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Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, along

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Speaker 1: with my co host of Bonnie Quinn. Every business day

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Speaker 1: we bring you interviews from CEOs, market pros, and Bloomberg experts,

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Speaker 1: along with essential market moving news. Kind of Bloomberg Markets

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Speaker 1: Podcast on Apple podcast or wherever you listen to podcasts,

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Speaker 1: and on Bloomberg dot com. Well, companies have been borrowing

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Speaker 1: absolutely at nauseum since that difficulty rose in March that

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Speaker 1: we like to refer to as the pandemic, but of

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Speaker 1: course it was around for much longer than that. Companies

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Speaker 1: now though, topping them on markets, maybe at a pace

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Speaker 1: that's moderating amid rising credit risk, because why well, the

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Speaker 1: coronavirus seems to be surging again around the world. Let's

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Speaker 1: bring in somebody who knows a lot about fixed income,

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Speaker 1: also covers high yield and of course everything else from

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Speaker 1: here to Europe where we're seeing a one hundred year

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Speaker 1: bond today being sold by Austria. TAD Ravelle is ce

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Speaker 1: IO for fixed income at t c W two twelve

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Speaker 1: billion dollars firm wide under management. TAD just summarize is

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Speaker 1: what you think is going on in fixed income markets?

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Speaker 1: These days, we have yields attaching themselves to ranges are

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Speaker 1: not moving, and yet so much activity. Yes, well, we've

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Speaker 1: gone through Alison Bonland the last couple of months, right,

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Speaker 1: we have. We are experiencing, from the perspective of fundamental

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Speaker 1: some of the worst fundamentals that the US economy, the

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Speaker 1: global economy has ever seen. And yet we have gone

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Speaker 1: over the course of two months basically from what might

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Speaker 1: have been actually semi rational levels in fixed income in

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Speaker 1: terms of credit spreads in March, where spreads were out

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Speaker 1: in i G and investment grade out to three and

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Speaker 1: fifty basis points over treasuries, to where we are today,

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Speaker 1: wherein we have almost completely repriced where we were back

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Speaker 1: in January of this year. The fundamentals obviously don't look

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Speaker 1: even remotely like where we were in January when we

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Speaker 1: were experiencing three and a half percent unemployment, and the

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Speaker 1: idea that we would have a global economic depression were

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Speaker 1: would would have been viewed as insane type of type

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Speaker 1: of comments. So where are we? I think where we

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Speaker 1: are basically is we are in a market that is

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Speaker 1: utterly supported by the central banks, most particularly by the FED,

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Speaker 1: and they're not supported by fundamentals and um as you

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Speaker 1: alluded to, we have had a record pace of borrowing

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Speaker 1: on the part of corporate America more than one trillion

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Speaker 1: year to date in investment grade. So what is you're

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Speaker 1: supposed to take away from this? This is the de

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Speaker 1: leveraging that was supposed to happen at the end of

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Speaker 1: the cycle, that is actually taking on the character of

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Speaker 1: a releveraging. So I think it's a case of the

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Speaker 1: can is getting kicked way down the road, and the

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Speaker 1: issues and the problems and the leverage that had built

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Speaker 1: for years as we went into the late cycle, they're

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Speaker 1: still with us. So tad given that the fundamentals are

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Speaker 1: not there to necessarily support some of these risky assets.

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Speaker 1: Does this end badly from your perspective? I'm not really

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Speaker 1: sure that there's any other way for it to end,

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Speaker 1: but badly. I mean, it's it's interesting. I mean, I'm

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Speaker 1: a fixed income person, so I should probably not ever

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Speaker 1: comment on the equity market. We never understand it. But

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Speaker 1: it is rather instructive to recognize that the that those

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Speaker 1: four stocks that everybody likes to talk about the pangs

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Speaker 1: are up anywhere from let's say to as much as

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Speaker 1: fifty year to date, in the case of Amazon, four

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Speaker 1: stocks appear to be supporting the vast bulk of the

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Speaker 1: of the equity market. I mean, again, maybe I'm not

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Speaker 1: an expert on this, but it certainly strikes me that

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Speaker 1: with the SMP down about five percent, with the move

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Speaker 1: this morning, that you have a a very narrow base

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Speaker 1: actually to build upon, and a perspective from from bond

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Speaker 1: Land would continue this way somewhere depending upon eight to

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Speaker 1: twelve percent of the mortgages out there, depending upon which

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Speaker 1: kind of mortgage you're looking at. But home mortgages, of

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Speaker 1: course are in some state of forbearance. How many of

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Speaker 1: these all timately get work through? Adversely, we don't know.

