Speaker 1: This is Bloomberg Business Week. I'm Carol Masser and I'm
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Speaker 1: Eastern only on Bloomberg Radio. Let's set the business week agenda.
Speaker 1: First off, Carol. Gina Martin Adams is with us on
Speaker 1: the phone from New Jersey. She, of course, is chief
Speaker 1: equity strategist for Blueberg Intelligence, and there with you in Manhattan.
Speaker 1: Dave Wilson, Stocks Editor, author of the Stock and the
Speaker 1: Chart of the Date. Dave quickly set the tone for
Speaker 1: us in this up trade today. Well, it's been a
Speaker 1: bit of back and forth that there's definitely a move
Speaker 1: higher at this point. And you know one group that
Speaker 1: really jumps out for me as utility stocks, because we've
Speaker 1: heard all these comparisons to two thousand and eight, two
Speaker 1: thousand nine, you know, the last bear market. Given the
Speaker 1: extent of the drop we've seen in stocks. More broadly,
Speaker 1: the S and People hundred Utilities index is headed for
Speaker 1: its biggest gains. It's October two thousand and eight, right
Speaker 1: smack in the middle of the previous bear market. And
Speaker 1: what's interesting if you look at the index, you actually
Speaker 1: saw that's dividendul because these are the kind of shares
Speaker 1: you buy for their payouts got close to four percent
Speaker 1: as stocks tumbled yesterday, and that's the highest dividendual on
Speaker 1: this group in four years. So it's clear that people
Speaker 1: are stepping in willing to go with a relatively defensive
Speaker 1: area of the market. And that's true more broadly as well.
Speaker 1: I mean, you're seeing, you know, the kind of defensive groups,
Speaker 1: the ones that tend to do well no matter how
Speaker 1: the economy is doing so leading the way here. But
Speaker 1: then you look at you know these stocks, Dominion Energy,
Speaker 1: you know, Utility in Virginia up seventeen percent, CMS Energy
Speaker 1: up almost seventeen for the Southern Company Big across the
Speaker 1: South up almost sixteen percent. I mean, the biggest gains
Speaker 1: in the S and P five hundred are dominated by
Speaker 1: these utilities, and you just don't see these moves like
Speaker 1: ever except in times of stress. All right, said Gen
Speaker 1: Martin Adams. Come on in on the trade today and
Speaker 1: what you're seeing and what you think is either promising
Speaker 1: or worries them. Um, So I'm kind of a data
Speaker 1: on this point. You don't usually see utilities lead a
Speaker 1: sustained rally in the equity market. As a matter of fact,
Speaker 1: utilities leadership is usually a signal of weakness, not a
Speaker 1: signal of strength, particularly with bond deals as low as
Speaker 1: they are and valuations for this group relative to the
Speaker 1: index as high as they are. Evaluation multiple three utilities
Speaker 1: are at their cycle peak already relative to the SMP
Speaker 1: five have only gotten more expensive and relative terms over
Speaker 1: the course of the last month or two. So I
Speaker 1: would say that it's a little bit of a sign
Speaker 1: of weakness. That's said, The fact that you do have
Speaker 1: broader participation and you have groups including technology, healthcare, financials,
Speaker 1: consumer staples, basically every group in the sp accept energy
Speaker 1: is up is somewhat encouraging. I think usually at real
Speaker 1: bottoms you see rotation into laggards, and we really haven't
Speaker 1: seen that yet. That said, I do think this is
Speaker 1: a process, right. Bottoms are typically a process. We had
Speaker 1: very clear capitulation days last Thursday as well as yesterday,
Speaker 1: setting the stage for potentially still a volatile market, but
Speaker 1: maybe more of a bottoming process to start to emerge
Speaker 1: over the next couple of weeks. Um it remains to
Speaker 1: be seen whether we actually get that real skyrocketing sort
Speaker 1: of v bottom which would require rotation, or more of
Speaker 1: a choppy bottoming process, which is our view and so Gina,
Speaker 1: is volatility just something we're gonna have to live with
Speaker 1: for the near term until we see a real clear
Speaker 1: picture of this virus playing out medically. I think so.
Speaker 1: I don't know that we're necessarily going to have to
Speaker 1: see volatility at yesterday's levels. I mean, yesterday the VIX
Speaker 1: index reached obviously a new a new high, even high
Speaker 1: er than at any point during the two nine crisis.
Speaker 1: So it seems that that was probably our peak volatility point.
