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,
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Speaker 1: twenty seven hundred journalists and analysts more than a hundred
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Speaker 1: Week on iTunes, SoundCloud, bl Bloomberg dot com. You can
Speaker 1: also listen to our radio show at two pm Eastern
Speaker 1: on Bloomberg Radio every weekday, or watch us on YouTube
Speaker 1: by searching Bloomberg Global News. We recently talked with the
Speaker 1: head of north Will Health. It's a massive hospital and
Speaker 1: healthcare system in New York State. They have seen the
Speaker 1: strains and stresses and really the devastating impact on patients
Speaker 1: brought on by COVID nineteen. Back with us and with us,
Speaker 1: I should say, is Bruce Farber, chief of Infectious Diseases
Speaker 1: at Northwell Health, on the phone from Inhasset, New York.
Speaker 1: Dr Farber, it is really great to have you here
Speaker 1: with us. UM we've learned a lot by talking to
Speaker 1: the head of your hospital system. Tell us a little
Speaker 1: a little bit about kind of where we are, because
Speaker 1: it's an interesting week where we're seeing more reopening, but
Speaker 1: yet we're hearing of, you know, cases now again in
Speaker 1: South Korea in places that have kind of been held
Speaker 1: up as a gold standard in terms of dealing with
Speaker 1: the virus. So what's important about what we need to
Speaker 1: know on this Monday, May eleven? Yeah, I agree, it's Um,
Speaker 1: it's a very funny time in New York. The number
Speaker 1: of new cases is down significantly, deaths or down significantly.
Speaker 1: At our hospital system. We're almost under a thousand hospitalized
Speaker 1: people with COVID from a peak of four thousand, So
Speaker 1: that's a huge decrease from what it was and that's
Speaker 1: all very good news. Um. Yeah, I still, and I
Speaker 1: think many people still think that this is going to
Speaker 1: be a game of whack a mole um and that
Speaker 1: we're clearly not out of the woods. We are making
Speaker 1: contingency plans for what the fall might look like when
Speaker 1: flu comes back. At the same time, I still think
Speaker 1: that there's not enough herd immunity in the community or
Speaker 1: in the world to think that this is going to
Speaker 1: be over any time in the foreseeable future without a vaccine,
Speaker 1: and that's not around the corner. And so Dr Farward
Speaker 1: talked to us, if you, if you will for a
Speaker 1: minute more about the New York City area. I mean,
Speaker 1: this is where you live and work. UM. I mentioned
Speaker 1: UH ear last week when we were talking about North Well,
Speaker 1: I'm very fortunate to live next to Phelps Hospital here
Speaker 1: in Westchester, which I believe is part of your UH
Speaker 1: system and certainly have taken advantage of your good care
Speaker 1: over the years. It has been incredibly intense in the
Speaker 1: Tri state area. What do we know about the state
Speaker 1: of this UH here in the New York City area
Speaker 1: right now? Well, like I said, things are much better
Speaker 1: and the hospital systems are now functioning. But remember, it's
Speaker 1: going to take three things for us to really be
Speaker 1: able to open up more than UM than we are now.
Speaker 1: And that's going to be one a dramatic decrease in
Speaker 1: the number of new cases. And based on the state's guidance,
Speaker 1: I think we basically still have to have them roughly
Speaker 1: about to roughly about two to three hundred per day
Speaker 1: in the entire New York City area. UH that's one thing.
Speaker 1: The second thing is we need more testing. Any opening
Speaker 1: up this contingent on us massively increasing our testing. And
Speaker 1: although testing has increased log rhythmically in the last three weeks,
Speaker 1: it's going to have to go up even more. We're
Speaker 1: talking about testing all admissions to the hospitals, doing surveillance,
Speaker 1: testing and people in the hospitals, testing people in nursing homes,
Speaker 1: testing people in other environments, going for elective surgery, going
Speaker 1: for procedures, going for cancer chemotherapy, testing employees, um. So
Speaker 1: the testing has to increase. And then the third component,
Speaker 1: which New York is not ready to do, although they're
Speaker 1: talking about it, is contact tracing because, after all, to
Speaker 1: really open up we need to have less cases, we
Speaker 1: need to have frequent testing. And thirdly, we need to
Speaker 1: have contact tracing so that when a mini outbreak breaks out,
Speaker 1: if you will, we can contain it quickly before it
Speaker 1: turns into a massive hotspot. Dr Farvar helped me out
Speaker 1: because I feel like we've been talking about testing and
Speaker 1: the need for it, and I feel like if there's
Speaker 1: one thing everybody agrees is testing and then ultimately tracing
Speaker 1: in order to really reopen up this economy, We've been
Speaker 1: doing this for several weeks now, and yet we're still
Speaker 1: talking about there's not enough tests out there. What's holding
Speaker 1: it back? What's the problem right now? There's several things.
Speaker 1: Number one is the supply chain is just not there.
