1 00:00:09,880 --> 00:00:13,800 Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene Jay Lee. 2 00:00:13,960 --> 00:00:17,560 Speaker 1: We bring you insight from the best in economics, finance, investment, 3 00:00:18,000 --> 00:00:23,520 Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 4 00:00:23,600 --> 00:00:27,440 Speaker 1: Bloomberg dot Com, and of course on the Bloomberg. I'm 5 00:00:27,440 --> 00:00:29,800 Speaker 1: pleased to say that we can join Lori Calvasina now 6 00:00:29,840 --> 00:00:33,080 Speaker 1: obviously Counital Markets head of US equity Strategy, Laurie. Great 7 00:00:33,120 --> 00:00:35,479 Speaker 1: to get you on this program. As always trying to 8 00:00:35,520 --> 00:00:37,360 Speaker 1: gage a couple of things in this market and one 9 00:00:37,400 --> 00:00:40,040 Speaker 1: thing you can readly help us with today is sentiment. 10 00:00:40,320 --> 00:00:44,320 Speaker 1: How washed out is sentiment at the moment. Well, unfortunately, 11 00:00:44,320 --> 00:00:46,400 Speaker 1: I don't think it's washed out enough. John Um. We 12 00:00:46,479 --> 00:00:49,280 Speaker 1: actually just released our investor survey this morning that we 13 00:00:49,320 --> 00:00:51,639 Speaker 1: do every quarter, and that we we ran this from 14 00:00:51,640 --> 00:00:54,720 Speaker 1: March thirty one, so it's pretty pretty fresh, as fresh 15 00:00:54,760 --> 00:00:57,680 Speaker 1: as we can get. We actually were stunned to see 16 00:00:57,680 --> 00:01:00,480 Speaker 1: that those describing themselves as bullish are very a bullish 17 00:01:00,560 --> 00:01:04,000 Speaker 1: rose from in December to fifty eight percent in March. 18 00:01:04,040 --> 00:01:05,960 Speaker 1: Now that's on a six to twelve month time frame. 19 00:01:06,240 --> 00:01:08,240 Speaker 1: But what's really stunning about it is that it's the 20 00:01:08,280 --> 00:01:10,520 Speaker 1: highest we've seen since we started our survey in the 21 00:01:10,520 --> 00:01:13,320 Speaker 1: first quarter of and it's the exact opposite of what 22 00:01:13,400 --> 00:01:16,280 Speaker 1: happened back in December when we saw the bear spike 23 00:01:16,319 --> 00:01:19,080 Speaker 1: and the bullsese back. So, you know, I've talked to 24 00:01:19,120 --> 00:01:21,080 Speaker 1: a lot of investors who are you know, running down 25 00:01:21,120 --> 00:01:23,120 Speaker 1: their shopping lists with me talking about how this is 26 00:01:23,120 --> 00:01:26,120 Speaker 1: a buying opportunity um. And we saw that in the 27 00:01:26,160 --> 00:01:28,679 Speaker 1: survey results that I just don't think people are barish enough, 28 00:01:28,920 --> 00:01:32,000 Speaker 1: all right, So walk us through the idea of why 29 00:01:32,040 --> 00:01:34,880 Speaker 1: they should be more bearished given the fact that the 30 00:01:35,000 --> 00:01:37,760 Speaker 1: US government that frankly governments around the world are pouring 31 00:01:37,800 --> 00:01:39,959 Speaker 1: money into the economy to try to sustain it, and 32 00:01:40,000 --> 00:01:43,720 Speaker 1: then beyond with the potential infrastructure program, isn't that enough 33 00:01:43,760 --> 00:01:46,480 Speaker 1: to get things back on track and get these valuations 34 00:01:46,520 --> 00:01:48,960 Speaker 1: to look better to you? Well, you know, one thing 35 00:01:49,000 --> 00:01:51,200 Speaker 1: we saw was that there is clear faith in the FED, 36 00:01:51,280 --> 00:01:53,520 Speaker 1: and I do think that that faith