Speaker 1: This is Bloomberg Business Week. I'm Carol Masser and I'm
Speaker 1: Jason Kelly. We're right here every day bringing you the
Speaker 1: latest news from the world's of business and finance, plus technology, politics, economics,
Speaker 1: all harnessing the power of Business Week reporters and editors.
Speaker 1: And of course Carol that's part of a team of
Speaker 1: twenty seven hundred journalists and analysts and more than a
Speaker 1: hundred and twenty countries and Jason. You can download Bloomberg
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Speaker 1: can also listen to our radio show at two pm
Speaker 1: Eastern on Bloomberg Radio every weekday, or watch us on
Speaker 1: YouTube by searching Bloomberg Global News. Investors. They are perhaps
Speaker 1: rightly worried about this spike that we're seeing across the
Speaker 1: country in coronavirus cases, especially in the sun Belts. This
Speaker 1: is not a disease. We know that summer is going
Speaker 1: to just sort of take away from us. Uh, the
Speaker 1: numbers are scary. John Tazzi is healthcare reporter for Bloomberg.
Speaker 1: He joins us on the phone from Queens And you know, John,
Speaker 1: I grew up in Houston, and so I look at
Speaker 1: what's going on in that city. I look at Texas
Speaker 1: and it's really troubling and a little bit scary. Help
Speaker 1: us understand where we are because two months after, almost
Speaker 1: three months after we were facing this in New York City,
Speaker 1: we're back to counting beds again. Yeah, I mean, I
Speaker 1: think it's a really concerning situation, um, as you said,
Speaker 1: and you know, not just in Texas, but a number
Speaker 1: of states um Arizona, California have recently set records for
Speaker 1: new cases um and you know, we we are seeing
Speaker 1: a rise in hospitalizations as well. So you know, sometimes
Speaker 1: new cases are just an indication of more testing. But
Speaker 1: I think there are an increasing number of positive tests, uh,
Speaker 1: and an increasing number of hospitalizations. And you know, the
Speaker 1: concern I think everywhere is to avoid getting to a
Speaker 1: point where hospital systems are, uh, you know, are overwhelmed
Speaker 1: that they have you know, not that they don't have
Speaker 1: enough debts to treat the patients they have coming in right,
Speaker 1: so much so that as you you know, put in
Speaker 1: your story that late yesterday the Texas Children's Hospital System
Speaker 1: in Houston began accepting adult COVID nineteen patients because of
Speaker 1: a surging demand. I do wonder John and your reporting.
Speaker 1: Have those states that are now dealing with surges and
Speaker 1: cases and and increasing hospitalization, have they learned anything? Are
Speaker 1: they better prepared than we were potentially here on the
Speaker 1: East Coast, you know, where it just kind of I
Speaker 1: think safe to say no one expected it, you know,
Speaker 1: to to shoot up as much as it did, and
Speaker 1: I think a lot of people were caught uh not,
Speaker 1: you know, unprepared. So I just wonder our hospital systems
Speaker 1: across the country better prepared now. UM. I think there
Speaker 1: are a lot of valuables in play. I think in
Speaker 1: some ways, yes, um, you know, everybody has now had
Speaker 1: uh some time to sort of see this coming and
Speaker 1: you know, to begin uh stockpileing uh personal protective equipment,
Speaker 1: UM you know in medicines, UM, you know, and to
Speaker 1: kind of really look carefully at their plans around how
Speaker 1: they are going to create surge capacity uh if they
Speaker 1: need to, um you know. But there are some other
Speaker 1: um factors that uh, you know pulling the other direction.
Speaker 1: In New York in uh in March and early April,
Speaker 1: basically everything stopped. People were not getting uh medical care
Speaker 1: for you know, non emergent issues other than COVID. A
Speaker 1: lot of schedules. Care was just canceled for weeks um
Speaker 1: in order to give the hospital's capacity to uh, you know,
Speaker 1: to treat the COVID surge. Um. In most of the country,
Speaker 1: elective surgeries are have resumed and hospitals are treating patients
Speaker 1: you know who who couldn't put up care indefinitely for
Speaker 1: you know, really serious issues in some cases, so you know,
Speaker 1: they're balanced thing that as well, along with you know,
Speaker 1: the kind of rising number of um of coronavirus cases,
Speaker 1: so being a little bit prochial here. How much do
Speaker 1: we need to worry in the Tri state area, which
Speaker 1: is starting to get back to work, where we it
Speaker 1: feels like, have been assured along the way that New
Speaker 1: York and and states surrounding would be ready if there
Speaker 1: was a second wave. What have we learned? What do
Speaker 1: we need to be worried about, especially because of what
Speaker 1: happened uh here before? Um. Well, I think that what
Speaker 1: the epidemnologists will tell you is that the potential for
Speaker 1: more spread of the virus exists everywhere, right because most
Speaker 1: of the population is still susceptible. So even though you
Speaker 1: know in New York that the number of people testing
Speaker 1: positive is very low, now and it feels much safer
Speaker 1: than it did, certainly a couple of months go. Um,
Speaker 1: you know, there's nothing to say that, you know, we
Speaker 1: won't be in a similar situation to what we're seeing
Speaker 1: in in Texas and Arizona again at some point down
Speaker 1: the line. And I think, you know, hospital systems everywhere
Speaker 1: are you know, considering, um, you know what they have
Speaker 1: to do to prepare for for uh, that kind of situation.
