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Speaker 1: Searched Bloomberg clovel News Well the fast spreading delta variant.
Speaker 1: It's flooded hospitals across the South. It's killed more people
Speaker 1: in Florida and Louisiana than the darkest days of the
Speaker 1: pandemic winter and left so many COVID nineteen patients gasping
Speaker 1: for breath. That's some places face shortages of medical oxygen.
Speaker 1: So right. Jonathan Levin and Michael Smith and their latest
Speaker 1: story for the Bloomberg terminally available at Bloomberg dot com
Speaker 1: as well. Overwhelmed hospitals belae us illusion of a defanged pandemic.
Speaker 1: Drew Armstrong is senior editor for US Healthcare for Bloomberg
Speaker 1: News and joins us Now on the phone from New
Speaker 1: York City. Drew, how did we get here? Well? I
Speaker 1: think we've been in this situation where you have many
Speaker 1: parts of the US vaccinating quite aggressively, but many parts
Speaker 1: that didn't. And you know, when you look at down South, UM,
Speaker 1: a lot of rural areas, those were places that had
Speaker 1: not been hit nearly as hard early on by COVID.
Speaker 1: And then you have this kind of perfect storm combining
Speaker 1: a much much much much more transmissible UM and by
Speaker 1: some reports more dangerous variants of the virus UH, low
Speaker 1: rates of vaccination UH in those places UM, and a
Speaker 1: population that probably didn't have necessarily as much kind of
Speaker 1: previous naturally acquired immunity. Because these are a lot of
Speaker 1: places that so man, these places have been hit by
Speaker 1: quite hard, but there were still a lot of places
Speaker 1: in the country that had not really been slammed uh
Speaker 1: by by COVID. You know, you mix all of that
Speaker 1: together and it's a pretty toxic brew. True. The data
Speaker 1: in the story seems to suggest that even with an
Speaker 1: orderly vaccine rollout, I've reflects. You know, what happened here
Speaker 1: in San Francisco. We started with those over the age
Speaker 1: of seventy, then down to sixty five. But what seems
Speaker 1: to be happening, particularly in the Southern States, is that
Speaker 1: there are sections of those age groups that just didn't
Speaker 1: for some for whatever reason, get vaccinated. And that's where
Speaker 1: the pressure points seems to be in terms of hospitalizations.
Speaker 1: What's going on there. Yeah, you know, you have higher
Speaker 1: levels of vaccine either refusal or reluctant to kind of
Speaker 1: across the board in a lot of these places. And
Speaker 1: the result of that is, you know, you're over seventy
Speaker 1: five populations like vaccinated, or over sixty five populations like vaccinated,
Speaker 1: or over a team population is less vaccinated. So you
Speaker 1: just leave more vulnerable people UM in play there. And obviously,
Speaker 1: especially with some of those older groups or people who
Speaker 1: have pre existing medical conditions you talk about you know, BCD, diabetes, UM,
Speaker 1: those people are really at risk of this virus. I mean,
Speaker 1: if you if you look at how to virus, who
Speaker 1: this virus impact UM. You know, if you're older and
Speaker 1: in ill health or you know just in ill health, UM,
Speaker 1: you're really profoundly at risk most younger, healthier people that
Speaker 1: are exceptions to this obviously, but are far less risk
Speaker 1: of this. It can be, you know, quite nasty and unpleasant,
Speaker 1: but you know, you don't see that as many of
Speaker 1: the charitable health outcomes as you do, um in a
Speaker 1: lot of these older populations, and that just means kind of,
Speaker 1: you know, more more kindling for this thing to burn through. So, Drew,
Speaker 1: how does this? How does this end? Because here we
Speaker 1: are in September. Kids are supposed to be back in
Speaker 1: school many parts of the United States, they're already not
Speaker 1: as a result of being quarantined or the spread of
Speaker 1: the virus among those classrooms. How does this? How does
Speaker 1: this end? Well? You know, I think the way it
Speaker 1: ends is some degree of immunity, either through vaccination or
Speaker 1: through previous infections, and and this pandemic probably burns itself
Speaker 1: mostly out and we move into kind of an endemic
Speaker 1: phase where, um know, we have pockets of infection and
Speaker 1: player ups and kind of a constant low grade COVID
Speaker 1: out there. Um. The one thing I'll say is that
Speaker 1: seemed to be a point of discussion out there amongst
Speaker 1: some groups. You know, the vaccines are kind of a
Speaker 1: shortcut to immunity. Yes, you can get naturally acquired immunity,
Speaker 1: but you have to get sick to get it, and
Speaker 1: that comes with some significant risks. I think as we've seen,
Speaker 1: as we had to you know, more than uh, you know,
Speaker 1: over half a million people dead of this disease in
Speaker 1: in the U s so um. You know, people talk
Speaker 1: a lot about like viruses as wildfires, and they tend
Speaker 1: to go until you know, burnt through all of the
Speaker 1: brush flammable brushes out there. Hey, Drew, we only have
Speaker 1: about thirty seconds left on this. I just want to
Speaker 1: get an idea from you about sort of the next
Speaker 1: catalyst we should be looking forward to see if Delta
Speaker 1: has indeed peaked here in the US. You know, I
Speaker 1: think what I'm personally watching is a lot of state
Speaker 1: and regional maps, um, you know, looking to see trying
Speaker 1: not to think about this as a US outbreak, but
Speaker 1: really thinking about it as a state and local UM
Speaker 1: one and keeping a close eye to seat. Okay, has
Speaker 1: it peeked down south fully? Um? Is it riving or
Speaker 1: is there a ceiling on cases in some of the
Speaker 1: states that have vaccinated more heavily, Would it have not
Speaker 1: been kind of forced indoors because of the heat, and
Speaker 1: then really paying attention to whats with the holidays, holidays,
Speaker 1: already thinking about that and trying to make those plans
Speaker 1: those right around the corner. Drew Armstrong, Senior editor for
Speaker 1: US Healthcare for Bloomberg News, joining us live on the
Speaker 1: phone from New York City. This is Bloomberg Business Week
Speaker 1: with Carol Messer and Bloomberg Quick Takes Tim Stinovic on
Speaker 1: Bloomberg Radio. Well, the pay phone an iconic image of
Speaker 1: the pay phone. Just think about what an image of
Speaker 1: a pay phone, or what a payphone evokes to you.
