1 00:00:00,160 --> 00:00:03,360 Speaker 1: This is Bloomberg Wall Street Week. What's the state of 2 00:00:03,400 --> 00:00:06,120 Speaker 1: corporate government? So the deficit is a real issue. The 3 00:00:06,200 --> 00:00:09,800 Speaker 1: US economy continues to send mixed signals, the financial stories 4 00:00:09,840 --> 00:00:12,680 Speaker 1: that cheap our world fed action to con concerns over 5 00:00:12,760 --> 00:00:16,239 Speaker 1: dollar liquidity and encouraging China data the five hundred wealthiest 6 00:00:16,239 --> 00:00:18,360 Speaker 1: people in the world. Through the eyes of the most 7 00:00:18,480 --> 00:00:22,520 Speaker 1: influential voices Larry Summers, the former Treasury Secretary, START CEO, 8 00:00:22,680 --> 00:00:26,360 Speaker 1: Kevin Johnson sec Chairman j Clayton. Bloomberg wool Street Week 9 00:00:26,480 --> 00:00:30,680 Speaker 1: with David Weston from Bloomberg Radio. A cold dose of 10 00:00:30,720 --> 00:00:34,440 Speaker 1: reality from the experts and equities appear to pay attention. 11 00:00:34,920 --> 00:00:38,760 Speaker 1: This is Bloomberg Wall Street Week. I'm David Weston. Welcome back. 12 00:00:39,159 --> 00:00:41,320 Speaker 1: Let's turn to the state of Connecticut. Now it has 13 00:00:41,360 --> 00:00:44,159 Speaker 1: had more than thirty thousand COVID cases so far and 14 00:00:44,280 --> 00:00:46,560 Speaker 1: very sadly were the three thousand deaths. But at the 15 00:00:46,600 --> 00:00:49,520 Speaker 1: same time, hospitalizations are coming down as it looks toward 16 00:00:49,560 --> 00:00:52,440 Speaker 1: a possible deadline for maybe some relief from some of 17 00:00:52,440 --> 00:00:54,840 Speaker 1: the restrictions coming up on May twenty were welcome now 18 00:00:54,880 --> 00:00:57,520 Speaker 1: an exclusive interview the governor of the state of Connecticut. 19 00:00:57,520 --> 00:00:59,280 Speaker 1: He is ned Lamont and Mr Governor, thank you so 20 00:00:59,360 --> 00:01:01,520 Speaker 1: much for joining said giving a sense, your sense of 21 00:01:01,560 --> 00:01:04,200 Speaker 1: where the disease is in your state and what do 22 00:01:04,240 --> 00:01:06,240 Speaker 1: you need to see between now and May twenty to 23 00:01:06,280 --> 00:01:08,960 Speaker 1: relieve at least some of those restrictions. Well, Connecticut got 24 00:01:09,000 --> 00:01:11,200 Speaker 1: pretty hard. We were right next to a New York 25 00:01:11,280 --> 00:01:14,920 Speaker 1: city which was many ways the wuhan province of the 26 00:01:14,959 --> 00:01:18,520 Speaker 1: pandemic here in the United States. And but now it's 27 00:01:18,640 --> 00:01:22,280 Speaker 1: uh you know, six weeks later, all those curves are 28 00:01:22,319 --> 00:01:26,960 Speaker 1: bending in the right direction. We have extra hospitalization capacity there, 29 00:01:27,000 --> 00:01:29,640 Speaker 1: which was a key metric. We're finally getting the PP 30 00:01:29,959 --> 00:01:33,880 Speaker 1: We delivered it ourselves, brought it from China, complicated process, 31 00:01:34,000 --> 00:01:36,880 Speaker 1: I might say, we got track and trace and testing 32 00:01:36,920 --> 00:01:39,480 Speaker 1: ready to go, and these are the key metrics we 33 00:01:39,520 --> 00:01:42,360 Speaker 1: needed to give people confidence we could begin to reopen 34 00:01:42,720 --> 00:01:45,560 Speaker 1: on May. Governor, can you give us any sense of 35 00:01:45,600 --> 00:01:47,960 Speaker 1: the distribution across the state, And I mean, I guess 36 00:01:48,040 --> 00:01:51,800 Speaker 1: both socio economic but also geographic. We see some differences 37 00:01:51,840 --> 00:01:53,680 Speaker 1: in some states. In fact, of course New York is 38 00:01:53,720 --> 00:01:56,920 Speaker 1: a larger geographic state. There's gonna be differences in the reopening. 39 00:01:57,000 --> 00:01:59,560 Speaker 1: Is that going to apply in Connecticut? Well, first, of all, UM, 40 00:01:59,800 --> 00:02:03,160 Speaker 1: we were hit in different ways in different regions. You know, 41 00:02:03,240 --> 00:02:06,160 Speaker 1: Fairfield County, which is closest to New York City, was 42 00:02:06,240 --> 00:02:09,680 Speaker 1: hit the hardest, hit the earliest, went right down Metro 43 00:02:09,840 --> 00:02:13,800 Speaker 1: North and up through a Bridgeport New Haven, Hartford. That 44 00:02:13,919 --> 00:02:16,880 Speaker 1: was the area that probably got hit the hardest because 45 00:02:16,919 --> 00:02:19,600 Speaker 1: of the proximity to New York. And now we've got 46 00:02:19,600 --> 00:02:22,359 Speaker 1: eastern Connecticut, which is the New London area, and maybe 47 00:02:22,400 --> 00:02:24,960 Speaker 1: a little bit of Boston is coming down that way 48 00:02:25,000 --> 00:02:28,440 Speaker 1: as well. But we're a pretty small states. So our 49 00:02:28,560 --> 00:02:32,960 Speaker 1: anticipation is we're gonna open on a statewide basis, uh, 50 00:02:33,160 --> 00:02:35,960 Speaker 1: on a very thoughtful way, and on some things, we 51 00:02:35,960 --> 00:02:38,360 Speaker 1: want to do it in the association with our neighboring governors. 52 00:02:38,360 --> 00:02:41,040 Speaker 1: It doesn't do me any good to UM close down 53 00:02:41,040 --> 00:02:43,600 Speaker 1: bars and restaurants if Andrew Cuomo opens them up in 54 00:02:43,639 --> 00:02:47,600 Speaker 1: Westchester County, So we're doing some things in conjunction. Yeah, 55 00:02:47,680 --> 00:02:50,600 Speaker 1: govern As you mentioned, there's so much integration between Connecticut 56 00:02:50,680 --> 00:02:52,720 Speaker 1: and particularly New York City and the New York City area. 57 00:02:53,040 --> 00:02:56,160 Speaker 1: What about those commuter trains, well, that posed a particularly 58 00:02:56,200 --> 00:02:57,520 Speaker 1: challenge for you because we have a lot of people 59 00:02:57,560 --> 00:02:59,639 Speaker 1: going back and forth between Connecticut and New York every 60 00:02:59,639 --> 00:03:02,120 Speaker 1: single on those trains. Uh there were a lot of 61 00:03:02,200 --> 00:03:05,399 Speaker 1: people going back and forth, and we thought about that, 62 00:03:05,800 --> 00:03:10,440 Speaker 1: but within a few weeks ridership was down. So I 63 00:03:10,440 --> 00:03:12,840 Speaker 1: think people have voted with their feet, so to speak. 64 00:03:12,880 --> 00:03:15,400 Speaker 1: They started staying at home and they started telecommuting, or 65 00:03:15,440 --> 00:03:18,239 Speaker 1: they drove if they had to, which was a good thing. 