Speaker 1: And you know, one of the messages I think we're
Speaker 1: hearing from Health US victuals no, no, you know what
Speaker 1: I was just gonna say, just to wrap up, is
Speaker 1: I love the way you wrap up your story. And
Speaker 1: there's a quote I believe from one physician who talks
Speaker 1: about that even if the health system is as prepared
Speaker 1: as we can be, if we see the degree of
Speaker 1: COVID cases and hospitalizations and it keeps growing exponentially, Um,
Speaker 1: this doctor says, I don't know if even the best
Speaker 1: preparation of the world would be enough. And it just
Speaker 1: is once again, Um, you know, Jason, a repeat of
Speaker 1: you know you can prepare and prepare about when those
Speaker 1: numbers go off the chart, it's really tough to keep up.
Speaker 1: And that's potentially what we could see again. Um, John,
Speaker 1: thank you so much, really appreciate the story. And you're reporting.
Speaker 1: John Tazzi, healthcare reporter at Bloomberg News, joining us on
Speaker 1: the phone in Queens, New York. And Jason, listen, you
Speaker 1: know here we are once again check out most red
Speaker 1: on the Bloomberg terminal there are. You know, for a
Speaker 1: while the virus updates was trending much lower in terms
Speaker 1: of what everybody was reading on the terminal. It's back
Speaker 1: up again. We've been here before. We've seen this movie
Speaker 1: and and I think we didn't like it the first time,
Speaker 1: and we like it even less this time. So we're
Speaker 1: gonna keep a close eye on this for sure. Eager
Speaker 1: to get some time later with the dean of the
Speaker 1: Stanford Medical School and get his perspective on what they're
Speaker 1: seeing from a medical perspective. We have leaned heavily on
Speaker 1: doctors and deans like him to give us a real
Speaker 1: reality check in terms of preparation, but also, you know,
Speaker 1: some prescriptive advice on what should we what we should
Speaker 1: be thinking about when it comes to work in life
Speaker 1: and all of it. I have advice for you, Jason,
Speaker 1: wear a mask, yeah, and social distancing. Yeah, I'm just
Speaker 1: going to put it out there. Sorry, Sorry for the sarcasm.
Speaker 1: Large family grew up on sarcasm. Alright, it's not even
Speaker 1: sure it's sarcastic at this point, it's just direct. You're
Speaker 1: absolutely right. This is Bloomberg Business Week with Carol Masser
Speaker 1: and Jason Kelly on Bloomberg Radio. Well, today was day
Speaker 1: three of Bloomberg Global Amazing event wrapping it up actually
Speaker 1: right now, I believe they're wrapping it up here in
Speaker 1: the US. So it went around the world. It was
Speaker 1: in Asia, Middle East, Europe, and the United States obviously,
Speaker 1: and during the European portion. This morning I got to
Speaker 1: catch up with Bruce Flat. You've met him. We've spent
Speaker 1: some time with him out in l a and elsewhere.
Speaker 1: He's based in New York. He was in London. He's
Speaker 1: got a global portfolio. They are a massive real estate investment,
Speaker 1: massive real estate, infrastructure, renewables. We talked about all of it.
Speaker 1: Check out a portion of this conversation. I would just
Speaker 1: say that, you know, leave aside the health um impact
Speaker 1: of everything. Um, the only thing constant in life is changed.
Speaker 1: And uh, we've witnessed from all across the world, the
Speaker 1: closing down of offices and the opening up of offices,
Speaker 1: and we're we're virtually opened up all of our offices
Speaker 1: globally and we're back up at some office in London
Speaker 1: here we're probably New York were thirty um and you know,
Speaker 1: so the numbers have been have been going back up
Speaker 1: and it's taken us three months. It's been stressful for
Speaker 1: a lot of people. But um, you know the bottom line,
Speaker 1: this will pass, and this is the crisis of the day.
Speaker 1: But we'll look back at it, um and some small
Speaker 1: things are going to change. Bought a lot of going
Speaker 1: back to where they were, and we'll have another crisis
Speaker 1: in the future. I'm sure, um that will be just
Speaker 1: as bad as this one. When you're in the middle
Speaker 1: of it. So what are those small things that have changed?
