1
00:00:02,640 --> 00:00:05,320
Speaker 1: Welcome to the Bloomberg Penl Podcast. I'm Paul swing you,

2
00:00:05,400 --> 00:00:07,720
Speaker 1: along with my co host Lisa Brahma wits. Each day

3
00:00:07,760 --> 00:00:10,280
Speaker 1: we bring you the most noteworthy and useful interviews for

4
00:00:10,320 --> 00:00:12,560
Speaker 1: you and your money. Whether at the grocery store or

5
00:00:12,600 --> 00:00:15,520
Speaker 1: the trading floor. Find a Bloomberg Penl podcast on Apple

6
00:00:15,560 --> 00:00:18,000
Speaker 1: podcast or wherever you listen to podcasts, as well as

7
00:00:18,000 --> 00:00:23,000
Speaker 1: that Bloomberg dot com. Well, the tensions between the US

8
00:00:23,120 --> 00:00:25,880
Speaker 1: and China seemed to be ramping up once again. Several

9
00:00:25,920 --> 00:00:28,920
Speaker 1: months ago it was trade and tariffs. Now it seems

10
00:00:28,960 --> 00:00:32,040
Speaker 1: to be US or Chinese companies listening in the US

11
00:00:32,120 --> 00:00:35,440
Speaker 1: and President Trump. Rheter coming out of President as relates

12
00:00:35,479 --> 00:00:37,840
Speaker 1: to the president she of China. Brendan A. Hearn, chief

13
00:00:37,880 --> 00:00:41,839
Speaker 1: investment officer of Crane Shares, joins us to discuss. So, Brendan,

14
00:00:41,920 --> 00:00:44,440
Speaker 1: let's start with just some of the rhetoric. Um, it

15
00:00:44,479 --> 00:00:46,760
Speaker 1: seems like President Trump is, you know, suggesting that the

16
00:00:46,800 --> 00:00:50,760
Speaker 1: country's leader, Gigi Ping, is behind quote a disinformation and

17
00:00:50,800 --> 00:00:54,120
Speaker 1: propaganda attack on the United States and Europe. What do

18
00:00:54,160 --> 00:00:56,600
Speaker 1: you think the strategy is of President Trump here as

19
00:00:56,640 --> 00:01:01,840
Speaker 1: it relates to economic issues with China. Well, I think

20
00:01:01,840 --> 00:01:06,280
Speaker 1: we tend to see US political rhetoric rise when equity

21
00:01:06,560 --> 00:01:11,280
Speaker 1: US equity markets are at high levels. Uh, that that

22
00:01:11,280 --> 00:01:15,080
Speaker 1: that we've we've recovered from from the lows. And so

23
00:01:15,120 --> 00:01:19,039
Speaker 1: we see this ratcheting up in in the rhetoric, and

24
00:01:19,240 --> 00:01:21,360
Speaker 1: you know, the market is doing what it usually does

25
00:01:21,480 --> 00:01:25,240
Speaker 1: following a ratching up of rhetoric, it falls. Um, you know,

26
00:01:25,280 --> 00:01:28,720
Speaker 1: we'll probably have Larry Cudlow wheeled out to try to

27
00:01:28,760 --> 00:01:33,000
Speaker 1: calm markets. Uh. You know we've kind of seen this before. Um,

28
00:01:33,360 --> 00:01:35,600
Speaker 1: so you know, I think, you know, there is a

29
00:01:35,600 --> 00:01:39,720
Speaker 1: lot of bark, but the end reality is there will

30
00:01:39,760 --> 00:01:43,160
Speaker 1: be probably a lot of bite. Very simply, China is

31
00:01:43,319 --> 00:01:48,000
Speaker 1: the third largest destination for US exports. So was this

32
00:01:48,280 --> 00:01:54,400
Speaker 1: tied to trade? Continuing trade negotiations, discussions terrorists? This you

33
00:01:54,440 --> 00:01:57,280
Speaker 1: think the rhetoric is all tied into keeping a certain

34
00:01:57,360 --> 00:02:00,320
Speaker 1: level of pressure on China from the US pact? Is

35
00:02:01,160 --> 00:02:03,920
Speaker 1: I mean? I mean maybe this is the art of

36
00:02:03,960 --> 00:02:08,560
Speaker 1: the deal, um, but maybe this is you know, a

37
00:02:08,680 --> 00:02:14,200
Speaker 1: deflection distraction strategy. Um. You know, um, you know this

38
00:02:14,360 --> 00:02:18,799
Speaker 1: this terrible pandemic. I think most people would would give

39
00:02:18,840 --> 00:02:21,280
Speaker 1: any leader a pass on what's happened. You know, we

40
00:02:21,280 --> 00:02:24,200
Speaker 1: haven't had a pandemic here in a hundred years. But

41
00:02:24,240 --> 00:02:26,880
Speaker 1: there's gonna be more pointing the finger as opposed to

42
00:02:26,880 --> 00:02:29,600
Speaker 1: looking in the mirror. Um. You know, I would have

43
00:02:29,639 --> 00:02:33,680
Speaker 1: hoped a nine eleven commission type committee would be formed

44
00:02:33,720 --> 00:02:36,240
Speaker 1: to kind of you prepare for the next time. But

45
00:02:36,240 --> 00:02:38,440
Speaker 1: but we're in We're in the blame game. We're not

46
00:02:38,520 --> 00:02:41,920
Speaker 1: in the accountability game exactly. Um. So what do you

47
00:02:41,960 --> 00:02:44,880
Speaker 1: make of the Senate, you know, approving legislation Wednesday that

48
00:02:44,919 --> 00:02:47,760
Speaker 1: could lead the Chinese companies such as you know, Ali Bob,

49
00:02:47,760 --> 00:02:50,120
Speaker 1: the big companies like that, being barred from listing on

50
00:02:50,320 --> 00:02:54,880
Speaker 1: U stock exchanges. Well, I think the senators themselves are

51
00:02:54,880 --> 00:02:57,200
Speaker 1: probably surprised that this thing passed, has put up for

52
00:02:57,280 --> 00:03:02,160
Speaker 1: unanimous consent. Uh. No one objected to a pass And

53
00:03:02,600 --> 00:03:06,960
Speaker 1: you know, US investors hold a trillion dollars worth of

54
00:03:07,240 --> 00:03:11,240
Speaker 1: US list of Chinese companies. This is not punishing China

55
00:03:11,680 --> 00:03:16,520
Speaker 1: in any form or fashion. Uh. US investors are the

56
00:03:16,520 --> 00:03:20,240
Speaker 1: ones that hold these stocks. The reality is, you know,

57
00:03:20,360 --> 00:03:23,880
Speaker 1: companies like Badu are not going to delist. The SEC

58
00:03:24,080 --> 00:03:27,400
Speaker 1: is not going to delist these companies. You know. You

59
00:03:27,400 --> 00:03:29,760
Speaker 1: know this that will go to the House next week.

60
00:03:30,280 --> 00:03:35,880
Speaker 1: It's it's going to pass. Trump will probably uh sign this.

