Speaker 1: This is Bloomberg Business Week. I'm Carol Masser and I'm
Speaker 1: Jason Kelly. We're here every day bringing you the latest
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Speaker 1: You can also listen to our radio show weekdays at
Speaker 1: two pm Eastern only on Bloomberg Radio. Let's set the
Speaker 1: business week agenda for you on this Friday. With so
Speaker 1: much going on, we've got a great duo. Gina Martin
Speaker 1: Adams back with us, chief equity strategist at Bloomberg Intelligence,
Speaker 1: certainly very familiar to our Bloomberg audiences. On the phone
Speaker 1: from New Jersey. Dave Wilson is with us stocks editor
Speaker 1: at Bloomberg News, joining us on the access line from
Speaker 1: New Jersey as well. Gina, I want to start with you.
Speaker 1: We're kind of falling apart. It feels a little bit,
Speaker 1: but I don't know, how do you see the equity
Speaker 1: trade right now. Yeah, I didn't think this is a
Speaker 1: little bit of pull back after an absolutely rip roaring April.
Speaker 1: I think a lot of people kind of came through
Speaker 1: April and said, Wow, how do we get such an
Speaker 1: extraordinary gain in the midst of all this fundamental weakness.
Speaker 1: I think the other thing you have is when we
Speaker 1: kind of knew this was coming, the big tech stocks
Speaker 1: not really reporting exactly what investors had wanted to hear.
Speaker 1: And that was a big part of this learning season,
Speaker 1: was the sentiment around, Okay, there's gonna be a ton
Speaker 1: of weakness, but there are going to be spright spots
Speaker 1: in the index. Those bright spots are going to be
Speaker 1: some healthcare companies, some technology companies, maybe some consumers stables companies.
Speaker 1: And this week has been for us a little bit
Speaker 1: about some disappointment on the tech front. It's not that
Speaker 1: these companies are turning over, it's just that they're not
Speaker 1: really satisfying expectations which were for them to really hold
Speaker 1: up the index. In my mind, well, Dave Wilson coming
Speaker 1: in here, because tech has been a theme that we
Speaker 1: have talked a lot about. The NASTAC it's now down
Speaker 1: four percent for the year. It was flirting with being
Speaker 1: flat there for a little while. Certainly was and you know,
Speaker 1: you talk about disappointment, and you have to look at
Speaker 1: Amazon front and center. I mean, as they looked ahead
Speaker 1: and talked about what they're going to have to spend
Speaker 1: to keep their workers safe in their warehouses, you know,
Speaker 1: because of the coronavirus. I mean, we've kind of seen
Speaker 1: this story before and in terms of the company being
Speaker 1: able to just go out and spend lots of money
Speaker 1: to accomplish something and you know, profits either they come
Speaker 1: or they don't. And so that's what the CEO, Jeff
Speaker 1: Bezos is looking at at this point. People don't like
Speaker 1: the idea. I mean, Amazon is down about seven and
Speaker 1: we're seeing some of all the other, uh, major technology
Speaker 1: type companies lower as well. You know, Apple's kind of
Speaker 1: gone back and forth today, but it's down a little
Speaker 1: more than one percent after their results. I mean, they
Speaker 1: talked about CEO Tim Cook did when he talked to
Speaker 1: us anyway, about how late March early April was pretty
Speaker 1: depressed in terms of their businesses started to pick up
Speaker 1: a bit, uh later in the month. There's a whole
Speaker 1: lot of back and forth there, and you really jumps
Speaker 1: out arguably is you know, you've got a day where
Speaker 1: crude oil is actually up and energy stocks are the
Speaker 1: worst performers in the S. A lot of that, no doubt,
Speaker 1: tied into x On Mobile reporting their first loss in decades,
Speaker 1: shares down more than five and a percent. Chevron also
Speaker 1: weighed in UH and is lower by two point three
Speaker 1: percent as we speak. We're going to talk about that
Speaker 1: a little bit later on. It's also the cover story
Speaker 1: of the magazine this week, so more on Exxon to come.
Speaker 1: All right, team, Thank you so much, Gina Martin Adams,
Speaker 1: Chief Equity Strategies at Bloomberg Intelligence along with Dave Wilson.
Speaker 1: You're listening to Bloomberg Business Week with Carol Messer and
Speaker 1: Jason Kelly on Bloomberg Radio. In terms of mixed messages,
Speaker 1: I feel like we got some mixed messages this week
Speaker 1: on the medical side to yirol and it's just one
Speaker 1: of these moments where we're trying to find the way forward, right, Yeah, exactly,
Speaker 1: especially on a day where I was reading stories about, hey, folks,
Speaker 1: get ready for a two year outbreak when it comes
Speaker 1: to the virus UH, and we're trying to figure out, oh, hey,
Speaker 1: can we get a vaccination in nine months? Can we
Speaker 1: get it in two years? What does it take? Dr
Speaker 1: Ian les Bader is always our voice of reason. He's
Speaker 1: Clinical Associate Professor of Medicine at the n y U
Speaker 1: Landgown Medical Center. He's back with us on the phone
Speaker 1: in New York. Um Ian, nice to have you back
Speaker 1: with us. So where are we in all of this?
Speaker 1: Can you? Can you kind of filter through what makes
Speaker 1: sense what doesn't make sense? I hope to thank you,
Speaker 1: you know, to me, the COVID nineteen story is really
Speaker 1: like Charles Dickens The Tale of Two Cities, which she
Speaker 1: wrote in eighteen fifty nine. You know, we have the
Speaker 1: outpatient story where you know, patients are seen by telemedicine
Speaker 1: and many of them are really getting cabin fever. They're anxious, depressed,
Speaker 1: on home isolation. They've gained weight. We call it the
Speaker 1: COVID nineteen like the fresh consisting. They're gaining a COVID
Speaker 1: nineteen due to inactivity. Named as friends and family, you know,
Speaker 1: kids and grandkids, and many have mild COVID symptoms called fever,
Speaker 1: chest pain, diarrhea, must like most of them will be okay.
Speaker 1: And then we have the impatient story where really I
Speaker 1: was rounding in the hospital earlier. Today, critically ill patients,
Speaker 1: you know, severe pneumonia, heart and kidney failure really due
Speaker 1: to these micro thromb by our plots um and many
Speaker 1: have risk factors diabetes, hypertension, CPD, obesity uh. And really
Speaker 1: diagnosis is like the tale of two cities. You know.
