Speaker 1: This is Bloomberg Business Week. I'm Carol Masser and I'm
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Speaker 1: Business Week. Jason Kelly and Alex Steel here with you
Speaker 1: on a Wednesday afternoon. So I'm really happy to have
Speaker 1: back with this. Alyssa Wrap, CEO of Surgical Solutions, join
Speaker 1: us on the phone from Deerfield, Illinois, and Alyssa has
Speaker 1: been great at providing us Alex with a real view
Speaker 1: of the front lines of this crisis because she's got
Speaker 1: more than two hundred employee who were working there in
Speaker 1: hospitals and health facilities less are really nice to have
Speaker 1: you back with us, Jason and Alex. Great to be
Speaker 1: with you today. Thanks for having me all right, So,
Speaker 1: I feel like the world has actually gotten worse since
Speaker 1: the last time we talked, certainly a lot of places
Speaker 1: across the United States. How worried are you, especially given
Speaker 1: the window that you have in terms of this healthcare
Speaker 1: system now being stretched to its capacity. So I think
Speaker 1: that I'm worried, isn't the word? Perhaps concerned is better,
Speaker 1: only because I've seen our people on the front lines
Speaker 1: be as excellent, dedicated, and prepared as we would want
Speaker 1: them to be. The only benefit of time marching on
Speaker 1: as people are leveraging their experience and insight as frontline
Speaker 1: healthcare workers in coping with it. So are people and
Speaker 1: those I hear about are doing a great job. But
Speaker 1: my concern is that the systems themselves are going to
Speaker 1: be increasingly taxed. And listen, we've had more incidences of
Speaker 1: COVID IT on our own team in Houston in the
Speaker 1: last three weeks then we did in New York City
Speaker 1: at the peak of the first search. So it's because
Speaker 1: of this snap, you know, rubber band effect of reopening
Speaker 1: without all the social distancing and masks in place. We
Speaker 1: unfortunately know that weather doesn't play as much of a
Speaker 1: role as we had hoped in dampening the virus transmissions.
Speaker 1: So because of everything going on, and without being overly political,
Speaker 1: we knew that there were mass gatherings due to the
Speaker 1: civil unrest. So with all of that closed down behavior
Speaker 1: than fast reopening and then uneven state by state responses,
Speaker 1: we're seeing many, many spikes and I expect those to
Speaker 1: continue for the next six months. Can I ask the
Speaker 1: sensitive question as to why the Sun Belt states weren't
Speaker 1: better prepared even if they reopened quote unquote the wrong time.
Speaker 1: It's like, we knew that this was going to play
Speaker 1: out in New York and March, so I wonder, like,
Speaker 1: why isn't there a stockpil of stuff, Alex. I think
Speaker 1: it's a great question, and I don't have the perfect
Speaker 1: answer for you. What I can say is I think
Speaker 1: that the cases were concentrated in New York. There was
Speaker 1: such a intense focus by the city, the state, and
Speaker 1: the healthcare hospitals and providers there to solve the crisis
Speaker 1: that they did the classic Bell curve effect, And because
Speaker 1: the peak of the curve was so much lower in
Speaker 1: the Sunbelt States. I think they hoped, I think we
Speaker 1: all hoped, frankly, that they would just avert disaster and
Speaker 1: never get to that same peak point local maximum. And unfortunately,
Speaker 1: no one is this. This disease doesn't discriminate. No one
Speaker 1: is immune. So when they thought they had averted danger
Speaker 1: and then unfortunately dangerous struck they were they thought they
Speaker 1: were on the back nine and and no one is,
Speaker 1: unfortunately yet. And so Alyssa, you know, one of the
Speaker 1: things that we've talked with you about before is this
Speaker 1: notion of the the holistic system in some ways. And
Speaker 1: while so many resources have been dedicated, obviously to treating
Speaker 1: COVID patients, there's a whole system out there and a
Speaker 1: whole population out there that has needs to go beyond COVID,
Speaker 1: some of which surgeries have been put off. Um, where
Speaker 1: are we in in that calculus right now? And what
Speaker 1: are you seeing when you talk to your folks, So
Speaker 1: that that I feel more optimistic about. Once people started
Speaker 1: rescheduling elective procedures, they started scheduling fast and furiously, and
Speaker 1: I think that, um, that's really important for preventative health.
Speaker 1: I get as as afraid about what the health care affects,
Speaker 1: the health effects and negative health effects I should say,
Speaker 1: of not being seen and treated for preventative measures, now
Speaker 1: what those will be in six, twelve, eighteen months. So
Speaker 1: I'm glad to see that our volumes were back up
Speaker 1: to eight of historic levels for elective surgeries, for example
Speaker 1: in places like Texas and Tennessee UM in June. Obviously,
Speaker 1: the next round of questions is where will they stabilize there?