Speaker 1: Because you have a window literally in figuratively into how
Speaker 1: we work. We spent so much of our time at
Speaker 1: the office, we spent shopping, you also have a window
Speaker 1: into that. What are the things that you see that
Speaker 1: will change in the short to mid term that we
Speaker 1: should be thinking about. Yes, so for offices, once we
Speaker 1: shut down office buildings around the world and that people
Speaker 1: went home, we started thinking this three months ago. We
Speaker 1: started thinking about what is it that we need to
Speaker 1: do get those offices back open, and that has included
Speaker 1: all of the things that you have seen if you're
Speaker 1: in an office today or you will see when you
Speaker 1: shortly go back, which is there's more distancing, elevators are
Speaker 1: have spacing out, there's more cleaning. Our air is better
Speaker 1: than what you're breathing in your house because we are
Speaker 1: um taking particles out of the air that we never
Speaker 1: took out before. So all of those things are happening
Speaker 1: in office buildings today and they are going to be
Speaker 1: some of the safest places in the world to be
Speaker 1: in the future. UM In In in retail, there's no doubt.
Speaker 1: There was this trend that was going on, and the
Speaker 1: trend was online and good retail. We're moving together and
Speaker 1: retailers were using them together as one UM space to
Speaker 1: deliver goods to customers, and that's going to be accelerated.
Speaker 1: There's no doubt. Uh. With curbside pick up probably increasing
Speaker 1: and other things happening, the trends that we're happening are
Speaker 1: going to continue to UM increase, some of them exponentially
Speaker 1: as you come out of this. And it's safe to say,
Speaker 1: and I know that this is your business, but you're
Speaker 1: still long office as a way of working. You've talked
Speaker 1: several times over the past few weeks about the power
Speaker 1: of people being together and those sorts of things. I
Speaker 1: think we're seeing that manifesting even in our social lives.
Speaker 1: Help me understand that a little bit. So here's what
Speaker 1: I would say. Our our view is that office space.
Speaker 1: After talking to virtually every company that we lease space
Speaker 1: two um that they're bringing their people back. The only
Speaker 1: the only reason some are saying we're actually not bringing
Speaker 1: back everyone right now is they don't have they don't
Speaker 1: have enough space to be able to have social distancing.
Speaker 1: While that's important to bring everyone back, So they may
Speaker 1: be bringing back of the people because of that, but
Speaker 1: eventually they're going to bring them all back. And I
Speaker 1: guess the point I would make, and I think this
Speaker 1: is in our company, but it's in other companies we
Speaker 1: talked to. The office is about the social interaction of
Speaker 1: people that creates a culture in a business. The spontaneity
Speaker 1: and the collaboration that comes from an office is incredibly
Speaker 1: important to a business, and you can't create that by
Speaker 1: video conference. Uh, you can maintain it for a while,
Speaker 1: and that's what we've all done for a little while.
Speaker 1: But you really can't do that over the longer term.
Speaker 1: So offices are going to be incredibly important as they
Speaker 1: were before, and in fact today, um, Jason, we're actually
Speaker 1: releasing greater amounts of space to people than they had
Speaker 1: before because they want to accommodate all our people and
Speaker 1: get them back quickly and uh, and so they're increasing
Speaker 1: their footprints versus getting taking less. That's fascinating. But you
Speaker 1: can go either way, right Jason. People can either you know,
Speaker 1: reduce their footprint and either have people out in the
Speaker 1: suburbs or working from home, or they can increase their
Speaker 1: footprint in the big cities to give everybody more space
Speaker 1: so that they feel comfortable. So that's and I listen,
Speaker 1: I've heard the death of major cities. How many times?
Speaker 1: How many times have we heard it. I don't think
Speaker 1: that's going to happen. I just think we're gonna have
Speaker 1: to figure out new ways. I think cities are going
Speaker 1: to change. I think you're going to have you know,
Speaker 1: I was talking to some people on the heels of
Speaker 1: this conversation, you know, because lots of people wanted to
Speaker 1: talk about what Bruce had to say, and you know,
Speaker 1: it's interesting. I think we're going to be living in
Speaker 1: a hybrid world. Um. You know, I just think about
Speaker 1: my experience this week alone, you know where it's like
Speaker 1: I spent a couple days in the office here I am,
Speaker 1: I'm doing the show, you know, with you. I did
Speaker 1: the show with you yesterday in a totally different location. Um.
Speaker 1: You know. Obviously, different people's jobs require different things at
Speaker 1: different times, and you know, I just I do think
Speaker 1: though the structure of cities could change. You know, one
Speaker 1: of the things we talked about later on in the conversation,
Speaker 1: prompted by an audience question, was does the architecture and
Speaker 1: design of cities change? And this is something you've talked about,
Speaker 1: which is do we move to a place where actually
Speaker 1: we want a little more space, so we need more
Speaker 1: walkable spaces, we need more space for outdoor dining, and
Speaker 1: so does that change the way cities look and feel?
Speaker 1: I think it's possible. It's so funny. For the first
Speaker 1: time I went into our local supermarket just recently, which
Speaker 1: has been like it was kind of a big thing
Speaker 1: for me because we've just stayed away and it was
Speaker 1: I gotta say it was a clean place to begin with.
Speaker 1: It was cleaner, it was really organized, there was more space,
Speaker 1: like the aisles were open and there were you could
Speaker 1: only walk one way down, And I have to say,
Speaker 1: to some extent, maybe we need to rethink some of
Speaker 1: the way things are built and on a grander scale cities.