Speaker 1: For so many years, it was the only way for
Speaker 1: any of us to communicate with one another or actually
Speaker 1: even be reached. But nowadays it's rare, with the advent
Speaker 1: of the smart phone and the cell phone, that they're
Speaker 1: even used. Well. David Dudley, a writer for Bloomberg City
Speaker 1: Lab who joins us now on the phone from Baltimore,
Speaker 1: profiled a photographer who's working to documents surviving pay phones
Speaker 1: that are evoking he lost US network of two million. David,
Speaker 1: it's great to have you on the show. Tell us
Speaker 1: about the photographer's project documenting thousands of these abandoned payphones.
Speaker 1: Thanks for having me, uh so. I spent the day
Speaker 1: with a gentleman named Eric Kunzman, who is a photographer
Speaker 1: and a photography professor in Rochester, New York, and a
Speaker 1: couple of years ago, he became sort of fascinated by
Speaker 1: the fact that it seemed like the neighborhood that he
Speaker 1: had moved to studio to was was full of payphones,
Speaker 1: and he hadn't noticed that in other parts of town.
Speaker 1: This is sort of a lower income part of Rochester.
Speaker 1: And he started um to sort of take images, portraits
Speaker 1: of of the payphones that he saw in the neighborhood,
Speaker 1: usually in front of convenience stores and gas stations. And
Speaker 1: this sort of expanded into this sort of a kind
Speaker 1: of a global quest that he has launched to document
Speaker 1: every single pay phone in Monroe County, New York, uh
Speaker 1: and also any place else basically that he happens to
Speaker 1: see become sort of fabated by what they symbolize. I'm
Speaker 1: a Londoner, right, I think phone box, I think iconic
Speaker 1: red phone box. I think tourism. But it's part of
Speaker 1: this process. What exactly what do you learn about any
Speaker 1: neighborhoods given phone box what does it tell you about
Speaker 1: the economy, about the people in that place. Well, Eric
Speaker 1: sort of theorized that that some of these these phones
Speaker 1: were basically just sort of forgotten. They've been sort of
Speaker 1: installed in the nineties or earlier, and because no one
Speaker 1: had renovated the building that they were attached to, or
Speaker 1: no one had bothered to call the phone company and say, hey,
Speaker 1: could you remove this thing, the machines themselves has sort
Speaker 1: of persisted. So it was sort of like a geograh
Speaker 1: fee of the more sort of economically left behind parts
Speaker 1: of the city. And as part of his project, he
Speaker 1: sort of mapped all the phones across the county and
Speaker 1: overlaid that with with economic data and other information. So
Speaker 1: he became sort of interested sort of what the the
Speaker 1: whole kind of social, kind of geography of telephones meant um,
Speaker 1: which sort of made this more than just sort of
Speaker 1: an esthetic project. It was sort of a social documentary.
Speaker 1: I do find that the the idea that this is
Speaker 1: based in Rochester, New York just fascinating. As you point out,
Speaker 1: it was the home of George and Eastman, the founder
Speaker 1: of Eastman Kodak, and at its nine seventies peak, the
Speaker 1: photography giant employed about fifty thou people and fueled a
Speaker 1: quarter of the city's economic activity. It's absolutely a different
Speaker 1: picture in this day and age, David, And I'm wondering
Speaker 1: the juxtaposition of that and the symbolism there that this
Speaker 1: project is being done on film, first of all, uh,
Speaker 1: in in a place where Eastman Kodak was for so
Speaker 1: long a stalwart of the economy. Yeah. No, I mean
Speaker 1: it's that's sort of part of the conceit here is
Speaker 1: this sort of this convergence of of obsolete technologies, uh,
Speaker 1: that that Eric really still finds value. And he is
Speaker 1: a he is a a film photographer, die Hard. He
Speaker 1: has sort of a shrine to Kodak film in his studio.