Speaker 1: We have nasal swamps and blood tests which are now
Speaker 1: more available, so we're ordering a lot of those outpatient
Speaker 1: blood tests, you know, and many patients are coming back negative,
Speaker 1: so they say, when can we leave the house. So
Speaker 1: that's the tale of two cities. And treatment is like
Speaker 1: a tale of two cities. You know, we've learned a
Speaker 1: lot of medications are not helpful. The hydroxy flooric Clint
Speaker 1: and his intromax clearly did not pan out. And then
Speaker 1: we have sort of maybe helpful medications, uh, the aisle
Speaker 1: sex inhibitors run destiny or maybe those have some issues
Speaker 1: and maybe convalescent alasthma. That is one of the recent
Speaker 1: studies that we're doing. Now that we know people have antibodies,
Speaker 1: we're collecting those and infusing them and that may be
Speaker 1: really a breakthrough. We'll have to see how that is.
Speaker 1: And that actually goes back about a hundred years. These
Speaker 1: convalescent antibodies were used a hundred years ago, obviously for
Speaker 1: a different disease, but for a variety of diseases. Uh,
Speaker 1: it's still been used. So you know, we really have
Speaker 1: very a real dichotomy on on where to go and
Speaker 1: and sort of what you do. Alright, So Dr les Fers,
Speaker 1: Sorry I dropped off there for a second. We're having
Speaker 1: all sorts of like weird technical issues, uh that are
Speaker 1: familiar to all of our listeners out there tried to
Speaker 1: work from home, probably you as well, Dr les Vader,
Speaker 1: But you know you're a high tech guy. You've got
Speaker 1: it all under control. I know. Um, So I know
Speaker 1: you've been talking about sort of all these variety of
Speaker 1: things that we may be approaching, plot and whatnot. I
Speaker 1: do wonder what does it look like sort of on
Speaker 1: the ground right now. What's the mood among the healthcare
Speaker 1: professionals that like you and and folks you're talking to
Speaker 1: amid these sort of like mixed messages that we're getting.
Speaker 1: You know, so again that tale of two cities. Um,
Speaker 1: you know, I think for for those of us who
Speaker 1: are where to hats you know, as out patient doctors
Speaker 1: were starting to see patients now back in the office.
Speaker 1: Elective surgery is being permitted to you know, procedures and
Speaker 1: colonos could be slowly that sort of thing, you know.
Speaker 1: And I think it is interesting many patients are afraid
Speaker 1: to come in, they like to tell the medicine they're
Speaker 1: afraid that uh, to almost leave the house at this point,
Speaker 1: and they have a lot of anxiety and depression, you know.
Speaker 1: And then you've got the impatient doctors who I think
Speaker 1: are still very very stressed and and a little depressed
Speaker 1: as well with really critically ill patients. Some of these
Speaker 1: patients are in you know for months or more, uh
Speaker 1: some of some of even two months, and and uh,
Speaker 1: you know, to care for these very complex patients is
Speaker 1: is very draining. Staff changes all the time. No one
Speaker 1: can be there seven, you know, and I think that's
Speaker 1: a challenge for everyone to maintain that level of intensity
Speaker 1: with sick inpatients. So I have to say your talle
Speaker 1: of Two Cities resonates so much with us because we
Speaker 1: talked about mixed messages at the top of our show,
Speaker 1: which is what we felt like the week was, whether
Speaker 1: it was on the medical front, whether it was on
Speaker 1: the earnings front um, just so many different kind of
Speaker 1: back and forth here and confusion, and I think it's
Speaker 1: certainly playing out a little bit in the financial markets.
Speaker 1: What do you make of that report by Maduna that
Speaker 1: says the coronavirus outbreak may last for two years and
Speaker 1: won't be controlled until about two thirds of the world's
Speaker 1: population is immune. Right, so we we certainly know herd
Speaker 1: immunity for many disease is is really what stops these
Speaker 1: big outbreaks and hospital surges. And since we're just now
Speaker 1: really beginning to test antibodies on people blood tests and so, uh,
Speaker 1: you can go to your doctor and if you think
Speaker 1: you've had COVID, they can order an antibody test. Will
Speaker 1: have to see about who's paying for all this, but
Speaker 1: we can certainly order it um and then I think
Speaker 1: we're going to have a lot more data as to
Speaker 1: how close are we to herd immunity. But what really
Speaker 1: gives people herd immunity is that vaccine. And even if
Speaker 1: we get a vaccine, no one is a sure if
Speaker 1: people will get antibodies, and then we're not a hundred
Speaker 1: percent sure those antibodies will really prevent you from getting COVID.
Speaker 1: Especially if it mutates. So there's a number of hills
Speaker 1: to climb, which I think is why the markets are
Speaker 1: a little uh unsteady, shall we say? And so I
Speaker 1: what do we do in the meantime, just as like
Speaker 1: human beings living in the world, like, how should we
Speaker 1: be thinking about, you know, even the next month or so,
Speaker 1: maybe the next two months especially. I think it's tricky
Speaker 1: for us who live in the Tri state area because
Speaker 1: we're seeing you know, other parts of the country reopen.
Speaker 1: And we can talk about the wisdom of that separately,
Speaker 1: but you know, sort of day to day, and you
Speaker 1: mentioned very importantly, I think a lot of the anxiety, uh,
Speaker 1: and and depression that that people are feeling on the
Speaker 1: front lines and even here on the way back lines. Uh,
Speaker 1: that's happening. What do we do is as folks here?
Speaker 1: You know, my sense is in most of life, you
Speaker 1: cannot be safe. You know. You I tell my patients,
Speaker 1: you know when they ask you about informed consent or procedures.
Speaker 1: You know, you live in Manhattan, you're walking across the street.
Speaker 1: You can pull on a pothole, break your ankle. You know,
Speaker 1: there there's a risk, there's a benefit, and there's a
Speaker 1: risk and I'm my sense is that we're beginning to
Speaker 1: um lose the benefit of home isolation and we're maybe
Speaker 1: getting into a higher risk arena. And I think people
Speaker 1: want to return to a more normal lifestyle. And certainly
Speaker 1: as the weather gets warmer and people want to go out.