Speaker 1: I mean, you need certain re agents, you need certain
Speaker 1: swabs UM, and they're really not enough of them around
Speaker 1: despite the the reassurances from from some politicians, they're not there.
Speaker 1: You just can't get them. Secondly, a lot of people
Speaker 1: are dependent on point of care. Remember there's base sically
Speaker 1: two forms of these tests occurring. One is point of
Speaker 1: care that's a rapid test that can be done in
Speaker 1: a relatively in a two to three hour period of time.
Speaker 1: That is used when you need very quick results somebody
Speaker 1: coming into an e er, somebody about to go for surgery,
Speaker 1: somebody who's about to go for a procedure, or in
Speaker 1: a community UM, we really want to know right away
Speaker 1: in terms of segregating people UM. And then there's the
Speaker 1: much more reliable and tests that can be done on
Speaker 1: in much greater volumes UM in laboratories. But the turnaround
Speaker 1: time there is going to be at least nine and
Speaker 1: it's often twelve hours in terms of delivery and getting
Speaker 1: it and that sort of thing, And there's a very
Speaker 1: short supply of the point of care tests. They're just
Speaker 1: not out there to be had at the present time.
Speaker 1: As a matter of fact, paradoxically, our numbers of point
Speaker 1: of care testing has decreased in the last um we
Speaker 1: strictly due to supply problems. Are laboratory based testing is
Speaker 1: increasing significantly, so just briefly, the point of care testing.
Speaker 1: So it sounds like we need both. But I mean,
Speaker 1: is it something that the federal government should be acting
Speaker 1: much more aggressively on And we've only unfortunately got about
Speaker 1: forty seconds before we'll take a break and tuck a
Speaker 1: it more. Well, you get into the politics of it,
Speaker 1: But yes, I mean, I think we've been reassured so
Speaker 1: many times by the federal government that there are more
Speaker 1: than adequate tests, um, but anybody working here knows that's
Speaker 1: just not the case. I mean, they're just not available.
Speaker 1: I think the labs are doing the best they can.
Speaker 1: I think we're gearing up as fast as we can.
Speaker 1: We do have enough sterrology capacity. We can test over
Speaker 1: ten thousand people a day for sorology, But unfortunately sorology
Speaker 1: is helpful from an epidemiologic point of view, but it
Speaker 1: is not going to allow us to rapidly distinguish who's
Speaker 1: infecting who's not well. Let's continue our conversation with Dr
Speaker 1: Bruce far where he's at Heath of Infectious Diseases at
Speaker 1: Northwell Health here in the New York area. Dr Farber,
Speaker 1: let's just go there and talk about what does reopening
Speaker 1: look like? And, as Carol said just a few minutes ago,
Speaker 1: what's a realistic timeline, especially when we're thinking about our
Speaker 1: area here. Well, I think it's going to happen in stages.
Speaker 1: I don't think there's any doubt about that. Look, I
Speaker 1: do believe that it's much less likely to get this
Speaker 1: infection when you're outside, particularly with social distancing. It's not
Speaker 1: only easier to social distance, but the wind, the weather
Speaker 1: allow this virus to become much less contagious when you're
Speaker 1: outside than when you're in a confined space with poor
Speaker 1: air exchanges. UM. So I could potentially see over the
Speaker 1: summer outdoor restaurants opening with a lot of space, UM,
Speaker 1: indoor restaurants maybe maybe later, you know, with a lot
Speaker 1: of space. Um. The last thing, I don't think we're
Speaker 1: gonna see open for many months. Are going to be
Speaker 1: large venues broadway uh, basketball games, sports events, concerts, all
Speaker 1: of the things that unfortunately make New York such a
Speaker 1: vibrant city and bring in tourists. It's just hard to
Speaker 1: see that happening, uh for at least many, many, many
Speaker 1: more months to come. Dr Farber, what about though, Okay,
Speaker 1: teams playing professionally, but there's nobody in the stand, so
Speaker 1: at least broadcast organizations can be broadcasting games. Can teams
Speaker 1: play safely and easily? It's a really good question. And
Speaker 1: I've been working with one of the professional teams on this,
Speaker 1: and it can be done, but it has to be
Speaker 1: done with so much detail, and it's not going to
Speaker 1: be done the way it used to be done. It
Speaker 1: will literally have to be in a very closed environment
Speaker 1: where players cannot leave for a period of time. They
Speaker 1: will have to be tested on a regular basis. It's
Speaker 1: going to be harder for certain sports like football, much
Speaker 1: harder because of the number of people involved. It's not
Speaker 1: clear that anybody's going to be able to pull it off,
Speaker 1: and particularly if there's a shortage of tests, because there's
Speaker 1: gonna have you're gonna have to test all of these
Speaker 1: people very very often, probably every two days, three days
Speaker 1: at the most, maybe more often. So it's not a
Speaker 1: matter of just taking the fans out of the stadium
Speaker 1: and then putting on these games. There's a lot of
Speaker 1: work and a lot of problems. We talked with Paul
Speaker 1: Raybell and the Premier Lacrosse Lea because he is doing
Speaker 1: a self quarantine two week tournament. But basically, once the
Speaker 1: players are tested and quarantined, they're in it for a
Speaker 1: couple of weeks. And I do wonder if for professional sports,
Speaker 1: maybe baseball to actually take off. You're talking about teams
Speaker 1: having to quarantine themselves, probably from their families for uh
Speaker 1: sustained period of time in order for them to play. Yes,
Speaker 1: and it'll change the schedules. Back to back games will
Speaker 1: be more difficult to do based on the testing and
Speaker 1: the risk of exposure to the people. Um, yes, it's
Speaker 1: going to be a different game if if it if
Speaker 1: it comes off, and it's not going to be easy,
Speaker 1: and uh, it will have to be limited to a
Speaker 1: few sites. By the way, I don't think that you know,
Speaker 1: the travel will allow this to be a regular season.
