Speaker 1: This is Bloomberg Business Week. I'm Karl Masser. Every day
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Speaker 1: pm Eastern on Bloomberg Radio and be sort of watch
Speaker 1: us too on YouTube by searching Bloomberg Global News. Well,
Speaker 1: Alex and I were just chatting about a store on
Speaker 1: the Bloomberg about the pressures on healthcare workers here as
Speaker 1: we go into a second and third wave here, and
Speaker 1: it must just be just the ongoing cumulative pressures and
Speaker 1: the on these healthcare workers is just extraordinary. Our next
Speaker 1: guests can help us talk about that a little bit.
Speaker 1: In the overall home healthcare services space. ALYSSA. Wrap is
Speaker 1: a chief executive officer of Surgical Solutions. He joins us
Speaker 1: on the phone from Deerfield, Illinois. Lissa, thanks so much
Speaker 1: for joining us. I know you've got your company has
Speaker 1: over to employees on the frontlaw lines of this crisis. Here,
Speaker 1: give us a sense of what you're hearing from them.
Speaker 1: I mean, this is month ten, and it looks like
Speaker 1: we're gonna have a couple three more difficult months ahead
Speaker 1: of us. How are they doing well? Thanks for asking
Speaker 1: and thanks for having me back, Paul and Alex. You know,
Speaker 1: it's been a crazy and wild year for frontline healthcare workers.
Speaker 1: I was looking this morning at our volume of the
Speaker 1: kind of the number of surgeries they've supported from November
Speaker 1: of eight thousand and months that's then dipped and plummeted
Speaker 1: to two thousand in April, and starting in July and
Speaker 1: August it was back and now we're up above a
Speaker 1: hundred and fifteen of our annual volume from last year
Speaker 1: because people are rescheduling those procedures that were canceled or
Speaker 1: trying to get them in before their year in deductibles
Speaker 1: are refreshed. So what is how would I feel or
Speaker 1: you feel if we had been on that roller coaster ride, exhausted,
Speaker 1: a little burnt out, motivated by the mission of the
Speaker 1: work and serving the end patient, and anxiously awaiting the vaccine.
Speaker 1: It's been a heck of a year and it feels
Speaker 1: like it's going to be medium worse in some ways.
Speaker 1: We have this new strain of COVID that was discovered
Speaker 1: in the UK that hasn't been reported here yet, but
Speaker 1: by all admissions like, there's no way it can't get
Speaker 1: here at some point right where it might be here already.
Speaker 1: What are you hearing about that from your online workers? Yeah,
Speaker 1: so what I am hearing is that people are cautiously
Speaker 1: optimistic that the current vaccines will vaccinate against the current
Speaker 1: strain and those uh less virulent but more fast spreading
Speaker 1: strains or mutations, so they're not as afraid of the mutations.
Speaker 1: What we're all concerned about for our two or fifty
Speaker 1: people in thirty five hospitals in nine states is when
Speaker 1: are they going to get the vaccine? And there's they're
Speaker 1: in the front line to get it in January, but
Speaker 1: they're not there yet. Yeah, that's kind of where I
Speaker 1: want to go. Well, listen, I think you know, and
Speaker 1: we all in the eu furia of the last month
Speaker 1: or so of these uh fives and modern vaccines. You know,
Speaker 1: the number that I seem to have been the acceptable
Speaker 1: number out there is maybe twenty million vaccinations by the
Speaker 1: end of count I think we're nowhere near that. What
Speaker 1: is your sense of of how this is rolling out
Speaker 1: in some of the early days here, Great question, Paul.
Speaker 1: So what we are seeing is at about of each
Speaker 1: hospitals eligible staff is getting vaccinated or has been already.
Speaker 1: What does that mean. You're an e ER worker, you're
Speaker 1: an I c U worker, or you're a surgeon, you
Speaker 1: have probably been vaccinated. If you're in a major metropolis
Speaker 1: or a market that has access to the vaccine. If
Speaker 1: you're the other of the essential workers, you're getting it next,
Speaker 1: but you probably haven't had that first shot yet, by
Speaker 1: and large, So that's great that we're making progress. What
Speaker 1: we need is more progress faster. Um, are you hearing
Speaker 1: anything about individuals not wanting to take it? In the
Speaker 1: healthcare profession? It's interesting and our our team is you know,
Speaker 1: frontline support for minimally invasive surgeries, and we have a
Speaker 1: roster of vaccines and immunizations our team has to get
Speaker 1: before they go into any hospital, and the hospital policy
Speaker 1: about vaccines is what governs ours for our team. And
Speaker 1: so in these hospitals where it's required of their staff,
Speaker 1: there's really not been any pushback of when our team
Speaker 1: is getting it. If anything. It's the contrary, are we
Speaker 1: on the list to get it when when our run
Speaker 1: of essential worker gets vaccinated in the answer is yes,
Speaker 1: I'm sure there will be pushback, But when you are
Speaker 1: on the front line, UM, and you are knowing how
Speaker 1: exposed you've been, I haven't seen it yet with our team.
