WEBVTT - Cumberland's Kotok: Not Seeing Inflationary Forces Yet 0:00:00.800 --> 0:00:04.000 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney. Alongside 0:00:04.040 --> 0:00:06.920 my co host Matt Miller. Every business day, we bring 0:00:06.960 --> 0:00:11.520 you interviews from CEOs, market pros, and Bloomberg experts, along 0:00:11.560 --> 0:00:15.560 with essential market moving news. Find the Bloomberg Markets Podcast 0:00:15.600 --> 0:00:18.479 on Apple Podcasts or wherever you listen to podcasts, and 0:00:18.480 --> 0:00:23.160 at Bloomberg dot com slash podcast. There is an elite 0:00:23.320 --> 0:00:31.200 group of economists and UH politicians, bankers, philanthropists who meet 0:00:31.280 --> 0:00:35.120 up every year at Camp ko Talk to UH to 0:00:35.360 --> 0:00:37.960 cast a Rod. I don't know if that's even how 0:00:38.000 --> 0:00:40.720 you say it, but um David KO Talk joins us 0:00:40.880 --> 0:00:45.280 himself right now, Chairman and chief investment Officer at Cumberland Advisors. David, 0:00:45.320 --> 0:00:49.560 I feel like McKee has gone, Rid Holtz has gone. 0:00:49.800 --> 0:00:52.760 Kathleen Hayes, I've never gotten invite to Camp COO Talk 0:00:53.720 --> 0:00:57.840 might be a reason. Officially and in the presence of 0:00:57.880 --> 0:01:02.880 anybody who's listening in care, you are invited this August, 0:01:03.000 --> 0:01:07.560 and we would love to have you. They made I 0:01:07.560 --> 0:01:09.200 can actually go home now, but I want to ask 0:01:09.240 --> 0:01:12.080 you a couple of questions. David, first, about the state 0:01:12.080 --> 0:01:15.200 of the U S economy, especially in light of today's 0:01:15.319 --> 0:01:18.840 jobs report, it looked great, but there's still millions of 0:01:18.880 --> 0:01:21.760 people without jobs. We talked about the high savings rate, 0:01:21.800 --> 0:01:23.880 but there's so many people who can't even afford to 0:01:23.920 --> 0:01:28.440 pay rent. Is this is this K shaped recovery a 0:01:28.520 --> 0:01:34.360 problem for the FED? For example, it appears so um. 0:01:34.560 --> 0:01:38.600 J Pal said so um. Others in the FED continue 0:01:38.840 --> 0:01:44.720 to say so. And we shouldn't be deceived by the 0:01:44.920 --> 0:01:49.640 six percent or so official unemployment rate. When you recomputed, 0:01:49.760 --> 0:01:54.600 to reflect some technical differences, it's closer to say ten percent. 0:01:55.200 --> 0:01:58.480 So you think about that. You say, see, there were 0:01:58.520 --> 0:02:01.720 about a hundred and fifty five million, hundred and fifty 0:02:01.760 --> 0:02:06.760 two millions something like that non farm payrolls before COVID started, 0:02:07.520 --> 0:02:12.480 and there's fifteen million people out of that group that 0:02:12.600 --> 0:02:15.960 are not employed today. Some of them have dropped out, 0:02:16.080 --> 0:02:18.160 some of them are in the unemployment rate. That the 0:02:18.280 --> 0:02:22.880 picture is recovery which is robust, but it's coming off 0:02:22.919 --> 0:02:27.560 a very deep bottom. So I wouldn't get sanguine that 0:02:27.680 --> 0:02:31.120 everything's going back to normal and everything is wonderful. I 0:02:31.160 --> 0:02:34.880 don't think we're there yet, but the trend is good, David. 0:02:35.280 --> 0:02:38.400 You know, we again, the trend is good, there's also 0:02:38.480 --> 0:02:41.560 been some I guess the murmur starting to build here 0:02:41.560 --> 0:02:43.840 over the last couple of weeks about inflation and and 0:02:43.880 --> 0:02:47.240 maybe not the good kind of inflation. How are you 0:02:47.280 --> 0:02:48.919 thinking about kind of what we're seeing maybe in the 0:02:48.919 --> 0:02:52.720 commodities markets, we're seeing the treasuries tenure over one point 0:02:52.800 --> 0:02:55.280 six percent even earlier this morning. How do you think 0:02:55.280 --> 0:03:00.480 about inflation? Well, we we look at inflation expectation. They 0:03:00.480 --> 0:03:05.080 are building, there's various ways to estimate them, and they're 0:03:05.120 --> 0:03:09.959 all saying that the expectation is rising. My colleague Jung 0:03:10.000 --> 0:03:14.600 