1 00:00:00,800 --> 00:00:04,040 Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside 2 00:00:04,040 --> 00:00:06,920 Speaker 1: my co host Matt Miller. Every business day we bring 3 00:00:06,960 --> 00:00:11,520 Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along 4 00:00:11,520 --> 00:00:15,560 Speaker 1: with essential market moving news. Find the Bloomberg Markets Podcast 5 00:00:15,600 --> 00:00:18,439 Speaker 1: on Apple Podcasts or wherever you listen to podcasts, and 6 00:00:18,480 --> 00:00:21,720 Speaker 1: at Bloomberg dot com slash podcast. All right, let's go 7 00:00:21,760 --> 00:00:24,120 Speaker 1: to a professional here. Let's switch gears. This is it's 8 00:00:24,160 --> 00:00:27,760 Speaker 1: just ugly afterre Matt Stucky, senior portfolio manager for Northwestern Mutual, 9 00:00:27,840 --> 00:00:31,200 Speaker 1: joins us. Matt. The concern this morning to talk this morning. 10 00:00:31,560 --> 00:00:35,080 Speaker 1: The Wall Street chatter this morning is recession. What say you? 11 00:00:35,200 --> 00:00:38,440 Speaker 1: Is that in your model? Well, it certainly in the 12 00:00:38,479 --> 00:00:41,920 Speaker 1: distribution and at that section the distribution has been rising 13 00:00:41,960 --> 00:00:45,120 Speaker 1: over the last few months. Um, growth is rapidly slowing, 14 00:00:45,400 --> 00:00:48,840 Speaker 1: and the potential for a mild recession I think is 15 00:00:48,920 --> 00:00:51,640 Speaker 1: pretty elevated here. Um, you know a couple of data 16 00:00:51,680 --> 00:00:54,400 Speaker 1: points that you know, we would point to that are 17 00:00:54,400 --> 00:00:57,279 Speaker 1: really starting to kind of shine out to us as 18 00:00:57,320 --> 00:01:00,880 Speaker 1: you saw it the last quarter with orange reports from 19 00:01:01,000 --> 00:01:03,480 Speaker 1: you know, the likes of Target and Walmart. We kind 20 00:01:03,480 --> 00:01:05,160 Speaker 1: of wonder what else is going to be spilling over. 21 00:01:05,400 --> 00:01:07,679 Speaker 1: And you know, first and foremost we think it's probably 22 00:01:07,720 --> 00:01:10,800 Speaker 1: housing here just as a reflection of how quickly interest 23 00:01:10,880 --> 00:01:13,880 Speaker 1: rates are rising and what that does to affordability. Um. 24 00:01:13,880 --> 00:01:17,040 Speaker 1: But you what you've seen so far this quarter, which 25 00:01:17,040 --> 00:01:19,280 Speaker 1: I think is really interesting, is just the percentage of 26 00:01:19,480 --> 00:01:22,520 Speaker 1: increase of inventory that's out there in the existing home market, 27 00:01:23,560 --> 00:01:26,040 Speaker 1: and that's being met with with a buyer that's starting 28 00:01:26,080 --> 00:01:30,280 Speaker 1: to uh, really refine out what their what their budgets 29 00:01:30,280 --> 00:01:33,840 Speaker 1: are with the higher interest rate environment, and um, you know, 30 00:01:33,959 --> 00:01:35,560 Speaker 1: somewhat of a bias right going smar right now? So 31 00:01:35,640 --> 00:01:38,480 Speaker 1: housing about a house without even thinking about my budget 32 00:01:38,760 --> 00:01:41,600 Speaker 1: and about how terrified every day but hopefully locked in 33 00:01:41,680 --> 00:01:45,360 Speaker 1: that interest rate exactly. I was like three, I'll pay 34 00:01:45,360 --> 00:01:50,480 Speaker 1: whatever you want. Um. So we've had these um inventory 35 00:01:50,560 --> 00:01:54,760 Speaker 1: build ups at Walmart, at Target, and I hear you 36 00:01:54,880 --> 00:01:57,360 Speaker 1: now saying that we're seeing that in housing as well. 37 00:01:57,480 --> 00:01:59,600 Speaker 1: Does that mean you think inflation is going to roll over? 38 00:02:02,080 --> 00:02:04,080 Speaker 1: I do think that's going to roll over pretty quickly. 39 00:02:04,240 --> 00:02:06,200 Speaker 1: And you know a couple of things, you know, certainly 40 00:02:06,280 --> 00:02:10,080 Speaker 1: the durable goods, the story has been well discussed, and 41 00:02:10,320 --> 00:02:12,959 Speaker 1: inventories they are potting up quickly, which you know inevitably 42 00:02:13,000 --> 00:02:16,639 Speaker 1: leads to discounting that eventually find its way into uh 43 00:02:16,760 --> 00:02:20,640 Speaker 1: inflation obviously. But um, you know, the housing story I 44 00:02:20,639 --> 00:02:23,120 Speaker 1: think hasn't been really discussed much in terms of what 45 00:02:23,160 --> 00:02:26,000 Speaker 1: it means in terms of overall inflation. UM. You know, 46 00:02:26,000 --> 00:02:28,079 Speaker 1: this is it's a stickier part of the inflation story, 47 00:02:28,639 --> 00:02:31,120 Speaker 1: and it moves with a lag and in terms of 48 00:02:31,160 --> 00:02:34,799 Speaker 1: the way excuse me, it finds its way into inflation. UM. 49 00:02:35,040 --> 00:02:37,000 Speaker 1: So you know for the third War, certainly, you know, 50 00:02:37,240 --> 00:02:40,320 Speaker 1: I think it's got upward pressure for for PC as 51 00:02:40,320 --> 00:02:42,600 Speaker 1: well cp I. But you know, as you move into 52 00:02:42,600 --> 00:02:45,360 Speaker 1: the fourth quarter beyond, UM, you know, we don't really 53 00:02:45,520 --> 00:02:48,400 Speaker 1: expect as much up pressure from the happening part of 54 00:02:48,400 --> 00:02:51,560 Speaker 1: the equation as it relates to inflation. UM. So you know, 55 00:02:51,760 --> 00:02:55,239 Speaker 1: between the backup of inventories as well as consumer spending 56 00:02:55,240 --> 00:02:58,800 Speaker 1: shifting away from durable goods and you know pressure coming 57 00:02:58,840 --> 00:03:02,840 Speaker 1: off for um, for housing as we moved throughout this year, 58 00:03:03,160 --> 00:03:05,600 Speaker 1: you do think that there is the potential for inflation 59 00:03:05,680 --> 00:03:08,040 Speaker 1: to to move lower throughout the rest of this year 60 00:03:08,080 --> 00:03:10,839 Speaker 1: and into and it's it's a it's starting to show 61 00:03:10,919 --> 00:03:13,120 Speaker 1: up in terms of what the bond markets expecting the 62 00:03:13,120 --> 00:03:17,160 Speaker 1: Federal Reserve to do you did you didn't notice that, um, 63 00:03:17,400 --> 00:03:20,440 Speaker 1: first quarter traders are certain to price in Fed Reserve cuts, 64 00:03:20,919 --> 00:03:22,560 Speaker 1: which is just you know, obviously a pivot by the 65 00:03:22,560 --> 00:03:25,880 Speaker 1: feder Reserve from a ratching up of interest rates and so, UM, 66 00:03:26,000 --> 00:03:27,920 Speaker 1: it's starting to fall on a line where you know, 67 00:03:27,960 --> 00:03:30,480 Speaker 1: the peak of inflationary pressures in the rear view mirror. Here. 68 00:03:31,280 --> 00:03:33,600 Speaker 1: All right, man, we got the earnings coming up starting 69 00:03:33,600 --> 00:03:35,600 Speaker 1: in about a week or so, the big banks will 70 00:03:35,640 --> 00:03:37,920 Speaker 1: kick it off in earnest here. What are you looking 71 00:03:37,920 --> 00:03:43,440 Speaker 1: for this earning season? You know, UM, it's it's great 72 00:03:43,440 --> 00:03:45,960 Speaker 1: that we get to have banks start things up because 73 00:03:45,960 --> 00:03:48,680 Speaker 1: they touched so many fastest of the economy, from the 74 00:03:48,680 --> 00:03:51,920 Speaker 1: consumer and credit conditions there to what business spending is 75 00:03:51,960 --> 00:03:54,760 Speaker 1: looking like. UM, as well as you know M and 76 00:03:54,800 --> 00:03:57,760 Speaker 1: A activity. A couple of things that really we watch 77 00:03:57,800 --> 00:04:00,560 Speaker 1: out for obviously is is consumer press sure and in 78 00:04:00,600 --> 00:04:03,480 Speaker 1: the form of delinquencies. You would expect those to normalise 79 00:04:03,760 --> 00:04:07,800 Speaker 1: as inflationary pressures have started to strain consumer pujects. UM. 80 00:04:08,280 --> 00:04:10,760 Speaker 1: You know, credit credit performance throughout the last couple of 81 00:04:10,800 --> 00:04:14,160 Speaker 1: years such as been absolutely fantastic. UM. You would expect 82 00:04:14,200 --> 00:04:16,719 Speaker 1: that to normalize would still be pretty healthy here because 83 00:04:16,760 --> 00:04:20,000 Speaker 1: consumers and aggregates still have two trillion worth of access 84 00:04:20,040 --> 00:04:22,960 Speaker 1: liquidity that they didn't have before the pandemic. UM that 85 00:04:23,000 --> 00:04:26,520 Speaker 1: really helps credit performance for for banks UM. You know, 86 00:04:26,640 --> 00:04:31,560 Speaker 1: on the on the expense side, UM, we are wondering 87 00:04:31,560 --> 00:04:33,520 Speaker 1: whether or not you know, banks you could be able 88 00:04:33,560 --> 00:04:37,680 Speaker 1: to start to defend margins UM you know as as 89 00:04:37,880 --> 00:04:41,240 Speaker 1: UM and transition from UH back to more of an 90 00:04:41,240 --> 00:04:45,480 Speaker 1: operating leverage scenario that you know we saw pre pandemic. 91 00:04:45,640 --> 00:04:48,080 Speaker 1: You know, UH, operating leverages been going in the wrong 92 00:04:48,120 --> 00:04:50,440 Speaker 1: direction for the last couple of years and and you know, 93 00:04:50,480 --> 00:04:53,480 Speaker 1: maybe this quarter with rising UH that interesting income as 94 00:04:53,520 --> 00:04:56,400 Speaker 1: well as you know, continued healthy credit performance, operating leverage 95 00:04:56,480 --> 00:05:00,160 Speaker 1: can continue, can continue to be a good out of 96 00:05:00,160 --> 00:05:01,400 Speaker 1: the story. In said of Nago that we've seen the 97 00:05:01,440 --> 00:05:03,080 Speaker 1: last couple of you. By the way, I'm wondering, do 98 00:05:03,080 --> 00:05:06,480 Speaker 1: you have products at Northwestern that you sell the people 99 00:05:06,520 --> 00:05:08,719 Speaker 1: who are just worried about inflation. All they want to 100 00:05:08,720 --> 00:05:11,560 Speaker 1: do is be inflation like a tips thing or or 101 00:05:11,560 --> 00:05:15,400 Speaker 1: an insurance product. Well not, I don't really think we 102 00:05:15,440 --> 00:05:18,600 Speaker 1: have one on the insurance side, but certainly side portfolios 103 00:05:18,600 --> 00:05:22,440 Speaker 1: that we manage UM of you know, public securities. You know, 104 00:05:22,480 --> 00:05:25,039 Speaker 1: we do from time, from time to time build up 105 00:05:25,560 --> 00:05:28,520 Speaker 1: UM inflation protection in their portfolios in the form of tips. 106 00:05:28,760 --> 00:05:31,279 Speaker 1: We took a pretty big step into a TIPS position 107 00:05:31,920 --> 00:05:36,239 Speaker 1: UH in April. We actually exited out earlier out earlier 108 00:05:36,600 --> 00:05:39,760 Speaker 1: in two is we thought we were past the point 109 00:05:39,760 --> 00:05:42,320 Speaker 1: of peak inflation. UM. You know, we we tipped at 110 00:05:42,360 --> 00:05:44,440 Speaker 1: maybe a couple of a few weeks to early because 111 00:05:44,480 --> 00:05:48,240 Speaker 1: in the Russia, Russia Ukraine flare up did occur, unfortunately. 112 00:05:48,400 --> 00:05:51,960 Speaker 1: But you know, even since even since um, you know, 113 00:05:52,200 --> 00:05:55,960 Speaker 1: Russian dated Ukraine, you've seen one year UH inflation break 114 00:05:56,040 --> 00:05:59,600 Speaker 1: evens moved from UM over six percent back down to 115 00:05:59,640 --> 00:06:02,240 Speaker 1: four and app all right, man, we're gonna to have 116 00:06:02,320 --> 00:06:03,840 Speaker 1: to leave it there because of time. But but we'll 117 00:06:03,880 --> 00:06:06,120 Speaker 1: get you back and we'll check in on that. Matt Stucky, 118 00:06:06,200 --> 00:06:12,800 Speaker 1: senior portfolio manager in Northwestern Neutral. Now let me bring 119 00:06:12,880 --> 00:06:16,480 Speaker 1: in my friend Gary Schilling, who's had a long and 120 00:06:16,760 --> 00:06:22,920 Speaker 1: storied career, starting in Fremont, Ohio, then going on to Amherst, 121 00:06:23,040 --> 00:06:27,080 Speaker 1: which is almost as good as Williams and Wesleyan before 122 00:06:28,240 --> 00:06:33,800 Speaker 1: landing at Stanford UM, the Federal Reserve and Mary Lynch etcetera, 123 00:06:34,720 --> 00:06:38,240 Speaker 1: and so forth. Gary, great to have you on the program. Um. 124 00:06:38,839 --> 00:06:40,760 Speaker 1: I was hoping, first of all, we could talk about 125 00:06:40,760 --> 00:06:43,200 Speaker 1: a comparison between the kind of inflation that we're having 126 00:06:43,680 --> 00:06:46,240 Speaker 1: now and the kind of inflation that we had in 127 00:06:46,360 --> 00:06:49,400 Speaker 1: the seventies. A buddy of mine, Neil Grossman and and 128 00:06:49,520 --> 00:06:54,159 Speaker 1: Bill Dudley also have said that the way they're measured 129 00:06:54,279 --> 00:06:57,160 Speaker 1: is different. But if we measured inflation now like we did, 130 00:06:57,240 --> 00:07:01,240 Speaker 1: then it could seem just as bad. What do you think, Well, 131 00:07:01,360 --> 00:07:04,720 Speaker 1: it is a different type of inflation. It's more it's 132 00:07:04,760 --> 00:07:10,440 Speaker 1: more supply. It's more weakness and supply and over abundance 133 00:07:10,480 --> 00:07:13,160 Speaker 1: of demand. But it's a little of both. And the 134 00:07:13,240 --> 00:07:16,679 Speaker 1: way they come together as pushed as push up prices. 