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Speaker 1: There's complete opacity, I think as it relates to the

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Speaker 1: economic fundamentals. And if you cast your eye into the

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Speaker 1: commercial mortgage world and you look at it, if you

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Speaker 1: pull a typical uh C MBS commercial mortgage back deal

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Speaker 1: off the shelf and then looking under the hood, you'll

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Speaker 1: see that about of the loans are retail oriented or

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Speaker 1: lodging hotel oriented. The idea that we're going to see

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Speaker 1: a rebound and a retracement and a reperformance of these

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Speaker 1: loans back to where we were six months ago. Is

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Speaker 1: I think it's just it's strains credulity to the to

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Speaker 1: the breaking point. So will there be losses? Is that

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Speaker 1: what you're saying? Yes, there are going to be losses.

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Speaker 1: But the the the policy response in a way has

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Speaker 1: destroyed information. UM. You don't actually know which loans are

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Speaker 1: good or bad. I mean, I'm not speaking against the

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Speaker 1: policy response, because I think that once the leverage got

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Speaker 1: to these boles, and once we got ourselves into a

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Speaker 1: state of vulnerability and then the pandemic occurred. I'm not

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Speaker 1: sure that there was any other response. But nonetheless, one

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Speaker 1: of the adverse consequences from a capital markets perspective with

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Speaker 1: respect to the policy response, if you don't know what

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Speaker 1: loans are good or bad, you don't know what businesses

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Speaker 1: are going to make it through UM. And part of

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Speaker 1: that process is also piling on additional leverage UM onto

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Speaker 1: the balance sheets. In fact, Bank of America, I believe,

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Speaker 1: recently put out a research piece in which I mean

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Speaker 1: their best guests, of course, but that leverage ratios UH

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Speaker 1: debt to IBADA ratios are probably going to be rising

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Speaker 1: by at least a full turn UM in the investment

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Speaker 1: grade universe that's very strange. At the end of the

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Speaker 1: cycle is exactly when corporations are supposed to be getting

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Speaker 1: their house in order, deleveraging UM and essentially adapting themselves

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Speaker 1: to new realities. So is it supposed to end badly? Yeah,

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Speaker 1: because unless you restore economic growth back to uh some

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Speaker 1: semblance of normality. Um, you don't know where you are. Um.

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Speaker 1: I mean again, I mean maybe I'm rambling a little bit.

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Speaker 1: Where where's unemployment is it? Where? Where is it going

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Speaker 1: to settle down? Is it going to settle down at

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Speaker 1: the end of the pandemic at ten percent? At fifteen? Right,

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Speaker 1: I was gonna go back to three I'll say, no, Tad,

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Speaker 1: as you look across your portfolio, give us a sense

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Speaker 1: of kind of credit quality now and kind of how

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Speaker 1: you think that might trend. Uh. Well, there was a

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Speaker 1: great opportunity. There was the greatest opportunity in many years

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Speaker 1: to add credit exposure in March, and we took I

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Speaker 1: think pretty full advantage of it. That basically there was

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Speaker 1: a The way we talked about it internally is that

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Speaker 1: we're going to do credit committee meetings that last no

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Speaker 1: more than seconds. Because what we said, if we have

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Speaker 1: to if we have to discuss a credit in March

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Speaker 1: for more than ninety seconds, um, if it takes that

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Speaker 1: much analysis us, we probably don't want to be involved.

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Speaker 1: And so the names that we did get involved in

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Speaker 1: would include things like Exxon and Intel and Procter and Gamble,

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Speaker 1: some of the money center banks and Disney and buying

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Speaker 1: those issues. They were coming new issue. Not only were

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Speaker 1: they coming cheap, they were coming with new issue cancer.