Whoso talks about that all the time. The problem is 0:03:14.760 --> 0:03:19.280 expectations are one thing. Delivering a change in the price 0:03:19.560 --> 0:03:26.280 level of a strategic elevation is something else. Again, hard 0:03:26.360 --> 0:03:30.880 to see it when you have a true unemployment rate 0:03:31.040 --> 0:03:34.320 somewhere around ten percent in the country. So maybe down 0:03:34.320 --> 0:03:40.320 the road it comes. But we're more mild or sanguine 0:03:40.360 --> 0:03:45.760 about higher inflation risk than some of the others. Actually 0:03:45.800 --> 0:03:50.440 spoke yesterday with Scott Minerd of Guggenheim. He's well, I mean, 0:03:50.480 --> 0:03:53.520 he's an outlier, right, he thinks the tenure yield could 0:03:53.520 --> 0:03:59.160 go negative. But his point was that disinflationary um forces 0:03:59.200 --> 0:04:02.960 are much stronger than what he sees as transient inflation. 0:04:03.000 --> 0:04:06.880 He says, you always see a spike in yields like this, 0:04:07.000 --> 0:04:10.400 but it's um you know, but but it doesn't stay. 0:04:10.560 --> 0:04:13.120 Do you look at historically and come of the same 0:04:13.160 --> 0:04:18.080 conclusion pretty much? So I saw the U I saw 0:04:18.120 --> 0:04:21.640 the interview with Scott and and the you know their 0:04:21.680 --> 0:04:26.200 two camps. Now there's the camp that says, jee, the 0:04:26.240 --> 0:04:28.200 FETE is printing all this money, we're having all this 0:04:28.360 --> 0:04:30.760 defic set spending, We're going to get a big inflation. 0:04:31.200 --> 0:04:34.160 Well sometimes that happens, but there's a lot of history 0:04:34.240 --> 0:04:38.920 it says that doesn't happen. And I raised a different perspective. 0:04:38.960 --> 0:04:42.240 I say, to get inflation, you need two things. You 0:04:42.279 --> 0:04:48.560 need rising labor income, which is robust. We don't have 0:04:48.680 --> 0:04:52.440 that yet. We're in a recovery, but it's not robust yet. 0:04:52.760 --> 0:04:56.800 And the second thing is you need private sector credit multipliers, 0:04:57.400 --> 0:05:00.480 and that's the monetary piece. We don't have that either. 0:05:00.600 --> 0:05:02.760 So if you create a lot of bank reserves and 0:05:02.800 --> 0:05:08.520 they sit there and they're sterilized, and the transfer payments 0:05:08.640 --> 0:05:13.000 coming from the federal government are not capital investments, but 0:05:13.120 --> 0:05:17.039 what they're doing is ridging gaps across the valley to 0:05:17.240 --> 0:05:23.600 keep people surviving. I don't see the inflation forces yet 0:05:23.640 --> 0:05:27.840 in place, and I don't believe you you treager inflation 0:05:28.320 --> 0:05:31.080 by looking at a change in an oil price. The 0:05:31.160 --> 0:05:35.040 Federal Reserve can drill for oil. It's in monetary and 0:05:35.160 --> 0:05:39.359 banking multipliers, and the multipliers aren't there yet. And it 0:05:39.400 --> 0:05:44.000 doesn't look like you're coming so quickly to us, all right, David, 0:05:44.040 --> 0:05:47.919 If if inflation is not at least a near term 0:05:48.240 --> 0:05:52.039 concern here, it seems like the bulls have kind of 0:05:52.080 --> 0:05:54.680 the runway here, given the backdrop they're seeing with the 0:05:54.720 --> 0:05:58.280 FED and with the potentially reopening trade here. Where are 0:05:58.320 --> 0:06:04.200 you finding the best opportunities right now? In the stock market, 0:06:04.240 --> 0:06:06.279 we think you have to be in it all. You 0:06:06.360 --> 0:06:09.960 have to be in it. We're looking at maybe SMP 0:06:10.080 --> 0:06:13.480 five hundred earnings at around a two hundred dollar level 0:06:13.640 --> 0:06:17.839 in the recovery and trending upward. In the bond market, 0:06:18.040 --> 0:06:22.240 you you know, we favor the municipal bond sector, the 0:06:22.320 --> 0:06:25.360 tax free bond yields and structure, and the tax free 0:06:25.400 --> 0:06:29.880 market are ignoring part of the value of the arbitrage 0:06:30.120 --> 0:06:33.720 in the US tax code. I, for one, don't see 0:06:33.720 --> 0:06:38.120 how tax rates go down. They may stay the same 0:06:38.279 --> 