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 more than a hundred
Speaker 1: and twenty countries and Jason. You can download Bloomberg Business
Speaker 1: Week on iTunes, SoundCloud, ol 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. Looking forward to our next
Speaker 1: guest who has our website points out has served as
Speaker 1: senior consultant to the U. S. Government and then includes
Speaker 1: Departments of Health and Human Services, Homeland Security, Veterans Affairs,
Speaker 1: the Administration for Children and Families, and most recently FEMA,
Speaker 1: the Federal Emergency Management Agency. Dr tenort Mima is Professor
Speaker 1: of Nursing at Johns Hopkins University of Bloomberg School of
Speaker 1: Public Health. The Bloomberg School of Public Health supported by
Speaker 1: my Lar Bloomberg founder of course at Bloomberg LP and
Speaker 1: Bloomberg Philanthropies, and Dr Venoma joins us on the phone
Speaker 1: from Sara Sota, Florida. Dr Venom, nice to have you
Speaker 1: here on Bloomberg Radio. UM tell us a little bit
Speaker 1: about your world right now. I mean, I really feel
Speaker 1: like it's an interesting time where we're seeing more of
Speaker 1: the world reopening, we're seeing more virus cases. UM tell us,
Speaker 1: how you see it at this point? Well, thank you
Speaker 1: so much. It's an honor and a privilege to join
Speaker 1: you this afternoon and to have the opportunity to comment
Speaker 1: on the ongoing COVID nineteen pandemic and just the incredible
Speaker 1: burden and challenges that the pandemic has created for healthcare
Speaker 1: systems and for the people who work within them. And
Speaker 1: of course our report really focused on the challenges that
Speaker 1: the nursing workforce faced and continue to face in light
Speaker 1: of what we're sort of considering a smoldering pandemic that
Speaker 1: we're actually seeing increases in certain states. So we have
Speaker 1: really learned some early lessons from all of this, and
Speaker 1: certainly from uh the the devastating impact that the pandemic
Speaker 1: had in the Greater New York and New Jersey metro areas.
Speaker 1: The surge and demand for healthcare for those UH increased
Speaker 1: numbers of COVID positive patients just required that nurses UH
Speaker 1: be able to work UM have had very limited access
Speaker 1: to the appropriate levels of personal protective equipment that they needed.
Speaker 1: Many nurses have actually not received the training that one
Speaker 1: needs to understand how to safely don and doff that
Speaker 1: personal protective equipment. And then, of course, because of the
Speaker 1: large number of patients surging as we refer to it,
Speaker 1: within the healthcare system, we were forced to redesign workflow
Speaker 1: and change staffing pattern and reassigned nurses to COVID positive
Speaker 1: patient units where some of those nurses had never worked
Speaker 1: with critically care patients before. So we saw a multitude
Speaker 1: of challenges. We saw amazing resilience within the nursing workforce
Speaker 1: in terms of being able to respond to those challenges.
Speaker 1: But that led my colleagues and I to co author
Speaker 1: the report that really tried to look at what the
Speaker 1: issues were, so how do we fix it, because that
Speaker 1: seems like you know, medical care one oh one right
Speaker 1: to make sure that people first of all, of course
Speaker 1: have the equipment. And we saw the problems with that,
Speaker 1: you know revealed um as the case is spiked in
Speaker 1: the country and certainly in places like New York City.
Speaker 1: But how do you make sure that nurses and everyone
Speaker 1: certainly within the health care community has the necessary equipment?
Speaker 1: And I think training like that just seems to me
Speaker 1: like you've got to make sure everybody knows how to
Speaker 1: use it. Absolutely, you raised some excellent questions, and I
Speaker 1: think my answer is that there's a myriad of factors
Speaker 1: that really come into play here. Uh. It certainly starts
Speaker 1: fundamentally in in colleges and universities and schools of nursing
Speaker 1: in terms of ensuring that pandemic preparedness and public health
Speaker 1: emergency preparedness and response content is included in nurse and curriculum,
Speaker 1: which very often it is not. And then so not
Speaker 1: only do we really need to make sure that our
Speaker 1: our student nurses and our graduate student nurses get this
Speaker 1: education in training, but they are competent. They we are
Speaker 1: testing their competencies in terms of their skills and abilities
Speaker 1: to participate in pandemic response. We're looking down the road
Speaker 1: at the implementation of a national vaccine campaign where we
Speaker 1: have you know, over three hundred and fifty million Americans
Speaker 1: that will require a vaccine hopefully once it's developed and
Speaker 1: manufactured and we're ready to distribute it, and certainly that
Speaker 1: will be a very nursing intensive public health event. So
Speaker 1: looking at education and preparingness is the right thing. The
Speaker 1: other thing is the support of nurses in hospitals and
Speaker 1: in healthcare setting in MS, so you know that ongoing
Speaker 1: support from hospital administration and participating in disaster drill. Forgive me,
Speaker 1: and I want to interrupt only because we only have
Speaker 1: about a couple of minutes left here, but I do
Speaker 1: wonder because you have worked with so many different departments
Speaker 1: within the government, whether it's FEMA, whether it's Health and
Speaker 1: Human Services, Homeland Security, the v a UM in terms
Speaker 1: of the government the federal government response, what needs to
Speaker 1: be done differently next time around? And I will say
Speaker 1: about the testing and tracing. We keep hearing that we
Speaker 1: almost need a military like effort um to make sure
Speaker 1: that we can kind of get out of this and
Speaker 1: that we're kind of we're missing an opportunity. So I'm
Speaker 1: just curious how you see that. Absolutely well, obviously the
Speaker 1: Department of Health and Human Services and in particular the
Speaker 1: Centers for Disease Control and Prevention and then ask for
Speaker 1: the assistance Secretary Office of Preparedness and Response. Those are
Speaker 1: the federal agencies that in our report we strongly encourage
Speaker 1: them to take time to look at detailed pandemic and
Speaker 1: other disaster and public health emergency response plans and look
Speaker 1: at the assumptions where having a prepared, competent nursing workforce
Speaker 1: is going to be critical for them to execute those plans.
