1 00:00:00,080 --> 00:00:12,960 Speaker 1: Yeah, Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane. 2 00:00:13,480 --> 00:00:17,560 Speaker 1: Daily we bring you insight from the best in economics, finance, investment, 3 00:00:18,000 --> 00:00:23,520 Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 4 00:00:23,600 --> 00:00:28,200 Speaker 1: Bloomberg dot Com, and of course on the Bloomberg TONYDI 5 00:00:28,520 --> 00:00:31,880 Speaker 1: of kind of co generity. Tony always fantastic to catch 6 00:00:31,960 --> 00:00:34,600 Speaker 1: up with you, sir. Let's just think about things we 7 00:00:34,680 --> 00:00:37,159 Speaker 1: can solidate and you want to add risk as we 8 00:00:37,240 --> 00:00:41,080 Speaker 1: can solidate. Why is that, Tony? Well, John, I think 9 00:00:41,440 --> 00:00:44,120 Speaker 1: ultimately there's two phrases that we've all come to know, 10 00:00:44,200 --> 00:00:46,600 Speaker 1: and that's don't fight the FED and don't fight the tape. 11 00:00:47,000 --> 00:00:50,120 Speaker 1: The FED is extraordinary here you have a FED that 12 00:00:50,240 --> 00:00:53,520 Speaker 1: is literally looked into a television camera and said, we're 13 00:00:53,600 --> 00:00:56,560 Speaker 1: just printing the money and don't worry about that. Now 14 00:00:56,760 --> 00:00:59,080 Speaker 1: is not the time to worry about that. And we're 15 00:00:59,080 --> 00:01:03,040 Speaker 1: gonna issue unlimited support for the credit markets. And the 16 00:01:03,040 --> 00:01:05,600 Speaker 1: phrase that really, I think has has hurt so many 17 00:01:05,640 --> 00:01:09,160 Speaker 1: portfolio managers and myself frankly, over time is it's not 18 00:01:09,319 --> 00:01:11,400 Speaker 1: it's different this time. That's the phrase we all love 19 00:01:11,440 --> 00:01:14,119 Speaker 1: to talk about. I think the real phrase that really 20 00:01:14,200 --> 00:01:17,720 Speaker 1: hurts performances. This will end badly because of course it's 21 00:01:17,720 --> 00:01:20,080 Speaker 1: going to add badly. You cannot fix exponential debt with 22 00:01:20,160 --> 00:01:24,480 Speaker 1: infinity debt. However, in the current framework, the FET is 23 00:01:24,680 --> 00:01:29,679 Speaker 1: very driven to obtain their to um. There's only two 24 00:01:29,720 --> 00:01:34,000 Speaker 1: mandates full employment, which clearly even with a game we're 25 00:01:34,000 --> 00:01:37,280 Speaker 1: not going to get on over any over the near term, 26 00:01:37,360 --> 00:01:39,520 Speaker 1: and stable core inflation, which they want to be at 27 00:01:39,560 --> 00:01:42,959 Speaker 1: two percent so recently last week at one. They're a 28 00:01:43,000 --> 00:01:44,760 Speaker 1: long way off. So this FET is going to be 29 00:01:45,240 --> 00:01:48,440 Speaker 1: sending the money in and I don't want to fight that. 30 00:01:50,160 --> 00:01:52,520 Speaker 1: I mean, so this is really really important because you've 31 00:01:52,520 --> 00:01:55,120 Speaker 1: been very clear that you're modeling a caution in a 32 00:01:55,160 --> 00:01:58,160 Speaker 1: bear market even off of a recession. Well we got 33 00:01:58,160 --> 00:02:01,000 Speaker 1: an m v e R recession, but you're putting a 34 00:02:01,040 --> 00:02:04,920 Speaker 1: big asterisk next to it, right, Well, there's so we 35 00:02:05,040 --> 00:02:09,680 Speaker 1: downgraded the market on January because we just we wanted 36 00:02:09,720 --> 00:02:11,440 Speaker 1: to take some risk off the table and it's just 37 00:02:11,480 --> 00:02:14,280 Speaker 1: gotten way too excessive. Then of course I didn't expect 38 00:02:14,320 --> 00:02:17,560 Speaker 1: a thirty you know that. I was glad we took 39 00:02:17,560 --> 00:02:20,480 Speaker 1: some risk down. We added risk when we came out 40 00:02:20,520 --> 00:02:25,600 Speaker 1: of what actually when FED chair Powell Tom said into 41 00:02:25,680 --> 00:02:28,640 Speaker 1: the camera on sixty Miss CBS is sixty minutes that 42 00:02:28,680 --> 00:02:31,400 Speaker 1: we're just printing the money. I never thought you and 43 00:02:31,440 --> 00:02:33,760 Speaker 1: I have been doing this a long time. Did you 44 00:02:33,880 --> 00:02:36,560 Speaker 1: ever think that the FED would actually not even use 45 00:02:36,880 --> 00:02:41,280 Speaker 1: great terms like q E or buying trade. They're just 46 00:02:41,320 --> 00:02:44,520 Speaker 1: saying they literally were printing the money. So at that 47 00:02:44,639 --> 00:02:48,239 Speaker 1: point you know that they're going to try to um 48 00:02:48,560 --> 00:02:53,440 Speaker 1: increase economic activity, not stop until they do, Tony, don't 49 00:02:53,440 --> 00:02:55,880 Speaker 1: fight the FED is certainly one theme that we've had 50 00:02:55,919 --> 00:02:58,440 Speaker 1: this year. The other theme is don't fight the big 51 00:02:58,480 --> 00:03:01,360 Speaker 1: tech rally, but that's getting three reatened by the Facebook 52 00:03:01,440 --> 00:03:05,640 Speaker 1: advertising boycott is really raising questions in general about the 53 00:03:05,639 --> 00:03:09,240 Speaker 1: advertising budgets of big companies. How much could that influence 54 00:03:09,240 --> 00:03:12,680 Speaker 1: the rally going forward? Well, I think that that could 55 00:03:13,080 --> 00:03:16,400 Speaker 1: create a little bit. So once we have created the market, 56 00:03:16,400 --> 00:03:18,800 Speaker 1: you've got this incredible runoff of that trading range. So 57 00:03:18,840 --> 00:03:21,000 Speaker 1: on June five, we thought that the market would go 58 00:03:21,040 --> 00:03:25,080 Speaker 1: into a period consolidation because these stocks has seen extraordinary 59 00:03:25,160 --> 00:03:28,639 Speaker 1: moves right there. It's just even the economically sense of stocks. 60 00:03:28,639 --> 00:03:30,680 Speaker 1: You had a two week rally in the banks of 61 00:03:30,720 --> 00:03:33,639 Speaker 1: thirty and it was time to take a little bit 62 00:03:33,639 --> 00:03:36,920 Speaker 1: of that. That is an extraordinary thing that's never happened. 63 00:03:36,920 --> 00:03:39,320 Speaker 1: So it's time to take a little bit. It was 64 00:03:39,400 --> 00:03:40,960 Speaker 1: time to take a little bit of money off the table. 