Speaker 1: I gotta say the city has gotten crowded. There's a
Speaker 1: lot more cars because of Uber and Lift, And I'm
Speaker 1: not saying those need to go away, because I think
Speaker 1: they have provided great services. But I think we need
Speaker 1: to think about it's a walking city, and it's become
Speaker 1: much more difficult to do that. So let's figure that out. Yeah,
Speaker 1: I think in order to do that, though, you've got
Speaker 1: to figure out public transportation. And I've yet to take
Speaker 1: public transportation, so I can't judge it um fully. But
Speaker 1: the reality is is that that has to be clean.
Speaker 1: I mean it has to be clean beyond clean. And
Speaker 1: by all accounts, the MTA has done a great job.
Speaker 1: But the thing we have to worry about is large
Speaker 1: groups of people, right listen, and it's needed to be
Speaker 1: cleaner than what it's been. Okay, I'm just gonna put
Speaker 1: that out and I know, it's really tough when you
Speaker 1: think about my husband. I were talking about the numbers
Speaker 1: that ride it on a daily basis. When everything is normal,
Speaker 1: it's unbelievable. But it can be better, and I think
Speaker 1: we need to figure that out. So um fascinating to
Speaker 1: hear his conversation. And I think stay tuned everyone in
Speaker 1: terms of how things play out. But cities I still love.
Speaker 1: They love it well. You and Bruce flat your long cities,
Speaker 1: your long offices. So we'll see where that goes. Check
Speaker 1: that whole interview out on Bloomberg Live dot com. This
Speaker 1: is Bloomberg Business Week with Carol Messer and Jason Kelly
Speaker 1: on Bloomberg Radio. In today's Bloomberg Business Week, Economics, we
Speaker 1: want to look at the interesting and complicated and often
Speaker 1: problematic relationship between the FED and acid bubbles. Great voice
Speaker 1: to have to talk about that. He put out some research.
Speaker 1: Joe Kalish is back with us. He is chief Global
Speaker 1: macro Strategist at ned Davis Research, and he joins us
Speaker 1: on the phone from Sarasota, Florida. Joe, it is so
Speaker 1: good to have you back with us. How are you.
Speaker 1: I'm doing well, Carol, Thanks for having me back. Well,
Speaker 1: it's great to have you back. And you know, it's
Speaker 1: interesting we've heard from the FED a lot lately. J
Speaker 1: Powell a lot, and certainly various FED governors you dig into.
Speaker 1: First of all, kudos and thank you because you give
Speaker 1: props to our own Mike McKee here at Bloomberg News.
Speaker 1: And the question that he asked J. Powell at the
Speaker 1: last press conference, why don't we kick off there? What?
Speaker 1: What kind of intrigued you about that question? I thought
Speaker 1: Michael really zeroed in on some really critical questions that
Speaker 1: the said is going to need to grapple with I
Speaker 1: think longer term, and what we as investors need to
Speaker 1: grapple with and policymakers need need to deal with it,
Speaker 1: and and and essentially, you know, Michael asked to two things. One,
Speaker 1: uh was on the question of acid bubbles and whether
Speaker 1: the FITS policies were helping to UM promote that. And
Speaker 1: the second one was as a consequences would have said
Speaker 1: therefore contributing to wealth inequality. There are a lot of
Speaker 1: questions at the press conference about income inequality, but Michael
Speaker 1: focused on on the wealth and equality aspect. So I
Speaker 1: think both of those were really UH important. UM questions
Speaker 1: to ask and and and and essentially, you know, the
Speaker 1: Fed chairman UH said they really didn't have much choice,
Speaker 1: that they weren't hitting their goals in terms of maximum
Speaker 1: employment and price stability. UM, that you know, they were
Speaker 1: really couldn't be concerned with the level of asset prices.