Speaker 1: So my senses, we may have to take a little
Speaker 1: bit of risk since you know, a vaccine is at
Speaker 1: least six months away, and you know, people should wear masks.
Speaker 1: And I think people who have serious risk factors and
Speaker 1: we've got over those that we can go over them again.
Speaker 1: But um, those people probably should be very very careful.
Speaker 1: But for the majority of people, I think if they're
Speaker 1: hand washing and distancing and masks, many should be able
Speaker 1: to resume a more normal lifestyle. And you know, we'll
Speaker 1: have to see if the governor and the mayor you know,
Speaker 1: buys on to that. I think eventually they're going to
Speaker 1: have to buy onto that because I don't think we
Speaker 1: are going to get a hundred percent solution either with
Speaker 1: medication at this point, um, certainly not as outpatient medicine
Speaker 1: or a vaccine. I do think the in patients are
Speaker 1: editor I think we have better uh, whether it's plasma
Speaker 1: or indiosity or I think we have a few more
Speaker 1: options to the very very sectation, which is encouraging. So
Speaker 1: taking risks, does that mean just get used to wearing
Speaker 1: masks and just being kind of extra careful. I think
Speaker 1: about the medical community that has been surrounded by this, right,
Speaker 1: you guys have figured it out. So what does it
Speaker 1: mean on a more kind of normal basis? Is it
Speaker 1: just masks? And I do wonder about this more vulnerable
Speaker 1: Does that mean they aren't allowed to kind of go
Speaker 1: out and and have a more normal life. That's a
Speaker 1: good question. I mean, I think that's an individual decision
Speaker 1: as to people's individual risk factors. I think if you've
Speaker 1: got high blood pressure, diabetes, obesity, lung disease, maybe you
Speaker 1: need to stay in for for quite a while, longer
Speaker 1: until the number of cases drops dramatically, and we should
Speaker 1: know that we're tracking that. But I think if you're
Speaker 1: otherwise seemingly healthy, you know, there are many staff in
Speaker 1: the hospital who wear masks and are up close with
Speaker 1: very sick patients, you know, and they're negative. So not everyone.
Speaker 1: Obviously that peign nurse who was in the e er
Speaker 1: and so it is healthcare workers definitely can get this um,
Speaker 1: but I think it's certainly not everyone who is getting it.
Speaker 1: So I think we are approaching a time when it
Speaker 1: will be reasonably safe to return to a more normal existence,
Speaker 1: and I think we have to do that, not just economically,
Speaker 1: but psychologically. Yeah, it's interesting. I was talking to a
Speaker 1: long time New York City resident earlier today, has worked
Speaker 1: on Wall Street and its environ's for a long time,
Speaker 1: and she was saying, you know, one of the things
Speaker 1: I think we're all anticipating and I worry about. This
Speaker 1: is true, different people are going to make different choices
Speaker 1: and have different tolerances of risk, and yet we're all
Speaker 1: sort of out there together. And I do worry about
Speaker 1: sort of the social contract to some extent, almost breaking down.
Speaker 1: Not to be too dark about it, but you know,
Speaker 1: sort confrontations happening like literally in the streets of New
Speaker 1: York City, you know, over you know, one person choosing
Speaker 1: to wear a mask, another person not, someone standing too
Speaker 1: close Like those are the things that are hard to anticipate, right,
Speaker 1: all of these crises. I think of us opportunities to
Speaker 1: do good or to do bad. And I think we
Speaker 1: see those first responders who are volunteering, doctors colleagues volunteering
Speaker 1: to go to the hospital help sick people. And I
Speaker 1: think you've got people who take advantage and are looting
Speaker 1: or you know, breaking into stores or seeing this as
Speaker 1: an opportunity for crime. But I think at the end
Speaker 1: of the day, we need to appeal to people's better
Speaker 1: angels and UM appeal to them to uh have that
Speaker 1: social contract, be careful, try and protect other people, do
Speaker 1: good things, help other people, and part of that will
Speaker 1: be uh just being a little bit more careful. And
Speaker 1: I think I see people in the street wearing masks.
Speaker 1: Everyone is complying, and I think that should red it
Speaker 1: s risk. It's not going to eliminate risk. We cannot
Speaker 1: eliminate the risk to zero, no, right, Yeah. I do
Speaker 1: think it's amazing how quickly we've all gotten more comfortable.
Speaker 1: And I do look at someone who maybe doesn't have
Speaker 1: a mask, and I'm kind of like, wait a minute,
Speaker 1: you need to mask. Ian. Thank you as always, We
Speaker 1: really do appreciate all the time you give us and
Speaker 1: really kind of helping us filter through so many of
Speaker 1: the stories that are out there and making sense of it.
Speaker 1: Stay safe. Dr Ian LUs Beder, Clinical Associate Professor of
Speaker 1: medicine at the n y U Landgo Medical Center. Jason
Speaker 1: joining us once again on the phone from New York.
Speaker 1: You're listening to Bloomberg Business Week with Carol Masser and
Speaker 1: Jason Kelly on Bloomberg Radio. All right, we do want
Speaker 1: to get to our next guest, because one of the
Speaker 1: concerns throughout the pandemic has been the access to our
Speaker 1: food supply chain. So far, it seems to have work
Speaker 1: despite some empty shelves and limitations on purchases. But the
Speaker 1: shutting down of meat processing plants of our health concerns
Speaker 1: for work is that has definitely created another round of
Speaker 1: worry about shortages of meat supplies. In particular, let's get
Speaker 1: into that with stul Leendard Jr. The President CEO of
Speaker 1: STU Leonards. They have been around for more than forty years,
Speaker 1: uh and very well known for those of us who
Speaker 1: live in the New York metro area. Joining us on
Speaker 1: the phone from Norwalk, Connecticut's too nice to find you
Speaker 1: here with us, So tell me a little bit about
Speaker 1: thank you. Yeah. I just want to also mention I
Speaker 1: am on the front line along with our three thousand
Speaker 1: people at stud Leonards, and we've been out there every
Speaker 1: day in the public, trying to give our communities food
Speaker 1: all day. So I know your last guest just said
Speaker 1: he didn't know what it's like to be on the line.