65 00:03:41,040 --> 00:03:45,440 Speaker 1: So actually, the market has been consolidating since early June. 66 00:03:45,800 --> 00:03:47,760 Speaker 1: So if you look at the percentage of stocks above 67 00:03:47,800 --> 00:03:51,400 Speaker 1: the ten day, it's dropped uh SMP components above their 68 00:03:51,440 --> 00:03:53,240 Speaker 1: ten day moving average, it's all the way back to 69 00:03:53,360 --> 00:03:57,000 Speaker 1: only if you look at the percentage of stocks above 70 00:03:57,040 --> 00:03:59,800 Speaker 1: their fifty day in the SMP just two and a 71 00:04:00,000 --> 00:04:04,520 Speaker 1: half weeks ago, that reading was over. It was it's 72 00:04:04,560 --> 00:04:10,960 Speaker 1: now so you've dropped, or so you you're already internally 73 00:04:11,000 --> 00:04:13,680 Speaker 1: consolidating the market. Now it's catching up at the indices 74 00:04:13,920 --> 00:04:16,479 Speaker 1: because some of those big mega caps stay at home 75 00:04:16,560 --> 00:04:20,800 Speaker 1: stocks are starting to get hit, Tony A. We're redefining 76 00:04:20,920 --> 00:04:23,960 Speaker 1: what a defensive asset actually is. Is a groat stock 77 00:04:24,000 --> 00:04:26,919 Speaker 1: of software stock with an anovated multiple of thirty times 78 00:04:26,920 --> 00:04:31,159 Speaker 1: forward earnings is not a defensive asset right now, buddy, 79 00:04:31,200 --> 00:04:34,520 Speaker 1: I I'll tell you time you meet. At least all 80 00:04:34,520 --> 00:04:37,440 Speaker 1: of us have been doing this a while. The NASDAC 81 00:04:37,600 --> 00:04:42,240 Speaker 1: mega cap stocks are considered the defensive stocks, which I 82 00:04:42,400 --> 00:04:46,839 Speaker 1: just that is unique to this cycle. Um, So when 83 00:04:46,880 --> 00:04:50,200 Speaker 1: you put those stocks, if you're making an offensive bet, 84 00:04:50,320 --> 00:04:52,440 Speaker 1: you've got to be believing that there's going to be 85 00:04:52,480 --> 00:04:55,679 Speaker 1: a reopening of economic activity. And again, our our target 86 00:04:55,960 --> 00:05:00,000 Speaker 1: is a story. It's not you know, in the next 87 00:05:00,080 --> 00:05:02,200 Speaker 1: fifteen minutes, we're off to the races. I think what 88 00:05:02,279 --> 00:05:05,760 Speaker 1: you want to do is use periods of liquidity on 89 00:05:05,839 --> 00:05:10,000 Speaker 1: the downside to add exposure. Okay, but Tony, where are 90 00:05:10,040 --> 00:05:12,279 Speaker 1: you putting new money? You got new money, you're putting 91 00:05:12,320 --> 00:05:13,840 Speaker 1: it to work? Where are you putting it to work? 92 00:05:14,760 --> 00:05:16,680 Speaker 1: So we're we've been thinking if you're gonna put money 93 00:05:16,760 --> 00:05:18,880 Speaker 1: into the market, it's got to be on this economic 94 00:05:18,920 --> 00:05:23,240 Speaker 1: reopening or an offensive sector allocation, which would be in 95 00:05:23,480 --> 00:05:27,640 Speaker 1: the beleaguered banks, which got absolutely smoked on Friday on 96 00:05:27,680 --> 00:05:30,560 Speaker 1: the Fed decision. Um. What was interesting about Friday though, 97 00:05:30,560 --> 00:05:33,040 Speaker 1: even though the market was pretty pretty weak, as you know, 98 00:05:33,520 --> 00:05:39,040 Speaker 1: the industrials and materials actually significantly outperformed the SMP. So 99 00:05:39,320 --> 00:05:42,560 Speaker 1: we're looking to go into those areas time that benefit 100 00:05:42,640 --> 00:05:46,040 Speaker 1: from an economic reopening and not a stay at home forever. 101 00:05:46,120 --> 00:05:47,960 Speaker 1: But again, this is something we're looking at over the 102 00:05:48,000 --> 00:05:53,159 Speaker 1: next twelve eighteen months, not the twelve next twelve eighteen minutes. John, 103 00:05:53,240 --> 00:05:55,839 Speaker 1: I've struck by Tony's comments and frankly the comments that 104 00:05:55,839 --> 00:05:58,080 Speaker 1: we get from a lot of investment managers, this idea 105 00:05:58,120 --> 00:06:00,480 Speaker 1: that we could have more upside and stocks even though 106 00:06:00,480 --> 00:06:03,560 Speaker 1: the economy faces a lot of uncertainty and downside surprise. 107 00:06:03,839 --> 00:06:07,599 Speaker 1: And again, I'm just struck by this dissonance between stocks 108 00:06:07,720 --> 00:06:11,400 Speaker 1: not necessarily representing the underlying economy where the bottom fifth 109 00:06:11,800 --> 00:06:16,680 Speaker 1: of all earners in America are currently about below employment 110 00:06:16,800 --> 00:06:19,560 Speaker 1: level seen in February. I'm just wondering how this is 111 00:06:19,600 --> 00:06:23,600 Speaker 1: going to filter into equities if ever, Well, least you've 112 00:06:23,600 --> 00:06:25,640 Speaker 1: said it a million times, the equity market is not 113 00:06:25,680 --> 00:06:27,960 Speaker 1: the economy, and Tony with just five big names making 114 00:06:28,040 --> 00:06:30,520 Speaker 1: up about a quarter of the SMP five hundred, it's 115 00:06:30,560 --> 00:06:32,640 Speaker 1: something we've just got to accept, isn't it. Some people 116 00:06:32,640 --> 00:06:35,239 Speaker 1: are really struggling with this still, that the equity market 117 00:06:35,360 --> 00:06:38,480 Speaker 1: somehow has to be a reflection of where this economy 118 00:06:38,560 --> 00:06:42,000 Speaker 1: is and where it's going. Well. Which equity market though, 119 00:06:42,400 --> 00:06:45,480 Speaker 1: um so, and again I think that's the most important phrase. 120 00:06:45,480 --> 00:06:48,360 Speaker 1: Would I would I chase some of those megacap stocks 121 00:06:48,360 --> 00:06:51,120 Speaker 1: that have had such an extraordinary move. I wouldn't have. 122 00:06:51,839 --> 00:06:56,360 Speaker 1: For example, Facebook on Friday gave back all the games 123 00:06:56,400 --> 00:06:59,480 Speaker 1: that had had in the prior month and change. So 124 00:06:59,760 --> 00:07:02,240 Speaker 1: what what you have is elevated risk. When you have 125 00:07:02,400 --> 00:07:06,320 Speaker 1: parabolic moves higher or such focused move higher, I want 126 00:07:06,320 --> 00:07:09,840 Speaker 1: to I want to invest in America or or um 127 00:07:09,880 --> 00:07:14,000 Speaker 1: economic activity in a reopening of the economy. I don't 128 00:07:14,000 --> 00:07:16,640 Speaker 1: want to. I don't want to be chasing the stay 129 00:07:16,680 --> 00:07:20,600 Speaker 1: at home work theme forever. Clearly that has been working 130 00:07:20,640 --> 00:07:22,720 Speaker 1: and that has been such a driver of the equity 131 00:07:22,760 --> 00:07:25,520 Speaker 1: market thus far. But again, if you look at the 132 00:07:25,720 --> 00:07:28,920 Speaker 1: well at the performance of the Russell one thousand growth 133 00:07:29,000 --> 00:07:32,200 Speaker 1: versus the Russell one thousand value, you're seeing not just 134 00:07:32,320 --> 00:07:36,880 Speaker 1: an absolute uh test of what happened in the dot 135 00:07:36,920 --> 00:07:39,840 Speaker 1: com era, but even on a ten week rade of change, 136 00:07:40,200 --> 00:07:42,040 Speaker 1: you saw a peak and it is now kind of 137 00:07:42,080 --> 00:07:44,520 Speaker 1: pulling back a little bit. So I think the move is, 138 00:07:44,840 --> 00:07:48,840 Speaker 1: to Tom's question, is value over growth and it's not played. 