WEBVTT - Why Economists are Calling for $1T More in Stimulus 0:00:00.720 --> 0:00:03.720 This is Bloomberg Business Week. I'm Carol Masser and I'm 0:00:03.800 --> 0:00:06.320 Jason Kelly. We're right here every day bringing you the 0:00:06.400 --> 0:00:11.160 latest news from the world's of business and finance, plus technology, politics, economics, 0:00:11.240 --> 0:00:14.280 all harnessing the power of Business Week reporters and editors, 0:00:14.440 --> 0:00:16.439 and of course Carol that's part of a team of 0:00:16.520 --> 0:00:20.439 twenty seven hundred journalists and analysts more than a hundred 0:00:20.480 --> 0:00:23.280 and twenty countries and Jason. You can download Bloomberg Business 0:00:23.280 --> 0:00:26.239 Week on iTunes, SoundCloud, bl Bloomberg dot com. You can 0:00:26.280 --> 0:00:28.600 also listen to our radio show at two pm Eastern 0:00:28.680 --> 0:00:31.560 on Bloomberg Radio every weekday, or watch us on YouTube 0:00:31.600 --> 0:00:37.159 by searching Bloomberg Global News. Well, we're really excited to 0:00:37.240 --> 0:00:40.560 reconnect with our next guests. We last saw him, I believe, 0:00:40.640 --> 0:00:45.000 Carol on campuses, totally on campus earlier this year. Earlier 0:00:45.040 --> 0:00:48.640 this year. Uh, Joel, help us out. When did we 0:00:48.680 --> 0:00:53.040 see you? Was last fall? Wasn't it this past fall? 0:00:53.120 --> 0:00:55.760 That's right, all right, Dr. The voice you're hearing is 0:00:55.840 --> 0:00:58.600 Dr Joel bloom, president of the New Jersey Institudent Technology 0:00:58.680 --> 0:01:00.600 n J. I t we know it, as he joins 0:01:00.680 --> 0:01:03.240 us on the phone from Newark, and that is where 0:01:03.240 --> 0:01:06.039 we last saw him last fall. So Dr Blum, first 0:01:06.040 --> 0:01:08.679 of all, how are you, How are things for you, 0:01:09.000 --> 0:01:12.880 for your family, for your team. We're all well. I 0:01:13.000 --> 0:01:16.520 thank you for the question. The team is doing well. 0:01:17.400 --> 0:01:20.560 We're following all the prescriptions that we can get with 0:01:20.640 --> 0:01:25.520 regard to the c d C, the state of New Jersey, etcetera. 0:01:25.880 --> 0:01:30.240 The campus is open, we are coming to campus. We're 0:01:30.319 --> 0:01:35.080 up to about of the staff now, which is based 0:01:35.120 --> 0:01:39.520 on the guidance of our governor and the various stages 0:01:39.560 --> 0:01:42.680 of faces that have been set up. So thank you. 0:01:42.760 --> 0:01:45.440 We're doing well. I hope you are all doing well. 0:01:46.480 --> 0:01:50.360 We are all things considered concepts of time and had 0:01:50.520 --> 0:01:53.480 made very clearly at the top of the show. Yeah, 0:01:53.520 --> 0:01:56.840 exactly exactly. So tell us about what you're working on, 0:01:56.920 --> 0:02:00.120 because I mean you are you are known you personally, 0:02:00.120 --> 0:02:01.920 and I believe the school, it's fair to say, is 0:02:01.960 --> 0:02:04.600 known for as the kids would say, your collapse, your 0:02:04.640 --> 0:02:10.799 collaborations with local government, and specifically you're working on some 0:02:10.919 --> 0:02:15.120 medical works and mobile medical work importantly, uh, to fight 0:02:15.160 --> 0:02:17.880 COVID nineteen and and to sort of help out with 0:02:18.440 --> 0:02:22.760 the healthcare infrastructure or lack thereof. Tell us about them. Well, 0:02:23.040 --> 0:02:26.639 you're absolutely right. So what we saw in this UH 0:02:26.960 --> 0:02:30.280 COVID nineteen is a lack of facilities, a lack of 0:02:30.560 --> 0:02:34.160 critical infrastructure. So we are working in a free way 0:02:34.240 --> 0:02:38.799 partnership with a group called the Tuckman Foundation, University Hospital 0:02:38.840 --> 0:02:41.280 in Newark and n g I T. So we've put 0:02:41.360 --> 0:02:45.760 medical practitioners together with engineers and we've taken one of 0:02:45.800 --> 0:02:53.239 those cargo containers. We've re refashioned them. We've both of 0:02:53.320 --> 0:02:58.639 them together, if you will, and those become for healthcare units, 0:02:59.280 --> 0:03:04.160 a testing room, a beds, and