is deserved. We 37 00:01:53,520 --> 00:01:57,080 Speaker 1: found that think monetary policy has been good or very good, 38 00:01:57,080 --> 00:01:58,559 Speaker 1: and there's also a lot of faith in the fiscal 39 00:01:58,640 --> 00:02:01,560 Speaker 1: response so far. But I think what concerns me a 40 00:02:01,560 --> 00:02:03,560 Speaker 1: little bit is that if you look at the economic 41 00:02:03,640 --> 00:02:06,680 Speaker 1: scenario that people are assuming there's a belief that the 42 00:02:06,680 --> 00:02:09,880 Speaker 1: economic damage from the crisis will be fairly contained and 43 00:02:09,960 --> 00:02:13,120 Speaker 1: fairly manageable and fairly short in duration. And so I 44 00:02:13,120 --> 00:02:15,600 Speaker 1: think the real risk to markets going forward is do 45 00:02:15,680 --> 00:02:17,840 Speaker 1: we test some of those assumptions. Now, we've seen a 46 00:02:17,919 --> 00:02:20,160 Speaker 1: number of firms around the street come out with some 47 00:02:20,240 --> 00:02:22,840 Speaker 1: pretty scary two Q GDP numbers, and thankfully I'm not 48 00:02:22,880 --> 00:02:24,720 Speaker 1: an economist, so I don't have to make that call. 49 00:02:25,240 --> 00:02:27,000 Speaker 1: But we did see that about two thirds of our 50 00:02:27,040 --> 00:02:29,560 Speaker 1: survey respondents think that GDP is going to be contracting 51 00:02:29,600 --> 00:02:33,400 Speaker 1: by or left. That assumption is starting to be tested 52 00:02:33,440 --> 00:02:36,080 Speaker 1: by the market. Um. So my concern is that some 53 00:02:36,160 --> 00:02:39,520 Speaker 1: of these assumptions on the economic side will be called 54 00:02:39,520 --> 00:02:44,079 Speaker 1: into question. Look, Glaurie, it where we are and it's 55 00:02:44,080 --> 00:02:46,680 Speaker 1: great to have a six to twelve month visibility. As 56 00:02:46,720 --> 00:02:49,240 Speaker 1: we talked to average Joseph Cohen yesterday, let me ask 57 00:02:49,280 --> 00:02:53,399 Speaker 1: you the same question, what is your counsel for institution 58 00:02:53,760 --> 00:02:57,120 Speaker 1: or high net worth looking out three years or dare 59 00:02:57,160 --> 00:03:01,160 Speaker 1: I say five years? So you know, in terms of 60 00:03:01,160 --> 00:03:02,800 Speaker 1: what we want to do, in terms of what we 61 00:03:02,840 --> 00:03:05,320 Speaker 1: want to buy. Um, we've been telling people to really 62 00:03:05,360 --> 00:03:07,160 Speaker 1: have a balance, So we think you should have some 63 00:03:07,240 --> 00:03:09,440 Speaker 1: defense in your portfolio. We think you should have some 64 00:03:09,520 --> 00:03:11,960 Speaker 1: long term growth in your portfolio, and we do think 65 00:03:11,960 --> 00:03:14,520 Speaker 1: you should have some cicklicality. But we're very picky about 66 00:03:14,520 --> 00:03:17,320 Speaker 1: what we're choosing on each of those. I would say, sick, 67 00:03:17,400 --> 00:03:21,160 Speaker 1: you pick your spots carefully, be exposed to equities, but 68 00:03:21,520 --> 00:03:24,120 Speaker 1: be prepared for some additional turbulence in the near term. 69 00:03:24,200 --> 00:03:25,639 Speaker 1: That's really how we think about it. And one of 70 00:03:25,680 --> 00:03:27,840 Speaker 1: the reasons why we're trying to really emphasize that there 71 00:03:27,880 --> 00:03:30,520 Speaker 1: could be additional turbulence in your term is we want 72 00:03:30,560 --> 00:03:32,640 Speaker 1: people to be prepared for it. We do want people 