0:06:41.000 or they may go up. But there's a value in 0:06:41.080 --> 0:06:44.440 the tax free sector. It has to be understood. It's 0:06:44.480 --> 0:06:47.480 a different kind of market than a corporate bird treasury 0:06:47.520 --> 0:06:52.640 bond market. So we like that as well. David, I 0:06:53.000 --> 0:06:57.080 just want to uh uh talk for a moment about 0:06:57.160 --> 0:06:58.920 the kind of fraud that you're seeing and if it's 0:06:58.920 --> 0:07:01.400 worrying you, because it is in your latest note you 0:07:01.400 --> 0:07:04.720 go through some state by state cases. Is it concerned 0:07:04.760 --> 0:07:09.880 you think or should we be focused on the bigger picture? No, 0:07:10.120 --> 0:07:13.280 I think there's a serious concern about flaws in the 0:07:13.360 --> 0:07:19.120 state by state data. And we see it in Florida. 0:07:19.240 --> 0:07:22.360 Now it's going to cost the state of Florida millions 0:07:22.400 --> 0:07:25.679 to redo their unemployment system. We see it in Ohio, 0:07:25.760 --> 0:07:28.240 we see it in California, we see it Arinzona, we 0:07:28.360 --> 0:07:32.520 see bits and pieces everywhere. I published that piece and 0:07:32.640 --> 0:07:35.200 I had a response from a friend and said, we 0:07:35.280 --> 0:07:39.320 have two hundred people in our company who were advised 0:07:39.360 --> 0:07:43.000 that their initial unemployment claims were processed and none of 0:07:43.000 --> 0:07:47.800 them applied for it. So the fact is there's a problem, 0:07:47.880 --> 0:07:51.400 and the problem has two implications. Number one, how do 0:07:51.440 --> 0:07:54.120 you rely on data when you know it's flawed and 0:07:54.160 --> 0:07:58.160 the flaws are changing, so I'm not consistent. And number two, 0:07:58.440 --> 0:08:02.160 it gives fuel to the people who don't want to 0:08:02.200 --> 0:08:06.760 help people the ones who needed to get across the valley. 0:08:07.120 --> 0:08:10.560 So it's a problem. Hey, David, thanks so much for 0:08:10.640 --> 0:08:13.080 joining us. We always appreciate chatting with you. David Kotalk, 0:08:13.160 --> 0:08:16.720 chairman and chief investment officer of Kumbling Advisors, also the 0:08:16.760 --> 0:08:20.800 author co author of the book Adventures in Muni Land. 0:08:20.840 --> 0:08:26.240 We'll have more coming up. This is Bloomberg. We're just 0:08:26.280 --> 0:08:28.480 talking about tech Stox. Greg jeb was talking about text 0:08:28.480 --> 0:08:30.880 stocks and Tesla. When you think about tech stocks, met 0:08:30.880 --> 0:08:33.880 One of our faves is Dan I. He's a managing 0:08:33.880 --> 0:08:37.360 director equity research at wed Bush Securities. Dan, thanks so 0:08:37.440 --> 0:08:40.160 much for joining us, really timely here. You've been, you know, 0:08:40.320 --> 0:08:42.959 very bullish on your tech sector for a long time. 0:08:43.000 --> 0:08:46.440 You've been very right tech Stox getting the short end 0:08:46.440 --> 0:08:49.960 of this rotation trade. If you will, Let's step back 0:08:50.040 --> 0:08:52.880 and I'd love you to share your thoughts on kind 0:08:52.880 --> 0:08:54.600 of some of the big tech names which have been 0:08:54.679 --> 0:08:56.760 so good for so long. How are you thinking about 0:08:56.760 --> 0:08:59.640 that that sector now? Sure? And it's great to be 0:08:59.720 --> 0:09:02.480 on well. Right now, it's a white knuckle period with 0:09:02.520 --> 0:09:05.400 what you're seeing in a ten year in the rotation trade, 0:09:05.920 --> 0:09:09.240 and you're seeing some of these crowded names hit the 0:09:09.320 --> 0:09:12.400 sell button. But to me, this is short term. I 0:09:12.520 --> 0:09:16.480 believe tech stocks go up another this year and we 0:09:16.520 --> 0:09:18.680 are in the midst We're in the middle of what 0:09:18.760 --> 0:09:22.640 I've used a multi year bull rally for tech stocks, 0:09:22.679 --> 0:09:26.640 and that doesn't change with the forty bits moving the tenure. 