Speaker 1: Welcome to the Bloomberg Penl Podcast. I'm Paul swing you
Speaker 1: along with my co host Lisa Brahmas. Each day we
Speaker 1: bring you the most noteworthy and useful interviews for you
Speaker 1: and your money, whether at the grocery store or the
Speaker 1: trading floor. Find a Bloomberg Penl podcast on Apple podcast
Speaker 1: or wherever you listen to podcasts, as well as that
Speaker 1: Bloomberg dot com. I am so excited for this next
Speaker 1: next conversation because there has been one economist who has
Speaker 1: uniquely been focused on the consumer, on the health of
Speaker 1: the balance sheets of Americans for frankly years, and now
Speaker 1: his research is all that much more poignant. Torsten Slock,
Speaker 1: Deutsche Bank chief economists joining us now and Torsten, you
Speaker 1: sent out a chart this morning that was pretty stark.
Speaker 1: It was global discretionary consumer spending a one percent decline
Speaker 1: in two weeks. Can you give us a sense towards
Speaker 1: and of what we have seen so far in terms
Speaker 1: of the economic impact and what it might say if
Speaker 1: you extrapolate it further given the all the closures and
Speaker 1: shut down to the way of the coronavirus. Yeah, I mean,
Speaker 1: the unfortunate thing is that we went into this with
Speaker 1: the liquacy rates and consumer loans already going up. We
Speaker 1: have seen a particularly auto loans the liquacy rates go
Speaker 1: up for several years. This has to do with loans
Speaker 1: were given to people who unfortunately were not able to
Speaker 1: pay their auto loans on time, so that meant that
Speaker 1: the dilquaty rate had already been slowly moving higher on
Speaker 1: a number of different consumer loans. So this of course
Speaker 1: is now the backdrop for the chart that I sent
Speaker 1: out that you're mentioning exactly that we're beginning to see
Speaker 1: quite a significant drop off in discrestionary spending. And this
Speaker 1: resonary spending basically means everything from cars to washers and dryers,
Speaker 1: to furniture to electronics, things that normally require financing or
Speaker 1: things that are normally bigger purchases. The nuance, of course
Speaker 1: is that with many people working at home, you could
Speaker 1: expect to see some categories of consumer durable goods, meaning
Speaker 1: electronics and computers and other things that could be doing better.
Speaker 1: But adaly speaking, this chart specifically showed for restaurants. We
Speaker 1: have seen and this is more on the anecdotal side,
Speaker 1: but we've seen a number of indicators begin to show
Speaker 1: that the unfortunately, the global consumer and this is not
Speaker 1: only a US phenomenon, The global consumer is importively stepping
Speaker 1: pretty hard on the brakes when it comes to discursion
Speaker 1: or spending, and that is of course not particularly good
Speaker 1: news when you think about the overall picture for the
Speaker 1: global economy. So Torsen. Over the weekend, we've seen a
Speaker 1: lot of forecasts come out economic forecast about US economic
Speaker 1: impact with obviously a significant contraction in the second quarter,
Speaker 1: but most of them have a pretty swift rebound INCUS
Speaker 1: three and four, suggesting a little bit of the type
Speaker 1: of scenario where do you come out on what the
Speaker 1: economic impact could be here? Yeah, this is afterlutely critical,
Speaker 1: and this is also critical for markets. I mean, what
Speaker 1: will the other leg of this v or even whatever,
Speaker 1: If it will be a you, what will that look like?