73 00:03:32,639 --> 00:03:34,480 Speaker 1: to be able to use it as a buying opportunity, 74 00:03:34,680 --> 00:03:36,720 Speaker 1: but we think it's important to understand that there are 75 00:03:36,760 --> 00:03:39,280 Speaker 1: still risks out there in the short term, risks out 76 00:03:39,320 --> 00:03:41,480 Speaker 1: there that are very hard to quantify or get your 77 00:03:41,520 --> 00:03:44,040 Speaker 1: hands around. Given the fact that a lot of this 78 00:03:44,240 --> 00:03:47,440 Speaker 1: is an epidemiological issue, it's a health issue, and it 79 00:03:47,480 --> 00:03:50,360 Speaker 1: depends on a lot of different factors, how do you 80 00:03:50,480 --> 00:03:54,960 Speaker 1: even go into figuring out what to consider when determining 81 00:03:55,000 --> 00:03:57,920 Speaker 1: whether we're hitting a bottom aside from just pure sentiment, 82 00:03:58,720 --> 00:04:00,400 Speaker 1: So you know, sentiment, I think is one of the 83 00:04:00,400 --> 00:04:02,360 Speaker 1: best things we can look at. I sort of laughed 84 00:04:02,360 --> 00:04:04,440 Speaker 1: when I looked at the survey results this morning because 85 00:04:04,440 --> 00:04:07,360 Speaker 1: we saw a huge number thing that valuations are attractive, 86 00:04:07,360 --> 00:04:09,400 Speaker 1: and you know, people are telling me they have no 87 00:04:09,480 --> 00:04:11,360 Speaker 1: idea what the earnings outlook is that how do you 88 00:04:11,360 --> 00:04:14,200 Speaker 1: know if valuations are attractive or not? Um, you know, 89 00:04:14,240 --> 00:04:16,200 Speaker 1: one of the things we did ask in the survey 90 00:04:16,440 --> 00:04:19,280 Speaker 1: was what does the market need to see to stabilize? 91 00:04:19,320 --> 00:04:21,240 Speaker 1: Just regardless of what your view is, what does the 92 00:04:21,279 --> 00:04:23,680 Speaker 1: market need to happen? And one of the things we 93 00:04:23,800 --> 00:04:26,560 Speaker 1: saw loud and clear in the survey results is that 94 00:04:26,640 --> 00:04:28,920 Speaker 1: people think that the virus is really the key. It's 95 00:04:28,960 --> 00:04:31,520 Speaker 1: taken center stage. So seventy eight percent told us that 96 00:04:31,520 --> 00:04:33,680 Speaker 1: a decline in new cases in the US is needed 97 00:04:33,720 --> 00:04:36,039 Speaker 1: for the market to stabilize. Now, I'm not a doctor, 98 00:04:36,080 --> 00:04:38,400 Speaker 1: you know. I sympathize with John when when he doesn't 99 00:04:38,400 --> 00:04:40,800 Speaker 1: like non doctors talking about medical stuff. So I'm not 100 00:04:40,839 --> 00:04:42,360 Speaker 1: going to do that here because I think he's dead 101 00:04:42,440 --> 00:04:45,000 Speaker 1: right on this. But I do think it's important to 102 00:04:45,120 --> 00:04:47,960 Speaker 1: understand that a lot of the rally we had towards 103 00:04:48,000 --> 00:04:51,320 Speaker 1: the end of March was a positive reaction to what 104 00:04:51,400 --> 00:04:53,599 Speaker 1: was coming out of Washington, to the actions the FED 105 00:04:53,680 --> 00:04:55,640 Speaker 1: was doing, and that was all very well and good 106 00:04:55,640 --> 00:04:58,440 Speaker 1: and deserve. But our survey this morning told us investors 107 00:04:58,520 --> 00:05:01,520 Speaker 1: don't think we need to really see additional fiscal response 108 00:05:01,560 --> 00:05:03,719 Speaker 1: to get the market to stabilize, but they sure do 109 00:05:03,800 --> 00:05:06,160 Speaker 1: think