Speaker 1: We know, and it's it's very demanding, uh, very demanding today.
Speaker 1: And I give our team at St. Leonards a huge,
Speaker 1: big pat on the back. I I totally agree that
Speaker 1: this situation has made us rethink who are those crucial workers?
Speaker 1: And and you know, I don't think we often have
Speaker 1: walked into supermarkets and thought of it that way, but
Speaker 1: I certainly have said I certainly feel that way right
Speaker 1: now because they have kept us, you know, really been
Speaker 1: taking care of us. And and that goes for your
Speaker 1: workers as well well, and especially given student sort of
Speaker 1: the number of people that are are coming in and out.
Speaker 1: And I count myself among a very happy, long time
Speaker 1: a Stud Leonards customer living here in Westchester. So it's
Speaker 1: certainly been the beneficiary. We do want to ask you about,
Speaker 1: you know, how Carol kicked off the conversation there about
Speaker 1: the supply chain, because I do wonder for you what
Speaker 1: does this look like on the front lines. Well, first
Speaker 1: of all, a nice thing about us is we deal
Speaker 1: with smaller, more family Farms. UM. Tyson closed their plant, huge, big,
Speaker 1: big plant is brobbly, three thousand people working at it,
Speaker 1: maybe more. We buy zero from Tyson, so that did
Speaker 1: not affect us at all. We are buying from the
Speaker 1: Amish chicken farmer in Pennsylvania. We got an egg farmer
Speaker 1: down in Pennsylvania. We get the uh fish right out
Speaker 1: of out of May from from small you know fishing
Speaker 1: boats go now. So we've been able to keep a
Speaker 1: constant flow coming into student leonards. And I've dealt with
Speaker 1: these people for twenty thirty years now, you know, our
Speaker 1: family business ourselves that they have assured me that they
Speaker 1: will supply us with the food that we need. And
Speaker 1: does that mean all kinds of food? I know we
Speaker 1: were talking about atle Bit in the newsroom. Um, you
Speaker 1: know that's you know, there's high end meat, there's organic beef,
Speaker 1: you know versus kind of regular stuff. I know you
Speaker 1: guys tend to play into the higher end. That's not
Speaker 1: you're not worried about that being um short and supply well,
Speaker 1: you know, we're doing the regular porter house stakes and everything.
Speaker 1: But people do want organic and they do want uh
Speaker 1: grats fed. That's those are big growing areas right now.
Speaker 1: We have not seen a limited supply of those right now.
Speaker 1: But like every business in America, the virus has affected everybody. Um.
Speaker 1: You know, the plants in the Midwest that are doing
Speaker 1: the meat, um, they're down like in their production. And
Speaker 1: a lot of that has to do with the virus.
Speaker 1: And the second thing that has to do with there's
Speaker 1: a lot of people that do not want to come
Speaker 1: to work right now. We have we give a thirty
Speaker 1: day unpaid sabbatical to our people to visit their families.
Speaker 1: We've have a hundred of people take advantage of that now.
Speaker 1: We never expected that to happen. Um. So we've been
Speaker 1: on a hiring blitz, you know, trying to hire butchers
Speaker 1: and chefs and and bakers right now. And it's tough
Speaker 1: because the unemployment benefits are so good, right absolutely. So
Speaker 1: you know, one thing, just go back to supply. And
Speaker 1: I want to talk about workers again in a second
Speaker 1: stew But on the supply front, I especially given your
Speaker 1: family and your long history in the dairy business, I
Speaker 1: do wonder about the dairy supply chain, uh to you know,
Speaker 1: looking beyond the beef and and the meat. You know,
Speaker 1: we've heard about you know, Farnest having to dump their
Speaker 1: milk and things like that. How does that get worked
Speaker 1: out in your estimation, Well, it's very sad, you know
Speaker 1: obviously everybody you know, especially in the dairy business, you
Speaker 1: have your your cows and they're producing milk every day.
Speaker 1: They don't know anything about COVID nineteen and all of
Speaker 1: a sudden, all all the school's closed and a lot
Speaker 1: of milk and into the school system. And so there's
Speaker 1: just not enough demand right now out there for all
Speaker 1: of this milk these cows are continually producing. So unfortunately,
Speaker 1: what do you do with extra milk? You can make
Speaker 1: butter and cheese out of it, but um, there's only
Speaker 1: so much of that you can do. Um. And and
Speaker 1: so you know, we have unfortunately breaks your heart because
Speaker 1: there's so many people that need food out there today
Speaker 1: have had they have had to dump some milk. I mean,
Speaker 1: that's that I have to say. And I understand it's
Speaker 1: not easy to get I guess from point A to
Speaker 1: point B and get all that excess food to people
Speaker 1: who need it. But I have to say, it just
Speaker 1: seems it just doesn't make sense, and and that we
Speaker 1: can't and that we can't figure out how to take
Speaker 1: that food and get it. We're you know, we're talking
Speaker 1: to a lot of chefs who you know, of course
Speaker 1: shut down their restaurants and they're creating, you know, meals
Speaker 1: to get out to communities where people have lost their
Speaker 1: jobs and they have no food. How come we can't
Speaker 1: figure this out? Uh? You know, you know what happens
Speaker 1: is is there you know a lot of these industries
Speaker 1: have to plan ahead, like you know, how many how
Speaker 1: many hogs are you going to have? You here? You know,
Speaker 1: they're they're feeding strawberries to some of the hogs right
Speaker 1: now because there's there's not enough demand for the They
Speaker 1: overproduced for strawberries. So what's happened with this COVID nineteen
Speaker 1: and the panic buying and it's just disrupted the entire
Speaker 1: um food chain and also what people are eating today.