Speaker 1: The fear we have is that it will be a
Speaker 1: muted rebound. And the muted aspect comes essentially from the
Speaker 1: fact that once we are on the other side of
Speaker 1: the virus, if there are fears that the virus is
Speaker 1: not quite defeated everywhere in the world, if they're fears
Speaker 1: that some countries still have it, if there fears that
Speaker 1: it might still be in some emerging markets. Then you
Speaker 1: do begin to wonder but one of them. The implications
Speaker 1: of course also for travel, not only traveled globally, but
Speaker 1: even travel domestically. What are the implications in terms of
Speaker 1: how people think about what the longer term planning is
Speaker 1: in terms of vacations, the longer term planning in terms
Speaker 1: of businesses doing things. So the reason why the reason
Speaker 1: to be somewhat cautious about the second leg of the
Speaker 1: v or the leg and the second leg of the
Speaker 1: move higher is that we will probably come out more
Speaker 1: scarred as consumers on the other side, and corporates will
Speaker 1: quite frank. We probably also come up most card where
Speaker 1: everyone will have higher stavings and you, as you know
Speaker 1: too well, if you have higher stavings, that means that
Speaker 1: consumption will also be muted. If you have higher savings.
Speaker 1: For corporates, that also means that cap expending is also
Speaker 1: going to be muted. So the risks are that the
Speaker 1: rebound here is going to be more nuded and more
Speaker 1: limited relative to the speed with which we are folding.
Speaker 1: At the moment we're speaking with Torsten Slock, you economist
Speaker 1: at Deutsche Bank, and Torsten You've done a lot of
Speaker 1: work about the fact that a lot of American households
Speaker 1: don't have an extra four hundred dollars to cover emergency expenses.
Speaker 1: You've also talked about how the lower wage workers are
Speaker 1: going to get harder hit by the disruptions caused by
Speaker 1: the coronavirus. And I'm just wondering going forward, do you
Speaker 1: have a sense of whether the fiscal stimulus currently being
Speaker 1: bandied about in Washington, d C. Adequately gets money to
Speaker 1: the people who would need it in order to continue
Speaker 1: their lifestyles and at least cushion the blow a little
Speaker 1: bit to get back to the kind of recovery that
Speaker 1: you're looking for hoping for on the other side of this. Yeah,
Speaker 1: this is absolutely a key question from a follcastic perspective,
Speaker 1: both of the economy and for markets. The problem is,
Speaker 1: as you know, and as you just mentioned that you
Speaker 1: look at the fit data about of the population would
Speaker 1: not be able to come up with four hundred dollars
Speaker 1: if they had an emergency expense. Data from two thousand
Speaker 1: nineteen shows that a roughly half of US households don't
Speaker 1: have an emergency savings account, and that means that they
Speaker 1: don't have a savings account with money put aside if
Speaker 1: there is some unexpected expenses. And if you also look
Speaker 1: at the distribution of this, it is distributed more among
Speaker 1: lower income households. And if you also then look at
Speaker 1: the issues in terms of age distribution, it is also
Speaker 1: distributed more in terms of the younger people and the
Speaker 1: younger generations who don't have savings. So it will certainly
Speaker 1: have a significant impact distributional terms on the consumer. What
Speaker 1: we're going through here, and to your question about the
Speaker 1: package that's being discussed, we need to see exactly how
Speaker 1: the design is as you cover so well, this is
Speaker 1: still being debated, but it is pretty clear that they're
Speaker 1: from a market perspective for every day then we don't
Speaker 1: get a solution, then there is a risk that this
Speaker 1: will be a deeper slowdown simply because something is needed
Speaker 1: right now. And if you go back and look at
Speaker 1: what happened in two thousand nine, then when the Congress
Speaker 1: voted on sending checks out to consumers, it took two
Speaker 1: months from the bill was voted on until the checks
Speaker 1: actually arrived, and two months forward from today. That brings
Speaker 1: you too late may that's a very very long period
Speaker 1: for consumers while they still have to pay their bills
Speaker 1: on their rent, the mobile phones, the groceries, everything that's
Speaker 1: going on. And that's why the discretionary spending does get
Speaker 1: a bit lower priority in that scale of things. Is
Speaker 1: it already too late? I wouldn't say it's too late,
Speaker 1: but I mean, as as we all know, and if
Speaker 1: you take the statistic into account that they have, the
Speaker 1: US households really only had their checking account and the
Speaker 1: money that they had in that. And if you are
Speaker 1: so unfortunate that you lost your job through this, and
Speaker 1: you so unfortunately you don't have any savings, I mean,
Speaker 1: we have a rent payment coming off here and April
Speaker 1: the first, and maybe we'll be able to get through that.