that we need this virus outlook to improve. Now. 110 00:05:06,200 --> 00:05:08,240 Speaker 1: The thing that also, you know, concerned me a little 111 00:05:08,279 --> 00:05:11,960 Speaker 1: bit is that also said for the market to stabilize, 112 00:05:12,000 --> 00:05:14,800 Speaker 1: we need significant progress on new drugs to treat the 113 00:05:14,839 --> 00:05:18,359 Speaker 1: coronavirus and or a vaccine. I'm not going to speculate 114 00:05:18,360 --> 00:05:21,240 Speaker 1: when that's going to happen, but just understand that the 115 00:05:21,360 --> 00:05:23,680 Speaker 1: virus in that path of that virus and all the 116 00:05:23,760 --> 00:05:27,120 Speaker 1: uncertainty there, that's pivotal to market's near term. Laurie, You've 117 00:05:27,160 --> 00:05:29,000 Speaker 1: had me with many things over the last couple of weeks, 118 00:05:29,000 --> 00:05:31,159 Speaker 1: but one thing in particular stands out how to tailor 119 00:05:31,200 --> 00:05:34,520 Speaker 1: the message for retail. This is an institutional audience that 120 00:05:34,560 --> 00:05:37,080 Speaker 1: you've been speaking to, and I think for retail at 121 00:05:37,080 --> 00:05:39,240 Speaker 1: the moment, it's a really confusing time because I get 122 00:05:39,240 --> 00:05:41,760 Speaker 1: many people on my programs, including on this program, with 123 00:05:41,800 --> 00:05:44,520 Speaker 1: all of us talking about the opportunities out there time 124 00:05:44,600 --> 00:05:46,560 Speaker 1: to add a little bit more risk. How do you 125 00:05:46,640 --> 00:05:50,239 Speaker 1: tailor the message for retail at a really confusing time. 126 00:05:51,320 --> 00:05:53,680 Speaker 1: I think that we do. You know, what we do 127 00:05:53,800 --> 00:05:56,119 Speaker 1: want people to generally do is just to sit tight, 128 00:05:56,720 --> 00:05:58,760 Speaker 1: to be prepared, to understand that this is a bit 129 00:05:58,760 --> 00:06:00,400 Speaker 1: of a rollers coaster and we're going to have up 130 00:06:00,440 --> 00:06:02,960 Speaker 1: swings and we're going to have down swings. Um. You know. 131 00:06:03,080 --> 00:06:04,880 Speaker 1: I used an analogy at the beginning of the year 132 00:06:04,920 --> 00:06:07,280 Speaker 1: when I was talking about the turbulence we expected in 133 00:06:07,320 --> 00:06:09,720 Speaker 1: the market, and I said, imagine that I'm the airline pilot. 134 00:06:09,920 --> 00:06:11,680 Speaker 1: I'm coming on. I'm telling you that we're going to 135 00:06:11,800 --> 00:06:14,200 Speaker 1: hit some bad weather. Um, please don't jump off my 136 00:06:14,200 --> 00:06:15,800 Speaker 1: plane in the middle of the flight. We are going 137 00:06:15,839 --> 00:06:19,400 Speaker 1: to get to our destination. I still do firmly believe that, unfortunately, 138 00:06:19,440 --> 00:06:22,240 Speaker 1: the turbulence has just been a bit worse than we expected, 139 00:06:22,240 --> 00:06:23,840 Speaker 1: and it could get a little bit worse than it's been. 140 00:06:24,440 --> 00:06:26,640 Speaker 1: I was pretty impressed, Laurie. I had to buy some 141 00:06:26,680 --> 00:06:29,680 Speaker 1: boat tie wax yesterday from the Amazon, and you know, 142 00:06:29,839 --> 00:06:35,800 Speaker 1: usually it's like next day delivery. It's hold on, hold 143 00:06:35,800 --> 00:06:39,800 Speaker 1: on it, you got it. You got to elaborates, you 144 00:06:39,839 --> 00:06:41,440 Speaker 1: put it on your boat tie and it keeps a 145 00:06:41,480 --> 