139 00:07:49,040 --> 00:07:51,280 Speaker 1: It's not been the great theme coming off the low, 140 00:07:51,600 --> 00:07:54,000 Speaker 1: but coming out of a recession. Going to Lisa's point, 141 00:07:54,640 --> 00:07:59,480 Speaker 1: coming out of a recession, typically your your outperformers are 142 00:07:59,600 --> 00:08:05,080 Speaker 1: finance anchials, industrials, materials, and consumer discretionarya Those are the 143 00:08:05,120 --> 00:08:07,720 Speaker 1: areas if you believe that the economy is ultimately going 144 00:08:07,720 --> 00:08:10,160 Speaker 1: to recover, the global economy is ultimately going to recover, 145 00:08:10,640 --> 00:08:13,080 Speaker 1: those are the sectors that you want to buy into 146 00:08:13,080 --> 00:08:15,720 Speaker 1: the weakness that we've been expecting and could see a 147 00:08:15,760 --> 00:08:18,400 Speaker 1: little bit more. The two main problems that everybody had 148 00:08:18,440 --> 00:08:21,480 Speaker 1: for the market was what about the second wave and 149 00:08:21,520 --> 00:08:25,760 Speaker 1: what about if the Democrats do some kind of sweep. Well, 150 00:08:26,000 --> 00:08:29,840 Speaker 1: the polling is pulling forward the political side, and the 151 00:08:29,880 --> 00:08:32,920 Speaker 1: expansion of the COVID nineteen cases in the South is 152 00:08:33,000 --> 00:08:35,600 Speaker 1: clearly telling us what the second wave could look like. 153 00:08:36,000 --> 00:08:39,680 Speaker 1: So that's this consolidation period. Instead of happening in the fall, 154 00:08:39,679 --> 00:08:42,439 Speaker 1: it's happening now, and I think that creates the opportunity 155 00:08:42,559 --> 00:08:47,920 Speaker 1: for investing in those reopening areas over the next few months. 156 00:08:48,800 --> 00:08:51,319 Speaker 1: Cound of coach Intimacy Tony always fantastic to catch up with. 157 00:08:51,360 --> 00:09:05,400 Speaker 1: You appreciate the transparency the honest state joining us from 158 00:09:05,440 --> 00:09:08,000 Speaker 1: Duke Downs. Jonathan Quick, and what is so important about 159 00:09:08,080 --> 00:09:11,640 Speaker 1: Dr Quick is not only his exceptionally Prussian book The 160 00:09:11,760 --> 00:09:15,360 Speaker 1: End of Epidemics, but also it's a commitment over multiple 161 00:09:15,480 --> 00:09:22,000 Speaker 1: decades to looking at the epidemic turned to pandemic. Dr Quick, 162 00:09:22,040 --> 00:09:25,359 Speaker 1: What everyone wants to know is what is your solution 163 00:09:25,559 --> 00:09:29,880 Speaker 1: for the political chaos that we're in right now? It's 164 00:09:29,920 --> 00:09:34,560 Speaker 1: not much different than an Albert Camus the plague. How 165 00:09:34,559 --> 00:09:39,400 Speaker 1: do you extricate yourself from the political chaos to end 166 00:09:39,400 --> 00:09:44,960 Speaker 1: with a better medical outcome? Well, I I think the 167 00:09:45,000 --> 00:09:48,640 Speaker 1: first thing is that we need to keep persisting in 168 00:09:49,360 --> 00:09:53,160 Speaker 1: getting the getting the public, everybody to see the reality 169 00:09:53,200 --> 00:09:56,480 Speaker 1: in front of us, and to do what works. Um, 170 00:09:57,320 --> 00:10:02,200 Speaker 1: We're sitting here in the US seeing explosive increases, UH, 171 00:10:02,240 --> 00:10:05,240 Speaker 1: with at least thirty of the states seeing increases. Yet 172 00:10:05,280 --> 00:10:09,560 Speaker 1: we look around the world and we see what works. Um. 173 00:10:09,920 --> 00:10:13,319 Speaker 1: I think we've had the worst of a pandemic communication 174 00:10:13,559 --> 00:10:18,200 Speaker 1: in the sense that we have our leaders, um, you know, 175 00:10:18,480 --> 00:10:21,920 Speaker 1: not on a on a common message. And that's that's 176 00:10:21,960 --> 00:10:26,520 Speaker 1: part of it. And UM, I think right now we're 177 00:10:26,559 --> 00:10:31,240 Speaker 1: based on the Rockefeller Foundations, we're working to build an 178 00:10:31,280 --> 00:10:37,040 Speaker 1: alliance of public organizations to get a consistent message out 179 00:10:37,080 --> 00:10:40,720 Speaker 1: to the public about the viruses here. And so if 180 00:10:40,760 --> 00:10:43,840 Speaker 1: the leaders aren't coming together, I think society has to 181 00:10:43,880 --> 00:10:47,440 Speaker 1: come together. But keep pushing the leaders with facing the 182 00:10:47,520 --> 00:10:50,360 Speaker 1: reality we've got this pandemic. We know it will be 183 00:10:50,440 --> 00:10:52,040 Speaker 1: with us for a while and we know what to 184 00:10:52,120 --> 00:10:58,080 Speaker 1: do to to slow it down. Your work included six 185 00:10:58,160 --> 00:11:00,720 Speaker 1: years of the World Health Organization, and you are a 186 00:11:00,760 --> 00:11:03,600 Speaker 1: good filter of all the literature that is out there. 187 00:11:04,160 --> 00:11:09,240 Speaker 1: If we see the case count explode in Florida to Arizona, 188 00:11:09,760 --> 00:11:13,319 Speaker 1: do you just correlate correlate that over to a rising 189 00:11:13,480 --> 00:11:20,920 Speaker 1: death count in the coming weeks. Well, yes, with with 190 00:11:21,120 --> 00:11:27,400 Speaker 1: the recognition that the shift early in the outbreak, it 191 00:11:27,520 --> 00:11:30,800 Speaker 1: was really a lot of at risk, all the people 192 00:11:30,840 --> 00:11:34,960 Speaker 1: we weren't protecting the most vulnerable. Um, so we're seeing 193 00:11:35,000 --> 00:11:40,199 Speaker 1: now cases rise, but the death account at the point, 194 00:11:40,280 --> 00:11:45,520 Speaker 1: at the present time is is holding steady. So um, 195 00:11:45,840 --> 00:11:50,480 Speaker 1: we will see more deaths, we will see proportionally fewer 196 00:11:50,559 --> 00:11:53,240 Speaker 1: because more of the cases are younger people who don't 197 00:11:53,440 --> 00:11:55,960 Speaker 1: don't die is often. But yes, indeed we will see 198 00:11:56,080 --> 00:12:00,839 Speaker 1: rises in death count as as the increase now mostly 199 00:12:00,840 --> 00:12:04,400 Speaker 1: in the in the youth gets filters up to the 200 00:12:04,440 --> 00:12:07,400 Speaker 1: middle age and older. So yeah, I expect we will 201 00:12:07,440 --> 00:12:11,679 Speaker 1: see the death count coming back up dr quick. This 202 00:12:11,760 --> 00:12:14,520 Speaker 1: distinction is so important, This idea that you're seeing the 203 00:12:14,559 --> 00:12:17,280 Speaker 1: case count rise exponentially in some areas, but the death 204 00:12:17,320 --> 00:12:20,199 Speaker 1: count not expected to rise as much and not rising 205 00:12:20,240 --> 00:12:24,200 Speaker 1: significantly at this point. Could this be interpreted as perhaps 206 00:12:24,280 --> 00:12:27,280 Speaker 1: these flare ups not being as dangerous as the initial 207 00:12:27,320 --> 00:12:30,720 Speaker 1: ones and being just another sign of reopening economy, young 208 00:12:30,720 --> 00:12:33,559 Speaker 1: people getting back into the workforce and managing through the 209 00:12:33,679 --> 00:12:37,040 Speaker 1: virus to get some sort of herd immunity without necessarily 210 00:12:37,080 --> 00:12:39,480 Speaker 1: a vaccine on the on the horizon for the next 211 00:12:39,480 --> 00:12:44,520 Speaker 1: couple of months. Well, I mean, honestly, I think that's UH. 212 00:12:44,559 --> 00:12:47,320 Speaker 1: I think that's a wishful thinking in the sense that 213 00:12:47,679 --> 00:12:54,400 Speaker 1: um UH is a bigger outbreak, even if proportionally more 214 00:12:54,480 --> 00:12:58,280 Speaker 1: of it is in the youth, it's still gonna claim lives. 