two of the units UH. 0:03:04.160 --> 0:03:07.280 And we built a prototype, put it on the campus 0:03:07.360 --> 0:03:11.560 of University Hospital in New York and actually ran some 0:03:11.720 --> 0:03:15.720 testing that we did for COVID nineteen. We obviously can 0:03:15.760 --> 0:03:20.680 do reception, UM, we can take record history. So now 0:03:20.720 --> 0:03:25.440 we've created very mobile ease on mobile containers. You've seen 0:03:25.480 --> 0:03:30.919 them stacked up their railways and that at airport's very flexible, 0:03:31.680 --> 0:03:37.360 very mobile, whether it's COVID nineteen or a natural disaster. 0:03:37.880 --> 0:03:40.480 We saw what happened to Puerto Rico and the long 0:03:40.920 --> 0:03:45.360 time and coming back. These you can put them freighters, 0:03:45.800 --> 0:03:47.960 you can put them on trains, you can even put 0:03:48.000 --> 0:03:51.600 them on aeroplanes and move them around the world. So 0:03:51.640 --> 0:03:55.920 we built a prototype the three way partnership of the 0:03:55.920 --> 0:03:58.800 Foundation in the hospital and n g I T built 0:03:59.280 --> 0:04:02.880 and made up rational prototype this past week. That is 0:04:02.920 --> 0:04:06.400 so cool. So tell me, um, Dr Bloom you know, 0:04:06.880 --> 0:04:09.000 so are they going to be put into use? Um, 0:04:09.040 --> 0:04:11.240 you did the prototype. I'm just curious about what kind 0:04:11.240 --> 0:04:14.600 of response you're hearing. What are the thoughts about applications 0:04:14.640 --> 0:04:18.920 and what's the demand? Maybe get them up and running. Um. 0:04:19.000 --> 0:04:21.880 So we put it all out there on the web. Great, 0:04:22.120 --> 0:04:25.080 you know, the great Worldwide Web. We've had I don't 0:04:25.080 --> 0:04:29.159 know so many able to five thousand views a good 0:04:29.279 --> 0:04:34.320 Senator Senadate Booker, Corey Booker king view them. Um, we 0:04:34.400 --> 0:04:38.599 are interested. We'll soon hopefully be talking with SEMA. UM, 0:04:38.920 --> 0:04:43.000 we'll be talking with ni H about the application, and 0:04:43.080 --> 0:04:46.320 we're talking to hospitals, health care units, health care of 0:04:46.600 --> 0:04:51.200 systems about how you would deploy them. We certainly uh, 0:04:51.279 --> 0:04:53.400 and we know about how we're going to produce them. 0:04:53.440 --> 0:04:57.040 We've already got one factory quewed up. We can produce 0:04:57.080 --> 0:05:00.760 about a hundred, about two D beds a week. So 0:05:00.800 --> 0:05:03.839 now that we've prototyped them, we found them to work 0:05:04.640 --> 0:05:08.039 their air conditioned, unlike tents who saw tents go upright 0:05:08.360 --> 0:05:11.479 and then during this crisis during the pandemic, well, tents 0:05:11.520 --> 0:05:14.000 are very hard to heat, they're very hard to chill, 0:05:14.160 --> 0:05:17.800 and they're very hard to keep dry. These are h 0:05:17.880 --> 0:05:22.279 v A C with the state of the art filters. 0:05:22.400 --> 0:05:27.160 Um they can be negative pressurized. Uh, they don't leak, 0:05:27.839 --> 0:05:30.440 they can be warm, they can be chilled, and they 0:05:30.480 --> 0:05:35.919 can be sanitized easily. Um uh so uh, there is 0:05:35.960 --> 0:05:40.600 the replacement to these emergency tents, the applications. They can 0:05:40.640 --> 0:05:45.719 be abed for treating people. They can be diagnostic facilities, 0:05:46.120 --> 0:05:50.680 they can be registration facilities, they can be testing facilities. Again, 0:05:50.880 --> 0:05:56.640 very flexible, plug and play is how these units designed. 0:05:56.760 --> 0:06:00.080 Talk to us about getting students back to campus in 0:06:00.080 --> 0:06:03.240 a meaningful way this fall. You are right there in 0:06:03.279 --> 0:06:06.120 the middle of new work, so you have both the 0:06:06.120 --> 0:06:10.280 benefit and the drawback of a big urban campus. How's 0:06:10.279 --> 0:06:14.520 it gonna work? So the benefit is we're right in 0:06:14.520 --> 0:06:18.200 the middle of two hospitals. One I've already talked about 0:06:18.279 --> 0:06:21.280 University hospital are the ones St. Michael's. They help us 0:06:21.320 --> 0:06:25.200 with all of the testing, all of the contact tracing. 