Speaker 1: And so I do believe that the federal government needs
Speaker 1: to take some steps to ensure that we're better prepared
Speaker 1: next time. Well, we certainly certainly hope that we've all
Speaker 1: learned you know, very obviously harsh lesson unfortunately, but we
Speaker 1: do hope we've learned a lesson so that we cannot
Speaker 1: do um and and meet this kind of a stress
Speaker 1: or you know, tragedy in the future in a in
Speaker 1: a much better way. Dr Tenor Venoma she is Professor
Speaker 1: Nursing at Johns Hopkins University Bloomberg School of Public Health.
Speaker 1: As we mentioned, of course, supported by Michael R. Bloomberg,
Speaker 1: founder of Bloomberg LP and Bloomberg Radio. On the phone
Speaker 1: from Sarasota, Florida, This is Bloomberg Business Week with Carol
Speaker 1: Masser and Jason Kelly on Bloomberg Radio. Great cover story
Speaker 1: this week. You and I have been talking about it
Speaker 1: a lot um in the last day or so. It
Speaker 1: is the remarks in the magazine. It's very timely. It's
Speaker 1: a necessary conversation in light of the protests that have
Speaker 1: erupted over racism in America. And Jason, as we know,
Speaker 1: it delves into the gaps between blacks and whites set
Speaker 1: exist on many levels, and it asks a really important
Speaker 1: question whether it is time maybe for quotas. Yeah, and
Speaker 1: it is a powerful story, a provocative story. We expect
Speaker 1: no less from Rebecca Greenfield. She runs all of our
Speaker 1: diversity sustainability coverage here at Bloomberg, focusing on the managing
Speaker 1: Diversity team, which is just doing some terrific work. She's
Speaker 1: with us on the phone as a Stue Webber, both
Speaker 1: in Brooklyn. Joll set this up for us. Why the cover.
Speaker 1: I think it's probably the most important story in corporate
Speaker 1: America right now. Um, And it was one of these
Speaker 1: ones that Rebecca filed the draft and we thought it
Speaker 1: was really good and we started talking to the art
Speaker 1: department about how do we art the story, and the
Speaker 1: art department came back with basically the most arresting art
Speaker 1: asset that that um that I I saw all week
Speaker 1: I think, which was five hundred headshots of Fortune five companies.
Speaker 1: And it reveals that there are four black CEOs in
Speaker 1: the country right now and in in leading uh fortuneies,
Speaker 1: And that just alone is just shocking when you see it,
Speaker 1: um laid out like we did on the cover. And um,
Speaker 1: Rebecca's story is ultimately about quotas, which you know are
Speaker 1: practically illegal. And yet when you see this gigantic problem
Speaker 1: and it's you know, we put that problem on the
Speaker 1: cover of the magazine, UM, it makes you wonder if
Speaker 1: there shouldn't be a more radical approach for a solution. UM. So, so, Becca,
Speaker 1: can you kind of walk us through, um, what quotas
Speaker 1: might solve in the problems that are associated with them. Yeah, so,
Speaker 1: I think you mentioned the main problem, which is how
Speaker 1: few black leaders there are. And this is not because
Speaker 1: they have There haven't been a lot of efforts to
Speaker 1: change the makeup of companies. There have been billions of
Speaker 1: dollars that in decades of trying and of companies saying
Speaker 1: it's in their best interest to do this, and most
Speaker 1: companies one person I quote said so, but it's so
Speaker 1: well said. They look like Plantations. Organizational chart looks like Plantations,
Speaker 1: and black folks are at the boss that was a
Speaker 1: close to them. I gave me. And that's the reality
Speaker 1: and it's and it hasn't changed. So what's what when
Speaker 1: what's their own devices? Companies aren't really able to move
Speaker 1: the needle, and it's it's because it's a very complicated
Speaker 1: and difficult problem to solve. So, like to mention, I
Speaker 1: was wondering if we need something more aggressive or more coercive.