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Speaker 1: I want to hear one of those pitches, do you

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Speaker 1: have ninety seconds left? Fall exactly? We might have to

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Speaker 1: wait till the next time, because I don't think we

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Speaker 1: have fully ninety seconds. All right, Thanks so much for

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Speaker 1: joining us. We appreciate it. As always loved to get

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Speaker 1: your take on the markets. You've been cautious, Continue to

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Speaker 1: be cautious. Tad Revelle, chief investment Officer for fixed Income

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Speaker 1: at TCW. Big folks out on the West Coast over

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Speaker 1: two billion dollars in assets under management. They know what

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Speaker 1: they're doing out there. Uh. They see every deal that

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Speaker 1: comes across the tape, and so we always love talking

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Speaker 1: to tags. He gives us a great perspective. The elevator

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Speaker 1: issue pitch. Yes, I mean, come on, ninety seconds. It's true.

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Speaker 1: If you can't sell something in ninety seconds, don't try

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Speaker 1: and sell it, right, Yeah, exactly, And you know the issue.

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Speaker 1: There are some opportunities, as Tad was saying, they were

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Speaker 1: trying to be pretty aggressive there back in March when

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Speaker 1: there was some real dislocation in the market and they

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Speaker 1: had some capital dry and put some money to work.

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Speaker 1: So we'll see here. But again, uh, this is a market,

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Speaker 1: as we've talked about, a lot of money that's really

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Speaker 1: really been supported, maybe even back stopped by the US

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Speaker 1: Federal Reserve and other central banks around the world. And

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Speaker 1: the question is will that be enough? And what happens

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Speaker 1: when that support starts to be pulled back. We'll have

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Speaker 1: it now. Plenty of stories about political interference at the

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Speaker 1: Department of Justice. We have former roger Stone prosecutor Eron

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Speaker 1: Zelinski testifying on Capitol Hill again today at noon. He's

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Speaker 1: been telling lawmakers the d o j G favorable treatment

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Speaker 1: to Roger Stone. We also had, of course, that massive

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Speaker 1: clash between a g bar and the former Manhattan Chief

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Speaker 1: federal prosecutor, which played out Friday night and over the weekend,

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Speaker 1: and just earlier we had a three judge Apple a

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Speaker 1: panel deciding to deny the U. S. District judge the

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Speaker 1: authority to examine whether the government's surprise motion to dismiss

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Speaker 1: the Michael Flynn case was part of a corrupt effort

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Speaker 1: to aid one of Trump's political allies. In other words,

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Speaker 1: another win from Resident Donald Trump. To speak to all

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Speaker 1: of these stories, let's bring in Cana nowadays, former corruption

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Speaker 1: and fraud prosecutor for the U. S. Attorney's Office in

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Speaker 1: the Southern District of New York, is now partner at

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Speaker 1: Available LLLP. Kind of thanks for joining. Let's begin with

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Speaker 1: the decision today, which is a win for President Trump,

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Speaker 1: and it's basically the dismissal of the case against former

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Speaker 1: National Security advisor Michael Flynn. Now, the decision may be appealed,

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Speaker 1: but is it going to be considered a win for

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Speaker 1: Resident Trump? Is this going to be the end of this?

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Speaker 1: You know, likelihood it will be the end. This is

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Speaker 1: a win for um the administration. Uh, And there is

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Speaker 1: a likely there's a possibility that this can go on bank,

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Speaker 1: which means all the district court judges will review this decision.

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Speaker 1: But I would take a majority of the judges to

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Speaker 1: actually want to do that. So UM, I think it's unlikely. Um,

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Speaker 1: it's possible, But to answer your question, this might very

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Speaker 1: likely be it and Flynn is done. All right, can

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Speaker 1: let's go back to your home turf the Southern District

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Speaker 1: of New York. Give us your interpretation of what happened

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Speaker 1: Friday night. Uh. What happened was, it's been said, unprecedented. Uh.

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Speaker 1: It was embarrassing for everyone involved and frankly terrible. It

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Speaker 1: shouldn't have happened. Um. It it's rare that U S

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Speaker 1: attorneys just missed when they've been doing a great job.

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Speaker 1: And to have it be done that way is terrible

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Speaker 1: for everyone involved. Um. And that's that's my reaction to it.