Speaker 1: It will be entirely different, and so dr Farber. What
Speaker 1: are we learning so far from other states that have
Speaker 1: had lower infection rates, lower incidences of COVID nineteen cases
Speaker 1: that maybe we can take from and learn from as
Speaker 1: as this country sort of reopens in different stages. Well,
Speaker 1: I think we actually learn more in some respects from
Speaker 1: other countries than we do for different states, because states
Speaker 1: have been all over the place, and a lot of
Speaker 1: what's happened in states to me so far is it's
Speaker 1: too early to say that they're really going to be
Speaker 1: spared or whether they've been literally lucky to date based
Speaker 1: on their population density and and other things, because certainly
Speaker 1: um jury is still out on all those issues. But
Speaker 1: in the countries like South Korea and Indonesian Singapore that
Speaker 1: have done a pretty good job, what you notice is
Speaker 1: that they've done pretty much what we've done, only they've
Speaker 1: ramped up testing enormously. They've done a lot of contact tracing,
Speaker 1: they've changed the work habits of people, they've did ongoing
Speaker 1: social distancing, and most importantly, they're seeing many outbreaks and
Speaker 1: many reintroductions that they have to clamp down on immediately
Speaker 1: and isolate those people. And unfortunately it's a lot harder
Speaker 1: in a big heterogeneous country like ours, particularly in a
Speaker 1: density like New York, you're gonna have to be a
Speaker 1: quick twenty seconds. But offices and things like New York
Speaker 1: and community, that's going to be really difficult to work out. Yes,
Speaker 1: staggered hours. People probably will change the way they work.
Speaker 1: They'll come in in the morning, shift in the office
Speaker 1: and you know, stay later. Um, Yeah, there's gonna be
Speaker 1: a lot of changes. Yeah, absolutely. All right, Well, we
Speaker 1: will look forward to keeping touch with you. Thank you
Speaker 1: so much. This was really really worthwhile for us and
Speaker 1: for our listeners. Bruce Farber, he is the chief of
Speaker 1: infectious Diseases at Northwell Health. Johinius on the phone from
Speaker 1: a little bit totally totally. This is Bloomberg Business Week
Speaker 1: with Carol Masser and Jason Kelly on Bloomberg Radio. I've
Speaker 1: got to save ourselves from going down a major rabbit
Speaker 1: hole here, because Joel Webber and I are instant messaging
Speaker 1: right now talking about the Big Lebowski and I could
Speaker 1: spend the rest of the show talking about that. We're
Speaker 1: not going to talk about that. We're gonna talk about
Speaker 1: a terrific story that Devin Leonard wrote. He has projects
Speaker 1: and investigations reporter one of our favorites for Bloomberg Business Week,
Speaker 1: Johinius on the phone from New York, as is the
Speaker 1: aforementioned editor of the magazine, Joe Weber. He's on the
Speaker 1: phone from Brooklyn. So this aggression will not stand, Joel.
Speaker 1: But I turned it over to you to help us
Speaker 1: understand what's going on in the world of small business. Uh, boy,
Speaker 1: talk about a moment in time that group of businesses
Speaker 1: have just been really sideswiped. Um. And and this is
Speaker 1: obviously something that UM Bloomberg has been covering closely from
Speaker 1: the moment that pandemic really started to escalate. Because if
Speaker 1: there's a you know, really a backbone of this country's
Speaker 1: economy in the U S, it's it looks like small business.