66 00:03:18,400 --> 00:03:20,919 Speaker 1: So um governor call and I thought about what we 67 00:03:20,960 --> 00:03:24,040 Speaker 1: should do with sayt Metro North the rail system decided 68 00:03:24,080 --> 00:03:26,560 Speaker 1: it was probably first responders and people that really had 69 00:03:26,600 --> 00:03:28,520 Speaker 1: no other way to get to work. So we did 70 00:03:28,600 --> 00:03:31,720 Speaker 1: keep it open on a limited basis. But as you reopen, 71 00:03:31,840 --> 00:03:34,920 Speaker 1: as as we reopened, will we'll be looking at certain curtailment, 72 00:03:34,960 --> 00:03:37,720 Speaker 1: for example, a capacity of the seating arrangement, things like that. 73 00:03:37,760 --> 00:03:40,520 Speaker 1: In the commuter trains, we're certainly going to be very 74 00:03:40,560 --> 00:03:44,920 Speaker 1: strict about um uh de sanitizing and making sure everything 75 00:03:45,000 --> 00:03:48,160 Speaker 1: is clean on a real basis, probably gonna discourage people 76 00:03:48,240 --> 00:03:51,160 Speaker 1: from going in the train for the near term, Probably 77 00:03:51,280 --> 00:03:54,800 Speaker 1: gonna strongly recommended everybody used mass in the train for 78 00:03:54,840 --> 00:03:57,320 Speaker 1: the near term. But I think even bigger, I think 79 00:03:57,320 --> 00:04:00,400 Speaker 1: you're gonna find that um the old idea of the 80 00:04:00,440 --> 00:04:03,120 Speaker 1: commuter going into New York City five days a week. 81 00:04:03,200 --> 00:04:05,560 Speaker 1: Maybe an idea of this behind us. I think we 82 00:04:05,680 --> 00:04:09,680 Speaker 1: found at the end of this COVID session UM that 83 00:04:09,760 --> 00:04:12,720 Speaker 1: we're realizing the telecommunity in many cases work. So maybe 84 00:04:12,720 --> 00:04:14,680 Speaker 1: you have a great job that seems to be a 85 00:04:14,720 --> 00:04:17,599 Speaker 1: geographically located New York City you can do with two 86 00:04:17,640 --> 00:04:19,960 Speaker 1: thirds of the time from you're a home in Stanford. 87 00:04:20,279 --> 00:04:24,360 Speaker 1: As you look towards possible reopening, Uh, what is your 88 00:04:24,400 --> 00:04:27,719 Speaker 1: situation this stick to testing sort of tracing and hospital capacity. 89 00:04:27,760 --> 00:04:30,080 Speaker 1: You said you have the hospital capacity you need right now, 90 00:04:30,279 --> 00:04:32,800 Speaker 1: but in case there's a flare up, how much capacity 91 00:04:32,800 --> 00:04:34,560 Speaker 1: do you have to deal with it? Well, we have 92 00:04:35,320 --> 00:04:39,840 Speaker 1: capacity now, and I think that's a pretty good benchmark. 93 00:04:39,880 --> 00:04:42,360 Speaker 1: If there's a flare up, I would rethink things if 94 00:04:42,360 --> 00:04:45,599 Speaker 1: we got the eighty or nine capacity. Obviously we have 95 00:04:45,720 --> 00:04:48,040 Speaker 1: capacity now. In fact, they're going back and doing some 96 00:04:48,120 --> 00:04:51,560 Speaker 1: of the so called electors, many of which were important 97 00:04:51,560 --> 00:04:55,040 Speaker 1: operations that were put off and should be taking place now. 98 00:04:56,360 --> 00:04:59,240 Speaker 1: The testing, UM, we've ramped that up. We're doubled it 99 00:04:59,279 --> 00:05:01,680 Speaker 1: from last week. We'll double it again next week. So 100 00:05:01,720 --> 00:05:04,440 Speaker 1: we'll be doing about forty two thousand tests a week 101 00:05:04,640 --> 00:05:07,760 Speaker 1: starting next week. Governor. You mentioned that PPE, that personal 102 00:05:07,760 --> 00:05:10,440 Speaker 1: protective equipment that you bought from China, a fair amount 103 00:05:10,440 --> 00:05:12,280 Speaker 1: of it. Now, have you had any issues with the 104 00:05:12,400 --> 00:05:14,479 Speaker 1: quality of that, because there have been some other places 105 00:05:14,520 --> 00:05:16,680 Speaker 1: around the world and even around the country who bought 106 00:05:16,760 --> 00:05:18,320 Speaker 1: things from China and it turns out it didn't work 107 00:05:18,320 --> 00:05:21,080 Speaker 1: so well. Whether it's testing kits or whether it's PPE. 108 00:05:21,400 --> 00:05:24,400 Speaker 1: We had to be very careful and how you vet this, 109 00:05:24,560 --> 00:05:27,760 Speaker 1: that's that's a good question. And let's face it, you know, 110 00:05:28,000 --> 00:05:30,200 Speaker 1: a month or so ago when people were really scrambling 111 00:05:30,240 --> 00:05:32,440 Speaker 1: the globe, but everybody had a friend who had a 112 00:05:32,480 --> 00:05:35,040 Speaker 1: cousin in Ukraine who did some work with Rhody Giuliani, 113 00:05:35,279 --> 00:05:37,479 Speaker 1: and you didn't know where you were getting this stuff from. 114 00:05:38,080 --> 00:05:40,040 Speaker 1: We didn't do any of that, but we found this. 115 00:05:40,200 --> 00:05:43,360 Speaker 1: We vetted it very carefully, working closely with the government 116 00:05:43,440 --> 00:05:47,039 Speaker 1: of China, working with some strong relationships we had here 117 00:05:47,080 --> 00:05:49,640 Speaker 1: with the business people in Connecticut. So I have it 118 00:05:49,720 --> 00:05:53,039 Speaker 1: on high confidence this is the right stuff going forward. 119 00:05:53,080 --> 00:05:56,040 Speaker 1: And you've been coordinating with Governor Cuomo, Governor Murphy down 120 00:05:56,040 --> 00:05:57,960 Speaker 1: in New Jersey and things like that. Do you envision 121 00:05:57,960 --> 00:06:00,120 Speaker 1: a world in which those three states and maybe more 122 00:06:00,120 --> 00:06:03,760 Speaker 1: really get together in the manufacturing and purchasing a ppe 123 00:06:03,760 --> 00:06:06,520 Speaker 1: and stockpiling. Yeah, I think that makes all the sense 124 00:06:06,520 --> 00:06:09,039 Speaker 1: in the world. You know, we've got a buying consortium now, 125 00:06:09,080 --> 00:06:11,920 Speaker 1: so it's not little Connecticut going all the way to 126 00:06:12,000 --> 00:06:14,760 Speaker 1: China to buy this product. But even more importantly, we 127 00:06:14,760 --> 00:06:17,560 Speaker 1: ought to figure out who is good at manufacturing what. 128 00:06:17,760 --> 00:06:20,479 Speaker 1: We've got a facility here in this state that makes vents. 129 00:06:20,640 --> 00:06:23,839 Speaker 1: Gina Romando up in Rhode Island has a growth that's 130 00:06:23,880 --> 00:06:27,159 Speaker 1: making a mass in a significant way. Phil Murphy. They've 131 00:06:27,200 --> 00:06:29,440 Speaker 1: got some of the best pharma in the country and 132 00:06:29,480 --> 00:06:31,960 Speaker 1: are doing the saliva tests. So I think there are 133 00:06:31,960 --> 00:06:34,120 Speaker 1: a lot of ways we can mix and match. That 134 00:06:34,200 --> 00:06:38,960 Speaker 1: was Connecticut Governor Ned Lamont coming up looking for green shoots. 135 00:06:39,400 --> 00:06:42,480 Speaker 1: Could the auto industry point the way toward a rebound? 