Speaker 1: Given what's going on, they'll probably dip again and then
Speaker 1: hopefully come back. So I feel slightly optimistic actually about
Speaker 1: people's willingness to get back in there and get seen
Speaker 1: for what was considered quote unquote elective. What I am
Speaker 1: concerned about on a on a macro level is how
Speaker 1: these hospitals that typically operate at three percent margins in
Speaker 1: the best case scenarios, are going to weather the next
Speaker 1: wave of the financial storm. And as self serving as
Speaker 1: it is to say, I think that even if I
Speaker 1: were looking at arm's length, you want this notion of
Speaker 1: an outsourcing partner like Surgical Solutions and many others where
Speaker 1: they can really risk share economically and in terms of
Speaker 1: human capital and capital equipment, etcetera. If I were if
Speaker 1: I could wave a wand it's that many hospital systems
Speaker 1: would enter into those kind of risk sharing partnership strategic
Speaker 1: partnerships so they could have another entity or team of
Speaker 1: people helping them whether the next storms, because unfortunately this
Speaker 1: one isn't over. So I mean, aside from the obvious
Speaker 1: linkage with with with surgical solutions, like what are some
Speaker 1: other good options? Because I have to wonder like which
Speaker 1: is it? Is it a demand or supply issue? Like
Speaker 1: if all these people come back, and will you have
Speaker 1: the actual capacity, Like I have to have a procedure
Speaker 1: done and I had to wait like two months and
Speaker 1: I was like on the list. No totally. Um. I
Speaker 1: think that it's both right and I think that the
Speaker 1: degree to which the federal government is doing creative things
Speaker 1: like making total joint procedures, those are orthopedic procedures where
Speaker 1: you would have something restorative, corrective and me a hip, etcetera.
Speaker 1: Because they agreed that they're now going to be reimbursed
Speaker 1: through ambulatory surgery centers in and out where you can
Speaker 1: go in and out in a day and you have
Speaker 1: to be there less time, which is better for you
Speaker 1: and better for them. But but the providers will still
Speaker 1: be reimburses a similar way. I think the degree to
Speaker 1: which we can make it easier for people to have
Speaker 1: shorter hospital stays and and do more you know, ambilatory
Speaker 1: surgery center work, that will be better for everyone. I
Speaker 1: think that could be a system shift that is a
Speaker 1: result of this. And needless to say, this isn't an
Speaker 1: original idea to me, but tell the medicine is your friend. Listen,
Speaker 1: if my kids have to go get a physical before
Speaker 1: getting back to school in the fall, I want that
Speaker 1: to be live. But if one of them has a
Speaker 1: you know, a sore throat or an alley in their
Speaker 1: ear to I really want to take them in right now. No,
Speaker 1: if pddriction could see them, that would be a great pla. Yeah,
Speaker 1: just grab the iPhone for sure. Alright, Alyssa Rap, CEO
Speaker 1: of Surgical Coal Solutions. Great to have you back with us.
Speaker 1: Really appreciate your time joining us on the phone from Deerfield, Illinois. Well,
Speaker 1: I believe the technical term alex is baller alert. We
Speaker 1: got a couple of guys coming on next to talk
Speaker 1: about a great story, a really important story as well.
Speaker 1: We haven't talked to Sean Donna in a while I've
Speaker 1: missed him, I follow him on Twitter, so I feel
Speaker 1: like I'm keeping up. Senior trade and globalization reporter for Bloomberg.
Speaker 1: He's joining us on the phone from Maine. Good for him.
Speaker 1: Joel Weber, editor of Bloomberg Business Week. He's in Massachusetts.
Speaker 1: So Joel, this is a really important story and one
Speaker 1: that I feel like provide some much needed context about
Speaker 1: where we are in the economic aspect of this crisis. Yeah.
Speaker 1: So a couple of weeks slash months ago, now, Sean
Speaker 1: was like, you know, UM based in DC, and I
Speaker 1: really to get out of DC and I get into uh,
Speaker 1: you know, the heart of America and see what how
Speaker 1: this crisis is really unfolding for for normal people. And
Speaker 1: Cleveland ended up being one of the places UM that
Speaker 1: he's gone, and the story that he published from there,
Speaker 1: I thought was a really interesting look at um, you know,
Speaker 1: community that's really uh grasping for any sort of relief,
Speaker 1: and it gives UM a sense of how, you know,
Speaker 1: two trillion dollar uh you know kind of effort to
Speaker 1: to kind of you know make the rescue um you
Speaker 1: know from Congress with the Cares Act, be something that
Speaker 1: was you know, rooted in helping things, but it actually
Speaker 1: has left a lot of people in the cold. And
Speaker 1: I think that was what Sean was really able to
Speaker 1: find in Cleveland. And and Sean, you know what, what
Speaker 1: what jumped out at you because you know, this is
Speaker 1: a city where there's a river that divides the east
Speaker 1: and west, and people on the east side, especially these
Speaker 1: are black neighborhoods, they're really feeling it. Yeah. I mean,
Speaker 1: like you said, a couple of months ago, I just
Speaker 1: was looking through the data and I just happened to
Speaker 1: see the the unemployment data for for Cleveland, for the
Speaker 1: metro area, and what it happened in Cleveland in April
Speaker 1: was that literally of the workers in the city had
Speaker 1: lost their jobs in a matter of weights. You had
Speaker 1: an unemployment rate that had gone from a little above
Speaker 1: three percent to twenty three percent just in weeks. And
Speaker 1: most of those people were lower income people. And I
Speaker 1: started thinking, I need to go find out what's happening
Speaker 1: and if they're getting the help that that they need,
Speaker 1: and all the stuff that people are talking about in
Speaker 1: Washington in terms of this enormous and this really is
Speaker 1: a pretty unprecedented fiscal stimulus coming out of Washington, when
Speaker 1: that's actually getting to the people who you did on
Speaker 1: the ground. And once you get to Cleveland, what you
Speaker 1: discover is that there is this divide that happens with
Speaker 1: the Cuyahoga River UH. On the east side of it,
Speaker 1: you've predominantly black neighborhoods, which really for decades now has
Speaker 1: been left behind by the economy, and this time around
Speaker 1: they're just not getting the help in the same way
Speaker 1: that UH neighborhoods predominantly white neighborhoods the west of the
Speaker 1: river are. And that's a story about you. We'll talking
Speaker 1: about race in America and racial incites, and so we're here.
