaker 1: to start with this quote from the World Health Organization. 17 00:00:51,159 --> 00:00:54,880 Speaker 1: Epidemics in the century are spreading faster and farther than ever. 18 00:00:55,240 --> 00:01:00,320 Speaker 1: Outbreaks that were previously localized can now become global very rapidly. Robert, 19 00:01:00,320 --> 00:01:03,320 Speaker 1: why is that well? That's absolutely true. We just have 20 00:01:03,440 --> 00:01:06,840 Speaker 1: a world with much more population, is much more interconnected 21 00:01:06,880 --> 00:01:10,000 Speaker 1: than ever before. And even that, you may remember, one 22 00:01:10,000 --> 00:01:13,200 Speaker 1: of the first scary emerging viruses, Stars, one of the 23 00:01:13,319 --> 00:01:16,119 Speaker 1: last ones to come out of China, killed killed about 24 00:01:16,120 --> 00:01:19,040 Speaker 1: eight hundred people in two thousand three. Uh And now 25 00:01:19,600 --> 00:01:22,840 Speaker 1: UH dis coronavirus is the next emerging virus to come 26 00:01:22,880 --> 00:01:24,959 Speaker 1: out of China, and the differences that's spreading you know, 27 00:01:25,040 --> 00:01:28,160 Speaker 1: much faster because even since two thousand and three, there's 28 00:01:28,200 --> 00:01:31,360 Speaker 1: just so many more uh discount plane flights and so 29 00:01:31,400 --> 00:01:34,080 Speaker 1: many more high speed trains, so people just from all 30 00:01:34,120 --> 00:01:37,000 Speaker 1: over China and Southeast Asia travels so much more than 31 00:01:37,040 --> 00:01:39,040 Speaker 1: they used to. So a virus that emerges, you know, 32 00:01:39,440 --> 00:01:42,479 Speaker 1: somewhere out in the world just gets all around the world, 33 00:01:42,520 --> 00:01:44,640 Speaker 1: you know, much more quickly than it that it used to. 34 00:01:44,760 --> 00:01:47,320 Speaker 1: And it probably is the case that you know, years 35 00:01:47,319 --> 00:01:48,960 Speaker 1: and decades ago, we had a lot of you know, 36 00:01:48,960 --> 00:01:53,160 Speaker 1: emerging viruses that hit some obscure city out out in 37 00:01:53,160 --> 00:01:55,240 Speaker 1: the developing world somewhere and just didn't spread that far 38 00:01:55,320 --> 00:01:57,040 Speaker 1: and kind of died out before we even kind of 39 00:01:57,080 --> 00:02:00,000 Speaker 1: heard of it. Now, these things that spread every around 40 00:02:00,040 --> 00:02:03,120 Speaker 1: the world, Robert just you know, given I know we're 41 00:02:03,120 --> 00:02:05,200 Speaker 1: early days of this coronavirus, but kind of what's the 42 00:02:05,760 --> 00:02:08,280 Speaker 1: um thought out there in the health community about the 43 00:02:08,360 --> 00:02:13,520 Speaker 1: China's response to this coronavirus. Well, the problem is, I mean, 44 00:02:13,560 --> 00:02:16,799 Speaker 1: obviously China is doing very aggressive response now and it's 45 00:02:16,800 --> 00:02:20,320 Speaker 1: basically locked down the whole city, the whole province of 46 00:02:20,360 --> 00:02:23,480 Speaker 1: sixty million people. Uh, you know, it's sort of an 47 00:02:23,560 --> 00:02:26,519 Speaker 1: unprecedented quarantine or there. The problem is that in the 48 00:02:26,680 --> 00:02:30,400 Speaker 1: kind of key early weeks of the virus spreading, you know, 49 00:02:30,480 --> 00:02:33,600 Speaker 1: it didn't it didn't really communicate much what was going on, 50 00:02:33,840 --> 00:02:37,480 Speaker 1: you know, internally, and and the big response that didn't 51 00:02:37,480 --> 00:02:40,600 Speaker 1: begin until like several weeks into it because apparently because 52 00:02:40,600 --> 00:02:43,360 Speaker 1: you know, local officials are waiting for the top level 53 00:02:43,639 --> 00:02:45,840 Speaker 1: communist parties for what to do and what they could say, 54 00:02:46,360 --> 00:02:49,160 Speaker 1: and so that basically allowed it to spread, you know, 55 00:02:50,440 --> 00:02:53,680 Speaker 1: before people really knew what a big deal what it 56 00:02:53,800 --> 00:02:55,600 Speaker 1: was for you know, two or three weeks before like 57 00:02:55,720 --> 00:02:58,440 Speaker 1: a heavy, heavy response. And that's the sort of that's 58 00:02:58,480 --> 00:03:00,160 Speaker 1: sort of the key period in sort of are you 59 00:03:00,200 --> 00:03:02,040 Speaker 1: gonna need to slow these things down right away and 60 00:03:02,120 --> 00:03:04,079 Speaker 1: nipped them in the bud. And when that doesn't happen 61 00:03:04,160 --> 00:03:07,200 Speaker 1: that allows them to escape the headline of the of 62 00:03:07,240 --> 00:03:09,760 Speaker 1: the piece that you're over the magazine man versus microbe. 63 00:03:09,760 --> 00:03:13,320 Speaker 1: We're not ready for the next global virus outbreak, and 64 00:03:13,360 --> 00:03:15,880 Speaker 1: I'm wondering whether we can glean any insights from the 65 00:03:15,919 --> 00:03:19,240 Speaker 1: spread of the coronavirus and extrap played out Why is 66 00:03:19,280 --> 00:03:23,080 Speaker 1: this the case? Why are we unprepared well? One of 67 00:03:23,120 --> 00:03:26,120 Speaker 1: the problems that happens is that, you know, we have 68 00:03:26,240 --> 00:03:28,880 Speaker 1: lots of scientific smarts, and there has been real progress 69 00:03:28,919 --> 00:03:33,400 Speaker 1: and better better testing and drug development, uh and you know, 70 00:03:33,440 --> 00:03:36,320 Speaker 1: new gene sequencing technology, so we know exactly what's in 71 00:03:36,440 --> 00:03:39,080 Speaker 1: this coronavirus very quickly. But kind of what's missing really 72 00:03:39,160 --> 00:03:41,640 Speaker 1: is a long term focus. You know, every time you know, 73 00:03:42,160 --> 00:03:44,280 Speaker 1: you know, they call it the cycle of panic and neglect. 74 00:03:44,320 --> 00:03:46,280 Speaker 1: You know, every time there's a new outbreak is global panic, 75 00:03:46,360 --> 00:03:49,240 Speaker 1: but there's momentary resolved and then kind of that a 76 00:03:49,240 --> 00:03:51,200 Speaker 1: few years later, we kind of forget about it fades away, 77 00:03:51,200 --> 00:03:53,240 Speaker 1: and that kind of gives away to kind of in action. 