Speaker 1: Uh roughly one out of every two jobs in the
Speaker 1: country probably are small business related. And UM, so they've
Speaker 1: really been bearing the brunt of it. And Uh, as
Speaker 1: we've sort of seen this story evolved, we put death
Speaker 1: in into the mixt to sort of step back and
Speaker 1: really kind of help us make sense of things like
Speaker 1: P P P. And as he kind of dug into it,
Speaker 1: it just was like such a rich narrative and also
Speaker 1: one that like, look, this is a story that were
Speaker 1: this is the opening opening chapters of it. We're looking
Speaker 1: at something here that's gonna last for weeks, months, years. Um, Devin,
Speaker 1: what did you talk to so many small business people
Speaker 1: for this story? Where did what kind of takeaways and
Speaker 1: lessons did you have? Well, just really quickly, just just
Speaker 1: for the record, um, my editor who did a great
Speaker 1: job in the story he cut out by big Lebowski joke,
Speaker 1: I said that the SBA abides anyway, I just since
Speaker 1: you guys brought it up. But what I found out
Speaker 1: was that, I mean, this was a really well intentioned
Speaker 1: thing that Congress did as part of the Cares Act,
Speaker 1: the Paycheck Protection Program, but it was rushed out. It
Speaker 1: was intended, you know, it was sort of sort of
Speaker 1: framed as something that would that would really help small businesses,
Speaker 1: but really it's much more designed to well to do
Speaker 1: what it has protect people's paychecks, keep people on the
Speaker 1: payroll these of these small businesses. But a lot of
Speaker 1: the small businesses are struggling. They've been ordered to shut
Speaker 1: and for for the for the proprietors, they have to decide, well,
Speaker 1: do I just pay all my workers to do nothing,
Speaker 1: or do I somehow hope that I can use the
Speaker 1: money later when we're opening up in an uncertain economy.
Speaker 1: So it's a lot of money, you know, more than
Speaker 1: six hundred billion dollars, but it's going to have the
Speaker 1: impact that that Congress. I think that we all hoped.
Speaker 1: I I don't. I don't. No, I don't think it's
Speaker 1: really clear at all. Well, Devin, so what you know
Speaker 1: through your reporting and talking to small business and you
Speaker 1: have a you know, really great read and story um
Speaker 1: reality of Sarah McNally, who runs you know, well known bookstores,
Speaker 1: certainly here in the New York City area, And I
Speaker 1: just do wonder is it the program itself, the size
Speaker 1: of the program, the access to small business loans? Where
Speaker 1: what have you found out that's you know what's breaking
Speaker 1: down here. Well, Congress sort of, as as often happens,
Speaker 1: Congress passes along allocates you know, you know, the amount
Speaker 1: of money to be spent on it. But how it's
Speaker 1: actually going to be implemented, that's the left up to
Speaker 1: to the agency that's actually going to be running the program,
Speaker 1: or in this case, the Small Business Administration and the
Speaker 1: you know, the U. S. Department of Treasury, and they
Speaker 1: together they wrote these rules kind of after the fact
Speaker 1: that's going to lock in small business owners to this
Speaker 1: sevent uh you know, had spend seventy five percent on
Speaker 1: payroll or you don't get a loan forgiven. And the
Speaker 1: whole thing was presented kind of as a grant program
Speaker 1: to begin with, so you know, you have that, of course, Carol,
Speaker 1: on top of well, people had you know, people had
Speaker 1: heard had hard times getting loans because rather than put
Speaker 1: the money through the Small Business Business Administration, which has
Speaker 1: had a tough time handing out to the loans directly
Speaker 1: before and you know, situations like Katrina and even you know,
Speaker 1: more recently in Hurricane Sandy, they basically had the SBA
Speaker 1: guarantee loans and then the you know, banks would would
Speaker 1: hand them out. And you know, as we all know
Speaker 1: now and as Bloomberg has reported extensively on UM and
Speaker 1: done a fantastic job on you know, you know, jpm Oregan,
Speaker 1: big banks like that they favored their existing clients first
Speaker 1: because again the rules were unclear and they didn't want
Speaker 1: to take a chance or they were you know, they
Speaker 1: didn't want to rush to take a chance on a
Speaker 1: bunch of you know, first time bars credit histories that
Speaker 1: they were completely unfamiliar with. So actually that given that
Speaker 1: leads to sort of like a chapter in the story
Speaker 1: that you did, which is ultimately about you know, small
Speaker 1: business owners who are you know, almost turned away from
Speaker 1: the big institutions and one of the places that they've
Speaker 1: turned to our sort of smaller or community banks. Um.
Speaker 1: And at first that wasn't really an option. But then
Speaker 1: there's been sort of cast of characters that happens to
Speaker 1: show up in your story. Told me about those people, um,
Speaker 1: and sort of how how there's been sort of a
Speaker 1: sort of middleman aspect to how these loans have gone down, well,
Speaker 1: at least at least in this case. So you start
Speaker 1: with Sarah McNally. She owns four bookstores. You know, she'd
Speaker 1: had two bookstores up until about six months ago, and
Speaker 1: then she opened two more, double the size of her
Speaker 1: company than the COVID you know, the COVID nineteen crisis hits.