135 00:07:16,800 --> 00:07:19,320 Speaker 1: But it makes it a lot coverer for the Fed 136 00:07:19,400 --> 00:07:21,960 Speaker 1: to deal with because the Fed. You know, look what 137 00:07:22,120 --> 00:07:23,720 Speaker 1: what can the Fed do? They can raise the lower 138 00:07:23,760 --> 00:07:26,880 Speaker 1: interest rates, they can buy and sell securities and that's it, 139 00:07:27,640 --> 00:07:31,840 Speaker 1: and that's very good for controlling demand. Um. You know, 140 00:07:31,920 --> 00:07:35,320 Speaker 1: they pull on the string constrict demand. They push on 141 00:07:35,400 --> 00:07:38,040 Speaker 1: the string, not much happens, but they can't do very 142 00:07:38,120 --> 00:07:41,280 Speaker 1: much on the supply side. So the FED is dealing 143 00:07:41,400 --> 00:07:45,680 Speaker 1: with instruments. They're not really appropriate to the current situation, 144 00:07:46,360 --> 00:07:50,360 Speaker 1: but they were so far behind the inflation curve that 145 00:07:50,480 --> 00:07:53,680 Speaker 1: I think they felt just just to preserve their credibility, 146 00:07:53,760 --> 00:07:56,120 Speaker 1: they had to do something. So they are hot and 147 00:07:56,200 --> 00:07:58,680 Speaker 1: heavy at raising rates. And when they go on these 148 00:07:58,800 --> 00:08:02,200 Speaker 1: rate raising campaigns, more times than not, you end up 149 00:08:02,240 --> 00:08:05,120 Speaker 1: with a recession their virgin soft landings in the entire 150 00:08:05,200 --> 00:08:07,840 Speaker 1: post or a period that brings up something that that 151 00:08:07,960 --> 00:08:09,880 Speaker 1: you and I were talking about this weekend, and I 152 00:08:10,040 --> 00:08:13,840 Speaker 1: was really taken to task this morning, um by claiming 153 00:08:13,880 --> 00:08:17,520 Speaker 1: that we're in a recession already. The Atlanta Fed GDP 154 00:08:17,720 --> 00:08:22,000 Speaker 1: now tracker says the second quarter contraction was two point 155 00:08:22,080 --> 00:08:24,600 Speaker 1: one percent, and of course we had a one point 156 00:08:24,640 --> 00:08:28,559 Speaker 1: six percent contraction in Q one. John Riding said, Miller, 157 00:08:28,600 --> 00:08:30,800 Speaker 1: you don't know you're talking about And you basically told 158 00:08:30,840 --> 00:08:34,520 Speaker 1: me the same thing, Um, how will how will we 159 00:08:34,720 --> 00:08:37,760 Speaker 1: know when we're in a recession? We'll know when they 160 00:08:38,120 --> 00:08:42,520 Speaker 1: Nastural Bureau of Economic Research, a private research organization that 161 00:08:42,960 --> 00:08:46,720 Speaker 1: really first uh first mapped out business cycles and started 162 00:08:46,800 --> 00:08:48,679 Speaker 1: them back in the ninet thirties. When they say so, 163 00:08:49,200 --> 00:08:52,880 Speaker 1: no administration, Republican or Democrat, would ever want to declare 164 00:08:52,880 --> 00:08:55,560 Speaker 1: a recession. Oh no, no, they leave that to somebody 165 00:08:55,600 --> 00:08:58,360 Speaker 1: else and v R. And the thing is that they 166 00:08:58,480 --> 00:09:01,160 Speaker 1: wait until they get all the visions and all the 167 00:09:01,640 --> 00:09:04,440 Speaker 1: late data in and and there are times when they 168 00:09:04,520 --> 00:09:08,319 Speaker 1: don't declare that they passed the peak of business and 169 00:09:08,400 --> 00:09:11,520 Speaker 1: intercession until the whole thing is over. And so it's 170 00:09:11,600 --> 00:09:14,079 Speaker 1: it's it's very difficult. I mean, you can't to say 171 00:09:14,120 --> 00:09:16,800 Speaker 1: you're in recession. Yeah, I think we're probably either in 172 00:09:16,960 --> 00:09:19,559 Speaker 1: or close to it. That's what I started talking about 173 00:09:19,679 --> 00:09:24,199 Speaker 1: earlier this year. But again, it's all over, including the 174 00:09:24,320 --> 00:09:28,600 Speaker 1: shop for the time it becomes official. So, Gary, if 175 00:09:28,679 --> 00:09:30,760 Speaker 1: we are already in a recession or close to one, 176 00:09:30,960 --> 00:09:34,520 Speaker 1: do you have any sense, based upon your experience, how 177 00:09:34,640 --> 00:09:37,520 Speaker 1: deep it maybe, how long it may be. Do you 178 00:09:37,559 --> 00:09:41,680 Speaker 1: have any feelings at that point? I think it could 179 00:09:41,760 --> 00:09:45,720 Speaker 1: be deep now, not like the oh seven oh nine 180 00:09:46,280 --> 00:09:49,679 Speaker 1: when you have the collaps and sub prime mortgages, and 181 00:09:49,960 --> 00:09:53,000 Speaker 1: and not like the two thousand, which was the COVID 182 00:09:53,640 --> 00:09:56,480 Speaker 1: in terms of depth. But you've got a lot of 183 00:09:56,600 --> 00:09:59,599 Speaker 1: speculation out there, and that's that's what happens, you know, 184 00:10:00,040 --> 00:10:02,959 Speaker 1: what really happens. What's the guts of recessions? It's the 185 00:10:03,040 --> 00:10:09,720 Speaker 1: correction of accesses, accesses and inventories, accesses and speculation heavy 186 00:10:09,920 --> 00:10:14,360 Speaker 1: financial positions. And we've had so much very reserved for 187 00:10:14,880 --> 00:10:20,000 Speaker 1: largest really since two thousand eight reaction to the financial crisis, 188 00:10:20,480 --> 00:10:24,319 Speaker 1: that there's there's, there's no doubt, an awful lot of speculation. 