61
00:03:36,520 --> 00:03:39,560
Speaker 1: Uh then reality it will take another year for the

62
00:03:39,600 --> 00:03:43,440
Speaker 1: actual details to be sorted out. And and you know,

63
00:03:43,480 --> 00:03:46,560
Speaker 1: I think there's going to be a tremendous effort from

64
00:03:46,640 --> 00:03:50,840
Speaker 1: the US financial industry to rewrite this. No one wants

65
00:03:50,880 --> 00:03:55,680
Speaker 1: to see US investors holding stocks that get delisted. Uh

66
00:03:55,720 --> 00:03:58,080
Speaker 1: So I think this is again hard of there's a

67
00:03:58,120 --> 00:04:02,120
Speaker 1: huge amount of bark. There's there's not gonna be I

68
00:04:02,160 --> 00:04:05,320
Speaker 1: don't think any bite to this. So given you know,

69
00:04:05,360 --> 00:04:08,760
Speaker 1: again more bark than bite here, what are your overall

70
00:04:08,880 --> 00:04:13,400
Speaker 1: views about investing in China these days? It appears that

71
00:04:13,480 --> 00:04:17,159
Speaker 1: they're getting back uh to work here. Um, are you

72
00:04:17,160 --> 00:04:19,520
Speaker 1: seeing some meaningful progress such that it would you know,

73
00:04:19,760 --> 00:04:23,159
Speaker 1: alter kind of your outlook preps? Well, I think you

74
00:04:23,200 --> 00:04:26,720
Speaker 1: know one, you know, these these US list of Chinese companies,

75
00:04:27,240 --> 00:04:31,560
Speaker 1: they're they're gonna relist in in Hong Kong. Anyway, you know,

76
00:04:31,640 --> 00:04:34,719
Speaker 1: over the last two years during this trade war, the

77
00:04:34,760 --> 00:04:38,960
Speaker 1: fundamentals of of these companies, I mean, I mean, I've

78
00:04:39,240 --> 00:04:42,839
Speaker 1: done nothing but improve, but but the stocks trade based

79
00:04:42,839 --> 00:04:44,919
Speaker 1: on every trade tweet. They have nothing to do with

80
00:04:45,000 --> 00:04:47,359
Speaker 1: the trade war. So they're gonna go back to a

81
00:04:47,440 --> 00:04:50,480
Speaker 1: market where they don't have to explain themselves. They're gonna

82
00:04:50,520 --> 00:04:53,720
Speaker 1: get valued at a higher level. They have the potential

83
00:04:53,760 --> 00:04:57,720
Speaker 1: for index inclusions like the Hang Sang index. There's the

84
00:04:57,800 --> 00:05:02,760
Speaker 1: potential for southbound connect flows. So mainland investors can buy

85
00:05:02,800 --> 00:05:04,880
Speaker 1: them and they're gonna bait them up. So so the

86
00:05:04,920 --> 00:05:08,240
Speaker 1: companies are gonna relist, you know, you know, that's that's

87
00:05:08,360 --> 00:05:11,080
Speaker 1: ultimately it sounds crazy, but that is a very good

88
00:05:11,120 --> 00:05:13,479
Speaker 1: thing for the investors in the U S shares because

89
00:05:13,480 --> 00:05:17,880
Speaker 1: the stocks are fungible. Yeah, interesting, real quickly thirty seconds, Brendan,

90
00:05:18,040 --> 00:05:20,560
Speaker 1: do you think this rhetoric that we've talked about today

91
00:05:20,680 --> 00:05:23,680
Speaker 1: is just gonna, you know, maybe give the next Chinese

92
00:05:23,720 --> 00:05:26,240
Speaker 1: company pause about listing on the US. We've had some

93
00:05:26,279 --> 00:05:28,800
Speaker 1: great success stories with Ali Baba and and others. But

94
00:05:28,920 --> 00:05:30,279
Speaker 1: do you think this is gonna put a little bit

95
00:05:30,279 --> 00:05:33,200
Speaker 1: of a pause on that. Well, I would think so.

96
00:05:33,279 --> 00:05:36,599
Speaker 1: You know, I think Hong Kong, the mainland exchanges are

97
00:05:37,160 --> 00:05:40,080
Speaker 1: you know as as evans. Hong Kong Stock Exchange went

98
00:05:40,160 --> 00:05:42,599
Speaker 1: up almost two percent today and am surpresident and go

99
00:05:42,680 --> 00:05:45,760
Speaker 1: up more, you know, So, so exchanges do compete with themselves,

100
00:05:45,800 --> 00:05:48,880
Speaker 1: and that's why there's a whole find US financial system

101
00:05:49,000 --> 00:05:52,479
Speaker 1: ecosystem is going to push back against this, you know, big,

102
00:05:52,520 --> 00:05:54,520
Speaker 1: big way. They don't want to see the the uh

103
00:05:54,760 --> 00:05:59,000
Speaker 1: basically the money train turned off. Yeah, exactly. Brendan Aheran,

104
00:05:59,000 --> 00:06:01,400
Speaker 1: thanks so much for joining us with appreciate your perspective

105
00:06:01,400 --> 00:06:04,680
Speaker 1: as it relates to China and the investment environments that

106
00:06:05,480 --> 00:06:10,760
Speaker 1: surrounding China. Brendan Ahearn, Chief investment officers from Crane Shares

107
00:06:10,800 --> 00:06:13,640
Speaker 1: based here in New York City. Uh. Talking about some

108
00:06:13,680 --> 00:06:17,039
Speaker 1: of those companies like Bai Do, uh, like Ali Baba,

109
00:06:17,120 --> 00:06:20,120
Speaker 1: they've just been such successful I p os and successful

110
00:06:20,160 --> 00:06:23,760
Speaker 1: stocks on the US exchanges. A lot of US investors

111
00:06:24,120 --> 00:06:27,960
Speaker 1: in those stories. They've been excellent growth stories really predicated

112
00:06:28,040 --> 00:06:30,320
Speaker 1: upon me think about on Ali Baba, predicated upon the

113
00:06:30,400 --> 00:06:34,240
Speaker 1: growth of the middle markets in China as more and

114
00:06:34,279 --> 00:06:37,600
Speaker 1: more of the Chinese economy, uh, you know, moves from

115
00:06:37,760 --> 00:06:41,039
Speaker 1: uh lower end of the economic cycle to kind of

116
00:06:41,040 --> 00:06:46,000
Speaker 1: more than middle market. You're listening to Bloomberg Markets with

117
00:06:46,080 --> 00:06:50,560
Speaker 1: Lisa Ramo, Eds and Paul Sweeney on Bloomberg Radio. Well,

118
00:06:50,600 --> 00:06:53,200
Speaker 1: as we all make our way through this pandemic. One

119
00:06:53,200 --> 00:06:56,080
Speaker 1: of the issues that we've discussed over the last several weeks.

120
00:06:56,200 --> 00:06:59,800
Speaker 1: Is how will consumer behavior change on the other side

121
00:06:59,800 --> 00:07:02,240
Speaker 1: of the as it relates to things like travel. Whill

122
00:07:02,279 --> 00:07:04,280
Speaker 1: we get on planes while we get on cruise ships,

123
00:07:04,839 --> 00:07:07,960
Speaker 1: retail sales, Will people just when they go into stores again,

124
00:07:08,040 --> 00:07:10,880
Speaker 1: or just kind of see an acceleration of online shopping.

125
00:07:11,040 --> 00:07:13,280
Speaker 1: That's why I'm so happy and excited to have our

126
00:07:13,360 --> 00:07:17,040
Speaker 1: next guest, Donnie Dorling. He's a professor of geography Oxford,

127
00:07:17,320 --> 00:07:20,880
Speaker 1: University of Oxford in England. He's also the author of

128
00:07:21,040 --> 00:07:25,040
Speaker 1: slow Down, The End of the Great Acceleration. Get a

129
00:07:25,080 --> 00:07:26,680
Speaker 1: sense of kind of how he thinks things are gonna

130
00:07:26,680 --> 00:07:29,600
Speaker 1: play it here, Donny, thanks so much for joining us.