0:06:25.560 --> 0:06:28.360 So we have agreements. We're also working with the County 0:06:28.360 --> 0:06:33.320 of Essex to test everyone before they come back to campus. 0:06:33.640 --> 0:06:37.400 We're anticipating going from what the Governor's named Stage to 0:06:38.240 --> 0:06:42.520 to Stage three, which means up to of our students 0:06:42.839 --> 0:06:48.039 and our faculty and staff. So we're gonna do converge learning. Um, 0:06:48.240 --> 0:06:51.359 we had a lot of practice. We've been doing converged learning, 0:06:51.400 --> 0:06:54.160 which is while the class is going on on campus, 0:06:54.200 --> 0:06:56.120 we can tele caster that you can go on the 0:06:56.160 --> 0:07:00.400 web and participate at home. We've been doing that literally 0:07:00.440 --> 0:07:04.560 since so when we had to come back following Springs 0:07:04.880 --> 0:07:12.120 break this past much of our courses went online. So 0:07:12.280 --> 0:07:16.160 the fall we're going to do about half online and 0:07:16.200 --> 0:07:21.560 about a half in person. As a polytechnic university, we 0:07:21.640 --> 0:07:26.080 are very lab intense, and again you can do simulations 0:07:26.120 --> 0:07:29.840 to some labs, but for many labs you cannot do it. 0:07:30.360 --> 0:07:32.920 And this is part of the curriculum that very often 0:07:33.000 --> 0:07:38.880 leads to licensure or certificates for students. So um, that's 0:07:38.920 --> 0:07:42.480 the plan going forward. We're hoping to move New Jersey 0:07:42.600 --> 0:07:45.760 is hoping to move from Stage to the Stage three. 0:07:46.680 --> 0:07:49.240 You've probably been aware our numbers have been down. We're 0:07:49.320 --> 0:07:53.080 still one of the few green states in the United 0:07:53.160 --> 0:07:57.040 States UM which regard to the spread of the virus. 0:07:57.080 --> 0:08:02.840 So we're anticipating residential students, We're anticipating in class, in 0:08:03.000 --> 0:08:07.640 person students, and we expect to do a signific amount 0:08:07.720 --> 0:08:12.120 of online We will follow all of the everyone will 0:08:12.120 --> 0:08:15.520 get two masks that have been branded with NJA logos. 0:08:15.600 --> 0:08:20.120 Onto will do remote the temperature sensing around the campus 0:08:20.160 --> 0:08:24.560 and kiosks UM and again we are equipped. We'll be 0:08:24.640 --> 0:08:31.480 doing some UM waste water testing in our residential halls. 0:08:31.600 --> 0:08:34.440 And you know, students work in classes and in groups 0:08:34.440 --> 0:08:38.160 and in pods, and we'll be doing some pool testing there. 0:08:38.640 --> 0:08:44.080 So we're trying everything we can to escape our community 0:08:44.280 --> 0:08:49.120 as safe as is possible. So, Joel, I have to 0:08:49.160 --> 0:08:51.199 ask you, because you know, and just got about a 0:08:51.240 --> 0:08:53.720 minute or so left. I we we're watching, you know, 0:08:53.800 --> 0:08:57.360 other UM colleges, universities kind of figure their way back 0:08:57.400 --> 0:09:01.880 and they really are having to figure out hybrid learning. 0:09:01.880 --> 0:09:03.480 All of a sudden, you guys have been doing it, 0:09:03.520 --> 0:09:08.319 as you said, converge learning. Since do you feel like 0:09:08.440 --> 0:09:11.080 we will in the future see a lot more of 0:09:11.120 --> 0:09:13.680 what you guys have been doing for the past few 0:09:13.760 --> 0:09:17.360 years because of what happened of the virus. Does the 0:09:17.559 --> 0:09:24.400 academic academia world, academic world change or change longer term? Yes, 0:09:24.480 --> 0:09:28.280 it does. It's it's going to change because again people 0:09:28.400 --> 0:09:33.160 realize the power of having online learning. Again, not to 0:09:33.320 --> 0:09:36.800 every course, not to every discipline, but it is very 0:09:36.880 --> 0:09:42.679 powerful and it is rather effective. Again, not every discipline, 0:09:43.080 --> 0:09:45.480 not every course. So yes, I think it's been changed 0:09:45.480 --> 0:09:48.800 for ever. Absolutely. Yeah. Well, we've learned a lot from 0:09:48.840 --> 0:09:51.280 you over the years about you know, how you guys 0:09:51.280 --> 0:09:53.280 are looking around the corner when it comes to education. 