Speaker 1: But if you look at how traders are positioning, the
Speaker 1: spread between the two months and three month volatility contract
Speaker 1: is also at a record level, suggesting that traders are
Speaker 1: positioned for volatility to remain very very high. I do
Speaker 1: think that just the information vacuum that we're in right
Speaker 1: now creates a lot of frayed nerves, a lot of
Speaker 1: concern on the part of investors with respect to where
Speaker 1: we're headed, what the real value of shares is in
Speaker 1: an environment where you can't predict earnings. It's tough, you know.
Speaker 1: That's said when you have massive volatility spikes likely had yesterday.
Speaker 1: Most of the time, the result is pretty positive for
Speaker 1: investors willing to take on risk in those kinds of
Speaker 1: uncertain periods over the course of twelve months, and I
Speaker 1: think that's why we're likely to see pretty choppy price
Speaker 1: action as investors continually realized the fact that when everyone's
Speaker 1: else is so fearful, you should probably be starting to
Speaker 1: get a little greedy. All right, We're gona leave there,
Speaker 1: Gina Martin Adams, thank you so much, chief equity strategist
Speaker 1: for Bloomberg Intelligence. And of course, Dave Wilson stock c
Speaker 1: will be back with us later on with his chart
Speaker 1: in Stock of the Day. You're listening to Bloomberg Business
Speaker 1: Week with Carol Messer and Jason Kelly on Bloomberg Radio
Speaker 1: speaking about trying to get their heads around the situation
Speaker 1: and certainly being very, very busy is the medical community.
Speaker 1: New York Governor Andrew Cuomo saying earlier today that New
Speaker 1: York State will be in desperate need of hospital beds
Speaker 1: and ventilator soon and may need more than twelve times
Speaker 1: existing intensive care capacity. Let's talk about the medical community
Speaker 1: how they're dealing with the virus. Dr Ian LUs Beder
Speaker 1: is back with us, clinical Associate Professor of Medicine at
Speaker 1: n y U Landgown Medical Center on the phone in
Speaker 1: New York. Dr LUs Beder, Great to have you back
Speaker 1: with us. Um, how are you guys coping with this?
Speaker 1: Thanks for having me Carol and Jason. Um, you know
Speaker 1: everyone is coping. Uh, it's sort of amazing. I just
Speaker 1: came back from the hospital doing uh urching cases. All
Speaker 1: elective cases are canceled, people are being rescheduled really to
Speaker 1: conserve equipment, and streets are deserted. You know, there's definitely
Speaker 1: people calling in a panic, and so I think it's
Speaker 1: important to understand that the individual risk at this point
Speaker 1: is not very high of of death. Certainly, they're probably
Speaker 1: a number of patients people who are who are have
Speaker 1: an asymptomatic infection, but in terms of the medical community.
Speaker 1: Really to rationale is to um be careful with equipment.
Speaker 1: You certainly don't want out of want to run out
Speaker 1: of food in the middle of an ocean voyage. And
Speaker 1: all interactions are really done with what are called ppees
Speaker 1: or personal protective equipment. So all the masks are disposable,
Speaker 1: the masks, the gowns, the gloves, you know, every it's
Speaker 1: very UM intensive whenever you interact with a patient, and
Speaker 1: so the concern is really sort of conserving those uh
Speaker 1: if there's really a surge in the need, and that's
Speaker 1: where the rationale for for canceling elective surgeries and so forth. Right,
Speaker 1: So in you know, we've talked with you at extensively
Speaker 1: over a long period of time, but more recently about
Speaker 1: this virus being on the front lines. How worried are
Speaker 1: you about the system individual hospitals, especially in heavily populated
Speaker 1: areas like New York City, essentially getting overwhelmed exactly. Well,
Speaker 1: at this point, fortunately, everything is going smoothly. We've just
Speaker 1: started testing. So for example, Dana n y U, it's
Speaker 1: about a hundred patients a day being tested. UM no
Speaker 1: results back. That takes certainly a few days, and I
Speaker 1: think there is a bit of anxiety. I think most
Speaker 1: physicians are you know, common comfortable, UM. I think patients
Speaker 1: are are certainly concerned, UM. And I think certainly we
Speaker 1: have enough equipment now to handle things. But you're exactly
Speaker 1: right with the population you know, ten fifteen, you know,
Speaker 1: depending on how far you want to draw the circle,
Speaker 1: millions of people, even if a small percent become symptomatic
Speaker 1: or more critically ill. There are contingency plans not only
Speaker 1: for the intensive cary units, but for surgical areas and
Speaker 1: step down units. So I think the governor is right
Speaker 1: in trying to prepare. The last thing you want to
Speaker 1: do is do this at the last minute. But at
Speaker 1: this point everything seems really quite under control. The issue is,
Speaker 1: you know, conserving all this equipment. It's ironic that many
Speaker 1: of these masks are made in Wuhan, China, so supplies
Speaker 1: are somewhat limited. You can't just um open the shelf
Speaker 1: time and time again and expect it supplies to be there.