Speaker 1: So he's shooting these things on an old half of
Speaker 1: black camera film, using the this this product that is
Speaker 1: so associated with with Rochester and with the wealth that
Speaker 1: sort of built the city, and it's sort of part
Speaker 1: of his his his sort of thesis that there is
Speaker 1: value in things that that that might not be putting
Speaker 1: edge technology anymore, but are still useful and still still
Speaker 1: serve different people encourage you know, yeah, exactly. It's the saying, David,
Speaker 1: I really encouraged Bloomberg radio listeners to go on Bloomberg
Speaker 1: dot com onto the Bloomberg terminal and look at the
Speaker 1: actual photographs themselves. As Tim said, short and film. But
Speaker 1: there's something miss singing from every single photograph. There are
Speaker 1: no people in any of the shots at all. Why
Speaker 1: is that? Yeah, that's sort of on on Eric's park.
Speaker 1: He didn't want you to sort of think about who
Speaker 1: who was using the phone. He wanted you to sort
Speaker 1: of leave that to your imagination because really, you know,
Speaker 1: and those of us who are out in age when
Speaker 1: we uh use payphones more regularly. In the eighties and nineties, um,
Speaker 1: it was a public amenity. Everyone used the payphone, and
Speaker 1: now it's sort of perceived as something as a communication
Speaker 1: device of last resort for people who really have no resources.
Speaker 1: And he really wanted you to think about who who
Speaker 1: might need that phone. And uh so it's this sort
Speaker 1: of gallery of of of unpeopled landscapes where you sort
Speaker 1: of see the phone as part of a kind of
Speaker 1: a streetscape. But yeah, there's no there are no people there.
Speaker 1: They're they're used sometimes. He's got data from from the
Speaker 1: telecom that soprates them, that says that you know, that
Speaker 1: most of these phones are used a couple of times
Speaker 1: a week. Still, Uh, the handful that are still working.
Speaker 1: A lot of them are just sort of corpses. They're
Speaker 1: their handsets are broken or the insides have been removed.
Speaker 1: But some of them still work, and and those that
Speaker 1: do still do find people who need to use them.
Speaker 1: What did the company that oversees these phones, that these
Speaker 1: phones belong to, Frontier tell you about the status of
Speaker 1: the phones. You know, it's it's not really a priority
Speaker 1: of fun your communications right now. This is a telecom
Speaker 1: that is, you know, pivoting to fiber optics and you know,
Speaker 1: cutting edge technologies. But it also happens to have about
Speaker 1: fifteen hundred of these phones scattered around the county. Um,
Speaker 1: you know, a spokes first when told the last reporter
Speaker 1: who did the story on this that they're they're still
Speaker 1: maintaining the ones that are When they get a call
Speaker 1: to fix up a phone, they'll still send someone out. Um,
Speaker 1: it's unlikely it's a major profit center. Let's just it's
Speaker 1: a it's a it's a very very declining business. There
Speaker 1: are less than a hundred thousand payphones across all of
Speaker 1: the United States. Probably a lot less and uh, you know,
Speaker 1: it's it's very much a a part of the telephone
Speaker 1: tunations business that has has really been left in the past.
Speaker 1: David very quickly here, what was your takeaway? I mean, look,
Speaker 1: you you can't see me. I'm holding my cell phone
Speaker 1: in my hand. I'm rarely ever detached from it. I
Speaker 1: can't live without my cell phone. But is you going
Speaker 1: through that experience driving around neighborhoods. How did it make
Speaker 1: you feel? You know, it's it's like a time capsule.
Speaker 1: It's like as you're driving around and I grew up
Speaker 1: near Rochester and I know the area pretty well, and
Speaker 1: you have to kind of pretend that it's like nine nineties,
Speaker 1: and you sort of have to think in those terms,
Speaker 1: and you sort of squinting you and then suddenly you
Speaker 1: can see, oh, there's a payphone attached to that cast stage,
Speaker 1: and uh, it's a it's kind of an interesting experience
Speaker 1: to become aware of this of this this this furniture
Speaker 1: that used to be so omnipresent on our streets and
Speaker 1: it's kind of hiding in playing site and in some places.
Speaker 1: But you know, well, we we've completely forgotten. David Dudley
Speaker 1: is a writer for Bloomberg City Lab. Check out this story.