0:09:53.320 --> 0:09:55.400 So we really appreciate you spending some time with us, 0:09:55.400 --> 0:09:57.679 both on some of the novel things you're doing when 0:09:57.679 --> 0:10:00.920 it comes to partnerships and testing and trade racing, but 0:10:01.040 --> 0:10:04.040 also getting students back to campus. We know it is 0:10:04.120 --> 0:10:06.240 top of mind for us and for so many of 0:10:06.280 --> 0:10:08.840 our listeners out there. So Dr Joel bloom Our, thanks 0:10:08.880 --> 0:10:11.560 to you, President New Jersey Institute of Technology. Join us 0:10:11.640 --> 0:10:14.240 on the phone from Newark, New Jersey. You are listening 0:10:14.320 --> 0:10:17.920 to Bloomberg business Week. Jason Kelly and Carol Master here 0:10:18.040 --> 0:10:21.480 with you. So let's talk a little bit about a 0:10:21.800 --> 0:10:25.440 story that I feel like Business Week has done such 0:10:25.480 --> 0:10:29.240 a great job of capturing Carol, which is this disconnect 0:10:29.320 --> 0:10:33.720 between Wall Street and Main Street. But it's more complicated 0:10:33.720 --> 0:10:36.199 than just the typical like what do investors know that 0:10:36.280 --> 0:10:38.680 you know, regular old folks don't know. Uh, and they're 0:10:38.720 --> 0:10:41.439 continuing to dig into it with a plum as they 0:10:41.480 --> 0:10:44.079 do as we do. Joel Weber is the editor of 0:10:44.120 --> 0:10:47.079 Bloomberg business Week. He joins us along with Mike Reagan. 0:10:47.280 --> 0:10:49.440 He wrote the story. He is, of course, the senior 0:10:49.520 --> 0:10:53.840 editor for Bloomberg Markets. The story investors Can't Stop Dancing 0:10:53.880 --> 0:10:56.880 to the Bull Markets tune. Joelt this up for us, 0:10:58.160 --> 0:11:00.600 So I think, um, I mean, Jason said, like we've 0:11:00.720 --> 0:11:02.960 one of the themes I think of the pandemic that 0:11:03.000 --> 0:11:06.840 we've noticed is just this utter disconnect between the sort 0:11:06.840 --> 0:11:10.120 of the real economy and the stock market. And uh, 0:11:10.160 --> 0:11:12.160 you know we've hit that note in the cover. Um, 0:11:12.640 --> 0:11:15.120 there's ways that we've hit it with even just the 0:11:16.040 --> 0:11:18.880 recent earnings of Wall Street. But you know, this this 0:11:19.160 --> 0:11:22.000 story that Mike did, I thought, really, you know, one 0:11:22.000 --> 0:11:23.559 reason that it really jumped out to me where the 0:11:23.880 --> 0:11:27.280 valuations um. And you know, as as Mike says, like 0:11:27.520 --> 0:11:29.720 very close to the top of the story, the mas deck, 0:11:29.800 --> 0:11:33.080 which obviously just it was that record has uh you know, 0:11:33.080 --> 0:11:36.760 it's the index is valuation thirty four times earnings at 0:11:36.800 --> 0:11:39.760 the highest it thin for fifteen years. When you see 0:11:39.800 --> 0:11:42.720 stuff like that, it just really jumps. It's so, Mike, 0:11:42.800 --> 0:11:46.520 what what what's behind all this? What was the point 0:11:46.559 --> 0:11:48.080 that you were able to kind of dig into in 0:11:48.120 --> 0:11:51.440 the story? Well, you know, uh so what's interesting is 0:11:51.480 --> 0:11:54.000 to me is, Okay, you have this Wall Street investor 0:11:54.080 --> 0:11:57.199 class who was trained to look at the fundamentals. You 0:11:57.240 --> 0:12:00.079 look at the potetrol for earnings, you look at it 0:12:00.120 --> 0:12:03.600 potential for economic growth, all these things, and you know, 0:12:03.640 --> 0:12:06.679 you really have this sort of rigid, sort of mathematical 0:12:06.720 --> 0:12:10.760 approach to how you invest. But sometimes none of that matters, right, 0:12:10.920 --> 0:12:14.760 It's just the market gets in this mode, um you know, 0:12:14.800 --> 0:12:18.320 whether whether you call it animal instincts or whatever, it 0:12:18.440 --> 0:12:23.560 is where um, you know, it just starts ignoring all 0:12:23.600 --> 0:12:25.960 of the problems, all the uncertainty. And one of the 0:12:25.960 --> 0:12:28.719 bigg issues right now is that if you're trying to 0:12:28.880 --> 0:12:32.480 price the stock market based on what you expect the 0:12:32.480 --> 0:12:36.239 earnings to be going forward, well it's it's almost impossible. 