Speaker 1: And quotas are very controversial, but they have been proven
Speaker 1: to work in that capacity, which is to get more representation.
Speaker 1: They don't fix everything, they don't fix racism, but they
Speaker 1: do move the needle more than what company they're doing.
Speaker 1: And we know, Rebecca, it has helped move the needle
Speaker 1: with women. Correct. Yeah, So there is this law that
Speaker 1: was passed in California UM a couple of years ago
Speaker 1: that where they required boards there too have at least
Speaker 1: one female director UM by last year and then they're
Speaker 1: upping that UM depending on the size of the board.
Speaker 1: So there were there's a quota. They've been sued because,
Speaker 1: like Jile mentioned, quotas, some are in a legal gray area.
Speaker 1: But it has touched all of these boards of PELO
Speaker 1: companies in California to add women, UM, and they were
Speaker 1: worried that they wouldn't be able to find qualified candidates.
Speaker 1: But at the end of the day they did to
Speaker 1: comply because if they didn't comply, they had to pay
Speaker 1: a hundred thousand dollar fine. Not everyone, there was a
Speaker 1: huge I think the California one is a really interesting
Speaker 1: UM example of how it might actually feel that there's
Speaker 1: a way to make this work. But obviously there's going
Speaker 1: to be these legal challenges and what would have been
Speaker 1: the basis of the legal challenges so far in California. Yeah,
Speaker 1: so quotas. I think the Supreme Court has been weighing
Speaker 1: in an affirmative action. That's all comes back todaya of
Speaker 1: affirmative action UM. And when the Supreme Court weighed in
Speaker 1: has weighed in, they the Court has tended to not
Speaker 1: like quotas. I think the Court thinks they go too far,
Speaker 1: but has said that organizations can use affirmative action too
Speaker 1: for their their interests. That's where we get this big
Speaker 1: pusher diversity. UM. So the legal challenges in California are
Speaker 1: based in that spirit that quotas are a form of discrimination,
Speaker 1: UM and that it's unconstitutional. But neither of those challenges
Speaker 1: have been successful so far. And in the meantime, the
Speaker 1: boards are adding more women. And they don't think if
Speaker 1: the laws, you know, knocked down, if they're going to
Speaker 1: just fire these women from these boards. UM, I think
Speaker 1: they're going to stick with it. Okay. I also want
Speaker 1: to ask, because California isn't, um, the only place in
Speaker 1: the world that is experimented with this. You also kind
Speaker 1: of scratch some international UM seems what what what about
Speaker 1: outside of the US. How are other countries looking at this? Yeah,
Speaker 1: so you know laws are different places to the Norway.
Speaker 1: They also have a public company, um law And says I,
Speaker 1: forty person on the boards teach for women, which is high,
Speaker 1: and they are women who hold a little bit over
Speaker 1: forty percent of those positions. But I think it shows
Speaker 1: the drawback of quotas or how quotas are limited. Really
Speaker 1: they do what they're so to do they get companies
Speaker 1: to our boards or whoever, to add more of whatever
Speaker 1: demographic you want. Even with all those women empowered hasn't
Speaker 1: changed the overall makeup of the executive power of the
Speaker 1: companies where there aren't quotas. So I think that kind
Speaker 1: of shows their quotas are very powerful what they do,
Speaker 1: and you need them. But also you can't just use
Speaker 1: them in one place and expect you know, the rest
Speaker 1: of corporate America to PA Online or or Norway or wherever. Well,
Speaker 1: and it's interesting, you know, Becky, you you also bring
Speaker 1: up the idea that even talking about them maybe spur action.
Speaker 1: I mean, is that a reasonable argument? I mean, what
Speaker 1: do you think of that that? Well, I would say
Speaker 1: that so far, a lot of the feedback I think, yeah,
Speaker 1: gets a lot of people at set because they don't
Speaker 1: like them. I can tell you that from my Twitter mentions,
Speaker 1: you're going to turn for the worst today. Um. But
Speaker 1: I think my my motivation or making this argument and
Speaker 1: writing this, and I think about this for a long time,
Speaker 1: is that we do need something more radical if there's
Speaker 1: going to be real change, because there is a lot
Speaker 1: of you know, millionaise or what I mean, very well
Speaker 1: meaning acting in the area and it doesn't doesn't do
Speaker 1: anything right. Um. I think it's also rethinking of what
Speaker 1: the front of action or quotas are for I think
Speaker 1: some people I talked is that we need to really
Speaker 1: think it as this way of counteracting well, not as
Speaker 1: like this representation challenge. Right, And as you said, a
Speaker 1: lot of well meaning and there's a lot of committees
Speaker 1: and conversations, but we've been talking for a long time,
Speaker 1: and so maybe we need to rethink the process and
Speaker 1: maybe we need something that's a little bit more aggressive.
Speaker 1: I gotta just say it, the cover man, what's wrong
Speaker 1: with this picture? It just hits you really, you know quickly. Yeah,
Speaker 1: the picture and the words together are really just remarkable.