Speaker 1: It is right now happening again in terms of rescue
Speaker 1: being rolled out by the government. If you go to
Speaker 1: the east side of Cleveland today, you will find lots
Speaker 1: of people who aren't seeing to help that lots of
Speaker 1: other people in America are. Yeah, it's really amazing, amazing reporting.
Speaker 1: I urge all of you to to to listen to it,
Speaker 1: to look at it, to read it. So I guess
Speaker 1: my problem is is that we know that they messed
Speaker 1: up in that respect, and now we're looking at another
Speaker 1: stimulus Supposedly maybe we're gonna get before August ten, and
Speaker 1: I'm wondering if we're ever going to be able to
Speaker 1: the things that we did to them help, especially when
Speaker 1: you have the extra money for unemployment ending July one.
Speaker 1: I mean, how do we right the ship? Yeah? No, absolutely,
Speaker 1: so that the first thing is that extra unemployment. There's
Speaker 1: no doubt that next for six hundred dollars a week
Speaker 1: that was included. That cares that that's important for the ground,
Speaker 1: for people on the ground on the east side of Cleveland.
Speaker 1: But what's also important and in talking in work reporting
Speaker 1: the story, I talked to Rob Portman, the Republican Senator
Speaker 1: at Shore Ground the Democratic Senate, two people who really
Speaker 1: were heavily involved in a cool point together the Cares out,
Speaker 1: and they said, they really want to get something in
Speaker 1: this next thing that's much more targeted at a block
Speaker 1: on businesses and minority on businesses, and they really find
Speaker 1: some way to get to these people who are who
Speaker 1: are being left out because they are being left out
Speaker 1: and they recognize that. And so we'll have to wait
Speaker 1: and see if that happens. But you know, there's there's
Speaker 1: a lot of neat out there. Sean Um, I want
Speaker 1: to talk about some of the characters that you got
Speaker 1: to meet um on the east side of the river,
Speaker 1: especially a pastor in a church twitch. What are those
Speaker 1: experiences like. Yeah, so one of the people I ran
Speaker 1: into on in my reporting with Miriam Scott. And Miriam
Speaker 1: is a really impressive woman. She's a corrections officer. She
Speaker 1: works overnight shifts one of the play at huge county
Speaker 1: detention centers. UH and during the day she runs the
Speaker 1: First Love Outreach and Ministries, which is a tiny church
Speaker 1: UM in a part of Cleveland that literally is is
Speaker 1: called the Forgotten Triangle UM and it is a part
Speaker 1: of Cleveland where possible people live under the poverty line.
Speaker 1: Three quarters of the children in the episode live under
Speaker 1: the U S Povy line. She's just a stunning UH
Speaker 1: statistics and Miriam stop is. She's been running this turn
Speaker 1: on a Sea spring basically on three hundred, one hundred
Speaker 1: dollars a week and ties and she can't hold in
Speaker 1: person services anymore, so that money's disappeared. She tried to
Speaker 1: go after a UH some pros some money from the
Speaker 1: from the sederal government for faith based education, but she
Speaker 1: discovered that because she's a volunteer, she and because there's
Speaker 1: no paywall associated with the pods. She couldn't get any help.
Speaker 1: And she's not unemployed. She's working on she's working a job.