Speaker 1: And um, she has to decide what to do. I
Speaker 1: started talking to her before she even went to you know,
Speaker 1: try try to get a you know, a p P
Speaker 1: P loan. But because like a lot of these small
Speaker 1: business owners, they operate in really slow margins. What they
Speaker 1: don't want and want is more debt. But she decided
Speaker 1: she kind of had to go for it because bookstores
Speaker 1: are non essential businesses, so she had to pretty much
Speaker 1: close down. She is operating an online business, but that
Speaker 1: that doesn't she can't employ you know, a hundred and
Speaker 1: fifteen employees on that revenue. So she goes to Bank
Speaker 1: of America. It becomes pretty pretty clear that you know,
Speaker 1: pretty walked about a week or so that um, it's
Speaker 1: that the only thing is possible is maybe getting loans
Speaker 1: for two of her stores, and she has actually has
Speaker 1: two stationary stores, so it's six and all. So she
Speaker 1: kind of panics, calls all these people, winds up talking
Speaker 1: to her optometries of all people, and he's in a
Speaker 1: similar situation. He's gone, he's he's tried to apply online
Speaker 1: at JP Morgan Chase, he's been turned down, and but
Speaker 1: he has this connection through his um optometric association to
Speaker 1: this because a loan brokerage out of Long Island, and
Speaker 1: these guys basically deal with all these non banks, and
Speaker 1: they wind up connecting Sarah with a non bank. It's
Speaker 1: it's called Fountain Head in uh in Florida, and the
Speaker 1: bank approves her, but doesn't get a chance to actually
Speaker 1: submit the loan to to the SBA for for guarantee.
Speaker 1: That's right when the money runs out. So so I
Speaker 1: I just think people were just running around like crazy
Speaker 1: because if you didn't have a relationship with a really
Speaker 1: big bag, where did you go? And and and and
Speaker 1: and so so so that you know you have a
Speaker 1: a mess right there with that. Luckily she she was
Speaker 1: able to find somebody, but then she gets alan and
Speaker 1: now she's kind of like, you know, she's quite to
Speaker 1: do with it. But anyway, well, and there's a great
Speaker 1: question that's brought up in your store, and I highly
Speaker 1: recommend that everybody go read it because there's so much
Speaker 1: information in there, but about whether or not p p
Speaker 1: P is really kind of thought about, is really as
Speaker 1: pro worker as they are saying it is, And and
Speaker 1: that's something I don't think has really gotten a lot
Speaker 1: of attention so rightfully, so um, you're giving it, Devin,
Speaker 1: So check out the story. It's going to be in
Speaker 1: the magazine, on newstands, online and on the Bloomberg. Devin
Speaker 1: Leonard wrote it. He is Bloomberg Business Week Investigations reporter
Speaker 1: and also joining us, of course, was Joe Webber, Bloomberg
Speaker 1: Business Week editor, on the phone from Brooklyn. This is
Speaker 1: Bloomberg Business Week with Carol Masser and Jason Kelly on
Speaker 1: Bloomberg Radio. Let's continue our economics discussion, but take it
Speaker 1: in a slightly different direction with one of our face,
Speaker 1: Andy Brown back with this editorial director for Bloomberg New
Speaker 1: Economy and his column a provocative headline, as it often has,
Speaker 1: Trump is trying to open Pandora's box. Andy Jones's on
Speaker 1: the phone from New Hampshire. Alright, what's going on here? Ab? Yeah, So, look,
Speaker 1: the the central idea here is at um. You know,
Speaker 1: at the very heart of this global pandemic UM is
Speaker 1: a mystery. UM. And that mystery quite simply is where
Speaker 1: where did this virus come from? So we know that
Speaker 1: the outbreak was in Wuhan in China, and UM scientists
Speaker 1: are pretty sure that it jumped from bats to humans
Speaker 1: via another kind by animals. UM. You know, but UM,
Speaker 1: there are huge gaps in our understanding. We don't know
Speaker 1: what kind of animal. We don't know. Is it a
Speaker 1: was it a farm animal, a pig for instance, Was
Speaker 1: it a wild animal, a pangl in Um how did
Speaker 1: it spread so quickly? Um? Could things have been done
Speaker 1: to halt it before it it spread widely in Mohan
Speaker 1: and then to the rest of the world. Um. And
Speaker 1: so you know, in the absence of answers of this,
Speaker 1: and all we have is is basically information coming out
Speaker 1: of China, and much of the world doesn't believe what's
Speaker 1: coming out of China. We know that there were cover ups.
Speaker 1: The Chinese media has reported that, you know, uh, the
Speaker 1: Chinese authorities may have way lobal the numbers of infections
Speaker 1: and deaths in Wuhan. And in the absence of that,
Speaker 1: you've had all of these conspiracy theories taking root, particularly
Speaker 1: in the in the American political right. And one of
Speaker 1: these theories is sort of what I call the Pandora's
Speaker 1: box theory, which is that you know, it came out
Speaker 1: of a lab in Wuhan, a a high security lab
Speaker 1: where they where they're studying viruses. It was an accident, um.