Speaker 1: Thank you so much. Rebecca Greenfield leading all of our
Speaker 1: diversity coverage managing diversity team here at Bloomberg. She joined us,
Speaker 1: as did Joel Webber, the editor of the magazine. You're
Speaker 1: listening to Bloomberg Business Week with Carol Masser and Jason
Speaker 1: Kelly on Bloomberg Radio. All right, let's talk a little
Speaker 1: Business Week economics now, because it's Thursday, and now we
Speaker 1: have gotten unfortunately all too used to, are all too
Speaker 1: accustomed to, maybe I should say, uh, seeing jaw dropping
Speaker 1: numbers every single Thursday when it comes to jobless claims.
Speaker 1: Today was no exception, Let's understand that in the broader
Speaker 1: context of the economy what the Fed has been saying,
Speaker 1: and much more. With Milton as Roddy, he is the
Speaker 1: chief economist for Vested. Johnius on the phone from Glenn Mills, Pennsylvania. Milton, really,
Speaker 1: nice to have you here with Carolin myself. Pleasure to
Speaker 1: be on. So let's start with the news of the day,
Speaker 1: which is those jobless claims, surprising too many that it
Speaker 1: remains at that high level. What did you read into it,
Speaker 1: especially as you got into the details. Yeah, well, mostly
Speaker 1: what I got out of the numbers were that some
Speaker 1: of the optimism that was implicit in the jobs report
Speaker 1: earlier this month in the retail sales overstated the rebounding
Speaker 1: the economy. There are still a lot of people losing
Speaker 1: their job. One and a half million applied to unemployment insurance.
Speaker 1: That says to me that J. Powell, when he testified
Speaker 1: and said this is going to be a little longer,
Speaker 1: a little odder than you think, was correct. Well, you know, Milton,
Speaker 1: one of the things I was excited about having you
Speaker 1: on is that you have been in the world of
Speaker 1: finance and economics for I don't know forty years You've
Speaker 1: seen a lot of cycles, um, and a lot of
Speaker 1: different crises. So this is safe to say unlike any other, right,
Speaker 1: because there's a logical part of us that understands what
Speaker 1: the economy shutting down, the impact is going to have
Speaker 1: on activity, on the labor market and so on. UM.
Speaker 1: I'm just curious how you see it though. Coming up
Speaker 1: on the other side, I think there was hopeful expectations
Speaker 1: it was v and we bounce back real quickly. But
Speaker 1: it's not that easy. Especially we have so many guests
Speaker 1: that come on and say, listen, we're still in a
Speaker 1: health crisis and we still have a lot of problems. Well,
Speaker 1: there's the uncertainty about what's going to happen with the virus,
Speaker 1: and I'm not equipped to do that, uh, to talk
Speaker 1: about how the virus will go. But I think the
Speaker 1: issue here, and it's one thing that Powell tried to
Speaker 1: explain to his testimony before Congress and his press conference
Speaker 1: after the f O m C meetings, is that there
Speaker 1: was a lot of damage done. It was fong to
Speaker 1: say we're gonna shut down, and everyone gets pent up demand,
Speaker 1: everyone wants to get out. But a lot of businesses closed,
Speaker 1: a lot of people will laid off. Yes, these people
Speaker 1: will be called back, those people who have the capital,
Speaker 1: all the loans to bridge the gap. But there has
Speaker 1: been a real rise in bankruptcies. Those firms are never
Speaker 1: coming back, and I think that that is going to
Speaker 1: make this a lot longer. So we may see a
Speaker 1: bounce here, uh the v that everyone's talking about, But
Speaker 1: then we're going to deal with the leg can see
Speaker 1: these bankruptcies, the legacy of downsizing that did occur, more
Speaker 1: permanent downsizing, the just bridging the lockdowns, and it'll the
Speaker 1: economy will slow after a happy looking the Yeah, it's
Speaker 1: interesting you say that. And I was telling Carol a
Speaker 1: little bit about a conversation I had just while I
Speaker 1: was late to the show is catching up with Henry
Speaker 1: Kravis over at KKR, and he was talking about the
Speaker 1: CEO is that he's talking to to a person are
Speaker 1: basically saying, my workforce is going to be smaller on
Speaker 1: the other side of this, And even if it's not
Speaker 1: every CEO, if it's a lot of CEOs who are
Speaker 1: saying that, that has a profound effect on the labor
Speaker 1: force going forward and ultimately the broader economy. It does.
Speaker 1: And we had wonderful employment numbers before the shutdowns and
Speaker 1: the lockdowns. I'm not saying we should have avoided them.
Speaker 1: That's a separate issue, but we're not getting back to
Speaker 1: that for a long time. And I rest the bankruptcies
Speaker 1: because the people who suffered most. J. Pale made a
Speaker 1: point of this to the people who suffered most in
Speaker 1: in this these lockdowns, were they undercapitalized small businesses, particularly
Speaker 1: in the less advantaged sectors of this economy. And they're gone,
Speaker 1: they're they've gone bankrupt. They if they're never coming back.