Speaker 1: As Ed mentioned, you've got to go online and look
Speaker 1: at the peak pictures. David story is featured in These
Speaker 1: Cities issue of Bloomberg Business Week magazine. It's available on
Speaker 1: newstands and at Bloomberg dot com slash business Week. You're
Speaker 1: listening to Bloomberg Business Week with Carol Masser and Bloomberg
Speaker 1: Quick Takes Tim Stinovik on Bloomberg Radio. Okay, so Masks
Speaker 1: are back on its city Group and a Bank of
Speaker 1: America workers still have to keep their distance and conference
Speaker 1: rooms at JP Morgan Investment bankers and traders can no
Speaker 1: longer blow off steam at the nearby Monkey Bar. That's
Speaker 1: the Tony restaurant in Midtown Manhattan that closed during the pandemic,
Speaker 1: so writes Jenny Seraine, who says that Wall Street is back,
Speaker 1: just not the way that industry executives had hoped. Jenny
Speaker 1: joins us now in the Bloomberg News Interactive Broker Studio
Speaker 1: in New York. She's finance reporter for Bloomberg News. So
Speaker 1: Jenny this a few months ago. This was supposed to
Speaker 1: be a completely different story. The the the the Tuesday
Speaker 1: after labor day was when things were supposed to be
Speaker 1: back in full swing. Give us an update from what
Speaker 1: the big banks are doing. Yeah, that's exactly right. So
Speaker 1: today it was really supposed to be, um, Wall Streets
Speaker 1: big back to school day and kind of the start
Speaker 1: of Wall Streets new normal, and we just haven't seen
Speaker 1: that really take shape. You know, you've got a lot
Speaker 1: of smaller Wall Street firms actually pushing back their dates saying,
Speaker 1: you know what, we're just going to do this in October, November,
Speaker 1: maybe next year. Um. And then the biggest guys, Yeah,
Speaker 1: they are still very adamant. They want their folks back
Speaker 1: at their desks. Um. They're increasingly having those folks there. Um.
Speaker 1: And really they're just it's just not the way they
Speaker 1: pictured it. The mass, the social distancing, um, all the rest.
Speaker 1: It's just not what they wanted. You guys kind of
Speaker 1: set it out, Jenny, right, there's no one size fits
Speaker 1: all return to office COVID plan. But I guess the
Speaker 1: trend does seem to be the big guys want you
Speaker 1: back at your desk, the smaller firms more cautious approach
Speaker 1: pushing things. You know, well, as fathers pushed back a
Speaker 1: couple of times but why is that? I mean, is
Speaker 1: it just the spending that was required on protection mechanisms,
Speaker 1: it's just psychology, you know, what's behind that difference. Yeah,
Speaker 1: it's a really good question. I think for each firm
Speaker 1: it might be different. So I think some firms are
Speaker 1: using this as an opportunity to recruit away from the
Speaker 1: big firms and saying, you know, people want flexibility, We're
Speaker 1: willing to give you that. UM. In some cases it's
Speaker 1: more about UM. You know, some of these bigger banks
Speaker 1: have staff in places like Texas or Florida, Georgia, places
Speaker 1: where vaccination rates are way lower than than here in
Speaker 1: New York, and so that's kind of complicating how quickly
Speaker 1: you're or how many people they can bring back. UM.
Speaker 1: So I think lots of things can be driving it. UM.
Speaker 1: Definitely spending on making the office is safer. It's a
Speaker 1: big expense. UM. And if you see a lot of
Speaker 1: your employees really are really hesitant to be back, you
Speaker 1: just you might say, know what will wait? You kind
Speaker 1: of mention in your story about out West this way
Speaker 1: there's this play by the tech companies, right, they keep
Speaker 1: pushing back, they give more flexibility, particularly in the engineering department,
Speaker 1: and you mentioned the story that there's some crossover there right,
Speaker 1: There's there's a flow of talent from Wall Street into
Speaker 1: big tech and vice versa sometimes. But the point is
Speaker 1: you have to give the people what they want. What's
Speaker 1: going on with this just indefinite delay from ever going
Speaker 1: back to the office. Yeah. I think engineers on Wall
Speaker 1: Street are are very special breed. They seem to be
Speaker 1: the only ones that are getting this uh special dispensation
Speaker 1: from c e o s who are really aggressively bringing
Speaker 1: a lot of their workers back. But they're very hesitant
Speaker 1: to do anything that will upset the developers and engineers
Speaker 1: and everyone that that kind of keep the technology of
Speaker 1: Wall Street going. And that's because, you know, competition for
Speaker 1: that talent right now is at levels that these executives
Speaker 1: haven't ever seen, and they are very aware that places
Speaker 1: like Google and Facebook are are rolling out the red
Speaker 1: carpet for these folks and really trying to keep those
Speaker 1: folks happy and keep them in their jobs. I wonder
Speaker 1: about that in the in the other ranks of employees too,
Speaker 1: because it's not just that these banks are competing with
Speaker 1: the other banks for talent, they're also competing with tech
Speaker 1: companies that perhaps have different types of work from home
Speaker 1: policies and more relaxed policies. And I wonder what you're here,
Speaker 1: wondering what you're hearing from your sources, Jenny, about whether
Speaker 1: or not banks are starting to think differently about being
Speaker 1: more lenient with this stuff because from a competitive perspective,
Speaker 1: they may have to. Yeah, I think so. So many
Speaker 1: of these CEOs are It's like a ceo thing, like,
Speaker 1: so many of these CEOs just feel strongly that culture
Speaker 1: is built in the office and that younger employees especially
Speaker 1: need training and and they want to see folks in
Speaker 1: their seats every day. And so I think you've got
Speaker 1: a little bit of what do the people want versus
Speaker 1: what does the person um, the person at the top
Speaker 1: of the house want um. And that's a really hard balance,
Speaker 1: and I think you're seeing it play out at all
Speaker 1: these different firms in slightly different ways. Um, But ultimately,
Speaker 1: I do think in a lot of cases, what the
Speaker 1: CEO wants is ultimately going to win out, irrespective of
Speaker 1: where they're working, Jenny, how are they working? You know,
Speaker 1: is it it's been a purple patch for for these firms,
Speaker 1: or is part of the sort of impetus to go
Speaker 1: back to your face that they need to do better,
Speaker 1: you know, to get some energy going amongst the workforce. Yeah.