Speaker 1: She's looking overnight shift as a corrective officer. Uh. And
Speaker 1: she's at the same time she's kind of scraping it
Speaker 1: together and she is feeding. The last Saturday, she said
Speaker 1: over six hundred people one Saturday of Junion, she gave
Speaker 1: out twenty thousand towns of food, which is more food
Speaker 1: almost than she gave out in all of twenty nineteenons
Speaker 1: for the church. She's done incredibly hard work and she's
Speaker 1: doing it with no help from the government. And it's
Speaker 1: you know these times of characters that run into on
Speaker 1: the east side of Cleveland. We're working really hard to
Speaker 1: help the communities to get through this crisis, and they're
Speaker 1: doing it with very little help to no help from
Speaker 1: from the sederal government. You look at the stimulus that's
Speaker 1: going on the economy, you think about the people who
Speaker 1: serves and how vulnerable they are, and that is clearly
Speaker 1: one part of the economy that should be getting more
Speaker 1: and just isn't. It just isn't. And a really nice
Speaker 1: piece of reporting is Alex pointed out Shawn congratulations on
Speaker 1: this story. It's a must re check it out at
Speaker 1: Bloomberg dot com, on the Bloomberg terminal, or in the
Speaker 1: upcoming edition of Bloomberg business Week. That's Sean Donn, and
Speaker 1: senior trade reporter who left Washington to do some great
Speaker 1: reporting there in Cleveland. Our thanks as well to Joel Webber,
Speaker 1: the editor of Bloomberg Business Week. All right, let's do
Speaker 1: a little Business Week economics, because when it comes to
Speaker 1: reopening the economy in any meaningful way, Alex, I think
Speaker 1: you and I can one agree on this, both being
Speaker 1: parents schools, they have to be reopened for the economy
Speaker 1: to be fully reopened. Please please not even economy for
Speaker 1: my own sandy and my husband's sanity, and then also
Speaker 1: for the economy. Yes, so in that order. Emily Austar
Speaker 1: she wrote a terrific piece for Bloomberg Opinion about this
Speaker 1: professor of economics at Brown University and a Bloomberg Opinion columnists.
Speaker 1: As I mentioned, she joins us on the phone from Providence.
Speaker 1: All right, Emily, you gave voice and and maybe more importantly,
Speaker 1: gave some solutions to the problem that I think we
Speaker 1: are all obsessively thinking about. Tell us what you think
Speaker 1: and what you found is you sort of put pen
Speaker 1: to paper here. Yeah, So what I was what I
Speaker 1: was writing about was just how we're going to think
Speaker 1: about working under the constraints that we seem to be
Speaker 1: facing for the fall. So, you know, like you, I
Speaker 1: would very much like us all to be back in
Speaker 1: person if we can do that. Bafely, it doesn't seem
Speaker 1: like school district A necessarily gonna be there. And so
Speaker 1: I think, particularly in New York, you guys are not
Speaker 1: going to be in uh in school every day. And
Speaker 1: so I was thinking a little bit about different solutions
Speaker 1: people that have ranging from you know, the kind of
Speaker 1: home schooling that we've all been doing for this entire
Speaker 1: time period, two kind of different market based solutions. So
Speaker 1: should we all hire a governess like the one percent?
Speaker 1: Or should we should we think about intermediate and can
Speaker 1: be tid with other families, and just trying to give
Speaker 1: people some ideas for for how to move forward in
Speaker 1: what's obviously an incredibly challenging set up. Well, what I
Speaker 1: thought was interesting in the piece is that, um, a
Speaker 1: lot of it is for those one per centers, Like
Speaker 1: you said, the governance, there's also to do it yourself,
Speaker 1: which homeschooling, which would be really bad my household. But
Speaker 1: then you got into different options like a babysitter, coop
Speaker 1: or market based solutions. Can you take us through that
Speaker 1: where it is maybe more accessible to a broad variety
Speaker 1: of people. Yeah, So I think that the two things
Speaker 1: there were sort of one talking about like, let's say
Speaker 1: your kid is in school for two days a week, uh,
Speaker 1: with a bunch of other kids in their class, UM,
Speaker 1: and there you could think about hiring a babysitter along
Speaker 1: with some other kids in the class, so you know,
Speaker 1: rotating the kids around to your different houses or apartments, um,
Speaker 1: with some kind of supervision. Obviously, if you did that
Speaker 1: with six families, you know, that's six one six of
Speaker 1: the cost of doing it doing on your on your
Speaker 1: own UM. And then there are also you know, my
Speaker 1: guess is I'm actually just talking to somebody in l
Speaker 1: A this morning runs and after school program and they're
Speaker 1: going to be running a lot of programming for kids
Speaker 1: who are would otherwise be in school. So there certainly
Speaker 1: will be some art market based solutions for this where
Speaker 1: your kids can be out of the house. Uh. Those
Speaker 1: aren't going to be challenging in other ways, I think
Speaker 1: and for that you're talking about like the j c
Speaker 1: C s and the y m c A s the
Speaker 1: world right, Yeah, exactly why I'm j c C is
Speaker 1: all those kind of things. And so as you look
Speaker 1: across the country, I guess one of the other challenges here,
Speaker 1: Emily is that even within a state like New York,
Speaker 1: you're going to have different decisions being made sort of
Speaker 1: region by region, much less you know, across the country. Uh,
Speaker 1: is it feasible to think about, especially from an economic perspective,
Speaker 1: that some regions of the country and even some subregions
Speaker 1: of a state may be able to essentially thrive economically
Speaker 1: while others may be left behind owing to closures and whatnot. Yeah,
Speaker 1: I mean, I think this is part of what what's
Speaker 1: sort of been very odd about the economics of this
Speaker 1: is just the idea that, you know, we don't think
Speaker 1: of the US as quite so segmented, and yet all
Speaker 1: of a sudden, you know, in this world, like the
Speaker 1: situation in Rhode Island is totally different from the situation
Speaker 1: in Texas, or from Florida, or from or from New York.