78 00:03:53,320 --> 00:03:57,120 Speaker 1: And the problem is we're only uh as as prepared 79 00:03:57,160 --> 00:04:00,680 Speaker 1: as our weakest lengths. So it doesn't matter. The CDC 80 00:04:00,920 --> 00:04:02,920 Speaker 1: is a great job inside the United States if we 81 00:04:03,000 --> 00:04:06,120 Speaker 1: haven't provided support to developing countries so they have some 82 00:04:06,200 --> 00:04:10,240 Speaker 1: first responders that can identify emerging outbreaks right away. What 83 00:04:10,280 --> 00:04:12,400 Speaker 1: does it mean to be prepared? Is it just the 84 00:04:12,440 --> 00:04:16,960 Speaker 1: in terms of the sanitary equipment and testing kids? How 85 00:04:16,960 --> 00:04:18,320 Speaker 1: can you be prepared for something if you don't even 86 00:04:18,320 --> 00:04:21,160 Speaker 1: know what the virus is. Well, there's like two different 87 00:04:21,160 --> 00:04:23,719 Speaker 1: things here, you know. One one is that well, i'll 88 00:04:23,720 --> 00:04:26,359 Speaker 1: give you an example of the Ebola outbreak in West 89 00:04:26,400 --> 00:04:30,000 Speaker 1: Africa and two fourteen or so that killed more than 90 00:04:30,040 --> 00:04:32,919 Speaker 1: eleven thousand people. But it's not that Ebola was an 91 00:04:33,040 --> 00:04:36,360 Speaker 1: unknown virus. What happened there was it took literally the 92 00:04:36,360 --> 00:04:39,359 Speaker 1: thing was brewing in Guinea for three full months and 93 00:04:39,440 --> 00:04:44,520 Speaker 1: expanding before the wider world knew uh. And that allowed 94 00:04:44,520 --> 00:04:46,520 Speaker 1: it a chance to reach cities. So if there had 95 00:04:46,600 --> 00:04:49,719 Speaker 1: been some you know, first responders, some some better little 96 00:04:49,720 --> 00:04:51,760 Speaker 1: bit of better infrastructure there not a lot, but just 97 00:04:51,960 --> 00:04:54,520 Speaker 1: enough to recognize and do tests right away, we could 98 00:04:54,520 --> 00:04:56,600 Speaker 1: have nipped that in the bottom. That wouldn't have killed 99 00:04:56,640 --> 00:04:59,479 Speaker 1: anywhere near you as many people. So that's the one thing. 100 00:05:00,040 --> 00:05:02,640 Speaker 1: Another thing is that you know, that's a real problem, 101 00:05:02,839 --> 00:05:05,359 Speaker 1: and people think that one of the places where this 102 00:05:05,640 --> 00:05:10,479 Speaker 1: coronavirus originated or spread to people, isn't uh one of 103 00:05:10,520 --> 00:05:13,440 Speaker 1: these uh These food markets in China and Southeast Asia 104 00:05:13,480 --> 00:05:16,480 Speaker 1: called wet markets, and that's where live animals and freshly soltered, 105 00:05:16,560 --> 00:05:20,080 Speaker 1: unrated beat kind of commingle with lots of shoppers and 106 00:05:20,080 --> 00:05:22,440 Speaker 1: and the and they've live animals there, and cages often 107 00:05:22,440 --> 00:05:25,240 Speaker 1: stacked and top each other, different types of live animals, 108 00:05:25,240 --> 00:05:27,520 Speaker 1: so they're very unsanitary of their team with germs. Are 109 00:05:27,560 --> 00:05:31,080 Speaker 1: these perfect breeding grounds are deadly pathogens And a lot 110 00:05:31,120 --> 00:05:33,200 Speaker 1: of the health experts we talked to said, these really 111 00:05:33,240 --> 00:05:35,719 Speaker 1: need to be shut down. That's just not safe, not 112 00:05:35,839 --> 00:05:38,120 Speaker 1: in the not in the new interconnected world, and that 113 00:05:38,240 --> 00:05:41,280 Speaker 1: just provides too much opportunity for the emerging virus that 114 00:05:41,320 --> 00:05:43,400 Speaker 1: kind of mixed around the different animals and then spread 115 00:05:43,440 --> 00:05:46,920 Speaker 1: onto people. And that's what we think probably happened with 116 00:05:46,960 --> 00:05:50,440 Speaker 1: the virus from Uhan. So, Robert, one of the areas 117 00:05:50,440 --> 00:05:52,960 Speaker 1: of focus has been on kind of the healthcare industry, 118 00:05:53,040 --> 00:05:55,960 Speaker 1: big pharma, the ability to come up with maybe antidotes 119 00:05:56,040 --> 00:05:58,840 Speaker 1: or just vaccines or something like that for something that 120 00:05:58,839 --> 00:06:00,800 Speaker 1: pops up. Is that a fair criticism? Do you think 121 00:06:00,800 --> 00:06:06,120 Speaker 1: big pharma should respond better or more quickly. Well, the 122 00:06:06,160 --> 00:06:08,840 Speaker 1: problem is, you know, for emerging virus, they're they're kind 123 00:06:08,839 --> 00:06:11,440 Speaker 1: of you know, is not it's not a regular market. 124 00:06:11,480 --> 00:06:13,880 Speaker 1: There is an a regular market for you know, disease 125 00:06:13,880 --> 00:06:17,440 Speaker 1: it doesn't exist yet, or a vaccine like this, where 126 00:06:17,440 --> 00:06:19,440 Speaker 1: we just you know, don't know what the market could. 127 00:06:19,440 --> 00:06:20,800 Speaker 1: But we don't know is this is going to be 128 00:06:20,800 --> 00:06:23,440 Speaker 1: doing a year from now, whether it's going to disappear entirely, 129 00:06:23,440 --> 00:06:24,880 Speaker 1: whether it's still going to be here with us but 130 00:06:24,880 --> 00:06:27,680 Speaker 1: it's contained in China, whether it's going to be something 131 00:06:27,720 --> 00:06:30,040 Speaker 1: you know, that's endemic in the population, and we need 132 00:06:30,080 --> 00:06:33,640 Speaker 1: to like vaccinevaccidate, like influenzo. So that means it's just 133 00:06:33,720 --> 00:06:36,200 Speaker 1: kind of not a regular market for drug companies to 134 00:06:36,240 --> 00:06:39,279 Speaker 1: go after. And and people, you know, top thinkers like 135 00:06:39,320 --> 00:06:43,120 Speaker 1: Bill Gates says, we need to treat this possibility pandemics, 136 00:06:43,160 --> 00:06:45,680 Speaker 1: you know, more likely prepare for war kind of as 137 00:06:45,680 --> 00:06:48,400 Speaker 1: a national security threat. And we don't really do that 138 00:06:48,600 --> 00:06:52,480 Speaker 1: we need because Robert just real quickly here, I'm wondering 139 00:06:52,600 --> 00:06:56,320 Speaker 1: about the Chinese doctor who initially was sanctioned for warning 140 00:06:56,440 --> 00:06:59,800 Speaker 1: about the deadly Wuhan coronivor virus outbreak and that was 141 00:07:00,400 --> 00:07:04,040 Speaker 1: in December, and there is a concern that perhaps this 142 00:07:04,080 --> 00:07:07,040 Speaker 1: was spreading for a lot longer within China and there 143 00:07:07,080 --> 00:07:10,000 Speaker 1: was a political incentive not to really disclose it because 144 00:07:10,080 --> 00:07:13,200 Speaker 1: of the ongoing trade negotiations. Have you heard any discussion 145 00:07:13,240 --> 00:07:15,600 Speaker 1: to that effect or is that just a conspiracy theory 146 00:07:15,640 --> 00:07:17,520 Speaker 1: and rumor at this point, Well, I don't know what 147 00:07:17,640 --> 00:07:20,320 