Speaker 1: So that's really sort of the rationale to you know,
Speaker 1: rational these carefully not have people come in who really
Speaker 1: are symptomatic. You have to have certain criteria to get tested.
Speaker 1: Certainly at n YU you have to have a fever,
Speaker 1: respiratory symptoms. You know, they worried. Well, we're trying to reassure,
Speaker 1: right and I think that's what I think the President's
Speaker 1: team at this point are trying to convey to Americans.
Speaker 1: What are the signs to look at that say you
Speaker 1: really need to have a test at this point, because
Speaker 1: we don't have a test for everyone right now. Is
Speaker 1: there a point, a peak point? I know Dr Fauci
Speaker 1: said it's not going to necessarily be a peak, but
Speaker 1: I think more like a hump hump, that's what he said. Thanks,
Speaker 1: Jason um So, is there a point where you feel
Speaker 1: like we could be as a health care system in
Speaker 1: our country definitely taxed? That's that's really the theory. You know,
Speaker 1: we talked about that S curve logarithmic curves. So you know,
Speaker 1: people shouldn't panic right now. There are certainly going to
Speaker 1: be more and more cases reported. Fortunately, deaths in the
Speaker 1: United States are still below a hundred several thousand cases.
Speaker 1: You know, worldwide we've seen much more critical situations, but
Speaker 1: again we don't really you know what the final number
Speaker 1: will be, and there will be more and more cases.
Speaker 1: So this is really a matter of just preparing for
Speaker 1: a worst case scenario. That is, so people, streets are deserted.
Speaker 1: I think people are anxious and businesses are suffering. It's
Speaker 1: important to sort of pull together and do social distancing,
Speaker 1: personal hygiene, kind of mutual sacrifice or shared sacrifice. Not
Speaker 1: because anyone is individually in a panic. We don't really
Speaker 1: know what that final number will be. How many I
Speaker 1: see you bids will ultimately ultimately be needed. You don't
Speaker 1: want to be in a situation where someone needs an
Speaker 1: I CU bed and you don't have it. Quick question,
Speaker 1: You've gotta be quick for me twenty seconds. A vaccine?
Speaker 1: Is that still a kind of thing? Multiple companies are
Speaker 1: working on it. I think we're going to see it
Speaker 1: within six to nine months is my guestimate. So I
Speaker 1: think we'll see it before all right. Dr Ian las Bader,
Speaker 1: thank you so much. Um. We really do enjoy talking
Speaker 1: to you and really appreciate your insight on all of
Speaker 1: this on an ongoing basis. Dr Iain los Bader, Clinical
Speaker 1: Associate Professor of Medicine, n y U Lango and Medical Center.
Speaker 1: On the phone in New York City, you're listening to
Speaker 1: Bloomberg Business Week with Carol Masser and Jason Kelly on
Speaker 1: Bloomberg Radio. All Right, what a day, What a Tuesday,
Speaker 1: Carol Masser, And it's only Tuesday, Lemon, It's only Tuesday, Lemon.