0:12:36.280 --> 0:12:38.599 I mean, there are numbers out there, there are, but 0:12:39.160 --> 0:12:41.839 so many companies have withdrawn their guidance that it is. 0:12:42.080 --> 0:12:45.240 It's kind of anyone's guests from an index level, from 0:12:45.280 --> 0:12:48.320 sort of the macro aggregate level level, what the earnings 0:12:48.320 --> 0:12:51.959 pictures is going to look like in the next year. Um. 0:12:52.120 --> 0:12:54.880 So you know, if you go back to the textbooks, 0:12:54.920 --> 0:12:56.959 you're sort of investing one on one that should cause 0:12:57.000 --> 0:13:00.360 an uncertainty, that would cause a risk aversion in the market. 0:13:00.400 --> 0:13:03.720 But we're really seeing the opposite. And see what's fascinating 0:13:03.800 --> 0:13:07.559 is you hear investors. We had Scott Minord of uh 0:13:07.679 --> 0:13:11.920 Guggenheim Investments quoted in the story from a recent Bloomberg 0:13:12.040 --> 0:13:14.680 TV interview, and he says, look to me, it looks 0:13:14.760 --> 0:13:18.600 like a bubble. Now that that sounds scary, but many 0:13:18.640 --> 0:13:21.240 investors who've lived through bubbles, you know, you don't want 0:13:21.280 --> 0:13:23.240 to get out on the ground floor of a bubble. 0:13:23.320 --> 0:13:25.000 You want to be there for the whole thing. So 0:13:25.040 --> 0:13:28.600 it's this sort of awkward, precarious situation where you're you're 0:13:28.600 --> 0:13:30.800 willing to write it higher even though you don't know 0:13:30.840 --> 0:13:32.960 when it's talking in Mike, I feel like we have 0:13:33.040 --> 0:13:36.320 the ultimate insurance policy to prop up the stock market, 0:13:36.400 --> 0:13:39.000 and we've essentially gone from the Greenspan put to the 0:13:39.000 --> 0:13:41.439 bernandcy put to the Powell put. I mean, the FED 0:13:41.840 --> 0:13:45.000 has shown time and time again that when we get 0:13:45.040 --> 0:13:48.160 into any kind of crisis, financial or otherwise, and this 0:13:48.280 --> 0:13:51.200 was initially not a financial crisis, it was a health crisis, 0:13:51.679 --> 0:13:53.560 the FED will be there to make sure that the 0:13:53.600 --> 0:13:57.880 financial markets operate in a liquid and smooth ways. I mean, 0:13:58.000 --> 0:14:01.360 talk about the ultimate insurance policy. Yeah, I mean, and 0:14:01.440 --> 0:14:04.640 that's absolutely part of the bullish case. Uh. For why 0:14:04.760 --> 0:14:07.800 people are willing to sort of ignore the fundamentals for 0:14:07.920 --> 0:14:11.400 now is that, UM. I think the speed with which 0:14:11.440 --> 0:14:14.640 the Federal Reserve reacted U you know, during the financial crisis, 0:14:14.640 --> 0:14:17.160 he was kind of you know, you'd get hit by 0:14:17.200 --> 0:14:21.320 these nasty headlines about damage being done to the assets 0:14:21.360 --> 0:14:23.840 of banks day after day, and it took a while 0:14:23.880 --> 0:14:26.880 through the policy to catch up with that. Um. You know, 0:14:26.920 --> 0:14:30.920 remember the troubled Asset Relief for program, that part program 0:14:31.240 --> 0:14:33.840 that failed in Congress on its first vote back during 0:14:33.880 --> 0:14:36.480 the financial crisis, this kind of the fet both the 0:14:36.520 --> 0:14:40.800 FETE and the Congress reacted very strongly and very swiftly. UM. 0:14:40.880 --> 0:14:44.720 And that's obviously the you know, the main reason to 0:14:44.720 --> 0:14:47.840 stay bullish throughout this, but I would say, you know, 0:14:48.240 --> 0:14:52.760 when you know, doesn't justify getting sort of unhinged completely 0:14:52.840 --> 0:14:56.320 from the fundamentals. UM is what I start to wonder, 0:14:56.320 --> 0:14:59.000 and you wonder how long that can possibly last? You know, 0:14:59.040 --> 0:15:02.040 markets tend to mean revert back to something that sort 0:15:02.080 --> 0:15:06.240 of makes sense fundamentally. So