136 00:06:43,000 --> 00:06:45,400 Speaker 1: We talked with Wall Street veteran and architect of the 137 00:06:45,440 --> 00:06:49,160 Speaker 1: auto industry recovery, Steve Rattner. That's next on Wall Street 138 00:06:49,200 --> 00:06:58,640 Speaker 1: Week on Bloombergo. This is Bloomberg Wall Street Week with 139 00:06:58,800 --> 00:07:02,919 Speaker 1: David weston bloom Bird Radio. Whether driven by electricity or 140 00:07:02,960 --> 00:07:07,040 Speaker 1: internal combustion engines, autobiles have long been an important indicator 141 00:07:07,080 --> 00:07:10,160 Speaker 1: of the overall economy. And they may be showing some 142 00:07:10,280 --> 00:07:13,320 Speaker 1: slight signs of a rebound. Steve Ratner is a veteran 143 00:07:13,320 --> 00:07:15,880 Speaker 1: of Wall Street who also headed up Prisoner Obama's efforts 144 00:07:15,960 --> 00:07:18,400 Speaker 1: to save the auto industry, and we asked him whether 145 00:07:18,440 --> 00:07:21,600 Speaker 1: he could see some indications of a rebound overall economy 146 00:07:21,840 --> 00:07:24,400 Speaker 1: from what we're seeing from autobiles. David, I think we 147 00:07:24,480 --> 00:07:28,240 Speaker 1: have to be careful not to be misled by early 148 00:07:28,320 --> 00:07:30,880 Speaker 1: signs of what may seem like spring we are going 149 00:07:30,960 --> 00:07:32,760 Speaker 1: to see. And there's already a little bit of a 150 00:07:32,800 --> 00:07:35,720 Speaker 1: tiny little bit of evidence of a pick up in 151 00:07:35,840 --> 00:07:39,600 Speaker 1: car sales from obviously an abysmally low level in the 152 00:07:39,640 --> 00:07:43,520 Speaker 1: month of a month of April. But this is this 153 00:07:43,680 --> 00:07:47,440 Speaker 1: is all going to be relatively small potatoes compared to 154 00:07:47,600 --> 00:07:49,640 Speaker 1: the distance we have to go to get back to 155 00:07:49,680 --> 00:07:52,320 Speaker 1: where we were before all this started. And I am 156 00:07:52,680 --> 00:07:55,920 Speaker 1: pretty pessimistic about our ability to get back to that 157 00:07:55,960 --> 00:08:00,800 Speaker 1: point at any time in the immediate or imaginable future. Well, 158 00:08:00,800 --> 00:08:03,520 Speaker 1: we heard some of the pessismism, or at least realism 159 00:08:03,560 --> 00:08:06,400 Speaker 1: perhaps from the Fed chair J. Powey and his remarks 160 00:08:06,400 --> 00:08:10,360 Speaker 1: where he really warned about things like mass bankruptcy and unemployment. 161 00:08:10,480 --> 00:08:13,640 Speaker 1: If we don't do even more in the financial financial, 162 00:08:13,760 --> 00:08:16,680 Speaker 1: the fiscal and the monetary side. Is there more that 163 00:08:16,840 --> 00:08:20,880 Speaker 1: Cannon should be done to try to bring that recovery sooner? Yes, absolutely, 164 00:08:21,000 --> 00:08:24,880 Speaker 1: I I am completely in agreement with Chairman Powell, not 165 00:08:24,920 --> 00:08:29,080 Speaker 1: that he needs my support for his for his thoughts. Look, 166 00:08:29,280 --> 00:08:31,400 Speaker 1: as I said, I think I think the notion that 167 00:08:31,440 --> 00:08:33,880 Speaker 1: we are facing a V shaped recovery where it's all 168 00:08:33,920 --> 00:08:35,800 Speaker 1: going to bounce back. Car sales are gonna go back 169 00:08:35,840 --> 00:08:38,640 Speaker 1: to seventeen million, people are going to travel and spend 170 00:08:38,880 --> 00:08:40,720 Speaker 1: and go to Disney World and all those kinds of 171 00:08:40,760 --> 00:08:43,880 Speaker 1: things is frankly a fantasy. Uh. This has been an 172 00:08:44,000 --> 00:08:47,320 Speaker 1: enormous shock to the economic system. There's been much permanent 173 00:08:47,480 --> 00:08:50,760 Speaker 1: job loss. Factories that are never going to reopen, restaurants 174 00:08:50,800 --> 00:08:53,000 Speaker 1: that are never going to reopen, companies that are never 175 00:08:53,040 --> 00:08:54,920 Speaker 1: going to rehire back or at least not in the 176 00:08:54,960 --> 00:08:57,880 Speaker 1: foreseeable future, all the people that they have laid off. 177 00:08:58,200 --> 00:09:00,280 Speaker 1: And so we do need to do more. But I 178 00:09:00,320 --> 00:09:04,080 Speaker 1: think it needs to be not just providing income support 179 00:09:04,160 --> 00:09:07,280 Speaker 1: to Americans who have lost their jobs and businesses that 180 00:09:07,320 --> 00:09:09,720 Speaker 1: are in danger of failing, but also we need to 181 00:09:09,760 --> 00:09:13,680 Speaker 1: really rebuild America. We need to finally do something on infrastructure. 182 00:09:13,960 --> 00:09:16,920 Speaker 1: We need to do something about retraining and finding jobs 183 00:09:17,240 --> 00:09:18,880 Speaker 1: for the people who are not going back to their 184 00:09:18,920 --> 00:09:21,520 Speaker 1: old jobs, because this whole economy is going to shift 185 00:09:21,559 --> 00:09:25,760 Speaker 1: into a somewhat different focus. And so yeah, there's an 186 00:09:25,840 --> 00:09:28,280 Speaker 1: enormous amount of Congress can do. The question is whether 187 00:09:28,320 --> 00:09:30,480 Speaker 1: they have the will to do it. In the meantime, 188 00:09:30,520 --> 00:09:32,880 Speaker 1: we have a big investors trying to decide what to do. 189 00:09:32,920 --> 00:09:35,560 Speaker 1: We heard Stanley Duckomer and on temperate thing. They're very 190 00:09:35,600 --> 00:09:39,640 Speaker 1: concerned with the equity markets, being overallly optimistic about the future. 191 00:09:39,679 --> 00:09:41,880 Speaker 1: As an investor, what do you do in that environment 192 00:09:42,000 --> 00:09:44,400 Speaker 1: where equities actually a bounced back a long way from 193 00:09:44,400 --> 00:09:47,120 Speaker 1: the trial frankly, and they may not be justified by 194 00:09:47,120 --> 00:09:49,080 Speaker 1: the economic data. I think many of us have been 195 00:09:49,080 --> 00:09:52,680 Speaker 1: scratching our heads about the resurgence of the equity market, 196 00:09:52,840 --> 00:09:56,920 Speaker 1: and we can debate the reasons for it. Uh. I 197 00:09:56,960 --> 00:10:00,480 Speaker 1: think the most important reason is probably all the liquidity 198 00:10:00,559 --> 00:10:03,720 Speaker 1: the FED has pumped into the system. But nonetheless, I 199 00:10:03,760 --> 00:10:05,920 Speaker 1: think what Stanley Druck and Miller and David Tepper and 200 00:10:05,960 --> 00:10:08,840 Speaker 1: others have been saying makes a lot of sense in 201 00:10:08,960 --> 00:10:11,880 Speaker 1: terms of being concerned about the level of the equity market. 202 00:10:12,280 --> 00:10:14,600 Speaker 1: How do you hedge it? Well, the simplest thing to 203 00:10:14,600 --> 00:10:17,720 Speaker 1: do is simply sell. Uh. There are then if you 204 00:10:17,880 --> 00:10:20,640 Speaker 1: if you for whatever reason want something more esoteric, you 205 00:10:20,679 --> 00:10:22,959 Speaker 1: can do things with options. You can do things with 206 00:10:23,040 --> 00:10:26,400 Speaker 1: tail risk. There are more sophisticated ways. But at the 207 00:10:26,440 --> 00:10:29,520 Speaker 1: bottom line is either if you don't have a positive 208 00:10:29,559 --> 00:10:32,240 Speaker 1: view about the equity market, you simply need to reduce 209 00:10:32,280 --> 00:10:35,600 Speaker 1: your exposure to the equity market, give up the possible upside, 210 00:10:35,640 --> 00:10:38,800 Speaker 1: and protect yourself again against the downside. We still are 211 00:10:38,840 --> 00:10:41,000 Speaker 1: in a world of quite efficient markets and are no 212 00:10:41,440 --> 00:10:45,320 Speaker 1: silver bullets or magic ways to take out the downside 213 00:10:45,600 --> 00:10:48,360 Speaker 1: but keep the upside. So I guess it was Margaret 214 00:10:48,400 --> 00:10:51,439 Speaker 1: Thatchrick to talk about Tina that there is no alternative. 