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Speaker 1: And and it puts a cloud on what d o

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Speaker 1: J does as as an institution. Um. You know, it's

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Speaker 1: smacks of something very suspicious. Uh. And the fairy, how

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Speaker 1: does the relationship now improve between the d o J

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Speaker 1: and you know, officers such as the SDN Y the

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Speaker 1: federal prosecuting offices around the country on various matters. If

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Speaker 1: there's no trust between the two, or if there is

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Speaker 1: some sort of a you know, suspicion hanging over any relationship,

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Speaker 1: how does anything get on Uh? It's hard for the

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Speaker 1: work to get done. You're absolutely right on. Uh, it's

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Speaker 1: very hard. Um. And it doesn't seem to me that

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Speaker 1: this is the end of the story necessarily between the

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Speaker 1: Seven District of New York and B. O. J and A. G.

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Speaker 1: Bar and that tension because Bar did not get what

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Speaker 1: he ultimately wanted, which was someone from the outside at

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Speaker 1: least on an interim basis to be in charge of

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Speaker 1: the Seven District of New York. Bar lost that fight.

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Speaker 1: He could very well with his wounds and then come

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Speaker 1: back again and try to uh replace Audrey Strausch, who

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Speaker 1: was Burman's and his Berman's deputy and now the acting

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Speaker 1: US Attorney in the Southern districtive work. So what the

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Speaker 1: window will continue? Right? So Ken, what can you tell

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Speaker 1: us about Audrey strauss Do you how independent is she?

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Speaker 1: Do you expect her to continue? Um? The some of

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Speaker 1: the investigations that do touch upon the Trump organization and

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Speaker 1: President himself. Absolutely, she wills to do it with independence. Um.

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Speaker 1: She was Berman's right hand person. She has a razor

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Speaker 1: sharp legal intellect and she cannot be corrupted. Um. And

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Speaker 1: what's interesting is she was the one overseeing many of

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Speaker 1: the Trump related investigation prosecution episode con Districtive New York

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Speaker 1: and it wasn't Berman anyway, because Burman was conflicted. So

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Speaker 1: I'd expect those investigations to proceed at a fast clip. Now.

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Speaker 1: So much of the work is done by the rank

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Speaker 1: and file, right, so you obviously have people at the

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Speaker 1: top that are directing and responsible for everything, but so

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Speaker 1: many rank and file workers are just be hiving every

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Speaker 1: day on so many different cases. How much turnover has

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Speaker 1: there been since this administration took control? And you know,

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Speaker 1: you know roughly what would happen if the president were

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Speaker 1: to be re elected. I mean, would there be more

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Speaker 1: of an influx of um, you know, administration sympathetic people

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Speaker 1: to the SDN Y or will it still remain the

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Speaker 1: sort of similar to the way it is now? Um?

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Speaker 1: I think the turnover has slowed down since the administration,

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Speaker 1: uh all right came in back in. UM. I think

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Speaker 1: morale generally at the U. S. Attorney's offices and d

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Speaker 1: o J is pretty low because it's not good to

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Speaker 1: have the credibility of the institution UH affected in this way. UM.

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Speaker 1: You know, it affects how as a line prosecutor you

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Speaker 1: do your job. If people think that certain people get

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Speaker 1: a better deal because of who they know. It's not good.

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Speaker 1: You can't do your job. You're supposed to be trusted,

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Speaker 1: and the bar, the bench stops trusting you. The courts

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Speaker 1: and the judges stopped trusting you, and that's just bad.

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Speaker 1: So Ken, I mean, the key thing it would seem

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Speaker 1: for the for the president, as you suggested, would and

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Speaker 1: for an attorney general, Bar would be to get one

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Speaker 1: of their people in their heading the southern District of

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Speaker 1: New York. Do you think that will happen at some point?