Speaker 1: And and he really kind of you know, sidestepped the
Speaker 1: whole question about um wealth inequality. UM. But he also
Speaker 1: did you know, I think Michael is also asking about um,
Speaker 1: you know, financial stability, and I thought, UH, Chairman Powell's
Speaker 1: way of framing that was to go to the banks
Speaker 1: and say, well, the banks were better capitalized. H And
Speaker 1: that's true, but in other areas of the Monetary Policy Report,
Speaker 1: they it flags some issues with households and businesses and
Speaker 1: non bank financials, so um, you know, he started put
Speaker 1: them more a little bit more of a positive and
Speaker 1: in the actual report, well, it's tricky. It gets to
Speaker 1: the heart of what we've been talking to so much
Speaker 1: about here at Bloomberg. UH. And in light of the virus,
Speaker 1: to be quite honest, and also what happened in Minneapolis
Speaker 1: and the killing of George Floyd, and again we're talking
Speaker 1: about inequalities, racism, in America and we're once again having
Speaker 1: that discussion of wealth creation versus income, you know, and
Speaker 1: where we're seeing the gaps, and there's a lot, uh
Speaker 1: and a wide gap in America when it comes to
Speaker 1: who has the wealth and who does not. And you
Speaker 1: certainly get into that, you know, lots of questions about
Speaker 1: the FED and central banks, you essential banks and their
Speaker 1: role in creating bubbles. Your point is, I mean, we
Speaker 1: can learn from the past, and I guess the past
Speaker 1: has shown us that the FED doesn't necessarily think a
Speaker 1: lot about the bubbles they're creating. Well, they may be
Speaker 1: aware from but I guess they feel there's not much
Speaker 1: they can do about it. So the most famous one
Speaker 1: was the so called a rational exuberant speech that form
Speaker 1: ofthe Chairman Greenspan gave in December ninety six. And at
Speaker 1: that time the NASDAK was around twelve hundred or so,
Speaker 1: essentially climbed to five thousand. So you know, I think
Speaker 1: the attitude on the part of the policymakers is that
Speaker 1: they really can't identify a bubble, uh, and they'll just
Speaker 1: deal with the aftermath. And we have a very similar
Speaker 1: situation two thousands with the housing bubble and you know
Speaker 1: that the said was very slow to react to that,
Speaker 1: and then they kind of let asset prices go here
Speaker 1: up until you know, the COVID crisis and just let
Speaker 1: let the you know, stack prices continue to rise and
Speaker 1: without much concern. To be fair though, and and you know,
Speaker 1: and I know you listened to the in Burg. I mean,
Speaker 1: as we've had many discussions for a long time, it
Speaker 1: felt like the FED was the only game in town. Uh.
Speaker 1: And we've certainly seen relief come from from the US government,
Speaker 1: but the FED was certainly looking at ways to calm
Speaker 1: the markets, you know, make it easy to make sure
Speaker 1: that money was flowing throughout the economy, especially in the
Speaker 1: early days of the crisis and the shutting down of
Speaker 1: the economy. And so, you know, is it fair to
Speaker 1: say that you at least you know, understand kind of
Speaker 1: what the FED is thinking about and what it's watching
Speaker 1: and maybe what it kind of almost had no choice
Speaker 1: but to do and to make it and kind of
Speaker 1: set the path for potentially creating another bubble. Well, the
Speaker 1: problem is they really didn't have a choice because if
Speaker 1: they didn't do those things would be a whole lot worse.
Speaker 1: Well that's no, but that's my point. That's my point
Speaker 1: exactly that they didn't really have a choice, right, They
Speaker 1: really didn't have a choice. They had to restore the
Speaker 1: functioning and of the financial markets number one, which I
Speaker 1: think they've done a pretty good job of doing that. Um.
Speaker 1: And then because of the huge uh you know, setback
Speaker 1: we've had in the economy, Uh, you're actually restoring some
Speaker 1: wealth can be helpful in terms of spending, and that
Speaker 1: could help support the economy. So you know, I'm not
Speaker 1: saying it's not necessary, but my point was, you know,
Speaker 1: in that the financial markets basically have a green light
Speaker 1: to go where they want to go, and the FIT
Speaker 1: is not going to come in and stop it and
Speaker 1: pop it. Well, and I just just got about thirty
Speaker 1: seconds here, Joe, So do you see a bubble and
Speaker 1: what that bubble might be at this point? Just quickly so? So, um,
Speaker 1: you know, I think there's a limit on how much
Speaker 1: uh you know, the treasury rates can go down here. Um.
Speaker 1: You know, I think we kind of explored where those
Speaker 1: lows were not just in the US, but but globally. Um.
Speaker 1: And in terms of stock market evaluations, I see those
Speaker 1: is more fairly proh. There's a measure I'd like to
Speaker 1: look at on a forward basis, right looking at the
Speaker 1: Triple Bonniels and and we're close to zero today on
Speaker 1: the equity risk premium um and we never went below
Speaker 1: that during the entire two thousand nine to two thousand
Speaker 1: That's that's great. Yeah, that's great perspective. UM, Joe, thank
Speaker 1: you so much. Nice to get some time with you
Speaker 1: on this Wednesday. Really appreciate Jo Kayleish, his chief Global
Speaker 1: macro Strategies at ned David's Research, joining us on the
Speaker 1: phone in Sarasota, Florida. This is Bloomberg Business Week with
Speaker 1: Carol Masser and Jason Kelly on Bloomberg Radio and our
Speaker 1: weekly Bloomberg Green segment. We're gonna take a look at
Speaker 1: the common traits that are often found in leaders who
Speaker 1: really really move the needle when it comes to sustainability.
Speaker 1: So let's get right to that story. I feel like
Speaker 1: I love when we get to specifics. Emily Chason is
Speaker 1: Sustainability editor Bloomberg New She joins us on the phone
Speaker 1: once again in New York City. UM, Emily, good to
Speaker 1: have back with us. Tell us about this story. I'm
Speaker 1: just curious about they said, Okay, you're gonna go talk
Speaker 1: to leaders and find out what's in come and tell
Speaker 1: us how it came about and what you found out. Yeah,
Speaker 1: so thanks so much for having me again, Kara Um.