Speaker 1: And I think that's going to mean that everybody's got
Speaker 1: to have got to have different solutions, but it is
Speaker 1: also going to mean that there's a tremendous amount of
Speaker 1: inequality across places in how much your economy is gonna
Speaker 1: be able to reopen. I mean, as you said, you know,
Speaker 1: school reopenings are kind of a key to economic reopening,
Speaker 1: and places where school is fully remote are going to
Speaker 1: have which fundamentally very different trajectory than places where school
Speaker 1: is in is in person. If the schools can thence
Speaker 1: to stay open, I think the hardest thing is going
Speaker 1: to be if they open and they close again. That's
Speaker 1: going to be even even more challenging to adapt to.
Speaker 1: What I'm trying to get a handle on is like
Speaker 1: we we can talk for years about how horrible it
Speaker 1: is to have kids not in school on so many
Speaker 1: different levels, and I just can't quite get a read on,
Speaker 1: like financially what we need to pump into each school
Speaker 1: to get them reopened safely and anecdotally. I have a
Speaker 1: five year old. Her kindergarten class had twenty six kids
Speaker 1: in a five hundred, six hundred square foot room, so
Speaker 1: already like that class would have to be broken up
Speaker 1: into three classes like there, so there's different classrooms. Um,
Speaker 1: do we have a read on that yet. No. What
Speaker 1: I actually think this is one of the biggest challenges
Speaker 1: to making progress on this is that people have different ideas.
Speaker 1: You know, I have some ideas, people have some some
Speaker 1: other ideas, different kinds of staffing models, space models. But
Speaker 1: it's clear all of these things are going to take resources.
Speaker 1: But I don't think we've had a lot of uh,
Speaker 1: We've made a lot of efforts to like write down
Speaker 1: what is the budget? Um, you know, what different people
Speaker 1: do we need? How many of them do we need?
Speaker 1: Do we need two? And more? If your kids class
Speaker 1: needs to be in three different in three different classrooms,
Speaker 1: do we need three you know, three teachers? What's the
Speaker 1: space we're going to use for that? How are we
Speaker 1: going to afford that afford that space? I think part
Speaker 1: of the problem is once we read that down, the
Speaker 1: answer will be, you know, this is incredibly expensive. But
Speaker 1: I also think until we do that, we won't we
Speaker 1: won't know, you know, what are the pieces that are
Speaker 1: the most expensive and what can we what can we do?
Speaker 1: So I would really like to see more concrete numbers
Speaker 1: put to this. All right, Emily Austin, We're gonna leave
Speaker 1: it there. Professor of Economics at Brown University Blueberg opinion columnists.
Speaker 1: Her column parents Don't have to panic over part times school.
Speaker 1: It was one of the most read columns on the
Speaker 1: Bluemberg continues to get a ton of readership. It has
Speaker 1: spun around the web so many times, Alex, for all
Speaker 1: the obvious reasons, because people like you and me are
Speaker 1: trying to figure this out, both, as you said, for
Speaker 1: our own sanity, for the sake of the economy, for
Speaker 1: the sake of our humanity. You know, we think about
Speaker 1: you know, and I have the the interesting perspective of
Speaker 1: both teenagers and a a a sub sub three roles
Speaker 1: who doesn't go to traditional school obviously yet, and and
Speaker 1: the the effect on families. And listen, you and I
Speaker 1: are very fortunate to have the resources that we do,
Speaker 1: and I think a lot about folks who don't have
Speaker 1: those luxuries too. Yeah, it's and you know, yes, it's
Speaker 1: going to be horrible in terms of the social and
Speaker 1: inequality divide that we're going to see, particularly here in
Speaker 1: New York. And I look at my own personal circumstance
Speaker 1: like we're going to be fine. My daughter is gonna
Speaker 1: be fine, Like we're going to take care of her.
Speaker 1: How many people can really say that, and and that's
Speaker 1: a long term set up, like you can lose billions
Speaker 1: of dollars over your lifetime as a whole group. Yes, um,
Speaker 1: if you don't have the right education, and that's gonna
Speaker 1: make all the issues we see worse. Absolutely alright, a
Speaker 1: really important issue. So check that out on the Bloomberg
Speaker 1: Our thanks to Emily Austrich. You are listening to Bloomberg
Speaker 1: Business Week. Jason Kelly and Alex Steel here with you.
Speaker 1: We are debating the merits and demerits of meat right now,
Speaker 1: as we get into this new segment, Bloomberg Green, we
Speaker 1: call it. Emily Chasen, Sustainability editor, back with us for
Speaker 1: Bloomberg on the phone from New York City. All Right,
Speaker 1: I have to say, Emily, the headline alone, low methane meat.
Speaker 1: I'm like, all right, that's here, but it's a stop gap.
Speaker 1: First of all, tell us what we're talking about. I
Speaker 1: have to say, I saw this on Twitter, I believe you,
Speaker 1: or when your colleagues put it out. So we're talking
Speaker 1: about burger king to some extent. But this whole concept
Speaker 1: of low methane meat, this is basically like cows and gas, right,
Speaker 1: it's cow too. It's dude, it's cow too. So let's
Speaker 1: just let's just call it. It's cow to it. That's
Speaker 1: what it is. Um. Yeah. So it's really interesting because
Speaker 1: you know, there was a big trend years ago toward
Speaker 1: organic meat UM, and now people are thinking about, well,
Speaker 1: meat actually has a huge impact on the environment. It
Speaker 1: is a huge force of global emissions, probably just nine
Speaker 1: from agriculture directly, and then if you think about the
Speaker 1: whole supply chain from farm to fork, over a third
Speaker 1: of global emissions. And then it's going to get even
Speaker 1: more attention as we've been working really hard to get
Speaker 1: the electric sector and the transport sector emissions under control.