Speaker 1: So Alyssa, let's switch gears a little bit um PPE.
Speaker 1: That was such a big problem in the initial wave
Speaker 1: back in March in April, and it really underscored kind
Speaker 1: of the risk to the supply chain, if you will. Well,
Speaker 1: here we are fast forward ten months later. Where are
Speaker 1: we in terms of P p P within the healthcare
Speaker 1: system to deal with these rising numbers? I can I
Speaker 1: can speak to this anecdotally, not nationwide, but anecdotally. We
Speaker 1: saw a dearth of PP in all major markets when
Speaker 1: this first hit, like everybody did, and then those major
Speaker 1: metropolo these again New York City, Chicago, l A, San
Speaker 1: Francisco stockpiled and so those markets are now flushed with PPE.
Speaker 1: But where we're seeing a shortage now uh eight, nine,
Speaker 1: ten months later is in more rural markets and more
Speaker 1: small regional hospitals. That's where our folks have said they're
Speaker 1: starting to see a decline, and we have our own
Speaker 1: corporate stockpiled just in case our people made it. We
Speaker 1: want them armed with the right artillery to go to battle,
Speaker 1: so to speak. But we've heard the pinch the greatest
Speaker 1: so far in Rule America, not in the major metropolis,
Speaker 1: just totally. Also, what area right now is worse off that?
Speaker 1: I don't know. I think that it depends how you
Speaker 1: define where's we're soft right. I think that the major
Speaker 1: metropolis are gonna see higher numbers by by definition, but
Speaker 1: it's all about preparedness and also the rate of positivity.
Speaker 1: So the first wave in the Q two hit those
Speaker 1: dense urban markets the highest, where the smaller markets were
Speaker 1: not as scathed. And here we are. We saw a
Speaker 1: big pop in those secondary in tertiary markets in October
Speaker 1: November because that's when it hit. That first wave was
Speaker 1: was really their first wave. And so now it's I
Speaker 1: don't want to stay calming to a dull roar. The
Speaker 1: numbers are the numbers. We all see them. But it's
Speaker 1: I think people are more prepared and I'm just hopeful
Speaker 1: that the vaccine can come in a more widespread manner
Speaker 1: before there. As you said earlier, a third, fourth, and
Speaker 1: fifth wave of this thing. So listen, just in the
Speaker 1: next twenty seconds, where are your people mostly deployed. Are
Speaker 1: they smaller, more rural markets maybe where they're understaffed. No, Actually,
Speaker 1: we have forty of our team in New York City,
Speaker 1: and then we also have them in big, big markets
Speaker 1: like Houston, and then uh, you know, a large number
Speaker 1: in Kentucky and Louisiana and upstate New York and other places.
Speaker 1: But now we're we sort of see both extremes, the
Speaker 1: large urban markets in the in the smaller regional ones. Hey, listen,
Speaker 1: thanks so much for joining us. Again. We always appreciate
Speaker 1: your perspective here on this unfolding stories that moves from
Speaker 1: you know, just trying to deal with it on a
Speaker 1: day to day basis, to therapeutics and vaccines. So we
Speaker 1: appreciate your thoughts and listen. Rap Chief executive Officer Surgical Solutions,
Speaker 1: joining us on the phone from the Deerfield, Illinois, and again,
Speaker 1: Alex interesting, We're gonna be seeing how this vaccination rollout
Speaker 1: plays out over the coming weeks and months, and hopefully
Speaker 1: it can go smoothly so we can do it as
Speaker 1: efficiently as possible. Well, we did finally get that fiscal
Speaker 1: stimulus bill passed and sign although it was an ugly
Speaker 1: process over the last several days. You had weird coalitions.
Speaker 1: On one day you had the president with the Democrats
Speaker 1: and you have the Republicans and not with their president.
Speaker 1: But it all got said, all got done there in
Speaker 1: the end, let's get the latest. Let's dig under the hood.