215 00:12:58,720 --> 00:13:02,360 Speaker 1: The virus hasn't changed changed, And I think one reality 216 00:13:02,480 --> 00:13:06,680 Speaker 1: is it's not UM saving lives of saving the economy. 217 00:13:06,720 --> 00:13:10,080 Speaker 1: That's a false choice. We can do both, But our 218 00:13:10,120 --> 00:13:15,439 Speaker 1: biggest failure has been not to really reinforce those basic 219 00:13:15,559 --> 00:13:21,120 Speaker 1: personal protective behaviors which we know work distancing face mailk handwashing, 220 00:13:21,600 --> 00:13:26,280 Speaker 1: avoid large gatherings. UM. I think there's an in between 221 00:13:26,800 --> 00:13:29,679 Speaker 1: where we I mean, staying indoors for three months didn't 222 00:13:29,720 --> 00:13:33,760 Speaker 1: change the virus. It's still just as contagious. And whether 223 00:13:33,800 --> 00:13:38,560 Speaker 1: you whether you start with a youth epidemic because they're 224 00:13:38,600 --> 00:13:45,560 Speaker 1: not following enough that these personal protective behaviors um it 225 00:13:45,679 --> 00:13:50,480 Speaker 1: will eventually continue um and and affect the whole population. 226 00:13:50,880 --> 00:13:53,640 Speaker 1: So we we we do have to reopen, but we 227 00:13:53,760 --> 00:13:55,679 Speaker 1: have to we have to do it in a way 228 00:13:56,040 --> 00:14:00,320 Speaker 1: which really applies the lessons of what has worked in 229 00:14:00,440 --> 00:14:03,960 Speaker 1: other countries to plateau at least the virus and and 230 00:14:04,040 --> 00:14:07,920 Speaker 1: minimize UH and reduce the desks and and all of 231 00:14:07,960 --> 00:14:12,200 Speaker 1: the knock on effects. Dr Quick, how long do you 232 00:14:12,200 --> 00:14:15,880 Speaker 1: think it will be until we have a vaccine? Well, 233 00:14:16,000 --> 00:14:19,520 Speaker 1: I have to say I'm encouraged by the vaccine work 234 00:14:19,600 --> 00:14:23,240 Speaker 1: that's going on now because we have UH we have 235 00:14:23,320 --> 00:14:30,560 Speaker 1: at least nearly twenty vaccines and human trials and that's exciting. 236 00:14:30,640 --> 00:14:33,840 Speaker 1: And we've got a couple that are going into the 237 00:14:33,880 --> 00:14:39,600 Speaker 1: Astrozenic University of Oxford one and the MODERNA one. Both 238 00:14:39,640 --> 00:14:43,440 Speaker 1: of those are going into to the last phase of 239 00:14:43,800 --> 00:14:47,240 Speaker 1: human trials where we really go on a large scale 240 00:14:47,280 --> 00:14:50,760 Speaker 1: to test the safety and efficacy. UM So I'm encouraged. 241 00:14:51,360 --> 00:14:54,200 Speaker 1: That said, the whole process of scaling up production and 242 00:14:54,280 --> 00:14:58,640 Speaker 1: all I think we'll start seeing some coming out in 243 00:14:59,200 --> 00:15:01,120 Speaker 1: the spring is for so hope, but I don't see 244 00:15:01,240 --> 00:15:07,200 Speaker 1: large scale vaccine availability that changes things fundamentally until until 245 00:15:07,280 --> 00:15:13,120 Speaker 1: the uh, you know latter half of as as folks 246 00:15:13,120 --> 00:15:16,640 Speaker 1: have been saying since the beginning, I think that hasn't changed. 247 00:15:17,320 --> 00:15:20,280 Speaker 1: But I do think the speed has been historic and 248 00:15:20,760 --> 00:15:23,640 Speaker 1: um and the companies are really looking at how to 249 00:15:23,920 --> 00:15:29,840 Speaker 1: maximize production quick of the Rockefeller Foundation Dot Defense has 250 00:15:29,920 --> 00:15:31,240 Speaker 1: to catch up with you say, you've got to come 251 00:15:31,280 --> 00:15:44,040 Speaker 1: back on soon. This is a really interesting interview because 252 00:15:44,080 --> 00:15:48,680 Speaker 1: he's a very interesting guy. His father basically made modern 253 00:15:48,720 --> 00:15:52,920 Speaker 1: Miami Beach. Seymour Gelbert was the mayor of Miami Beach forever, 254 00:15:53,080 --> 00:15:56,200 Speaker 1: lived at the lofty age of years old, and his 255 00:15:56,360 --> 00:16:01,040 Speaker 1: son Dan has carried the torch forward. Steeped in Florida politics, 256 00:16:01,040 --> 00:16:04,280 Speaker 1: he's one of the most interesting Democratic voices across the 257 00:16:04,360 --> 00:16:08,760 Speaker 1: Sun Belt, and he is the the mayor of Miami Beach. 258 00:16:08,840 --> 00:16:12,200 Speaker 1: Mayor Gilbert, thank you so much for joining us. If 259 00:16:12,240 --> 00:16:15,840 Speaker 1: I went down to the Vetsy Hotel this morning, could 260 00:16:15,840 --> 00:16:19,000 Speaker 1: I have a beverage of my choice on that wonderful 261 00:16:19,120 --> 00:16:23,880 Speaker 1: veranda looking out across Miami Beach. Well, if it we're open, 262 00:16:24,040 --> 00:16:27,600 Speaker 1: you could, because it's a restaurant, not a bar. Bars 263 00:16:27,680 --> 00:16:31,440 Speaker 1: have been closed in our city since we we sheltered 264 00:16:31,440 --> 00:16:34,720 Speaker 1: in place. We're the first city in Florida to do so. 265 00:16:34,720 --> 00:16:36,880 Speaker 1: So we don't have bars right now anywhere, but we 266 00:16:36,920 --> 00:16:42,280 Speaker 1: do allow restaurants with limited capacity. At this point, what 267 00:16:42,440 --> 00:16:46,320 Speaker 1: is the capacity you need from your state government, including 268 00:16:46,360 --> 00:16:50,280 Speaker 1: your Republican governor, and what do you need from Washington 269 00:16:50,480 --> 00:16:53,960 Speaker 1: right now? Well, first of all, from Washington, we need 270 00:16:54,000 --> 00:16:57,560 Speaker 1: people to start sending out a message that you need 271 00:16:57,600 --> 00:16:59,560 Speaker 1: to do the things that we're asking people to do. 272 00:17:00,320 --> 00:17:03,520 Speaker 1: You know, I always describe you know, mayors in South 273 00:17:03,520 --> 00:17:06,159 Speaker 1: Florida know about hurricanes. They happen all the time, or 274 00:17:06,160 --> 00:17:10,040 Speaker 1: at least they seem to, uh, you know, be be 275 00:17:10,119 --> 00:17:14,359 Speaker 1: coming towards our way generally during hurricane season. So we 276 00:17:14,400 --> 00:17:18,600 Speaker 1: all prepare and there's never any discussion about whose fault 277 00:17:18,640 --> 00:17:21,600 Speaker 1: it is, or whether it's what party it is, or 278 00:17:22,160 --> 00:17:23,920 Speaker 1: everybody just does what they need to do, and they 279 00:17:23,920 --> 00:17:26,800 Speaker 1: tend to help everybody else. They tend to listen to 280 00:17:26,960 --> 00:17:30,240 Speaker 1: the direction of their political and health management leaders, and 281 00:17:30,280 --> 00:17:32,680 Speaker 1: they tend to sort of get in line and help people. 