Speaker 1: This is a really interesting topic right now because there's
Speaker 1: so much systemic change in the system right now. There's
Speaker 1: a pandemic, there's climate change, there's um huge issues around
Speaker 1: inequality and social justice. And who are the types of
Speaker 1: leaders who can solve those problems and identify these issues
Speaker 1: sooner rather than later and pivot and make changes in't that?
Speaker 1: So what we did was we talked to Russell Reynolds Association,
Speaker 1: which as a recruiter, and they have been looking at
Speaker 1: the traits of leaders at the companies that are sort
Speaker 1: of scoring the best unsustainability UM. That's companies like Unilever,
Speaker 1: companies like Hilton Hotels UM. They were un Global compact
Speaker 1: to sign those and what they found was there were
Speaker 1: some traits that sort of make a sustainability leader and
Speaker 1: some traits they might be born with. I have to
Speaker 1: just say just kind of a call out and maybe
Speaker 1: a little flex for Jason and me, but we have
Speaker 1: talked to both the head of Hilton, Christmas Set and
Speaker 1: Alan joke of Uni Leaver. So we have talked with them, Yeah, exactly, exactly, So, UM,
Speaker 1: tell us a bit more about what those traits are. Yeah.
Speaker 1: So well, the first one they found was being a
Speaker 1: multi level systems thinker and being able to incorporate systems
Speaker 1: thinking into your your leadership style. Right. And then there
Speaker 1: were also people who wanted to actively include stakeholders in
Speaker 1: their talks and really you know, understand the issues of
Speaker 1: stakeholders and UM bring them in, not in terms not
Speaker 1: managing them, not telling them what to do, but to
Speaker 1: bring them in and bring them along. UM. The other
Speaker 1: one was disruptive innovation UM and being able to challenge
Speaker 1: traditional approaches and cut the bureaucracy and sort of figure
Speaker 1: out where those tradeoffs are between profitability and sustainability. And
Speaker 1: the last one was having sort of a long term mindset.
Speaker 1: So they found these four ideas and it wasn't necessarily
Speaker 1: that leaders were born with them a lot of times
Speaker 1: maybe they were, but sometimes they wake up to them
Speaker 1: across the course of their career, like they go through
Speaker 1: a UM transformative business opportunity and say, oh my gosh, wait,
Speaker 1: I can think differently about this. Yeah, I mean, and
Speaker 1: man as you said, we are seeing this so across
Speaker 1: the board right now in this moment, right I mean,
Speaker 1: in this moment where a CEO isn't allowed to I
Speaker 1: shouldn't say it is allowed, isn't able to just like
Speaker 1: jet around the world and sort of hop from place
Speaker 1: to place. They're usually in one spot. They're having to
Speaker 1: deal with everything that's in front of them. Uh. And
Speaker 1: one of those things, obviously, are these big issues of equality,
Speaker 1: which demand a level of accountability and transparency that we
Speaker 1: just have not seen leaders subjected to in a long time,
Speaker 1: if ever, Carol, Yeah, I think it's a really good point.
Speaker 1: And there's another story in the terminal and and we
Speaker 1: I don't know if you saw this too, but it
Speaker 1: talked about E s G investors, those who run E
Speaker 1: s G funds, you know, and they're constantly saying to
Speaker 1: other companies and leaders like, hey, where's your diversity, we're
Speaker 1: your sustainability, And now they're looking at their own firms
Speaker 1: and finding out, oh wait, we're not doing so well
Speaker 1: on that Market's just kind of, you know, kind of
Speaker 1: blows your mind. And it's great that I think people
Speaker 1: are finally really understanding what it means to be either
Speaker 1: diverse or sustainable. You know, it has to be all
Speaker 1: the way around. Yeah, it's definitely important to be authentic
Speaker 1: and all of these things sort of walk the walk
Speaker 1: um to talk to talk um. So we also talked
Speaker 1: to the Carlisle Group, which is that what the Impact
Speaker 1: report this week on what they've been doing, and we
Speaker 1: asked them about, you know, how are you seeing this
Speaker 1: in the real world, and they said that the management
Speaker 1: teams that really focus on where the world is going
Speaker 1: versus where it has been are the ones that are
Speaker 1: generating great financial performance. Interesting. Yeah, I mean, and I
Speaker 1: will say private equity in in many ways, and Emily,
Speaker 1: you and I have talked about this before. We've been
Speaker 1: at some of the same conferences around investing, and you know,
Speaker 1: the private equity fronts for all of the slings and
Speaker 1: arrows that they take it in many ways, they seem
Speaker 1: to have kind of gotten religion around impact over the
Speaker 1: past few years. You know, you think about what KKR
Speaker 1: is doing, Carlisle you mentioned, and others, you know, and
Speaker 1: not to mention the ones who are very focused, uh
Speaker 1: specifically on this, like Generation which I know, our Gore Shop,
Speaker 1: which you've spent some time with. Yeah, definitely. A lot
Speaker 1: of them are focused on this right now. KKR actually
Speaker 1: had a deal this week on water Um. There's a
Speaker 1: lot of thinking about the thing. You know, it would
Speaker 1: look at those long term trends. We want to happen
Speaker 1: to them right now, especially in private equity, and especially
Speaker 1: in finding those leaders who can make the pivots necessary
Speaker 1: to build the infrastructure of the future. Well, and not
Speaker 1: for nothing, but what the private The reasons the private
Speaker 1: equity guys have gotten religion around this, as you well know, Emily,
Speaker 1: is because they can make a lot of money, and
Speaker 1: and these executives that they can attract can make a
Speaker 1: lot of money, and so you know, not surprisingly Hilton,
Speaker 1: you know, not necessarily a sustainability player and impact play,
Speaker 1: but private equity back. So really interesting, all right, Emily Chason,
Speaker 1: thank you so much. Good to catch up with you.