Speaker 1: So as those emissions well, then the agriculture emissions get
Speaker 1: bigger and bigger and bigger. So what we're looking at
Speaker 1: here is this sort of that realization from consumers and
Speaker 1: company saying, well, I guess we can sell you low
Speaker 1: methane meet it's like the new organic foods label or
Speaker 1: low carbon meat. So how do you get them? How
Speaker 1: do you get their tooths better? Usually have to like
Speaker 1: seriously because what it is, like, what is it? What
Speaker 1: you feed them? I means a certain type of cow.
Speaker 1: There is a ton of experimentation in the field right now.
Speaker 1: I guess um Burger King just this week that came
Speaker 1: out with a open source method UM that looks at
Speaker 1: lemon grass and they say that lemon grass um sort
Speaker 1: of makes cow's bellies happier. Um. I think there's other
Speaker 1: people trying seaweed and various food additives. UM, so you know,
Speaker 1: if cows have fe bellies and the planet will be
Speaker 1: happier also. Um. But it's it's only a limited solution,
Speaker 1: right because there's still going to be quite a lot
Speaker 1: of my thing. Even this can produce methane by up
Speaker 1: to a third, there's still many years that cows are
Speaker 1: out there emitting methane versus you know, a plant, right,
Speaker 1: I dare say, I mean, and we will not go
Speaker 1: down this rabbit hole, but like this could be useful information,
Speaker 1: I think for all sorts of things, especially you know
Speaker 1: have teenage boys. But Emily pizza there, that's true. The ultimate, um,
Speaker 1: I mean, the ultimate solution here, as you just alluded
Speaker 1: to when you talk about plants versus animals is eat
Speaker 1: less meat. How much is that actually catching on? I
Speaker 1: will say I had an impossible sausage sandwich. This morning.
Speaker 1: It was delicious. Um, And we know that those meat
Speaker 1: alternatives are catching on, but I wonder sort of where
Speaker 1: we are in that adoption. Yeah, well, there's a ton
Speaker 1: of you start ups every year. There's a lot of
Speaker 1: activity in the private markets right now around plant based meat. UM,
Speaker 1: beyond meats. I p O was really interesting in that space. Um,
Speaker 1: some of the big meat companies they're starting to get
Speaker 1: into plant based meat. There's all sorts of different proteins
Speaker 1: that people are putting out there, even once from microbes.
Speaker 1: So there's a lot of stuff happening there. And what
Speaker 1: what you're thinking about this. I've talked to an investor
Speaker 1: who's like trying to be a vegan investor. Now, there's
Speaker 1: enough opportunities right now that you could try and adjust
Speaker 1: your portfolio for a vegan lifestyle in a way that
Speaker 1: you could just do your food in the grocery aisle
Speaker 1: more easily in the past. And that's interesting. Um, here
Speaker 1: here's the question for you. Can you methane capture this stuff?
Speaker 1: Before you laugh, I mean carbon captures a thing. Um,
Speaker 1: Capturing methane is also a thing, like is is that
Speaker 1: somewhere on solution somehow there was actually an experiment in
Speaker 1: Argentina a few years ago where they put methane backpacks
Speaker 1: on cows to capture it and then they create a
Speaker 1: full system. And there's also all this whole network of
Speaker 1: anaerobic digestors that works with cow maneure and that sort
Speaker 1: of thing could try and um capture the methane from
Speaker 1: it and you know, power trucks or something else with it. Um.
Speaker 1: But yeah, it's interesting from a financial perspective that it's
Speaker 1: hard to invest in this space because there's not a
Speaker 1: lot of, like speaking companies that are public, so you
Speaker 1: sort of have to screen out stocks that are fossil
Speaker 1: fuels or curl or have some sort of damage to
Speaker 1: wildlife or deforestation. Wow, all right, well this is a
Speaker 1: great story. We'll put it out on Twitter. It is
Speaker 1: on the Bloomberg and at Bloomberg dot com. Emily Chason,
Speaker 1: sustainability editor for Bloomberg, on the phone from New York City. Low,
Speaker 1: methane meat has arrived, but it's a stop gap. I
Speaker 1: feel like Alex Steel on my list of garage band names,
Speaker 1: methane backpacks pretty good one. I'm just wearing like, I mean,
Speaker 1: you know, those things be heavy. That's that's a bummer
Speaker 1: for the cows, but to the point of actual investing.
Speaker 1: I completely agree with her on this. So I was
Speaker 1: talking to one big name head fund manager who used
Speaker 1: to be really into oil and basic commodities, and his
Speaker 1: base sick goal in life now is to invest in
Speaker 1: startups that make food better. And that can be like
Speaker 1: making bees more productive or making your corn more productive.