215 00:10:51,760 --> 00:10:53,319 Speaker 1: Is there an alternative? I mean you have to put 216 00:10:53,320 --> 00:10:55,920 Speaker 1: your money somewhere. Is it better off under the mattress 217 00:10:56,000 --> 00:10:58,800 Speaker 1: or there are other asset classes that offer at least 218 00:10:58,840 --> 00:11:01,840 Speaker 1: some solace. I don't think there are any. Again, there's 219 00:11:01,880 --> 00:11:06,080 Speaker 1: no magic bullets or simple solutions. Part of again, why 220 00:11:06,120 --> 00:11:09,400 Speaker 1: the equity markets have been so robust is because people 221 00:11:09,440 --> 00:11:12,680 Speaker 1: look around and see relatively interest rates relatively near zero 222 00:11:13,200 --> 00:11:15,640 Speaker 1: and decide that's not a particularly attractive place to put 223 00:11:15,679 --> 00:11:17,920 Speaker 1: their money. And you can make two or three percent 224 00:11:18,040 --> 00:11:19,760 Speaker 1: just on the dividend yield on the S and T, 225 00:11:20,000 --> 00:11:22,760 Speaker 1: so that seems pretty interesting. But then you're taking all 226 00:11:22,840 --> 00:11:27,000 Speaker 1: this risk on your actual capital value. UM. So no, 227 00:11:27,200 --> 00:11:29,680 Speaker 1: there are no there are again, there are unfortunately no 228 00:11:29,960 --> 00:11:32,280 Speaker 1: secret places you can put your money. I don't think 229 00:11:32,280 --> 00:11:36,840 Speaker 1: any of us feel that corporate credit, corporate bonds, things 230 00:11:36,920 --> 00:11:40,400 Speaker 1: like that are particularly attractive at these levels either, and 231 00:11:40,520 --> 00:11:43,760 Speaker 1: so I think the best advice I would give would 232 00:11:43,800 --> 00:11:46,960 Speaker 1: be a mix of some equity exposure so that if 233 00:11:47,240 --> 00:11:49,720 Speaker 1: in fact it turns out these levels of the stock 234 00:11:49,760 --> 00:11:52,640 Speaker 1: market makes some sense, you can participate in it with 235 00:11:52,679 --> 00:11:57,800 Speaker 1: good companies, combined with maintaining a very low leverage level 236 00:11:57,840 --> 00:12:00,120 Speaker 1: of leverage if any at all, and a high on 237 00:12:00,160 --> 00:12:02,120 Speaker 1: a high amount of a cash balance on which you 238 00:12:02,120 --> 00:12:04,280 Speaker 1: should not expect to earn any interest, but you're not 239 00:12:04,280 --> 00:12:07,120 Speaker 1: gonna lose any money. And what about cross border exposure. 240 00:12:07,160 --> 00:12:09,440 Speaker 1: There's a lot of talk now that the supply chains 241 00:12:09,480 --> 00:12:11,400 Speaker 1: may never be the same. Certainly there's a lot of 242 00:12:11,400 --> 00:12:14,800 Speaker 1: focus on China right now, with the President really certainly 243 00:12:14,880 --> 00:12:18,040 Speaker 1: rattling a saber about China. Does that indicate that you're 244 00:12:18,080 --> 00:12:21,760 Speaker 1: better off with more domestic exposure and not as exposed 245 00:12:21,800 --> 00:12:25,400 Speaker 1: to globalization. We have to see how that unfolds. There's 246 00:12:25,400 --> 00:12:28,040 Speaker 1: certainly a lot of talk by the President, but frankly, 247 00:12:28,080 --> 00:12:31,439 Speaker 1: with the president is mostly talked. There's some talk among 248 00:12:31,600 --> 00:12:33,320 Speaker 1: c e O s and that we should pay close 249 00:12:33,360 --> 00:12:36,120 Speaker 1: attention to. I think we've all learned a lesson here 250 00:12:36,160 --> 00:12:38,800 Speaker 1: about long supply chains. But as we look around the 251 00:12:38,840 --> 00:12:43,280 Speaker 1: world as investors, we find Europe exceedingly uninteresting. UH. They 252 00:12:43,280 --> 00:12:46,840 Speaker 1: have huge structural problems. Their companies are not the companies 253 00:12:46,960 --> 00:12:49,600 Speaker 1: that are most likely to do well, and in post 254 00:12:49,640 --> 00:12:54,280 Speaker 1: COVID environment, a lot of old economy industrial companies. China 255 00:12:54,360 --> 00:12:57,720 Speaker 1: has done and is continuing to do amazingly well, both 256 00:12:57,760 --> 00:13:00,560 Speaker 1: in terms of keeping the virus under troll but in 257 00:13:00,600 --> 00:13:04,040 Speaker 1: getting people back to work and in UH and in 258 00:13:04,120 --> 00:13:07,880 Speaker 1: getting their economy going again. And the biggest risk in 259 00:13:07,960 --> 00:13:10,959 Speaker 1: China is the one that you identified, which is essentially 260 00:13:10,960 --> 00:13:14,800 Speaker 1: will they have customers either because the economies elsewhere not 261 00:13:14,840 --> 00:13:17,360 Speaker 1: in great shape or because the supply lines are too long. 262 00:13:17,760 --> 00:13:20,640 Speaker 1: We'll have to see how that infolds. But we have 263 00:13:20,800 --> 00:13:23,720 Speaker 1: been before all this and continue to be as an 264 00:13:23,760 --> 00:13:27,479 Speaker 1: economic matter, not as a political matter, not as a 265 00:13:27,480 --> 00:13:29,760 Speaker 1: any other matter of that sort, but as a purely 266 00:13:29,800 --> 00:13:33,640 Speaker 1: economic matter. We continue to find China very interesting as 267 00:13:33,679 --> 00:13:38,360 Speaker 1: investors and are disproportionately invested. There is the big issue 268 00:13:38,440 --> 00:13:39,920 Speaker 1: right now for the United States and maybe for the 269 00:13:39,920 --> 00:13:42,480 Speaker 1: globe demand. I mean we hear about things like demand 270 00:13:42,480 --> 00:13:46,000 Speaker 1: destruction or or a doom loop. Is that what you 271 00:13:46,080 --> 00:13:48,000 Speaker 1: believe Sherman Power was talking about and he said there 272 00:13:48,000 --> 00:13:50,880 Speaker 1: could be really long term, maybe even permanent damage the economy. 273 00:13:51,000 --> 00:13:54,400 Speaker 1: Are we in danger of permanently destroying demand? I think 274 00:13:54,400 --> 00:13:56,560 Speaker 1: we have a problem on both the supply and the 275 00:13:56,600 --> 00:13:59,240 Speaker 1: demand side. We clearly have a problem on the demand 276 00:13:59,280 --> 00:14:02,280 Speaker 1: side when you have what is effectively when you make 277 00:14:02,360 --> 00:14:05,840 Speaker 1: the right adjustments and things, probably of Americans out of 278 00:14:05,840 --> 00:14:10,120 Speaker 1: work getting their unemployment insurance but not their their real wages, 279 00:14:10,160 --> 00:14:14,440 Speaker 1: and with huge uncertainty since the unemployment insurance does expire 280 00:14:14,480 --> 00:14:18,280 Speaker 1: the extra six dollars after eight weeks, obviously people are 281 00:14:18,280 --> 00:14:20,720 Speaker 1: going to spend less. And of course when they're essentially 282 00:14:20,800 --> 00:14:22,720 Speaker 1: trapped in their houses, they're going to spend less. And 283 00:14:22,760 --> 00:14:25,520 Speaker 1: you see that in the consumer spending data that was 284 00:14:25,560 --> 00:14:28,880 Speaker 1: Steve Rattner, Chairman and CEO of Will and Advisers, which 285 00:14:28,920 --> 00:14:32,560 Speaker 