Speaker 1: We can do that with Laura Davison, congressional tax reporter
Speaker 1: for Bloomberg News. She joined us on the phone from Washington,
Speaker 1: d C. So, Laura, we did get a plan. Talk
Speaker 1: to us about the stimulus payment that seems to be
Speaker 1: the real bone of contention here between all parties involved. Yes,
Speaker 1: so similar to the Cares Act backs in March, this
Speaker 1: still has another stimulus payment, this time six dollars for
Speaker 1: adults and four children. Uh. Last time it was college
Speaker 1: for adults, five dred for children. But otherwise the eligibility
Speaker 1: is is relatively similar. Um, if you make less than
Speaker 1: seventy five thousand dollars as an individual, you'll get that
Speaker 1: full payment. Twice that a hundred and fifty thousand dollars
Speaker 1: for a married couple, you'll get that full amount. And
Speaker 1: there's a phase out, so uh, you know for about
Speaker 1: twenty dollars. On top of that, there's a you'll get
Speaker 1: a diminishing amount below that six hundred dollars. Uh. But
Speaker 1: this is still very much a live issue. There is
Speaker 1: a vote planned in the House of Representatives tonight that
Speaker 1: would increase that amount to two thousand dollars, both for
Speaker 1: adults and children. Unclear how it will fare in the House, However,
Speaker 1: the prospect for this passing Congress is not likely. The
Speaker 1: Senate is not likely to bring us up, or if
Speaker 1: if they were to it, it would like to not
Speaker 1: pass that chamber is two thousand dollars on the table
Speaker 1: for like three weeks from now, You know, that is
Speaker 1: a good question. Obviously there will be a change of
Speaker 1: administration uh come next month. The question really hangs the
Speaker 1: bounce of you know, what happens in Georgia. Uh, is
Speaker 1: that runoff election for both Georgia seats That will determine
Speaker 1: the control of the Senate UM and that will really
Speaker 1: sort of be a deciding factor in terms of, you know,
Speaker 1: what can get done legislatively, what sort of political appointees
Speaker 1: UM are able to to pass the Senate and enjoining
Speaker 1: Biden administration. So there's a lot of question mark about
Speaker 1: you know, not only you know, what can be done politically,
Speaker 1: but also what the state of the economy and the
Speaker 1: virus and the vaccine will be and what the what
Speaker 1: the calls will be for in terms of what parts
Speaker 1: of the economy need boosting at that point. So, Laura,
Speaker 1: you've covered this Congress thing for a while, what do
Speaker 1: you make of the seemingly lack of coordination and cohesion
Speaker 1: between the White House uh, their Republican colleagues, and then
Speaker 1: the Democratic Party just seem like the President really pulled
Speaker 1: the wrong out from under his own party. He he
Speaker 1: really did. You know, Congresses is known for chaos, but
Speaker 1: even by Congress of standards, this was quite bizarre. Um.
Speaker 1: It has created some really weird factions where you had Democrats,
Speaker 1: you when when President Trump said, hey, you know, I
Speaker 1: want two thousand dollars, they were like, great, We've been
Speaker 1: saying this for months, let's take a vote on it.
Speaker 1: And Republicans were put in a very awkward position of,
Speaker 1: you know, having negotiated actually for a lower stimulus payment
Speaker 1: rather than a higher one. Yeah, that they're definitely when
Speaker 1: I saw the headline last week was on vacation. I
Speaker 1: was like, wait, what happened? Usually go away, nothing happens,
Speaker 1: you can back, everything is the same. Um, So what
Speaker 1: else is in this bill, um that we need to
Speaker 1: know about. I feel like we've glossed over kind of
Speaker 1: what's happening for the sectors that need to be bailed
Speaker 1: out again that are the ones actually rallying today. Yeah.
Speaker 1: So there is a new round of p p P
Speaker 1: that Paycheck Protection Program money UH to kind of go
Speaker 1: out to two small businesses across the board. They specifically
Speaker 1: targeted some money to two very small businesses minority owned. UH.
Speaker 1: There's a lot of money for for stages for for
Speaker 1: live performance venues, which had lobby hard saying, hey, look
Speaker 1: we've been closed for months and really unable to do anything.
Speaker 1: There's some additional airline aid UM. And there's also very
Speaker 1: importantly another round of unemployment benefits, these sort of enhanced
Speaker 1: federal benefits to to help people who are who are
Speaker 1: out of work and kind of keep them afloat UH
Speaker 1: for for the coming months. So on the p PP side,
Speaker 1: Lard there was some concern and some criticism last time
Speaker 1: that it didn't really get to the small and midsized
Speaker 1: businesses that really needed it. For example, if he didn't
Speaker 1: have a relationship with a bank, Uh, it was very,
Speaker 1: very difficult to get the funds. Is there any modification
Speaker 1: to the plan this time? As far as we can tell,
Speaker 1: there's there's several things that they did, um and and
Speaker 1: the advocates who were pushing for those changes are hopeful
Speaker 1: that that small you know, those very small businesses, we
Speaker 1: will be able to access the funds. They changed with
Speaker 1: the incentive structures for the banks who were actually making
Speaker 1: these loans, processing these loans, so that they wouldn't necessarily
Speaker 1: benefit or you know, be incentivized to take only big
Speaker 1: loans and not take small loans. There's a certain part
Speaker 1: of the money that's earmarked for these very small loans.