I think most people think 0:15:06.280 --> 0:15:09.800 that process will happen. It's just timing it is next 0:15:09.800 --> 0:15:14.360 to impossible. UM. Likedly. Another element that UM has just 0:15:14.360 --> 0:15:18.560 been such a phenomenon of the sort of the basketble 0:15:18.600 --> 0:15:21.760 months has been the day trading set. And You've got 0:15:21.800 --> 0:15:25.840 some interesting numbers here that I've really stuck out that 0:15:26.000 --> 0:15:32.440 you know, up to you uncertain days can be gage traders. Uh, 0:15:32.520 --> 0:15:35.920 that's almost twice as much as even just a decade ago. Um. 0:15:36.080 --> 0:15:41.520 How much are institutional investors actually like getting from day 0:15:41.560 --> 0:15:44.600 traders and all of this? Yeah? Well there, Yeah, there's 0:15:44.600 --> 0:15:47.680 certainly this push among you know, the hedge hedge fund 0:15:47.720 --> 0:15:50.800 class and sort of the sophisticated investor class to try 0:15:50.840 --> 0:15:54.400 to wrap their heads around what these this new horde 0:15:54.440 --> 0:15:57.000 of day traders are doing. You know, the Robin Hood app, 0:15:57.160 --> 0:15:59.920 the Robin tracker that you have that tracks let's be 0:16:00.120 --> 0:16:03.160 bought on, sold on on Robin Hood UH is very 0:16:03.200 --> 0:16:06.000 popular among the Klands now, mainly because that's kind of 0:16:06.000 --> 0:16:08.680 a window you get into the retail trader that you 0:16:08.760 --> 0:16:11.880 don't necessarily get from some of the other UH discount 0:16:11.920 --> 0:16:15.160 brokerages out there. But I do think also Joel, you know, 0:16:15.240 --> 0:16:19.800 this reduction complete elimination of brokerage fees that we saw 0:16:20.480 --> 0:16:23.040 UH you know in the past year is is another 0:16:23.120 --> 0:16:25.400 huge elemen of it. You know, if there's no friction now, 0:16:25.440 --> 0:16:28.000 if you want to gabble in stocks, you're not paying 0:16:28.080 --> 0:16:30.880 nine dollars a trade or fifteen dollars a trader or 0:16:30.920 --> 0:16:33.200 whatever you know historically used to pay. Now you can 0:16:33.560 --> 0:16:35.840 you know, you can buy a stock for free. Um, 0:16:36.040 --> 0:16:38.800 I mean, you know the obvious complich that is you 0:16:38.800 --> 0:16:40.720 can also sell it for free. So I I do 0:16:40.840 --> 0:16:43.320 think there is a risk of a of a sudden 0:16:43.360 --> 0:16:46.880 sentiment shift among that retail crowd. But you're right the 0:16:47.560 --> 0:16:51.280 volume wise, the fact that retail traders, according to Citadel 0:16:51.600 --> 0:16:53.840 UH can make up a quarter of the volume on 0:16:53.840 --> 0:16:56.400 the stock market on that any day. I mean, that's 0:16:56.440 --> 0:17:00.760 that's rivaling the hedge fund sponson and the amnium chasers 0:17:00.760 --> 0:17:02.360 of the world. So it's a force to be reckoned 0:17:02.400 --> 0:17:04.800 with that. I think paulow Walter, he's trying to wrap 0:17:04.840 --> 0:17:08.600 their head around what's to do with this information coming 0:17:08.680 --> 0:17:11.520 from the new horts of retail traders. Yeah, and the 0:17:11.760 --> 0:17:14.840 last question for you briefly, Mike, is is that a 0:17:14.920 --> 0:17:18.280 lasting phenomenon in your estimation? Mean, no one really knows, 0:17:18.320 --> 0:17:20.800 but obviously part of that has been driven by people 0:17:20.840 --> 0:17:23.159 are at home. Uh, maybe they've got a little bit 0:17:23.160 --> 0:17:25.800 of extra money if if they're lucky. How does this 0:17:25.920 --> 0:17:28.840 change as we find the next normal here? Right? And 0:17:29.000 --> 0:17:33.200 you often see it compared to sort of an entertaining product. 