Speaker 1: You know what's interesting about the trading floor specifically is
Speaker 1: we keep hearing from traders that on slow trading days,
Speaker 1: it's really helpful to have folks in the office. You've
Speaker 1: got that water cooler chat, you come up with random ideas,
Speaker 1: you go out, you pitch it to clients. UM. That's
Speaker 1: sort of like organic UM conversation is really hard to
Speaker 1: pull off on Zoom and in virtual meetings and things
Speaker 1: like that. So certainly for the traders, I think that
Speaker 1: you see a lot of those folks are kind of
Speaker 1: eager to get back at least part of the time, UM,
Speaker 1: and that they think it will really help the results.
Speaker 1: I mean, for the rest of the bank, they're they're
Speaker 1: at record profits and UM, it's kind of hard to
Speaker 1: say that they're they're doing poorly in this remote work time. UM.
Speaker 1: But certainly for the traders, you do see them starting
Speaker 1: to get a little auntie, especially as we've had a
Speaker 1: few of these like summer dold drums these past couple
Speaker 1: of weeks. Yeah, well, the summer summer season certainly over
Speaker 1: now I mean officially over. We are the first Tuesday
Speaker 1: after Labor Day, so this is the time when fall
Speaker 1: officially kicks off. Jenny, I'm I'm wondering really about how
Speaker 1: the timeline has changed now that this goal and I
Speaker 1: know the goalpost move. I understand that this is an
Speaker 1: involving situation, but what are the banks saying about, Okay,
Speaker 1: we are back to normal. You know on this date,
Speaker 1: there's not really one new universal date like there was
Speaker 1: with this UM. So it's I think we're going to
Speaker 1: see it really be low and slow. Um. The biggest
Speaker 1: US banks have brought a lot of their folks back
Speaker 1: or are planning to do so this month. UM. So
Speaker 1: you're definitely seeing that push, But I think for a
Speaker 1: lot of these smaller firms they're just hesitant and they're
Speaker 1: they're playing it by ear um. You know, especially with
Speaker 1: schools and that situation being as uneven as it is,
Speaker 1: that also makes it really hard for you to kind
Speaker 1: of say, all right, we have to be back in
Speaker 1: especially you know, with with folks with kids under twelve
Speaker 1: who's kids can't even be vaccinated. That just makes everything
Speaker 1: so much harder and just not the moment in time
Speaker 1: that Wall Street thought it was going to be Jenny
Speaker 1: very quickly, what's the next big name to watch for?
Speaker 1: Which bank moves next, which trading floor moves next to
Speaker 1: bring their their teams back. I actually think the banks,
Speaker 1: the two banks to watch would be City Group and
Speaker 1: Bank of America. So they're planning to bring back more
Speaker 1: and more of their folks this month, So it'll be
Speaker 1: kind of interesting to see how that plays out and
Speaker 1: kind of how their employees react. Here. All right, Jenny Seraine,
Speaker 1: we are going to have to leave it. Their finance
Speaker 1: reporter for Bloomberg News. She joins us in the Bloomberg
Speaker 1: Interactive Brokers studio in New York. Check out Jenny's story.
Speaker 1: It's available at the Bloomberg terminal and of course at
Speaker 1: Bloomberg dot Com. It's called Wall Street Limps into Post
Speaker 1: Labor Day Return Derailed by Delta ed. As Jenny said,
Speaker 1: this was supposed to be Wall Streets Back to School Day,
Speaker 1: it's not necessarily turning out to be. Yeah, it's all
Speaker 1: about the psychology home in you, in your shut upstairs,
Speaker 1: sweats downstairs, or what do you do well? You can
Speaker 1: join by zoom in many places. But now we'll see
Speaker 1: how long you're listening to Bloomberg Business Week with Carol
Speaker 1: Messer and Bloomberg Quick Takes Tim's of it on Bloomberg Radio. Well,
Speaker 1: it's likely to lose money for black Rocks clients, and
Speaker 1: more important, will damage the national security interests of the
Speaker 1: US and other democracies. Those are the words of legendary
Speaker 1: investor George Soros criticizing Black Rock for investing in China
Speaker 1: in an op ed in the Wall Street Journal today,
Speaker 1: joining us now to talk all about it and more.
Speaker 1: There's pretty much no better person to speak to this
Speaker 1: than Andy Brown, editorial director of Bloomberg New Economy Forum.
Speaker 1: Although he spent years in China. Today he is joining
Speaker 1: us on the phone from New Hampshire, and we're certainly
Speaker 1: glad because if he were in China right now, it
Speaker 1: would be the middle of the night. Andy, thank you
Speaker 1: so much for taking the time and joining us on this.