Speaker 1: the link to the trade negotiations in particularly, I don't 148 00:07:20,360 --> 00:07:22,600 Speaker 1: know that, but certainly there is a concern that for 149 00:07:22,720 --> 00:07:26,520 Speaker 1: whatever reason, the Chinese of provision provincial officials were trying 150 00:07:26,520 --> 00:07:29,680 Speaker 1: to keep talking about this down, you know, not not 151 00:07:29,800 --> 00:07:31,600 Speaker 1: say a lot about this, you know, they didn't they 152 00:07:31,640 --> 00:07:33,960 Speaker 1: you know, it certainly seems like I think that, you know, 153 00:07:34,120 --> 00:07:37,000 Speaker 1: they didn't announce there was definite human to human transmission 154 00:07:37,040 --> 00:07:38,920 Speaker 1: until just one or two or a few days before 155 00:07:38,920 --> 00:07:40,480 Speaker 1: they kind of locked down the whole city. And it 156 00:07:40,600 --> 00:07:43,480 Speaker 1: certainly seems like looking back at it, there's pretty clear 157 00:07:43,520 --> 00:07:46,200 Speaker 1: evidence and they should have known well before that there 158 00:07:46,240 --> 00:07:49,240 Speaker 1: was human to human transmission. So so certainly there does 159 00:07:49,280 --> 00:07:52,440 Speaker 1: appear to be been an effort to underplay this or 160 00:07:52,440 --> 00:07:55,720 Speaker 1: at least minimize this, uh, for you know, several weeks, 161 00:07:55,720 --> 00:07:59,600 Speaker 1: and it's just not clear was that because officials and 162 00:07:59,720 --> 00:08:02,120 Speaker 1: the province were timid and they kind of wait for 163 00:08:02,360 --> 00:08:03,960 Speaker 1: Beijing to tell them what to do. It's really not 164 00:08:04,040 --> 00:08:06,280 Speaker 1: clear what was going on there. The information coming out 165 00:08:06,280 --> 00:08:10,280 Speaker 1: of China now is so kind of murky and confusing 166 00:08:10,320 --> 00:08:12,000 Speaker 1: and hard to know. You know what's true and you 167 00:08:12,000 --> 00:08:15,240 Speaker 1: know what's not true. Even with the death of this doctor, 168 00:08:15,240 --> 00:08:17,240 Speaker 1: you know, first we heard it was dead, then they 169 00:08:17,240 --> 00:08:19,640 Speaker 1: started to retract it there talking and we're gonna have 170 00:08:19,640 --> 00:08:21,280 Speaker 1: to leave it there. Thank you so much for that. 171 00:08:21,360 --> 00:08:24,320 Speaker 1: Robert lang Greth, healthcare reporter for Bloomberg News. With this 172 00:08:24,600 --> 00:08:28,160 Speaker 1: latest it's actually a Bloomberg Business Week cover story, man 173 00:08:28,480 --> 00:08:32,760 Speaker 1: versus micro very timely look at pathogens and the disease 174 00:08:32,800 --> 00:08:36,319 Speaker 1: in the case of the Corona virus. This is Bloomberg 175 00:08:39,360 --> 00:08:42,600 Speaker 1: trying to check in with Bloomberg Opinion returned by opinion 176 00:08:42,640 --> 00:08:46,240 Speaker 1: columnists A. Lisa Mark Tinouzi. She covers all things finance 177 00:08:46,280 --> 00:08:49,800 Speaker 1: for Bloomberg Opinion based in London, Alsa, thanks so much 178 00:08:49,840 --> 00:08:53,200 Speaker 1: for joining us boys. Some more news at Credit Swiss 179 00:08:53,280 --> 00:08:59,160 Speaker 1: t gent Tim ousted as CEO. What happened? Well, it's 180 00:08:59,200 --> 00:09:01,920 Speaker 1: been um a long time coming in that you've had, 181 00:09:02,240 --> 00:09:06,280 Speaker 1: you know, a bank that has been tarred by a 182 00:09:06,320 --> 00:09:09,400 Speaker 1: series of embarrassing league for the last four or five 183 00:09:09,480 --> 00:09:14,160 Speaker 1: months or so um starting with the revelation that one 184 00:09:14,200 --> 00:09:17,160 Speaker 1: of their former employees who had just jumped trip to 185 00:09:17,160 --> 00:09:20,520 Speaker 1: to rival ubs, had been tailed by a contractor for 186 00:09:20,640 --> 00:09:23,480 Speaker 1: the bank, and that that triggered a sequence of events. 187 00:09:23,480 --> 00:09:26,520 Speaker 1: There was an internal probe that found that the CEO 188 00:09:26,679 --> 00:09:29,280 Speaker 1: wasn't aware that it was actually the c O who 189 00:09:29,320 --> 00:09:33,400 Speaker 1: had you know, orchestrated this um and and then subsequently 190 00:09:33,440 --> 00:09:38,360 Speaker 1: another another incidence of corporate um um surveillance of one 191 00:09:38,360 --> 00:09:42,239 Speaker 1: of the employees, and you know, and you know, continuing 192 00:09:42,520 --> 00:09:46,880 Speaker 1: um to be followed by news about you know, internal warfares, etcetera, etcetera, 193 00:09:47,320 --> 00:09:48,760 Speaker 1: And and this came to a head really in the 194 00:09:48,840 --> 00:09:52,040 Speaker 1: last week where it appeared, you know, it was reported 195 00:09:52,040 --> 00:09:56,120 Speaker 1: that the chairman was about to ounced the CEO. Investors 196 00:09:56,120 --> 00:09:59,080 Speaker 1: weighed in backing the CEO, and it's you know, today's 197 00:09:59,200 --> 00:10:03,360 Speaker 1: the outcome of that boardroom battle sees T and TM 198 00:10:03,480 --> 00:10:08,280 Speaker 1: leave to be succeeded by the first Swiss born CEO 199 00:10:08,400 --> 00:10:11,760 Speaker 1: in almost twenty years, atop the Swiss farm initially shares 200 00:10:11,800 --> 00:10:15,440 Speaker 1: of credits we traded in Switzerland down UH they still 201 00:10:15,440 --> 00:10:17,760 Speaker 1: are down, but much less than they were initially, now 202 00:10:17,800 --> 00:10:19,760 Speaker 1: down just for tense of a percent. Do we have 203 00:10:19,800 --> 00:10:22,520 Speaker 1: any sense of the new path forward? Was this an 204 00:10:22,559 --> 00:10:25,960 Speaker 1: issue with t gent TM strategy or a culture clash 205 00:10:26,280 --> 00:10:30,120 Speaker 1: or perhaps something personal? Well, I think, you know, you've 206 00:10:30,120 --> 00:10:32,760 Speaker 1: had a strategy that he put in place, and this 207 00:10:32,880 --> 00:10:36,559 Speaker 1: this structuring which basically saw the bank shrink and and 208 00:10:37,040 --> 00:10:39,760 Speaker 1: shift more of the business towards wealth management and away 209 00:10:39,760 --> 00:10:43,040 Speaker 1: from UM invest and banking and volatile trading, that hasn't 210 00:10:43,120 --> 00:10:46,240 Speaker 1: really yet delivered as much of of the fruits as 211 00:10:46,400 --> 00:10:48,560 Speaker 1: t and would have liked. By now that was starting 212 00:10:48,600 --> 00:10:50,480 Speaker 1: to come through, and I think we'll see some strong 213 00:10:50,920 --> 00:10:54,439 Speaker 1: numbers on the fourth quarter when their report next week. UM. 214 00:10:54,480 --> 00:10:56,840 Speaker 1: So you had a you know, some questions over strategy 215 00:10:56,960 --> 00:11:00,400 Speaker 1: just because it's taken so long for that to translate 216 00:11:00,440 --> 00:11:04,120 Speaker 1: into better shareholder returns. UM. On the other hand, yes, 217 00:11:04,160 --> 00:11:07,360 Speaker 1: you've had this huge damage to the bank's franchise and 218 00:11:07,360 --> 00:11:11,240 Speaker 1: reputation UM over what appears to be you know, quite 219 00:11:11,360 --> 00:11:16,280 Speaker 1: a bitter internal UM internal warfare and and and certainly 220 00:11:16,280 --> 00:11:18,640 Speaker 1: it's put a spotlight on on the culture but also 221 00:11:18,679 --> 00:11:21,080 Speaker 1: on the governance of the bank. UM. You know, the 222 00:11:21,080 --> 00:11:24,319 Speaker 1: CEO claiming not to know about what his CEO was 223 00:11:24,440 --> 00:11:27,680 Speaker 1: up to, and the board equally being in the dark 224 00:11:27,800 --> 00:11:30,480 Speaker 1: about what its leadership was up to. It all points to, 225 00:11:30,600 --> 00:11:34,120 Speaker 1: you know, certain concerns of controls and governance right across 226 00:11:34,120 --> 00:11:37,240 Speaker 1: the farm. Well. Attentioning to me a Lisa about this 227 00:11:37,320 --> 00:11:40,160 Speaker 1: whole saga was that some just recently in the less 228 00:11:40,200 --> 00:11:42,920 Speaker 1: several days, some big shareholders of Credit Source came out 229 00:11:42,960 --> 00:11:47,760 Speaker 1: in support of the austed CEO TM yet the board 230 00:11:47,840 --> 00:11:51,840 Speaker 1: still moved to ausked him from the company. What's the 231 00:11:51,920 --> 00:11:54,360 Speaker 1: situation there? But of course, you know, these were three 232 00:11:54,440 --> 00:11:57,200 Speaker 1: large shareholders, but they're not the only shareholders. You know, 233 00:11:57,640 --> 00:12:01,359 Speaker 1: Bloomberg is reporting that other investor does, including the Guitars. 234 00:12:01,840 --> 00:12:06,000 Speaker 1: We're backing the chairman on this. Um. I think, um, 235 00:12:06,160 --> 00:12:07,320 Speaker 1: you see, you have to you have to bear in 236 00:12:07,320 --> 00:12:09,120 Speaker 1: mind that what we're seeing is not, you know, necessarily 237 00:12:09,160 --> 00:12:12,280 Speaker 1: everything that's going on behind the scenes. Um. But I 238 00:12:12,320 --> 00:12:15,040 Speaker 1: think what's what's significant is really that from what I'm 239 00:12:15,040 --> 00:12:16,959 Speaker 1: picking up and what I'm reading and from one of 240 00:12:17,040 --> 00:12:21,319 Speaker 1: what we're hearing, is that this doesn't necessarily bring closure 241 00:12:21,760 --> 00:12:25,120 Speaker 1: to this chapter. There's still an investigation on going by 242 00:12:25,160 --> 00:12:30,360 Speaker 1: the local regulator. Into governance and controls. And you have 243 00:12:30,440 --> 00:12:32,880 Speaker 1: a CEO now who will take over from t J 244 00:12:32,960 --> 00:12:36,000 Speaker 1: and t M um who who's you know, whose remate 245 00:12:36,040 --> 00:12:38,720 Speaker 1: is a little bit unclear because in a year's time 246 00:12:38,800 --> 00:12:41,520 Speaker 1: the chairman will definitely go. He's confirmed that he's only 247 00:12:41,559 --> 00:12:44,560 Speaker 1: going to serve out maximum another year. Um. And that 248 00:12:44,640 --> 00:12:46,880 Speaker 1: leads to potential questions as to whether this is really 249 00:12:46,920 --> 00:12:50,439 Speaker 1: a permanent CEO succession or whether it's you know, an 250 00:12:50,440 --> 00:12:54,440 Speaker 1: interim step towards you know, further strate teacher reviews further 251 00:12:54,480 --> 00:12:56,559 Speaker 1: down the line, and perhaps a new management at least. 252 00:12:56,559 --> 00:12:58,680 Speaker 1: So I'm just wondering, what do you think that Credit 253 00:12:58,720 --> 00:13:03,040 Speaker 1: Suite needs to do in order to bolst their profitability. Well, 254 00:13:03,040 --> 00:13:05,440 Speaker 1: I think we'll learn a little bit more, um, you 255 00:13:05,480 --> 00:13:07,960 Speaker 1: know this coming um, these coming elearnings next week. In 256 00:13:08,040 --> 00:13:10,760 Speaker 1: terms of how how successful that restructuring has been. I 257 00:13:10,760 --> 00:13:14,920 Speaker 1: think there's been a very strong shift towards UM lending 258 00:13:15,080 --> 00:13:18,600 Speaker 1: in particularly in the wealth management business and particularly in Asia. 259 00:13:19,000 --> 00:13:21,800 Speaker 1: And of course we've we've seen, um, you know, what's 260 00:13:21,840 --> 00:13:24,400 Speaker 1: been happening in Hong Kong and the repercussions in the 261 00:13:24,400 --> 00:13:28,079 Speaker 1: economy from from the coronavirus both you know, in China 262 00:13:28,160 --> 00:13:31,160 Speaker 1: and Hong Kong. There are some questions as to whether this, 263 00:13:31,400 --> 00:13:36,199 Speaker 1: you know, very excessive growth in Asia driven really by 264 00:13:36,320 --> 00:13:39,520 Speaker 1: top line targets is going to um you know, it's 265 00:13:39,520 --> 00:13:42,400 Speaker 1: going to lead to potential more difficulty in delivering those 266 00:13:42,400 --> 00:13:45,360 Speaker 1: shareholder returns. A Lisa Martin News thank you so much 267 00:13:45,360 --> 00:13:47,040 Speaker 1: for being with us. A Lisa Martin News is a 268 00:13:47,040 --> 00:13:50,760 Speaker 1: columnist covering finance for Bloomberg Opinion. Joining us from London. 269 00:13:50,760 --> 00:13:53,880 Speaker 1: You could read our columns Bloomberg dot com, Slash Opinion 270 00:13:53,960 --> 00:13:56,600 Speaker 1: or O P I and go on the Bloomberg. Interesting 271 00:13:56,640 --> 00:13:59,959 Speaker 1: to see the market response to the credit suit. Snoo 272 00:14:00,040 --> 00:14:02,000 Speaker 1: is t G and TM after joining the bank as 273 00:14:02,040 --> 00:14:05,240 Speaker 1: chief executive officer in two thousand and fifteen to parting 274 00:14:05,400 --> 00:14:13,120 Speaker 1: being pushed out ousted after a battle in the boardroom. 275 00:14:13,200 --> 00:14:15,680 Speaker 1: We got the latest US jobs report out this morning. 