1: invests the private and filmthropic funds of Michael R. Bloomberg, 286 00:14:32,880 --> 00:14:36,280 Speaker 1: the founder of our parent company, Coming Up. Oil has 287 00:14:36,320 --> 00:14:39,360 Speaker 1: added to the concern over the economy overall. We talk 288 00:14:39,480 --> 00:14:42,720 Speaker 1: with Dan Boreyette, Secretary of the Department of Energy, about 289 00:14:42,760 --> 00:14:46,360 Speaker 1: the prospects for oil. That's next on Wall Street Week 290 00:14:46,640 --> 00:14:55,520 Speaker 1: on Bloomberg. This is Bloomberg Wall Street Week with David 291 00:14:55,560 --> 00:14:58,880 Speaker 1: Weston from Bloomberg Radio. Oil has been one of the 292 00:14:58,960 --> 00:15:03,200 Speaker 1: darkest corners a gloomy economic picture, but with Saudi Arabia 293 00:15:03,280 --> 00:15:07,280 Speaker 1: this week announcing unilateral production cuts, things may be looking up. 294 00:15:07,440 --> 00:15:10,320 Speaker 1: That's what Secretary of Energy Dan Briette says, anything that 295 00:15:10,360 --> 00:15:13,360 Speaker 1: applies to both the supply and the demand side. Yes, 296 00:15:13,400 --> 00:15:15,600 Speaker 1: it is starting to look really good. Has the President 297 00:15:15,600 --> 00:15:18,240 Speaker 1: has been saying for quite some time now. We're on 298 00:15:18,320 --> 00:15:20,560 Speaker 1: the verge of a transition to greatness and we're starting 299 00:15:20,600 --> 00:15:22,360 Speaker 1: to see it. We now have states that are opening, 300 00:15:22,600 --> 00:15:26,480 Speaker 1: there are local economies that represents roughly the gasoline demand 301 00:15:26,880 --> 00:15:30,280 Speaker 1: in the United States. We're starting to see oil prices stabilize. 302 00:15:30,720 --> 00:15:33,080 Speaker 1: I think it's very important to note that, um, you know, 303 00:15:33,160 --> 00:15:36,440 Speaker 1: this increase is good for consumers in the sense of 304 00:15:36,560 --> 00:15:39,880 Speaker 1: jobs are protected all across the economy, and we see 305 00:15:39,960 --> 00:15:43,280 Speaker 1: no dramatic impact on gasoline prices across the country, which 306 00:15:43,320 --> 00:15:45,680 Speaker 1: I think is very important as well. So Mr Secretary, 307 00:15:45,720 --> 00:15:47,320 Speaker 1: take us behind the scenes a little bit, if you can. 308 00:15:47,920 --> 00:15:50,160 Speaker 1: We know the President Trump has a very good relationship 309 00:15:50,200 --> 00:15:53,000 Speaker 1: with the Crown Princess Saudi Arabia, Mohammad ben Sell Mine 310 00:15:53,520 --> 00:15:55,880 Speaker 1: was that cut at all something that the President helped 311 00:15:56,120 --> 00:16:00,560 Speaker 1: encourage or even arrange. The Presidents have been personally engaged 312 00:16:00,600 --> 00:16:03,520 Speaker 1: in this conversation for the last few weeks. Um. You know, 313 00:16:03,520 --> 00:16:07,000 Speaker 1: as we talked about in the past, OPEC began its 314 00:16:07,040 --> 00:16:10,320 Speaker 1: conversations around the March time frame, early March time frame, 315 00:16:10,880 --> 00:16:14,040 Speaker 1: and Saudi Arabia and Russia got themselves into a bit 316 00:16:14,040 --> 00:16:18,360 Speaker 1: of a dispute over their production numbers. And when the 317 00:16:18,720 --> 00:16:21,680 Speaker 1: Saudi's decided to take some actions right at the beginning 318 00:16:21,680 --> 00:16:24,400 Speaker 1: of this pandemic that led to both increased production and 319 00:16:24,440 --> 00:16:27,840 Speaker 1: a reduction in the pricing of oil across the world. 320 00:16:27,920 --> 00:16:31,320 Speaker 1: That impacted the U S producers very dramatically. And the 321 00:16:31,320 --> 00:16:33,800 Speaker 1: President saw that early. He engaged with the head of 322 00:16:33,840 --> 00:16:36,920 Speaker 1: state in both countries, both Russia. He's talked to President 323 00:16:36,960 --> 00:16:40,040 Speaker 1: Putin several times, and he's also engaged personally with the 324 00:16:40,120 --> 00:16:43,720 Speaker 1: King of Saudi Arabia. The point of those conversations is 325 00:16:43,760 --> 00:16:46,480 Speaker 1: to bring stability to the marketplace and stability to the 326 00:16:46,520 --> 00:16:49,560 Speaker 1: producing community, and that's really our goal here. Is there 327 00:16:49,600 --> 00:16:52,120 Speaker 1: any risk that actually the US Prussian may come back 328 00:16:52,200 --> 00:16:54,920 Speaker 1: too far, too fast? I mean, I just read there's 329 00:16:55,040 --> 00:16:57,240 Speaker 1: energy transfer LP came out and said that at least 330 00:16:57,240 --> 00:16:59,960 Speaker 1: in the premium basin that actually shales coming about quite fast. 331 00:17:00,040 --> 00:17:01,960 Speaker 1: US that went down about eight percent, and now a 332 00:17:02,040 --> 00:17:04,000 Speaker 1: full quarter that is back online. Are you at all 333 00:17:04,040 --> 00:17:06,679 Speaker 1: concerned that that might undermine some of the efforts here 334 00:17:06,720 --> 00:17:10,480 Speaker 1: to stabilize the price. No, I don't think so, David. 335 00:17:10,480 --> 00:17:12,560 Speaker 1: I think what we're gonna see here very shortly, If 336 00:17:12,880 --> 00:17:15,920 Speaker 1: if you're familiar with our Energy Information Administration what we 337 00:17:16,040 --> 00:17:18,399 Speaker 1: referred to as e i A. They just put out 338 00:17:18,440 --> 00:17:21,879 Speaker 1: a report. It talks about the economic boom that I 339 00:17:21,920 --> 00:17:23,840 Speaker 1: think we're just on the verge of seeing. So the 340 00:17:23,880 --> 00:17:27,240 Speaker 1: third and fourth quarters in twenty and certainly into twenty 341 00:17:27,240 --> 00:17:29,879 Speaker 1: one are going to be very very robust. So the 342 00:17:29,920 --> 00:17:32,919 Speaker 1: production will come back online as this economy begins to 343 00:17:33,000 --> 00:17:35,359 Speaker 1: take off. And if you look at those numbers, I 344 00:17:35,400 --> 00:17:39,320 Speaker 1: think you'll see that that that what the President has 345 00:17:39,359 --> 00:17:43,080 Speaker 1: referred to as a V shaped recovery looks very clear 346 00:17:43,119 --> 00:17:45,280 Speaker 1: in the charts right now, so you'll see the production 347 00:17:45,400 --> 00:17:48,359 Speaker 1: tend to match that V shaped curve. So Mr. Sextually, 348 00:17:48,359 --> 00:17:49,840 Speaker 1: it wasn't that long ago we were talking about what 349 00:17:49,920 --> 00:17:52,840 Speaker 1: kinds of accommodations you need to make. The President designated you, 350 00:17:52,960 --> 00:17:55,120 Speaker 1: along with Secretary Manution, to really help out the US 351 00:17:55,160 --> 00:17:58,280 Speaker 1: oil industry, and you're talking about certain things like lending facilities. 