Speaker 1: What a week? Uh, fast and furious. Let's get back
Speaker 1: down to Washington quickly to Anna Edgerton, deputy team leader,
Speaker 1: looking after Congress. She's looking after everything these days because
Speaker 1: the center of the world is in Washington, at least
Speaker 1: is when it comes to fiscal stamulus. We've heard a lot,
Speaker 1: Uh Anna, help us understand what we just heard from
Speaker 1: the Treasury secretary. Well, it seems like the price of
Speaker 1: this package just continuous to grow. You know. This morning,
Speaker 1: Minusian had asked lawmakers to put together a package shows
Speaker 1: about eight hundred and fifty billion dollars of aid three
Speaker 1: different industries, cash payments for directly to American adults, and
Speaker 1: you also a payroll tax cut. Now that total is
Speaker 1: topping one trillion dollars. So right now, the Senate has
Speaker 1: a measure those passed by the House last week, that
Speaker 1: they're going to try to pass quickly and then move
Speaker 1: onto this other gigantic fiscal stimulus that will try to
Speaker 1: dull the impact of this coronavirus. How quickly can all
Speaker 1: of this stuff go through? So the Senate could act
Speaker 1: very quickly on the House though, as long as there's
Speaker 1: no objections that will force different procedural measures. It depends
Speaker 1: on really how this package comes together. It seems like
Speaker 1: all you know, that's the last of the fiscal hawks
Speaker 1: to put away their concerns about how much this would cost,
Speaker 1: and you realize that this is really the time to
Speaker 1: step in in a big, bold way for the economy. Well,
Speaker 1: and what I what's interesting is that Mitch McConnell I
Speaker 1: guess the headline crossing additional bill of much larger scale
Speaker 1: is needed. I think we're all realizing, certainly when you
Speaker 1: hear New York City mayor build a Lazio speak about
Speaker 1: how this is impacting just about everybody, and we hear
Speaker 1: this from airs and governors across the country, certainly those
Speaker 1: in the hardest hit regions. Um is politics being put aside,
Speaker 1: anna uh and Republicans and Democrats um coming together and
Speaker 1: understanding about what the mission is here? Increasingly so, I
Speaker 1: mean we're still seeing some kind of snarky comments at
Speaker 1: the sides, you know, policy saying that this needs to
Speaker 1: be evidence in science based, suggesting that not everything the
Speaker 1: administration does is you know, is science base. But you know,
Speaker 1: for the most part, there is an understanding that this
Speaker 1: is a really unprecedented challenge that lawmakers need to respond
Speaker 1: to and really need to put the best of the
Speaker 1: American people first and make sure that they're putting not
Speaker 1: only the health measures forward, but also economic measures that
Speaker 1: it is going to dull the impacts of this. And
Speaker 1: I have to say, uh, Secretary Manuchin has really become
Speaker 1: the go to guy for a lot of these negotiations
Speaker 1: with the Hill notable. It feels like, yeah, absolutely, And
Speaker 1: you know, there's kind of two ways or Democrats, especially
Speaker 1: how Speaker Nancy Pelosi to engage with the administration. One is,
Speaker 1: you know, the confrontration of of impeachment and kind of
Speaker 1: pushing back on this very unpopular president. The other one
Speaker 1: is to get down to the nitty gritty with his
Speaker 1: Treasury secretary, with Stephen Manution. And we saw this in
Speaker 1: the de limit discussion last summer. We're seeing this now
Speaker 1: and he really has become an effective negotiator. One challenge
Speaker 1: that Manusian has, though, is that he doesn't have a
Speaker 1: very deep bench at the Treasury, so he doesn't have
Speaker 1: kind of the brain trust that um you know, that
Speaker 1: they had responding to the two thousand and eight two
Speaker 1: thousand nine crisis. He's kind of doing this all by himself.
Speaker 1: All right, Anna Edgerton, thank you so much. Great update,
Speaker 1: A fast movie. Storry. As you say, we are moving
Speaker 1: in increments of hundreds of billions of dollars as the
Speaker 1: day goes on in terms of this fiscal stimulus. You're
Speaker 1: listening to Bloomberg Business Week with Carol Masser and Jason
Speaker 1: Kelly on Bloomberg Radio. Let's move to Andy Brown, editorial
Speaker 1: director for Boomberg New Economy, joining us on the phone
Speaker 1: from New Hampshire. And Andy, I want you to pick
Speaker 1: up right where Doug was talking about this coordinated effort
Speaker 1: or lack thereof. We're starting to see some coordination from Europe,
Speaker 1: but this has not been coordinated overall. But first I
Speaker 1: gotta ask you your well, your family as well as
Speaker 1: everybody doing Hey. Thanks Jason. Yeah, I'm well. I'm in
Speaker 1: New Hampshire where something. I have a place in New
Speaker 1: Hampshire where social distancing isn't a temporary expedient, It's almost
Speaker 1: a way of life there. Aren't that many people up
Speaker 1: here where I am, And so what are you seeing?