Speaker 1: But the longer that we had to go through rent
Speaker 1: payments and payments and mobile phones, the more the more
Speaker 1: cautious and more hesitant and reluctant the US continuers probably get.
Speaker 1: So that's why the more confidence how US households and
Speaker 1: markets can get that package is coming in. It's coming sooner,
Speaker 1: run and later. I do think that that will be
Speaker 1: very sumportive, of course importantly for markets, but most importantly
Speaker 1: ultimately for the US economy. Torsten slack. Thanks so much
Speaker 1: for joining us. We really appreciate your perspective. Torsten slock Is,
Speaker 1: Deutsche Banks chief Economists. Well, certainly the news of the
Speaker 1: morning is the Federal Reserve unvailing unlimited quantitative easing to
Speaker 1: aid for businesses and states. To get some details, we
Speaker 1: welcome our good friend Michael McKee, international economics and policy
Speaker 1: correspondent for Bloomberg. Mike, thanks so much for joining us.
Speaker 1: What are the salient details here of what the Fed
Speaker 1: announced this morning. I think the most important is the
Speaker 1: unlimited que and the fact that they're starting this week
Speaker 1: by basically doing that six billion dollars in treasuries in
Speaker 1: mortgage securities every day this week. That dwarfs anything we
Speaker 1: saw during the quee one, two and three period, so
Speaker 1: they are going all in on that. And then the
Speaker 1: fact that they're buying corporate bonds. Now they're setting up
Speaker 1: a special purpose vehicle. The idea is keep these things
Speaker 1: off the FEDS books. Technically they're not allowed to buy
Speaker 1: corporate paper, so by setting up a special purpose vehicle
Speaker 1: they can sort of get around that. And you mentioned
Speaker 1: that the FED is is putting up for this. It's
Speaker 1: also the Treasury Department in the corporate bond programs and
Speaker 1: the asset back program. The Treasury is taking an equity
Speaker 1: stake in that as well, so they're working together on that.
Speaker 1: And one important thing to keep in mind is that
Speaker 1: if the stimulus bill puts more money into the Exchange
Speaker 1: Stabilization Fund at the Treasury, as it's sort of scheduled
Speaker 1: to do, they can ramp these up even farther and
Speaker 1: by even greater amounts. So the FED and Treasury working
Speaker 1: together to do as much as they can to try
Speaker 1: to take some of the pressure off in the markets.
Speaker 1: So the feders are really sort of reinstating some of
Speaker 1: the crisis era programs. The program you were talking about
Speaker 1: is telf right the term Asset BacT Securities Loan Facility
Speaker 1: that they're reinstating, and basically, uh, the idea here is
Speaker 1: to create a way to lever up to free up
Speaker 1: cash based on existing loans and securities that are held
Speaker 1: on dealers and investors balance sheet. I'm trying to understand
Speaker 1: the credit risk that the FED is taking on here. Yes,
Speaker 1: this is providing more cash to the system. Are they
Speaker 1: also essentially bearing the credit risk for these instruments too? Well?
Speaker 1: The special purpose vehicle will at least for the corporate
Speaker 1: bonds bear the credit risk. They are insisting that what
Speaker 1: you can put up is got to be investment grade,
Speaker 1: but they're going down to triple B minus, so they're
Speaker 1: they're willing to take, um, you know, some risk that
Speaker 1: some of this stuff may fall if the corporation is
Speaker 1: ultimately downgraded then um the TALF program is triple A
Speaker 1: rated assets, so they're taking as little credit risk as possible.
Speaker 1: They have a requirement in the new Dodd Frank law
Speaker 1: that they can't lose money. Basically, they can't put financing
Speaker 1: at risk. So they can only go so far with that,
Speaker 1: and that's one of the reasons you have the Treasury
Speaker 1: involved in this taking the first trunch of risk. Hey, Mike.