Speaker 1: Um and they've also just made the process a lot
Speaker 1: easier for the businesses applying. There is some concern that
Speaker 1: there were you know, just there is some reputational risk
Speaker 1: uh and with the program of people of her that
Speaker 1: it's complicated that it's hard that the rules change, and
Speaker 1: some businesses may be scared. Though there's a lot of
Speaker 1: efforts sort of in the small business community development world
Speaker 1: trying to get businesses who are who are hurting to
Speaker 1: go ahead and apply for this money. Y Lara, thanks
Speaker 1: so much for joining us. We really appreciate it clarifying
Speaker 1: what's coming out of Washington here in terms of that
Speaker 1: fiscal stimulus. Laura Davison, congressional tax reporter for Bloomberg News.
Speaker 1: She joins us on the phone from Washington, d C.
Speaker 1: And there's a lot of moving parts there, Alex. But
Speaker 1: I guess this is a good first step, and then
Speaker 1: we'll have to just wait and see what the Biden administration,
Speaker 1: what strep strategy that they want to take in terms
Speaker 1: of fiscal stimulus. Presumably they're going to want to be
Speaker 1: more aggressive, your boy, I guess we'll have to wait
Speaker 1: and see what happens, certainly in Washington, d c. Uh
Speaker 1: to make it the makeup of Congress. You're listening to
Speaker 1: Bloomberg Business Week with Carol Masser on Bloomberg Radio. Let's
Speaker 1: take some time and talk about the global oil business.
Speaker 1: When you think about all the commodities after that have been,
Speaker 1: you know, swinging around during this pandemic. On news as
Speaker 1: it relates to the pandemic, metrics as it relates to vaccines,
Speaker 1: crude oil has been one of the most actives, and
Speaker 1: clearly it's a bell weather and it's a reflects on
Speaker 1: investors belief about when this economy will begin to open.
Speaker 1: Let's get the latest. We can do that with the
Speaker 1: professor Brenda Schaefer. She's from the She's a research faculty
Speaker 1: member of the U S. Naval post Graduate School, also
Speaker 1: a fellow with the Atlantic Council's Global Energy Center. She
Speaker 1: joins us on the phone from Washington, d C. Professor
Speaker 1: of Schaeffer, thanks so much for joining us here. You know,
Speaker 1: we've seen oil kind of rally up to the high
Speaker 1: forties here in terms of w t I, but it
Speaker 1: really seems to be driven by demand or the perceptions
Speaker 1: of demand going forward, as opposed to supply a little bit.
Speaker 1: We know it's a commodity and it's a demand supply issue,
Speaker 1: but it just feels like it's being driven by demand.
Speaker 1: How do you view the global oil markets right here?
Speaker 1: Thank you? Yes, and I think that there is I mean,
Speaker 1: we're backed up to um the pre COVID, you know,
Speaker 1: oil oil price rate, you know, bent back up to
Speaker 1: the rates of of March um. So it's definitely a
Speaker 1: confidence in the direction of that with the general economic
Speaker 1: trends are going UM. But I think that there's two
Speaker 1: big picture trends that are going to emerge post COVID,
Speaker 1: and it's pretty clear to anyone you know, trading in oil. UM.
Speaker 1: One is that we're not going back to the same
Speaker 1: rates of public transportation. So even after the vaccine, after
Speaker 1: people return to work, UM, they're not going to return
Speaker 1: to the same rates of use of public transport. Transportation
Speaker 1: that that fuer will probably linger for a long time.
Speaker 1: And the second is the use of plastics. So if
Speaker 1: we would almost already factored in two thousand eighteen two
Speaker 1: thousand nineteen sort of a general global decline and demand
Speaker 1: for plastics, UM with you know, different environmental goals, UM,
Speaker 1: you know, and and and commercial goals, UM, it's clear
Speaker 1: that plastics demand will be high. And plastics, you know,
Speaker 1: the main is a sector that uses a lot of
Speaker 1: oil to produce it. So these are two things that
Speaker 1: won't change that you know, dependent on you know, regardless
Speaker 1: of what happens going forward with the pandemic, with the economy,
Speaker 1: we're not going to see return earned to the same
Speaker 1: levels of public transportation or or a decline in demand
Speaker 1: for plastics. Can other things offset that so diesel, for example,
Speaker 1: or other petro cam products. UM. Yes, I think the
Speaker 1: specifics you know for plastics that you know right now
Speaker 1: with current technologies, UM, I don't think we'll see, you know,
Speaker 1: a big, big change in that trend. But there are
Speaker 1: on the supply side a couple more short term things
Speaker 1: that could affect the market. UM. One, we have OPEC
Speaker 1: plus meeting again in January and reevaluating their strategy. It
Speaker 1: looks like Russia actually wants to up production, which would
Speaker 1: mean UM, you know, downward pressure on the price UM.