189 00:10:24,400 --> 00:10:27,000 Speaker 1: That's we see it coming out of the woodwork every day. 190 00:10:27,040 --> 00:10:29,480 Speaker 1: You see the sp A c is collapsing, you see 191 00:10:29,559 --> 00:10:33,520 Speaker 1: crypto collapsing. These things that people fall were perfectly safe, 192 00:10:33,840 --> 00:10:36,640 Speaker 1: but you find out there's a lot of speculation. And 193 00:10:36,760 --> 00:10:39,319 Speaker 1: one of the things that we always see is that 194 00:10:39,640 --> 00:10:42,080 Speaker 1: everybody ends up on the same side of the same 195 00:10:42,160 --> 00:10:45,200 Speaker 1: trade at the same time. So when one goes bad, 196 00:10:45,840 --> 00:10:48,520 Speaker 1: traders have to cut back their positions and other things 197 00:10:48,559 --> 00:10:52,800 Speaker 1: they are totally unrelated, oftentimes in order to survive. So 198 00:10:52,960 --> 00:10:55,560 Speaker 1: I think it could be, it could be deep blank, 199 00:10:56,559 --> 00:10:59,120 Speaker 1: it'll it'll run into next year. I wouldn't I wouldn't 200 00:10:59,120 --> 00:11:01,719 Speaker 1: try to put an exact pinpoint the timing, but it 201 00:11:01,800 --> 00:11:04,880 Speaker 1: could very well last three or four quarters, which isn't 202 00:11:04,880 --> 00:11:07,959 Speaker 1: all let unusual. Could the sell off in stocks and 203 00:11:08,120 --> 00:11:13,599 Speaker 1: indeed bonds gary which have you know, collapsed relative to 204 00:11:13,720 --> 00:11:17,200 Speaker 1: history in the first half, could it be a paradigm shift, 205 00:11:17,440 --> 00:11:22,040 Speaker 1: because you famously called the shift back in the day 206 00:11:22,320 --> 00:11:26,760 Speaker 1: when you know, before people owned tangible assets and eventually 207 00:11:27,480 --> 00:11:30,640 Speaker 1: started investing in things like stocks and bonds. Could we 208 00:11:30,679 --> 00:11:37,240 Speaker 1: see that turnaround? Uh? Yeah, we probably probably could. I 209 00:11:37,400 --> 00:11:41,600 Speaker 1: think you've had a lot of speculation in commodities. Um, 210 00:11:41,880 --> 00:11:44,000 Speaker 1: I don't. I don't. There isn't anything that's really going 211 00:11:44,040 --> 00:11:48,520 Speaker 1: to drive global global growth. There's no big forces on 212 00:11:48,640 --> 00:11:51,199 Speaker 1: the horizon. And I think we're going to be in 213 00:11:51,240 --> 00:11:54,360 Speaker 1: a low inflationary environment. And the key driver of that 214 00:11:54,559 --> 00:11:57,959 Speaker 1: is we're in the next I supply world. You've got Asia, 215 00:11:58,640 --> 00:12:02,839 Speaker 1: huge producers, very weak consumers, and unless we had all 216 00:12:02,880 --> 00:12:07,040 Speaker 1: out protection as you've got a surplus of of supply 217 00:12:07,200 --> 00:12:10,480 Speaker 1: or demand that the savings but they talk about, and 218 00:12:10,600 --> 00:12:13,960 Speaker 1: I think that's going to keep downward pressure on on inflation. 219 00:12:14,160 --> 00:12:17,160 Speaker 1: So uh yeah, I think you've probably got slow growth 220 00:12:17,720 --> 00:12:23,960 Speaker 1: of low inflation, if not even deflation as we look ahead. Garry, 221 00:12:24,240 --> 00:12:26,120 Speaker 1: give us your sense of the consumer here. I was 222 00:12:26,160 --> 00:12:28,160 Speaker 1: down at the Jersey Shore this weekend. People were out 223 00:12:28,200 --> 00:12:30,920 Speaker 1: and about spending money, having a good time. Are you 224 00:12:31,040 --> 00:12:35,640 Speaker 1: confident that the consumer can kind of power through here? Uh? Well, 225 00:12:35,720 --> 00:12:37,280 Speaker 1: if you look at if you look at what's going on, 226 00:12:37,480 --> 00:12:40,480 Speaker 1: people are pining back or article to wellstry journal the 227 00:12:40,600 --> 00:12:43,200 Speaker 1: day you probably saw to that effect that people are 228 00:12:43,600 --> 00:12:49,080 Speaker 1: taking fewer trips, even the libraries. So consumers, consumers are 229 00:12:49,240 --> 00:12:52,000 Speaker 1: you know they're there are two thirds of of GDP 230 00:12:52,240 --> 00:12:55,800 Speaker 1: consumers spending and people have been affected. I mean it's 231 00:12:55,800 --> 00:12:58,560 Speaker 1: you know, they call it demand destruction if it cast 232 00:12:58,640 --> 00:13:01,600 Speaker 1: you cast of I bucks of down and to fill 233 00:13:01,720 --> 00:13:05,480 Speaker 1: the tank unless you've got a big shirt plus of 234 00:13:05,920 --> 00:13:08,760 Speaker 1: of saving and a lot of people have been saving more, 235 00:13:08,840 --> 00:13:12,120 Speaker 1: they're really scared. So I just don't think that there's 236 00:13:12,160 --> 00:13:14,520 Speaker 1: gonna be a lot of spending. You know, it's it's 237 00:13:14,600 --> 00:13:17,679 Speaker 1: a it's if it's it's cut back in one area 238 00:13:17,800 --> 00:13:21,720 Speaker 1: that they've got up accommodate others. So do you still 239 00:13:21,760 --> 00:13:24,000 Speaker 1: have that Volvo? Gary? You had? You had like a 240 00:13:24,840 --> 00:13:29,319 Speaker 1: a brown two forty station wagon from the eighties. Now, 241 00:13:29,520 --> 00:13:34,640 Speaker 1: wait a minute, two thousand one board explorer. I drive 242 00:13:34,720 --> 00:13:39,320 Speaker 1: him till they dropped? Man? Okay, has some one Ford explore? 243 00:13:39,360 --> 00:13:43,640 Speaker 1: All right? Gary? Great stuff as always. Gary Shilling, President 244 00:13:43,760 --> 00:13:49,160 Speaker 1: of a. Gary Shilling and Company, UH PhD in economics 245 00:13:49,400 --> 00:13:53,839 Speaker 1: from Stanford BS in physics from Amherst College back in 246 00:13:53,920 --> 00:13:56,400 Speaker 1: the day. He's seen a thing or two. He's seen 247 00:13:56,440 --> 00:13:59,400 Speaker 1: a cycle or two on Wall Street over his career. 