276 00:14:15,720 --> 00:14:19,560 Speaker 1: It was a blowout number two thousand jobs added that 277 00:14:19,640 --> 00:14:23,440 Speaker 1: was compared to estimates of economist survey by Bloomberg of 278 00:14:23,480 --> 00:14:27,200 Speaker 1: a hundred and sixty five. The market's response negative. It 279 00:14:27,240 --> 00:14:29,160 Speaker 1: took it as bad news. Joining us now to talk 280 00:14:29,160 --> 00:14:32,680 Speaker 1: about the actual underlying market and why there could be 281 00:14:32,720 --> 00:14:35,440 Speaker 1: such a negative response. Tom gimbal He his chief executive 282 00:14:35,440 --> 00:14:38,920 Speaker 1: officer of global staffing company LaSalle Network. Tom, can you 283 00:14:38,920 --> 00:14:41,960 Speaker 1: give us a sense was there anything in this report 284 00:14:42,160 --> 00:14:46,200 Speaker 1: that was anything other than positive? Well, I think people 285 00:14:46,240 --> 00:14:48,640 Speaker 1: are always looking for there to be a bigger increase 286 00:14:48,680 --> 00:14:51,600 Speaker 1: in wages. They're always looking to have a jump in 287 00:14:51,680 --> 00:14:55,200 Speaker 1: participation rate. UM. What I always call the chicken little 288 00:14:55,240 --> 00:14:57,560 Speaker 1: effect that that the better it gets, the more people 289 00:14:57,600 --> 00:15:00,680 Speaker 1: are waiting for the sky to fall. And so there's 290 00:15:00,720 --> 00:15:02,800 Speaker 1: there's that situation. But you know, when you're when you're 291 00:15:02,800 --> 00:15:05,520 Speaker 1: talking about the market and how they're seeing it, sometimes 292 00:15:05,720 --> 00:15:08,880 Speaker 1: it is just serendipitous that the market goes down based 293 00:15:08,880 --> 00:15:11,240 Speaker 1: on whatever the number is. Tom, I know that you 294 00:15:11,280 --> 00:15:14,320 Speaker 1: guys talked to a lot of companies out there. Are 295 00:15:14,600 --> 00:15:17,120 Speaker 1: you finding are the companies out there finding It's really 296 00:15:17,160 --> 00:15:21,200 Speaker 1: hard to find talent and keep talent. It is extremely 297 00:15:21,200 --> 00:15:22,920 Speaker 1: hard to find town when you're looking at a three 298 00:15:22,960 --> 00:15:26,560 Speaker 1: point five percent unemployment radio ticked up at tentsive a 299 00:15:26,560 --> 00:15:29,640 Speaker 1: point to three point six percent UM. It's really hard 300 00:15:29,680 --> 00:15:32,160 Speaker 1: to find people. So what companies are doing is they're 301 00:15:32,240 --> 00:15:36,960 Speaker 1: hiring a lot more recent college graduates, they are transitioning people, 302 00:15:36,960 --> 00:15:39,560 Speaker 1: They're spending a lot more money on training and development 303 00:15:39,880 --> 00:15:42,240 Speaker 1: is one of the leading areas that companies are investing in. 304 00:15:42,680 --> 00:15:46,120 Speaker 1: And then also, um, you're getting people to move. But 305 00:15:46,600 --> 00:15:51,120 Speaker 1: the act of people, even executives, leaving one job for another, 306 00:15:51,640 --> 00:15:54,120 Speaker 1: there's a little bit of hesitancy because they don't want 307 00:15:54,120 --> 00:15:56,200 Speaker 1: to be the low man on the totem pole if 308 00:15:56,240 --> 00:15:59,880 Speaker 1: the bottom does followut this is interesting because we're hearing 309 00:15:59,880 --> 00:16:02,600 Speaker 1: the job gains are coming at the lower end of 310 00:16:02,640 --> 00:16:05,120 Speaker 1: the totem poll when it comes to wages and skills 311 00:16:05,520 --> 00:16:09,040 Speaker 1: in the jobs market. So if that's the case, and 312 00:16:09,120 --> 00:16:12,640 Speaker 1: that's where we're seeing the additional jobs and the wage increases, 313 00:16:12,680 --> 00:16:15,200 Speaker 1: why aren't we seeing them more at the top where 314 00:16:15,200 --> 00:16:19,640 Speaker 1: skills are are sort of more necessary. The people don't exist, right, 315 00:16:19,680 --> 00:16:23,280 Speaker 1: So so the factory if you will, of producing people 316 00:16:23,760 --> 00:16:27,720 Speaker 1: is always going to be in college graduates and unskilled 317 00:16:28,360 --> 00:16:31,600 Speaker 1: uh labor if you will call centers and customer service 318 00:16:32,160 --> 00:16:36,520 Speaker 1: uh people doing hospitality and service jobs. So when you 319 00:16:36,600 --> 00:16:39,160 Speaker 1: have that, that's where it's going to be there there 320 00:16:39,200 --> 00:16:41,280 Speaker 1: you don't just find a surplus at three point five 321 00:16:41,320 --> 00:16:45,680 Speaker 1: percent unemployment of DYR people. Which is the question again 322 00:16:45,720 --> 00:16:48,840 Speaker 1: about capital expenditure, about why we're not seeing a company 323 00:16:48,960 --> 00:16:51,680 Speaker 1: spend more on training people and getting up the skills 324 00:16:52,200 --> 00:16:54,920 Speaker 1: UH to fill these jobs. If there just aren't the people, 325 00:16:55,040 --> 00:16:57,880 Speaker 1: why aren't we seeing more of that? Well, I think 326 00:16:57,920 --> 00:17:00,760 Speaker 1: we are. It takes time. So you know, every Fortune 327 00:17:00,760 --> 00:17:03,680 Speaker 1: five hundred companies, different small the medium sized companies have 328 00:17:03,840 --> 00:17:06,840 Speaker 1: always been the engine for UH for growth in this 329 00:17:07,000 --> 00:17:09,840 Speaker 1: country and so, but they're not going to have full 330 00:17:10,160 --> 00:17:13,160 Speaker 1: huge UM training and development when you get the Fortune 331 00:17:13,200 --> 00:17:16,440 Speaker 1: five companies to implement something like that at the level 332 00:17:16,480 --> 00:17:19,000 Speaker 1: of jobs that it needs to be there, there just isn't. 333 00:17:19,440 --> 00:17:22,080 Speaker 1: If you look at where the skills gap exists, the 334 00:17:22,119 --> 00:17:25,679 Speaker 1: majority of jobs that people that companies need on the 335 00:17:25,720 --> 00:17:29,200 Speaker 1: medium to bigger size companies are where there aren't people. 