131
00:07:29,600 --> 00:07:32,800
Speaker 1: We really appreciate you joining us. I wonder if you

132
00:07:32,880 --> 00:07:36,640
Speaker 1: have a sense of maybe how consumer behavior is going

133
00:07:36,680 --> 00:07:39,880
Speaker 1: to change on the other side of this pandemic as

134
00:07:39,920 --> 00:07:42,000
Speaker 1: we you know, at some point get out of the

135
00:07:42,000 --> 00:07:44,160
Speaker 1: lockdown and get back to some type of normal life.

136
00:07:44,160 --> 00:07:47,720
Speaker 1: What are the things you're looking at? Uh? Well, I

137
00:07:47,720 --> 00:07:49,760
Speaker 1: can tell you My guess is the course already guesses.

138
00:07:50,840 --> 00:07:53,800
Speaker 1: I spent six years looking at the late to change

139
00:07:53,880 --> 00:08:00,320
Speaker 1: in loads of forms of behavior. Um so whether something

140
00:08:00,360 --> 00:08:02,560
Speaker 1: was slowing down or whether it was speeding up. And

141
00:08:02,640 --> 00:08:04,680
Speaker 1: the shock of spending this the six years doing this

142
00:08:05,040 --> 00:08:07,560
Speaker 1: because the time that most things that were still rising,

143
00:08:07,560 --> 00:08:10,120
Speaker 1: people are buying more of things. The rise isn't as

144
00:08:10,120 --> 00:08:14,000
Speaker 1: big as it was in the past. In the very

145
00:08:14,040 --> 00:08:16,640
Speaker 1: first week of January, that's puddenly stopped changing it. So

146
00:08:16,960 --> 00:08:19,040
Speaker 1: the book is not about the pandemic. The book is

147
00:08:19,080 --> 00:08:23,560
Speaker 1: about what was already happening before the pandemic. And the

148
00:08:23,640 --> 00:08:27,360
Speaker 1: suggestion was that wages were not rising as fast as

149
00:08:27,400 --> 00:08:30,800
Speaker 1: they have been, our ability to spend wasn't rising. Are

150
00:08:30,840 --> 00:08:34,360
Speaker 1: borrowing although it's still rising, the increase was slowing down.

151
00:08:34,440 --> 00:08:38,280
Speaker 1: So the student that in America was glowing but not

152
00:08:38,320 --> 00:08:40,760
Speaker 1: going as quickly as it had done before. And the

153
00:08:40,800 --> 00:08:43,240
Speaker 1: importance of sail all of this for the pandemic is

154
00:08:44,160 --> 00:08:47,840
Speaker 1: this time it was different. This time the pandemic hit

155
00:08:48,080 --> 00:08:51,160
Speaker 1: at the point of slowdown. The great contrast of the

156
00:08:51,160 --> 00:08:56,320
Speaker 1: pandemics of the past fifty one, fifty seven, and sixty eight,

157
00:08:56,400 --> 00:08:59,000
Speaker 1: and I have some of those in the book. In

158
00:08:59,040 --> 00:09:01,559
Speaker 1: the past, when we had the normal's pandemic much much

159
00:09:01,600 --> 00:09:07,560
Speaker 1: bigger than this one pandemic, world GDP dropped by percent,

160
00:09:08,320 --> 00:09:11,520
Speaker 1: but the year later it rose by sixtent and it

161
00:09:11,600 --> 00:09:14,559
Speaker 1: was as if it had never happened. There's later pandemics

162
00:09:14,559 --> 00:09:16,840
Speaker 1: you've probably never heard of that. They all had a

163
00:09:16,920 --> 00:09:20,080
Speaker 1: higher mortality rate than this, and again no effect on

164
00:09:20,080 --> 00:09:22,800
Speaker 1: the economy. So the so there was safe wisdom is

165
00:09:23,040 --> 00:09:26,280
Speaker 1: pandemics don't matter. But I'm saying that this is different.

166
00:09:27,400 --> 00:09:29,800
Speaker 1: Why is this time different? If you talk about some

167
00:09:29,840 --> 00:09:33,720
Speaker 1: of the mortality rates and affection rates, it's different because

168
00:09:33,720 --> 00:09:36,880
Speaker 1: of the way we reacted to it. We didn't shut

169
00:09:36,960 --> 00:09:41,319
Speaker 1: down in the past. We have of course far fewer

170
00:09:41,400 --> 00:09:46,520
Speaker 1: people um and far fewer elderly people. But also we

171
00:09:46,559 --> 00:09:49,000
Speaker 1: didn't have twenty four hour news, we didn't have the veilance.

172
00:09:49,040 --> 00:09:52,680
Speaker 1: We didn't know that the pandemics were coming um and

173
00:09:53,000 --> 00:09:56,000
Speaker 1: but more importantly than that, more importantly than that, our

174
00:09:56,040 --> 00:09:59,439
Speaker 1: economies were so buoyant in the past, so you kind

175
00:09:59,440 --> 00:10:03,160
Speaker 1: of forced hind and growing was so big that propelling forward.

176
00:10:03,200 --> 00:10:05,720
Speaker 1: The markets were getting bigger. More people are being born,

177
00:10:06,080 --> 00:10:08,679
Speaker 1: they are going to be more consumers. But a pandemic

178
00:10:08,679 --> 00:10:11,880
Speaker 1: could be a blit. Whereas now, and like I say,

179
00:10:12,360 --> 00:10:14,559
Speaker 1: I put this book to bed before this thing hit,

180
00:10:15,440 --> 00:10:18,520
Speaker 1: and now so much was so shaky. We were talking

181
00:10:18,559 --> 00:10:22,000
Speaker 1: trade wars with China. You know, we were talking China

182
00:10:22,040 --> 00:10:25,240
Speaker 1: and here having six quote in December and that being

183
00:10:25,280 --> 00:10:28,120
Speaker 1: a terrible thing for China and so on. Things are

184
00:10:28,160 --> 00:10:31,720
Speaker 1: so shaky that it doesn't take very much to suddenly

185
00:10:31,800 --> 00:10:35,240
Speaker 1: uncover or you have a used deck crisis. Oh, so

186
00:10:35,320 --> 00:10:38,600
Speaker 1: many of your firms have no capital. No, they can't

187
00:10:38,640 --> 00:10:41,440
Speaker 1: just stop working the field four months, but you have

188
00:10:41,480 --> 00:10:46,120
Speaker 1: no reserved So the pandemic has revealed how shaky our

189
00:10:46,200 --> 00:10:51,559
Speaker 1: situation was and how much we were step killed, and

190
00:10:51,600 --> 00:10:55,959
Speaker 1: you can't rightlessly increase, So, professor, I mean, so I

191
00:10:56,000 --> 00:10:57,800
Speaker 1: guess where we are right now in terms of the

192
00:10:57,840 --> 00:11:00,960
Speaker 1: discussion as a religios to the pandemic and is kind

193
00:11:01,000 --> 00:11:03,080
Speaker 1: of and I think it probably goes to your book

194
00:11:03,080 --> 00:11:05,959
Speaker 1: a little bit in terms of, you know, the acceleration is,

195
00:11:06,000 --> 00:11:09,240
Speaker 1: how do we reopen economies across the world. How do

196
00:11:09,320 --> 00:11:13,119
Speaker 1: you balance the health care aspects versus the economic aspects?

197
00:11:13,120 --> 00:11:19,560
Speaker 1: How do you kind of think that discussion should be framed? Um, well,

198
00:11:19,600 --> 00:11:21,360
Speaker 1: we're probably going to have less in Tutu, and that's

199
00:11:21,400 --> 00:11:22,800
Speaker 1: one way of framing it. But the way I would

200
00:11:22,840 --> 00:11:26,920
Speaker 1: frame the balance thing, it's a mechanism called lives versus lives.