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Speaker 1: I don't. It's a political question. I don't. I don't

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Speaker 1: know if politically Bar can do that right now because

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Speaker 1: he had his hand handed a way of trying to

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Speaker 1: do it, and it was found out that he lied

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Speaker 1: about Burman uh resigning, it turns out at least and

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Speaker 1: he reported that he lied to the district New Jersey

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Speaker 1: u S Attorney as well about that. Um. But procedurally

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Speaker 1: is I think it is possible. Um, I think it's

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Speaker 1: possible he can do what do it in the manner

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Speaker 1: that Burman actually was appointed as he was attorney originally,

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Speaker 1: Berman was appointed by Bar on an interim basis By statute,

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Speaker 1: uh Bar can do that again. It's never been done before. Uh,

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Speaker 1: and the legality of doing a successive interim appointment is

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Speaker 1: up in the air. But my question is if he

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Speaker 1: did do it, who would have standing to challenge it anyway? Yeah, exactly,

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Speaker 1: I can't. Thanks so much for joining us today giving

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Speaker 1: us your thoughts on a lot of these legal issues happening.

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Speaker 1: Crossing tape can nowaday partnered Venable l l P. He

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Speaker 1: was formerly nine years at the Southern District of New York,

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Speaker 1: giving us his thoughts there well. One of the negative

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Speaker 1: byproducts of the pandemic has been higher food costs. We

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Speaker 1: had some some supply chain issues we had uh certain

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Speaker 1: meat and poultry processing plants shutting down due to the virus.

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Speaker 1: But the conservatism maybe food prices will remain at these

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Speaker 1: higher levels even as some of these issues get resolved.

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Speaker 1: To discuss this, we welcome Stud Leonard Jr. He's a

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Speaker 1: chief executive officer of Stewart Stud Leonards. He's on the

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Speaker 1: phone from Danbury, Connecticut. STU, thanks so much for joining

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Speaker 1: us here. We saw that initial spike up in food

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Speaker 1: prices at the supermarket level. Should we expect those prices

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Speaker 1: that come down as supply chain issues get resolved. Well,

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Speaker 1: first of all, good to be with did this morning

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Speaker 1: call by? How are you? Um? You know what this

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Speaker 1: has been. I've been in the business fifty years and

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Speaker 1: you know, we have a family business here in New York,

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Speaker 1: New Jersey and Connecticut. And I have never seen such

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Speaker 1: a volatile food market as we've seen since the pandemic hit. Um.

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Speaker 1: You've seen all sorts of our you know, big processing

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Speaker 1: plants across the country closed down, and you know, whenever

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Speaker 1: there is a shortage of supply, prices always go up. Well,

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Speaker 1: we're noticing it's stew Leonards and we buy direct right

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Speaker 1: from the local farms and and and you know, local

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Speaker 1: meat companies and so forth. What we have seen and

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Speaker 1: I just talked to all our buyers this morning with meat, fish, produce, cheese, fish,

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Speaker 1: We're starting to see the prices coming down. And I'm

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Speaker 1: reading the newspaper and I'm saying that our prices aren't

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Speaker 1: going up at stew Leonards. You know, we've even lowered

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Speaker 1: the price on ground beef, you know, from Memorial Day

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Speaker 1: a dollar a pound, um. And it might even decrease

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Speaker 1: a little bit more in the future. As as the

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Speaker 1: processing plants in the Midwest stabilize a little bit. What's

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Speaker 1: demand been like stew because people haven't been able to

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Speaker 1: just you know, pop out the store to buy something

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Speaker 1: last minutes in many cases. And also there have been

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Speaker 1: so many reports about you know, infections at plants. Has

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Speaker 1: it put people off things like ground beef? You know

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Speaker 1: it hasn't you know, it's it's a rock star item

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Speaker 1: at stew Leonards. You know, you grind it fresh and

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Speaker 1: what could be better than hamburger. I mean, it's part

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Speaker 1: of America. Just you know, put a little cheese on

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Speaker 1: it too, and you're all set um. But you know,

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Speaker 1: we we have seen that that a lot of our

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Speaker 1: suppliers will be going through normal normal variations that happened

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Speaker 1: last year's happened every year have been in business. You know,

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Speaker 1: if the lobsters are shedding up up the coast of

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Speaker 1: Maine and they're not out there catching lobsters, lobster price

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Speaker 1: will be a little high at this time of the year,

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Speaker 1: but it comes down again. So there's a market driven

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Speaker 1: roller coaster that most people are used to every year

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Speaker 1: with eggs, butter, all the pressed commodities, and you know

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Speaker 1: we're gonna ride those I don't know. Maybe people are

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Speaker 1: picking items that might be on a natural high right now,

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Speaker 1: but you know it's stud Leonards. I don't see our

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Speaker 1: prices going up. I actually see him going down a

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Speaker 1: little bit in the month of July. So, Stu one

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Speaker 1: of the things, you know, I'm fascinated about as we

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Speaker 1: as we take a look at some of the uh,

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Speaker 1: the issues are surrounding this pandemic because how consumer behavior

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Speaker 1: may change going forward as a result of this pandemic.

