WEBVTT - Developing Tech to Increase COVID-19 Testing 0:00:00.720 --> 0:00:03.720 This is Bloomberg Business Week. I'm Carol Masser and I'm 0:00:03.800 --> 0:00:06.320 Jason Kelly. We're right here every day bringing you the 0:00:06.400 --> 0:00:11.160 latest news from the world's of business and finance, plus technology, politics, economics, 0:00:11.240 --> 0:00:14.280 all harnessing the power of Business Week reporters and editors. 0:00:14.440 --> 0:00:16.439 And of course Carol that's part of a team of 0:00:16.520 --> 0:00:20.439 twenty seven hundred journalists and analysts more than a hundred 0:00:20.480 --> 0:00:23.280 and twenty countries and Jason. You can download Bloomberg Business 0:00:23.280 --> 0:00:26.239 Week on iTunes, SoundCloud, bl Bloomberg dot com. You can 0:00:26.280 --> 0:00:28.600 also listen to our radio show at two pm Eastern 0:00:28.680 --> 0:00:31.560 on Bloomberg Radio every weekday, or watch us on YouTube 0:00:31.600 --> 0:00:36.320 by searching Bloomberg Global News. So much to get to, 0:00:36.479 --> 0:00:39.640 but let's understand what's going on in the trade today, 0:00:39.760 --> 0:00:42.239 what we have to look forward to this week, Scarlett, 0:00:42.320 --> 0:00:44.440 we are going to set the business week agenda. We've 0:00:44.479 --> 0:00:47.000 got Gina Martin Adams with this, chief equity strategist for 0:00:47.000 --> 0:00:49.640 Bloomberg Intelligence. She joins us from New Jersey. As to 0:00:49.680 --> 0:00:53.840 Stave Wilson, stocks editor for Bloomberg. He's also in the 0:00:53.880 --> 0:00:58.240 Garden States. So Dave quickly set the stage for us. Uh, 0:00:58.240 --> 0:01:01.840 what's underneath this trade. Well, you look at the eleven 0:01:01.880 --> 0:01:04.559 main industry groups in the SMP five hundred and it 0:01:04.560 --> 0:01:09.319 it looks rather familiar technology stocks of leading the way. 0:01:09.440 --> 0:01:12.440 Uh you know, you look at the consumer discretionary category, 0:01:12.440 --> 0:01:16.080 which is basically Amazon dot Com and it's up. You know, 0:01:16.280 --> 0:01:20.200 so kind of a familiar story. Communications services, which is 0:01:20.560 --> 0:01:24.360 you know, Facebook and U Alphabet, the owner of Google 0:01:24.959 --> 0:01:29.000 also higher and you know it's really their week, those 0:01:29.080 --> 0:01:32.360 kinds of companies because you know, you you talk about 0:01:32.440 --> 0:01:36.360 the four trillion dollar companies in the SMP five hundred 0:01:36.400 --> 0:01:40.280 based on market value, you have three of them, Uh, 0:01:40.319 --> 0:01:44.200 you know, reporting on the same day coming up on Thursday. 0:01:44.200 --> 0:01:48.640 I'm calling it a triple a afternoon because you get Alphabet, 0:01:49.000 --> 0:01:51.800 you know, the owner of Google, and Amazon dot Com 0:01:51.840 --> 0:01:54.040 and Apple. It just goes to show you what kind 0:01:54.080 --> 0:01:57.160 of week it's gonna be. Uh. You know, something like 0:01:57.200 --> 0:02:01.120 a third of the SNP five companies were warning today, 0:02:01.160 --> 0:02:03.400 pretty quiet on that front, but it really does pick 0:02:03.480 --> 0:02:06.640 up tomorrow and carries through the rest of the week. 0:02:06.800 --> 0:02:09.800 So you know, it isn't just about the Fed policymakers 0:02:09.800 --> 0:02:12.240 getting together. It's about what companies are gonna have to 0:02:12.280 --> 0:02:15.639 say on their results. Absolutely. Technology is going to be 0:02:15.720 --> 0:02:18.280 front and center this week. But it's interesting because when 0:02:18.320 --> 0:02:21.000 I look at the most actively traded stocks by value 0:02:21.000 --> 0:02:23.760 and I look at foreign common stocks, nine out of 0:02:23.760 --> 0:02:27.000 the ten most actively traded stocks are all gold miners 0:02:27.080 --> 0:02:30.359 or precious metals miners, and that speaks to the rally 0:02:30.400 --> 0:02:33.800 that we've seen in gold prices Gina. Material stocks are 0:02:33.880 --> 0:02:36.359 certainly in favor right now as people continue to bid 0:02:36.480 --> 0:02:39.520 gold and silver prices higher. Do we have any sense 0:02:39.560 --> 0:02:44.120 of whether this will be reflected