Speaker 1: So what does it look like then on the other side, Um,
Speaker 1: we've had you know, various economists and even our Bloomberg
Speaker 1: Economics team Milton come on and talk to us and say,
Speaker 1: you know, it's going to be several years before we
Speaker 1: get back to where we were pre COVID nineteen. Well,
Speaker 1: I think it will be a long time, and I
Speaker 1: think several years is probably a good estimate. What I
Speaker 1: think is going to be deceptive here is that we're
Speaker 1: going to have this bounce. There's a lot of people
Speaker 1: who spent less money and who have incomes because they
Speaker 1: could work from home or they were essential workers and
Speaker 1: did not have an opportunity to spend money, so you'll
Speaker 1: have this bouncing the economy. They want to get out,
Speaker 1: They want to have a restaurant meal, they want to
Speaker 1: see people in the bar. They want to buy clothes
Speaker 1: other than the pajamas they water a month and a half.
Speaker 1: They are just for the record, Jason and I have
Speaker 1: been dressed every day doing our show in real clothes,
Speaker 1: not in our pajamas, I will think, partially because we
Speaker 1: have to look at each other on video conference because
Speaker 1: who's to say what would happen if there were no Ever, however,
Speaker 1: our morning planning call, yeah, exactly, and some of the
Speaker 1: zoom calls I've done, I've decided on the last clean
Speaker 1: shaven man in America. I think that's right. I think
Speaker 1: you're I think you're right about that. But it's but
Speaker 1: it's it's going to be different, and it's gonna be
Speaker 1: really tough, and it's going to be lasting for for
Speaker 1: many individuals and many small businesses, as you said it is.
Speaker 1: And I think the minority groups in this country, not
Speaker 1: because of racism, just because of the undercapitalization in those
Speaker 1: sectors of the economy are going to take the longest
Speaker 1: time coming back. We had best figures for Hispanic workers,
Speaker 1: best figures for Black workers. Full of the shutdowns, it'll
Speaker 1: be a long hole for and it will be a
Speaker 1: long hole for everybody. We will have this bounce because
Speaker 1: people do want to get out, but that will fade
Speaker 1: by the fourth quarter, right, because when we have a
Speaker 1: really tight labor market, that's when the fringes of the
Speaker 1: labor force rights really start to benefit. And they did.
Speaker 1: We had a very tight labor market and they were benefiting,
Speaker 1: but now it's going to be a long road back,
Speaker 1: especially to them. Well, and as as you're alluding to, Milton,
Speaker 1: I think you know there are some structural issues. We
Speaker 1: talked about them with the CEO of Lendustry yesterday that
Speaker 1: relate to a lot of minority on businesses where if
Speaker 1: they are they may not even be able to survive
Speaker 1: to the other side. And there are a lot of
Speaker 1: applications for that as well, Milton. As Roddie, thank you
Speaker 1: so much. Really nice to catch up. The chief economists
Speaker 1: for Vested joining us on the phone from Pennsylvania. Carol,
Speaker 1: do you think Ari and Paul have like peee pajamas.
Speaker 1: I don't think so. Ari's in the office. Oh that's right,
Speaker 1: So he's been dressed when he's doing that morning call Paul. Paul, Yeah, Paul,
Speaker 1: maybe could be bunny slippers, little bunny slippers. Yeah, thank
Speaker 1: you are sorry, just confirmed that he isn't. He is
Speaker 1: dressed in our control room. So no, I think there's
Speaker 1: an n C. No comment from Paul. Paul Brandon's in shorts.
Speaker 1: Oh that checks out. That checks out. This is Bloomberg
Speaker 1: Business Week with Carol Masser and Jason Kelly on Bloomberg Radio.
Speaker 1: I like the understated headlines sometimes that Bloomberg Intelligence have.
Speaker 1: Carnival's second quarter results show recovery risks amid cost cuts.
Speaker 1: That is true. Uh, this is a story that we've
Speaker 1: been following very closely. Business Week has been following you
Speaker 1: very closely. Brian Egger, senior Gaming and lodging analysts for
Speaker 1: Bloomberg Intelligence. He joins us on the phone from New Jersey. Brian,
Speaker 1: you know, I'm just teasing. I love your research of
Speaker 1: so don't where'd you like? Wait? What? Oh my god?
Speaker 1: What's going on? I mean, this isn't. This is a
Speaker 1: remarkable story in many cases, but by a numbers help
Speaker 1: us understand what's going on at Carnival. Sure, so Carnival basically,
Speaker 1: as did other cruise operators, suspended sailing operations on their
Speaker 1: fleetback in mid mid March. They've been basically in a
Speaker 1: no revenue scenario for quite some time. They expect to
Speaker 1: begin to resume some cruises beginning in August after the
Speaker 1: CDC Morning against taking a cruise expires, But nevertheless, it's
Speaker 1: going to obviously be a very steep uphill climb as
Speaker 1: they resume operations with a lot of distancing in place.