Speaker 1: You know, from your perch there is you look across
Speaker 1: the world. You're in the business of the new economy,
Speaker 1: and it seems like part of the new economy is
Speaker 1: every man for himself. Yeah, you know, this is the
Speaker 1: way it panned out. I mean, you know that the
Speaker 1: one of the first and biggest casualties of the coronavirus
Speaker 1: has been global cooperation, international cross border collaboration, you know.
Speaker 1: And this is in such stock contrast to what happened
Speaker 1: back in two thousand and eight, where governments all over
Speaker 1: the world pulled together to prevent a global recession from
Speaker 1: becoming a global depression. And what you're seeing now is
Speaker 1: piecemeal policy formulated with little or no cross border consultation
Speaker 1: and often in the end working at cross purposes. Yeah,
Speaker 1: I mean that's what's fascinating, right, Like you know we
Speaker 1: talk about I mean, we know this is a global crisis,
Speaker 1: h and everybody's facing it together, and yet when it
Speaker 1: comes to dealing with it, um, we're not seeing that
Speaker 1: kind of coordination. We're watching headlines come out of the EU.
Speaker 1: We're yep, they're figuring out things. Um, it looks like
Speaker 1: finally together, the US is you know, charting its own course.
Speaker 1: Um Andy, And you know, if ever, we need more
Speaker 1: cooperation on this than ever before. Oh my goodness. I
Speaker 1: mean you know, I have to tell you that if
Speaker 1: we're going to eat back this coronavirus, if we're going
Speaker 1: to prevent a global recession from turning into global depression,
Speaker 1: we have to have I mean, this is this is
Speaker 1: not optional. You have to have global collaboration. And particularly
Speaker 1: between the US and China. You think about this, What
Speaker 1: really should be happening right now between the US and
Speaker 1: China is that they should be agreeing to accelerate the
Speaker 1: search for a vaccine against coronavirus. They have the largest
Speaker 1: pools of scientists and researchers in the world. They are
Speaker 1: the world's to data giants, you know. And not just
Speaker 1: and not just the search for a vaccine, right, I
Speaker 1: mean for the manufacturer and the distribution of all kinds
Speaker 1: of emergency medical equipment, you know, whether you're talking about
Speaker 1: face masks or respirators or ventilators. You know, these two
Speaker 1: countries need to be working right now together to combat this.
Speaker 1: And what are we seeing with the two the two
Speaker 1: of them are basically shooting poison bobs at each at
Speaker 1: each other. We heard it today what no, Donald Trump
Speaker 1: is tweeting about the Chinese virus right, and just a
Speaker 1: few minutes ago, a few hours ago, we hear from
Speaker 1: the from Beijing that you know that they're going to
Speaker 1: be booting out all the American journalists from the from
Speaker 1: the New York Times, Washington Post and the and the
Speaker 1: Wall Street Journal I mean, the exact opposite of pulling
Speaker 1: together that we need to see from the world's too
Speaker 1: largest economy. And I have to say, I keep thinking
Speaker 1: about because we don't know enough about this particular virus.
Speaker 1: And that's what we keep hearing um from the medical
Speaker 1: experts and the health community, and what happens if cases
Speaker 1: start to pick up again, whether it's in a few
Speaker 1: months or later this year, Like there needs to be
Speaker 1: global tracking of it at this point, so that we
Speaker 1: can make sure countries can get ahead of it and
Speaker 1: countries can share what seems to be the most effective
Speaker 1: policies in dealing with it. Well, that's exactly right, and
Speaker 1: we're and and and to your point, this is what
Speaker 1: we're seeing, right, So, Singapore, Taiwan, Hong Kong, South Korea.
Speaker 1: That really seemed that like they and they did have
Speaker 1: the coronavirus under control. And how you're starting to see
Speaker 1: the numbers ticking up again as infected travelers arrived in
Speaker 1: these places from Europe, from the United States. So it's
Speaker 1: you know, it's it's a global problem. It's gonna be
Speaker 1: with it. It's gonna be with us, you know, for
Speaker 1: for for for for potentially another couple of years, you know.
Speaker 1: I mean, it's we shouldn't be surprised, okay, I mean,
Speaker 1: this is this is the product of years of populists
Speaker 1: coming into power in government country after country around the world,
Speaker 1: you know, And and they have been at odds with
Speaker 1: the with an international agenda, with globalization. They've torn down
Speaker 1: international institutions. You take yesterday, we had a meeting of
Speaker 1: the G seven. The G seven agreed that one of
Speaker 1: the best ways of keeping the global economy going is
Speaker 1: to maintain open trade. Well, guess what. The Trump administration
Speaker 1: has just paralyzed the workings of the World Trade Organization,
Speaker 1: which polices global trade. You know, so you have you know,
Speaker 1: and you talk about global collaboration. Donald Trump has spent
Speaker 1: the last four years picking trade battles and all the
Speaker 1: battles with China, with the Yampion Union and so on.