248 00:13:59,440 --> 00:14:05,959 Speaker 1: We appreciate getting a few minutes. The discussion today is 249 00:14:06,000 --> 00:14:08,280 Speaker 1: all about recession, so we need to check on the read. 250 00:14:08,360 --> 00:14:12,240 Speaker 1: Pickard U s economy reporter for Bloomberg News, plus Ryan Guest, 251 00:14:12,720 --> 00:14:17,480 Speaker 1: CEO at Arrow Clean, discusses how her company is trying 252 00:14:17,559 --> 00:14:21,640 Speaker 1: to disrupt the cleaning and disinfectant market in a sustainable way. 253 00:14:21,680 --> 00:14:23,800 Speaker 1: That should be interesting, but coming up, let's check in 254 00:14:23,880 --> 00:14:26,080 Speaker 1: with Greg Jared first get a Bloomberg Business Flash. Greg 255 00:14:26,480 --> 00:14:30,600 Speaker 1: stocks have tumbled as recession fears gripped the market's outweighing 256 00:14:30,640 --> 00:14:35,480 Speaker 1: optimism over the possibility that US China talks will have 257 00:14:35,840 --> 00:14:38,160 Speaker 1: tariff reductions. As a result, the S and P five 258 00:14:39,040 --> 00:14:41,440 Speaker 1: is now down two percent, down seventy five dollars down 259 00:14:41,480 --> 00:14:45,119 Speaker 1: two point two percent, down seventy five, and the nasdacs 260 00:14:45,160 --> 00:14:48,600 Speaker 1: down just over one down a hundred eleven thirty four. 261 00:14:48,720 --> 00:14:51,320 Speaker 1: The tenure is up twenty one thirty seconds, with the 262 00:14:51,360 --> 00:14:55,040 Speaker 1: yield at two point eight percent. West Texas intermediate crude 263 00:14:55,240 --> 00:14:58,120 Speaker 1: is down below a hundred dollars for the first time 264 00:14:58,680 --> 00:15:02,080 Speaker 1: in a long time. Uh, down eight point three at 265 00:15:02,880 --> 00:15:05,560 Speaker 1: forty one a barrel. Comics gold is down at one 266 00:15:05,600 --> 00:15:12,160 Speaker 1: point nine at seventeen sixty six dollar the euro a 267 00:15:12,240 --> 00:15:15,240 Speaker 1: dollar to forty three in the British founded dollar nineteen twelve. 268 00:15:15,960 --> 00:15:18,240 Speaker 1: How many people hold up your hands, honky your horns, 269 00:15:18,240 --> 00:15:20,880 Speaker 1: flash your lights or whatever. How many think that gasoline 270 00:15:20,960 --> 00:15:22,760 Speaker 1: is going to go back down to where it was 271 00:15:23,440 --> 00:15:29,160 Speaker 1: when oil was last at? No way? Why not? Because 272 00:15:29,240 --> 00:15:31,920 Speaker 1: they've already raised prices. They don't cut them now. You 273 00:15:32,000 --> 00:15:33,840 Speaker 1: know how hard it is to get that long pole 274 00:15:33,960 --> 00:15:36,440 Speaker 1: out there and move those numbers around. Paul, Okay, that 275 00:15:36,760 --> 00:15:40,560 Speaker 1: explains it. Actually, I just I saw a great meme 276 00:15:40,720 --> 00:15:46,560 Speaker 1: over the weekend with people President Biden blames for gas prices, right, 277 00:15:46,600 --> 00:15:50,800 Speaker 1: and it's putin crossed out oil producers, crossed out, gas 278 00:15:50,840 --> 00:15:54,560 Speaker 1: station owners, crossed out the guy who puts the numbers 279 00:15:54,560 --> 00:15:58,080 Speaker 1: on the side that's next. I think it's just a commodity. 280 00:15:58,160 --> 00:15:59,960 Speaker 1: That's kind of how I play it, all right, Greig Jared, 281 00:16:00,000 --> 00:16:02,120 Speaker 1: thanks so much for that. We appreciate it. All right. 282 00:16:02,160 --> 00:16:05,000 Speaker 1: Let's check in with read a pick or u s 283 00:16:05,080 --> 00:16:07,920 Speaker 1: economy reporter and editor for Bloomberg News, and read It's 284 00:16:07,960 --> 00:16:10,360 Speaker 1: a great time to touch base with you, because, boy, 285 00:16:10,400 --> 00:16:13,320 Speaker 1: the narrative in the market today after the July four 286 00:16:13,440 --> 00:16:17,080 Speaker 1: long weekend is recession. That seems to be spooking the market. 287 00:16:17,800 --> 00:16:20,760 Speaker 1: What do you what is your reporting showing? Absolutely so 288 00:16:20,960 --> 00:16:23,000 Speaker 1: thank you for having me. So we had a story 289 00:16:23,040 --> 00:16:27,560 Speaker 1: out today based on Bloomberg Economics model and they now 290 00:16:27,680 --> 00:16:31,080 Speaker 1: see a chance of recession within the next twelve months 291 00:16:31,320 --> 00:16:34,600 Speaker 1: at thirty eight percent. So that's a big increase from 292 00:16:34,640 --> 00:16:36,560 Speaker 1: what they were expecting just a couple of months ago, 293 00:16:36,760 --> 00:16:40,440 Speaker 1: where this same model was showing zero percent UM. And 294 00:16:40,520 --> 00:16:42,880 Speaker 1: then of course if we look further on that time 295 00:16:42,960 --> 00:16:47,960 Speaker 1: horizon UM by the start of they, like a lot 296 00:16:48,040 --> 00:16:51,880 Speaker 1: of other economists on Wall Street UM, expect a recession. UM. 297 00:16:51,960 --> 00:16:54,440 Speaker 1: There's about a three and four chance of a recession 298 00:16:54,520 --> 00:16:58,120 Speaker 1: by the start of so you know, in terms of 299 00:16:58,200 --> 00:17:01,600 Speaker 1: the markets, yeah, they're looking at the picture where recession 300 00:17:01,640 --> 00:17:05,760 Speaker 1: odds are growing. It's looking increasingly likely that we could 301 00:17:05,840 --> 00:17:10,359 Speaker 1: have a second straight quarter where GDP declines UM and 302 00:17:11,000 --> 00:17:14,399 Speaker 1: the Fed, you know, is messaging that they are determined 303 00:17:14,480 --> 00:17:18,240 Speaker 1: to crush inflation. So you know how much they would 304 00:17:18,280 --> 00:17:21,200 Speaker 1: come to the rescue if things go down to downhill? 305 00:17:21,359 --> 00:17:23,800 Speaker 1: Is is not super clear. No, well, they can't do 306 00:17:23,920 --> 00:17:27,000 Speaker 1: it right now. Um. The worst thing that could happen 307 00:17:27,119 --> 00:17:30,479 Speaker 1: for the Fed's credibility is that they don't raise as 308 00:17:30,600 --> 00:17:35,080 Speaker 1: much as we expect and then inflation rises even higher. Right. So, 309 00:17:35,920 --> 00:17:39,240 Speaker 1: but you mentioned something interesting the the fact that we 310 00:17:39,359 --> 00:17:43,400 Speaker 1: have two quarters of you know, back to back contraction. 