Speaker 1: What was your reaction when you saw that? What was
Speaker 1: your reaction when you saw that editorial from George Soros? Yeah, look,
Speaker 1: this is pretty inflammatory stuff. I mean, he's essentially accusing
Speaker 1: Wall Street leaders of being on patriotic almost fifth columnists, investing,
Speaker 1: as it were, in the enemy at a time when
Speaker 1: the United States and China, in his view, are locked
Speaker 1: in this life and death struggle for supremacy. And his
Speaker 1: point is you've got to choose side. This is a
Speaker 1: national um security with I mean, it's certainly you've gone
Speaker 1: further in his criticism of people like you know, Larry
Speaker 1: Spink and and uh and Schwartzman, and John Thornton, the
Speaker 1: former Golden Sex senior executives, and perhaps um any any
Speaker 1: senior public figure has before Good afternoon, Andy. I mean,
Speaker 1: what is the concern here? Is it complete focus on
Speaker 1: the regulatory crackdown or is it the presidency economic strategy,
Speaker 1: which is which is largely a shift to industrialization right
Speaker 1: away from software, away from internet. Where is the area
Speaker 1: of concern for Soros? Well, No, I think he's looking
Speaker 1: at this at a much higher level. I mean, in
Speaker 1: his view, you now have to competing and incompatible systems
Speaker 1: buying for global supremacy. And on the one hand, you
Speaker 1: have the democratic free market system of the US, Europe
Speaker 1: and the West more generally, and then you have China,
Speaker 1: which in his view is moving in an authoritarian, uh
Speaker 1: even autocratic direction and doubling down on state capitalism, and
Speaker 1: that certainly is the way that he would interpret the
Speaker 1: latest ructions in China. With s jimping taking on UM
Speaker 1: the big tech champions, he would no doubt see this
Speaker 1: as being an effort to strengthen the state and tear
Speaker 1: down the private sector. But it's very interesting that you
Speaker 1: now have real divergence of views within the investment community
Speaker 1: on what the on the significance. I mean you you
Speaker 1: have other people like Great Value is saying now's the
Speaker 1: time to invest. Jim Thing is doing exactly the right things,
Speaker 1: sorting out problems in the tech economy, that problems that
Speaker 1: we all grapple with, including in the US. UM you know,
Speaker 1: and that China and that in the sense of chigin
Speaker 1: Pins actions should not just be supported, they are laudable.
Speaker 1: They should be applauded well and paint us a picture
Speaker 1: of China today, China one, where does it sit ideologically?
Speaker 1: Where does it sit in its economic story? Well, this
Speaker 1: is what's to play for. I mean we don't really know.
Speaker 1: I mean Lilho who runs the Chinese economy, who came
Speaker 1: out just the other day to saying this isn't at
Speaker 1: all an attack on the private sector. The private sector
Speaker 1: is responsible for six GDP and eighty percent of all
Speaker 1: new employment. This is all about rationalizing or this is
Speaker 1: all about getting rid of abusive in our system, leveling
Speaker 1: the playing field, and making society more more equitable. Um.
Speaker 1: And there are a lot of people, as they say,
Speaker 1: including people great value, who take all this uh at
Speaker 1: at face value? Andy, is you right? In New Economy Saturday.
Speaker 1: What began as a regulatory takedown of Jack Ma, the
Speaker 1: flamboyant Ali Baba co founder, it quickly grew to an
Speaker 1: assault on tech platforms, including those like ten cents that
Speaker 1: offer online gaming. You asked the question, is this a
Speaker 1: new cultural revolution? Is it? Yeah? Well, you know there
Speaker 1: is a very hard edged ideological element to all this
Speaker 1: and what you're seeing, Ah, these really eerie, rather sinister
Speaker 1: echoes all the cultural Revolution, both in the language and
Speaker 1: a lot of talk now struggle. Um, there's you know
Speaker 1: a lot of talk about rectification. You know, these these
Speaker 1: are these are words and concepts that were very common
Speaker 1: in the early years um, all the People's Republic and
Speaker 1: of course during the Cultural Revolution. And then you have
Speaker 1: this sort of very powerful uh symbolism, the cult of personality.
Speaker 1: And I was noting that you know, Chijin pings Jen
Speaker 1: being thought has now become a part of the school.
Speaker 1: Everybody from age seven out all the way through university
Speaker 1: is going to have to study see him as as
Speaker 1: The Economist magazine pointed out, the last time hundreds of
Speaker 1: millions of Chinese school kids had to read the thoughts
Speaker 1: of one man Um was indeed during the male ear
Speaker 1: during the Cultural Revolution. Andy, just in the last thirty seconds,
Speaker 1: we have what is what is Sijin ping thought? That's
Speaker 1: a that's that's a very good question. And not having
Speaker 1: not having been through the syllabus, it's hard. It's hard
Speaker 1: to answer in in in a word, um, But we
Speaker 1: have to take this very seriously. Um. This is not
Speaker 1: a temporary school. Something very serious has shifted um in
Speaker 1: in China, something very profound. And investors who think that
Speaker 1: they're going to play this as they might play any
Speaker 1: market trend, A're gonna get quite badly. Bunt Yeah. Hence
Speaker 1: the ed from George Sorrows in Today's Wall Street Journal.