Speaker 1: In terms of scope at scale, how does this action
Speaker 1: compared to two eight? They've gone beyond uh, two thou
Speaker 1: eight and in two ways, one in size there are
Speaker 1: more programs now buying more things, and also in speed.
Speaker 1: There has since two thousand eight been a doctrine sort
Speaker 1: of developed an economics called optimal control, which is a
Speaker 1: nur the term for go big, go fast. When you're
Speaker 1: facing a crisis, throw everything you've got at it as
Speaker 1: quickly as possible to get ahead of it, and don't
Speaker 1: chase it down the market, you know, don't chase the
Speaker 1: market down. And so that's what they seem to be
Speaker 1: applying here. They seem to be all in on that
Speaker 1: if we do everything we can now, it will put
Speaker 1: a floor onto the markets. Obviously, the floor is going
Speaker 1: to depend on what your outlook is in the markets
Speaker 1: for how long this is going to go on, But
Speaker 1: the FAN is signaling it's going to do everything possible
Speaker 1: is out. Does it have anything left? Uh, it doesn't
Speaker 1: have a whole lot left unless it could take on
Speaker 1: more credit risk. I'm not sure what else they could buy.
Speaker 1: They're pretty much buying every asset except equities, which they're
Speaker 1: legally over here. If they want it, they could have it.
Speaker 1: They come get it. Yeah, we'll have a flea market sale.
Speaker 1: They can buy that. But the Fan is doing everything
Speaker 1: they can do now. There. They did mention that they're
Speaker 1: going to set up a main street lending program, but
Speaker 1: we don't have any details on that. It does seem
Speaker 1: to be tied to whatever comes out of Capitol Hill,
Speaker 1: and we'll see how that works. There was some thought
Speaker 1: at the FED that they didn't really want to be
Speaker 1: in the position of being the lender to main Street
Speaker 1: because they don't have the bureaucratic set up to do it.
Speaker 1: That banks would be better off doing that, and banks
Speaker 1: could be funded directly through the fiscal program. But it
Speaker 1: may be that the Fed is going to have a
Speaker 1: role here. Michael McKee, thank you so much for for
Speaker 1: breaking it down for us, and we'll continue to get
Speaker 1: details and we'll bring them to you, but definitely throwing
Speaker 1: the kitchen sink at it. The Federals are trying to
Speaker 1: cut out ahead of what will inevitably be a really
Speaker 1: difficult time in the economy. Michael McKee, International Economics and
Speaker 1: Policy correspondent for Bloomberg. Really amazing the speed and the
Speaker 1: scope to which they are acting. Perhaps they learned from
Speaker 1: the last time around. It does not help anything to
Speaker 1: be slow, certainly when Congress is not passing their bill
Speaker 1: in the fashion that everybody would like. Let's bring out
Speaker 1: our good friend, Kid Jukes, Global ffex Strategist for Society
Speaker 1: is General kit Thanks so much for joining us. We
Speaker 1: know you're busy talking with your clients, keeping in touch
Speaker 1: with the market. Give us a sense of you know,
Speaker 1: We've seen the dollar, the d X, Y and next
Speaker 1: just rallies so dramatically over the last couple of weeks.