Speaker 1: And this is in order to preempt US shale from
Speaker 1: recovering and you know and coming back in in a
Speaker 1: big way to the market. And then a second big
Speaker 1: question mark is that UM, if the incoming Biden administration
Speaker 1: will quickly go back to an agreement with Ran will
Speaker 1: allow more Iranian oil to the market, how quick Iran
Speaker 1: manages to up its production if that takes place, So
Speaker 1: on the supply side, there could be more oils coming
Speaker 1: into the market UM in early one that would affect
Speaker 1: the price UM, but those bigger issues on the demand
Speaker 1: side probably won't won't be moved. So, professor, do you
Speaker 1: think we've some people are you know, raise the issue
Speaker 1: prior to the pandemic that perhaps the world had seen
Speaker 1: peak oil. What is your view there? Um, as my
Speaker 1: students know over the years, I don't. I don't believe
Speaker 1: in peak anything when it comes to oil. So so,
Speaker 1: you know, I mean basically having a finite of anything fine,
Speaker 1: whether it's finite supply or finite demand. I think it's
Speaker 1: very uh you know, it's very difficult to conceive of that.
Speaker 1: So it used to be we were talking about peak oil.
Speaker 1: We meant about you know, peak supplies, and that was
Speaker 1: completely debunked. You know, we were we got you know,
Speaker 1: we were we were awash and oil from from from
Speaker 1: two thousand fourteen to about out. Um. Uh so debunks that,
Speaker 1: and then then we had to have a new peak theory,
Speaker 1: which was peak demand. Um. Yeah, I you know, I
Speaker 1: see it doesn't it's much ago. We often talk about
Speaker 1: energy transition, energy transformation as if it's a fact. Sure,
Speaker 1: many things are happening, but I'm still in the transportation sector,
Speaker 1: especially with this new uh lingering fear of public transportation,
Speaker 1: I think we're far away from uh, you know, decoupling
Speaker 1: our activities from oil. In the transportation sector. I mean
Speaker 1: totally right now. I mean look at like SUV sales
Speaker 1: or bananas. I mean, evs are great. Okay, you're gonna
Speaker 1: have more UM subsidies, you're gonna push them out, et cetera.
Speaker 1: Maybe you'll have some charging stations, but people just really
Speaker 1: want to buy SUVs. UM just and we'll get to
Speaker 1: the specific of the energy plan UM that was passed
Speaker 1: in a moment. But I mean, does gasoline have a
Speaker 1: have a real life here, real future UM you know,
Speaker 1: you know, yeah, definitely if you again, if they it's
Speaker 1: it's not even I agree with your point about it's
Speaker 1: UM larger cars, but we're even seeing sort of a
Speaker 1: revival of the used cars and uh, the industry of
Speaker 1: you know, car parts and and repairs, because the same
Speaker 1: people that were riding the bus and the metro UM,
Speaker 1: they might not be buying a new you know, a
Speaker 1: new car. So so it's really a renaissance of those
Speaker 1: industries UM as well. And uh yes, and and and
Speaker 1: still not you know, people can't afford uh, there's the
Speaker 1: same kind of people that are moving from public transportation
Speaker 1: to to private vehicle. UM, you know, probably can't afford
Speaker 1: electric cars regardless of the subsidy. And then quickly, are
Speaker 1: we going to see a point where we don't have
Speaker 1: enough oil for the demand that we're going to meet
Speaker 1: over the next two years or three years. Well, we
Speaker 1: will have enough oil, but it might come at a price.
Speaker 1: And that's why um there, there's there is a big
Speaker 1: chance that you know, what has happened over the past
Speaker 1: the past year and even more or less over the
Speaker 1: past uh six years, when there's spent a lot of
Speaker 1: many periods of low oil prices that there haven't been
Speaker 1: a lot of um uh, there haven't been a lot
Speaker 1: of investments investments in new oil. So so now the
Speaker 1: demand is going up, there isn't necessarily new production there
Speaker 1: to meet the demands. What will happen to you know,
Speaker 1: prices will go up. A big question mark is how
Speaker 1: fast US shale production will uh will reappear because it
Speaker 1: basically it has about the ability relatively to swing back
Speaker 1: faster than a lot of other places um and that
Speaker 1: could be a modifying impact on on on the global
Speaker 1: oil price. But you know, it's not clear how much
Speaker 1: investor appetite uh there is to go back to the
Speaker 1: shale because some most more people have lost money on
Speaker 1: that then than Professor I want to continue discussion and
Speaker 1: kind of go to the fact that we are going
Speaker 1: to have a new administration in the White House in
Speaker 1: a little more than three weeks. What does that mean
Speaker 1: for the U. S energy policy? Do you believe what
Speaker 1: if you heard from the Biden campaign and maybe what
Speaker 1: we know about his past policymaking. Um, yeah, thank you.
Speaker 1: Um yeah, you know, I think that the ability of
Speaker 1: the federal government in general to uh influence some at
Speaker 1: least US energy production is limited relatively to the States,
Speaker 1: you know. So we debated a lot, we talked about
Speaker 1: it a lot, but but at the end of the day,
Speaker 1: you know, most of the regulation of US energy production
Speaker 1: is by you know, by the state structure. So um,
Speaker 1: you know, clearly there's going to be on the formal level, Um,
Speaker 1: you know, more of an emphasis on climate policy. Um.