282 00:17:32,680 --> 00:17:36,560 Speaker 1: They don't even know this. For whatever reason, the messaging 283 00:17:36,600 --> 00:17:40,520 Speaker 1: from Washington has not been help everybody else, help yourself. 284 00:17:40,600 --> 00:17:44,480 Speaker 1: It's been don't wear a mask, or stand up against this, 285 00:17:44,640 --> 00:17:47,600 Speaker 1: or stand up against that. It's so unhelpful. Right now, 286 00:17:47,640 --> 00:17:50,399 Speaker 1: the biggest concern we have is getting people to simply 287 00:17:50,440 --> 00:17:52,639 Speaker 1: do what every health expert tells them they should do, 288 00:17:53,200 --> 00:17:55,360 Speaker 1: which is to wear a mask. Wear a mask when 289 00:17:55,359 --> 00:17:57,680 Speaker 1: you're near somebody, wear a master, protect your parents, wear 290 00:17:57,680 --> 00:18:01,560 Speaker 1: a master, protect yourself. And they're not complying. And young 291 00:18:01,600 --> 00:18:05,040 Speaker 1: people are especially not complying. And since my city is 292 00:18:05,040 --> 00:18:08,359 Speaker 1: in the middle of this, because we get so many guests, 293 00:18:08,400 --> 00:18:12,640 Speaker 1: so many visitors, so many uh you know, hospitality workers, 294 00:18:12,680 --> 00:18:15,920 Speaker 1: all in this little interchange that happens in this little island, 295 00:18:16,359 --> 00:18:17,920 Speaker 1: we see it in a big way and it has 296 00:18:17,960 --> 00:18:23,480 Speaker 1: to We need direction, and we need leadership. As you 297 00:18:23,520 --> 00:18:25,720 Speaker 1: look to leadership, there is a question about some of 298 00:18:25,760 --> 00:18:28,320 Speaker 1: the hard decisions that you have to make as a 299 00:18:28,400 --> 00:18:30,720 Speaker 1: leader of your city and as a parent. I know 300 00:18:30,800 --> 00:18:34,359 Speaker 1: the conversation very much among my friends is a question 301 00:18:34,359 --> 00:18:36,679 Speaker 1: about when summer camps can get back up and running, 302 00:18:36,720 --> 00:18:38,720 Speaker 1: when we can get schools back up and running. I 303 00:18:38,760 --> 00:18:41,320 Speaker 1: know that summer camps have been open in your region. 304 00:18:41,680 --> 00:18:43,960 Speaker 1: At what point will you shut them down and keep 305 00:18:44,040 --> 00:18:49,000 Speaker 1: schools closed come the fall. Well, you know, we have 306 00:18:49,119 --> 00:18:52,919 Speaker 1: tried very hard to follow very directly the advice of 307 00:18:52,960 --> 00:18:57,679 Speaker 1: the health care professionals. So CDC allows for summer camps 308 00:18:57,760 --> 00:19:01,199 Speaker 1: if all of these other visions are taken care of. 309 00:19:01,280 --> 00:19:04,960 Speaker 1: And I think the Pediatric Association today really wants people 310 00:19:05,000 --> 00:19:07,880 Speaker 1: to strive to open up schools in some way because 311 00:19:07,920 --> 00:19:10,880 Speaker 1: they're worried about the impact of not having schools open 312 00:19:10,920 --> 00:19:14,160 Speaker 1: and the failure to socialize and all those issues. So 313 00:19:14,480 --> 00:19:16,480 Speaker 1: we're going to try to, you know, to do what 314 00:19:16,560 --> 00:19:20,360 Speaker 1: we can within the confines and constraints of all of 315 00:19:20,400 --> 00:19:23,520 Speaker 1: what the healthcare professionals say. This is a healthcare issue 316 00:19:23,520 --> 00:19:26,840 Speaker 1: and it should be treated that way. That said, you know, 317 00:19:26,880 --> 00:19:29,480 Speaker 1: a lot of it is what parents are going to permit. 318 00:19:30,320 --> 00:19:33,280 Speaker 1: We opened up virtual and regular summer camps with with 319 00:19:33,400 --> 00:19:35,720 Speaker 1: lots of restrictions, and we got a good number of 320 00:19:35,760 --> 00:19:39,119 Speaker 1: people interested, but many obviously didn't. Um The reason we 321 00:19:39,160 --> 00:19:42,239 Speaker 1: opened up summer camps and the reason why schools are 322 00:19:42,240 --> 00:19:44,520 Speaker 1: trying to open up is obviously people can't work if 323 00:19:44,560 --> 00:19:48,280 Speaker 1: their kids are at home, especially their younger children, and 324 00:19:48,280 --> 00:19:50,440 Speaker 1: and so it's part of not just the kids development, 325 00:19:50,520 --> 00:19:54,480 Speaker 1: but the economy. So We're trying very hard to navigate. 326 00:19:55,280 --> 00:19:57,880 Speaker 1: But right now, given the spikes that we've the enormous 327 00:19:57,880 --> 00:20:01,400 Speaker 1: spikes we've seen in the in the county, in the state, uh, 328 00:20:01,440 --> 00:20:03,120 Speaker 1: you know, we're not sure what we're going to be doing, 329 00:20:03,200 --> 00:20:06,320 Speaker 1: because if we can't get a handle on this, then 330 00:20:06,359 --> 00:20:12,520 Speaker 1: obviously the health care concerns will override everything else. Mayor 331 00:20:12,600 --> 00:20:15,600 Speaker 1: not an easy decision in tom I'm really struck, especially 332 00:20:15,600 --> 00:20:17,520 Speaker 1: in what the mayor was talking about in terms of 333 00:20:17,520 --> 00:20:20,520 Speaker 1: the economic concerns people not getting back to work if 334 00:20:20,520 --> 00:20:23,560 Speaker 1: their kids are not in school, and the idea of 335 00:20:23,600 --> 00:20:27,920 Speaker 1: what could happen if we have children congregating they don't 336 00:20:27,960 --> 00:20:30,720 Speaker 1: social distance, and what happens with respect to all the 337 00:20:30,720 --> 00:20:35,640 Speaker 1: little victors of disease who go home to their families. So, yeah, 338 00:20:35,840 --> 00:20:39,560 Speaker 1: it's interesting here, Mayor gil Well, go ahead, please, Mayor Gilbert, 339 00:20:39,560 --> 00:20:48,280 Speaker 1: go ahead. But what's interesting here too, euro up, What 340 00:20:48,400 --> 00:20:52,000 Speaker 1: I was gonna say, excuse the delay, Mayor Gilbert. What 341 00:20:52,119 --> 00:20:55,359 Speaker 1: I was gonna say is your father basically invented the 342 00:20:55,440 --> 00:20:58,359 Speaker 1: idea of moving from New York down to Miami Beach. 