201
00:11:27,760 --> 00:11:30,680
Speaker 1: So you look at how many lives have put an

202
00:11:30,679 --> 00:11:35,440
Speaker 1: extra risk by unlocking versus how many lives have put

203
00:11:35,440 --> 00:11:38,400
Speaker 1: an extra risk by not unlocking. In the UK the

204
00:11:38,480 --> 00:11:41,360
Speaker 1: most obvious cases, we know that people have not been

205
00:11:41,440 --> 00:11:45,880
Speaker 1: checked the councils because of the pandemic, So we know

206
00:11:46,000 --> 00:11:48,520
Speaker 1: people will be getting council now and it will not

207
00:11:48,559 --> 00:11:50,960
Speaker 1: be being treated, and we can estimate and we will die.

208
00:11:51,360 --> 00:11:55,079
Speaker 1: So after pandemic here falls, and we're luckily we a

209
00:11:55,160 --> 00:11:58,200
Speaker 1: few weeks ahead of you at moments fall, there comes

210
00:11:58,200 --> 00:12:01,520
Speaker 1: the point when, unluckily we'll actually save lives. And I

211
00:12:01,559 --> 00:12:07,080
Speaker 1: think that is a way of doing it. But longer term,

212
00:12:07,320 --> 00:12:09,200
Speaker 1: we're not going to come out of this doing things

213
00:12:09,320 --> 00:12:12,480
Speaker 1: exactly as we've done before. Some things we realize or

214
00:12:12,480 --> 00:12:16,520
Speaker 1: should realize, are more valuable to us than we realized before.

215
00:12:17,120 --> 00:12:21,040
Speaker 1: What we really care about, food supplies, system that actually works,

216
00:12:21,679 --> 00:12:24,720
Speaker 1: the health care obviously matters more than we probably valued

217
00:12:24,760 --> 00:12:28,280
Speaker 1: it before. And other things flying on holidays you may

218
00:12:28,320 --> 00:12:31,160
Speaker 1: not enjoy. Really we should do much less of that

219
00:12:31,280 --> 00:12:34,720
Speaker 1: in future. So what are just some things as we

220
00:12:34,760 --> 00:12:37,160
Speaker 1: think about, you know, on the other Sideay's pandemic, What

221
00:12:37,200 --> 00:12:39,920
Speaker 1: do you think what might speed up while other things

222
00:12:39,960 --> 00:12:43,600
Speaker 1: slow down a little bit? In in in our daily lives,

223
00:12:43,679 --> 00:12:46,400
Speaker 1: you know, well, are working more from home, all those

224
00:12:46,440 --> 00:12:49,080
Speaker 1: types of things of work, leisure, balance. How do you

225
00:12:49,080 --> 00:12:52,520
Speaker 1: think those things are going to play out? Yet? You so,

226
00:12:53,280 --> 00:12:55,160
Speaker 1: all the things that I measure, almost all of them,

227
00:12:55,200 --> 00:12:58,439
Speaker 1: apart from calm, pollution and temperature and so on, was

228
00:12:58,480 --> 00:13:01,760
Speaker 1: slowing down. But it isn't that we're sort of heading

229
00:13:01,800 --> 00:13:04,040
Speaker 1: towards the end of history were nothing changes very much.

230
00:13:04,400 --> 00:13:06,880
Speaker 1: Things that we don't measure will be speeding up things

231
00:13:06,920 --> 00:13:09,640
Speaker 1: that all measure in future. Our social relations, how how

232
00:13:09,720 --> 00:13:13,360
Speaker 1: liberal we are over how we tolerate other people. That

233
00:13:13,520 --> 00:13:15,880
Speaker 1: is that I suspect is likely th Wise, if you

234
00:13:15,920 --> 00:13:20,120
Speaker 1: look at the social apetudes of young people versus older people,

235
00:13:20,760 --> 00:13:23,000
Speaker 1: you can see a big distance, and I think we

236
00:13:23,000 --> 00:13:27,800
Speaker 1: should expect that's an increase in the future, hopefully Finally

237
00:13:27,880 --> 00:13:31,600
Speaker 1: what we were promised in decades, in decades working fewer hours,

238
00:13:31,960 --> 00:13:35,400
Speaker 1: not for changing values. You know, you have to actually

239
00:13:35,440 --> 00:13:38,760
Speaker 1: say it is prescious to be allowed to only have

240
00:13:38,840 --> 00:13:41,800
Speaker 1: to work from forty the week they or first five,

241
00:13:41,880 --> 00:13:44,599
Speaker 1: which is the normal from European country. It is that

242
00:13:44,720 --> 00:13:47,280
Speaker 1: you know what that is worth to you having that

243
00:13:47,400 --> 00:13:49,520
Speaker 1: amount of free time, and you do not have to work,

244
00:13:50,400 --> 00:13:52,400
Speaker 1: and that would be a cultural change. And it's cultural

245
00:13:52,480 --> 00:13:55,880
Speaker 1: changes like that. Well, I expect to see a speeding

246
00:13:56,000 --> 00:13:59,320
Speaker 1: up of people being distance to their parents who just

247
00:13:59,360 --> 00:14:03,040
Speaker 1: said you must egstimes as you can works necessary. Those

248
00:14:03,120 --> 00:14:06,000
Speaker 1: kind of attitudes I suspect will disappear and be seen

249
00:14:06,640 --> 00:14:11,000
Speaker 1: as more obsolete in future. One game you can play

250
00:14:11,040 --> 00:14:13,959
Speaker 1: with yourself is you can think, what things did your

251
00:14:14,000 --> 00:14:18,000
Speaker 1: parents say that now you couldn't like company? And then what,

252
00:14:18,160 --> 00:14:20,240
Speaker 1: of course do me and you to pay to each other?

253
00:14:20,240 --> 00:14:23,040
Speaker 1: That we think is perfectly exemptible, But our cland children

254
00:14:23,080 --> 00:14:27,600
Speaker 1: will say, you won't believe what they said, and that's

255
00:14:27,600 --> 00:14:29,680
Speaker 1: where the speed up will be, right, I think it

256
00:14:29,800 --> 00:14:35,600
Speaker 1: could be. We think, yeah, exactly. Danny's appreciatory Danny Dorling,

257
00:14:35,640 --> 00:14:39,000
Speaker 1: Professor of geography at the University of Oxford, really fascinating.

258
00:14:39,000 --> 00:14:41,800
Speaker 1: He is the author of a book slow Down, the

259
00:14:41,960 --> 00:14:45,720
Speaker 1: End of the Great Acceleration, arguing that life had actually

260
00:14:45,720 --> 00:14:48,560
Speaker 1: started to slow down across a number of metrics even

261
00:14:48,600 --> 00:14:52,000
Speaker 1: before this pandemic. How will this pandemic affect lots of

262
00:14:52,000 --> 00:14:57,920
Speaker 1: our lives going forward? This is bloom Bird Markets with

263
00:14:58,040 --> 00:15:02,600
Speaker 1: Lisa Rama Weds and Paul Sweeney on Bloomberg Radio. You know,

264
00:15:02,640 --> 00:15:05,480
Speaker 1: when the Fed looked for bond buying help in this

265
00:15:05,560 --> 00:15:09,480
Speaker 1: pandemic crisis, it turned to black Rock, the giant money manager.