Speaker 1: They have enough money in place. I know they've tapped
Speaker 1: the markets, but do they have enough money in place
Speaker 1: to kind of ride out the storm. So they've got
Speaker 1: about seven and a half billion dollars in liquidity, and
Speaker 1: by our estimate, that allows them to basically continue maintain
Speaker 1: their cash burn rate for at least eight to ten
Speaker 1: months or so. So we do reach a point beyond
Speaker 1: the end of this year where it becomes very worrisome
Speaker 1: if they don't resume operations at some level, and they
Speaker 1: do plan to, the question is how quickly can may
Speaker 1: reintroduce ships and what will the uptake be from customers? Brian,
Speaker 1: I mean, what's your overall read You and the team
Speaker 1: that overall read on this industry because I feel like
Speaker 1: for some of us, at least, looking at it more
Speaker 1: as consumers as anything, you think, Okay, no way, I'm
Speaker 1: not getting back kind of ship. There are other people
Speaker 1: who are very excited about getting back on a ship.
Speaker 1: We know that by the numbers. Charlie Pellett is one
Speaker 1: of them, our colleague, voice of the New York City Subway. Uh,
Speaker 1: how do you help us understand kind of what the
Speaker 1: actual demand is and what the way forward is? Sure?
Speaker 1: So one way to look at this is that for
Speaker 1: one about one third of the bookings or you know,
Speaker 1: on the book sailings actually come from individuals that were
Speaker 1: on canceled cruises this year and are basically you're going
Speaker 1: to redeem them next year as future cruise credits. So
Speaker 1: you know, you have ships getting to book last next
Speaker 1: for next year, obviously at a much slower pace and
Speaker 1: with pricing down, but part of the imagery of cruise
Speaker 1: ships next year is going to be booked about a
Speaker 1: third vice so far by people that actually had their
Speaker 1: cruise canceled, They were forced to cancel this year and decided,
Speaker 1: rather than taking a cash refund, try to book again
Speaker 1: next year, hoping things will be better obviously, But that's interesting.
Speaker 1: You know, if they were given the option of cashing out,
Speaker 1: I think I would have just taken the cash and run.
Speaker 1: But I mean it's interesting that they're like, no, no, no,
Speaker 1: I want to do it. And you know, I've done
Speaker 1: some deep dives into Carnival and have spent some time,
Speaker 1: you know, doing stories and on the ship and the
Speaker 1: people that are on there, Like I remember talking to
Speaker 1: folks in the elevators. These are people who go on
Speaker 1: you know, five, six, seven, eight Carnival cruises. I mean,
Speaker 1: this is what they do over and over again. So
Speaker 1: they're really a committed And I know Carnival has many
Speaker 1: brands and they hit different kind of economic sectors, but
Speaker 1: these are people who really loved to cruise and cruise Carnival. Yeah,
Speaker 1: it's interesting. About half of the individuals that have their
Speaker 1: cruises canceled for this year chose to get a full
Speaker 1: cash refund and the other half chose to use this
Speaker 1: the voucher basically for a future credit towards a free
Speaker 1: cruise for a future period. So it is about split
Speaker 1: between people that just basically want the cash back or
Speaker 1: people that say, you know, i'll basically take a refund
Speaker 1: or something like that off of what I initially booked
Speaker 1: and redeem it next year. Yeah, I mean it. It's
Speaker 1: such a fascinating set of dynamics. I mean, this is
Speaker 1: coming at a time and you know that's better than
Speaker 1: we do, Brian, that you know, the entire travel and
Speaker 1: lodging industry is under a sort of existential threat. You know,
Speaker 1: we talked with the CEO of Hilton, and subsequent to
Speaker 1: us talking to him, you know, they cut their corporate workforce.
Speaker 1: You know, we talked to CEOs all the time who
Speaker 1: basically say, yeah, I'm talking to my colleagues, and you know,
Speaker 1: from a business travel perspective, it's gonna be way down.
Speaker 1: I mean, this is a reckoning that's going to last
Speaker 1: for a long time. It feels like I think so.
Speaker 1: And it's fair to say that the company has realized this.
Speaker 1: I mean, Carnival, like other companies, has suspended its share
Speaker 1: by backs and dividends. It plans to sell six of
Speaker 1: its four ships to get rid of some of that capacity,
Speaker 1: and they do expect, working to their favor, that some
Speaker 1: of the expected ship deliveries will be getting this year
Speaker 1: will be the way until next year. So in some
Speaker 1: ways that kind of helps not have too much supply
Speaker 1: at a time when they really don't need it. Obviously. Yeah,
Speaker 1: it's really amazing. I do wonder though, the hit that
Speaker 1: they're taking this year does it How many years does
Speaker 1: it take for them to kind of get back to
Speaker 1: where they were previus previrus. Do you have any thoughts
Speaker 1: on that. I think the curizing experience when people do
Speaker 1: go back, as is true for also the castinos which
Speaker 1: I follow, it's going to be it's gonna characterized by
Speaker 1: social distancing, by by much lower capacity, utilization and bookings levels,
Speaker 1: and it's going to take quite some time. I mean,
Speaker 1: pricing will be lower often, ces will be lower by design,
Speaker 1: and I think it will probably take a good period
Speaker 1: of time to get back to anything resem only what
Speaker 1: we saw before the pandemic. I just feel like big
Speaker 1: cruise ships, that's the antithesis social distancing. Seriously, especially as
Speaker 1: we come to learn more and more about this guy's
Speaker 1: Brian Egra, thank you so much, senior gaming and lodging analysts.