343 00:20:58,400 --> 00:21:01,320 Speaker 1: You took advantage of that out of Tufts and all that. 344 00:21:01,840 --> 00:21:05,639 Speaker 1: How do you do the winter season in Miami Beach 345 00:21:05,680 --> 00:21:09,560 Speaker 1: this year. How do you convince those Northerners to get 346 00:21:09,600 --> 00:21:14,520 Speaker 1: down there when it gets chilly? Well, the first question 347 00:21:14,680 --> 00:21:17,800 Speaker 1: is how we're going to tolerate crowds. I mean, my 348 00:21:18,160 --> 00:21:20,840 Speaker 1: little city and I'm just a small part of the 349 00:21:20,880 --> 00:21:24,800 Speaker 1: county has four thousand New York addresses people, you know, 350 00:21:24,840 --> 00:21:27,440 Speaker 1: four thousand units are owned by New Yorkers, So we 351 00:21:27,800 --> 00:21:31,399 Speaker 1: we have already a pretty natural influx of either people 352 00:21:31,480 --> 00:21:34,440 Speaker 1: visiting or people living part of the year here, sometimes 353 00:21:34,600 --> 00:21:38,040 Speaker 1: six months in a day for tax reasons. Um. But 354 00:21:38,960 --> 00:21:41,520 Speaker 1: the tip of the matter is the market is going 355 00:21:41,560 --> 00:21:45,080 Speaker 1: to determine some things because some people will simply not travel. 356 00:21:45,840 --> 00:21:49,400 Speaker 1: So much of our hospitality economy is tethered two planes 357 00:21:49,600 --> 00:21:52,800 Speaker 1: and boats, and the ships that are not gonna you know, 358 00:21:52,840 --> 00:21:55,920 Speaker 1: the cruise line seem to be moored for quite some time. 359 00:21:56,040 --> 00:21:59,320 Speaker 1: Right now. People are traveling by planes as much as 360 00:21:59,320 --> 00:22:01,640 Speaker 1: they do, so we're seeing probably a little bit more 361 00:22:01,640 --> 00:22:04,760 Speaker 1: regional tourism. But I don't know, I mean a lot 362 00:22:04,800 --> 00:22:08,000 Speaker 1: of I mean we're worried. Obviously, we have huge events 363 00:22:08,040 --> 00:22:11,520 Speaker 1: every year. Uh down here, we just had a Super Bowl, 364 00:22:11,520 --> 00:22:13,880 Speaker 1: We've got the n C Double A championships obviously aren't 365 00:22:13,880 --> 00:22:17,760 Speaker 1: bossil in December. We have lots of things that we 366 00:22:17,800 --> 00:22:21,520 Speaker 1: rely on and that we enjoy. I mean, look, we 367 00:22:21,600 --> 00:22:25,159 Speaker 1: are a community that is built to not socially distance ourselves. 368 00:22:25,200 --> 00:22:28,000 Speaker 1: We are a community built for all the other gatherings 369 00:22:28,000 --> 00:22:31,720 Speaker 1: that we want. Mr Matt, we gotta leave you that 370 00:22:31,800 --> 00:22:34,080 Speaker 1: I appreciate your time this morning. Mac Alba that on 371 00:22:34,119 --> 00:22:48,880 Speaker 1: a situation on Miami Beach and across Florida. Tiffany Wilding 372 00:22:48,960 --> 00:22:52,760 Speaker 1: of PIMCOA, she does very careful economic work that their 373 00:22:52,840 --> 00:22:57,160 Speaker 1: portfolio managers bounce off of. Tiffany, what is your calling off? 374 00:22:57,200 --> 00:23:00,520 Speaker 1: I want an update from you on how V the 375 00:23:00,680 --> 00:23:05,680 Speaker 1: V is. How's the V shaped recovery going? Well, I 376 00:23:05,720 --> 00:23:07,920 Speaker 1: think it's gonna look like a V. First first, thanks 377 00:23:07,920 --> 00:23:09,399 Speaker 1: for having me. I think it's going to look like 378 00:23:09,440 --> 00:23:12,680 Speaker 1: a V in the first several months of this recovery. Now, 379 00:23:12,800 --> 00:23:14,359 Speaker 1: what one thing that I would say is, I think 380 00:23:14,400 --> 00:23:16,360 Speaker 1: it's very important to note so we think we came 381 00:23:16,359 --> 00:23:19,360 Speaker 1: out of recession in May UM and as we came 382 00:23:19,359 --> 00:23:23,440 Speaker 1: out of that recession is not only the deepest recession UM, 383 00:23:23,440 --> 00:23:25,880 Speaker 1: but it's also the shortest recession. So we clearly saw 384 00:23:25,960 --> 00:23:28,320 Speaker 1: growth in the payroll figures as well as retail sales 385 00:23:28,359 --> 00:23:30,280 Speaker 1: and things like that in May. So we probably came 386 00:23:30,280 --> 00:23:32,439 Speaker 1: out of recession in May. And I think what's going 387 00:23:32,480 --> 00:23:34,399 Speaker 1: to happen is this these next couple of months are 388 00:23:34,400 --> 00:23:37,000 Speaker 1: going to look very much like a v shape recovery 389 00:23:37,040 --> 00:23:40,040 Speaker 1: as we get this spurt of activity, as people you know, 390 00:23:40,119 --> 00:23:42,520 Speaker 1: start to get back to work, um and and start 391 00:23:42,560 --> 00:23:45,800 Speaker 1: to reopen the economy. Um. But after that, we think 392 00:23:45,840 --> 00:23:47,960 Speaker 1: the recovery is going to be much slower. And I 393 00:23:47,960 --> 00:23:49,720 Speaker 1: think you're you know, you're starting to see some of 394 00:23:49,720 --> 00:23:52,280 Speaker 1: the effects of reopening the economy with um, you know, 395 00:23:52,320 --> 00:23:55,439 Speaker 1: some of the rising cases within the Sung Belt within 396 00:23:55,480 --> 00:23:58,080 Speaker 1: the United States of of the COVID virus. You know. 397 00:23:58,200 --> 00:24:00,720 Speaker 1: So after that kind of initial spurt of activity, things 398 00:24:00,720 --> 00:24:03,760 Speaker 1: are going to be much more slow going. We think, okay, well, 399 00:24:04,200 --> 00:24:06,240 Speaker 1: you know a lot of the reports over the weekend, 400 00:24:06,240 --> 00:24:09,119 Speaker 1: Tiffany have this down you go, and there's sort of 401 00:24:09,160 --> 00:24:12,840 Speaker 1: this you know, nudging up in business activity. We spent 402 00:24:12,920 --> 00:24:15,520 Speaker 1: a lot of time on a consumer with a pandemic. 403 00:24:15,640 --> 00:24:22,400 Speaker 1: What does PIMCO observe about business spirit across this nation? Well, 404 00:24:22,400 --> 00:24:25,959 Speaker 1: look for businesses are actually a little bit more cautious. 405 00:24:26,080 --> 00:24:28,280 Speaker 1: I would say they're getting going a little bit more 406 00:24:28,400 --> 00:24:31,760 Speaker 1: slowly of than the consumer sector. You know, so I 407 00:24:31,920 --> 00:24:35,120 Speaker 1: mentioned retail sales, you know, clearly with a bounce back 408 00:24:35,320 --> 00:24:39,480 Speaker 1: in a pretty dramatic bounce back in and sort of 409 00:24:39,760 --> 00:24:42,879 Speaker 1: durable goods types of things. It looks like consumers are 410 00:24:43,240 --> 00:24:46,280 Speaker 1: they're still standing of the spending data that that we 411 00:24:46,359 --> 00:24:48,640 Speaker 1: look at, and durable goods actually looks like it might 412 00:24:48,680 --> 00:24:51,560 Speaker 1: be similar to where it was pre COVID. So services 413 00:24:51,560 --> 00:24:53,640 Speaker 1: are down a lot still bit, but consumers are still 414 00:24:53,680 --> 00:24:56,280 Speaker 1: spending their shifting some of their they're spending over On 415 00:24:56,320 --> 00:24:58,639 Speaker 1: the other side of that, you know, busises look a 416 00:24:58,640 --> 00:25:02,399 Speaker 1: little bit more tentative of UM. The business survey, we 417 00:25:02,480 --> 00:25:04,680 Speaker 1: do think that is m this week does bounce back 418 00:25:04,800 --> 00:25:08,640 Speaker 1: to fifty, which means that the business or the manufacturing 419 00:25:08,680 --> 00:25:11,600 Speaker 1: sector is expanding. But