0:17:33.240 --> 0:17:35.560 You know, there's hey there's no on TV, you can 0:17:35.840 --> 0:17:37.600 you can't go to the movies, you can't go to this, 0:17:37.720 --> 0:17:41.560 and can't bet on sports and yeah yeah, so um, 0:17:42.200 --> 0:17:44.400 we'll have to see. I mean, if interesting to see 0:17:44.440 --> 0:17:47.600 if that sort of I does with the return of 0:17:47.640 --> 0:17:50.760 sports and the return of sort of life as it was, 0:17:51.160 --> 0:17:53.680 you know, getting back to normal live events, live concerts 0:17:53.680 --> 0:17:56.000 and that sort of thing. I don't I can't imagine 0:17:56.000 --> 0:17:58.360 it's all just people trading for entertainment, but I think 0:17:58.359 --> 0:18:00.600 it is certainly, you know, people find a lot of 0:18:00.600 --> 0:18:03.000 time on their hands with not much to the life. 0:18:03.000 --> 0:18:06.480 I could certainly feeding it alright, Mike Reagan always a 0:18:06.520 --> 0:18:08.280 treat to catch up with. You are thanks to him. 0:18:08.359 --> 0:18:10.720 Check out his story in the upcoming issue A Business 0:18:10.720 --> 0:18:12.840 Week Our Thinks as well to Joel Webber, editor of 0:18:12.880 --> 0:18:16.960 the magazine. This is Bloomberg Business Week with Carol Masser 0:18:17.080 --> 0:18:21.840 and Jason Kelly on Bloomberg Radio. All right, time to 0:18:21.840 --> 0:18:24.560 the little Business Week Economics. We are so psyched. I 0:18:24.600 --> 0:18:26.680 think that's the technical term to have back with this 0:18:27.480 --> 0:18:31.439 tots to its Christopher Condon, Chris Condon, Federal Reserve and 0:18:31.560 --> 0:18:34.320 US Economy reporter. Fun fact, you know that Chris Condon 0:18:34.359 --> 0:18:36.520 and I were colleagues on the US investing team at 0:18:36.520 --> 0:18:38.800 Bloomberg News. Oh my god, that must have been wild. 0:18:38.920 --> 0:18:40.679 It was wild. He's a man of many tales. I 0:18:40.800 --> 0:18:45.080 love his journalism. This story is Chris con the stories, 0:18:45.240 --> 0:18:48.359 the stories. He's joining us on the phone from Virginia. 0:18:48.520 --> 0:18:50.840 He's on the FED beat now, which is arguably one 0:18:50.840 --> 0:18:54.080 of the most important, not the most important, uh these days. 0:18:54.800 --> 0:18:58.320 So Chris tell us what's going on when we think 0:18:58.359 --> 0:19:01.359 about stimulus, what it's going to be, when it's going 0:19:01.400 --> 0:19:05.080 to be. This is the debate in Washington right now. 0:19:06.119 --> 0:19:08.960 It is. It's a very important debate. Jason. This is 0:19:09.160 --> 0:19:12.920 UH really I think a momentous piece of legislation that's 0:19:13.000 --> 0:19:16.480 desperately needed. It's timing could not be better if they 0:19:16.520 --> 0:19:20.000 wrap it up UM in the next couple of weeks. 0:19:20.040 --> 0:19:23.320 You know that the UH, much of the stimulus that 0:19:23.400 --> 0:19:27.480 came from the Cares Act is winding down, specifically the 0:19:27.800 --> 0:19:32.640 supplemental aid to people on unemployment benefits UM. A lot 0:19:32.680 --> 0:19:36.320 of economists feel that that if that just disappears, it's 0:19:36.359 --> 0:19:39.520 going to create a huge strain in our economy by 0:19:39.640 --> 0:19:42.960 just eliminating a lot of demand, so that it will 0:19:43.040 --> 0:19:47.080 hurt households, it will hurt businesses UM. And in so far, 0:19:47.400 --> 0:19:51.320 it looks like they are making progress towards some kind 0:19:51.400 --> 0:19:55.920 of package that would include both direct payments to households, 0:19:56.359 --> 0:19:58.800 the size of which we don't really know yet UM 0:19:58.920 --> 0:20:03.879 and some extension of the supplemental unemployment benefits those so 0:20:03.960 --> 0:20:06.840 those are really two very important things. Well, but the 0:20:06.960 --> 0:20:10.679 size is really also quite important, and we're yet to 0:20:10.760 --> 0:20:14.960 hear overall numbers. That's right, because we got three trillion 0:20:15.320 --> 0:20:18.160 in terms of a relief package. Chris back in March. Right, 0:20:18.280 --> 0:20:20.600 we got a lot of aid. The package they're talking 0:20:20.600 --> 0:20:23.720 about now is a trillion and I do wonder tell 0:20:23.880 --> 0:20:26.920 us the size of this package what it will mean 0:20:27.160 --> 0:20:32.120 for the economic recovery on the other side of the virus. Right. Well, 0:20:32.119 --> 0:20:35.520 the big thing is that so much income has been lost, 0:20:35.680 --> 0:20:40.280 Carol Um. We still have The numbers are difficult to 0:20:40.320 --> 0:20:43.160 tease out, but there's an estimated twenty five million people 0:20:43.640 --> 0:20:48.760 still receiving unemployment benefits. That's a massive amount of lost 0:20:48.800 --> 0:20:52.120 income that is up to this point largely being replaced 0:20:52.280 --> 0:20:56.520 by government assistance. Some of that replacement has got to continue. 