352 00:17:58,400 --> 00:18:00,639 Speaker 1: We also have the Fed now doing that well, changing 353 00:18:00,640 --> 00:18:03,240 Speaker 1: their rules. Do we need that support anymore? Is that 354 00:18:03,280 --> 00:18:06,680 Speaker 1: taken care of pretty much? Well, too loorally to tell, 355 00:18:06,720 --> 00:18:09,560 Speaker 1: and it various company by company. But what the Secretary 356 00:18:09,600 --> 00:18:13,119 Speaker 1: directed both Secretary Manuchin and myself to do was to 357 00:18:13,200 --> 00:18:15,760 Speaker 1: evaluate the programs that were passed by the Congress and 358 00:18:15,920 --> 00:18:19,520 Speaker 1: ensure but there is access for these energy industries to 359 00:18:19,640 --> 00:18:24,040 Speaker 1: those programs. And that's what we've done. Secretary Manuchin worked 360 00:18:24,160 --> 00:18:27,880 Speaker 1: very closely with the Federal Reserve. We adjusted the program, 361 00:18:28,000 --> 00:18:32,639 Speaker 1: the main Street lending program, and made that program available 362 00:18:32,680 --> 00:18:36,600 Speaker 1: to what we refer to as MidCap sized companies. You know, 363 00:18:36,600 --> 00:18:39,720 Speaker 1: there are companies in America that are investment grade, Um, 364 00:18:40,119 --> 00:18:42,600 Speaker 1: they perhaps do not need the same level of economic 365 00:18:42,680 --> 00:18:44,560 Speaker 1: help that others do in the marketplace, and they have 366 00:18:44,680 --> 00:18:47,840 Speaker 1: access to capital and access to liquidity perhaps others don't have. 367 00:18:48,520 --> 00:18:50,800 Speaker 1: But there are many companies out there that simply didn't 368 00:18:50,840 --> 00:18:54,920 Speaker 1: have that option. So making available this program that was 369 00:18:54,960 --> 00:18:57,760 Speaker 1: passed by Converse was very, very important, and I applaud 370 00:18:57,800 --> 00:19:01,080 Speaker 1: Secretary Manuchi in the Federal Reserve and others from moving 371 00:19:01,119 --> 00:19:05,560 Speaker 1: so aggressively to do exactly that. So, Mr Secretary, when 372 00:19:05,600 --> 00:19:07,560 Speaker 1: you implement a program like that, how do you deal 373 00:19:07,600 --> 00:19:09,600 Speaker 1: with what a lot of people call moral hazard? As 374 00:19:09,640 --> 00:19:12,240 Speaker 1: you said, the investigrade companies don't really need it so much. 375 00:19:12,520 --> 00:19:15,080 Speaker 1: Others do because they're not nearly as good shape. But 376 00:19:15,200 --> 00:19:17,600 Speaker 1: sometimes that's because they, let's be frank, borrowed too much. 377 00:19:17,640 --> 00:19:19,080 Speaker 1: This tends to be a bit of a boom and 378 00:19:19,119 --> 00:19:22,080 Speaker 1: bust business as I understand it in the oil patch. 379 00:19:22,200 --> 00:19:24,639 Speaker 1: How do you make sure that we're not encouraging almost 380 00:19:24,680 --> 00:19:28,320 Speaker 1: reckless behavior when it comes to financing. That's absolutely corrective. 381 00:19:28,400 --> 00:19:30,960 Speaker 1: I mean, there's no question that moral hazard exists. That 382 00:19:31,040 --> 00:19:34,439 Speaker 1: exists in every form of the banking industry. So you know, 383 00:19:34,720 --> 00:19:37,320 Speaker 1: when we apply these types of UM you know, or 384 00:19:37,440 --> 00:19:40,200 Speaker 1: we create these types of programs, we apply very strict 385 00:19:40,280 --> 00:19:43,520 Speaker 1: lending standards to them. And what Secretary Manichul and I 386 00:19:43,600 --> 00:19:47,760 Speaker 1: did was to identify those companies that really were impacted 387 00:19:47,760 --> 00:19:51,320 Speaker 1: by COVID, I mean, but for the COVID pandemic, they 388 00:19:51,359 --> 00:19:55,120 Speaker 1: would be strong ongoing concerns, and we looked at those 389 00:19:55,160 --> 00:19:59,760 Speaker 1: companies for potentially UM making loans available to them. We 390 00:20:00,240 --> 00:20:03,399 Speaker 1: you know, we're very very clear and very strict about this. 391 00:20:03,840 --> 00:20:05,600 Speaker 1: There are some companies that were on the verge of 392 00:20:05,600 --> 00:20:08,640 Speaker 1: insolvency and they were highly leveraged, and we're perhaps not 393 00:20:08,680 --> 00:20:12,159 Speaker 1: going to make it under any circumstance. Those companies are 394 00:20:12,160 --> 00:20:15,000 Speaker 1: going to be excluded from these types of programs, and 395 00:20:15,119 --> 00:20:18,080 Speaker 1: I think rightfully so. That was Secretary of Energy Dan 396 00:20:18,280 --> 00:20:21,199 Speaker 1: Briet coming up. We wrap up the week with our 397 00:20:21,240 --> 00:20:26,320 Speaker 1: special contributor Larry Summers. This is Wall Street Week on Bloomber. 398 00:20:30,920 --> 00:20:34,240 Speaker 1: Social distancing slows the spread of coronavirus, So stay a 399 00:20:34,240 --> 00:20:36,600 Speaker 1: minimum of six ft away from others and stay home 400 00:20:36,640 --> 00:20:40,080 Speaker 1: if you can. More info at Coronavirus dot gov. Let's 401 00:20:40,080 --> 00:20:43,480 Speaker 1: all do our part because we're all hashtag alone together. 402 00:20:43,880 --> 00:20:47,880 Speaker 1: Brought to you by the ad Council. This is Bloomberg 403 00:20:47,960 --> 00:20:52,080 Speaker 1: Wall Street Week with David Weston from Bloomberg Radio. The 404 00:20:52,160 --> 00:20:56,119 Speaker 1: experts spoke this week, and for once, investors seemed to 405 00:20:56,240 --> 00:20:59,960 Speaker 1: take heed. Dr Anthony Fauci warned that opening the economy 406 00:21:00,000 --> 00:21:03,000 Speaker 1: who soon could lead not only to illness and even death, 407 00:21:03,520 --> 00:21:06,080 Speaker 1: but also it could do more harm than good for 408 00:21:06,119 --> 00:21:09,920 Speaker 1: the economy. And President Trump he would have none of it. 409 00:21:10,440 --> 00:21:13,199 Speaker 1: Luck he wants to play all sides of the equation. 410 00:21:14,520 --> 00:21:17,240 Speaker 1: I think we're going to have a tremendous fourth quarter. 411 00:21:17,840 --> 00:21:21,159 Speaker 1: And then FED Chair J. Powell warned of potential mass 412 00:21:21,280 --> 00:21:24,800 Speaker 1: bankruptcies and unemployment. He said that we may need more 413 00:21:25,040 --> 00:21:30,080 Speaker 1: fiscal and monetary stimulus, and once again, President Trump, he disagreed. 414 00:21:30,600 --> 00:21:32,840 Speaker 1: I disagree with him on one thing now, and that's 415 00:21:33,160 --> 00:21:37,200 Speaker 1: negative rates. But Wall Street heavyweights like Stan drucken Miller 416 00:21:37,280 --> 00:21:40,520 Speaker 1: and David Tepper sided with the experts, saying the talk 417 00:21:40,560 --> 00:21:43,680 Speaker 1: of a V shaped recovery was really just a fantasy 418 00:21:43,760 --> 00:21:47,080 Speaker 1: and the equities are more overvalued than in any time since. 419 00:21:48,960 --> 00:21:51,640 Speaker 1: It was a week of cheer leading from the administration, 420 00:21:52,000 --> 00:21:55,440 Speaker 1: even as those on the front lines, from governors to investors, 421 00:21:55,800 --> 00:21:59,000 Speaker 1: talked of caution and of worry. And one of those 422 00:21:59,000 --> 00:22:01,239 Speaker 1: who has been expressing ashton and even war has been 423 00:22:01,280 --> 00:22:04,200 Speaker 1: our very on Wall Street Week contributor Larry Summers. From 424 00:22:04,200 --> 00:22:06,159 Speaker 1: the very beginning, he's been talking about some of the 425 00:22:06,200 --> 00:22:08,000 Speaker 1: problems we have in store. This is someone what he 426 00:22:08,080 --> 00:22:11,040 Speaker 1: said in the past on this program. The first plank 427 00:22:11,359 --> 00:22:17,080 Speaker 1: in that UH right economic strategy is an aggressive health strategy. 