in their earnings? Probably not. 0:02:44.480 --> 0:02:46.520 I mean, I think it's a bit early to expect 0:02:46.600 --> 0:02:49.440 that the companies are actually going to produce earnings results 0:02:49.480 --> 0:02:51.600 as a results of the price action in gold. So 0:02:51.639 --> 0:02:54.760 I do think that the materials sector is most likely 0:02:54.800 --> 0:02:56.760 to be one of the weaker sectors within the S 0:02:56.840 --> 0:03:00.720 and P five in terms of actual output um from 0:03:00.760 --> 0:03:04.720 an earnings perspective. That said, I do think that if 0:03:04.720 --> 0:03:07.920 you start looking at value names in the SMP five hundred, 0:03:08.040 --> 0:03:10.760 you could have an opportunity for a lot of beats 0:03:10.760 --> 0:03:13.200 to expectations. So if you think about the sort of 0:03:13.280 --> 0:03:17.519 value styles in a broader set, I've got fifteen stocks 0:03:17.520 --> 0:03:20.360 on a list of stocks in our high Value Bucket 0:03:20.400 --> 0:03:22.919 as well as the SMP five hundred peer Value Index 0:03:23.000 --> 0:03:25.920 that report this week. All of them are expected to 0:03:25.960 --> 0:03:29.880 have just really really weak earnings, just kind of tremendous declines, 0:03:29.960 --> 0:03:33.560 some of them even with negative earnings, and as a group, 0:03:33.639 --> 0:03:36.880 they're starting to experience positive estimate revision, which is very 0:03:37.000 --> 0:03:40.040 different than what Dave was talking about. With the big 0:03:40.200 --> 0:03:46.280 heavyweight tech companies facing a completely alternative with higher expectations 0:03:46.840 --> 0:03:49.840 going into their earnings, it's less likely that they can 0:03:49.920 --> 0:03:53.040 sustain those expectations, where some of the value stocks actually 0:03:53.120 --> 0:03:55.760 might be able to beat um very very low forecasts. 0:03:56.480 --> 0:04:00.360 And so, Gina, I believe you told us last this 0:04:00.400 --> 0:04:03.520 is the single biggest, big, busiest, excuse me week for 0:04:03.560 --> 0:04:07.080 earnings right this quarter, this week that we're headed into it. Yeah, 0:04:07.560 --> 0:04:09.200 there's not going to be any rest for the weary 0:04:09.240 --> 0:04:11.920 this week. Yeah. So, any I mean, what's the key 0:04:12.040 --> 0:04:15.320 theme for you beyond what you were just describing and 0:04:15.880 --> 0:04:20.560 the tech importance here? Yeah, So it's a combination of things. 0:04:20.560 --> 0:04:22.240 I mean, I think one thing that happened last week 0:04:22.279 --> 0:04:25.160 that really quite frankly surprised us is for the first 0:04:25.160 --> 0:04:27.040 time in a long time, despite the fact that every 0:04:27.080 --> 0:04:30.320 tech stock that reported earnings last week beat expectations. Price 0:04:30.360 --> 0:04:33.880 performance was negative. So I think I want to watch 0:04:33.960 --> 0:04:37.760 that really carefully. Can sticks tech stocks actually live up 0:04:37.760 --> 0:04:39.880 to expectations? Are heavily gotten a little bit ahead of 0:04:39.880 --> 0:04:42.320 our skis, and investors are going to sell the news 0:04:42.320 --> 0:04:44.359 on both tech as well as healthcare and some of 0:04:44.400 --> 0:04:48.920 the grossy stocks. UM, the opposite may occur with respective value. 0:04:49.040 --> 0:04:52.320 I think beyond earning season, there's more than just earnings. 0:04:52.360 --> 0:04:54.000 Even though this is the heaviest week of earnings and 0:04:54.040 --> 0:04:56.520 next week is the second heaviest week, we're obviously also 0:04:56.560 --> 0:04:59.120 contending with the FED policy meeting this week, and we're 0:04:59.120 --> 0:05:02.680 contending with the fiscal package, which we keep bumping around 0:05:03.320 --> 0:05:06.200 UM as a possibility or not a possibility, And you know, 0:05:06.240 --> 0:05:08.960 I think that that has the prospect of creating a 0:05:09.000 --> 0:05:11.960 little bit of turmoil for stocks as well. So, Dave, 0:05:12.080 --> 0:05:14.960 when we talk about the FED meeting this week, do 0:05:15.000 --> 0:05:18.400 you sense a change in tone or in sentiment when 0:05:18.440 --> 0:05:20.880 it comes to what the Fed