266
00:15:09,800 --> 00:15:12,640
Speaker 1: Some folks think that black Mark black Rocks role in

267
00:15:12,800 --> 00:15:14,640
Speaker 1: the economy might be a little bit too big as

268
00:15:14,680 --> 00:15:17,480
Speaker 1: it relates to its its efforts with the government. In fact,

269
00:15:17,680 --> 00:15:20,960
Speaker 1: Will Embert, this old professor at the Chicago Kent College

270
00:15:21,360 --> 00:15:24,400
Speaker 1: of Law who studies the fund industry, said it's impossible

271
00:15:24,440 --> 00:15:26,680
Speaker 1: to think of black Rock without thinking of them as

272
00:15:26,720 --> 00:15:29,320
Speaker 1: the fourth branch of government. To get a sense of

273
00:15:29,520 --> 00:15:32,360
Speaker 1: kind of how worried we should be, we welcome Annie

274
00:15:32,520 --> 00:15:36,240
Speaker 1: massa investing reporter for Bloomberg News, as well as Eric

275
00:15:36,280 --> 00:15:39,520
Speaker 1: Balcunas he's a senior et F analyst for Bloomberg Intelligence. So,

276
00:15:39,720 --> 00:15:42,160
Speaker 1: and I just want to start with you as we

277
00:15:42,200 --> 00:15:44,480
Speaker 1: think about that. I mean, when you think black Rock

278
00:15:44,600 --> 00:15:47,080
Speaker 1: is so huge they're doing a lot of business with

279
00:15:47,120 --> 00:15:51,880
Speaker 1: the government, is the reason to be concerned. So black

280
00:15:51,960 --> 00:15:55,720
Speaker 1: Rock is indeed the world's biggest asset manager, and it's

281
00:15:55,760 --> 00:15:59,120
Speaker 1: a huge kind of force of nature in Washington, d C.

282
00:15:59,760 --> 00:16:02,240
Speaker 1: And so when the Federal Reserve launched some of its

283
00:16:02,320 --> 00:16:08,080
Speaker 1: unprecedented UH plans, to kind of shore up the bond market. UM.

284
00:16:08,120 --> 00:16:11,400
Speaker 1: You know, for three of its UH separate plans it

285
00:16:11,840 --> 00:16:14,360
Speaker 1: went to black Rock, and so black Rock is managing

286
00:16:15,000 --> 00:16:19,800
Speaker 1: UM its efforts to buy UH debt directly from companies

287
00:16:20,120 --> 00:16:23,200
Speaker 1: UH secondary market, you know, debt on the secondary market,

288
00:16:23,240 --> 00:16:27,960
Speaker 1: and then also UM mortage commercial mortgage backed securities UM.

289
00:16:28,400 --> 00:16:32,480
Speaker 1: So I mean it's really taken an expansive role in

290
00:16:32,600 --> 00:16:35,360
Speaker 1: the fed's clean up from this crisis, and that's what's

291
00:16:35,400 --> 00:16:40,640
Speaker 1: had UM certain individuals looking at it and wondering if UM,

292
00:16:40,680 --> 00:16:44,040
Speaker 1: you know that relationship is okay or whether we should

293
00:16:44,040 --> 00:16:47,080
Speaker 1: be worried. So, Eric, I know you spend a lot

294
00:16:47,120 --> 00:16:49,960
Speaker 1: of time looking at black Rock. You cover the e

295
00:16:50,040 --> 00:16:52,600
Speaker 1: t F space and they are obviously a dominant, dominant

296
00:16:52,640 --> 00:16:54,920
Speaker 1: player in et F space. What's your sense of kind

297
00:16:54,920 --> 00:16:58,720
Speaker 1: of their role in the marketplace based on your experience,

298
00:17:00,120 --> 00:17:03,240
Speaker 1: So I think it makes sense to ask questions about

299
00:17:03,240 --> 00:17:07,160
Speaker 1: this is definitely UM, you know, I get it the

300
00:17:07,160 --> 00:17:09,040
Speaker 1: the some of it's overblown though. I think the E

301
00:17:09,160 --> 00:17:11,879
Speaker 1: t F buying is a little overblown. The amount of

302
00:17:11,880 --> 00:17:14,119
Speaker 1: money they're going to use to buy black Rock ETFs

303
00:17:14,600 --> 00:17:17,640
Speaker 1: isn't that much. A and B they're going to not

304
00:17:18,000 --> 00:17:19,760
Speaker 1: miss with the market share, so they're going to buy

305
00:17:19,800 --> 00:17:22,399
Speaker 1: Vanguarden State Street too. That way, they don't pick winners

306
00:17:22,440 --> 00:17:24,760
Speaker 1: in the E t F market. So they're taking great

307
00:17:24,800 --> 00:17:27,200
Speaker 1: care to make sure that there's a lot of safeguards

308
00:17:27,200 --> 00:17:30,640
Speaker 1: in place so that uh, they're not getting extra aid

309
00:17:30,960 --> 00:17:33,800
Speaker 1: from the government. That said, um, you know, it is

310
00:17:33,840 --> 00:17:36,480
Speaker 1: pretty it's unprecedented. I think this shows the rise of

311
00:17:36,560 --> 00:17:39,720
Speaker 1: the by side. Vanguard and black Rock are the big

312
00:17:39,760 --> 00:17:43,280
Speaker 1: fish now on Wall Street. Um, and this really, you know,

313
00:17:43,400 --> 00:17:46,000
Speaker 1: shows that that happening. The big question people have to

314
00:17:46,040 --> 00:17:48,800
Speaker 1: ask is what should the Fed have done? Should it

315
00:17:48,840 --> 00:17:53,280
Speaker 1: have let the bond market remain in what I call illiquidity?

316
00:17:53,280 --> 00:17:56,560
Speaker 1: Hell on Marche, we were seeing outflows from mutual funds

317
00:17:56,560 --> 00:17:59,919
Speaker 1: that were just scary. I mean, regular investors were going

318
00:18:00,080 --> 00:18:03,840
Speaker 1: have funds probably halt redemptions. And so there's the bigger questions,

319
00:18:03,840 --> 00:18:05,840
Speaker 1: should the study even step in if they did step in,

320
00:18:06,119 --> 00:18:08,000
Speaker 1: when they want to work with somebody who knows the

321
00:18:08,040 --> 00:18:10,600
Speaker 1: bond market better than anybody. So those are some questions

322
00:18:10,600 --> 00:18:12,280
Speaker 1: that you had pulled a threat all the way to

323
00:18:12,840 --> 00:18:15,399
Speaker 1: should any should should the Fed of help the market

324
00:18:15,440 --> 00:18:18,040
Speaker 1: at all? Exactly? So, Anny, what do you is your

325
00:18:18,080 --> 00:18:23,840
Speaker 1: sense that the the FEDS buying in the marketplace is effective.

326
00:18:23,880 --> 00:18:26,560
Speaker 1: Are they doing it well? Is it disruptive? How would

327
00:18:26,560 --> 00:18:30,080
Speaker 1: you characterize kind of FEDS efforts in trying to ensure

328
00:18:30,119 --> 00:18:32,480
Speaker 1: liquid it in the marketplace by going in and actually

329
00:18:32,680 --> 00:18:36,960
Speaker 1: buying securities and ETFs. Well, it's important to remember that

330
00:18:37,000 --> 00:18:40,520
Speaker 1: we're only in the very beginning phases of this last week. Um,

331
00:18:40,720 --> 00:18:44,960
Speaker 1: you know, the first phases of black rocks. Um kind

332
00:18:44,960 --> 00:18:48,080
Speaker 1: of role here got underway as it started buying ets.