00:06:48,680 Speaker 1: little fuzzies down. So anyways, it's a four day delivery, 146 00:06:48,680 --> 00:06:52,279 Speaker 1: which I thought was pretty extraordinary. Laurie, Amazon has got 147 00:06:52,279 --> 00:06:55,760 Speaker 1: to be the mother of all buys. Well, look, one 148 00:06:55,760 --> 00:06:57,400 Speaker 1: of the things we've talked about, and I can't talk 149 00:06:57,440 --> 00:06:59,880 Speaker 1: about individual stocks, but we have, you know, said in 150 00:07:00,000 --> 00:07:02,480 Speaker 1: investors need to really think about how consumer habits are 151 00:07:02,520 --> 00:07:04,279 Speaker 1: going to change. And there will be some good changes 152 00:07:04,320 --> 00:07:06,480 Speaker 1: for some companies and there will be some bad changes 153 00:07:06,560 --> 00:07:10,200 Speaker 1: from other companies. UM. But you know, my personal view is, 154 00:07:10,400 --> 00:07:12,840 Speaker 1: you know, when we think about sort of the tech space, 155 00:07:13,320 --> 00:07:15,360 Speaker 1: um and sort of this internet space, we we think 156 00:07:15,400 --> 00:07:17,880 Speaker 1: that they're sort of you know, heroes that that are 157 00:07:17,920 --> 00:07:21,240 Speaker 1: emerging in the in the investment world, um, you know, 158 00:07:21,320 --> 00:07:23,440 Speaker 1: and sort of thinking about the tech companies, the banks, 159 00:07:23,480 --> 00:07:26,160 Speaker 1: the healthcare companies, these are the ones that are really 160 00:07:26,200 --> 00:07:29,000 Speaker 1: you know, sort of coming to the rescue to help 161 00:07:29,080 --> 00:07:31,640 Speaker 1: this economy muddle through. And when I think back to 162 00:07:31,720 --> 00:07:35,600 Speaker 1: past crises, the tech bubble, the financial crisis, sort of 163 00:07:35,600 --> 00:07:38,360 Speaker 1: how these companies step up if they're they're viewed as 164 00:07:38,400 --> 00:07:40,600 Speaker 1: being part of the solution or part of the problem, 165 00:07:40,720 --> 00:07:44,320 Speaker 1: does have longer term investment implications. Nice, pretty fur To, 166 00:07:44,360 --> 00:07:51,880 Speaker 1: thank you so much RBC Capital Markets and right now, folks, 167 00:07:51,960 --> 00:07:54,280 Speaker 1: we bring in a gentleman has been very supportive of 168 00:07:54,320 --> 00:07:58,080 Speaker 1: all our efforts. Jason Furman is a unique economists and 169 00:07:58,160 --> 00:08:00,800 Speaker 1: yes there's an academic track, but far more at a 170 00:08:00,840 --> 00:08:05,320 Speaker 1: young age he had the courtesy to really tackle policy 171 00:08:05,480 --> 00:08:11,040 Speaker 1: and almost applied policy within the American political economy. Professor 172 00:08:11,120 --> 00:08:14,560 Speaker 1: Furman at Harvard and the former chairman of President Obama's 173 00:08:14,960 --> 00:08:18,600 Speaker 1: Council of Economic Advisors. Jason at this time and moment, 174 00:08:18,640 --> 00:08:20,840 Speaker 1: and this is something we've gone back and forth with 175 00:08:20,920 --> 00:08:24,760 Speaker 1: the economist John Farrell on at this time and moment, Jason, 176 00:08:25,080 --> 00:08:29,400 Speaker 1: do you wish that America and Washington was more fiscally 177 00:08:29,600 --> 00:08:35,959 Speaker 1: like Europe? I think the United States has a big 178 00:08:35,960 --> 00:08:39,680 Speaker 1: advantage every Europe And what way borrows at the level 179 00:08:39,679 --> 00:08:42,640 Speaker 1: of the United States and Europe right