Speaker 1: And this is a big difference between now and two
Speaker 1: thousand and eight. Two thousand and eight. Who has to leadership? Right?
Speaker 1: You know? Aria different and the US is is I'm
Speaker 1: afraid when it comes to all aspects of this problem,
Speaker 1: really is you know, is not in position anymore to leave?
Speaker 1: All right, Andy Brown, We're gonna leave it. They're always
Speaker 1: good to catch up with you, Uh, Managing editor for
Speaker 1: our Bloomberg New Economy the Group joining us on the
Speaker 1: phone from New Hampshire. Brother, colonel, Now, but you let
Speaker 1: me drive? Oh no, no, no, no home, honey, please,
Speaker 1: I'll do the writing, revel let me. I want to try.
Speaker 1: Just drive, baby, It's good question. This is the drive
Speaker 1: to the globe community. Thanks, we'll try us Bloomberg Radio.
Speaker 1: This indeed, it is time for the drive to the
Speaker 1: clothes Back with us is Henley Smith, senior relationship manager
Speaker 1: at New York based stone Castle Cash stone Castle Cash Management. Uh.
Speaker 1: And he dug us on the phone from Connecticut. So Henley,
Speaker 1: nice to have you here. First of all, tell us
Speaker 1: a little bit us about your situation. I'm assuming you're
Speaker 1: working from home. Tell us a little bit about kind
Speaker 1: of how your world has changed. Well, yes, working from home.
Speaker 1: Nice to be with you. I thought I would be studio,
Speaker 1: but we're here up in lovely Connecticut doing all doing
Speaker 1: our part to help out, you know, the nation. So, yes,
Speaker 1: we're working from Connecticut. I'm remote usually, but yeah, for
Speaker 1: the most part, it's it's been a it's been an
Speaker 1: easy switch over. And so what are you hearing? Henley?
Speaker 1: First of all, glad to hear you're you're safe and sound,
Speaker 1: doing your part for social distancing. I'm doing my part
Speaker 1: from sleepy Hello, not too far from you. Um, what
Speaker 1: are you hearing? In terms of your clients? I mean,
Speaker 1: this is a worrisome market, to say the least, this
Speaker 1: sort of volatility. I was talking to an executive earlier
Speaker 1: today and she said she was traveling a few weeks ago,
Speaker 1: she was at a big private equity conference and just
Speaker 1: got the vibe. She called her money manager and said,
Speaker 1: we gotta go half cash here. Uh did you get
Speaker 1: a lot of those calls over the past couple of months. Well,
Speaker 1: you know that's our expertise, is cash is something we've
Speaker 1: talked about for for a while. And uh, you know
Speaker 1: this is uh you know again when uh we're there
Speaker 1: for our clients. I think, you know again, cash is
Speaker 1: something that you just don't go to cash and you're safe.
Speaker 1: There's a lot of lunses to it. Um. The product
Speaker 1: that we offer is, you know fully in short through
Speaker 1: the fdi C. The questions that we're getting primarily are
Speaker 1: from uh institutional clients that use prime money market funds
Speaker 1: where there might be some commercial paper exposure, uh, there
Speaker 1: might be some foreign bank exposure, uh that we're getting
Speaker 1: calls from those that actually use treasury and government money
Speaker 1: market funds as well. We saw a lot of off
Speaker 1: the run treasuries. The bit ast spread widen out the
Speaker 1: last couple of days, which is an expression of their
Speaker 1: liquidity to a certain degree, and of course something that
Speaker 1: started back in September as we all know, when the
Speaker 1: repo markets kind of went wacky again. They're people that
Speaker 1: have exposure and counterparty risk as well. So I have
Speaker 1: clients that have a full complement of money market and
Speaker 1: cash vehicles, and it seems to me they're they're taking
Speaker 1: that back down even more to make sure that there's
Speaker 1: no counterparty risk or no credit risk. And of course
Speaker 1: they want to make sure that they have liquidity, and
Speaker 1: that would mean, you know, having not as much term
Speaker 1: or longer maturities. They want to make sure that they're
Speaker 1: overnight or or a couple of days maturity. And that's
Speaker 1: so they're really pulling back pretty hard. So okay, I mean,
Speaker 1: how do you quantify qualify this? I mean in terms
Speaker 1: of someone who has seen other shocks to the financial markets.