keep in mind, it doesn't tell 420 00:25:11,640 --> 00:25:14,280 Speaker 1: you how much it's expanding. Those isn't manufacturing industry, and 421 00:25:14,320 --> 00:25:16,280 Speaker 1: it just tells you that about fifty percent of firms 422 00:25:16,280 --> 00:25:18,600 Speaker 1: are So, you know, I think I think that they 423 00:25:18,600 --> 00:25:20,359 Speaker 1: will be a little bit more slow going. Still a 424 00:25:20,359 --> 00:25:22,879 Speaker 1: lot of uncertainty out there. You make sure there's a 425 00:25:22,920 --> 00:25:25,919 Speaker 1: lot of uncertainty about what the virus path will be. 426 00:25:26,400 --> 00:25:28,760 Speaker 1: You know, I just don't see businesses really investing in 427 00:25:28,760 --> 00:25:32,200 Speaker 1: in UM the things that will project that will could 428 00:25:32,200 --> 00:25:35,159 Speaker 1: take five years to get going. If you're pretty uncertain 429 00:25:35,160 --> 00:25:37,000 Speaker 1: about about how the you know, how things are going 430 00:25:37,080 --> 00:25:40,320 Speaker 1: to be tyfity right now, this is the main issue 431 00:25:40,440 --> 00:25:43,400 Speaker 1: for investors because of the fragility in the reopening process 432 00:25:43,440 --> 00:25:46,840 Speaker 1: across some states across America right now. Just how instructive 433 00:25:46,880 --> 00:25:49,240 Speaker 1: will the aggregate day to be in the common weeks 434 00:25:49,240 --> 00:25:54,720 Speaker 1: and months, How instructor will it be? UM, How instructive 435 00:25:54,760 --> 00:25:57,800 Speaker 1: will it be the economy and how it's going UM. 436 00:25:57,840 --> 00:26:00,879 Speaker 1: You know, I think I think data Tiffany, let me 437 00:26:00,960 --> 00:26:03,160 Speaker 1: let me clarify and make it super clear for our 438 00:26:03,200 --> 00:26:05,600 Speaker 1: for our lists and viewers as well. If the Advocate 439 00:26:05,680 --> 00:26:08,639 Speaker 1: data continues to show an improvement because of the mechanical 440 00:26:08,680 --> 00:26:11,439 Speaker 1: reopening of say a state like New York, does it 441 00:26:11,520 --> 00:26:15,240 Speaker 1: master the fragility in places like Florida, Texas, California, which 442 00:26:15,240 --> 00:26:19,680 Speaker 1: is struggling with the reopening process. I do, yeah, so yeah, 443 00:26:19,720 --> 00:26:22,119 Speaker 1: I think you absolutely have to go from more of 444 00:26:22,160 --> 00:26:27,000 Speaker 1: a kind of national um analysis to a very regional analysis. 445 00:26:27,080 --> 00:26:29,399 Speaker 1: And that's certainly been the case, you know, with the 446 00:26:29,960 --> 00:26:33,280 Speaker 1: you know, the hospitalization than the the COVID virus new 447 00:26:33,359 --> 00:26:36,480 Speaker 1: cases itself. On a national level, you know, actually looks 448 00:26:36,520 --> 00:26:38,760 Speaker 1: like the new cases daily to case talents are coming 449 00:26:38,760 --> 00:26:40,720 Speaker 1: downs and you're looking great. But if you if you 450 00:26:40,880 --> 00:26:43,879 Speaker 1: dispect the data, you know, there there's a very concerning 451 00:26:43,880 --> 00:26:47,640 Speaker 1: trend um evening after controlling for testing. So we're doing 452 00:26:47,640 --> 00:26:50,080 Speaker 1: more testing, which is great news, but even after controlling 453 00:26:50,080 --> 00:26:52,320 Speaker 1: for testing, a lot of these COVID cases, new COVID 454 00:26:52,359 --> 00:26:55,360 Speaker 1: cases and hospitalization in some of the Southern states are 455 00:26:55,400 --> 00:26:58,919 Speaker 1: doing very poorly. So we're actually watching, um, you know, 456 00:26:59,000 --> 00:27:01,320 Speaker 1: some of our high freak and see data on credit 457 00:27:01,320 --> 00:27:04,400 Speaker 1: card sales for example, to see if our consumers actually 458 00:27:04,440 --> 00:27:09,800 Speaker 1: reacting to those increases in cases or increased outbreaks in 459 00:27:09,840 --> 00:27:13,679 Speaker 1: those areas. And we're monitoring this pretty closely. So far, 460 00:27:14,040 --> 00:27:17,080 Speaker 1: we haven't really seen that big of a drop off 461 00:27:17,080 --> 00:27:19,560 Speaker 1: in sales, for example, in those regions. But I think 462 00:27:19,560 --> 00:27:21,359 Speaker 1: it's just going to be more like a light switch, 463 00:27:21,800 --> 00:27:24,280 Speaker 1: if you will. So people are going to continue, i think, 464 00:27:24,560 --> 00:27:27,680 Speaker 1: to try to get on with our lives until one day, 465 00:27:27,840 --> 00:27:29,840 Speaker 1: you know, things are maybe going to get that enough 466 00:27:30,240 --> 00:27:32,920 Speaker 1: where you know, they kind of stopped consuming um and 467 00:27:33,080 --> 00:27:34,440 Speaker 1: and that's the kind of thing that we're waiting for, 468 00:27:34,640 --> 00:27:36,679 Speaker 1: not a maniar process. That's something that has to be 469 00:27:36,760 --> 00:27:41,480 Speaker 1: monitored on a regional basis at this point. And Tiffany, 470 00:27:41,520 --> 00:27:43,320 Speaker 1: that's one reason why a lot of people are saying 471 00:27:43,320 --> 00:27:46,199 Speaker 1: that there could be a series of downside surprises on 472 00:27:46,240 --> 00:27:49,119 Speaker 1: the economic data front going forward in the next couple 473 00:27:49,119 --> 00:27:52,080 Speaker 1: of months. At the same time, so I'm including yourself, 474 00:27:52,280 --> 00:27:55,040 Speaker 1: seemed to believe that there may be an upside surprise 475 00:27:55,080 --> 00:27:58,320 Speaker 1: when it comes to the policy response, which sort of 476 00:27:58,359 --> 00:28:00,679 Speaker 1: sums comes as a surprise to me because it feels 477 00:28:00,720 --> 00:28:03,639 Speaker 1: as if the market is baking in a re upping 478 00:28:03,920 --> 00:28:07,000 Speaker 1: of the enhancement employment benefits. What is the market pricing 479 00:28:07,080 --> 00:28:09,280 Speaker 1: in and what do you see as likely when it 480 00:28:09,320 --> 00:28:12,840 Speaker 1: comes to fiscal stimulus. Well, I mean, I think that 481 00:28:12,960 --> 00:28:15,680 Speaker 1: the markets grappling with right now is that we are 482 00:28:16,000 --> 00:28:19,920 Speaker 1: going to have a ciscal cliff, if you will, um, 483 00:28:20,000 --> 00:28:23,480 Speaker 1: kind of in the neighborhood of July, if Congress doesn't 484 00:28:23,520 --> 00:28:26,919 Speaker 1: do more so, as you mentioned, the unemployment insurance benefits 485 00:28:27,400 --> 00:28:31,119 Speaker 1: a sixty six hundred a week, they will expire. You 486 00:28:31,200 --> 00:28:34,480 Speaker 1: also have that delay in the April fifteenth tax deadline 487 00:28:35,040 --> 00:28:38,040 Speaker 1: that people have to pay their taxes. Now in July fifteens, 488 00:28:38,040 --> 00:28:40,320 Speaker 1: that sort of expires, you know, the PPP, which is 489 00:28:40,320 --> 00:28:43,440 Speaker 1: a paycheck