333
00:18:48,080 --> 00:18:51,959
Speaker 1: But um, the the additional pieces of this program are

334
00:18:52,520 --> 00:18:56,760
Speaker 1: yet to come. But it's it's definitely clear that just

335
00:18:57,040 --> 00:19:01,880
Speaker 1: the fact that the FED announced is bond buying facilities

336
00:19:02,440 --> 00:19:07,159
Speaker 1: has calmed the market down, and just the knowledge that

337
00:19:07,200 --> 00:19:10,920
Speaker 1: the seed won't be there to buy corporate debts has

338
00:19:10,960 --> 00:19:14,359
Speaker 1: helped comm investors down. So that there's definitely a signaling

339
00:19:14,440 --> 00:19:19,320
Speaker 1: aspect that has that has helped the markets. Um, you know,

340
00:19:19,440 --> 00:19:24,159
Speaker 1: beyond even getting the efforts underway, y'all, don't fight. The

341
00:19:24,200 --> 00:19:28,040
Speaker 1: FED is alive and well as always, Eric, has there

342
00:19:28,080 --> 00:19:30,760
Speaker 1: been some gamemanship in the E t F market? I mean,

343
00:19:30,800 --> 00:19:33,560
Speaker 1: when the FED makes this announcement about coming into the market,

344
00:19:33,640 --> 00:19:36,159
Speaker 1: did did you sense when you're looking at volume or

345
00:19:36,240 --> 00:19:38,760
Speaker 1: price that you know, some members of some traders in

346
00:19:38,760 --> 00:19:40,480
Speaker 1: the market said, I'm gonna go buy some of the

347
00:19:40,960 --> 00:19:43,119
Speaker 1: you know, investment grade et F or maybe some of

348
00:19:43,119 --> 00:19:48,399
Speaker 1: the high DTF to kind of front run the FED. Absolutely. Um,

349
00:19:48,440 --> 00:19:50,240
Speaker 1: you know. You look at l q, D, H, y G,

350
00:19:50,760 --> 00:19:54,119
Speaker 1: they're leading the flows since March, which I call kitchen

351
00:19:54,119 --> 00:19:57,199
Speaker 1: sink Day, which is when the and and he is right.

352
00:19:57,240 --> 00:19:58,639
Speaker 1: All they had to do is say they're going to

353
00:19:58,720 --> 00:20:02,040
Speaker 1: be there, and that was enough, uh for the market

354
00:20:02,080 --> 00:20:05,159
Speaker 1: I think, to start acting like it used to. Um.

355
00:20:05,200 --> 00:20:07,840
Speaker 1: You know, it's almost as if they reverse time because

356
00:20:07,880 --> 00:20:10,240
Speaker 1: it looks a lot like it did at the beginning

357
00:20:10,240 --> 00:20:12,840
Speaker 1: of the year. Um. If you look at l q D, H,

358
00:20:13,000 --> 00:20:14,920
Speaker 1: y G, and then they're probably gonna buy be SIT,

359
00:20:15,080 --> 00:20:17,399
Speaker 1: which is a vanguard, b C s H which is

360
00:20:17,400 --> 00:20:19,679
Speaker 1: a short term intermediate, and then also J and K.

361
00:20:20,240 --> 00:20:22,320
Speaker 1: Those five I think are what we're looking for. But

362
00:20:22,720 --> 00:20:24,560
Speaker 1: they're not going to buy a lot where we call

363
00:20:24,560 --> 00:20:26,800
Speaker 1: it nibbling, and so we can't really see in the

364
00:20:26,920 --> 00:20:28,960
Speaker 1: data much going on. We saw a little bump in

365
00:20:29,040 --> 00:20:30,479
Speaker 1: volume one day in l q D, we thought, oh,

366
00:20:30,560 --> 00:20:32,520
Speaker 1: that could be the said but this is like trying

367
00:20:32,560 --> 00:20:35,679
Speaker 1: to find footprints in the forest. It's very difficult to

368
00:20:35,760 --> 00:20:39,000
Speaker 1: know who's who um, but especially with the amount of

369
00:20:39,000 --> 00:20:40,800
Speaker 1: money I think it was like three million they bought.

370
00:20:41,160 --> 00:20:43,800
Speaker 1: That would be one per cent of the total flows

371
00:20:43,880 --> 00:20:47,920
Speaker 1: that those bond ETFs took in since Mark. So they

372
00:20:47,960 --> 00:20:50,800
Speaker 1: are a tiny player. Their word, to me is more impactful.

373
00:20:50,840 --> 00:20:52,640
Speaker 1: I think they just decided to do this to buy

374
00:20:52,680 --> 00:20:55,199
Speaker 1: them so that people knew it what they wasn't just

375
00:20:55,280 --> 00:20:57,159
Speaker 1: talk that they were going to do it, but they

376
00:20:57,160 --> 00:20:59,600
Speaker 1: didn't actually need to do it. It doesn't seem like so,

377
00:20:59,640 --> 00:21:02,760
Speaker 1: but they definitely there and looking to act on this

378
00:21:03,080 --> 00:21:05,919
Speaker 1: to make the market I feel come more confident. So

379
00:21:06,000 --> 00:21:07,919
Speaker 1: and he'd given that, you know, the FED is, as

380
00:21:08,040 --> 00:21:09,960
Speaker 1: Eric was saying, is just kind of sending a signal there.

381
00:21:09,960 --> 00:21:12,000
Speaker 1: I mean, is do you expect the FED told be

382
00:21:12,080 --> 00:21:15,600
Speaker 1: any more or less aggressive or just kind of status

383
00:21:15,680 --> 00:21:18,239
Speaker 1: quo here? Knowing that, I guess, for lack of a

384
00:21:18,240 --> 00:21:23,360
Speaker 1: better word, they're a backstop here. Yes, I think that's

385
00:21:23,440 --> 00:21:26,200
Speaker 1: definitely the right word to use. There are a backstop

386
00:21:26,240 --> 00:21:29,720
Speaker 1: for these markets, and I think that we have to

387
00:21:29,880 --> 00:21:34,000
Speaker 1: wait and see a bit how much longer these lockdowns

388
00:21:34,040 --> 00:21:38,840
Speaker 1: continue on and how much additional pain companies feel as

389
00:21:38,880 --> 00:21:41,960
Speaker 1: results of them um to really see the full scope

390
00:21:42,000 --> 00:21:45,040
Speaker 1: of what will be needed in the FEDS bond buying

391
00:21:45,119 --> 00:21:47,760
Speaker 1: program here and he thanks so much for joining us.

392
00:21:47,760 --> 00:21:50,560
Speaker 1: We appreciate it. Any Massa. She's an investing reporter for

393
00:21:50,720 --> 00:21:53,960
Speaker 1: Bloomberg News as well as Eric Valcunis, senior e t

394
00:21:54,160 --> 00:21:57,439
Speaker 1: F analysts for Bloomberg Intelligence. Love getting their thoughts on

395
00:21:58,160 --> 00:22:00,960
Speaker 1: black Rock. You know, it's such a giant, giant firm,

396
00:22:01,080 --> 00:22:03,440
Speaker 1: you know, and like how they were Annie and Eric was,

397
00:22:03,720 --> 00:22:05,919
Speaker 1: you know, suggesting that these are the new giants of

398
00:22:05,960 --> 00:22:09,159
Speaker 1: Wall Street. You think about Vanguard and uh uh you

399
00:22:09,200 --> 00:22:12,840
Speaker 1: know black Rock, the uh asset allocators to et F funds,

400
00:22:12,880 --> 00:22:17,399
Speaker 1: the you know, the passive investors really really uh taking

401
00:22:17,440 --> 00:22:20,359
Speaker 1: a tremendous amount of liquidity in the market, huge positions.