Speaker 1: And uh, you know, returned to the Paris Agreement. But
Speaker 1: I think on you know, day to day things that
Speaker 1: affect US oil production and oil and gas production, we
Speaker 1: might not see any any uh dramatic changes. And it
Speaker 1: is quite interesting that under the Trump administration, even though
Speaker 1: there wasn't you know, a formal policy of you know,
Speaker 1: promoting climate aversion of promoting renewable energy. Renewable energy production
Speaker 1: continue to grow UH significantly, you know, enter to the
Speaker 1: Trump administration, UM US emissions relative to the economic growth
Speaker 1: continue to decline. UM. So you know, so really the
Speaker 1: you know, the most important signals actually if if there
Speaker 1: are policies that are both economic, it doesn't really matter
Speaker 1: UM or doesn't matter significantly what the political framework is.
Speaker 1: If I think the best example is, UM how the
Speaker 1: switching in the United States of the electricity production from
Speaker 1: natural gas to coal. So this is, you know, without
Speaker 1: any policy, simply because natural gas has been cheaper in
Speaker 1: most markets, UM power product producers have decided to go
Speaker 1: from you know, gas to from coal to gas. And
Speaker 1: this lower US emissions, is lowest US air pollution regardless
Speaker 1: of government policies. Well and then and to that point,
Speaker 1: I mean, even in the budget that UM is said
Speaker 1: to be passed today, there's like twenty three billion that
Speaker 1: was four solar and wind, even though it's a Trump administration.
Speaker 1: Also for carbon capture, et cetera. And I think that's
Speaker 1: something that's nuanced here is that if you get a
Speaker 1: lot of money going into this technology like carbon capture
Speaker 1: or direct air capture or you're basically just sucking carbon
Speaker 1: out of the for air um and then having to
Speaker 1: recycle it. That's actually an oil story. Like oil companies
Speaker 1: are the ones that are actually spending to do that
Speaker 1: because in part they have the infrastructure. Yeah, I think
Speaker 1: I think it's a great point. And how much you know,
Speaker 1: many things you know, because of Congress's support, you know,
Speaker 1: are not contingent on you know, who happens to occupy
Speaker 1: the White House. UM. But also I think you know
Speaker 1: that sometimes we lump all together, um, all fossile fuels
Speaker 1: as if you know, oil, natural gas and coal are
Speaker 1: the same thing. And I think that we're already seeing
Speaker 1: sort of maybe a backtracking in Europe on this because
Speaker 1: why has the US been so successful and lowing air pollution,
Speaker 1: lowering carbon emissions that is just this easy and you know,
Speaker 1: cheap transference from use of coal to natural gas UM.
Speaker 1: And Europe didn't adopt the same policies. They tried to
Speaker 1: sort of skip the fossil fuels, you'll skip natural gas
Speaker 1: and go uh, you know directly into renewable but that's
Speaker 1: the way to lower emissions, and they have not been
Speaker 1: despite all their you know, being part of the Paris agreement,
Speaker 1: all the global agreements, having all the rhetoric, they have
Speaker 1: not been a successful as the United States and lowering
Speaker 1: pollution and lowering carbon emission. So, um, I think we
Speaker 1: might be seen a rethinking of UH natural gas. That
Speaker 1: that really even though the fossil fuel it does has
Speaker 1: such a lower climate impact and pollution impact than the
Speaker 1: alternative fossil fuels. So professor, presumably under Rebided administration, the
Speaker 1: relationship economic relationship between the US and China will improve,
Speaker 1: uh and perhaps you know, we'll see trade levels pick up.
Speaker 1: How does that, How does energy fit in to the U. S.
Speaker 1: China relationship? Yeah, well, I think it's still early to call, um,
Speaker 1: you know, how the U. S. China relationship is going
Speaker 1: to change. I think that um, due to the pandemic
Speaker 1: and and you know, and seeing the vulnerability of US
Speaker 1: supply lines on uncritical UM and critical products you know,
Speaker 1: being abroad. I think there's something that there is bipartisan
Speaker 1: consensus that, um, you know, the sort of US dependence
Speaker 1: on China needs to change. So it's it's not really
Speaker 1: clear I think exactly how um, you know, how how
Speaker 1: if trade relations will go back to the sort of
Speaker 1: Obama era type of frameworks or for really in a
Speaker 1: sort of a new a new stage. UM. But we
Speaker 1: clearly sure energy you know, the US, UM, natural gas
Speaker 1: exports are often you know, touted as something that helps
Speaker 1: US allies, um, you know, improve their energy security. But
Speaker 1: but you know, some of the biggest consumers of US
Speaker 1: energy exports are you know, actually China and UH UM
Speaker 1: are not necessarily countries that are you know, have energy
Speaker 1: UH dependence or security supply issues. So clearly, for for
Speaker 1: the case of natural gas, UM, the trade policies that
Speaker 1: really matter. UM, do you expect this to be quick
Speaker 1: in the US in a way that they can catch
Speaker 1: up to Europe at all? I'm in terms of that
Speaker 1: climate policy, in terms of real money going to real places. UM. Well,
Speaker 1: I look more on the global aspects of UH of energy.