Speaker 1: So you know, it's been very hard to manage and
Speaker 1: and everybody's doing better every day and we're getting it
Speaker 1: under control. But right now you're you're seeing some real
Speaker 1: blemishes in the system. I don't want to point fingers,
Speaker 1: because I know this was a truly black swan and
Speaker 1: nobody really had planned for. But could the government, the
Speaker 1: federal government have stepped in and created some better systems
Speaker 1: off the bat to kind of connect point A to
Speaker 1: point B, especially when it comes to the food system. Well,
Speaker 1: you know, that's the big question everybody has, and obviously
Speaker 1: Washington is debating that back and forth. But I would
Speaker 1: just say that we have been in the food business
Speaker 1: ourselves for fifty years, you know, and we've been through
Speaker 1: Hurricane Sandy eleven, you know, all different snowstorms, you know,
Speaker 1: right in the metro New York area here, and we
Speaker 1: couldn't have planned for anything like this. This just even
Speaker 1: all the planning we thought we had done, and we
Speaker 1: we've always handled these big things, we felt pretty well,
Speaker 1: but this was just above and beyond anything anybody I
Speaker 1: think could have forecasted. So Stu, you know, you guys
Speaker 1: have been at the forefront of a lot of things,
Speaker 1: and you know, our family at least really counseling you
Speaker 1: for a lot of the things you described, sort of
Speaker 1: the sourcing at local farms, and you know, you have
Speaker 1: delicious food that that you sell. And I do wonder,
Speaker 1: especially knowing your customer base like you do, how does
Speaker 1: your business change on on the other side of this.
Speaker 1: What are things that maybe you do less of you
Speaker 1: do more of, especially given you know you've managed through
Speaker 1: all of these other crises you and your family. What
Speaker 1: does this crisis change on the other side for you? Well,
Speaker 1: you know that is the crystal all question right there. Um,
Speaker 1: you know, what is retailing going to look like post
Speaker 1: COVID nineteen And I think one thing that we definitely
Speaker 1: have noticed is delivery. We used to deliver five of
Speaker 1: all our food to customers. Um, and now if you
Speaker 1: go into the score today there getting it delivered. And
Speaker 1: also curbside pick So the question is what's the stickiness
Speaker 1: of this? Where's it gonna land? Is gonna be ten
Speaker 1: percent percentage? You know that's definitely changed. The other thing
Speaker 1: is a lot of people are buying curbside. Now look
Speaker 1: at the restaurant business and and um, you know everybody's
Speaker 1: getting curbside pick up. I mean, what will the restaurant
Speaker 1: look like a lot of people may say, hey, we
Speaker 1: really like that that we could go and pick that up.
Speaker 1: So there's some things like that that are going to change.
Speaker 1: And as as far as the the products go, people
Speaker 1: are just buying what they normally bought, except more of it.
Speaker 1: Except for things like hand sanitizer, which we never carried
Speaker 1: before the store. We might have had some Furel, which
Speaker 1: you can't buy right now because it's just sold out.
Speaker 1: But hand sanitizer, I think is going to be an
Speaker 1: item that we will stock at Stu Leonards in the future,
Speaker 1: even I don't know. But masks, you know, everybody's wearing masks.
Speaker 1: I couldn't even imagine the day in my life where
Speaker 1: I walked in the store and saw everybody, our team members,
Speaker 1: in our customers while we're in masks. We have boxes
Speaker 1: of masks in the store right now. I never would
Speaker 1: have thought we'd sell up. Well that will people still
Speaker 1: want to wear masks post COVID nineteen. I don't know. Yeah, well,
Speaker 1: a lot of big questions, a lot of big questions.
Speaker 1: For sure, we're gonna leave it there. Thank you so much.
Speaker 1: Stu Leender Jr. The CEO of Stu Leonards. And as
Speaker 1: I say, as a customer, I can vouch for them.
Speaker 1: It's such a great place. It's one of those things
Speaker 1: like you go in and just the way it's laid out. Um,
Speaker 1: it's just like a local treasure in a lot of ways.
Speaker 1: So definitely enjoyed them over the years, and as he
Speaker 1: said rightly at the top. Those guys very much on
Speaker 1: the front lines, and certainly appreciate all the work they're doing.
Speaker 1: All right, you're listening to Bloomberg Business Week, and this
Speaker 1: is one of those conversations that I feel like it's
Speaker 1: gonna help us frame this crisis in a new and
Speaker 1: different and maybe more sophisticated and nuanced way. No pressure on.
Speaker 1: Kenneth Feinberg, attorney at the law Offices of Kenneth R. Feinberg,
Speaker 1: well known to our audience for working on so many
Speaker 1: of the biggest crises of our time, He joins us
Speaker 1: on the phone from Washington. Kenneth, great to have you
Speaker 1: with us, as always, glad to be on Thanks. All right,
Speaker 1: So where are we in this crisis? What is new
Speaker 1: and different about this global pandemic versus some of the
Speaker 1: major things you've worked on, be at tarp, be at
Speaker 1: nine eleven. I could go one and on. Well, of course,
Speaker 1: the isolation after nine eleven, the tragedy of nine eleven,
Speaker 1: the foreign terrorist attacked everybody, All citizens came together, very
Speaker 1: bipartisan way, social cohesion. After the BP oil spill in
Speaker 1: the Gulf of Mexico, the Obama administration came together with
Speaker 1: the American people immediately drafted a compensation plan of action.
Speaker 1: The trouble with the coronavirus and mother nature is that
Speaker 1: solutions involve isolation, and you don't have that social reinforcement
Speaker 1: that you would normally have after a most unfortunate tragedy.
Speaker 1: That makes this particularly difficult to cope with. Yeah, and
Speaker 1: to get to the other side of it. We have
Speaker 1: constantly kind of talked about this, you know, kind of
Speaker 1: objectiposition of different forces of wanting to get back to work,
Speaker 1: wanting to get back to normal, but we also also
Speaker 1: also want to be safe, and so I don't know,
Speaker 1: how do you see it? How do you see some
Speaker 1: of the programs that have been implemented, whether it's stimulus
Speaker 1: programs that kind of help us get to the other side. Well,
Speaker 1: first of all, in order to get to the other
Speaker 1: side with stimulus programs of any type, whether it's thousands
Speaker 1: of dollars or trillions of dollars, there are two critically
Speaker 1: important variables that I've learned about over the years. First,
Speaker 1: any resolution must be bipartisan. You cannot cope with the
Speaker 1: disaster like the coronavirus unless everyone comes together in an
Speaker 1: a political way, and to the credit of the Congress,
Speaker 1: the trillion dollar plus stimulus packages that have emanated from
Speaker 1: the Congress so far and from the Trump administration largely
Speaker 1: have been bipartisan and with a minimum amount of polarization
Speaker 1: and opposition. So that's good. But the second thing I've learned,
Speaker 1: often to my detriment, hard hard lessons learned, you better
Speaker 1: get the money out fast and efficiently. Because all the
Speaker 1: talk in the world slapping yourselves on the back about
Speaker 1: a great thing, this is if you don't deliver what
Speaker 1: is promised via by undercutting the expectation of the American people,
Speaker 1: the program is going to be tarnished and every bit
Speaker 1: more important than enactment of stimulus or enactment of any
Speaker 1: legislation however, bipartisan is that you get the money out,
Speaker 1: you get it out fast, and you get it to
Speaker 1: the right people, and expectations are met, and if they're not,
Speaker 1: you are laboring with a real, real obstacle. And so
Speaker 1: it does feel like Kenneth Feinberg that some things were
Speaker 1: done in haste in order to sort of get it out. Uh,
Speaker 1: mistakes were made. I think most people would concede. Uh.