now is borrowing 180 00:08:42,640 --> 00:08:44,959 Speaker 1: at the level of national economies. But then have a 181 00:08:45,040 --> 00:08:49,160 Speaker 1: central bank UM at the level of the Eurozone. They need, 182 00:08:49,240 --> 00:08:52,280 Speaker 1: you know, the type of fiscal federalism um in Europe 183 00:08:52,280 --> 00:08:56,400 Speaker 1: that we have in the United States. Francis Borron, get 184 00:08:56,400 --> 00:08:58,360 Speaker 1: pretty loud, rights, Jason, just to lab right on that 185 00:08:58,360 --> 00:09:00,160 Speaker 1: a little bit. Mom but confused by that comment. They're 186 00:09:00,160 --> 00:09:03,160 Speaker 1: borrowing at very low rates across Europe. Are you talking 187 00:09:03,160 --> 00:09:06,679 Speaker 1: about burden sharing across the Eurozone? Yeah? No, I mean 188 00:09:06,760 --> 00:09:10,640 Speaker 1: you see, yes, you see low rates in Europe because 189 00:09:10,640 --> 00:09:13,719 Speaker 1: I think implicit in that is the expectation that at 190 00:09:13,720 --> 00:09:17,480 Speaker 1: the end of this the ECB will be there to 191 00:09:17,679 --> 00:09:26,440 Speaker 1: backstop the national borrowing and that um and that there 192 00:09:26,440 --> 00:09:29,080 Speaker 1: will be some form of fiscal federalism. I think absent 193 00:09:29,240 --> 00:09:32,600 Speaker 1: that expectation, UM, Europe wouldn't be borrowing at the rates 194 00:09:32,600 --> 00:09:35,840 Speaker 1: that's borrowing out. Now, let's talk about the response so far. Jason, 195 00:09:35,880 --> 00:09:38,320 Speaker 1: you were very early in asking for a big in 196 00:09:38,360 --> 00:09:42,000 Speaker 1: fact pushing for a big fiscal package in the United States. 197 00:09:42,080 --> 00:09:43,760 Speaker 1: It has come around, and I believe that you've had 198 00:09:43,800 --> 00:09:46,080 Speaker 1: some part in influencing the decision to move quickly on 199 00:09:46,120 --> 00:09:47,760 Speaker 1: all of that, and I congratulate for you for the 200 00:09:47,760 --> 00:09:50,040 Speaker 1: effort that you've done over the last couple of months 201 00:09:50,040 --> 00:09:52,160 Speaker 1: on that front. Jason, there are many people that think 202 00:09:52,240 --> 00:09:54,720 Speaker 1: we will need to do more, and I'm trying to 203 00:09:54,800 --> 00:09:57,040 Speaker 1: understand the easiest way of doing more. Can you top 204 00:09:57,120 --> 00:10:00,439 Speaker 1: up existing packages that are already available through the bill 205 00:10:00,480 --> 00:10:02,400 Speaker 1: that was produced last week, or do you need a 206 00:10:02,440 --> 00:10:04,520 Speaker 1: separate bill. What's the best web policy I can go 207 00:10:04,559 --> 00:10:07,800 Speaker 1: about doing that. Certainly, the most important thing in the 208 00:10:07,840 --> 00:10:12,439 Speaker 1: United States is to extend and expand what's already happened. 209 00:10:12,800 --> 00:10:17,760 Speaker 1: You know, the unemployment insurance ends at the end of June. 210 00:10:18,080 --> 00:10:20,440 Speaker 1: There's going to be very high unemployment the rest of 211 00:10:20,480 --> 00:10:23,560 Speaker 1: this year. That's gonna be very high unemployment. Next year 212 00:10:24,080 --> 00:10:27,040 Speaker 1: the checks are one time. You know, incomes are going 213 00:10:27,080 --> 00:10:30,040 Speaker 1: to be hit next year too, and we're gonna need, 214 00:10:30,240 --> 00:10:33,280 Speaker 1: you know, a more traditional stimulus for recovery. So