311 00:17:44,119 --> 00:17:49,119 Speaker 1: I know a recession does not uh make but for 312 00:17:49,480 --> 00:17:52,840 Speaker 1: simplistic people like me, that's a general rule of thumb, right, 313 00:17:52,880 --> 00:17:56,480 Speaker 1: And the Atlanta Fed UM GDP now forecast shows a 314 00:17:56,520 --> 00:17:59,639 Speaker 1: contraction in Q two of two point one percent, right, 315 00:17:59,800 --> 00:18:02,200 Speaker 1: and it is a general rule of them. So here 316 00:18:02,240 --> 00:18:04,359 Speaker 1: in the US is different than other countries, and that 317 00:18:04,840 --> 00:18:08,040 Speaker 1: we all look to a group of academics at the 318 00:18:08,240 --> 00:18:11,360 Speaker 1: National Bureau of Economic Research who makes the official call 319 00:18:11,440 --> 00:18:14,000 Speaker 1: on these types of things. Um. But what's tricky about 320 00:18:14,119 --> 00:18:17,200 Speaker 1: right now when we're looking at these two quarters is 321 00:18:17,400 --> 00:18:20,320 Speaker 1: you know, in the first quarter, a big part of 322 00:18:20,440 --> 00:18:24,080 Speaker 1: that decline UM. What weighed on that number in the 323 00:18:24,160 --> 00:18:29,119 Speaker 1: GDP accounting was that you had imports surge. So you 324 00:18:29,240 --> 00:18:34,000 Speaker 1: actually saw an underlying measure of demand that economist tend 325 00:18:34,080 --> 00:18:36,359 Speaker 1: to look at. UM. You actually saw that quite strong 326 00:18:36,520 --> 00:18:39,719 Speaker 1: consumer spending UM wasn't as strong as we were all 327 00:18:39,800 --> 00:18:42,399 Speaker 1: thought it would be UM after some recent revisions, but 328 00:18:42,560 --> 00:18:45,280 Speaker 1: it's still held up UM. But the second quarter is 329 00:18:45,320 --> 00:18:48,440 Speaker 1: looking UM kind of increasingly scary from the fact that 330 00:18:48,960 --> 00:18:53,720 Speaker 1: we finally just saw real spending or inflation ingested spending 331 00:18:53,880 --> 00:18:56,159 Speaker 1: fall for the first time this year in May. So 332 00:18:56,480 --> 00:18:58,760 Speaker 1: it's not quite clear what's going to happen in June 333 00:18:58,880 --> 00:19:01,200 Speaker 1: and whether that was more of a blip in the 334 00:19:01,280 --> 00:19:04,160 Speaker 1: month or whether this is the start of a sustained 335 00:19:04,320 --> 00:19:07,920 Speaker 1: downward trend and inflation adjusted spending. So read does that 336 00:19:07,960 --> 00:19:11,720 Speaker 1: Bloomberg Economics Research note that they have an opinion at 337 00:19:11,760 --> 00:19:14,960 Speaker 1: as to maybe how deep this recession, maybe if in 338 00:19:15,040 --> 00:19:17,240 Speaker 1: fact we do vol into recession, is it's something that 339 00:19:17,320 --> 00:19:20,320 Speaker 1: could be multi quarters? What are they saying? So I 340 00:19:20,440 --> 00:19:23,800 Speaker 1: haven't talked to Bloomberg Economics specifically about this, but in 341 00:19:24,000 --> 00:19:27,360 Speaker 1: terms of other economists that I've spoken with, the general 342 00:19:27,760 --> 00:19:31,720 Speaker 1: kind of description word that I hear is mild or modest, 343 00:19:32,200 --> 00:19:35,720 Speaker 1: But in terms of the length people differ. So I've 344 00:19:35,760 --> 00:19:38,760 Speaker 1: had some economists say that they see this being a 345 00:19:39,080 --> 00:19:42,800 Speaker 1: kind of two quarter thing, very short UM, and then 346 00:19:42,920 --> 00:19:45,880 Speaker 1: others who kind of note the fact that the FED 347 00:19:46,560 --> 00:19:49,159 Speaker 1: is in a situation where they really need to hit 348 00:19:49,240 --> 00:19:52,520 Speaker 1: inflation and hit inflation hard, so they might not offer 349 00:19:53,000 --> 00:19:56,160 Speaker 1: the kind of support monetary policy support that we're used 350 00:19:56,200 --> 00:19:59,080 Speaker 1: to seeing in downturns. And as a result, while it 351 00:19:59,200 --> 00:20:01,800 Speaker 1: might be a old recession, it could very well be 352 00:20:01,960 --> 00:20:05,040 Speaker 1: a long recession. Um. But I think it is important 353 00:20:05,119 --> 00:20:07,800 Speaker 1: to keep in mind, whether you know, even if this 354 00:20:07,960 --> 00:20:11,680 Speaker 1: is a quote unquote mild recession, recessions are painful, and 355 00:20:12,160 --> 00:20:15,560 Speaker 1: even a mild recession would still likely mean you know, 356 00:20:16,200 --> 00:20:20,560 Speaker 1: possibly hundreds of thousands of people losing their jobs. All right, interesting, Matt, 357 00:20:20,600 --> 00:20:24,159 Speaker 1: Do you know what the Cavalier Cavalier Daily is? Is 358 00:20:24,240 --> 00:20:29,720 Speaker 1: that a Cleveland, Ohio newspaper? Student newspaper? No, it is 359 00:20:29,800 --> 00:20:34,479 Speaker 1: the student newspaper at the University of Virginia. Read Pickard 360 00:20:34,560 --> 00:20:36,920 Speaker 1: was a reporter there. It is a very high quality 361 00:20:37,320 --> 00:20:39,280 Speaker 1: student publication. How long were you a reporter at the 362 00:20:39,400 --> 00:20:43,200 Speaker 1: Cavalier Daily. I was years ago now, but I was 363 00:20:43,280 --> 00:20:45,840 Speaker 1: a reporter for four years. It's a it's a heck 364 00:20:45,920 --> 00:20:48,320 Speaker 1: of a student paper. Are they the Cavaliers? I thought 365 00:20:48,320 --> 00:20:51,520 Speaker 1: they were like the who's who it's read? You can 366 00:20:51,600 --> 00:20:53,560 Speaker 1: explain it. Yeah, It's it's kind of like Auburn is 367 00:20:53,600 --> 00:20:56,880 Speaker 1: the same way where people people yell wah who waf 368 00:20:57,000 --> 00:21:00,400 Speaker 1: But um, the actual mascot is A is a cavalier. 369 00:21:00,600 --> 00:21:03,600 Speaker 1: So at football games and satch there um is A 370 00:21:04,359 --> 00:21:06,560 Speaker 1: is a mascot of a guy with a sword and 371 00:21:06,640 --> 00:21:08,639 Speaker 1: a hat with a feather in it. And I can't 372 00:21:08,680 --> 00:21:11,080 Speaker 1: not know that because we have like half of the 373 00:21:11,160 --> 00:21:14,120 Speaker 1: people at Bloomberg came from uv A. Right, Well, it's 374 00:21:14,240 --> 00:21:16,960 Speaker 1: even worse than that thing from the University of Carolina 375 00:21:17,119 --> 00:21:22,000 Speaker 1: Danny Berger. Um Kaylee lines and the list goes on 376 00:21:22,160 --> 00:21:25,000 Speaker 1: and on and on. I know there's more, you know, 377 00:21:25,200 --> 00:21:27,879 Speaker 1: uv A people, a ton of North Carolina people, and 378 00:21:28,040 --> 00:21:32,000 Speaker 1: painfully few dude people here, so we're vastly outnumbered. Well, 379 00:21:32,040 --> 00:21:35,000 Speaker 1: I'm the only one