protection something goes away. There's also a lot 490 00:28:43,440 --> 00:28:45,560 Speaker 1: going on in the state and local level. If state 491 00:28:45,640 --> 00:28:48,560 Speaker 1: and locals because they have to have balanced budgets and 492 00:28:48,600 --> 00:28:52,040 Speaker 1: because their fiscal year end it's ending in June, they're 493 00:28:52,080 --> 00:28:55,360 Speaker 1: gonna have to start slashing UH spending and that means 494 00:28:55,400 --> 00:28:57,960 Speaker 1: really cutting jobs and services. So there's a really big 495 00:28:58,000 --> 00:29:01,040 Speaker 1: potential fiscal cliffs that we could see in July. I 496 00:29:01,080 --> 00:29:04,560 Speaker 1: think markets are weighing that with you know, will will 497 00:29:04,600 --> 00:29:08,040 Speaker 1: federal government federal lawmakers get together and do something. Ultimately 498 00:29:08,120 --> 00:29:10,520 Speaker 1: we think that they will, um, you know, because at 499 00:29:10,520 --> 00:29:13,000 Speaker 1: this point the economy is still quite fragile. I think 500 00:29:13,000 --> 00:29:16,320 Speaker 1: the reason why we're seeing this re suit recovering in 501 00:29:16,360 --> 00:29:19,240 Speaker 1: the first couple of months is precisely because we've gotten 502 00:29:19,320 --> 00:29:22,600 Speaker 1: the large amount of fiscal stimulus that we've gotten, you know, 503 00:29:22,600 --> 00:29:25,000 Speaker 1: So those household rebate checks and things like that, they 504 00:29:25,040 --> 00:29:26,920 Speaker 1: are being spitched and the economy. We can see that 505 00:29:26,920 --> 00:29:28,800 Speaker 1: in the retail sales do that, you know, so it 506 00:29:28,840 --> 00:29:31,880 Speaker 1: would be I think very bad for the economy if 507 00:29:32,160 --> 00:29:34,520 Speaker 1: the center of the federal government, uh, you know, sort 508 00:29:34,520 --> 00:29:37,080 Speaker 1: of pulled back on spending now when the economy so fragile. 509 00:29:37,120 --> 00:29:39,600 Speaker 1: So ultimately we think that it does happen because it's 510 00:29:39,600 --> 00:29:41,720 Speaker 1: in needs to and we think we could get another 511 00:29:42,120 --> 00:29:44,880 Speaker 1: trillion dollar fiscal stimulus plan you know, kind of in 512 00:29:44,880 --> 00:29:48,000 Speaker 1: the neighborhood of July that basically thwart this fiscal cliff 513 00:29:48,040 --> 00:29:51,880 Speaker 1: that's coming tyfically, let's talk about the composition of that 514 00:29:51,960 --> 00:29:54,560 Speaker 1: plan where the fiscal effort should be directed. What is 515 00:29:54,600 --> 00:29:57,320 Speaker 1: the optimal composition of the next fiscal effort in the 516 00:29:57,360 --> 00:30:01,400 Speaker 1: next thirty days. Well, so that I think, I think 517 00:30:01,400 --> 00:30:03,360 Speaker 1: you have to be I think the maskers should be 518 00:30:03,400 --> 00:30:05,560 Speaker 1: a little bit careful because what we are starting to 519 00:30:05,720 --> 00:30:09,480 Speaker 1: see is that this this crisis, like others will have, 520 00:30:09,600 --> 00:30:12,080 Speaker 1: you know, because we call basting scars, you know. So 521 00:30:12,200 --> 00:30:13,920 Speaker 1: one of those things is and I kind of alluded 522 00:30:13,960 --> 00:30:16,680 Speaker 1: to this before, is that consumers are changing their behavior 523 00:30:17,000 --> 00:30:19,320 Speaker 1: and we think that they'll probably change, you know, they'll 524 00:30:19,400 --> 00:30:22,000 Speaker 1: kind of be permanently changed. So some of the things 525 00:30:22,000 --> 00:30:23,840 Speaker 1: that we're seeing is it's kind of interesting. You know, 526 00:30:23,880 --> 00:30:25,880 Speaker 1: people are you know for the summer, you know, they're 527 00:30:25,880 --> 00:30:29,440 Speaker 1: buying more camping gear for example, as opposed to you know, 528 00:30:29,520 --> 00:30:33,080 Speaker 1: taking you in a flight or going to a hotel. Uh, 529 00:30:33,120 --> 00:30:36,080 Speaker 1: they're they're buying a sporting equipment instead of going out 530 00:30:36,120 --> 00:30:39,320 Speaker 1: and going to the workout studios that they used to 531 00:30:39,360 --> 00:30:41,520 Speaker 1: go to and things like that. So we think, because 532 00:30:41,720 --> 00:30:44,640 Speaker 1: consumers are sort of buying these durable goods to substitute 533 00:30:44,680 --> 00:30:46,760 Speaker 1: for what we're services, this is going to be a 534 00:30:46,760 --> 00:30:49,520 Speaker 1: bit more of than ingrained behavioral change because they're investing 535 00:30:49,520 --> 00:30:52,280 Speaker 1: in these things, like our views are camping equipment. Um, 536 00:30:52,320 --> 00:30:53,960 Speaker 1: you know, that's kind of on a micro basis, but 537 00:30:54,000 --> 00:30:56,160 Speaker 1: I think it does really speak to this idea that 538 00:30:56,200 --> 00:31:00,000 Speaker 1: you're gonna have to have shifting economic resources from stuff 539 00:31:00,040 --> 00:31:04,280 Speaker 1: industries into other industries. And I think government, regular government 540 00:31:04,280 --> 00:31:07,240 Speaker 1: stimulas needs to understand that that's going to happen, allow 541 00:31:07,320 --> 00:31:09,880 Speaker 1: it to happen, you know, and not slow it down, 542 00:31:10,240 --> 00:31:12,560 Speaker 1: but at the same time sort of pad pad the 543 00:31:12,600 --> 00:31:14,960 Speaker 1: economy while that transition is happening. I think the best 544 00:31:14,960 --> 00:31:18,560 Speaker 1: way to do that is to basically focus on unemployment 545 00:31:18,600 --> 00:31:21,480 Speaker 1: and sharing for example, maybe carefully calibrated so you don't 546 00:31:21,520 --> 00:31:24,640 Speaker 1: just incentivize people to work, but focus on things that 547 00:31:24,680 --> 00:31:29,400 Speaker 1: will help the household really gap that income loss while 548 00:31:29,760 --> 00:31:32,360 Speaker 1: um you know, they're looking for new jobs and new industries. 549 00:31:34,280 --> 00:31:37,920 Speaker 1: Finally tuning the policy effort. A huge, huge decision to 550 00:31:37,960 --> 00:31:40,760 Speaker 1: make in the next thirty days. Tiffinitely fantasticic cash show 551 00:31:40,800 --> 00:31:42,280 Speaker 1: with you. My best to you and the team of pimcow. 552 00:31:42,400 --> 00:31:45,600 Speaker 1: Tiffitely Wilding there the chief economists of a pimcow in 553 00:31:45,680 --> 00:31:49,920 Speaker 1: the United States. Thanks for listening to the Bloomberg Surveillance podcast. 554 00:31:50,280 --> 00:31:55,320 Speaker 1: Subscribe and listen to interviews on Apple Podcasts, SoundCloud, or 555 00:31:55,360 --> 00:31:59,640 Speaker 1: whichever podcast platform you prefer. I'm on Twitter at tom 556 00:31:59,720 --> 00:32:03,680 Speaker 1: Key before the podcast. You can always catch us worldwide. 557 00:32:04,120 --> 00:32:05,200 Speaker 1: I'm Bloomberg Radio.