Speaker 1: He's got a lot on his plate these days trying
Speaker 1: to figure out what happens next with some of these
Speaker 1: big lodging and gaming names, including Carnival, which delivered quite
Speaker 1: a loss. He is with Bloomberg Intelligence. Of course, Johnny
Speaker 1: is on the phone from New Jersey Journal. Now, but
Speaker 1: you let me drive? Oh no, no, no no, no, honey, please,
Speaker 1: I'll do the riding drivel. I want to drive, Just drive, baby,
Speaker 1: good questions and trying. This is the drive to the
Speaker 1: globe to give me a thing radio, Yes, indeed, it
Speaker 1: is time for the drive to the close. Back with
Speaker 1: us someone We've talked to a bunch. I'm glad we've
Speaker 1: got a back. Ross Gerber, he's president and chief executive
Speaker 1: officer of Grower cow Saki Wealth and Investment Management. He
Speaker 1: joins us once again on the phone from Santa Montica, California.
Speaker 1: Got about a billion dollars in assets under management. Ross,
Speaker 1: how are you. I'm good? How are you? I'm doing okay.
Speaker 1: You know it's week fourteen, Yeah, exactly, exactly, and just
Speaker 1: trying to make sense of the last you know, fourteen
Speaker 1: weeks and really the last three weeks. We've had a
Speaker 1: lot of discussions about diversity and racism, you know, through institutions,
Speaker 1: whether it's the financial sector, in other industries. I know
Speaker 1: you've been thinking about that too. Oh, yeah, I mean,
Speaker 1: you know, just just to start, we're real proud of
Speaker 1: the fact we just won another award for diversity and
Speaker 1: inclusion for my firm from Wealth Management dot Com. We
Speaker 1: also want it from Investment News. So we're considered one
Speaker 1: of the most diverse firms in the entire industry. And
Speaker 1: I still think as a firm, we have a lot
Speaker 1: more diversity to go, you know, And we don't specifically
Speaker 1: obviously hire for diversity. We just try to reflect the
Speaker 1: community we're in here in in southern California, which is very,
Speaker 1: very diverse. So you know, that's the way we look
Speaker 1: at the world is we try to hire the best
Speaker 1: qualified people, but we want to represent the communities that
Speaker 1: we're seeing too, and there was those are diverse communities.
Speaker 1: But do you think about it, right, it's an effort.
Speaker 1: I think about it a lot because we are constantly
Speaker 1: hiring and I've been dealing with this my entire career.
Speaker 1: So I've been hiring and training advisors for twenties six
Speaker 1: years now, and we've constantly struggled with this issue of
Speaker 1: getting certain groups of people and and including African Americans
Speaker 1: through our system. And I really think that there are
Speaker 1: three main things are industry needs to change, and it
Speaker 1: starts with FINRA, the regulatory body and the rules to
Speaker 1: getting license as a financial advisor. So we're, you know,
Speaker 1: what we want to do is call on FINRA to
Speaker 1: take a good look at the way licensing works. For example,
Speaker 1: the first thing is standardized testing. Standardized testings used throughout
Speaker 1: our system in college and also in the securities industry,
Speaker 1: and it's been proven to be a have no correlation
Speaker 1: to actual performance of people, and be it clearly favors
Speaker 1: certain groups of people over others. We need to change
Speaker 1: the way with that, we're testing people into a much
Speaker 1: more you know, reasonable format that's fairer, that it is
Speaker 1: more inclusive, and and that's kind of how they do
Speaker 1: continuing education with like videos and other things that are
Speaker 1: not just filling in the little dots and getting the
Speaker 1: questions right. So testing is one area. The second area
Speaker 1: is credit, and the third is criminal. So these are
Speaker 1: the three things that constantly have a lot of people
Speaker 1: who would otherwise be qualified financial advisors not get through
Speaker 1: the registration and licensing system because the testing, the credit checks,
Speaker 1: and the criminal checks are inherently biased against certain groups
Speaker 1: of people, including African Americans. And and so we really
Speaker 1: love to see that change. And so how does it
Speaker 1: play through ross to what you do or don't invest
Speaker 1: in Well, as far as making investment choices, you know,
Speaker 1: we run sort of our own version of E. S G.