will likely say? Obviously, 0:05:21.000 --> 0:05:24.320 the environment around US has worsened with the increase of 0:05:24.320 --> 0:05:27.640 cases across much of the United States. UM. How much 0:05:27.720 --> 0:05:30.800 of that is reflected in people's expectations of what they 0:05:30.800 --> 0:05:33.800 expect to hear from J. Powell. You know, I haven't 0:05:33.880 --> 0:05:36.800 really run across a whole lot on that score at 0:05:36.839 --> 0:05:40.000 this point, you know, I mean, given that there's sort 0:05:40.040 --> 0:05:43.159 of a policy direction that's been set, you know, near 0:05:43.240 --> 0:05:46.400 zero interest rates and and and some bond bind though 0:05:46.440 --> 0:05:50.600 they backed off lately in terms of actual purchases, you know, 0:05:50.680 --> 0:05:52.960 trying to throw money at the economy where they can. 0:05:53.760 --> 0:05:56.400 I And it does seem like, if anything, they'll try 0:05:56.400 --> 0:05:59.960 and redouble those efforts. But at least the policy direction 0:06:00.040 --> 0:06:03.240 has been set, and what we may get Wednesday just 0:06:03.360 --> 0:06:06.440 were sort of reinforced where we are when it comes 0:06:06.480 --> 0:06:09.479 to what the Fed's up to. Right, all right, Well, 0:06:09.480 --> 0:06:11.640 thank you both so much. You know, Martin Adam's chief 0:06:11.640 --> 0:06:15.400 equity strategist for Bloomberg Intelligence. She joined us from New Jersey, 0:06:15.400 --> 0:06:18.720 as did Dave Wilson, stocks editor. This is Bloomberg Business Week. 0:06:18.920 --> 0:06:21.479 We are keeping an eye obviously on the virus, those 0:06:21.520 --> 0:06:25.480 cases continuing to rise across the country, and testing Scarlett 0:06:25.640 --> 0:06:30.120 certainly front of mind, and we need to understand how 0:06:30.160 --> 0:06:33.320 it works, where it works, when it works, and how 0:06:33.320 --> 0:06:35.400 it's all going to be executed. We got the perfect 0:06:35.400 --> 0:06:39.320 person to talk about that, Neil D. Crescenzo Crescenso, did 0:06:39.360 --> 0:06:43.640 I say that right now? All right, thank you, I 0:06:43.680 --> 0:06:46.800 appreciate it. Uh you're the CEO of Change Health here 0:06:46.839 --> 0:06:50.160 joining us on the phone from San Francisco. Uh, so 0:06:50.240 --> 0:06:53.120 tell us about testing here, like, where are we? How 0:06:53.160 --> 0:06:55.880 should we be thinking about it? Especially when it comes 0:06:55.880 --> 0:07:00.599 to a typical local community. How's it happening? Well, Jason, 0:07:00.640 --> 0:07:02.719 I think you made a very important point is that 0:07:02.760 --> 0:07:06.240 there really is maybe not a typical community. There's a 0:07:06.240 --> 0:07:09.480 lot of different types of communities in this country. And 0:07:09.480 --> 0:07:12.600 what you know, people didn't really perhaps realized prior to 0:07:12.640 --> 0:07:16.880 the pandemic that only about of lab orders are actually 0:07:16.920 --> 0:07:21.080 submitted electronically today, and as you can imagine, that's particularly 0:07:21.120 --> 0:07:24.920 challenging in a rural or per community. So, um, what 0:07:25.080 --> 0:07:28.200 we really focus on with our network, where you know, 0:07:28.280 --> 0:07:32.440 we move around about fifteen billion healthcare transactions per year, 0:07:32.480 --> 0:07:36.160 were the largest clinical, financial administrative networks in the country, 0:07:36.360 --> 0:07:39.040 is really helping the doctors ordered these lab tests and 0:07:39.080 --> 0:07:41.320 making sure that people can get them in the most 0:07:41.360 --> 0:07:46.240 convenient and fast fast process possible. In order of course, critically, 0:07:46.240 --> 0:07:49.280 as we've heard, particularly recently to get their results back, 0:07:49.320 --> 0:07:52.880 and so we've made access to our nationwide lab network 0:07:52.960 --> 0:07:56.880 free for all positions, and we have over fourteen hundred 0:07:56.960 --> 0:07:59.720 labs and over a hundred providing COVID testing on the 0:07:59.760 --> 0:08:03.760 net work. Neil, is there a difference between people going 0:08:03.800 --> 0:08:06.920 to their primary doctor or to an urgent care center 