0:09:27.480 --> 0:09:31.079 So what kind of valuations do you think are healthy then, 0:09:31.160 --> 0:09:35.680 because some of them are really high. I mean, I 0:09:35.679 --> 0:09:38.240 guess it's not fair to look at earnings for Tesla 0:09:38.320 --> 0:09:43.640 but a thousand times look, I think right now the conundrum, 0:09:44.040 --> 0:09:47.120 almost say, the quagmire for investors is how do you 0:09:47.280 --> 0:09:51.120 value five trillion dollars of growth over the next decade. 0:09:51.120 --> 0:09:53.360 And that's really what the ev market is of course 0:09:53.480 --> 0:09:56.200 right now, Tessa Math, we lead in that market. I 0:09:56.240 --> 0:09:58.599 think that's that's the question. Right now. You see in 0:09:58.600 --> 0:10:01.959 the digestion period, and of course valuation is going to 0:10:02.040 --> 0:10:05.200 be a nice right here. But to me, these are 0:10:05.280 --> 0:10:08.040 stocks that are going to grow into their evaluation. Tassa 0:10:08.120 --> 0:10:10.640 Fernt and Center and re rate higher, and I view 0:10:10.720 --> 0:10:13.920 this is just it's a timbercent pullback that we've seen 0:10:14.000 --> 0:10:17.600 a lot of high gripthmes anywhere from and Paul I 0:10:17.679 --> 0:10:20.720 view this as a golden buying opportunity in tech. I 0:10:20.720 --> 0:10:22.960 think we probably get this. You know, this could be 0:10:23.120 --> 0:10:25.920 our shot in terms of this year. Just just checked 0:10:25.960 --> 0:10:28.760 in OR or e V s. I mean, Folkswagen is 0:10:28.840 --> 0:10:33.960 coming on strong. They're targeting at e V share in 0:10:34.160 --> 0:10:37.640 China and the US by thirty. They're targeting a sevent 0:10:38.240 --> 0:10:42.120 EV share in Europe and they have you know, seventy 0:10:42.160 --> 0:10:46.240 billion dollars to invest to make it happen. Yeah, and 0:10:46.280 --> 0:10:48.760 it speaks to what GM's done and Marry, I mean 0:10:48.800 --> 0:10:51.280 they're diving into the deep end of the pool and evs, 0:10:51.440 --> 0:10:55.440 but we're do you like? But do you like folks Wagen? Now? 0:10:55.520 --> 0:10:59.280 To me, I like GM in particular in terms of 0:10:59.320 --> 0:11:02.040 one that's going to have success. I think volkswagging. The 0:11:02.120 --> 0:11:05.000 key with them is what they're doing on the MOBU 0:11:05.080 --> 0:11:07.960 or build out of EV and their quantums gave ownership. 0:11:08.040 --> 0:11:10.880 I think that's came from the battery technology. And I 0:11:10.920 --> 0:11:14.160 think EV we're talking about probably the most transform national 0:11:14.160 --> 0:11:17.640 opportunity that I've seen twenty plus years of covering tack 0:11:17.720 --> 0:11:22.640 and disruptive technology. All Right, Dan, let's back away from 0:11:22.720 --> 0:11:24.360 the Tesla EV a little bit. Talk to us a 0:11:24.360 --> 0:11:27.520 little about five G. That's another big theme that we 0:11:27.679 --> 0:11:33.120 hear coming out of technology companies, telecommunications companies. How should 0:11:33.160 --> 0:11:35.880 we be thinking about five G and and what are 0:11:35.880 --> 0:11:39.200 the names that you like as a play on five G. Yeah, 0:11:39.240 --> 0:11:42.080 in five G we're still probably the first inning of 0:11:42.120 --> 0:11:45.200 this all building out In China, they've been ahead, but 0:11:45.240 --> 0:11:47.920 when you look what's happened in US from a five 0:11:48.000 --> 0:11:51.520 G perspective, this is really building out the infrastructure from 0:11:51.520 --> 0:11:56.200 a hotelcom services perspective over the next decade. And our 0:11:56.240 --> 0:11:58.920 best five G play continues to be Apple because of 0:11:59.000 --> 0:12:02.200 the supercycled it's playing out in real time, and I 0:12:02.240 --> 0:12:04.480 think that's still gonna be a three trillion dollar mark 0:12:04.520 --> 0:12:06.559 ap this year. And then you look at some of 0:12:06.600 --> 0:12:09.840 the supply chain please like a qual Calm as well 0:12:09.840 --> 0:12:13.800 as across Semis, which is why we're bullish on Semis 0:12:14.040 --> 0:12:16.959 as well as just the overall sector with five G 0:12:17.120 --> 0:12:20.920 as a tall in Apple clearly the biggest beneficiary there. 