from Antioch College and anti colleges 380 00:21:35,040 --> 00:21:38,320 Speaker 1: in Ohio. Right it is Antioch College, Yellow Springs, Ohio 381 00:21:38,560 --> 00:21:41,480 Speaker 1: when they're the fighting. Uh, we have had no football 382 00:21:41,560 --> 00:21:46,680 Speaker 1: team since. The only intercollegiate sport we've had that I 383 00:21:46,840 --> 00:21:50,560 Speaker 1: know of is women's rugby. Nice. I'm sure you exceled 384 00:21:50,560 --> 00:21:52,080 Speaker 1: there a right. Read Thanks so much for joining us. 385 00:21:52,119 --> 00:21:55,240 Speaker 1: Read Pickard us economy reporter and editor for Bloomberg News, 386 00:21:55,320 --> 00:22:02,200 Speaker 1: former reporter at the Daily Cavalier The Cavalier Daily. I 387 00:22:02,240 --> 00:22:05,400 Speaker 1: guess during the pandemic we all became I guess experts 388 00:22:05,440 --> 00:22:09,680 Speaker 1: at cleaning stuff and disinfecting stuff. Our next guest has 389 00:22:10,119 --> 00:22:13,639 Speaker 1: an angle on that. Rain guest CEO of a company 390 00:22:13,720 --> 00:22:17,000 Speaker 1: called arrow Clean. Rain, thanks so much for joining us here. 391 00:22:17,440 --> 00:22:18,680 Speaker 1: I love for you just to give us, you know, 392 00:22:18,760 --> 00:22:20,960 Speaker 1: kind of a thirty overview of what you guys do 393 00:22:21,720 --> 00:22:25,840 Speaker 1: at Aero Clean. Well, nice to chat with you guys 394 00:22:25,920 --> 00:22:29,160 Speaker 1: this morning. Things for having me, uh So at Aero Clean, 395 00:22:29,240 --> 00:22:32,960 Speaker 1: we actually have a patented device that gives people the 396 00:22:33,040 --> 00:22:36,879 Speaker 1: power to produce their own cleaning and disinfecting products on site. 397 00:22:37,520 --> 00:22:41,360 Speaker 1: So it actually just circumvents the whole supply chain completely. 398 00:22:42,840 --> 00:22:45,520 Speaker 1: So I mean I would think that during the pandemic, 399 00:22:46,240 --> 00:22:51,480 Speaker 1: as people were searching for again, cleaning solutions, disinfecting solutions, 400 00:22:52,359 --> 00:22:53,960 Speaker 1: your business got impact. A little bit of talk to 401 00:22:54,040 --> 00:22:57,480 Speaker 1: us about how that played out over the less several years. Yeah, 402 00:22:57,560 --> 00:23:01,119 Speaker 1: so it was really interesting. Historically at we've been regulated 403 00:23:01,240 --> 00:23:04,200 Speaker 1: as a device um by the e p A. So 404 00:23:04,320 --> 00:23:06,480 Speaker 1: when the pandemic hit, even though we had all the 405 00:23:06,600 --> 00:23:09,600 Speaker 1: testing that showed we were, you know, thirty times more 406 00:23:09,640 --> 00:23:14,800 Speaker 1: effective at killing uh COVID. We were actually exempt from 407 00:23:14,960 --> 00:23:17,720 Speaker 1: the list end, which is the holy grail of products 408 00:23:17,760 --> 00:23:21,840 Speaker 1: that you know, everybody recommended during the pandemic. So you know, 409 00:23:21,920 --> 00:23:24,119 Speaker 1: at a time when everybody was looking for ways to 410 00:23:25,040 --> 00:23:28,360 Speaker 1: you know, they nobody had access to disinfectants and cleaners. 411 00:23:29,160 --> 00:23:31,760 Speaker 1: We actually had a facility hole of here in the 412 00:23:31,880 --> 00:23:34,920 Speaker 1: Dallas area of devices that made hundreds of gallons of 413 00:23:35,000 --> 00:23:38,320 Speaker 1: it a day, but because we were exempt from that list, 414 00:23:38,840 --> 00:23:42,200 Speaker 1: people didn't trust it. So since then, thankfully, the e 415 00:23:42,280 --> 00:23:44,399 Speaker 1: p A has put us on that list. And you 416 00:23:44,480 --> 00:23:47,440 Speaker 1: know now that supply change shortages are happening again and 417 00:23:47,560 --> 00:23:50,520 Speaker 1: people are looking for ways to save money, um, and 418 00:23:50,600 --> 00:23:54,200 Speaker 1: they're understanding the importance of killing germs effectively. You know, 419 00:23:54,320 --> 00:23:58,320 Speaker 1: people are understanding that these germs infect us and that's 420 00:23:58,320 --> 00:24:02,200 Speaker 1: why everybody's getting sick, you know now, uh, you know, 421 00:24:02,280 --> 00:24:06,160 Speaker 1: whether it's here domestically or for an uh overseas, people 422 00:24:06,200 --> 00:24:09,920 Speaker 1: are are wanting to find more effective, safer disinfectants. So 423 00:24:10,160 --> 00:24:16,680 Speaker 1: only there were such a device for baby formula, right. Well, 424 00:24:16,920 --> 00:24:20,399 Speaker 1: you know what's interesting about the baby formula situation is 425 00:24:20,640 --> 00:24:23,960 Speaker 1: you know, the CDC actually determined that the bacteria that 426 00:24:24,040 --> 00:24:27,800 Speaker 1: they found at the Abbot facility didn't match the genetic 427 00:24:27,840 --> 00:24:30,320 Speaker 1: strains that infected the babies. So if you look at 428 00:24:30,359 --> 00:24:33,560 Speaker 1: the CDC's website, it actually says that the most likely 429 00:24:33,680 --> 00:24:37,320 Speaker 1: cause of infections is then someplace like someone's kitchen counter. 430 00:24:37,800 --> 00:24:39,680 Speaker 1: You know, you put a formula scoop on a kitchen 431 00:24:39,760 --> 00:24:43,600 Speaker 1: counter and then it contaminates the baby formula and that's 432 00:24:43,640 --> 00:24:46,600 Speaker 1: where infections come from. Um. Because you know, I'm really 433 00:24:46,680 --> 00:24:49,000 Speaker 1: hoping that the CDC will put out a public warning 434 00:24:49,040 --> 00:24:52,040 Speaker 1: soon to parents, you know, reiterating how important it is 435 00:24:52,200 --> 00:24:55,840 Speaker 1: for us to disinfect surfaces in our homes, so that 436 00:24:55,960 --> 00:24:59,320 Speaker 1: week with your website on it, right, Okay, Well, you 437 00:24:59,400 --> 00:25:01,800 Speaker 1: know you want to use the products that works the fastest, 438 00:25:01,880 --> 00:25:03,639 Speaker 1: and you want to you know, use the product that 439 00:25:04,040 --> 00:25:07,680 Speaker 1: is safe. So yeah, what do you expect in terms 440 00:25:07,760 --> 00:25:11,280 Speaker 1: of I mean, clearly, right now, we're all still freaked out. 441 00:25:11,400 --> 00:25:17,240 Speaker 1: Even if the pandemic were to end tomorrow. Um. I 442 00:25:17,400 --> 00:25:19,159 Speaker 1: know a lot of people in this office are going 443 00:25:19,200 --> 00:25:21,720 Speaker 1: to be disinfecting things until the rest of their lives. 