0:08:07.040 --> 0:08:10.280 or to the hospital to get COVID tests, because I 0:08:10.320 --> 0:08:12.840 remember reading that ultimately they all get process at the 0:08:12.880 --> 0:08:16.640 same couple of labs. Well, I think Scott don's a 0:08:16.640 --> 0:08:19.040 great question, because whe does that really come down to. 0:08:19.120 --> 0:08:22.440 It comes down to convenience and people's comfort level with 0:08:22.600 --> 0:08:25.320 either maybe their primary care physician or an urgent care 0:08:25.360 --> 0:08:28.080 center they're familiar with, where some other site, whether it's 0:08:28.080 --> 0:08:31.960 a Walgreens of CBS, etcetera. UM, And you know, right 0:08:32.000 --> 0:08:35.160 now we've got about thirty six states that are testing 0:08:35.280 --> 0:08:39.120 less than the recommended level with the c d C. 0:08:39.440 --> 0:08:42.040 So unless people go in to get tested, they're clearly 0:08:42.040 --> 0:08:44.000 not going to get the results, and we're not gonna 0:08:44.040 --> 0:08:46.079 be able to impact not only the testing rates, but 0:08:46.160 --> 0:08:51.160 the positivity rates through treatment and contact tracing afterwards. That 0:08:51.280 --> 0:08:55.760 spend such a challenge in many states, and so if 0:08:55.800 --> 0:08:58.320 people have a choice of where to go. Where should 0:08:58.360 --> 0:09:01.880 they go? Well, I think it really comes down to 0:09:01.960 --> 0:09:05.120 the individual. Uh, you know, I think that the testing 0:09:05.200 --> 0:09:09.480 is getting obviously continued to have different sites, additional types 0:09:09.520 --> 0:09:11.680 of sites, and it's going to come down to, you know, 0:09:11.720 --> 0:09:13.839 what people are able to do in terms of the 0:09:14.080 --> 0:09:17.800 convenience for them what they're dealing with in their personal lives, 0:09:17.800 --> 0:09:20.760 but making sure that it's done in a way that 0:09:20.840 --> 0:09:24.040 the results are provided back to them as fast as possible, 0:09:24.280 --> 0:09:27.000 and utilizing the lab network that we and others have 0:09:27.080 --> 0:09:29.640 had in place, you know, frankly for decades, but it 0:09:29.720 --> 0:09:32.960 just wasn't really of course, operating at this level and 0:09:32.960 --> 0:09:35.080 with this degree of focus. You know, one of the 0:09:35.120 --> 0:09:37.960 things that's important for people to realize is one are 0:09:37.960 --> 0:09:40.160 the key priorities over the next few months is also 0:09:40.200 --> 0:09:41.760 going to be trying to figure out how to get 0:09:41.800 --> 0:09:44.920 at home testing. One of the things we focused on 0:09:45.000 --> 0:09:47.400 is connecting our network to be sort of fast growing 0:09:47.400 --> 0:09:50.600 companies like you do tests that provide home tests. But 0:09:50.679 --> 0:09:54.160 we're now seeing the industry leaders like Mayo, Clinical Labs, 0:09:54.240 --> 0:09:57.360 Lab Core Quests, the big lab companies as they're often 0:09:57.400 --> 0:10:00.280 thought of, beginning to develop these tests. You can imagine 0:10:00.360 --> 0:10:02.720 the paradigm shift will have if we're able to get 0:10:02.840 --> 0:10:06.559 at home testing that's reliable, that will really facilitate people, 0:10:06.600 --> 0:10:08.880 particularly trying to get back to work or kids going 0:10:08.880 --> 0:10:11.320 to school. Well, speaking of kids going back to school, 0:10:11.520 --> 0:10:14.439 um for students who are going back to university of campuses. 0:10:14.559 --> 0:10:16.800 Jason and I were talking earlier about how some schools 0:10:16.800 --> 0:10:20.400 will say that they will be testing students what fairly 0:10:20.440 --> 0:10:24.040 frequently twice a week for instance, What kind of what 0:10:24.120 --> 0:10:26.880 kind of problems or challenges do you foresee in being 0:10:26.920 --> 0:10:29.760 able to execute that not just on one campus but 0:10:29.960 --> 0:10:33.160 across the nation. Yeah, it's really a lot of the 0:10:33.240 --> 0:10:36.000 challenges we've seen Scarlett throughout the pandemic, which is really 0:10:36.000 --> 0:10:39.200 one of infrastructure. I think all of these universities will 0:10:39.320 --> 0:10:41.920 point out that they weren't really set up or contemplating 0:10:42.000 --> 0:10:44.560 doing this ever in the past, and so you know, 0:10:44.559 --> 0:10:46.440 what we really look at is how can we take 0:10:46.760 --> 0:10:50.200 infrastructure we've had in place for the traditional settings and 0:10:50.280 --> 0:10:54.120 expand them these sorts of settings, including universities. You know, 0:10:54.360 --> 0:10:57.880 down in Florida and the pandemic started, they have sixty 0:10:57.880 --> 0:11:01.319 seven counties with clinics that wanted to obviously leverage is 0:11:01.400 --> 0:11:03.640 part of the testing, and just in a few days 0:11:03.679 --> 0:11:06.199 we connected them with the commercial labs because we had 0:11:06.200 --> 0:11:08.920 most of the infrastructure in place to help with the 0:11:09.080 --> 0:11:12.000 challenges that they continue to have, like many of these 0:11:12.000 --> 0:11:15.440 hotspots states in Florida, and I think you know, universities 0:11:15.520 --> 0:11:17.640 very unusually as you can imagine, are now having to 0:11:17.679 --> 0:11:20.760 contemplate how they do that as well prior to school starting. 0:11:21.800 --> 0:11:25.320 And so last question for you and Neil, what's the 0:11:25.480 --> 0:11:28.120 sort of technology solution that sort of sticks with us 0:11:28.320 --> 0:11:30.800 here now that all of this tech has been thrown 0:11:30.800 --> 0:11:33.640 I mean your background was having a big job over 0:11:33.679 --> 0:11:37.720 the health sector at Oracle. I do wonder how how 0:11:37.720 --> 0:11:40.280 our lives going to be different even beyond COVID testing 0:11:40.320 --> 0:11:42.040 when it comes to tech. Only got about a minute 0:11:42.080 --> 0:11:46.120 left here. Well, there's gonna be a lot more digital data, Jason, 0:11:46.200 --> 0:11:48.720 that's going to be used for variety of purposes. So 0:11:48.760 --> 0:11:52.720 I'd say it's really three things. More data, more connectivity, 0:11:52.840 --> 0:11:57.280 and the interoperability around that data and connectivity to enable 0:11:57.400 --> 0:12:00.560 people to basically better maintain or improve health or in 0:12:00.600 --> 0:12:04.480 this case, deal with a crisis situation like the pandemic. Right, 0:12:04.720 --> 0:12:07.360 A lot to learn, We're going to be dealing with 0:12:07.400 --> 0:12:09.679 this a lot. I have a feeling, especially in this 0:12:09.760 --> 0:12:11.880 race to a vaccine, we've got to get tested to 0:12:12.040 --> 0:12:13.880 get back to work, as you point out, and back 0:12:13.880 --> 0:12:18.200 to school. Neil D. Crescenso is the CEO of Change Healthcare, 0:12:18.280 --> 0:12:21.520 joiningus on the phone from San Francisco. This is Bloomberg 0:12:21.559 --> 0:12:24.680 Business Week. But let's get into the world of sports. 0:12:24.800 --> 0:12:28.800 John Stashower joins us Bloomberg sports reporter on the remote 0:12:28.840 --> 0:12:33.280 line from Connecticut. Alright, so, John, we saw some baseball 0:12:33.360 --> 0:12:37.160 over the weekend. We're gonna see less baseball tonight. How 0:12:37.200 --> 0:12:42.160 in danger is the baseball season given these positive tests 0:12:42.160 --> 0:12:44.640 with the Miami Marlins. Yeah, we don't never really know. 0:12:44.760 --> 0:12:47.240 I think we have to wait for more test results. 0:12:47.240 --> 0:12:50.400 I think we're at eleven Miami Marlins players right now. 0:12:50.400 --> 0:12:52.160 There was I think the report of twelve. Least I 0:12:52.160 --> 0:12:54.480 heard was eleven plus a couple of coaches. One player. 