Speaker 1: What's your sense about kind of the currency markets right here? Um,
Speaker 1: that they're comments today than they've been, which doesn't mean
Speaker 1: they calm um you, last week was a mad scramble
Speaker 1: for for dollars. We know, we know the dollars the
Speaker 1: world's global currency. We know there's a lot of folks
Speaker 1: who have dollar assets that they financed with short term
Speaker 1: dollar liabilities. Whether they're boring and lending dollars from Americans
Speaker 1: or not, doesn't matter. They need them, and they needed
Speaker 1: them immediately. That the FED has, you know, along with
Speaker 1: Pizza's mother in law's as Incinc. Whoever think he had
Speaker 1: involved in this particular exercise, that they were very quick
Speaker 1: to expand the group of central banks that they do
Speaker 1: swap arrangements with to get more dollars more widely into
Speaker 1: the system. They seem to have calmed down the domestic
Speaker 1: front end of the money market. Um, but it's a
Speaker 1: huge problem. So so on any given day we look
Speaker 1: at it and you know, I couldn't promise you that
Speaker 1: we wouldn't start feeling dollars tight again later this evening,
Speaker 1: you know, before I go home. But but today, um,
Speaker 1: as the FED has ramped up yet again. You know
Speaker 1: that the dollar is a little bit lower against something
Speaker 1: against the euro and the and the end the currencies
Speaker 1: that are still it's a lot weaker by the way,
Speaker 1: against things like you know, the Norwegian chrona for example,
Speaker 1: which is sort of getting itself out of gael But
Speaker 1: it's it's still um. The weakest currencies are sort of
Speaker 1: half related to that, which are the ones which are
Speaker 1: um most all sensitive. So some of the emerging market
Speaker 1: currencies a week week, generally the oil sensitive currencies, um,
Speaker 1: they have you know, they have a whole problem of
Speaker 1: their own really with the collapse and in all prices
Speaker 1: gave them this kind of unique double wemmy. But but
Speaker 1: the FED is doing a fantastic job of of of
Speaker 1: doing more than the ECB did when they did whatever
Speaker 1: it takes. If if everything is bigger than that, then
Speaker 1: then then this is where we are, and it could
Speaker 1: I think most of the people who I was speaking
Speaker 1: with over the weekend agreed with you, but they still
Speaker 1: felt rather catastrophic. And I'm wondering from your perspective, there
Speaker 1: is a feeling out there a very big fear that
Speaker 1: all of the borrowing, the leverage that was built into
Speaker 1: the system, with especially emerging markets borrowing in dollars and
Speaker 1: corporates around the world just borrowing as much as they
Speaker 1: could do things like you know, share buy backs and
Speaker 1: pay out dividends, that the FED can't stop this, and
Speaker 1: that possibly fiscal stimulus can't either, and the system just
Speaker 1: needs to kind of exhaust itself before people can really
Speaker 1: start to reassess the damage. Do you think there's any
Speaker 1: credence to that view. I'm worried about that being true,
Speaker 1: and I think central banks can can get to gross
Speaker 1: with this that you know, I mean, there's a there's
Speaker 1: a problem that comes later, which is that if you know,
Speaker 1: if if if the if. Corporate America for example, has
Speaker 1: re levied itself since the financial crisis, so there's even
Speaker 1: more leverage than there was last time. Um. Is it
Speaker 1: great that we all get sorted out with infinite, infinite
Speaker 1: free short term money to make everything okay? Um? You
Speaker 1: know we we we do actually have to clean the
Speaker 1: system out, so but but I don't think we need
Speaker 1: to clean this out in the middle of a human crisis.
Speaker 1: Thanks that's not a useful piece. So I do think
Speaker 1: that we will that we will get through. But but
Speaker 1: you're right, it's enormous, you know. I mean again over
Speaker 1: the weekend, you know, the kind of the charts that
Speaker 1: were being floated around. We're all armageddon ones in terms
Speaker 1: of how bad some of these things. Outflows from outflows
Speaker 1: from bond funds, from ets, the weakness that we were
Speaker 1: seeing in things, and um, what what I what I
Speaker 1: think though, if there's a chromos comfort is that what
Speaker 1: we've learned over several cycles now it is to to
Speaker 1: go in large, not worry about inflation um and society
Speaker 1: up later, but but go in and really make sure
Speaker 1: that the financial system doesn't make the economic problems and
Speaker 1: the real life problems worse than they have to be already.
Speaker 1: I think they'll succeed. But I am not anising other
Speaker 1: than anxiously staring at screens all like the rest of us. Yeah,
Speaker 1: Kit Jukes, thanks so much for joining us. We really
Speaker 1: appreciate you taking some time out of your busy day.