Speaker 1: That point is that just to be expected given the
Speaker 1: velocity at which this happened, or were there things that
Speaker 1: could have been done and maybe can be done better
Speaker 1: in the future in order to ensure that it gets
Speaker 1: out and gets out in the right way these funds.
Speaker 1: Well that that's a tough question. On the one he
Speaker 1: and there's never been anything quite like this Corona biraus
Speaker 1: stimulus in the trillions. I mean, I can empathize and
Speaker 1: sympathize a little bit with administrators with responsibility for getting
Speaker 1: the money out, but that may be in mitigation, but
Speaker 1: it doesn't solve the problem because, um, it doesn't help
Speaker 1: if as an operational matter, whether it's the rollout of
Speaker 1: Obamacare or whether it's this or any other number of
Speaker 1: prob rims. If you if you tout a solution and
Speaker 1: then there are problems in delivery, in administration, in operations,
Speaker 1: so that the money is going slower or not going
Speaker 1: to the right people. That's a real problem that's got
Speaker 1: to be corrected fast, or uh, the citizen disapproval will
Speaker 1: simply grow. And it's not just disapproval, right, it's also
Speaker 1: just there are people out there that absolutely no safety net,
Speaker 1: and we're you know, we know these problems were out there, Kenneth,
Speaker 1: but I feel like the virus has certainly laid them
Speaker 1: there even more so. Um, And we really have left
Speaker 1: people out there in the cold. Oh. I think that's right,
Speaker 1: and it's it's what magnifies the problem, of course, is
Speaker 1: what we spoke about five minutes ago. People are out
Speaker 1: there in the cold alone. There's not a whole lot
Speaker 1: of social cohesion when it comes to the virus because
Speaker 1: you have to suffer basically in private, in an inn
Speaker 1: in isolation where you don't have that social reinforcement from friends, colleagues,
Speaker 1: fellow employees, etcetera. So I'm curious, have you reached out
Speaker 1: to the administration to maybe give them a hand, Have
Speaker 1: they reached out to you, Has anyone reached out to
Speaker 1: you to help in this process. I've received over the
Speaker 1: past few weeks a series of of calls from various
Speaker 1: members of Congress talking about whether or not, what lessons
Speaker 1: have been learned so far, should we do something like
Speaker 1: a coronavirus nine eleven type victim compensation fund to compensate
Speaker 1: victims of the virus, health providers, essential workers, victims, citizens.
Speaker 1: There's been some talk about that. There's been some talk
Speaker 1: about creating an alternative UH to liability for companies where
Speaker 1: you'll recall. During nine eleven, in order to protect the
Speaker 1: airlines and then be aligned manufacturers in the World Trade
Speaker 1: Center from lawsuits, there were a series of nine eleven
Speaker 1: compensation funds created where I administered funds voluntarily, voluntarily to
Speaker 1: anybody who took that nine eleven public money, UH. They
Speaker 1: had to promise not to litigate, not to go to court,
Speaker 1: And of course it worked smashingly the nine eleven fund.
Speaker 1: Seven percent of all the people that could have gone
Speaker 1: to court rather came into the fund voluntarily. I distributed
Speaker 1: over seven billion dollars of taxpayer money and lawsuits. There
Speaker 1: were only nine four lawsuits nationwide arising out of the
Speaker 1: nine eleven attacks. So that's another alternative, that is I
Speaker 1: assume being considered, but I don't know where the administration stands,
Speaker 1: and I don't know where the Congress stands. Those were
Speaker 1: just inquiries from Congressman, and without divulging your private conversations,
Speaker 1: I mean, what is your at least initial take on
Speaker 1: the idea of a compensation fund for health care workers.
Speaker 1: We got to be careful, you know, you you raise
Speaker 1: a very interesting issue think about it. Healthcare workers, Maybe
Speaker 1: a compensation fund for them because of their heroism uh
Speaker 1: In in dealing with the virus at whole local hospitals.
Speaker 1: Very good. Now, wait a minute, what about the policeman
Speaker 1: on the beat who contracts the virus helping people get
Speaker 1: to the hospital. What about the mailman? Ten mailman mail
Speaker 1: workers nationwide have died? What about the essential workers? Now
Speaker 1: in these food processing plants in Iowa, you open this
Speaker 1: up to a nine eleven type fund, and you immediately
Speaker 1: confront a very thorny public policy issue. Who's eligible? Who's
Speaker 1: eligible for this? Well, it's interesting you say that. It's interesting,
Speaker 1: is that, Kenneth, Because we just had a conversation earlier
Speaker 1: in the show with Stu Leonard. You know who runs
Speaker 1: Stu Leonards here in the in Tri state area. I'm
Speaker 1: sure you're familiar with it, and he essentially with saying,
Speaker 1: and rightly, I think very few would disagree with him.
Speaker 1: His workers, his grocery store workers, their front line. They're
Speaker 1: dealing with people every day, all sorts of people coming
Speaker 1: in and they are providing an essential service. So you
Speaker 1: open that up, you think about restaurant workers. We talked
Speaker 1: with Tom Calichio yesterday. I mean, you know, these are
Speaker 1: people who really could make a strong case. So you're
Speaker 1: exactly right. I mean, bad things happen to good people
Speaker 1: every day in this country. I remember during my administration
Speaker 1: of the nine eleven Fund, d you, Mr Fineberg, my
Speaker 1: son died in Oklahoma City in the terrorist attack committed
Speaker 1: by an American. We as my check. You better be careful.