0:12:55.160 --> 0:12:57.680 First positive tests I guess last Friday, and it's spread 0:12:57.679 --> 0:13:00.120 through the team and they are still in Philadelphi. Few 0:13:00.120 --> 0:13:02.760 of the Marlins were supposed to come home last night 0:13:03.280 --> 0:13:05.360 or then this morning. They still haven't done it. They're 0:13:05.360 --> 0:13:07.560 winning on these test results. I mean, if it stays 0:13:07.640 --> 0:13:10.680 right there at eleven Miami Marlins. You know that these 0:13:10.840 --> 0:13:14.040 teams have extra players at an alternate campsite, they can 0:13:14.040 --> 0:13:17.160 bring them up. But who knows. You know, they played 0:13:17.160 --> 0:13:20.000 the Braves last week in Atlanta, and the Braves were 0:13:20.000 --> 0:13:21.840 in New York they played the Mets. Now the Mets 0:13:21.840 --> 0:13:24.320 are in Boston to play the Red Socks. So who 0:13:24.360 --> 0:13:26.200 knows how one long this how much this thing can 0:13:26.240 --> 0:13:29.160 spread around. So John, eleven out of a squad of 0:13:29.200 --> 0:13:32.880 how many and therefore doesn't mean that the Braves need 0:13:32.920 --> 0:13:34.480 to get tested as well, and the Phillies need to 0:13:34.480 --> 0:13:37.520 get tested too, Yeah, I would think absolutely. And you know, 0:13:37.559 --> 0:13:40.280 as we just talked about, there's thirty. Normally our team 0:13:40.320 --> 0:13:42.360 in Pastors has had twenty five. They were gonna expand 0:13:42.360 --> 0:13:46.720 it to twenty six. Anyway, they're starting with thirty players, uh, 0:13:46.760 --> 0:13:49.320 and then they have like another thirty, Like there's no 0:13:49.400 --> 0:13:52.000 minor leagues this year, but they have like a reserves 0:13:52.040 --> 0:13:54.920 of about thirty players. So yeah, they can replace these 0:13:54.960 --> 0:13:58.280 eleven players with with other players. But yeah, we have 0:13:58.400 --> 0:14:01.040 to wait on the test results. Are they more Marlins, 0:14:01.080 --> 0:14:04.280 like you said, the Braves, the Phillies, the Phillies was 0:14:04.280 --> 0:14:06.880 supposed to host the Yankees tonight. That game has been 0:14:06.920 --> 0:14:09.840 postponed because the Yankees would have been going into the 0:14:09.880 --> 0:14:13.400 locker room that the Marlins had just used this past weekend. 0:14:13.440 --> 0:14:15.880 So they didn't want that to happen, obviously, and obviously 0:14:15.880 --> 0:14:17.520 there's a ton of money on the line. I mean, 0:14:17.520 --> 0:14:19.720 not to be too cross about it here, John, I mean, 0:14:19.800 --> 0:14:22.200 baseball basically sort of limped over the finish line to 0:14:22.280 --> 0:14:26.760 get these sixty games. They opted not to bubble themselves 0:14:26.880 --> 0:14:30.280 as some of the other leagues have done, and a 0:14:30.280 --> 0:14:31.920 lot of folks have a lot to lose players and 0:14:31.920 --> 0:14:35.600 owners alike here if we if this season doesn't go on, 0:14:36.320 --> 0:14:38.760 Oh there's no question about it, and a lot of surprise. 0:14:38.840 --> 0:14:41.040 We haven't heard yet from the commissioner around Manford, but 0:14:41.080 --> 0:14:44.040 I assume we will at some point today that you know, 0:14:44.080 --> 0:14:46.640 maybe he's waiting on these these test results. But it's 0:14:46.640 --> 0:14:48.360 a good point you make about the bubble because the 0:14:48.360 --> 0:14:51.400 other sports are doing that. The hockey players have arrived 0:14:51.400 --> 0:14:55.320 in Canada, they're getting ready to have playoff games this weekend. Um. 0:14:55.560 --> 0:14:58.000 The NBA players are in this bubble in Orlando. The 0:14:58.080 --> 0:15:00.880 latest test results from NBA players were no positive tests, 0:15:00.920 --> 0:15:04.640 so Baseball talked about doing the bubble changed their mind. 0:15:05.320 --> 0:15:07.200 Some people thought maybe they were thought they were smart 0:15:07.200 --> 0:15:09.119 because they were going to go to Florida and Arizona, 0:15:09.320 --> 0:15:11.240 two places you don't want to be right now. But 0:15:11.880 --> 0:15:14.480 no bubble, a lot of travel and you know, that's 0:15:14.480 --> 0:15:16.960 why the Toronto the Canadian government didn't let the Blue 0:15:17.000 --> 0:15:20.080 Jays play in Toronto because they didn't want players traveling 0:15:20.360 --> 0:15:22.880 in and out of the country. And my understanding John 0:15:22.880 --> 0:15:25.800 as well, is that these Marlin's players got tested before 0:15:25.880 --> 0:15:28.080 they played their game against the Phillies, right and then 0:15:28.120 --> 0:15:31.000 they got their results after the game. So they went 0:15:31.040 --> 0:15:35.640 into that game presumably eleven of them um testing positive. 