Speaker 1: Our sustainability editor for Bloomberg joining us on the phone
Speaker 1: from New York City. Sustainable leaders have these traits in common.
Speaker 1: Check that out on the Bloomberg or Bloomberg dot com.
Speaker 1: Pretty interesting, right, yeah, totally interesting. But I think you
Speaker 1: know you and I've talked about too about everybody. Okay,
Speaker 1: let's do another focus group, let's talk about the problem.
Speaker 1: Blah blah blah. You know this is getting down to okay,
Speaker 1: what makes a leader a really great leader in creating
Speaker 1: a diverse workforce, a diverse supply chain. Like, let's get
Speaker 1: down to the stace. How do you do That's that,
Speaker 1: that's what That's what creates it. Doing stuff. There's our
Speaker 1: next T shirt. Yeah, doing stuff, Just do it. Just
Speaker 1: do good stuff. At a boss a long time ago,
Speaker 1: he said, just do good stuff. He didn't give any
Speaker 1: direction other than that, but that's the way went did.
Speaker 1: But it was pretty clear message. Yeah, just can you
Speaker 1: say it's like it makes sense. You're listening to Bloomberg
Speaker 1: Business Week on this Wednesday, Carol Master along with Jason Kelly.
Speaker 1: It is time to cut you down to the closing bill.
Speaker 1: Aaron Kennon is back with us. He's co founder and
Speaker 1: chief executive officer at Clear Harbor Asset Management. Back with
Speaker 1: us once again on the phone from Greenwich, Connecticut. Aaron,
Speaker 1: good to have you here with us. You know we've
Speaker 1: been talking with you certainly throughout the year and throughout
Speaker 1: this crisis. Um, I don't know how has your outlook
Speaker 1: on the markets, on the economic rebound maybe changed over
Speaker 1: the last few months. Well, great to be back, Carol,
Speaker 1: thank you. Um, well, let's see. I mean, certainly we
Speaker 1: are going through a period where there's this huge divergence
Speaker 1: right between the the equity markets and the real economy.
Speaker 1: Now that that's not necessarily a new thing, but the
Speaker 1: degree to which we're seeing a divergence is quite uh significant,
Speaker 1: meaning that you know, the equity market tends to be
Speaker 1: a discounting mechanism. It tends to recover or start to
Speaker 1: recover ahead of a recovery in the real economy. But
Speaker 1: you know, to come thirty nine, not including today, off
Speaker 1: of that March twenty three low is quite a significant.
Speaker 1: I think there's a lot of optimism built in the
Speaker 1: equity markets and when we you know, sort of look
Speaker 1: at the divergence even within the equity market. Um, I
Speaker 1: think it really details a tale of two stories. Um
Speaker 1: the technology piece is in a bowl market and the
Speaker 1: financial piece is very much in a bear market. And
Speaker 1: I think that's really sort of proven itself out maybe
Speaker 1: perhaps since we last spoke. And so where does it
Speaker 1: go from here? Do you think, Karen? Well, I think
Speaker 1: as as we wade through this crisis, it's going to
Speaker 1: be long. They're going to be a lot of speed bumps, Jason,
Speaker 1: and UM. I believe that, you know, the technology sector
Speaker 1: is an asset light sector that's focused on providing productivity
Speaker 1: to their clients, to their corporations. UM. In this period
Speaker 1: of future deglobalization, where you're going to have supply chains
Speaker 1: moving all around the world, technology is going to play
Speaker 1: a key role in that effort. I think companies with
Speaker 1: strong balance sheets, with strong management, and strong capital allocators
Speaker 1: more generally are going to capture some market share during
Speaker 1: this crisis. They have been capturing markets or during this crisis,
Speaker 1: and will be even stronger as we come out the
Speaker 1: other side. So I think that trend continues. In The
Speaker 1: real question in our minds at Clear Harbor is well,
Speaker 1: what about valuations and UM? Technology valuations have become you know,
Speaker 1: quite quite lofty across the board and UM. But you know,
Speaker 1: you look at the banks and they're they're in a
Speaker 1: bear market. UM. Net interest margins are are collapsing, loan
Speaker 1: loan growth is certainly a problem UM, and and the
Speaker 1: credit picture is being butchered by the Fed. So UM,
Speaker 1: go ahead here, No, you know what I was thinking, Aaron,
Speaker 1: They're listening to you what you said about technology, and
Speaker 1: I certainly agree with you, but I got it to say,
Speaker 1: I look at my world and increasingly, I mean, Jason
Speaker 1: and I are doing our radio show because of technology,
Speaker 1: and everybody is working at home because of technology. And
Speaker 1: I feel like, despite what the outlook is, if there's
Speaker 1: any one consistent theme that we can count on, and