336 00:17:29,320 --> 00:17:32,159 Speaker 1: You can't train somebody who's been a construction worker to 337 00:17:32,240 --> 00:17:34,840 Speaker 1: be a data scientist. You can't take a salesperson turn 338 00:17:34,880 --> 00:17:38,879 Speaker 1: them into an accountant. So the aspect of training is 339 00:17:39,040 --> 00:17:42,679 Speaker 1: very different for UM training and acclimating them for a 340 00:17:42,760 --> 00:17:46,280 Speaker 1: job going up on a vertical level versus horizontal movement 341 00:17:46,320 --> 00:17:49,320 Speaker 1: into a totally different category. And if someone's brain isn't 342 00:17:49,320 --> 00:17:51,520 Speaker 1: programmed to be an engineer, you can't turn them into one. 343 00:17:52,080 --> 00:17:55,639 Speaker 1: Tom are you seeing any regional you know differences and 344 00:17:55,800 --> 00:17:59,480 Speaker 1: across the US in terms of job demand job creation 345 00:17:59,640 --> 00:18:02,119 Speaker 1: is it's still the you know, the sun Belt is 346 00:18:02,200 --> 00:18:05,760 Speaker 1: kind of the growth area for example. No, I'm seeing 347 00:18:05,800 --> 00:18:08,960 Speaker 1: a lot more of the coast springing in higher volume 348 00:18:09,119 --> 00:18:13,240 Speaker 1: jobs into the Midwest. Uh So, what we're seeing is 349 00:18:13,240 --> 00:18:16,480 Speaker 1: is that the cost of living and the cost of 350 00:18:16,680 --> 00:18:21,040 Speaker 1: salaries on both coasts have gotten so high, and for 351 00:18:21,040 --> 00:18:25,720 Speaker 1: for non technology driven jobs, non developer, non engineers, a 352 00:18:25,760 --> 00:18:28,160 Speaker 1: lot of those jobs can be done from the Midwest. 353 00:18:28,200 --> 00:18:30,879 Speaker 1: So you're starting to see uh, kind of not a 354 00:18:30,960 --> 00:18:34,000 Speaker 1: rebirth but for lack of a better phrase, in Chicago, 355 00:18:34,240 --> 00:18:37,360 Speaker 1: in St. Louis, I think it'll end up going into Detroit, 356 00:18:37,920 --> 00:18:40,600 Speaker 1: UM and you're seeing more that Dallas continues to be 357 00:18:40,640 --> 00:18:43,280 Speaker 1: a big, big hub of companies and then obviously the 358 00:18:43,320 --> 00:18:47,160 Speaker 1: Austin of the second Silicon Valley s type of environment. 359 00:18:47,280 --> 00:18:49,120 Speaker 1: But you're gonna see a lot more in the Midwest 360 00:18:49,160 --> 00:18:52,119 Speaker 1: and continue to see that flourish. Is that at the 361 00:18:52,119 --> 00:18:58,240 Speaker 1: expense of the workforce in the big cities on the coasts. No, 362 00:18:58,560 --> 00:19:02,040 Speaker 1: because the companies that are air still have huge hubs, 363 00:19:02,080 --> 00:19:06,000 Speaker 1: whether it's San Francisco with with LinkedIn and Oracle and 364 00:19:06,080 --> 00:19:09,120 Speaker 1: what Exist and Apple obviously, and Facebook and what's there. 365 00:19:09,160 --> 00:19:12,840 Speaker 1: They have so many huge companies out there and on 366 00:19:12,880 --> 00:19:15,359 Speaker 1: the East Coast with the financial services of Fidelity and 367 00:19:15,480 --> 00:19:18,399 Speaker 1: Goldman and and what have you in financial services, that 368 00:19:18,480 --> 00:19:19,879 Speaker 1: those are still going to be there. But you know, 369 00:19:19,920 --> 00:19:22,400 Speaker 1: if you look at uh it's not necessarily the Midwest, 370 00:19:22,400 --> 00:19:25,240 Speaker 1: but Salt Lake City is a huge hotbed for hiring 371 00:19:25,320 --> 00:19:28,600 Speaker 1: right now, has been probably the last half decade. And 372 00:19:28,680 --> 00:19:32,040 Speaker 1: Goldman SAX has a huge office in uh IN in 373 00:19:32,520 --> 00:19:35,159 Speaker 1: Salt Lake City. Tom Gimble, thank you so much for 374 00:19:35,280 --> 00:19:37,600 Speaker 1: joining us. Tom as a founder and CEO of LaSalle 375 00:19:37,760 --> 00:19:42,000 Speaker 1: Network based in Chicago, helping us breakdown the jobs numbers today. 376 00:19:42,040 --> 00:19:46,080 Speaker 1: Five thousand jobs added in the latest month, wages up 377 00:19:46,119 --> 00:19:49,600 Speaker 1: about three point one percent, So and uh it just 378 00:19:49,600 --> 00:19:53,359 Speaker 1: some continued strength in the job sector, driving continued strength 379 00:19:53,400 --> 00:19:57,400 Speaker 1: in the US consumer, driving continued strength in the US economy. 380 00:19:57,560 --> 00:19:59,960 Speaker 1: That has been the story that continues to be the 381 00:20:00,080 --> 00:20:02,280 Speaker 1: story in the US. Looking at the markets here the 382 00:20:02,320 --> 00:20:06,400 Speaker 1: SMP down six, down down one seventy three, uh NASDAC 383 00:20:06,840 --> 00:20:09,800 Speaker 1: down six here to end the week. Looking at the 384 00:20:09,840 --> 00:20:12,320 Speaker 1: treasury market up fifteen thirty seconds, pushing a ten year 385 00:20:12,400 --> 00:20:20,200 Speaker 1: yield down to one point five eight percent. But we're 386 00:20:20,200 --> 00:20:22,159 Speaker 1: about two thirds of the way through earning season, and 387 00:20:22,200 --> 00:20:25,120 Speaker 1: we've heard a whole host of CEOs from a whole 388 00:20:25,119 --> 00:20:27,960 Speaker 1: host of industries talking about the impact of the coronavirus 389 00:20:28,000 --> 00:20:30,639 Speaker 1: on their businesses, and none more so than the global 390 00:20:30,720 --> 00:20:32,959 Speaker 1: travel business. To get a sense of what's going on 391 00:20:33,000 --> 00:20:36,240 Speaker 1: with the US airlines, we welcome Mary Slangenstein. She's a 392 00:20:36,359 --> 00:20:39,479 Speaker 1: US airlines reporter for Bloomberg News, joining us on the 393 00:20:39,480 --> 00:20:41,800 Speaker 1: phone from our Dallas bureau. Mary, thanks so much for 394 00:20:41,880 --> 00:20:43,119 Speaker 1: joining us on. I want we want to get that 395 00:20:43,280 --> 00:20:45,960 Speaker 1: Jet Blue story they're launching a new low cost airline, 396 00:20:46,000 --> 00:20:47,640 Speaker 1: but first I just want to get your thoughts kind 397 00:20:47,640 --> 00:20:50,800 Speaker 1: of what you're seeing right here right now as it 398 00:20:50,840 --> 00:20:53,359 Speaker 1: relates to the US airlines and maybe how they're being 399 00:20:53,400 --> 00:20:57,919 Speaker 1: impacted by the coronavirus. Well, the US carriers UM that 400 00:20:58,000 --> 00:21:01,600 Speaker 1: fly to China have pretty much suspended their flights to 401 00:21:02,240 --> 00:21:06,480 Speaker 1: mainland China. UM they've also suspended or are suspending Hong 402 00:21:06,560 --> 00:21:09,600 Speaker 1: Kong routes, but on a little bit different time frame. 403 00:21:09,680 --> 00:21:14,240 Speaker 1: For example, American Airlines UM is only suspending DFW to 404 00:21:14,280 --> 00:21:19,040 Speaker 1: Hong Kong to February, and UM United is suspending Hong 405 00:21:19,119 --> 00:21:22,920 Speaker 1: Kong also to February twenty so there that's a little 406 00:21:22,920 --> 00:21:27,239 Speaker 1: bit shorter suspension of flights than to mainland China. UM. 407 00:21:27,280 --> 00:21:31,159 Speaker 1: They aren't really talking yet about monetary damages or monetary 408 00:21:31,200 --> 00:21:35,120 Speaker 1: losses related to the suspensions of flights, Mary, so we'll 409 00:21:35,200 --> 00:21:38,080 Speaker 1: keep watching to see whether there's any kind of financial impact. 