0:15:36.080 --> 0:15:39.920 And right now, in terms of context, the league is 0:15:39.960 --> 0:15:42.560 trying to play when the case number in the country 0:15:42.760 --> 0:15:45.520 is higher than when sports overall shut down in March. 0:15:45.800 --> 0:15:48.920 It's pretty stunning when you think about the broader picture. Well, 0:15:48.960 --> 0:15:51.040 I mean, if you think back to when this all started, 0:15:51.040 --> 0:15:54.400 they remember those one NBA player who tested positive, and 0:15:54.400 --> 0:15:56.880 it was all like, oh my god, you know, and 0:15:56.920 --> 0:15:59.960 now yeah, they're they're playing with with all kinds of 0:16:00.000 --> 0:16:04.400 players having the virus testing positive. Um, you know, they 0:16:04.400 --> 0:16:06.720 were the report. Originally, as of this morning, there was 0:16:06.760 --> 0:16:10.240 that four Marlins had tested positive, and you could argue 0:16:10.240 --> 0:16:12.360 maybe they shouldn't have played a game yesterday, actually won 0:16:12.360 --> 0:16:15.040 the game yesterday in Philadelphia, But then they got more 0:16:15.080 --> 0:16:19.280 test results and now we're up to eleven. And I 0:16:19.360 --> 0:16:22.560 have to think Roger Goodella and others in the National 0:16:22.600 --> 0:16:26.920 Football League or watching this in a very very worried way, John, Oh, yeah, absolutely, 0:16:26.960 --> 0:16:30.360 football is a big question mark. They can't have a bubble, 0:16:30.440 --> 0:16:32.360 you know. I mean, there's just too man two large 0:16:32.360 --> 0:16:35.760 a roster, so many coaches and all that, so you know, 0:16:35.800 --> 0:16:38.320 it's such a contact sport and some of the college 0:16:38.360 --> 0:16:41.360 players where we're having workouts and we were hearing about, 0:16:41.680 --> 0:16:44.960 you know, dozens of positive tests as a result of that. 0:16:45.000 --> 0:16:47.280 College football as a whole other story, you know, with 0:16:47.320 --> 0:16:49.080 the kids who are not if they may not even 0:16:49.120 --> 0:16:52.360 have classes and they really have football games. So I'm 0:16:52.360 --> 0:16:54.720 sure the NFL is gonna try. You talked before about 0:16:54.800 --> 0:16:56.960 the money involved, So the NFL is gonna give it 0:16:57.000 --> 0:16:58.720 a go, but I think there's a lot of questions 0:16:58.760 --> 0:17:01.280 about whether it'll work. All right, John stash Our, We're 0:17:01.320 --> 0:17:04.000 gonna leave it there. Thank you so much. Great context 0:17:04.119 --> 0:17:07.200 and keeping us up to date on a story scarlet 0:17:07.240 --> 0:17:09.440 that obviously all of us are watching. You and I 0:17:09.480 --> 0:17:12.040 are big sports fans, and it was great to see 0:17:12.040 --> 0:17:15.400 baseball back. But who knows, maybe short lived, or maybe 0:17:15.480 --> 0:17:17.680 they will find a way through this hard to say. 0:17:17.840 --> 0:17:21.240 You're listening to Bloomberg business Week, Well, let's dive into 0:17:21.920 --> 0:17:25.800 the magazine if we can. Bloomberg business Week, this is 0:17:25.800 --> 0:17:29.639 a story that's on the Bloomberg and at Bloomberg dot com. 0:17:29.840 --> 0:17:32.080 One of our phase him a parmer. She joins us 0:17:32.320 --> 0:17:34.800 on the phone from New York City, along with Joel Weber, 0:17:34.880 --> 0:17:38.720 the editor of Bloomberg Business Week. He joins us from Massachusetts. 0:17:39.240 --> 0:17:41.320 You know, I love talking about hedge funds and fees 0:17:41.400 --> 0:17:43.479 and money in Wall Street. Joel so te this up 0:17:43.480 --> 0:17:48.479 for us. Uh So, the moment that um Nischanch, who 0:17:48.560 --> 0:17:50.880 was one of the UH co authors on this kind 0:17:50.880 --> 0:17:52.840 of spoke up about it, I was like, oh, please 0:17:52.880 --> 0:17:56.840 tell me more. And obviously the two and twenty UH 0:17:56.960 --> 0:18:00.680 business model has been a mainstay of the hedge funds 0:18:00.760 --> 0:18:04.359 in this industry. UM, but we're we're beginning to see 0:18:04.800 --> 0:18:08.679 UH that get trimmed and um and it's not just 0:18:08.760 --> 0:18:11.280 a little trimming. It's a big trim him. And what 0:18:11.320 --> 0:18:15.200 did you guys