Speaker 1: I'm not saying you can't do it, but you've better
Speaker 1: you know, you better think this through. Well that's a
Speaker 1: really good point, Kenneth, because some of the discussions we
Speaker 1: are having to especially when we talk about state bailout,
Speaker 1: city bailouts, you know, where do you draw the line,
Speaker 1: especially you know where there were or you know when
Speaker 1: you look at some of the industries. You know, the
Speaker 1: restaurant industry is a tough one from the get go,
Speaker 1: even when it's successful. You know, who do you help
Speaker 1: out when you're talking about stimulus or do you do
Speaker 1: blanket checks? Because you just got to protect our economy essentially,
Speaker 1: That's that's why we have elected officials making the judgment
Speaker 1: call with the understanding that the ballot box at the
Speaker 1: end of the day, it's the ballot box. That determines
Speaker 1: whether those public officials and Congress and state legislatures, the
Speaker 1: administration governors, mays, did they make the right call? And Uh,
Speaker 1: the nine eleven fund was exactly the right call made
Speaker 1: by the Bush administration bipartisans, supported by not only Senator
Speaker 1: Hegel of Nebraska, but Senator Kennedy and Congressman gibb Hot
Speaker 1: and um so just Senator Schumer. So, I mean you
Speaker 1: you had that type of consents us whether you can
Speaker 1: get back today and how you want to if you
Speaker 1: want to UM try and draft um a compensation program
Speaker 1: designed to minimize lawsuits and and and how broad you
Speaker 1: want to create that without making it impossible that those
Speaker 1: are very very difficult, challenging public policy issues to be
Speaker 1: resolved well, and what are the other issues? And we've
Speaker 1: sort of alluded to this a little bit, Uh, Kenneth Feinberg,
Speaker 1: is this notion of are you helping workers by help
Speaker 1: by bailing out or giving relief to a big company,
Speaker 1: a big airline, a big corporation, whether it's in the
Speaker 1: hospitality industry, transportation industry, or something else, or should you
Speaker 1: be going directly to the people, directly to the workers.
Speaker 1: How do you find that balance. Well, that's a very
Speaker 1: difficult balance. Now in Europe, as you know, they have
Speaker 1: largely gone in the direction of bailing out the come Benese,
Speaker 1: with the with the admonition, the requirement, the prescription that
Speaker 1: that bailout money be used to maintain as close to
Speaker 1: full employment as you can. Pass through the shareholders, no
Speaker 1: pass through for profits. It's more direct assistants designed to
Speaker 1: avoid unemployment compensation by keeping workers on the job. Now,
Speaker 1: in the stimulus package in the United States, it was
Speaker 1: really really the opposite. It seems that most of the
Speaker 1: money designed to help workers were in the form of
Speaker 1: unemployment supplementing existing unemployment compensation. UH. To what extent should
Speaker 1: any stimulus package that goes to airlines or to fortune
Speaker 1: five companies on a small businesses be required to use
Speaker 1: those funds to maintain employment so that you can stay
Speaker 1: in business? Again, tough policy choice. Absolutely, Well, we'd love
Speaker 1: to keep in touch with you on this. We always
Speaker 1: really value your expertise and your experience. No one literally
Speaker 1: has the experience you do in dealing with all of this.
Speaker 1: Kenneth Fineberg, attorney at the law offices of Kenneth our Fineberg,
Speaker 1: joining us on the phone. From Washington. He's seen it all, Carol.
Speaker 1: I mean he really has VP Deepwater Horizon, the Boston Marathon, bombing,
Speaker 1: Boeing's composition, a compensation for seven seven Max families. I mean,
Speaker 1: you're right, nobody has that experience. So a great person
Speaker 1: to check in with, bro journal. Yeah, but you let
Speaker 1: me drive. Oh no, no, no, no, drive home, honey, please,
Speaker 1: I'll do the right vel exples me. I want to drive,
Speaker 1: Just drive, baby questions trying this is the drive to
Speaker 1: the globe, long music, well run radio. All right, it's
Speaker 1: time to the try to drive to the closest time
Speaker 1: to the drive to because I don't it's it's just
Speaker 1: it's been one of those like we're headed toward it.
Speaker 1: Uh and and for good reason, because it's been quite
Speaker 1: a week. Let's get into it with Kara Murphy, Chief
Speaker 1: investment Officer Coleman Sex Personal Financial Management back with us
Speaker 1: on the phone from Dallas. Cara, it's been a while,
Speaker 1: have you been. I've been good. Thanks so much for
Speaker 1: having me. So what's going on down in Dallas? I mean,
Speaker 1: before we get into what's happening in the markets, you know,
Speaker 1: we're sort of in our little bubble in the Tri
Speaker 1: State area here as you know, and I know it
Speaker 1: looks a little bit different on the ground there in
Speaker 1: Texas and in Dallas. What do you make of this
Speaker 1: and what does it feel like? They're well, I will say,
Speaker 1: having lived in the New York area for twenty years, Um,
Speaker 1: I'm very grateful to live in Dallas. Yes, because we're
Speaker 1: not in the middle of the hot zone. We have
Speaker 1: a lot more space. It's been a beautiful spring. A
Speaker 1: lot of people are out walking. Um, but honestly, I've
Speaker 1: hardly left my street in six weeks, so I only
Speaker 1: know what's happening like within the three blocks around my house. Right.
Speaker 1: So you guys are sort of doing the same thing,
Speaker 1: sort of sheltering in place and you know, sort of
Speaker 1: abiding by all of those same things. Although it sounds
Speaker 1: like it may loosen up a little bit in Texas
Speaker 1: maybe this weekend, is that right, that's what they're telling us.
Speaker 1: So schools are you know, distance learning through the end
Speaker 1: of the school year, which ends earlier than for you
Speaker 1: folks on the East coast. Uh. Next week they're supposed
Speaker 1: to start loosening up, you know, with some people allowed
Speaker 1: back in movie theaters and restaurants, but quite honestly, I
Speaker 1: think us, like a lot of people are not in
Speaker 1: any rush to go back to crowded places. Yeah, well, well,
Speaker 1: you know, it's interesting to hear you say that, right,
Speaker 1: That's exactly I think the what we're hearing from a
Speaker 1: lot of folks that were not in a rush to
Speaker 1: to go back to all of those things because we're
Speaker 1: a little nervous. How does that impact potentially the investment
Speaker 1: environment in your view, in terms of what people do
Speaker 1: what they might not be doing on the other side
Speaker 1: of this. Yeah, So I think it's really important to
Speaker 1: be watching consumer behavior because a lot of people are
Speaker 1: sort of keen off of when will states start to
Speaker 1: open up. But then individuals have the choice about whether
Speaker 1: or not they go back to their regular lives. Um.