0:20:56.560 --> 0:21:01.920 Without that, consumer spending will drop a end drastically, which 0:21:01.920 --> 0:21:05.200 then feeds on and we begin to worry about what 0:21:05.280 --> 0:21:08.919 Glenn Hubbard say from Harvard caused the demand doom loop 0:21:09.760 --> 0:21:13.800 um Less spending which means more companies layoff people, which 0:21:13.840 --> 0:21:17.200 means more lost income. That's less spending, and so on 0:21:17.240 --> 0:21:23.080 and so on. The vicious cycle that we must absolutely avoid. Uh. 0:21:23.240 --> 0:21:24.880 And some of these things will go a long way 0:21:24.920 --> 0:21:28.120 towards that. Another item that I kept coming up when 0:21:28.119 --> 0:21:31.080 I spoke to economists was aide to h state and 0:21:31.119 --> 0:21:35.680 local and so far we're not really seeing we're we're 0:21:35.680 --> 0:21:39.920 not sure whether that will emerge in this package. Ben 0:21:39.960 --> 0:21:44.240 Bernankee most recently pointed out that after the last recession, 0:21:44.560 --> 0:21:46.720 that was one of the real big headwinds that that 0:21:46.960 --> 0:21:50.520 slowed down the recovery, the fact that federal government did 0:21:50.520 --> 0:21:53.879 not really come through in helping state and local governments, 0:21:53.920 --> 0:21:56.520 so they laid off a lot of people. That was 0:21:56.560 --> 0:21:59.360 a big drag on demand. And and the same will 0:21:59.400 --> 0:22:03.440 happen and the much worse fashion this time. Um. The 0:22:03.760 --> 0:22:07.000 layoffs from state local governments are already something about twice 0:22:07.040 --> 0:22:11.440 as much as happened back after the so called Great Recession. UM. 0:22:11.720 --> 0:22:15.240 So let's talk a little bit about states in and 0:22:15.359 --> 0:22:20.640 municipal aid there, because it feels like, I wonder from 0:22:20.680 --> 0:22:23.760 your perspective, is this a philosophical or is it a 0:22:23.800 --> 0:22:26.879 political debate around that sort of aid or is it both? 0:22:28.400 --> 0:22:31.600 It is really both, UM. I think one of the 0:22:31.640 --> 0:22:34.440 important things that is, and this is a reasonable thing 0:22:34.480 --> 0:22:37.679 to raise for Republicans that what you don't want to 0:22:37.680 --> 0:22:44.040 be doing is helping state and local governments cover up 0:22:44.080 --> 0:22:47.320 holes that were pre existing. Want to help them for 0:22:47.400 --> 0:22:50.760 holes that were created in their budget by the pandemic 0:22:50.880 --> 0:22:53.400 that they had no control over. But you don't want 0:22:53.400 --> 0:22:59.399 to be bailing them out. According to the conservative economic philosophy, 0:22:59.480 --> 0:23:02.000 you don't want to be adding this moral hazard of 0:23:02.040 --> 0:23:08.040 bailing them out for having run their budgets irresponsibly, say 0:23:08.080 --> 0:23:13.639 in years previous UM. And so that's a legitimate concern, um. 0:23:13.640 --> 0:23:17.080 But to be too careful about that, I think would 0:23:17.200 --> 0:23:21.760 leave a lot of UM municipalities and states just running 0:23:21.760 --> 0:23:24.640 into the ditch. The budget short hauls are shortfalls are 0:23:24.720 --> 0:23:27.959 really massive, and in the in the vast majority of 0:23:28.000 --> 0:23:32.520 that is legitimately caused by the drop in revenue associated 0:23:33.080 --> 0:23:37.240 with the shutdowns caused by the coronavirus. I mean, it's 0:23:37.240 --> 0:23:39.240 amazing to think about me. We were talking earlier in 0:23:39.240 --> 0:23:40.879 the show, Chris, but even you look at something like 0:23:40.960 --> 0:23:43.359 the New York City subway, you know, which is so 0:23:43.800 --> 0:23:47.200 intrinsic to the way that the economy runs and relies 0:23:47.320 --> 0:23:50.359