402
00:22:20,720 --> 00:22:23,000
Speaker 1: And so when the federal government comes in to say, hey,

403
00:22:23,000 --> 00:22:24,600
Speaker 1: we need to step in in terms of the FED

404
00:22:24,640 --> 00:22:26,960
Speaker 1: in terms of step in and supporting this market with

405
00:22:27,000 --> 00:22:29,880
Speaker 1: some liquidity in terms of buying securities in the marketplace,

406
00:22:29,920 --> 00:22:33,080
Speaker 1: who do they turn to? Not Goldman Sachs, not Morgan Stanley,

407
00:22:33,520 --> 00:22:36,040
Speaker 1: but Black Rocks. The Larry Fink and black Rock really

408
00:22:36,119 --> 00:22:41,080
Speaker 1: really have established just extraordinary position in the marketplace. UH.

409
00:22:41,119 --> 00:22:43,040
Speaker 1: So we'll have to see how that plays out over time,

410
00:22:43,040 --> 00:22:46,600
Speaker 1: but clearly, UH investors are paying close attention to how

411
00:22:47,160 --> 00:22:50,240
Speaker 1: the markets react. We will keep on top of that

412
00:22:50,760 --> 00:22:55,960
Speaker 1: for certain you're listening to Bloomberg Markets with Lisa Abrama,

413
00:22:56,119 --> 00:23:00,600
Speaker 1: Eds and Paul Sweeney on Bloomberg Radio. Well, the economic

414
00:23:00,680 --> 00:23:05,080
Speaker 1: impacts from COVID nineteen started to mount uh in March.

415
00:23:05,240 --> 00:23:08,000
Speaker 1: What we saw from the US feder Reserve was very

416
00:23:08,119 --> 00:23:12,040
Speaker 1: quick response, very decisive response in terms of really trying

417
00:23:12,080 --> 00:23:15,360
Speaker 1: to manage liquidity in the markets, and I think by

418
00:23:15,359 --> 00:23:18,959
Speaker 1: by and large, the Fed has received very positive marks

419
00:23:19,119 --> 00:23:21,919
Speaker 1: for its movement there. To get a sense of kind

420
00:23:21,960 --> 00:23:23,840
Speaker 1: of where we go from here and how we think

421
00:23:23,880 --> 00:23:27,040
Speaker 1: about the COVID nineteen and the impact on the economy

422
00:23:27,040 --> 00:23:30,159
Speaker 1: and investing, were really fortunate to have Jeff Flagger, Chairman

423
00:23:30,240 --> 00:23:34,080
Speaker 1: and CEO of McKay Shields. McKay Shields has over twenty

424
00:23:34,119 --> 00:23:37,280
Speaker 1: billion dollars in equity and fixed income assets under management,

425
00:23:37,280 --> 00:23:38,920
Speaker 1: based in New York City. Jeff, thanks so much for

426
00:23:39,000 --> 00:23:43,560
Speaker 1: joining us here. So it's interesting here. The feeds policy

427
00:23:43,560 --> 00:23:46,719
Speaker 1: response to COVID nineteen, I think generally is receiving some

428
00:23:46,720 --> 00:23:49,120
Speaker 1: pretty good marks. How do you view what the Fed

429
00:23:49,200 --> 00:23:54,000
Speaker 1: has done to date? I think we'd echo, uh, you know,

430
00:23:54,119 --> 00:23:57,400
Speaker 1: many of the responses thus thus far, we think that

431
00:23:57,480 --> 00:24:01,840
Speaker 1: the decisiveness that the said Treasury have both acted that

432
00:24:01,960 --> 00:24:05,479
Speaker 1: acted in has been applauded well by the by the market.

433
00:24:06,119 --> 00:24:08,920
Speaker 1: And you just sort of think back to that mid

434
00:24:08,960 --> 00:24:12,200
Speaker 1: March ladder, part of part of March, before that amulance

435
00:24:12,240 --> 00:24:15,240
Speaker 1: bill got up and up and running and markets were

436
00:24:15,320 --> 00:24:18,400
Speaker 1: very much in disarray. Yet we look at the investment

437
00:24:18,400 --> 00:24:21,439
Speaker 1: grade credit market and even the high yield market, and

438
00:24:21,480 --> 00:24:25,040
Speaker 1: these markets are not only functioning, but in many instances

439
00:24:25,119 --> 00:24:28,600
Speaker 1: they're actually flourishing as well. And the issuance has been

440
00:24:28,920 --> 00:24:32,320
Speaker 1: has been tremendous. It's been a good response. So, you know,

441
00:24:32,440 --> 00:24:35,000
Speaker 1: one of the concerns Jeff coming into the marketplaces, we

442
00:24:35,080 --> 00:24:38,080
Speaker 1: see about this, you know, retracement. We've had this partial

443
00:24:38,119 --> 00:24:40,879
Speaker 1: retracement of the declines from the peak to trough that

444
00:24:40,960 --> 00:24:43,080
Speaker 1: we've enjoyed over the last it's called it five six

445
00:24:43,119 --> 00:24:45,400
Speaker 1: weeks in the markets. The rebound, if if you will,

446
00:24:45,600 --> 00:24:48,440
Speaker 1: is that it's perhaps a little bit too far ahead

447
00:24:48,440 --> 00:24:51,040
Speaker 1: of where the economics are, and that boy that you know,

448
00:24:51,080 --> 00:24:53,080
Speaker 1: you see a job was claimed number like today, you

449
00:24:53,119 --> 00:24:55,800
Speaker 1: see some economic data points that were likely to see

450
00:24:55,840 --> 00:24:59,199
Speaker 1: for the next quarter or two. Perhaps the markets too

451
00:24:59,240 --> 00:25:01,040
Speaker 1: far ahead of its How do you come out on

452
00:25:01,080 --> 00:25:06,840
Speaker 1: that argument? There's no question markets have run dramatically, and

453
00:25:07,320 --> 00:25:11,440
Speaker 1: the support that the FED has has brought, we would argue,

454
00:25:11,560 --> 00:25:15,880
Speaker 1: is definitely a critical part of the part of the equation. UM.

455
00:25:15,920 --> 00:25:19,120
Speaker 1: I wouldn't call it a pure backstop, but I think

456
00:25:19,200 --> 00:25:23,919
Speaker 1: market participants are viewing UM much of the much of

457
00:25:23,920 --> 00:25:26,479
Speaker 1: the programs that are now starting to get up and

458
00:25:26,560 --> 00:25:30,640
Speaker 1: running as in essence a backstop. The FED has been

459
00:25:30,680 --> 00:25:33,440
Speaker 1: pretty clear fault if it's been clear, Treasury has been

460
00:25:33,480 --> 00:25:35,359
Speaker 1: clear that they're going to do what it takes to

461
00:25:35,440 --> 00:25:38,320
Speaker 1: keep this thing going. That doesn't mean we're not going

462
00:25:38,359 --> 00:25:41,520
Speaker 1: to see defaults, but what we are going to see

463
00:25:41,560 --> 00:25:44,520
Speaker 1: is we're going to see functioning markets. And functioning markets

464
00:25:44,640 --> 00:25:49,560
Speaker 1: is what market participants careing awful lot about. Jeff, how

465
00:25:49,800 --> 00:25:51,439
Speaker 1: what's kind of been your view we've had you know,

466
00:25:51,480 --> 00:25:54,919
Speaker 1: we had that big round of fiscal stimulus, uh several

467
00:25:54,920 --> 00:25:58,119
Speaker 1: weeks ago. UM. You know, what's your sense is that

468
00:25:58,240 --> 00:26:00,879
Speaker 1: how it is how effective that's been in terms of

469
00:26:00,920 --> 00:26:04,320
Speaker 1: getting money into the hands of consumers as well as