Speaker 1: It can be it can be technology, many different things,
Speaker 1: but like that's his thing now. So, yeah, the problem
Speaker 1: is there's not a lot of public opportunities r right, Well,
Speaker 1: but you know, increasingly is the private markets get more
Speaker 1: liquid in some form or fashion. You know, maybe that
Speaker 1: comes on board and venture capitalists. You know, I mean
Speaker 1: the idea of constructing a vegan portfolio. It's kind of interesting,
Speaker 1: perfectly honest with you. I don't know if I could
Speaker 1: construct a vegan diet, Like, I don't really know what
Speaker 1: that means. I know, I can't eat cheese, milk, eggs
Speaker 1: like I can eat carbs. I get really confused with
Speaker 1: the vegan thing. Yeah, there's it's basically no meat, no
Speaker 1: dairy I think are the main thing. Um, no paleos meat, nothing,
Speaker 1: you like, there's a grainy it's some grain and there's
Speaker 1: no cheese, like I can't like, I can't like. Here's
Speaker 1: the music. Can I have a segment? Yeah, exactly. I'm
Speaker 1: a journal Yeah, but you let me drive? Oh no,
Speaker 1: no, no no, no, who's going to drive home? Honey? Please,
Speaker 1: I'll do the riding revel. I want to drive all
Speaker 1: just drive, baby questions trying. This is the drive to
Speaker 1: the globe. Thanks, we'll dry un on Bloomberg Radio. All right,
Speaker 1: time for the drive to the clothes. Let's get there
Speaker 1: with Norm Calmly. He's CEO and c i O, Chief
Speaker 1: investment officer at Jack Capital Management, looking after about one
Speaker 1: and a half billion dollars. Joining us on the phone
Speaker 1: from St. Louis, Norm, how are you. I'm doing well.
Speaker 1: I'm doing well. Thank you. What does all this look like?
Speaker 1: They're on the ground in St. Louis? Uh be are
Speaker 1: we talking about we're talking about the crisis here, like
Speaker 1: I mean, the especially the health crisis. Yeah. Sure, so
Speaker 1: you know here in St. Louis we are um, you know,
Speaker 1: we're we're practicing a lot of social distancing. We've got
Speaker 1: some state in county and local mandates that I think
Speaker 1: of probably on the stricter side compared to many areas
Speaker 1: of the country. We're not quite yet um as as
Speaker 1: strict as for example, Los Angeles or over the last
Speaker 1: couple of days, but probably a little bit a little
Speaker 1: bit stricter than for example, you know, Georgia, uh, Colorado,
Speaker 1: some other states like that. Uh. I know we'll get
Speaker 1: to markets in the second as wealth manager, but I
Speaker 1: do want to ask a follow up on that norm
Speaker 1: and that um something that debates I think in the
Speaker 1: market is that do you kind of need a lockdown
Speaker 1: to then hurt economic growth or just the headlines are
Speaker 1: enough to curb investor confidence and curb their spending and
Speaker 1: make them stay home regardless of what the shutdown laws are.
Speaker 1: And I wonder what you're noticing is you're kind of
Speaker 1: like in the middle. Yeah. So so you know, I
Speaker 1: think that there is a bit of pent up demand
Speaker 1: from consumers. I mean, I've talked to a lot of
Speaker 1: folks and I think you know, you may have also
Speaker 1: that uh consumer. You know, savings rates have have gone
Speaker 1: up during this crisis. I mean, it was just not
Speaker 1: as many places over the last several months to spend money. Uh.
Speaker 1: So we're seeing, you know, we're seeing some benefits on
Speaker 1: the commerce side, uh and obviously delivery services. But um, yeah,
Speaker 1: I think that for folks that are lucky enough to
Speaker 1: to still have a job, and we know that there's
Speaker 1: there's a lot of a lot of folks that don't, um,
Speaker 1: there is some probably some pent up demand going on.
Speaker 1: So um, you know, I don't know if I answer
Speaker 1: your question. I think you know, any news that we're getting,
Speaker 1: we're seeing some of it today that that you know,
Speaker 1: there could be a light at the end of the
Speaker 1: tunnel for for this is a positive light in the
Speaker 1: at the end of the tunnel, in the form of
Speaker 1: a vaccine, right right, yeah, vaccine. I mean we you know,
Speaker 1: we've got the you know, globally the smartest people in
Speaker 1: the world working on a cure for this, and it
Speaker 1: looks like, um, it looks like, you know, they're getting closer.
Speaker 1: And in the meantime, um, you know, just reading things
Speaker 1: from the CDC and listening to medical professionals, our abilities
Speaker 1: collectively to treat cases when they arise, even in the
Speaker 1: absence of a vaccine, appears to have improved pretty materially
Speaker 1: over the last three to four months. Yeah. I think
Speaker 1: that's right. And as you say, you know, all the
Speaker 1: best minds focused on. This is probably in a way
Speaker 1: that we've never seen over the course of human history,
Speaker 1: certainly modern history. UM. So let's talk some names if
Speaker 1: we can. I mean, one of the biggest debates I
Speaker 1: feel like we're all having, and maybe it's not even
Speaker 1: a debate at this point, is around retail online and
Speaker 1: breaking mortar. How do you play this as an investor?