Speaker 1: Andy Brown, editorial director at Bloomberg New Economy, joining us
Speaker 1: on the phone from New Hampshire. Andy, it is always
Speaker 1: great to shot with you. Thanks so much for taking
Speaker 1: the time. This is Bloomberg Radio. I'm bro journal. Yeah,
Speaker 1: but you let me drive? Oh no, no, no no, non,
Speaker 1: drive home, honey please, I'll do the riding drivel. I
Speaker 1: want to drive all Just drive baby, good question trying.
Speaker 1: This is the drive to the Globe Funk Commune. Thanks well,
Speaker 1: dry Un on Bloomberg Radio. It is the drive to
Speaker 1: the close on the first day of this shorten the
Speaker 1: trading week, just over ten minutes away from the market close,
Speaker 1: and we are seeing a little bit read across the
Speaker 1: screen that down down by a little more than seven
Speaker 1: tents of one percent, by three tents of one percent,
Speaker 1: the NASDAC higher by just one tenth of one percent.
Speaker 1: Let's get into it with Dave Dat's managing principal and
Speaker 1: senior portfolio strategies at PEPA Pepack Private Wealth Management n
Speaker 1: billion dollars in assets under management. David, it's great to
Speaker 1: have you back on the show. I want to start
Speaker 1: just broadly in today's trade. What is the message that
Speaker 1: the market is sending here? Well, I think there are
Speaker 1: some growth concerns here. I think we're still trading in
Speaker 1: the wake of that week August job support that we
Speaker 1: heard on Friday. People are digesting that Um. But what
Speaker 1: I think is also a little off putting today is
Speaker 1: normally when you have growth concerns, interest rates are falling.
Speaker 1: Here today we have interest rates rising, which is a
Speaker 1: little odd. And so that that word, that scary word
Speaker 1: from the nineties seventies is popping up exactly where sluggish
Speaker 1: growth and higher rates that is not a great combination.
Speaker 1: I think it's it's premature to get to concerned. Remember
Speaker 1: azacs at a record today SMP and now very close
Speaker 1: to record, So let's not get carried away. But I
Speaker 1: think that's what people are focusing on. Okay, so what
Speaker 1: is the market? What is the signal that the bond
Speaker 1: market is sending though with with yields moving higher. Well,
Speaker 1: so what we saw in August was less jobs, well
Speaker 1: less jobs than we're expected that we're actually created, but
Speaker 1: we saw hourly wages jump sharply, much worse, about six
Speaker 1: tenths of one percent just in the month of August alone. Um,
Speaker 1: you know, that's about four point three percent annualized, and
Speaker 1: and that's well above what the FT has been targeting.
Speaker 1: And so I think there is that with of inflation
Speaker 1: there which um was not accompanied by people rushing into
Speaker 1: that labor force and and so I think that's very
Speaker 1: concerning here. Of course, you're still seeing that the chip
Speaker 1: shortage affecting the auto industry and others, terrible supply chain disruption.
Speaker 1: Who we're just pushing prices up. So you know, on
Speaker 1: the one hand, the FED is probably going to be
Speaker 1: cautious here to start any kind of taper because the
Speaker 1: job numbers are not where they want. On the other hand, uh,
Speaker 1: you know, with wages starting to rise, Uh, they've got
Speaker 1: to stay vigilant. And so that's that's what's perplexing the
Speaker 1: market today, David. That seems to be the debate, you know,
Speaker 1: yields rising. The consensus seems to be that if growth comes,
Speaker 1: the FED ist patient does not pull the trigger early,
Speaker 1: then yields continue to rise. At the same time, today
Speaker 1: you have big tech out performing. So what happens to
Speaker 1: those stocks with stretch valuations if we do get that
Speaker 1: prophecy that forecast comes to true coming out of the pandemic. Well,
Speaker 1: you know, so you know a lot of the stress valuations,
Speaker 1: quite frankly, are just in those top five stocks you
Speaker 1: make about twenty three percent of the market, and quite frankly,
Speaker 1: the growth prospects for companies like Microsoft, Amazon, Alphabet UM,
Speaker 1: Apple are really quite strong, so they're probably going to
Speaker 1: be all right. But the real concern is for the
Speaker 1: rank and file. UM, you know, your industrious, your cyclicals,
Speaker 1: you're doing in payers, uh, those that would benefit from infrastructure, UM, payments, UM.
Speaker 1: If you kind of if growth weekends, interest rates go up,
Speaker 1: that's not a great combination for the rest of the market.
Speaker 1: And that's what we're gonna have to watch very carefully. Yeah,
Speaker 1: a lot of focus on the FED right now and
Speaker 1: those megacat tech stocks here in the US, But this
Speaker 1: seems to me like a really global week. Reading this morning,
Speaker 1: a lot of focus on the ECB this Thursday, also
Speaker 1: looking towards Australia, New Zealand, South Korea. How do you
Speaker 1: view the global economy right now and asset prices moving forward?
Speaker 1: Reflected of that, well, you know, in some ways we
Speaker 1: like the global economy from an investment point of view.