Speaker 1: But I think you know, we should be really results
Speaker 1: driven driven versus process. So again, if you take something
Speaker 1: like uh the Paris Accords, clearly the Biden administration will
Speaker 1: go clearly back to the to the accords, but that
Speaker 1: won't necessarily change um, you know much in the United
Speaker 1: States because again the US has been doing a lot
Speaker 1: the market itself to to reduce emissions and reduced pollution
Speaker 1: Professor Brenda Shaffer, thank you so much. We appreciate that.
Speaker 1: Research faculty member at the US Naval post Graduate also
Speaker 1: a fellow with the Atlantic Council's Global Energy Center, joining
Speaker 1: us on the phone from Washington, d C. Giving us
Speaker 1: the latest geopolitical impact for global energy morow a journal. Yeah,
Speaker 1: but you let me drive. Oh no, and en Honey, please,
Speaker 1: I'll do thet I want to drive ball, Just drive
Speaker 1: baby the question. This is the drive to the globe community.
Speaker 1: Thanks well, dry up Don on Bloomberg Radio. Well, when
Speaker 1: you have markets at or near all time highs, as
Speaker 1: we do right now, you think about where we were
Speaker 1: back in March. It's just an extraordinary turnaround. But when
Speaker 1: you do get markets there, what you also get is
Speaker 1: a lot of companies tapping the initial public market offering market,
Speaker 1: either by a direct I p O, where now we've
Speaker 1: got spacks and direct listings, taking a sense of kind
Speaker 1: of how two thousand and twenty played out and maybe
Speaker 1: how one is going to look at this point. Christian Munafo,
Speaker 1: chief investment Officer of Liberty Street Advisers, also portfolio portfolio
Speaker 1: manager of share Post one Fund. He joins us on
Speaker 1: the phone from New York City. Christian, thanks so much
Speaker 1: for joining us here. Give us just a look back
Speaker 1: on it seemed like we had some really really big deals. Yes,
Speaker 1: good afternoon, it's nice to be with you. Yeah, it
Speaker 1: was certainly an active year, uh, in any stretch of
Speaker 1: the imagination, you know, I P O s, you know,
Speaker 1: the traditional IPO structure at least, you know, we've raised
Speaker 1: somewhere in the neighborhood of about eighty billion dollars, which
Speaker 1: is almost two f up from last year. Um spacts
Speaker 1: where over eighty billion, coming off of thirteen billion last year.
Speaker 1: Direct listings, you know, as we know, have beencoming more popular.
Speaker 1: So yeah, it's certainly been an interesting time for you know,
Speaker 1: private late stage innovation companies, you know. And it's worth
Speaker 1: just understanding that, you know, the the structure that these
Speaker 1: companies are coming from is essentially structurally a liquid, right,
Speaker 1: the private markets are in a structurally a liquid asset class,
Speaker 1: and over the last couple of decades, what we've seen
Speaker 1: is that these private companies continue staying private for longer,
Speaker 1: and so as a result of that, you have these
Speaker 1: companies that are growing into you know, much larger operating
Speaker 1: businesses and at the time that they go public, um
Speaker 1: or are attracting you know, also potential acquisition oriented um
Speaker 1: A sponsor capital. They're just much larger businesses than what
Speaker 1: we saw in the past when we think of companies
Speaker 1: like Microsoft and Oracle and those types of companies when
Speaker 1: they went public. These companies are staying private for much longer.
Speaker 1: They're scaling into much larger businesses, and we're seeing a
Speaker 1: lot of demand for this high growth innovation. So I'm
Speaker 1: going to try and tie this conversation into something that
Speaker 1: we saw in the markets overnight, and that was the
Speaker 1: big sell off we've seen over the last two days
Speaker 1: over in Asia, JD, dot Com, Ali, Baba, etcetera. All
Speaker 1: of that really because China's cracking down on Ant, which
Speaker 1: was supposed to go public would have been the biggest
Speaker 1: I p O ever and then now they're cracking down
Speaker 1: and you know, we're seeing something somewhat similar in the US.
Speaker 1: Obviously these are very different circumstances, but the idea that
Speaker 1: these companies are too big, they're doing too many things. Um,
Speaker 1: what are you noticing in the private market with mid
Speaker 1: sized companies? Are they getting that warning? Are they wanting
Speaker 1: to stay smaller? Yeah? No. I think it's a very
Speaker 1: good question. You know, I think we've been fortunate that
Speaker 1: we haven't seen this play out at scale as of yet.