discover as you dug into the numbers 0:18:15.200 --> 0:18:19.240 behind the story? Yeah, so UM in our story, we 0:18:19.240 --> 0:18:22.680 we're looking at the fee changes over see hedgebund sees 0:18:22.720 --> 0:18:25.000 them falling for a number of years. But what we're 0:18:25.000 --> 0:18:27.879 seeing now is not only are they continuing to fall, 0:18:28.080 --> 0:18:31.040 but you're seeing a lot of UM creative things that 0:18:31.280 --> 0:18:36.359 hedge funds are offering more concessions UM, such things as 0:18:36.640 --> 0:18:39.760 one funds offering to cover all investor losses that's almost 0:18:39.880 --> 0:18:42.679 never heard of UM. One fund is doing away with 0:18:42.720 --> 0:18:45.919 performance fees until they hit a threshold. Some firms are 0:18:46.000 --> 0:18:49.119 lowering their fees in exchange for locking up capital for 0:18:49.160 --> 0:18:52.280 more time. And what this is reflective of is UM 0:18:53.240 --> 0:18:55.680 a decline and some of the assets that we're seeing 0:18:55.680 --> 0:18:57.840 as investors have been pulling away from hedge funds a 0:18:57.880 --> 0:19:03.320 little bit and demand doing uh lower fees as performances 0:19:03.359 --> 0:19:05.840 away and just hasn't compared to the kind of returns 0:19:05.920 --> 0:19:08.480 we were seeing twenty years ago. Okay, so when we 0:19:08.600 --> 0:19:11.240 talk about two and twenty, is two percent management fees 0:19:11.240 --> 0:19:14.000 and is the cut of profits? A lot of people 0:19:14.040 --> 0:19:16.440 have said that two and twenty has been out of 0:19:16.720 --> 0:19:19.200 play for a long time. There have been modifications to that. 0:19:19.600 --> 0:19:21.680 But in your story how much you also talk about 0:19:21.720 --> 0:19:26.480 this one or thirty fee model. What does that even mean? Yeah, 0:19:26.560 --> 0:19:30.040 so one or thirty it's been champion by an L 0:19:30.119 --> 0:19:33.000 Born And basically what it means is in a good year, 0:19:33.040 --> 0:19:36.800 as a fun you could charge of the performance and 0:19:37.240 --> 0:19:39.800 no assets, no fees on the asset side. But in 0:19:39.880 --> 0:19:42.400 a bad year you would charge just one percent of assets. 0:19:42.720 --> 0:19:46.120 And what that does is it equals it equals out 0:19:46.520 --> 0:19:48.399 um the fees that you can charge and makes them 0:19:48.440 --> 0:19:51.879 more attractive to potential investors. And this has become increasingly 0:19:52.000 --> 0:19:55.440 popular with a number of hedge funds, and it's becoming 0:19:55.600 --> 0:19:58.600 um something that I think allocators are asking for too. 0:20:00.480 --> 0:20:02.879 So him UM when when you think about, you know, 0:20:03.119 --> 0:20:07.800 how long the hedge fund industry has gotten UM gotten 0:20:08.359 --> 0:20:10.240 you know away with this this has been really the 0:20:12.080 --> 0:20:15.960 normal for for decades now, UM. And obviously this has 0:20:16.080 --> 0:20:21.320 some profound impact UM, especially for investors. Uh So we're 0:20:21.560 --> 0:20:25.960 investors actually saying about this change in tactic because I 0:20:26.000 --> 0:20:27.760 mean it seems almost like it could have happened a 0:20:27.840 --> 0:20:31.280 decade ago. UM at this point, UM, you know, is 0:20:31.320 --> 0:20:33.919 it is it all happening too late? And and how 0:20:34.040 --> 0:20:37.800 sticky is this money ultimately going to be among institutional 0:20:38.000 --> 0:20:42.000 institutional investors. Well, investors I think are happy. UM, they 0:20:42.080 --> 0:20:45.600 are able to negotiate and get better sees. The bigger 0:20:45.720 --> 0:20:48.560 the allocator is, the more influence they have, the better 0:20:48.600 --> 0:20:51.640 fees they can negotiate for themselves. UM. Even the numbers 0:20:51.680 --> 0:20:55.080 that we've mentioned in our story, UM, an allocator could 0:20:55.560 --> 0:20:58.840 an investor could demand an even more preferential treatment for 0:20:58.880 --> 0:21:02.000 themselves if they have a big ticket investment investment that 0:21:02.040 --> 0:21:07.080 they're making. UM. And etaties have been declining as hedge been. 0:21:07.119 --> 0:21:09.320