410 00:21:38,080 --> 00:21:40,919 Speaker 1: But interesting to see, UH, that they are suspending some 411 00:21:41,000 --> 00:21:43,000 Speaker 1: of these flights. In the meantime, you wrote a story 412 00:21:43,400 --> 00:21:46,080 Speaker 1: that got our attention because it seems like a time 413 00:21:46,080 --> 00:21:49,760 Speaker 1: of consolidation in the airline industry, and yet the founder 414 00:21:49,800 --> 00:21:53,200 Speaker 1: of Jet Blue is trying to launch a new airline. 415 00:21:53,600 --> 00:21:55,560 Speaker 1: It's on track to start flying this year, and it 416 00:21:55,560 --> 00:21:59,840 Speaker 1: will focus on routes that primarily don't have anyone currently 417 00:22:00,200 --> 00:22:04,240 Speaker 1: operating in them. Can you explain what this is sure, UM. 418 00:22:04,840 --> 00:22:07,640 Speaker 1: David Neilman, who founded Jet Blue and has founded several 419 00:22:07,720 --> 00:22:12,280 Speaker 1: other airlines, including Ausul in Brazil, has decided he wants 420 00:22:12,280 --> 00:22:15,600 Speaker 1: to get back into the US aviation market, and so 421 00:22:15,640 --> 00:22:19,800 Speaker 1: he's founding UM an airline called Breeze Airways. And what 422 00:22:19,920 --> 00:22:22,000 Speaker 1: Neilman says he's done is he's been able to go 423 00:22:22,080 --> 00:22:26,159 Speaker 1: through look at routes and pull out five hundred potential 424 00:22:26,280 --> 00:22:28,960 Speaker 1: city pairs, So that's you know, flying from city A 425 00:22:29,040 --> 00:22:33,000 Speaker 1: to CITYB that don't have any NonStop competition, and those 426 00:22:33,040 --> 00:22:34,959 Speaker 1: are the routes that he wants to focus on with 427 00:22:35,000 --> 00:22:38,879 Speaker 1: this new airline, and he's planning to operate on midsize 428 00:22:38,920 --> 00:22:43,160 Speaker 1: cities that may be lost NonStop service as larger airlines 429 00:22:43,240 --> 00:22:46,320 Speaker 1: combined and then started to focus on building up there 430 00:22:46,359 --> 00:22:50,600 Speaker 1: already established hubs. Mary, I mean, I'm always fascinating when 431 00:22:50,600 --> 00:22:54,080 Speaker 1: I see people getting into the airline business. It seems 432 00:22:54,119 --> 00:22:58,359 Speaker 1: like such a brtally tough business with competition and the 433 00:22:58,480 --> 00:23:01,080 Speaker 1: unions and jet fuel and all those type types of things. 434 00:23:01,160 --> 00:23:04,480 Speaker 1: Is a tough, tough business. What's his cost advantage going 435 00:23:04,680 --> 00:23:06,879 Speaker 1: to be to, you know, go up against some of 436 00:23:06,880 --> 00:23:10,080 Speaker 1: these bigger players. Well, Newman claims that, you know, he's 437 00:23:10,080 --> 00:23:12,960 Speaker 1: going to be excuse me, get a big cost advantage 438 00:23:13,000 --> 00:23:15,160 Speaker 1: from the size of the aircraft that he's gonna fly. 439 00:23:15,560 --> 00:23:19,080 Speaker 1: He's smalling flying smaller planes. And also the fact that 440 00:23:19,160 --> 00:23:22,040 Speaker 1: he's not gonna fly, um every day of the week 441 00:23:22,359 --> 00:23:24,960 Speaker 1: to every location, and there may even be times of 442 00:23:24,960 --> 00:23:27,240 Speaker 1: the year where he doesn't fly. He's gonna fly only 443 00:23:27,280 --> 00:23:30,879 Speaker 1: on peak days periods of peak demand. Um that's a 444 00:23:31,000 --> 00:23:34,320 Speaker 1: very similar model to what Allegiant Airline flies and they've 445 00:23:34,359 --> 00:23:37,320 Speaker 1: been very successful with it. How much room is there 446 00:23:37,320 --> 00:23:41,119 Speaker 1: for another airline, um, you know, there's probably room for 447 00:23:41,160 --> 00:23:45,520 Speaker 1: another airline. UM. It's hard to tell from this, you know, 448 00:23:45,840 --> 00:23:48,959 Speaker 1: this date, at this point in time, how successful Neilman 449 00:23:49,000 --> 00:23:52,120 Speaker 1: will be. He's certainly been successful in the past with 450 00:23:52,440 --> 00:23:55,399 Speaker 1: um West Jet in Canada and then Jet Blue he 451 00:23:56,040 --> 00:23:58,760 Speaker 1: founded Jet Blue here in the United States, So he's 452 00:23:58,800 --> 00:24:00,919 Speaker 1: been able to work some magic in the past, and 453 00:24:00,960 --> 00:24:02,760 Speaker 1: we'll have to see if he's able to do that again. 454 00:24:03,200 --> 00:24:06,440 Speaker 1: It's interesting, you know, I certainly have I'm aware that 455 00:24:06,480 --> 00:24:09,080 Speaker 1: a lot of midsized cities have lost a lot of 456 00:24:09,480 --> 00:24:12,200 Speaker 1: capacity here, but I often think that it's because of 457 00:24:12,240 --> 00:24:14,080 Speaker 1: the Uniteds of the worlds are the Deltas of the 458 00:24:14,119 --> 00:24:17,200 Speaker 1: worlds have said it's just not economical to fly there, 459 00:24:17,240 --> 00:24:20,720 Speaker 1: given the load factors and whatnot. So is it really 460 00:24:20,760 --> 00:24:24,000 Speaker 1: all about the fact that he's gonna fly different planes, 461 00:24:24,080 --> 00:24:29,400 Speaker 1: maybe less union workforce? Is that kind of his business model? Yeah, 462 00:24:29,440 --> 00:24:31,920 Speaker 1: he's probably initially not going to have any unions working 463 00:24:31,960 --> 00:24:34,760 Speaker 1: at the airline as they get started, which was the 464 00:24:34,800 --> 00:24:37,360 Speaker 1: situation of Jet Blue for quite some time. But then 465 00:24:37,400 --> 00:24:39,840 Speaker 1: he also is saying that he's going to have a 466 00:24:39,840 --> 00:24:43,320 Speaker 1: lot of this stuff linked to technology, so that people 467 00:24:43,320 --> 00:24:46,360 Speaker 1: will be able to do almost everything on an app. Right, 468 00:24:46,400 --> 00:24:49,840 Speaker 1: So maybe they won't have to have people standing at 469 00:24:49,920 --> 00:24:53,040 Speaker 1: counters in the in the airport, or you know, there'll 470 00:24:53,080 --> 00:24:57,520 Speaker 1: be other ways that they can reduce the requirement for personnel. UM. 471 00:24:57,560 --> 00:24:59,720 Speaker 1: So I think he's going to count on technology a lot. 472 00:25:00,040 --> 00:25:03,240 Speaker 1: He's going to count on um. These new Airbus A 473 00:25:03,359 --> 00:25:07,000 Speaker 1: two twenty aircraft that he's ordered, Um, they're they're very 474 00:25:07,080 --> 00:25:10,639 Speaker 1: fuel efficient, they're very popular new aircraft. He's also flying 475 