Speaker 1: And just as you know, Pandora's sort of you know,
Speaker 1: reckless curiosity um led her to open the box and
Speaker 1: out of of course, in Greek mythology, outcomes sick all
Speaker 1: the evils of mankind, sickness and death and poverty and
Speaker 1: toil and all the rest of it. Uh, and that
Speaker 1: that was exactly the the uh what happened in in Wuhan,
Speaker 1: that that China unleashed all of these terrible evils on
Speaker 1: on mankind. So you know, and and that's and that
Speaker 1: that that theory is widely believed now in the White House,
Speaker 1: particularly you know, um Centator of State Pompeo. And he's
Speaker 1: he said earlier, you know, there's enormous ever what is happening.
Speaker 1: In fact, there's there is very little intact, there's no
Speaker 1: evidence at all that he's been able to produce UM
Speaker 1: to you know, to to to to uh substantiate um
Speaker 1: this conspiracy theory. So you know, I mean it just
Speaker 1: it just seems like we need a global inquiry. Right. Well,
Speaker 1: I have to say too, and Andy, one of the
Speaker 1: things that I found most telling was some of the
Speaker 1: injurviews over the weekend with scientists who said, if you
Speaker 1: look at the virus and you look at the genetic
Speaker 1: makeup of it, you understand that this was not um
Speaker 1: something that was you know, made in a lab. And
Speaker 1: so that there's just an overwhelmingly amount of scientific evidence
Speaker 1: that says, okay, where this came from. But put that aside.
Speaker 1: In the meantime, you just have these increased tensions and
Speaker 1: problems once again coming from both the US and Chinese sides.
Speaker 1: And you do wonder what this means going forward for
Speaker 1: what's already a fraught relationship, right and and not a
Speaker 1: great one. And you do wonder what this means you
Speaker 1: open up Pandora's box and and how much worse does
Speaker 1: it get? And then what are the repercussions in terms
Speaker 1: of us coming back from this virus on a health
Speaker 1: can you know basis as well as an economic basis, right?
Speaker 1: I mean we need yeah, for sure, you know, we
Speaker 1: we need answers to this. Um, you know, where where
Speaker 1: did this virus come from? Lessons need to be learned.
Speaker 1: I mean, we need to be better prepared for the
Speaker 1: next one. We're living in an age of pandemics. Um,
Speaker 1: we need to know, you know, what what should have
Speaker 1: been done that wasn't done. There are all sorts of
Speaker 1: you know, answers that scientists that that government officials that
Speaker 1: you know, citizens, we all need to we all need
Speaker 1: answers to these really basic questions. And you know, and yet, uh,
Speaker 1: it appears that that that China is adamantly against anything
Speaker 1: that looks like an international inquiry. In fact, the Australian
Speaker 1: foreignment is to u versa pain. When she suggested it
Speaker 1: a week or so ago, the Chinese ambassador to Canberra
Speaker 1: sort of been a rather veiled way. You threatened, that threatened,
Speaker 1: you know, trade sanctions against Australia, said, you know that
Speaker 1: the Chinese people may not uh by by Australian beef
Speaker 1: and wine and so on. Um. You know. So it's
Speaker 1: it's politically almost impossible, um for China to agree to this,
Speaker 1: because of course, any independent inquiry is likely to start
Speaker 1: uncovering all kinds of embarrassing details you know about about
Speaker 1: this cover up, uh that's been widely reported in in
Speaker 1: in Wuhan. And in the absence of that, what you
Speaker 1: have is US China relations now just plunging to to
Speaker 1: the lowest point that they've been since the establishment of
Speaker 1: diplomatic relations. Yeah, it's pretty remarkable. I mean when you
Speaker 1: think about how hot this has gotten and how fast, uh,
Speaker 1: and it it harkens back to all the back and
Speaker 1: forth over the trade war, which seems um uh uh
Speaker 1: almost quaint at this point because we're really talking about
Speaker 1: a lot of people's lives at this point, not just
Speaker 1: their livelihoods. All right, Andy Brown, editorial director for Bloomberg
Speaker 1: New Economy, his column It's a must read on the
Speaker 1: terminal and on Bloomberg dot com. Trump is trying to
Speaker 1: open Pandora's box. Carol. Yeah, I mean this is a
Speaker 1: you know, difficult relationship was as you said, going into it,
Speaker 1: and it just seems to get tricker and trickier. And
Speaker 1: you know, we need transparency from China, right and we've
Speaker 1: talked about that for ages. I feel like broc journal. Yeah,
Speaker 1: but you let me drive. Oh no, no, no, no no,
Speaker 1: who's honey? Please, I'll do the vel. I want to drive,
Speaker 1: Just drive, baby questions trying. This is the drive to
Speaker 1: the globe. Un radio, all right, it's time for the
Speaker 1: drive to the clothes back with us. We're excited to
Speaker 1: have her as Cathy Boyle, president and founder of champing
Speaker 1: Hill Advisors, join us on the phone just up the
Speaker 1: road from me in Pound Ridge, New York. Cathy, great
Speaker 1: to have you with us. How are you? I'm great, Jason.