Speaker 1: Here's why, you know, is certainly in Europe the percentage
Speaker 1: of vaccination is actually higher than many parts of the
Speaker 1: United States. That's a big positive, while evaluations are much lower,
Speaker 1: and of course interest rates there are are even lower
Speaker 1: than they are here negative in many cases, and so
Speaker 1: I think that's going to continue to drive some money
Speaker 1: into risk assets like stocks. Now, Asia is is a
Speaker 1: tricky situation. Of course. The Chinese stocks sold off um
Speaker 1: because of concerns that the Chinese government was usually raising
Speaker 1: regulations and there's you know, questions as to whether capitalism
Speaker 1: would survive and all that kind of stuff. There were
Speaker 1: actually kind of optimistic as to the outlook because at
Speaker 1: the end of the day, although China talks tough, I
Speaker 1: don't see how they become a real genuine world power
Speaker 1: if they don't have a genuine world class uh private
Speaker 1: uh capitalist system. So there, you know, we're seeing some
Speaker 1: stocks move up today and they were kind of optimistic. Well,
Speaker 1: one person who certainly are not optimistic about that is
Speaker 1: George Soros. We talked earlier about his op ed in
Speaker 1: today's Wall Street Journal. Uh, David, I want to talk
Speaker 1: about the stocks that you're bullish on. Let's start with
Speaker 1: Anheuser Bush. What's going on? Yeah, yeah, so absolutely so
Speaker 1: here is one of the top five consumer products stocks
Speaker 1: in the world. Um, you know, they're by far the
Speaker 1: law just beer maker is something like you know fifteen,
Speaker 1: they have fifteen of the top twenty brand worldwide. So
Speaker 1: the stock was over eighty about eighty in June. Right
Speaker 1: now it is below sixty. So you got marked down
Speaker 1: in in in a company where you can make fun
Speaker 1: of bud here in this country. But the factor matter
Speaker 1: is they have the best distribution network worldwide and sometimes
Speaker 1: that makes a difference in terms of profitability um and
Speaker 1: and of course other things I think are temporary. There
Speaker 1: was is a growth concern on hert Selzer, which was
Speaker 1: proclaimed by uh Austin Beer Sam and I think that's
Speaker 1: way on the beer stocks here. There's also some concern about,
Speaker 1: you know, the delay in the reopening trade. Quite frankly,
Speaker 1: you're going to consume your beer either off in at
Speaker 1: the bar or in the homp is far more profitable
Speaker 1: if you use the former at the bar. And so
Speaker 1: I think you've got an opportunity to buy a world
Speaker 1: class company about off. Of course, they owned two thirds
Speaker 1: of Ambev in Latin America, which has just the total
Speaker 1: lock on the beverage distribution system down there. So we
Speaker 1: think here's a world class company on sale. Snap it up.
Speaker 1: And if you're you're really concerned about growth, I think
Speaker 1: a beer company is something that won't be as sensitive
Speaker 1: to the vagaries of the GDP numbers. David, interesting to
Speaker 1: see x On on the top tics list. Taut me
Speaker 1: through that one. So we have a situation here is
Speaker 1: we're all convinced and we need to go green. The
Speaker 1: problem is investors UM are going green faster in terms
Speaker 1: of how they're handling their portfolio than how consumers. Then
Speaker 1: consumers can go green. So you have a situation where
Speaker 1: you know, people like UH, people like myself are not
Speaker 1: gonna be able to switch off the natural gas that
Speaker 1: we heat our homes in the ensuing winters or trade
Speaker 1: in our cars fast enough UH in order to meet
Speaker 1: those objectives. So I think we're still going to be
Speaker 1: needing lots of UH fossil fossil SHUEL and of course
Speaker 1: x On, being the largest in the world, actually benefits
Speaker 1: when UH capital is starved and taken away from the
Speaker 1: smaller companies, and I think ultimately energy prices will go
Speaker 1: higher in this interim. Here, Exxon, with close to six
Speaker 1: percent dividend as I mentioned UH, totally integrated from upstream
Speaker 1: to downstream chemical operations, is well positioned to take advantage
Speaker 1: of this inter period when oil still has a roll. Hey, David,
Speaker 1: we only have twenty seconds left, but I want you
Speaker 1: to make your case for Wells Fargo, another contrary event
Speaker 1: that was under pressure last week due to regulatory concern
Speaker 1: Well interestingly, with bond prices going up today, one of
Speaker 1: the few sectors that's doing well are the financials because
Speaker 1: they benefit from higher rights rage because that governs the
Speaker 1: price and their best known product. So we write the
Speaker 1: banks and Wells Fargo has we think one of the
Speaker 1: best UM franchises coast to coast, focusing on the middle market,
Speaker 1: and I think once they can lift get that asset
Speaker 1: cap lifted off of them, the stock could return to
Speaker 1: where it was January two, eighteen, above sixty. All right,
Speaker 1: David Deed's managing principle and senior portfolio strategies at Pepack
Speaker 1: Private Wealth Management, We are going to have to leave
Speaker 1: it there. Thank you so much for joining us on
Speaker 1: a Bloomberg Business Week Radio Thanks for listening to Bloomberg
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