Speaker 1: And so we'll be watching very closely to see, you know,
Speaker 1: how much these consumers spending numbers rebound. I think there
Speaker 1: are other areas that are pretty clear are going to
Speaker 1: take longer, things like travel, like how comfortable that people
Speaker 1: are going to be getting back on a plane, going
Speaker 1: in a hotel. Um, certain things will bounce that quicker,
Speaker 1: you know. I think restaurants probably people will start to
Speaker 1: feel more comfortable, especially if they can sit outside. But
Speaker 1: it's going to be a big question. And I think
Speaker 1: that's where also you're going to see very big regional differences. Yeah,
Speaker 1: it certainly feels like that. I mean, we keep talking
Speaker 1: about sort of this checkerboard of the United States, and
Speaker 1: and as you rightly point out there at the top,
Speaker 1: you know, obviously it looks very different in Dallas than
Speaker 1: it does in New York, even with some of the
Speaker 1: same kind of human reactions day to day. So we
Speaker 1: obviously have more earnings to come. But and clearly a
Speaker 1: lot of what we're seeing from an earnings perspective doesn't
Speaker 1: bake in everything that we saw over the last month
Speaker 1: or so or months to six seven weeks. You know,
Speaker 1: where how do you sort of synthesize everything you've seen
Speaker 1: so far and what does it tell you about sort
Speaker 1: of the next quarter. Yeah, so you're right in that, UM,
Speaker 1: this earning season is really just giving us the very
Speaker 1: first peek under the hood in terms of what's been
Speaker 1: happening in the companies, because it's reflecting only that first
Speaker 1: month or so when coronavirus really started to hit. UM.
Speaker 1: But I think there are some lessons that we can glean.
Speaker 1: So one is sales are down fairly significantly, but earnings
Speaker 1: are down more, right, So that tells us that profit
Speaker 1: margins are being squeezed. All this happened so rapidly that
Speaker 1: companies didn't have time to really right size their expense
Speaker 1: base for the lower sales. So I think we'll see
Speaker 1: more of that in Q two. UM. I also think
Speaker 1: it's interesting to note that more than half of the
Speaker 1: earnings decline that we've seen so far is concentrated in
Speaker 1: energy and financials. And so this is where you know,
Speaker 1: we talked about regional differences, but there are really significant
Speaker 1: differences in different sectors in the market. Um. You know,
Speaker 1: Energy had its own kind of set of issues heading
Speaker 1: into this, with you know, some oversupply in that market.
Speaker 1: Then you throw on this dramatic decline in demand. Uh,
Speaker 1: there's some real challenging issues there. And then of course
Speaker 1: financials grappling with a much lower interest rate environment, potential
Speaker 1: credit issues. Um. But then as you start to look
Speaker 1: at at earnings outside of those two sectors, it looks
Speaker 1: um much better. Still not great, right, we know that
Speaker 1: more negative to come, but it is a tale of
Speaker 1: two areas. So were you suggesting to client, especially when
Speaker 1: after the market was beaten up and before the bounce back.
Speaker 1: Any suggestions in terms of, you know, committing new money
Speaker 1: UM or or were you being more cautious. I'm just
Speaker 1: curious about your thinking here. Yeah, so we've talked a
Speaker 1: lot about kind of UM. Number one, it's most important,
Speaker 1: I think to stick with your long term view. I
Speaker 1: know that's not exciting, UM, but that is what really
Speaker 1: sort of causes people to make good decisions UM. And
Speaker 1: when people were really feeling very anxious at the bottom
Speaker 1: and late March, UM, it was a lot easier to
Speaker 1: be able to talk about. But this is your financial plan,
Speaker 1: these are the objectives. You know, you're still on track
Speaker 1: to do that UM. So that's what that's like one
Speaker 1: part of the component that's most important. But then the
Speaker 1: second one is to be able to have a very
Speaker 1: structured rebalancing process, you know, whether you're averaging into the market.
Speaker 1: And so we really stuck with our process in terms
Speaker 1: of rebalancing UM and actually started to recommend that people
Speaker 1: re risk or at least consider rerisking if it was
Speaker 1: within their long term objective UM in late March early April,
Speaker 1: and took care of final question for you only got
Speaker 1: about a minute left. I mean, as you generalize or
Speaker 1: if you can't generalize the conversations you're having with your clients,
Speaker 1: knowing that people have different risk appetize, their further along
Speaker 1: in their career earlier. Um, how anxious are they? How
Speaker 1: worried are they about this market? Or did April sort
Speaker 1: of do its job in terms of making people feel
Speaker 1: a little bit better. I think by and large, our
Speaker 1: investors have been remarkably calm throughout this and it's been
Speaker 1: really amazing to see. UM. I think going forward, some
Speaker 1: of the common questions that we're getting are, you know,
Speaker 1: with this lower rate environment, where are we going to
Speaker 1: find heals? That's going to be a challenge. Um. And
Speaker 1: then of course there's also the long term concern. We
Speaker 1: have this massive fiscal stimulus package. How is everybody going
Speaker 1: to pay for it? Yeah? No, that's a really good
Speaker 1: question and when we probably need to be talking more
Speaker 1: and more about, especially if there's more stimulus to come,
Speaker 1: because it is eye popping when you look at all
Speaker 1: those figures. All right. Kara Murphy, chief investment officer for
Speaker 1: Goldman Sachs Personal Financial Management Joinning, is on the phone
Speaker 1: from Dallas. Also should point out proud graduate of Georgetown University.
Speaker 1: Knew I was going to get that in there. I
Speaker 1: was gonna say shocking. Now the good stuffs listen, I
Speaker 1: get it. Thanks for listening to Bloomberg Business Week. You
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Speaker 1: dot com. You can also listen to our radio show
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