0:12:21.640 --> 0:12:23.720 What do you think I read a story today about 0:12:23.800 --> 0:12:28.239 China laying a cable that goes um, I think from Pakistan, 0:12:28.480 --> 0:12:32.199 then around the Horn of Africa and then up onto 0:12:32.240 --> 0:12:36.920 a beach in Marseille. It's gonna deliver um in one second, 0:12:37.600 --> 0:12:41.640 the ability to play nine thousand Netflix movies. I mean 0:12:42.000 --> 0:12:45.679 just super fast internet. Um. But I instantly thought, wow, 0:12:45.679 --> 0:12:48.800 I wonder where the backdoors are built in, Like cybersecurity 0:12:48.880 --> 0:12:52.920 must be a huge issue. Well right now cyber security 0:12:53.080 --> 0:12:56.320 continues to where we've seen post Sowar Wind's attacked as 0:12:56.360 --> 0:12:58.240 well as across the board. This is probably the biggest 0:12:58.280 --> 0:13:02.640 tame point facing enterprise and governments today especially is more 0:13:02.640 --> 0:13:04.720 and more moved to the cloud, and that's why there's 0:13:04.800 --> 0:13:07.920 names like a Z scale or a power out, a 0:13:08.040 --> 0:13:12.600 style points cybersecurity, that basket that that continues to probably 0:13:12.600 --> 0:13:14.720 be one of our most bullish areas of tech. And 0:13:14.720 --> 0:13:17.200 I think half those companies could get acquired in terms 0:13:17.240 --> 0:13:19.960 of consolidation and will give a step back. It's a 0:13:20.080 --> 0:13:24.160 fourth generation industrial revolution going on. That's why what I 0:13:24.240 --> 0:13:27.880 look in terms of the trillions spent, we trust it's 0:13:28.080 --> 0:13:30.880 to pound the table moment unpacked. Despite some of the 0:13:30.920 --> 0:13:34.160 white knuckles that we're seeing in many bears who've been 0:13:34.240 --> 0:13:36.800 hibernation mode the last year now calling fire in a 0:13:36.880 --> 0:13:41.319 cloud theater. So, Dan, when you talk to institutional investors, 0:13:41.320 --> 0:13:42.960 I don't you don't get to visit them anymore in 0:13:42.960 --> 0:13:44.480 this in this water, in but any you do lots 0:13:44.480 --> 0:13:45.839 of phone calls and things like that. What do you 0:13:46.120 --> 0:13:50.720 what's kind of them? Dude? Clients don't do zoom my 0:13:50.760 --> 0:13:52.880 mom guessing it's hard enough to get him on the phone. 0:13:52.920 --> 0:13:56.240 But Dan, what are they? What's the pushback you're getting 0:13:56.240 --> 0:13:59.640 from people that maybe have changed their minds on tech 0:13:59.679 --> 0:14:03.000 and in fact have turned negative on tech. I think 0:14:03.040 --> 0:14:06.280 the pushback is, are you are you catching the following night? 0:14:06.440 --> 0:14:08.760 Are these stocks that are going to continue to move 0:14:08.840 --> 0:14:13.320 high down in terms of valuation? Reading the other way? 0:14:13.480 --> 0:14:15.960 And what gives you that confidence? And that's where I 0:14:16.000 --> 0:14:18.120 think where you're going to start to see in terms 0:14:18.120 --> 0:14:20.680 of the fundamentals. I think street numbers move up another 0:14:20.800 --> 0:14:23.560 ten to fifteen percent this year. But I think what 0:14:23.600 --> 0:14:26.520 we're gonna see is over the next week, I believe 0:14:26.520 --> 0:14:29.280 we're gonna have a massive bounce back in tech. And 0:14:29.360 --> 0:14:31.560 that's where you start to see some of the green 0:14:31.680 --> 0:14:34.640 lights and the technic goals start to improve, but right now, 0:14:34.680 --> 0:14:36.640 I think that's the biggest war. No one wants to 0:14:36.760 --> 0:14:40.640 be the first to jump into the pool. In terms 0:14:40.640 --> 0:14:43.800 of this market, I saw an awesome story the other day. 0:14:43.840 --> 0:14:48.400 Bill Gates and the actor Robert Downey Jr. Are investing 0:14:48.400 --> 0:14:50.680 in a company called turn Tide. It's still small, it's 0:14:50.720 --> 0:14:53.520 not publicly traded yet, but they make it a motor 0:14:53.840 --> 0:14:55.880 that is able to produce the same amount of power 0:14:55.920 --> 0:14:59.120 as another electric motor with thirty less electricity. It's not 0:14:59.200 --> 0:15:01.880 all about bad right there are other improvements that can 0:15:01.920 --> 0:15:05.800 be made in e vis. It's a green title that 0:15:05.960 --> 0:15:08.000 that I