444 00:25:21,840 --> 00:25:25,800 Speaker 1: But do you see demand falling off at all? No, 445 00:25:26,280 --> 00:25:29,600 Speaker 1: not at all, but I am hoping happened. So, UM, 446 00:25:29,880 --> 00:25:33,000 Speaker 1: demands not going to fall up because there's numerous pathogens, right, 447 00:25:33,520 --> 00:25:37,600 Speaker 1: there's covid, different strings of covid. Hospitals historically have had 448 00:25:37,680 --> 00:25:40,640 Speaker 1: crazy death rates. You know, hundreds of thousands of people 449 00:25:40,760 --> 00:25:43,800 Speaker 1: diet you're in hospitals from infections. Millions of people get 450 00:25:43,840 --> 00:25:46,920 Speaker 1: infected in hospitals from infections. So COPE is not the 451 00:25:46,960 --> 00:25:50,240 Speaker 1: only bug in the game. You've got Merca's death. You know, 452 00:25:50,320 --> 00:25:55,359 Speaker 1: we've got monkey pops now and always. Well, yeah, but 453 00:25:55,440 --> 00:25:57,800 Speaker 1: you know it's spread on surfaces, so might so MC 454 00:25:57,880 --> 00:26:01,159 Speaker 1: for surfaces, and so you know, we really need to 455 00:26:01,240 --> 00:26:04,520 Speaker 1: take take a step back and say, Okay, everybody needs 456 00:26:04,560 --> 00:26:06,480 Speaker 1: to disinfect. But the question we need to be asking 457 00:26:06,560 --> 00:26:09,560 Speaker 1: ourselves is have we been doing it properly? Well? I 458 00:26:09,680 --> 00:26:12,000 Speaker 1: also wonder if we've been doing it too much though. 459 00:26:12,200 --> 00:26:16,359 Speaker 1: I mean, when I was a kid, uh growing up 460 00:26:16,400 --> 00:26:19,240 Speaker 1: here in New York City, my mom had no problem 461 00:26:19,320 --> 00:26:22,760 Speaker 1: with us like licking the handrails in the subway because 462 00:26:22,800 --> 00:26:27,560 Speaker 1: the idea back then was, um, it builds immunity, right, 463 00:26:27,840 --> 00:26:30,639 Speaker 1: Was that wrong? No? You know what I used to 464 00:26:30,680 --> 00:26:33,040 Speaker 1: see my younger brother, mud Pies. I was raised up 465 00:26:33,080 --> 00:26:35,639 Speaker 1: in Ida Hook. It was like, there doesn't get out 466 00:26:35,680 --> 00:26:38,840 Speaker 1: their play right, go climb a tree near stuff on 467 00:26:38,960 --> 00:26:41,560 Speaker 1: your face. Um, but you know there's good germs, when 468 00:26:41,600 --> 00:26:46,600 Speaker 1: there's sad germs, and when you know, imagine you know, 469 00:26:46,760 --> 00:26:50,200 Speaker 1: we're all a bunch of animals in a small, confined 470 00:26:50,320 --> 00:26:54,680 Speaker 1: space in essence, right, So I don't think that you 471 00:26:54,720 --> 00:26:57,520 Speaker 1: can ever disinfect too much. We're almost going to touch 472 00:26:57,600 --> 00:27:00,200 Speaker 1: surfaces and then touch our eyes, notes or my health, 473 00:27:00,320 --> 00:27:02,119 Speaker 1: and we're always going to get infections. But we do 474 00:27:02,200 --> 00:27:05,520 Speaker 1: want to mitigate some of the risk. Now. The one 475 00:27:05,560 --> 00:27:08,160 Speaker 1: thing that I don't think most people realize is, yes, 476 00:27:08,320 --> 00:27:12,760 Speaker 1: we were using a lot of disinfectants, but those disinfectants 477 00:27:12,840 --> 00:27:16,040 Speaker 1: that we were using, most of them have warnings on 478 00:27:16,119 --> 00:27:19,840 Speaker 1: them like they cause respiratory issues, their respiratory irritants. And 479 00:27:19,880 --> 00:27:23,640 Speaker 1: when you use products like that incorrectly without proper protective gear, 480 00:27:24,080 --> 00:27:28,040 Speaker 1: you actually leave yourself more susceptible to infectious diseases like COVID. 481 00:27:28,640 --> 00:27:31,520 Speaker 1: And then compound that problem, if you don't let that 482 00:27:31,640 --> 00:27:36,760 Speaker 1: product sit on the surface for the contact time the 483 00:27:36,880 --> 00:27:40,240 Speaker 1: proper contact times, you don't actually kill the bugs. So 484 00:27:40,400 --> 00:27:44,920 Speaker 1: most disinfectants cause respiratory irritants, and most disinfectants have to 485 00:27:45,000 --> 00:27:49,480 Speaker 1: sit wet on the surface for ten minutes to kill germs. Now, gentlemen, 486 00:27:49,560 --> 00:27:51,520 Speaker 1: have you ever let a product sit on the surface 487 00:27:51,560 --> 00:27:53,879 Speaker 1: for ten minutes? No? I mean, I mean, I was 488 00:27:53,960 --> 00:27:56,760 Speaker 1: just thinking. You know, we used to disinfect the grocery 489 00:27:56,760 --> 00:27:58,560 Speaker 1: who brought them home from the grocery store. Don't do 490 00:27:58,640 --> 00:28:02,000 Speaker 1: that anymore. I've also, I mean when I I can't 491 00:28:02,480 --> 00:28:04,919 Speaker 1: even conditioner when it says leave it in for two minutes, 492 00:28:05,000 --> 00:28:06,920 Speaker 1: I don't think I can last that long. No, No, 493 00:28:07,240 --> 00:28:09,920 Speaker 1: once you have no hair, So that's well. Now now 494 00:28:10,119 --> 00:28:13,679 Speaker 1: I used to have gorgeous locks. But it's a good point, Rain, 495 00:28:13,720 --> 00:28:17,119 Speaker 1: I know nobody does that. Yeah, exactly, all right, all right, Rain, 496 00:28:17,280 --> 00:28:19,560 Speaker 1: thank you so much for joining us. I really appreciate 497 00:28:19,640 --> 00:28:22,520 Speaker 1: getting your thoughts there. Rain Guests, CEO of Arrow Clean, 498 00:28:24,600 --> 00:28:27,679 Speaker 1: thanks for listening to the Bloomberg Markets podcast. You can 499 00:28:27,720 --> 00:28:31,480 Speaker 1: subscribe and listen to interviews with Apple Podcasts or whatever 500 00:28:31,600 --> 00:28:35,240 Speaker 1: podcast platform you prefer. I'm Matt Miller. I'm on Twitter 501 00:28:35,560 --> 00:28:39,000 Speaker 1: at Matt Miller three. Put on false swheey. I'm on 502 00:28:39,040 --> 00:28:41,960 Speaker 1: Twitter at pt Sweeney Before the podcast. You can always 503 00:28:42,000 --> 00:28:43,840 Speaker 1: catch us worldwide at Bloomberg Radio.