428 00:22:17,280 --> 00:22:20,960 Speaker 1: I think the market's reflecting a sense that there's a 429 00:22:21,000 --> 00:22:23,679 Speaker 1: wall of money okay, and we're delighted to have with 430 00:22:23,760 --> 00:22:27,280 Speaker 1: us now Wall Street were contributor from Harvard Form Prijory 431 00:22:27,320 --> 00:22:30,520 Speaker 1: Treasury Secretary Lauren Summers. So, Larry, give us a sense 432 00:22:30,520 --> 00:22:32,720 Speaker 1: why is it so difficult for us as a people 433 00:22:33,160 --> 00:22:35,760 Speaker 1: to really follow the science, follow the facts, because it 434 00:22:35,800 --> 00:22:37,600 Speaker 1: seems like the more we see it, the less we 435 00:22:37,600 --> 00:22:40,560 Speaker 1: pay attention. I wish I knew, and I wish I 436 00:22:40,600 --> 00:22:48,720 Speaker 1: fully understood. We're not getting presidential leadership. That's emphasizing what 437 00:22:48,960 --> 00:22:54,399 Speaker 1: the scientific community UH mostly believes. We all want to 438 00:22:54,440 --> 00:22:59,040 Speaker 1: believe that problems aren't there and that we can go 439 00:22:59,119 --> 00:23:05,879 Speaker 1: out uh with uh equanimity. So there's always a desire 440 00:23:06,000 --> 00:23:12,000 Speaker 1: to grab onto UH good news, and we're not being 441 00:23:12,080 --> 00:23:21,160 Speaker 1: given a solid plan beyond grabbing at flailing attempts that 442 00:23:21,520 --> 00:23:28,760 Speaker 1: could possibly UH work. The reality is that viruses like 443 00:23:28,960 --> 00:23:33,919 Speaker 1: this UH go into remission just like cases of cancer do, 444 00:23:34,880 --> 00:23:38,960 Speaker 1: but there's always a very great risk that they'll come back, 445 00:23:39,600 --> 00:23:44,280 Speaker 1: and you have to manage that risk very aggressively if 446 00:23:44,280 --> 00:23:49,199 Speaker 1: you want to succeed. And my great threat fear is 447 00:23:49,240 --> 00:23:55,080 Speaker 1: that we're not managing that risk aggressively. We're letting everything 448 00:23:55,240 --> 00:23:59,639 Speaker 1: back into the open before any of the criteria that 449 00:23:59,800 --> 00:24:03,960 Speaker 1: at Spurts have laid out have been fully uh met, 450 00:24:04,720 --> 00:24:08,000 Speaker 1: and we may not pay for it, but I think 451 00:24:08,040 --> 00:24:11,720 Speaker 1: the best guess has to be that whether it's soon 452 00:24:11,880 --> 00:24:15,480 Speaker 1: in the next couple of months or whether it's deferred 453 00:24:15,560 --> 00:24:19,480 Speaker 1: towards fall and winter, we will pay a price for 454 00:24:19,560 --> 00:24:27,679 Speaker 1: that in more cases, more fear and apprehension, ultimately less 455 00:24:27,960 --> 00:24:35,560 Speaker 1: economy UM, more job loss, more reductions in income. So 456 00:24:35,640 --> 00:24:39,919 Speaker 1: I'm not very comfortable with the path UH that we're on, 457 00:24:40,760 --> 00:24:46,400 Speaker 1: which seems to me to be translating hope UH into 458 00:24:47,240 --> 00:24:49,919 Speaker 1: a strategy. I could conceive it we turned out to 459 00:24:50,000 --> 00:24:55,840 Speaker 1: be wrong, but it's not a prudent bet UH that 460 00:24:55,920 --> 00:24:59,840 Speaker 1: we're making. It's not a prudent bet that so many 461 00:25:00,000 --> 00:25:03,920 Speaker 1: people are not wearing masks. It's not a prudent bet 462 00:25:04,040 --> 00:25:07,919 Speaker 1: that we're engaged in so little testing and so little 463 00:25:07,960 --> 00:25:12,159 Speaker 1: contact tracing. It's not a prudent bet that we haven't 464 00:25:12,200 --> 00:25:18,600 Speaker 1: made more substantial efforts to separate and target aging and 465 00:25:19,119 --> 00:25:24,280 Speaker 1: vulnerable UH populations. Our strategy seems to be we're just 466 00:25:24,359 --> 00:25:27,080 Speaker 1: tired of this and we're gonna let it all go. 467 00:25:27,760 --> 00:25:31,280 Speaker 1: And it might work, but it's not something I think 468 00:25:31,320 --> 00:25:34,679 Speaker 1: we can count on. Well. Where as you say you 469 00:25:34,800 --> 00:25:37,120 Speaker 1: may be wrong, and we hope you're wrong, but thus 470 00:25:37,119 --> 00:25:39,280 Speaker 1: far you've been pretty close to right in all of 471 00:25:39,320 --> 00:25:41,800 Speaker 1: your caution. Look Out now over the next month or 472 00:25:41,840 --> 00:25:44,280 Speaker 1: two months, what might be maybe on the radar stream 473 00:25:44,320 --> 00:25:46,280 Speaker 1: but not in the center of it, that you think 474 00:25:46,359 --> 00:25:50,000 Speaker 1: may well end up in the center of it. I 475 00:25:50,000 --> 00:25:51,760 Speaker 1: think there's a risk that they're going to be big 476 00:25:51,760 --> 00:25:54,679 Speaker 1: increases in the number of cases in at least some 477 00:25:54,800 --> 00:25:57,760 Speaker 1: of the places that have opened up, and that we're 478 00:25:57,800 --> 00:26:00,920 Speaker 1: going to have more hotspots that may not be as 479 00:26:00,960 --> 00:26:03,159 Speaker 1: bad as New York, but are going to be in 480 00:26:03,160 --> 00:26:07,280 Speaker 1: the direction of what happened in New York, and that 481 00:26:07,280 --> 00:26:12,280 Speaker 1: that's going to freak people out. I think there's a 482 00:26:12,400 --> 00:26:17,600 Speaker 1: risk UH that the law is gonna let up, but 483 00:26:17,720 --> 00:26:21,840 Speaker 1: people are going to realize that they're actually pretty scared 484 00:26:21,880 --> 00:26:24,200 Speaker 1: to go to stores, and they're pretty scared to sit 485 00:26:24,280 --> 00:26:28,240 Speaker 1: in restaurants, and people are going to realize that life 486 00:26:28,320 --> 00:26:31,280 Speaker 1: is going to be more or less like this until 487 00:26:31,400 --> 00:26:35,240 Speaker 1: we have a vaccine, and that that's gonna be a while, 488 00:26:35,920 --> 00:26:40,640 Speaker 1: and that that's gonna lead to some reassessment that there's 489 00:26:40,680 --> 00:26:45,959 Speaker 1: more uncertainty and lower incomes ahead and that that's hardly 490 00:26:45,960 --> 00:26:51,680 Speaker 1: going to be a positive factor UH for UH for markets. 491 00:26:52,080 --> 00:26:55,359 Speaker 1: I think there's a risk that we're gonna understand that 492 00:26:55,480 --> 00:27:00,560 Speaker 1: there's much more financial strain ahead as people can start 493 00:27:00,960 --> 00:27:04,080 Speaker 1: running out of the short cash reserves they had and 494 00:27:04,520 --> 00:27:09,360 Speaker 1: not paying rent, not making UH mortgage payments, not making 495 00:27:09,800 --> 00:27:13,520 Speaker 1: credit card payments, and I think there's an associated risk 496 00:27:13,760 --> 00:27:17,560 Speaker 1: that landing is going to decline and that that's going 497 00:27:17,600 --> 00:27:23,399 Speaker 1: to create something of an adverse uh financial uh spiral. 