believe is going to happen. The U S 0:15:08.000 --> 0:15:11.600 Bodens driven, especially with a blue cent, and we're talking 0:15:11.680 --> 0:15:14.720 something that's really gonna change the whole ecosystem, not just 0:15:14.840 --> 0:15:18.880 auto but sore and really across the whole, not just 0:15:18.960 --> 0:15:22.080 domestic but globally. And I think there's a massive impact 0:15:22.120 --> 0:15:24.760 here for the coming years. That's why I just cost 0:15:24.800 --> 0:15:27.680 him with investors. When you're playing ev and you're playing 0:15:27.680 --> 0:15:30.840 the basket, I think that this continues. Probably one of 0:15:30.840 --> 0:15:34.320 the most unique opportunities to the sector that I've seen 0:15:34.320 --> 0:15:37.920 in dectide. I hope someone figures out a way for 0:15:38.040 --> 0:15:41.840 evis to make a sweet noise I like, I like 0:15:42.000 --> 0:15:44.520 a good V eight exhaust note, but I don't know 0:15:44.680 --> 0:15:47.040 if fake is going to cut it anyway, Dan, thanks 0:15:47.040 --> 0:15:49.120 so much for joining us. Always a pleasure talking to you. 0:15:49.240 --> 0:15:53.640 Dana Eyes, Managing director for Equity Research at wed Bush Securities. 0:15:53.720 --> 0:15:59.600 This is Bloomberg. Your jobs number came out today. The 0:15:59.640 --> 0:16:05.280 headline were certainly impressive, seventy jobs at unemployment rate officially 0:16:05.480 --> 0:16:08.960 ticking down yet again. Uh, let's get a sense of 0:16:09.040 --> 0:16:12.200 what's going on at street level, at the company level. 0:16:12.480 --> 0:16:14.880 We do that with Tom Gimble. He's a founder at 0:16:14.880 --> 0:16:18.280 CEO of LaSalle Network, based in Chicago's lasal Network is 0:16:18.320 --> 0:16:22.320 one of the leading staffing and recruiting firms in the country. Tom, 0:16:22.320 --> 0:16:24.000 thanks so much for joining us here. Again that the 0:16:24.280 --> 0:16:27.960 numbers we got today were certainly certainly positive. What are 0:16:28.000 --> 0:16:30.440 you hearing and seeing from the clients that you talked 0:16:30.440 --> 0:16:34.520 to on a daily basis? Positives and understatement, I mean, 0:16:34.560 --> 0:16:36.600 we should be throwing parties in the street like it's 0:16:36.640 --> 0:16:40.560 Mardi Gras. I'm with you. I'm as optimistic as it 0:16:40.600 --> 0:16:43.080 gets on this kind of stuff. But I didn't think 0:16:43.080 --> 0:16:45.760 it was going to be this big. And what I've 0:16:45.800 --> 0:16:50.760 been seeing is companies of all shapes and sizes, non hospitality, 0:16:50.880 --> 0:16:53.880 non restaurants, have been hiring. I didn't think we were 0:16:53.880 --> 0:16:56.600 going to get this bump until the weather really got 0:16:56.600 --> 0:16:59.840 good in April or May. Job numbers. UM. So this 0:17:00.040 --> 0:17:02.960 is really a sign that the second and third quarter 0:17:03.000 --> 0:17:05.359 are really going to be fantastic. But companies are hiring 0:17:05.359 --> 0:17:09.040 at all, all levels of positions across the board right now. 0:17:09.760 --> 0:17:12.879 There was an awesome chart tom this morning showing that 0:17:13.000 --> 0:17:17.840 investors are really betting on summer vacation at least um 0:17:17.960 --> 0:17:20.000 here in Europe, and we don't even have the vaccines. 0:17:20.560 --> 0:17:23.399 Um that you guys have the S and T the 0:17:23.440 --> 0:17:28.960 stock six hundred Travel and Leisure Index just absolutely soaring. Um. 0:17:29.119 --> 0:17:32.400 Do you think we're gonna see business travel keep up 0:17:32.440 --> 0:17:35.520 with um? You know, the trips were all planning down 0:17:35.560 --> 0:17:39.800 to New Orleans for example. I think that will be 0:17:39.840 --> 0:17:42.480 the last one, at the last thing to come back. Actually, 0:17:42.560 --> 0:17:46.359 because the the economy is going to grow organically and 0:17:46.400 --> 0:17:50.920 innately in the second and third quarter, because of the vaccine, 0:17:51.880 --> 0:17:56.040 because of summer in hospitality coming back, that business travel 0:17:56.119 --> 0:17:58.719 won't need Businesses will think they don't need to do 0:17:58.800 --> 0:18:01.880 business travel of the second and third quarter. And what 0:18:01.920 --> 0:18:05.000 we'll start to see is eventually that's when the small 0:18:05.080 --> 0:18:08.240 scrappy companies put people on airplane because they know that 0:18:08.240 --> 0:18:10.480 if they get in front of people, they'll be able 0:18:10.520 --> 0:18:13.439 to differentiate. I think it'll be a real emergence of 0:18:13.480 --> 0:18:17.280 the entrepreneurial company because they will travel and big companies 0:18:17.480 --> 0:18:21.000 to keep earnings being positive, we'll pull back on TNE 0:18:21.040 --> 0:18:23.000 because that's where they met a lot of their profit numbers. 0:18:24.960 --> 0:18:28.040 So Tom again, the headline numbers were very good. You 0:18:28.119 --> 0:18:30.760 dig down a little bit deeper, there were some issues 0:18:30.760 --> 0:18:34.280 for concern. The African American unemployment rate actually ticked up 0:18:34.320 --> 0:18:37.960 a little bit. What's the concern that as we come 0:18:38.000 --> 0:18:41.720 out of this pandemic and out of this jobless issue, 0:18:41.840 --> 0:18:45.840 that it's going to be perhaps more unequal than many 0:18:45.880 --> 0:18:48.960 would like. Well, I think what we're really gonna have 0:18:49.840 --> 0:18:53.240 well on on the racial issue. You know, as you 0:18:53.280 --> 0:18:56.320 saw during the elections like the last year, is as 0:18:56.400 --> 0:18:59.439 the former administration went to out how great things were 0:18:59.800 --> 0:19:03.199 from minority hiring because of the a lot of the 0:19:03.280 --> 0:19:06.679 lack of education and poverty areas that that tends to 0:19:06.760 --> 0:19:08.919 be one of the laggers, which is a shame. I 0:19:08.960 --> 0:19:13.359 think an education forward thinking administration should help that. Where 0:19:13.440 --> 0:19:17.600 I'm really concerned about UH into the future is the 0:19:17.680 --> 0:19:21.040 white collar blue collar service level divide. And what I 0:19:21.080 --> 0:19:23.760 mean by that is what we've seen over the past 0:19:23.840 --> 0:19:26.440 year is that white collar jobs can be done remotely, 0:19:26.760 --> 0:19:31.439 but obviously blue collars job plus truck drivers plus cash 0:19:31.480 --> 0:19:36.320 register workers cannot. And eventually, whether you're black, brown, white, orange, 0:19:36.400 --> 0:19:39.560 or green, it doesn't matter. There's gonna be resentment of 0:19:39.560 --> 0:19:41.920 why are you working from home when I'm going into 0:19:41.920 --> 0:19:44.479 the factory every day or driving the truck, And we're 0:19:44.520 --> 0:19:48.760 gonna have some real sociological issues that go beyond gender 0:19:48.800 --> 0:19:52.800 and or race into deeper, deeper issues than that. That's 0:19:52.840 --> 0:19:55.600 going to be an interesting economic and job problem that 0:19:55.640 --> 0:19:59.120 we faced. Tom. What do you think about the minimum 0:19:59.119 --> 0:20:01.679 wage debate? It looks like, you know, it's done for 0:20:01.880 --> 0:20:05.840 now unless Kamala Harris kind of jumps in and does 0:20:05.880 --> 0:20:09.000 something last minute, or the government's table to do something separately, 0:20:09.080 --> 0:20:13.040 But is it just too hard for people in Middle 0:20:13.080 --> 0:20:17.520 America to imagine paying fifteen dollars an hour? How does 0:20:17.560 --> 0:20:20.879 it shake out? Yeah, that's the problem is that several 0:20:20.920 --> 0:20:24.520 minimum wage is a floor and and I think too 0:20:24.520 --> 0:20:27.639 many people look at it as what everybody's gotta gotta 0:20:27.680 --> 0:20:32.199 be making, and it really is a geographic uh issue. 0:20:32.520 --> 0:20:35.520 So should somebody in New York be getting fifteen an hour? Maybe? 0:20:35.520 --> 0:20:38.720 Should somebody in Tulta maybe not? And I think if 0:20:38.760 --> 0:20:42.639 they could compromise somehow, it's become seven, seventy five or 0:20:42.640 --> 0:20:45.439 fifteen and nothing in between. And maybe it's time for 0:20:45.480 --> 0:20:48.400 a ten or eleven dollar an hour minimum wage federally, 0:20:48.600 --> 0:20:52.560 but most of the municipalities are drawing that line up anyways. 