Speaker 1: I mean, if we saw it clearly, you know, Tobacco
Speaker 1: last year with we worked, and there's obviously some other
Speaker 1: ones out there. You look with Spaces we worked. Here's
Speaker 1: like a million years ago, by the way, doesn't it
Speaker 1: it does? Yeh, yeah, yeah, it sure does, except for
Speaker 1: those who invested into it. That's true. God, yeah, But
Speaker 1: I think look, I think the reality is, uh. From
Speaker 1: the mainstream standpoint, a lot of the venture capitalists and
Speaker 1: protequity investors who backed these companies are very much focused
Speaker 1: on nacho, you know, executing on the operational plans of
Speaker 1: the core company, but also making sure that they're not
Speaker 1: overexposing themselves because they've seen what happens. You know, there's
Speaker 1: been so much capital that's flown into these markets over
Speaker 1: the last decade alone. You know, somewhere in the order
Speaker 1: of six trillion has come into the private markets, of
Speaker 1: which over a trillion has been allocated just for venture
Speaker 1: And so when you can raise that kind of money,
Speaker 1: it's not difficult to get excited about trying to grow
Speaker 1: into different areas. But I think what a lot of
Speaker 1: it comes down to is governance and discipline at the
Speaker 1: board level to make sure that the company is staying
Speaker 1: focused on its core competencies and not stretching itself. So, Christian,
Speaker 1: what's your outlook for one? I guess just the broad
Speaker 1: market outlook is okay, vaccines are coming. The worst, you know,
Speaker 1: you know, once we get past the next couple of
Speaker 1: months will be behind us and we can look forward
Speaker 1: to maybe in the second half of the year, maybe
Speaker 1: even beginning a second quarter of the economy beginning to
Speaker 1: grow again. What do you think about the capital raising
Speaker 1: and the I p O and the going public market?
Speaker 1: And then sure, so, look, I think in any market cycle,
Speaker 1: from our experience and from our perspective, we believe that
Speaker 1: there's always going to be strong public market interest and
Speaker 1: demand for innovative, differentiated companies that are generating substantial growth
Speaker 1: and market penetration and that also can turn a profit, right,
Speaker 1: because we saw that with some of the companies were
Speaker 1: mentioning even though they have these hyper growth type trajectories,
Speaker 1: they're unable to demonstrate profitability or at least they passed
Speaker 1: to that. So it's our view at in any market cycle,
Speaker 1: there's going to continue to be strong demand for these
Speaker 1: types of companies you know that can uh show the
Speaker 1: ability to generate that that profit. And again there's just
Speaker 1: been a substantial supply build up of many of these
Speaker 1: late stage companies. And so you know, when we look
Speaker 1: at two thousand and twenty one, you know, we look
Speaker 1: at our own portfolio, we see activity that's happening. You know,
Speaker 1: we believe that two one should continue to be a
Speaker 1: very active year for the late stage private company space.
Speaker 1: What we saw this year clearly was an acceleration of
Speaker 1: technology adoption across the board. These not are not only
Speaker 1: technologies that are going to be disruptive, but they're also
Speaker 1: going to be complementary. And so, you know, we think
Speaker 1: there's a lot of capital out there that's chasing growth,
Speaker 1: that's chasing innovation. We think that it's going to continue
Speaker 1: for the foreseeable future. M Is it all going to
Speaker 1: be in tech startups? Well, it depends on what your
Speaker 1: definition of startup is, right, and so you know, when
Speaker 1: you have when you have companies in a generating you know,
Speaker 1: hundreds of millions to billions in revenue, you know, those
Speaker 1: are not startups from the from the traditional sense, and
Speaker 1: that's what many of these companies are. UM. But look,
Speaker 1: not all these companies are going to be success success stories,
Speaker 1: and not all of these companies are also going to
Speaker 1: achieve a public market currency. You know. We have to
Speaker 1: remember that there's hundreds of billions in cash sitting on
Speaker 1: the balance sheets of the mega tech companies alone that
Speaker 1: are looking for ways to augment their own reach capabilities,
Speaker 1: you know, And so a lot of these companies will
Speaker 1: also get acquired. UM. But yes, to your point there,
Speaker 1: there are certainly not going to be all success stories. Hey, Christian,
Speaker 1: thanks so much for joining it. We appreciate it so much.
Speaker 1: Very interesting talking tech investing and just growth investing in general.
Speaker 1: Christian manofo He is the chief investment officer for Liberty
Speaker 1: Street Advisers, also portfolio manager of shares Post Fund At
Speaker 1: joining us on the phone from New York City. Thanks
Speaker 1: so much for listening to Bloomberg Business Week. Download the
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