470
00:26:04,320 --> 00:26:08,600
Speaker 1: in to support smaller midsized businesses. Yeah, I think there's

471
00:26:08,640 --> 00:26:10,200
Speaker 1: a lot more to be done in terms of the

472
00:26:10,240 --> 00:26:14,200
Speaker 1: small and midsize mid sized businesses. And I also think

473
00:26:14,280 --> 00:26:16,879
Speaker 1: that you know, the help that the consumer has gotten

474
00:26:16,960 --> 00:26:21,120
Speaker 1: has been helped, has it solved the problem? No? I mean,

475
00:26:21,160 --> 00:26:23,760
Speaker 1: I think if you look towards the Fed's minutes just

476
00:26:23,920 --> 00:26:26,639
Speaker 1: the just the other day, they still see a significant

477
00:26:26,680 --> 00:26:30,200
Speaker 1: amount of downside risk that's that's out there. And while

478
00:26:30,200 --> 00:26:33,000
Speaker 1: we are anticipating a rebound in the second half of

479
00:26:33,200 --> 00:26:36,560
Speaker 1: this uh this year, we're gonna be looking very closely

480
00:26:36,840 --> 00:26:40,720
Speaker 1: at the at the consumer and how does the consumer reacting?

481
00:26:40,800 --> 00:26:43,760
Speaker 1: Can the consumer continue to pay their pay their bills?

482
00:26:43,960 --> 00:26:45,360
Speaker 1: And I think you hit the nail on the head

483
00:26:45,440 --> 00:26:48,280
Speaker 1: ball and we've got twenty five million people that are

484
00:26:48,320 --> 00:26:52,560
Speaker 1: out of out of work and those folks are going

485
00:26:52,600 --> 00:26:56,440
Speaker 1: to going to struggle, There's no question question about it.

486
00:26:56,800 --> 00:26:59,880
Speaker 1: So I think Chairman and Powell said it well within

487
00:27:00,320 --> 00:27:02,920
Speaker 1: within his remarks. We're gonna need some more fiscal support

488
00:27:03,040 --> 00:27:07,440
Speaker 1: as as well. Monitor policy is doing it's its job.

489
00:27:07,720 --> 00:27:10,520
Speaker 1: And I think the other critical point is that a

490
00:27:10,640 --> 00:27:13,639
Speaker 1: lot of these programs that are now up and up

491
00:27:13,680 --> 00:27:17,800
Speaker 1: and running. While they may not be critical today, they're

492
00:27:17,880 --> 00:27:21,679
Speaker 1: there for the next out of volatility, should it in

493
00:27:21,720 --> 00:27:25,119
Speaker 1: fact come. All right, Jeff, so again, I you know,

494
00:27:25,520 --> 00:27:28,320
Speaker 1: the Fed has done its part. We've had some good

495
00:27:28,359 --> 00:27:32,200
Speaker 1: fiscal stimulus coming out of Washington. There's another three trillion

496
00:27:32,240 --> 00:27:36,640
Speaker 1: dollars UH that the House has passed, and that's focusing

497
00:27:36,840 --> 00:27:40,000
Speaker 1: again a little bit more on state and local municipalities.

498
00:27:40,040 --> 00:27:43,320
Speaker 1: Doesn't seem to be much Republican support for the How

499
00:27:43,359 --> 00:27:45,600
Speaker 1: critical do you think that next round of fiscal stimulus

500
00:27:45,640 --> 00:27:49,280
Speaker 1: is to the market. Well, the state and local municipalities

501
00:27:49,320 --> 00:27:52,520
Speaker 1: are definitely gonna need, gonna need an assist and I

502
00:27:52,520 --> 00:27:55,840
Speaker 1: think policymakers are you know, pretty well and well in

503
00:27:55,920 --> 00:27:59,080
Speaker 1: touch with that sort of Also, look at some of

504
00:27:59,080 --> 00:28:02,680
Speaker 1: the power that the Fed and the Treasury have have gotten,

505
00:28:02,760 --> 00:28:05,840
Speaker 1: and arguably if there was one criticism that they were

506
00:28:05,880 --> 00:28:08,960
Speaker 1: they were getting was where they utilizing all of the

507
00:28:09,080 --> 00:28:12,160
Speaker 1: powers and all of the capacity that they that they

508
00:28:12,200 --> 00:28:14,840
Speaker 1: now now have. So I think we'll wait and wait

509
00:28:14,880 --> 00:28:17,360
Speaker 1: and see, and we'll wait, wait and watch, but there's

510
00:28:17,400 --> 00:28:20,360
Speaker 1: a lot that they can do. And do we need

511
00:28:20,400 --> 00:28:23,680
Speaker 1: a three trillion dollar stimulus still? I'm not. I'm not sure,

512
00:28:23,800 --> 00:28:26,240
Speaker 1: but I'm I am sure that we're going to need more,

513
00:28:26,720 --> 00:28:29,440
Speaker 1: and that more is going to need to be targeted

514
00:28:29,480 --> 00:28:32,800
Speaker 1: towards not only state in the local municipalities, but it's

515
00:28:32,800 --> 00:28:35,359
Speaker 1: also going to need to be targeted towards the towards

516
00:28:35,359 --> 00:28:39,320
Speaker 1: the consumer. Again, as we said, million people are out

517
00:28:39,320 --> 00:28:42,640
Speaker 1: of out of work. They're gonna need an assist. Hey, Jeff,

518
00:28:42,640 --> 00:28:44,920
Speaker 1: thanks so much for joining us. We really appreciate your thoughts.

519
00:28:44,960 --> 00:28:47,880
Speaker 1: Jeff Lager, he's a chairman and CEO of McKay Shields

520
00:28:47,880 --> 00:28:51,520
Speaker 1: giving us his thoughts on the markets and on fiscal

521
00:28:51,560 --> 00:28:54,200
Speaker 1: stimulus and on the FED. Again, the FED generally getting

522
00:28:54,200 --> 00:28:58,160
Speaker 1: some pretty good marks, I would suggest from the marketplace

523
00:28:58,200 --> 00:29:00,840
Speaker 1: as it relates to their uh firts in terms of

524
00:29:00,920 --> 00:29:03,760
Speaker 1: kind of trying to make sure there is enough liquidity

525
00:29:04,200 --> 00:29:06,400
Speaker 1: in the market places, both in the short end and

526
00:29:06,560 --> 00:29:08,760
Speaker 1: on the longer term basis. And now the question is

527
00:29:08,840 --> 00:29:14,240
Speaker 1: of what else can Washington do in terms of fiscal stimulus. Again,

528
00:29:14,280 --> 00:29:16,640
Speaker 1: if you listen to governors such as Governor Cuomo of

529
00:29:16,720 --> 00:29:20,400
Speaker 1: New York, UH, there is a dire need for support

530
00:29:20,960 --> 00:29:23,880
Speaker 1: for state and local governments will continue to cover that this.

531
00:29:25,640 --> 00:29:27,880
Speaker 1: Thanks for listening to the Bloomberg P and L podcast.

532
00:29:28,040 --> 00:29:30,680
Speaker 1: You can subscribe and listen to interviews at Apple Podcasts

533
00:29:30,760 --> 00:29:33,720
Speaker 1: or whatever podcast platform you prefer. I'm Paul Sweeney. I'm

534
00:29:33,760 --> 00:29:36,440
Speaker 1: on Twitter at pt Sweeney. I'm Lisa Abramoy. It's I'm

535
00:29:36,440 --> 00:29:39,440
Speaker 1: on Twitter at Lisa abramoits one before the podcast. You

536
00:29:39,440 --> 00:29:41,960
Speaker 1: can always catch us worldwide. I'm Bloomberg Radio