Speaker 1: Kit Jukes, global effects strategist for Society General, joining us
Speaker 1: on the phone again. The d X Y index off
Speaker 1: a little bit less than one percent but has been
Speaker 1: so strong over the past couple of weeks, Lisa, as
Speaker 1: investors just flocked to the you know that the US dollar, Yeah,
Speaker 1: you know. Frankly, I'm getting a little bit of confidence
Speaker 1: today that gold is up, it spot world is up
Speaker 1: because there was a fear last week that everything was broken,
Speaker 1: with bond yields rising and gold prices falling in this
Speaker 1: idea that you could just sell whatever you can and
Speaker 1: there wasn't really a bid for anything other than cash
Speaker 1: or dollars on the other side of it, And there
Speaker 1: does feel like there is a different tone today. The
Speaker 1: question is whether it'll be enough to really lubricate the
Speaker 1: system and get people to have conviction going into risk
Speaker 1: your credit at a time of a really uncertain economic backdrop.
Speaker 1: There's a question, Paul. A lot of people, particularly wealthier individuals,
Speaker 1: had been getting rather cautious in the months leading up
Speaker 1: to the coronavirus induced disruption that we've seen recently. There
Speaker 1: is a question of how they got cautious moving more
Speaker 1: into real estate, whether they have the cash to actually
Speaker 1: start deploying it, and whether they're starting to get perhaps
Speaker 1: a little bit more I don't want to say bullish,
Speaker 1: but starting to pick over some of the rubble in
Speaker 1: amid this sell off. Joining us now as someone with
Speaker 1: a very unique an important perspective on this, Michael Sonnenfeldt,
Speaker 1: chairman and founder of Tiger twenty one. It's a pure
Speaker 1: organization of ultra wealthy individuals that come together and share
Speaker 1: their investing strategies and views. Has seven members more than
Speaker 1: seventies seven billion dollars in assets. Michael, I remember last
Speaker 1: time we spoke with you, you were talking about how
Speaker 1: there is an increasing focus on real estate. Can you
Speaker 1: give us a sense of how some of the members
Speaker 1: of of of of your organization or position heading into
Speaker 1: this and what they're talking about right now? Sure, well,
Speaker 1: everybody is obviously sucked into their homes and gone through
Speaker 1: a transformation of being virtual, so that's new for everybody.
Speaker 1: Going into this are members which are not just wealthy,
Speaker 1: their entrepreneurs. It's a subset of people with certain levels
Speaker 1: of wealth, but because of entrepreneurs that allows them to
Speaker 1: think about this quite differently. And for the last year
Speaker 1: people been getting nervous about the market. But of course
Speaker 1: nobody could have anticipated the coronavirus, nor the Russia uh
Speaker 1: Saudi Arabia oil debacle. It's sort of like having a
Speaker 1: tsunami and an earthquake at the same time. So will
Speaker 1: While real estate has remained tops for our members at
Speaker 1: about of assets, it's actually come down as well. They
Speaker 1: had taken chips off the table over the last year
Speaker 1: and maintain very strong cash reserves at twelve percent so
Speaker 1: that they're not forced to sell at a bottom like this,
Speaker 1: but have enough living expenses so that they can power
Speaker 1: through or survive to the best of ability. But obviously
Speaker 1: there's a lot of devastation all around. Michael, what are
Speaker 1: your clients thinking here as to you know, kind of
Speaker 1: the duration here? Are they thinking kind of police's question,
Speaker 1: maybe time to maybe look at certain names or certain
Speaker 1: asset classes. Are they take any boy, this could be
Speaker 1: a much longer, lower for longer type scenario. So I
Speaker 1: don't think there's any one view. It's a collection of views.
Speaker 1: And our members who are typically in groups that meet
Speaker 1: in person now are meeting virtually. We've shifted the organization
Speaker 1: completely to virtual meetings on a dime, so to speak.