Speaker 1: Three companies that we own because we really consider that
Speaker 1: we own these companies like we're the owner, and so
Speaker 1: I don't want to be associated, for example, with Taco
Speaker 1: Bell today. You know, my god. You know. Granted, we're
Speaker 1: like Starbucks shareholders and we had that issue a few
Speaker 1: months back and they and they handled it. I thought,
Speaker 1: pretty well, it's very hard to maintain seventeen thousand stores
Speaker 1: and have everything go right. Also is the Philadelphia incident
Speaker 1: where they guys arrested, but they're very very you know,
Speaker 1: progressive at Starbucks, and I thought they dealt with it fine.
Speaker 1: But you know, if I'm dealing with a company. And
Speaker 1: a perfect example is we sold all of our Facebook
Speaker 1: position because of morals, not because of the performance of
Speaker 1: the company, but we feel that they support negative causes
Speaker 1: and and create a lot of problems in the world
Speaker 1: and we just didn't want to be a part of
Speaker 1: it as owners. So so it is something we think
Speaker 1: about as far as the way companies are inclusive or not. Um,
Speaker 1: we run that through a screen. But our basic investment
Speaker 1: process is still focused around obviously finding the best investments
Speaker 1: in the I mean, it's interesting. We we had a
Speaker 1: conversation with John Rodgers over at Aerial last week and
Speaker 1: he was talking about the role of institutional money in
Speaker 1: all this and that you know, absolutely companies and private
Speaker 1: equity investors, hedge fund investors, they are really only going
Speaker 1: to change their behavior in a meaningful way if they
Speaker 1: feel pressure from their own investors, whether that special yeah, yeah, totally.
Speaker 1: And and this is another crime of the index fund generation.
Speaker 1: You know, Vanguard doesn't have morals. They don't care if
Speaker 1: you discriminated or not. Now they are going to be
Speaker 1: upset that I said that. Then why don't you vote
Speaker 1: for something, Vanguard? Why don't you vote against management that
Speaker 1: that has non inclusive policies or discriminatory policies. Vanguard won't
Speaker 1: vote against a board to save their life. Now, I'm
Speaker 1: proud to say we do a lot of investing with
Speaker 1: black Rock, and Larry Fink has said, We're not going
Speaker 1: to just sit on the sidelines anymore. We own five
Speaker 1: percent of every company in America and they're not inclusive.
Speaker 1: So I shout out to black Rock, and you know,
Speaker 1: we specifically don't use Vanguard on purpose because of this
Speaker 1: stance that they've taken. But have they dismantled a lot
Speaker 1: of their index funds? Black Rock not dismantled. But I
Speaker 1: think what it is is using their positions to pressure
Speaker 1: companies to make better decisions. You know, if I own
Speaker 1: five percent of your company, you gotta listen to me,
Speaker 1: you know. And so if you feel like it's work though, Ross,
Speaker 1: I think it's just starting. Look, let's be real. Corporate
Speaker 1: America and the way things are has been this way
Speaker 1: for a long long time, Okay, in in my industry too, Okay,
Speaker 1: So trying to change these companies is super hard. That's
Speaker 1: why new companies like mine are formed and grow and
Speaker 1: succeed is because we are part of the future versus
Speaker 1: the past. They're still living in mad you know what
Speaker 1: a Madman or whatever that show is with sexism. I mean,
Speaker 1: this year has been phenomenal for our country in the
Speaker 1: sense of pushing forward things that matter. First, we had
Speaker 1: me to completely change Hollywood, okay completely for the better,
Speaker 1: and we have the best content we've ever seen coming
Speaker 1: out of Hollywood clearly, and we have more equality for
Speaker 1: women in now We've got to do it with African
Speaker 1: Americans in this country. Okay, And maybe this time, Maybe
Speaker 1: this time, because I lived through Rodney King and nothing happened,
Speaker 1: nothing changed, the same crap, Right, We lived through this,
Speaker 1: So maybe this time because these kids have had enough kids,
Speaker 1: you know, I've had enough that they'll get off their
Speaker 1: Facebook and Instagram and get into the streets. And I
Speaker 1: couldn't be more proud of them, couldn't be more proud
Speaker 1: of the young people today. Yeah. Well, it's great to
Speaker 1: catch up with you. Always love your passion and your perspective. Roscer.
Speaker 1: We're president CEO of Gerber Kawasaki Wealth and Investment Management,
Speaker 1: Native Angelino. Uh and I think that's a really good perspective.
Speaker 1: Uh yeah, understanding that maybe from a different perspective than
Speaker 1: we see in New York and other parts of the country. Uh. Important, important,
Speaker 1: And he is right if you think about all the
Speaker 1: different things that have happened, whether it's me too, whether
Speaker 1: it's you know, the rights that we've recently seen and
Speaker 1: we talked changed, you and I talked negatively at times
Speaker 1: about social media. Social media is a huge accelerant around
Speaker 1: this season. Nist, citizen journalists putting it down and getting
Speaker 1: into the street. But the fact that everybody saw that
Speaker 1: video makes a huge difference. Jurist, It's a big deal.
Speaker 1: Thanks so much for listening to Bloomberg Business Week. Download
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