Speaker 1: I work from a home office normally, so this isn't
Speaker 1: very much different the world that's coming to you in
Speaker 1: many cases, right, it is. Zoom is the hot buzzword.
Speaker 1: Everybody's an expert. It's fun it's funny. Uh. My wife
Speaker 1: also works from home, and she's been especially skeptical of
Speaker 1: this whole zoom thing. She's like, um, you know, we
Speaker 1: can talk on the phone, like there's some of us
Speaker 1: who do this, you know, all the time. But I
Speaker 1: do wonder, um, you know, as I say, you're up
Speaker 1: the road from me here in Westchester, and I wonder
Speaker 1: how it's playing out there in in Pound Ridge, and
Speaker 1: you put out a piece of research or or a
Speaker 1: note to your clients, you know, talking about some some
Speaker 1: local restaurants, which I feel like we've been talking a
Speaker 1: lot about here on the show and here in my
Speaker 1: little town and in New York City. It's sort of
Speaker 1: a it's a microcosm, right of what we're going through.
Speaker 1: It is, and I think a lot of people are unrealistic,
Speaker 1: they really are. I mean, you know, we live in
Speaker 1: a nice, wealthy area. So there's a lot of people
Speaker 1: that I call the law laws, you know, and life
Speaker 1: is great. They've got you know, very big incomes, lots
Speaker 1: of money in the bank, big houses. Um, so they
Speaker 1: are a little bit sheltered and isolated from what really
Speaker 1: goes on, and some of those I've seen on social
Speaker 1: media saying, oh, I can't wait when opens back up.
Speaker 1: We're gonna go out, We're gonna shop, We're gonna But
Speaker 1: I don't think the average person. I think this has
Speaker 1: been such a terrifying experience for so many people that
Speaker 1: I think we will turn into a nation of I
Speaker 1: don't know if we'll go quite the out of Savers,
Speaker 1: but I think people are really going to focus on
Speaker 1: the essentials. And restaurants have very skinny margins, so they
Speaker 1: really I worked in the restaurant business for years. I
Speaker 1: worked a lot in the food and beverage industry. They
Speaker 1: do not have the flexibility they need to have those
Speaker 1: dining room is full and it's it's a hundred seats.
Speaker 1: They need a hundred seats. They need to at the
Speaker 1: turn two or three times in order to make it,
Speaker 1: depending on the restaurant. So so very concerned. Well, and
Speaker 1: I was gonna say, Kathy, I mean a lot of
Speaker 1: your clients. I'm guessing our small business owners as well. Yeah,
Speaker 1: I mean we focus on five to fifty millions, So
Speaker 1: depends on where you you know, focus in terms of
Speaker 1: small business, right, but you don't have a food and
Speaker 1: beverage company doing ten million in revenue. They are lost
Speaker 1: for an in twenty thousand last year. He doesn't have
Speaker 1: any room for error. You know. The wine business in
Speaker 1: particular is usually what we call off premise, which is
Speaker 1: retail stores and on premise, which is restaurants. So because
Speaker 1: we've been drinking like fish across the country, the off
Speaker 1: premise has filled the gap, and many of these wine
Speaker 1: companies are doing close to the same volume, especially if
Speaker 1: they have liquor. But when we return, we will stop
Speaker 1: drinking as much, maybe still drink a little bit more
Speaker 1: than we were, but the restaurants are not going to
Speaker 1: fill the gap. So I'm advising a lot of my
Speaker 1: you know, wine and liquor companies that they really need
Speaker 1: to prepare for a downturn in revenue and really tighten
Speaker 1: their belts and look at their bottom line. And so, Cathy,
Speaker 1: help us if you can square what you see in
Speaker 1: the markets with what you see at a local restaurant
Speaker 1: or what you see when you talk to your clients.
Speaker 1: Because we've got a nasdact that's now up for the year,
Speaker 1: We've got an SMP that if it closes where it
Speaker 1: is will be you know, in single digits down amid
Speaker 1: a global pandemic. Help me understand how this is happening.
Speaker 1: So it is very confusing, right, and if you look
Speaker 1: at some of the smart money looking more in Buffett
Speaker 1: as sort of you know Oracle Omaha, right, he's got
Speaker 1: a hunt in thirty seven billion. He sold his entire
Speaker 1: airline position because they don't see air traffic returning. It's down.