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Speaker 1: What is your sense for people, you know, kind of

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Speaker 1: beating out versus you know, shopping at supermarkets and and

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Speaker 1: staying home and making maybe you know, more elaborate and

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Speaker 1: better meals. Do you have a sense that things are

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Speaker 1: going to change from your perspective, Hey, that's a great question,

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Speaker 1: because you know what we've found now people are cooking

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Speaker 1: at home. They're baking at home. We started during items

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Speaker 1: that we never used to carry. You know, we're we're

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Speaker 1: mainly fresh foods, but we've added yeast to the menu

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Speaker 1: and there are lots of flour we've been selling. People

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Speaker 1: are baking banana bread, you know, and things they never

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Speaker 1: used to do in their cooking at home and looking

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Speaker 1: for new recipes. We've seen the fish uh uh department

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Speaker 1: grow in size because people are starting to experiment with

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Speaker 1: different kinds of food. So I think post a pandemic,

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Speaker 1: you're gonna see a lot more people that are interested

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Speaker 1: in food. And I will say also wine. You know,

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Speaker 1: our wine sales have gone way up, and and even

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Speaker 1: even cottails. You know, we can't keep tequila in the

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Speaker 1: store just about. Um, you know, these margarita mixes are

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Speaker 1: flying up the shelves and a little uh you know,

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Speaker 1: cottails in a bottle now are really popular. And we

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Speaker 1: just put an item in now, which is like you

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Speaker 1: know those little um, those little pop frozen sticks that

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Speaker 1: you used to eat as a kid. Um, you know,

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Speaker 1: made your lips all blue. Now they have them, um,

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Speaker 1: but there's alcohol in them. Now we're talking. This is

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Speaker 1: not an endorsement, by the way on our part. Pull No.

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Speaker 1: I know that they're very low alcohol. It's like a

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Speaker 1: little more than beer just about. But um, we're starting

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Speaker 1: to see all sorts of items. We've put a five

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Speaker 1: pound bag of French fries in the store. You never

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Speaker 1: would have thought that cells, but they're they're gobbling them up.

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Speaker 1: Um More. Also towards immunity fighting, foods right now because look,

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Speaker 1: with the cold and a few flu everybody says more citrus.

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Speaker 1: So we've noticed our lemon cells have gone up sevenfold.

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Speaker 1: The same with limes, oranges. You know, grapefruit, ball of

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Speaker 1: citrus is really popular orange juice right now. So you're

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Speaker 1: seeing a real change in in the way people are

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Speaker 1: eating and shopping. And the big question we have at

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Speaker 1: stew Leonards is where's is going to settle out right? Yeah,

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Speaker 1: exactly still, you know, not to make light of at all,

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Speaker 1: but thank you so much for jumping on and talking

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Speaker 1: to us. A very difficult time for you guys in

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Speaker 1: terms of trying to figure out what to price, you know,

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Speaker 1: and where to change prices, how often to change prices

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Speaker 1: and so on. Headline just crossing the bloomberg. Though it

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Speaker 1: might actually be a good news for local grocery stores.

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Speaker 1: We'll see about that at a moment our thanks to

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Speaker 1: stud Lenard, Junior CEO of Stu Lenards. Now latent questions

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Speaker 1: for corporate Aurica have come up very strongly in recent

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Speaker 1: weeks on race in the United States, but it's not

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Speaker 1: a new conversation for many. For most, I would suggest

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Speaker 1: one group of people that have been looking at this

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Speaker 1: is a group of people that have already come up

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Speaker 1: with something called the Impact Shares in double a CP

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Speaker 1: Minority Empowerment et F. It's a fun design to provide

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Speaker 1: exposures to companies with strong racial and ethnic diversity policies

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Speaker 1: in place. Let's welcome now two of the men who

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Speaker 1: created and are helping to mark this, Ethan Powell, the