Speaker 1: What names do you look at specifically or not look at? Yeah, so,
Speaker 1: you know, for for a number of years now, Um,
Speaker 1: you know, brick and mortar, mall based retail in particular
Speaker 1: has been under pressure. You know, it's just hard to
Speaker 1: compete with you know, next day delivery to day delivery
Speaker 1: via Amazon Prime for example. But this crisis has really
Speaker 1: accelerated it. And I don't have to go into a
Speaker 1: lot of detail other than you know, we've seen J. C.
Speaker 1: Penny go into bankruptcy, Neiman Marcus re enter bankruptcy. Um.
Speaker 1: You know that the whole, the whole trend has been
Speaker 1: accelerated and compressed because of because of the locked ms
Speaker 1: of physical retail across most of the country. I mean,
Speaker 1: we own Amazon, we continue to like it. Uh, you know,
Speaker 1: we think obviously they're clear beneficiary and you know of
Speaker 1: the stay at home economy. Uh, and the stock has
Speaker 1: reflected a lot of that. But I think in addition
Speaker 1: to that, what what the CEO, Jeff Bezos has has
Speaker 1: done is used this crisis as an opportunity to invest
Speaker 1: more in their business and essentially were producing a um
Speaker 1: a COVID proof if I could use that term, supply
Speaker 1: chain and within the Amazon ecosystem, and you know, spending
Speaker 1: four billion dollars. Uh, you know it is what he's
Speaker 1: announced that they're going to be studying in the current
Speaker 1: quarter on this. Gosh, it's just it's really hard for
Speaker 1: other retailers, certainly physical retailers to to match that. So normal.
Speaker 1: Are you at all playing the recovery trade? Because I
Speaker 1: understand on the fundamental ways what you're saying about Amazon
Speaker 1: is also obviously caught up in the tech rally that
Speaker 1: we've seen except for the last few days. Are you
Speaker 1: doing the recovery bit? Um? Yeah, you know that's interesting.
Speaker 1: You may be reading our mail or we've been talking
Speaker 1: about it internally with our team. UM. I guess the
Speaker 1: short answer is, uh, we are playing the recovery of
Speaker 1: that to the extent to which our process and and uh,
Speaker 1: you know, our long standing process allows us to do so.
Speaker 1: So you know, we're growth investors. UM. There are probably
Speaker 1: a lot of really good values UM that will be
Speaker 1: a parent certainly in hindsight, say six or twelve months
Speaker 1: from now, that go into that recovery basket. So you
Speaker 1: could look at you know, for example, distressed travel related companies.
Speaker 1: Uh maybe you know some of them all based retailers
Speaker 1: that are going to survive. You know, they're really cheap.
Speaker 1: That's not our game, though. We let our our value
Speaker 1: brethren brethren, uh pick those really cheap stocks that are
Speaker 1: going to ultimately work their way out of distress and
Speaker 1: and and uh and recover. Um. But you know there
Speaker 1: are there are companies that that you know, we can
Speaker 1: own and you know one of them uh sent TOAs,
Speaker 1: which is a uniform company, probably the dominant work uniform company.
Speaker 1: You know, we think they're going to benefit from uh,
Speaker 1: you know, from normalization, you know, as an if and
Speaker 1: when it occurs. One more name I'd love to ask
Speaker 1: you about if I can, Norman, I think this is
Speaker 1: one that's interesting to both Alex and me as watches
Speaker 1: of the stock market, but also as consumers. Lulu Lemon Uh,
Speaker 1: that's been a fascinating name to watch in many cases
Speaker 1: and maybe has defied some expectations throughout this Maybe it's
Speaker 1: everybody working in you know, leggings. But what do you
Speaker 1: make of it? Yeah, so Lulu Lulu Lemon is you know,
Speaker 1: one of our largest holdings, and we've owned it for
Speaker 1: several years. Um, really fascinating company. Obviously, you know, made
Speaker 1: their name with leggings and and you know, yoga pants,
Speaker 1: mostly for for the female women market, but over the
Speaker 1: last several years has really made a concerted effort and
Speaker 1: by and large has been successful in expanding into into
Speaker 1: men's clothes. Um. So you know, we really liked the name.
Speaker 1: They're having a lot of success globally and growing their brand.
Speaker 1: And then I was really intrigued. Uh, and I guess
Speaker 1: I like the acquisition that they made pretty recently of Mirror,
Speaker 1: which is a company they invested about a million bucks
Speaker 1: in I guess a year year and a half ago, um,
Speaker 1: and ultimately here fought for five million, which is crazy.
Speaker 1: It sounds for a pre public company. Uh, that's about
Speaker 1: five times projective sales, right, So we really really like it. Yeah,
Speaker 1: all right, well we'll have to talk more about that
Speaker 1: when next time you join us, good to catch up
Speaker 1: with you. Norm Conley, of course, joining us from St. Louis,
Speaker 1: Chief Executive, Chief Investment Officer over Jack Capital Management. Thanks
Speaker 1: so much for listening to Bloomberg Business Week. Download the
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