Speaker 1: Um and obviously some members are looking for opportunities. A
Speaker 1: number of us traded shorts at the first sign of
Speaker 1: coronavirus of the market, and that trade has turned out
Speaker 1: to be very good. But you almost in most cases
Speaker 1: the profits from those shorts has simply offset the clins
Speaker 1: in the portfolio because you can't liquidate private equity and
Speaker 1: real estate in a month, and that's where we have
Speaker 1: a large concentration. But as to timing, I think everybody
Speaker 1: understands this is this is totally unique and the the
Speaker 1: medical issues, the health issues are likely to peak within
Speaker 1: three to six months, as has happened everywhere else. But
Speaker 1: when you have the kind of economic dislocation, the question
Speaker 1: is how long will it take for the economy to
Speaker 1: bounce back? And the only insight that we have is
Speaker 1: typically it takes less time. Most people say ten years.
Speaker 1: This could be returned in two to three years, but
Speaker 1: it's not going to be in six months. Michael, I
Speaker 1: want to go to your point about the real estate investments,
Speaker 1: that there were some chips taken off the table ahead
Speaker 1: of this, but that still was uh a significant holding
Speaker 1: or the biggest holding of your members. Tom Barrick, real
Speaker 1: estate investor, said in a Bloomberg Television interview that the
Speaker 1: U s commercial mortgage market is on the brink of collapse,
Speaker 1: the predicted a domino effective catastrophic economic consequences if the
Speaker 1: industry isn't basically back stopped by the government. I'm wondering
Speaker 1: whether any of your members are I guess in technical parlance,
Speaker 1: freaking out right now and trying to liquidate as much
Speaker 1: of their holdings as they can, uh in the face
Speaker 1: of what could be even more pain. Yeah, So you
Speaker 1: have to distinguish between the equity the real estate equity
Speaker 1: market and which is not a liquid market other than
Speaker 1: if you own it through reeds, and the commercial credit market,
Speaker 1: where there is more liquidity. Most of our members real
Speaker 1: estate exposure is in owning buildings directly or through private
Speaker 1: partnerships limited partnerships. And you know perfect example is, UH,
Speaker 1: my partner and I developed a Coals department store, meaning
Speaker 1: we own the land and Coals built their own building
Speaker 1: on the land. That was a rock solid triple net lease.
Speaker 1: But right now, UH, Coals is shut at their doors.
Speaker 1: They have no revenue, so they're not going to pay
Speaker 1: their rent and if they not, they haven't stopped yet.
Speaker 1: But if they don't pay their rent, then how do
Speaker 1: you pay the mortgage? And so you have this cascading
Speaker 1: effect So what Tom is talking about is unless there's
Speaker 1: help for the rent payers, you'll have this cascading effect
Speaker 1: that the landlords can't make their debt payments, and that's
Speaker 1: where all hell breaks loose. So Michael, just real quickly,
Speaker 1: what do your members think the government needs to do here?
Speaker 1: The government first of all needs to act decisively. Members,
Speaker 1: I think largely expect a bail out, uh, and they
Speaker 1: really would like to kind of leadership nationally that is
Speaker 1: calming that we've seen from FDR as an example during
Speaker 1: the war. And hats off to Governor Cuomo who seems
Speaker 1: to have really taken the lead in the kind of
Speaker 1: communications and straight talk that is calming to people. Uh.
Speaker 1: People really would like to see a steady hand and
Speaker 1: an optimistic but realistic assessment about how to get through this.
Speaker 1: Michael Son and felt, thanks so much for joining us.
Speaker 1: We always appreciate your unique opinion on investing across a
Speaker 1: whole series of asset classes. Michael Son and fell as
Speaker 1: a chairman of Tiger twenty one with a unique group
Speaker 1: of investors, Ultra high net worth investors tend to have
Speaker 1: some unique ways to look at the markets. Thanks for
Speaker 1: listening to the Bloomberg P and L podcast. You can
Speaker 1: subscribe and listen to interviews at Apple Podcasts or whatever
Speaker 1: podcast platform you prefer. I'm Paul Sweeney. I'm on Twitter
Speaker 1: at pt Sweeney. I'm Lisa Abram Boyd's I'm on Twitter
Speaker 1: at Lisa A. Bram Woyds One. Before the podcast, you
Speaker 1: can always catch us worldwide. I'm Bloomberg Radio