498 00:27:23,880 --> 00:27:25,720 Speaker 1: I think there's a risk and Larry, Larry, if I 499 00:27:25,760 --> 00:27:28,360 Speaker 1: could just interrupt on that point, and that specifically we've 500 00:27:28,400 --> 00:27:30,720 Speaker 1: heard from I'm sorry for we heard from fetch heare 501 00:27:30,960 --> 00:27:33,400 Speaker 1: j Pal this week saying if this goes on very 502 00:27:33,440 --> 00:27:35,040 Speaker 1: long as be trouble and then at the very end 503 00:27:35,080 --> 00:27:37,080 Speaker 1: of the week, the ft itself came out and ward 504 00:27:37,080 --> 00:27:41,080 Speaker 1: about potentially significant asset price declines if in fact, this 505 00:27:41,119 --> 00:27:43,760 Speaker 1: pandemic lasts too much longer, if this crisis last went 506 00:27:43,800 --> 00:27:45,359 Speaker 1: too much longer. At the same time, we have a 507 00:27:45,400 --> 00:27:47,960 Speaker 1: debate between the Democrats and Republicans by and large in 508 00:27:47,960 --> 00:27:50,120 Speaker 1: Congress about how fast we need to have the next 509 00:27:50,160 --> 00:27:55,960 Speaker 1: reflief package. How much time do we have. Every week 510 00:27:56,440 --> 00:28:01,800 Speaker 1: we delay committee to supporting the incomes of unemployed Americans, 511 00:28:02,720 --> 00:28:10,440 Speaker 1: supporting new investments, in testing, in contact tracing, in addressing 512 00:28:10,480 --> 00:28:15,879 Speaker 1: this virus. Every week we delay supporting state and local 513 00:28:15,960 --> 00:28:19,760 Speaker 1: governments is a week that we are weakening the foundation 514 00:28:19,880 --> 00:28:26,360 Speaker 1: of the economy, prolonging UH the downturn, reducing the speed 515 00:28:26,680 --> 00:28:32,000 Speaker 1: of UH the upturn. We should be making the necessary 516 00:28:32,040 --> 00:28:37,359 Speaker 1: commitment to keep supporting UH the economy within the next 517 00:28:37,400 --> 00:28:41,400 Speaker 1: two weeks, and it looks less likely now that we're 518 00:28:41,400 --> 00:28:44,080 Speaker 1: going to do it. Does Nancy Pelosi have exactly the 519 00:28:44,160 --> 00:28:46,920 Speaker 1: right formula? I think she's got many of the right 520 00:28:47,120 --> 00:28:52,720 Speaker 1: elements health investments, state and local government, unemployment insurance UH 521 00:28:52,840 --> 00:28:59,000 Speaker 1: in particular. But we need to be getting UH somewhere, 522 00:28:59,640 --> 00:29:04,760 Speaker 1: and UH I hope that we can find in the 523 00:29:04,840 --> 00:29:11,440 Speaker 1: face of this most extraordinary of emergencies, some capacity for 524 00:29:11,800 --> 00:29:17,000 Speaker 1: bipartisan cooperation. Is the best way to help the workers 525 00:29:17,360 --> 00:29:19,480 Speaker 1: directly to the workers, or is it go through the 526 00:29:19,520 --> 00:29:24,640 Speaker 1: states through block grants or to the companies. I think 527 00:29:24,680 --> 00:29:27,240 Speaker 1: we I think we need to have generous unemployment insurance 528 00:29:27,280 --> 00:29:30,120 Speaker 1: and we need it needs to be there for gig workers. 529 00:29:30,200 --> 00:29:32,680 Speaker 1: It needs to be there, whether your job ends, it 530 00:29:32,720 --> 00:29:35,800 Speaker 1: needs to be there, whether you're on temporary, I owe, whatever. 531 00:29:35,880 --> 00:29:39,200 Speaker 1: Exactly the circumstances that people have lost their ability to work, 532 00:29:39,280 --> 00:29:42,520 Speaker 1: we need to be supporting their incomes and those are 533 00:29:42,560 --> 00:29:46,880 Speaker 1: their families. We've got municipalities who do vital work. They 534 00:29:46,920 --> 00:29:51,719 Speaker 1: fight the fires, they keep the streets UH safe. They 535 00:29:52,080 --> 00:29:55,640 Speaker 1: will have to educate the children, perhaps in uh new 536 00:29:55,680 --> 00:30:00,840 Speaker 1: ways UH given uh this challenge. This is no time 537 00:30:00,960 --> 00:30:04,040 Speaker 1: for them to be cutting their budgets because of balanced 538 00:30:04,040 --> 00:30:09,000 Speaker 1: budget amendments and reduced tax collections. This is no time 539 00:30:09,120 --> 00:30:13,360 Speaker 1: for hospitals to be closing. This is no time for 540 00:30:13,480 --> 00:30:17,280 Speaker 1: doctors and nurses to be furloughed. And if we're going 541 00:30:17,320 --> 00:30:21,360 Speaker 1: to avoid that, we need to be supporting state and 542 00:30:21,400 --> 00:30:25,440 Speaker 1: local governments and we need to get off of defense. 543 00:30:25,880 --> 00:30:29,640 Speaker 1: We need to start playing offense and start using a 544 00:30:29,680 --> 00:30:34,480 Speaker 1: moment when commodities are cheap, when there's all kinds of 545 00:30:34,560 --> 00:30:38,720 Speaker 1: unemployed people to do the work, whether it's renewing the 546 00:30:38,760 --> 00:30:44,400 Speaker 1: country's infrastructure, whether it's building a caring economy, to do 547 00:30:44,560 --> 00:30:49,120 Speaker 1: the work that's always been essential um for us as 548 00:30:49,160 --> 00:30:55,400 Speaker 1: a UH country. Yeah, yeah, it's it's fascinating. A lot 549 00:30:55,440 --> 00:30:57,280 Speaker 1: of work to be done, not to speak of infrastructure, 550 00:30:57,280 --> 00:30:59,840 Speaker 1: which is something you've talked about more than one occasional 551 00:31:00,240 --> 00:31:02,920 Speaker 1: renew the infrastructure, and that's what we need to be 552 00:31:02,960 --> 00:31:07,720 Speaker 1: moved forward with, not debating about having a state bankruptcy code, 553 00:31:08,040 --> 00:31:14,360 Speaker 1: which is the proposal that McConnell put forth some time ago. Okay, 554 00:31:14,360 --> 00:31:16,320 Speaker 1: thank you so much, Larry. It's always a great treat 555 00:31:16,320 --> 00:31:18,000 Speaker 1: to have you with us. As in Larry Summer's former 556 00:31:18,000 --> 00:31:21,120 Speaker 1: treasures are great now at harbor and he also is, 557 00:31:21,160 --> 00:31:24,520 Speaker 1: by the way, I'm an important contribute to Wall Street Week. 558 00:31:24,960 --> 00:31:27,320 Speaker 1: This has been another edition of Wall Street Week, See 559 00:31:27,360 --> 00:31:35,040 Speaker 1: you next week. To protect her home and family in 560 00:31:35,080 --> 00:31:39,160 Speaker 1: a disaster, Karen was willing to wade through water, mud, 561 00:31:39,400 --> 00:31:44,160 Speaker 1: and insurance paperwork. Yeah, I can do this. You go, 562 00:31:44,400 --> 00:31:48,200 Speaker 1: Karen By simply understanding and updating what her insurance covers 563 00:31:48,280 --> 00:31:51,360 Speaker 1: and doesn't cover. Now she'll be better prepared no matter 564 00:31:51,440 --> 00:31:54,880 Speaker 1: when disaster strikes. Learn other simple ways to protect your 565 00:31:54,880 --> 00:31:58,040 Speaker 1: home and family before a natural disaster at ready dot gov. 566 00:31:58,240 --> 00:32:00,760 Speaker 1: That's ready dot gov. A mess. It's from Female and 567 00:32:00,880 --> 00:32:01,560 Speaker 1: the ad Council.