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Speaker 1: CEO of Impact Shares, and Marvin Owens Jr. Is Senior

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Speaker 1: Director of Economic Development at the n Double a CP. Welcome, gentlemen,

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Speaker 1: and it is great to have you. The ticker for

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Speaker 1: the e t F is an a CP for those

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Speaker 1: who like to look it up. My question to you is,

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Speaker 1: right now, it's a small fund, but Impact Shares is

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Speaker 1: a non property TF issuer. How do you plan. Let's

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Speaker 1: go to you first, Ethan, on marketing this. I would

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Speaker 1: imagine that in recent weeks it may have become easier. No,

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Speaker 1: you're right, Um, there's six under D s G funds

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Speaker 1: in the United States, and this is the only one

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Speaker 1: that's specifically addressing issues of UH corporate America and how

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Speaker 1: they interact with communities of color. Um, so I think

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Speaker 1: you know to your point, it's getting a lot of attention.

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Speaker 1: The volume on the secondary market has increased, and we

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Speaker 1: have seen some inflows. Um. I think you know, one

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Speaker 1: of the things that we need to appreciate is that

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Speaker 1: traditional asset managers really have a credibility and a communication

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Speaker 1: problem as it relates to E s G UM. And

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00:24:01,320 --> 00:24:04,359
Speaker 1: that's why we partner with leading social advocacy groups to

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00:24:04,480 --> 00:24:08,400
Speaker 1: craft issues specific E s G solutions. And we asked

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Speaker 1: what does a good corporate citizen look like through the

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Speaker 1: lens of the Double A CP, specifically as relates to

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Speaker 1: people of color in the United States, and we work

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Speaker 1: with them and the Corporate America to improve their business

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Speaker 1: practices relative to these issues. Marvin, I want to bring

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Speaker 1: you in here. I mean, you know, we all saw

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Speaker 1: the tremendous events the civil unrest as a result of

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Speaker 1: the death of George Floyd. To me at least to

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Speaker 1: it just as an individual, it feels different this time.

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Speaker 1: The conversation feels different than this time than in past episodes.

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Speaker 1: The folks at the Double A c P did they

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Speaker 1: feel the same way, Yeah, we do. Um. Though we've

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Speaker 1: been at this four hundred and eleven years, this does

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Speaker 1: feel like a watershed moment in which UM. Corporations and

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Speaker 1: individuals are thinking about how to get engaged with a

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Speaker 1: fight against racial injustice and against discrimination. And I think this, UH,

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Speaker 1: this fund has given us an opportunity to engage corporate

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Speaker 1: America and this conversation in a different way. For probably

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Speaker 1: twenty five years or more, the d c P has

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Speaker 1: been doing corporate scorecards UH. And the scorecard model is

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Speaker 1: essentially what is being used in this in this e

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Speaker 1: t F UH. And that's why we think it's a

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Speaker 1: it's a wonderful tool for engagement. UM. We need everyone involved,

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Speaker 1: and this is the way to get everybody involved. Marvin.

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Speaker 1: There are on holdings in the e t F, and

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Speaker 1: I'm curious about companies such as Amazon. It has the

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Speaker 1: highest net percentage, Microsoft and Apple right behind Amazon. Are

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Speaker 1: they doing the best on diversity? No, they're not doing

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00:25:43,359 --> 00:25:46,159
Speaker 1: the best on diversity. I think what that indicates is

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Speaker 1: simply the fact that they've they've really committed the resources,

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Speaker 1: are trying to develop and trying to measure what they're

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Speaker 1: doing UM. And I think that, quite frankly, is a

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Speaker 1: result of of their size. Again again, and I think

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Speaker 1: they're their focused and wanting to make sure sure that

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Speaker 1: they're creating a diverse, inequitable uh corporate corporate culture. Uh.

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Speaker 1: And I think that's a great thing to be to celebrate.

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Speaker 1: But I also think that it's important to recognize that

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Speaker 1: that those these organizations have put the money and resources

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Speaker 1: towards this effort. There are other organizations, other corporations, um,

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00:26:20,000 --> 00:26:22,840
Speaker 1: that are also doing great work. Um. And so yeah,

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Speaker 1: while they are represented in our fund in a significant way, UM,

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Speaker 1: they are not the best in class. I would say so, Ethan,

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Speaker 1: as you look at the class within their individual sector. Right.