0:20:52.800 --> 0:20:55.720 And I think you're looking at small retail businesses. Listen, 0:20:55.880 --> 0:21:00.679 I work in downtown Chicago. We have uh Sundurys slash 0:21:00.720 --> 0:21:03.879 convenience store in our lobby that was run by an 0:21:03.920 --> 0:21:06.720 Indian immigrant for twenty years. He's not a business now. 0:21:07.280 --> 0:21:09.479 And even if he could come back, it's vacant. He's been. 0:21:09.520 --> 0:21:12.640 He's gone because nobody was coming into the office. Even 0:21:12.640 --> 0:21:14.520 if he could, he couldn't have afforded to keep it 0:21:14.560 --> 0:21:16.960 running by paying somebody fifteen dollars an hour to work 0:21:17.000 --> 0:21:19.920 with him. So we've got real problems to think that 0:21:19.920 --> 0:21:25.640 that's what's gonna be the stagger to keep the economy going. 0:21:25.920 --> 0:21:27.840 It's not You've got to get people working and help 0:21:27.920 --> 0:21:30.280 people and and paying them more isn't going to help 0:21:30.280 --> 0:21:34.760 the entrepreneur in the small business owner, It's gonna hurt him. Hey, Tom, 0:21:34.760 --> 0:21:38.080 thanks so much. We appreciate that as always. Tom Gimble, 0:21:38.200 --> 0:21:40.399 founder at CEO of LASAL Network. We love talking to 0:21:40.400 --> 0:21:44.080 Tom on these jobs days. Uh, Tom is you know, Matt, 0:21:44.119 --> 0:21:45.720 you know, we've been talking to Tom for a long time. 0:21:45.760 --> 0:21:49.280 He's been, you know, pretty consistently bullish on the whole 0:21:49.800 --> 0:21:52.639 labor situation in his country, you know, really confident that 0:21:52.720 --> 0:21:55.000 jobs would come back as uh, you know, the vaccines 0:21:55.000 --> 0:21:57.520 get into the marketplace. I think it's pretty fascinating the 0:21:57.520 --> 0:22:01.080 point he made about travel, Paul, you know, be big companies, 0:22:01.119 --> 0:22:03.520 not only are the bean counters saying, look, we made 0:22:03.760 --> 0:22:06.520 so much money cutting back travel, let's keep it. Let's 0:22:06.560 --> 0:22:09.960 keep it down. But you've got big HR offices also 0:22:10.000 --> 0:22:13.160 who are saying not yet, let's let's wait a couple 0:22:13.160 --> 0:22:15.479 more weeks, a couple more months because they don't want 0:22:15.480 --> 0:22:18.359 their employees getting infected. That's when the small businesses are 0:22:18.359 --> 0:22:19.880 going to be able to get a leg up. Yeah, 0:22:19.920 --> 0:22:21.880 I think that's a good that's a good point. So, 0:22:22.000 --> 0:22:23.879 but light at the end of the tunnel, as we 0:22:24.000 --> 0:22:30.440 like to say. I am here in Berlin. Germany has 0:22:30.560 --> 0:22:33.879 said it's loosening the lockdown, but you really can't do 0:22:33.960 --> 0:22:36.359 anything except for go to the barber, which is no 0:22:36.520 --> 0:22:40.399 use to me, and uh and go to the flower shop. 0:22:40.720 --> 0:22:42.920 It's weird, isn't it that those are the two things 0:22:42.960 --> 0:22:45.320 they open. Hopefully by the end of the month they'll 0:22:45.359 --> 0:22:49.480 start opening my favorite stores and restaurants in the US 0:22:49.800 --> 0:22:53.119 many states are doing that. But is it a good idea? 0:22:53.640 --> 0:22:57.240 Let's bring in Lauren sour right now from Johns Hopkins University, 0:22:57.440 --> 0:23:02.160 where she is an associate professor of emergency Medicine in Lauren, Connecticut, 0:23:02.240 --> 0:23:07.440 now joining Texas and Mississippi in reopening the state lifting restrictions. 0:23:07.680 --> 0:23:10.040 Is it too soon? I mean Germany is like nowhere 0:23:10.119 --> 0:23:14.359 near that. Yeah. I mean my personal opinion, and I 0:23:14.400 --> 0:23:16.119 think the opinion of many of my colleagues is it 0:23:16.200 --> 0:23:18.240 is a bit too soon. It sort of feels like 0:23:18.680 --> 0:23:21.280 we've put in all this hard work we've done on 0:23:21.520 --> 0:23:24.520 all of this staying home and wearing the masks and 0:23:24.520 --> 0:23:27.360 and participating in all these restrictions. That have been challenging 0:23:27.400 --> 0:23:30.720