00:25:10,680 --> 00:25:14,840 Speaker 1: some used planes from his airline in Brazil. UM, but 476 00:25:14,880 --> 00:25:16,920 Speaker 1: he's saying he's going to be able to make good 477 00:25:17,040 --> 00:25:19,720 Speaker 1: use of those and even if he only has fifty 478 00:25:19,800 --> 00:25:21,960 Speaker 1: or sixty people on them, that they'll be able to 479 00:25:22,000 --> 00:25:25,400 Speaker 1: be profitable. When I hear Mary fuel efficient, I think 480 00:25:25,520 --> 00:25:28,040 Speaker 1: of a box with nothing else in it, and you're 481 00:25:28,080 --> 00:25:31,560 Speaker 1: basically foisted into the corner. It's and a little sardine 482 00:25:31,560 --> 00:25:33,400 Speaker 1: in the corner. Because that seems to be where we're 483 00:25:33,560 --> 00:25:38,200 Speaker 1: heading in terms of economy travel. I'm wondering is there 484 00:25:38,200 --> 00:25:41,240 Speaker 1: any pushed back by consumers at this point with respect 485 00:25:41,280 --> 00:25:44,080 Speaker 1: to the comfort of the seats that they have, or 486 00:25:44,200 --> 00:25:47,280 Speaker 1: is it entirely a cost basis um. You know, for 487 00:25:47,320 --> 00:25:51,800 Speaker 1: the people whose primary concern is the cost of flying, um, 488 00:25:51,920 --> 00:25:55,720 Speaker 1: you know, they will buy the basic economy seats, which 489 00:25:55,760 --> 00:25:59,240 Speaker 1: doesn't always translate to less leg room. It's just less, 490 00:25:59,280 --> 00:26:01,080 Speaker 1: you know, addition all things that are included in the 491 00:26:01,200 --> 00:26:04,640 Speaker 1: fair UM, and people continue to fly on Spirit Air, 492 00:26:04,760 --> 00:26:07,560 Speaker 1: which you know has a very little leg room. UM. 493 00:26:07,600 --> 00:26:09,880 Speaker 1: It just depends on what you value when you fly, 494 00:26:10,040 --> 00:26:12,879 Speaker 1: and certainly if you value more leg room, that option 495 00:26:12,960 --> 00:26:15,600 Speaker 1: is available for you on all the big carriers. You know, 496 00:26:15,640 --> 00:26:18,240 Speaker 1: they have sections that have more leg room cost you more. 497 00:26:18,320 --> 00:26:20,359 Speaker 1: But if that's what's important to you, then you know 498 00:26:20,760 --> 00:26:22,719 Speaker 1: they seem to be having a lot of success with it. 499 00:26:23,000 --> 00:26:25,359 Speaker 1: Mary Schlangenstein lang in Stein, thank you so much for 500 00:26:25,359 --> 00:26:28,040 Speaker 1: being with us. Mary s Langenstein, us airlines reporter for 501 00:26:28,160 --> 00:26:31,159 Speaker 1: Bloomberg News, joining us on the phone from Dallas. I 502 00:26:31,200 --> 00:26:36,080 Speaker 1: have to say I've flown Spirit and I will say, um, well, 503 00:26:36,119 --> 00:26:38,720 Speaker 1: I mean you have to pay for for absolutely everything. 504 00:26:38,720 --> 00:26:41,040 Speaker 1: Everything's all a cart. Now, everything's all a cart, and 505 00:26:41,119 --> 00:26:43,199 Speaker 1: you have to wonder whether at a certain point it 506 00:26:43,200 --> 00:26:46,040 Speaker 1: all adds up to the same price yeah, absolutely, I'm 507 00:26:46,119 --> 00:26:48,160 Speaker 1: I'm just looking at the airline stock sort of trailing 508 00:26:48,160 --> 00:26:51,320 Speaker 1: twelve months, decidedly mixed again, United down ten percent, America 509 00:26:51,359 --> 00:26:54,560 Speaker 1: down on Delta up seven team. So it's just a 510 00:26:55,160 --> 00:26:57,040 Speaker 1: brutal business. There's kind of a double way I mean 511 00:26:57,080 --> 00:26:58,960 Speaker 1: though here going on, because on one hand you have 512 00:26:59,040 --> 00:27:01,480 Speaker 1: reduced travel because as the spread of the coronavirus. In 513 00:27:01,520 --> 00:27:04,320 Speaker 1: the other hand, you have oil prices coming down, and 514 00:27:04,480 --> 00:27:08,040 Speaker 1: that cap is actually a huge tail wind to the 515 00:27:08,080 --> 00:27:10,439 Speaker 1: airlines because this is one of the biggest expenses. So 516 00:27:10,480 --> 00:27:13,719 Speaker 1: interesting to see how both of this will will affect 517 00:27:13,760 --> 00:27:16,920 Speaker 1: the industry at a time when in general travel is 518 00:27:16,920 --> 00:27:19,920 Speaker 1: getting hit pretty hard. Meanwhile, and markets were looking at 519 00:27:20,200 --> 00:27:22,800 Speaker 1: losses of the really clawing back from earlier declines. We're 520 00:27:22,840 --> 00:27:24,560 Speaker 1: seeing the NASTAC down less than two toenns of a 521 00:27:24,600 --> 00:27:27,040 Speaker 1: percent now, the SMPH down three tons of a percent, 522 00:27:27,520 --> 00:27:30,520 Speaker 1: thirty three thirty six on the SNP, and we're looking 523 00:27:30,560 --> 00:27:34,280 Speaker 1: at the NASTAC seven. Interesting to see how people are 524 00:27:34,280 --> 00:27:37,040 Speaker 1: interpreting the signs of whether the FED will cut or not. 525 00:27:37,160 --> 00:27:40,920 Speaker 1: After they released this report saying they're worried about the coronavirus, 526 00:27:41,080 --> 00:27:42,840 Speaker 1: people now saying, oh, maybe they'll just cut rates a 527 00:27:42,840 --> 00:27:45,080 Speaker 1: couple of times. Yeah. Absolutely, And you mentioned fuel as 528 00:27:45,080 --> 00:27:46,760 Speaker 1: it relates to the airlines. Looking at w t I 529 00:27:46,800 --> 00:27:49,359 Speaker 1: crewd here fifty dollars sixty seven cents barrel. Here. We 530 00:27:49,440 --> 00:27:52,080 Speaker 1: broke below fifty a couple of days ago, So oil 531 00:27:52,160 --> 00:27:56,199 Speaker 1: down on lower global demand expectations. Yeah, and just a 532 00:27:56,240 --> 00:27:59,159 Speaker 1: few weeks ago it was treading above sixty three dollars 533 00:27:59,200 --> 00:28:00,920 Speaker 1: a barrel at the beginning of the year, So down 534 00:28:01,840 --> 00:28:05,000 Speaker 1: dollars so far this year. And Lisa bramwe's with Paul Sweeney. 535 00:28:05,040 --> 00:28:09,480 Speaker 1: This is Bloomberg Markets. Thanks for listening to the Bloomberg 536 00:28:09,480 --> 00:28:12,160 Speaker 1: pen L podcast. You can subscribe and listen to interviews 537 00:28:12,160 --> 00:28:15,959 Speaker 1: at Apple Podcasts or whatever podcast platform you prefer. Paul Sweeney, 538 00:28:16,040 --> 00:28:18,800 Speaker 1: I'm on Twitter at pt Sweeney. I'm Lisa abram Woyit's 539 00:28:18,800 --> 00:28:21,840 Speaker 1: I'm on Twitter at Lisa abram woits one before the podcast. 540 00:28:21,840 --> 00:28:24,440 Speaker 1: You can always catch us worldwide on Bloomberg Radio.