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Speaker 1: So we have every sector of the economy represented, and

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00:26:36,640 --> 00:26:39,080
Speaker 1: we picked the leaders within each sector. So while the

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00:26:39,160 --> 00:26:42,240
Speaker 1: tech sector certainly has room to grow, um, you know

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00:26:42,320 --> 00:26:47,320
Speaker 1: those those names in particular are taking a leadership position. Yeah. So, Ethan,

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Speaker 1: I want to get a sense from you kind of

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Speaker 1: what are some of the characteristics or what are companies

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00:26:52,440 --> 00:26:54,679
Speaker 1: that are doing a good job? Right? Were they just early?

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00:26:54,760 --> 00:26:57,679
Speaker 1: Were they do they have commitment from the board? What

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Speaker 1: are some of the characteristics and companies that school are

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00:27:00,280 --> 00:27:04,480
Speaker 1: well on your screen? Right? So we look for supplier

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Speaker 1: diversity programs, spare hiring, game promotion practices, community engagement programs,

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Speaker 1: digital divide programs, and as Marvin said, it does have

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Speaker 1: a larger tapskew because those are the companies that have

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Speaker 1: the resources not only to commit to the programs, but

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Speaker 1: to prioritize reporting to the public as well. Now, yesterday

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Speaker 1: we saw Black Wall come out and say it plans

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Speaker 1: to increase its black workforce by twenty four you have

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00:27:31,240 --> 00:27:36,680
Speaker 1: other companies making similar pledges. Marvin, is the workforce enough

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00:27:37,000 --> 00:27:42,760
Speaker 1: and by four even not even immediately? I don't think

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Speaker 1: it's enough. I do think that it's a wonderful effort.

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Speaker 1: I think it's the right time to do it. But

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00:27:48,480 --> 00:27:50,800
Speaker 1: but you have to raise the question about why is

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Speaker 1: it happening in this moment um. If this was a

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Speaker 1: priority um, then it should have been a part of

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Speaker 1: the culporate corporate culture corporate culture prior to this moment.

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Speaker 1: And that's why I think it's important to engage these

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Speaker 1: corporations and needing institutions in these kinds of conversations. It's

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Speaker 1: it's great that they're making the commitment, and it's great

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Speaker 1: that they're sort of implementing these kinds of changes. It

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Speaker 1: does suggest to us that there's a lot more work

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Speaker 1: to be done, because in this moment, there was a

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Speaker 1: decision to do it, and it was a decision to

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Speaker 1: do it based on the current events that were happening.

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Speaker 1: What was happening prior to this moment is important to

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Speaker 1: also recognize UH, and so that's why it's important that

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Speaker 1: Black Rockets is making the commitment publicly UM and we're

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Speaker 1: excited to hear that they're doing it. Gentlemen, thank you

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Speaker 1: so much for this important conversation. Ethan pal CEO Impact

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Speaker 1: Shares based in Dallas, Texas and Marvin Owen's Junior Senior

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Speaker 1: Director of Economic Development for the n double a CP

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Speaker 1: based in Washington, Washington, d C. Talking about the E

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Speaker 1: T F n A CP is the symbol UH focusing

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Speaker 1: on companies UH that score well in the E s

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Speaker 1: G REALM, paying particular focus UH to diversity and certainly

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Speaker 1: a topic on the on the front burner these days.

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Speaker 1: Thanks for listening to Bloomberg Markets podcast. You can subscribe

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00:29:06,040 --> 00:29:09,000
Speaker 1: and listen to interviews at Apple Podcasts or whatever a

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00:29:09,080 --> 00:29:12,440
Speaker 1: podcast platform you prefer. I'm Bonnie Quinn. I'm on Twitter

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00:29:12,680 --> 00:29:15,000
Speaker 1: at Bonnie Quinn, and I'm Paul Sweeney. I'm on Twitter

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00:29:15,040 --> 00:29:17,920
Speaker 1: at pt Sweeney. Before the podcast, you can always catch

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00:29:17,960 --> 00:29:19,520
Speaker 1: us worldwide at Bloomberg Radio,