Speaker 1: They don't see it returning for another three years. That's
Speaker 1: a somebody from Boeing said that, and then Leon Cooperman
Speaker 1: joined in with Buffet and named all these reasons why
Speaker 1: he's not buying. So a lot of the smart money
Speaker 1: is not buying. I really think that part of what's
Speaker 1: happened in volume is very low. And there's a small
Speaker 1: number of stocks again driving a lot of technology, which
Speaker 1: granted their earning money this time as opposed to the
Speaker 1: dot com bubble. But ten stocks are accounting for the
Speaker 1: return of NASDAC, you know. So it's a little bit crazy.
Speaker 1: This disconnect of people surveyed believe that they're going to
Speaker 1: be rehired, yet the University of Chicago. I think it
Speaker 1: was just came out with a survey that said only
Speaker 1: two of those people will be rehired, three out of
Speaker 1: ten different. So I think. I also think that people
Speaker 1: got very very complacent every single time eleven years, Jason,
Speaker 1: eleven years, we got taught every time the market falls,
Speaker 1: by it, by the dip, and you'll be rewarded. And
Speaker 1: so I honestly think that's guiding behavior. I have people
Speaker 1: that are normally nervous. Nelly's the wife actually said to me.
Speaker 1: She goes, I mean, they're very conservative portfolio, and they've
Speaker 1: only lost about a third of what the market lost
Speaker 1: on the way down, which is our goal. But she said,
Speaker 1: you know, I'm okay with this, and she goes, can
Speaker 1: you believe I'm saying that because normally she wants to
Speaker 1: go all cash, you know. So I think that it's
Speaker 1: affected a broad range of people, and that people are
Speaker 1: thinking they got The last time they took plenty away
Speaker 1: from their advisors, they went in and oh nine they bought.
Speaker 1: They looked like heroes. So I think people are thinking
Speaker 1: they can do that again. Well. The other thing is, though, Kathy,
Speaker 1: we have so many questions about what life looks like
Speaker 1: after the virus. As you said, you don't anticipate all
Speaker 1: that demand, all this pent up demand coming back, and
Speaker 1: some of it cannot come back. We just talked about
Speaker 1: the sports world at the top of the show, and
Speaker 1: I mean, don't you know if you think you're going
Speaker 1: to go back to big sporting events in stadiums and
Speaker 1: you know still, you know, it's just not going to happen.
Speaker 1: And so that kind of economic momentum, economic momentum, excuse me,
Speaker 1: is not going to be there. And the same thing
Speaker 1: with restaurants, right, you know, we talked with the doctor
Speaker 1: who said, yeah, you might be eating outside, but you're
Speaker 1: not going to necessarily be in the restaurant. It's just
Speaker 1: not going to happen. So the economic momentum we get
Speaker 1: on the other side of this is not going to
Speaker 1: be great. No, and just think about it's a plan
Speaker 1: to ups closed the streets and let restaurants go alt
Speaker 1: fresco so they can at least make up, right, which
Speaker 1: then means think about that the next step. So all
Speaker 1: the delivery drivers can't get down during those hours, all
Speaker 1: the uber cars can't go taxis, so the economic fall
Speaker 1: through the domino really carries quite far. And if you
Speaker 1: look at hospitality seven point eight million people in that
Speaker 1: twenty million were related to that industry. The peril roles
Speaker 1: that have gone up for the last few years were
Speaker 1: largely hospitality, retail, NEME and Marcus filing j Crew filing,
Speaker 1: rumors that Macy's might be next malls opened up, and
Speaker 1: there were ghost towns. Um So, I really think that
Speaker 1: we're looking at a continued fall out. I hate and
Speaker 1: certainty on a plantaholic, and we run our own events.
Speaker 1: So normally I have an event next week with a
Speaker 1: fifty people, and we don't even know if we can
Speaker 1: do our July event with sitting. I can't do it
Speaker 1: for fifty, it just doesn't work. So I faced the
Speaker 1: same issues that a lot of other people do in
Speaker 1: terms of catering, event planning, etcetera. Well, I think it's
Speaker 1: a really good point. And you know, these bigger mass gatherings,
Speaker 1: and if a mass gathering is you know, to find
Speaker 1: is something more than ten or twenty or even fifty,
Speaker 1: it's a it's a whole different ballgame in many ways. Alright,
Speaker 1: good reality check. I feel like our theme is continuing.
Speaker 1: Carol Masster Cathy Boyle. We love catching up with her
Speaker 1: present founder of Chaping Hill Advisors joining us on the
Speaker 1: phone from Lovely pound Ridge, New York. Interesting to hear
Speaker 1: one of her you know folks that she works with
Speaker 1: and saying, you know who normally says, let's go to cash. Yeah,
Speaker 1: but I'm not that scared, and you're right, which is
Speaker 1: right that year after year after year, after the financial crisis,
Speaker 1: it made sense to just plow more money into the
Speaker 1: market for the most part. Thanks so much for listening
Speaker 1: to Bloomberg Business Week. Download the podcast on iTunes, Southcloud,
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