Speaker 1: I know it's been what's propelled the market's higher, you know,
Speaker 1: coming off the crisis, but it is technology, absolutely, so
Speaker 1: I would be in in plead agreement with that. And um,
Speaker 1: and I think you know, we we do have points
Speaker 1: of concern across the economy. I mean, certainly if you
Speaker 1: look at the SP five as in its entirety trading
Speaker 1: at you know, pick your number, but it probably best
Speaker 1: case twenty four times two thousand and twenty one earnings,
Speaker 1: so that that's a lofty multiple. UM. Corporate debtloads are
Speaker 1: are high. We saw the record high yield issuance this month,
Speaker 1: and um, you know that's that's all very much supported
Speaker 1: by by FED policy. Around the fallen angels. Unemployment, I
Speaker 1: think it's a huge question mark. And I've been hearing
Speaker 1: a lot about the rise in the savings rate. Um,
Speaker 1: it's at a record. I don't think we saw a
Speaker 1: savings rate spike like this in our entire lifetime. And
Speaker 1: some of you that as a positive that there's cash
Speaker 1: on the sidelines. Well, you know, can I just can
Speaker 1: I just jump? Because Jason and I talked about this yesterday,
Speaker 1: you know, as our reporting Ben Steve Berman put out
Speaker 1: a story that you know, yea that Americans have some
Speaker 1: money on the sidelines, but there is still consistently, you know,
Speaker 1: research showing that most Americans out there don't even have
Speaker 1: enough money to deal with like a car bill of
Speaker 1: four hundred dollars like that money on the sidelines. Some
Speaker 1: people are gonna have to live on that. And I know,
Speaker 1: well that's right, that's absolutely right. And and the money
Speaker 1: on the sidelines is is it an indication of optimism
Speaker 1: or is an indication of of anxiety? What will be
Speaker 1: the catalyst for altering that anxiety level? And so, you know,
Speaker 1: you mentioned the FED Arran and I feel like history
Speaker 1: will be very kind. I've said this on this program
Speaker 1: before to j Powell and his cohorts for what they
Speaker 1: have done. Don't fight the FED obviously has been one
Speaker 1: of the mantras that We've heard over and over again
Speaker 1: from both institutional and individual investors, what do you think
Speaker 1: the FED cannon should do next or what can we
Speaker 1: expect them to do next? Well, I think they're going
Speaker 1: to continue to provide um, you know, college stimulus, um
Speaker 1: monetary growth for as long as far as the eye
Speaker 1: can see. And I think the fiscal side, trickularly heading
Speaker 1: into a president presidential election, will do the same. So
Speaker 1: expect another fiscal stimulus package four point oh coming along
Speaker 1: next month. But I also think the FED is stuck
Speaker 1: because they're trying to weaken the dollar. They would never
Speaker 1: say that they are, but the world is faced with
Speaker 1: this COVID crisis. It's not just the US economic slowdown,
Speaker 1: and so it's difficult, you know, for the U S
Speaker 1: Dollar to, you know, which is a flight to quality
Speaker 1: currency along with the en to depreciate here in the
Speaker 1: midst of this global uncertainty. And I think that's one
Speaker 1: point of a real frustration for the FED right now.
Speaker 1: Do you think the Fed's creating another bubble? And it's
Speaker 1: just piggybacks on a conversation that we have with Joe
Speaker 1: Kalis earlier Na Davis's research, and you know, the Fed,
Speaker 1: doesn't you know, they're doing what they can to how
Speaker 1: about this economy, but as a result, maybe not so
Speaker 1: concerned about bubbles. They haven't been in the past. We
Speaker 1: need to be concerned about that. Aaron, Well, I mean,
Speaker 1: I think the FED is caught between a rock and
Speaker 1: a hard place. Certainly, they're creating some bubbles. Some are
Speaker 1: maybe identifiable now and some will be identifiable uh later.
Speaker 1: But that isn't to say that the FED policy to
Speaker 1: try to sort of keep this economy flow, which was
Speaker 1: sort of a government induced initiative to close down the economy,
Speaker 1: is not warranted. I mean, I think the FED is
Speaker 1: is in a is in a very difficult position, but
Speaker 1: they have a lot of firepower, and I think they'll
Speaker 1: continue to provide liquidity and will liquidity to allow for
Speaker 1: insolvency rage to decline. I think that's a big question
Speaker 1: and only time we'll tell on that. All right, Aaron Kennan,
Speaker 1: thank you so much. We're gonna leave with their co
Speaker 1: founder CEO Clear Harbor Asset Management joining us on the
Speaker 1: phone from Greenwich. Thanks so much for listening to Bloomberg
Speaker 1: Business Week. Download the podcast on iTunes, South Cloud of
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