Speaker 1: And this is obviously we keep saying it's not a
Speaker 1: financial market crisis, but it's a health crisis that's creating
Speaker 1: certainly a lot of stress and strain in the financial markets.
Speaker 1: So does this remind you of another time? I know,
Speaker 1: we keep think talking about either Dina eleven or we
Speaker 1: keep talking about certainly, um, you know, the financial crisis.
Speaker 1: How does it remind you? What does it want to do?
Speaker 1: We're dealing with the unknown. We're dealing with the uncertainty
Speaker 1: that creates market adjit, if you will it immediately go
Speaker 1: back twelve years ago to the O eight Again, it's
Speaker 1: different there. There we were dealing with derivative on derivative
Speaker 1: on derivative that no one could get any price discovery
Speaker 1: on and couldn't really quantify the risk. Here again, I
Speaker 1: think where we've been since that point where you know,
Speaker 1: trust testing with the banks, uh, you know, the vocal rule,
Speaker 1: all those things that we put in ACE I think
Speaker 1: are working very nicely now. So this isn't a banking crisis.
Speaker 1: This is you know where we as we've talked about
Speaker 1: it is a health crisis. That's something that will pass. Um.
Speaker 1: You know, I think that doing what this should be doing.
Speaker 1: But if I can, helly, but at what at what
Speaker 1: damage will this pass? I do wonder? Yeah, I mean
Speaker 1: I think that that's a concern obviously. Um, I don't think. Again,
Speaker 1: when I was thinking about it just a couple of
Speaker 1: days ago, again, it wasn't like there's valuations going into
Speaker 1: a black hole of nothing, which is what two thousand
Speaker 1: eight felt like. Here Again, it's you know, deferred wages,
Speaker 1: something that we can make up. Yeah, there's gonna be
Speaker 1: some real uh pain involved, but it's something that I
Speaker 1: think that we'll all come back from in terms of again,
Speaker 1: we'll get those wages back, we'll get those revenues back,
Speaker 1: And I think that's to me, I can feel real
Speaker 1: comfort in that. And I think the government is doing
Speaker 1: what it should be doing to back stuff people. So
Speaker 1: the pain isn't as much as we've worked through this period. Well,
Speaker 1: let me ask you about that just in the minute.
Speaker 1: So we have left Henley, which is we have seen
Speaker 1: especially the FED be incredibly active over the past forty
Speaker 1: eight hours. Really, as we think back across it, UH
Speaker 1: the initial monetary UH cut or the rate cut that
Speaker 1: we saw Sunday night, that emergency cut didn't thrill people.
Speaker 1: Some of the fiscal stimulus is come in from other
Speaker 1: parts of the government also, some of the FED action
Speaker 1: has made people feel better. What was the right thing
Speaker 1: that they did? In your read? Well, again, I'm looking
Speaker 1: at the markets right now and as you probably see,
Speaker 1: the tenure treasury is back over one percent. That's a
Speaker 1: big lot of comfort right now. I mean, if if
Speaker 1: I think if the crisis was still unfolding, which it
Speaker 1: is medically, but if it was still unfolding financially, and
Speaker 1: again we're gonna be probably dealing with this the fallout
Speaker 1: for the next couple of months. But if that was
Speaker 1: the case, you would see that treasury, that tenure treasury
Speaker 1: probably where it was a couple of weeks ago, low,
Speaker 1: you know, below half a percent. That's back over one percent.
Speaker 1: It seems like it's moving in the right direction. That
Speaker 1: gives me comfort. Also again, uh, you know, the treasury
Speaker 1: yield curve is very positive right now, it's not negative,
Speaker 1: so that gives me comfort as well that you know,
Speaker 1: things are starting to find the right level. You know,
Speaker 1: of course everything went wacky. We we tried to find
Speaker 1: exactly where we were at. We're still dealing with that,
Speaker 1: but I think financially we're starting to starting to get
Speaker 1: our legs again. All right, Henley Smith, We're gonna leave
Speaker 1: it there. Really appreciate you, senior relationship manager at Stonecastle
Speaker 1: Cash Management, joining us on the phone from Connecticut. Thanks
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