that's 215 00:10:33,320 --> 00:10:36,960 Speaker 1: the easiest. Then identifying some of the deficiencies of what's 216 00:10:37,000 --> 00:10:40,240 Speaker 1: happening so far. The biggest and most obvious one is 217 00:10:40,320 --> 00:10:44,080 Speaker 1: states and localities. They're cutting their budgets right now. That's 218 00:10:44,200 --> 00:10:47,080 Speaker 1: undoing some of the benefit of what's happening. At the 219 00:10:47,120 --> 00:10:50,959 Speaker 1: federal level. They can't borrow for themselves, they're not allowed 220 00:10:51,000 --> 00:10:54,080 Speaker 1: to UM, so they need much more money UM. And 221 00:10:54,120 --> 00:10:57,880 Speaker 1: then finally, we just need to keep open the channels 222 00:10:57,920 --> 00:11:01,240 Speaker 1: for anything that could help healthcare UM and fund the 223 00:11:01,240 --> 00:11:04,920 Speaker 1: health response. That's probably the most important, Jason. Everyone has 224 00:11:04,920 --> 00:11:06,960 Speaker 1: their hands out right now, and everybody needs money, and 225 00:11:07,000 --> 00:11:09,640 Speaker 1: everybody is looking for the government to step in and 226 00:11:09,679 --> 00:11:13,440 Speaker 1: plug that hole. Some people. Actually, no one right now 227 00:11:13,600 --> 00:11:15,840 Speaker 1: is particularly worried about the deficit, but some people have 228 00:11:15,920 --> 00:11:17,960 Speaker 1: brought it up sort of in passing. We're looking right 229 00:11:18,000 --> 00:11:20,520 Speaker 1: now at a trillion dollar deficits expected to rise to 230 00:11:20,559 --> 00:11:24,480 Speaker 1: three trillion dollars, especially as President Trump and even Democrats 231 00:11:24,520 --> 00:11:27,720 Speaker 1: talk about sort of rolling back some of the tax 232 00:11:28,200 --> 00:11:32,400 Speaker 1: provisions like the salt tax, etcetera that sort of created 233 00:11:32,440 --> 00:11:34,120 Speaker 1: a little bit of cost savings in the in the 234 00:11:34,160 --> 00:11:38,800 Speaker 1: previous rounds. How big can the US deficits sustainably get? 235 00:11:38,840 --> 00:11:44,920 Speaker 1: In your view, you saw years of GDP deficits in 236 00:11:45,320 --> 00:11:49,360 Speaker 1: fighting World War two. Um, this is like an invasion 237 00:11:50,000 --> 00:11:53,480 Speaker 1: and if that's needed, I wouldn't shrink from it. I mean, 238 00:11:53,520 --> 00:11:59,480 Speaker 1: the point is, the borrowing needs to happen somewhere, household states, locality, 239 00:11:59,640 --> 00:12:04,360 Speaker 1: small businesses, large businesses. Somebody needs to be borrowing. And 240 00:12:04,600 --> 00:12:08,480 Speaker 1: the least bad position for that borrowing right now our 241 00:12:08,720 --> 00:12:12,440 Speaker 1: national government. Jayson very quickly here, this is so important. 242 00:12:12,480 --> 00:12:15,200 Speaker 1: The inflation he has got it wrong coming out of 243 00:12:15,240 --> 00:12:18,640 Speaker 1: two thousand nine. Are the inflation warriors going to get 244 00:12:18,679 --> 00:12:22,160 Speaker 1: it wrong again? In two thous of nine, it was 245 00:12:22,200 --> 00:12:25,760 Speaker 1: completely obvious that in the highly depressed economy. You weren't 246 00:12:25,760 --> 00:12:29,079 Speaker 1: gonna get inflation here unless sure, you have a huge 247 00:12:29,120 --> 00:12:32,600 Speaker 1: supply shock, you have a huge demand shock. Um, we 248 00:12:32,679 --> 00:12:36,120 Speaker 1: are maintaining a lot of incomes, not all incomes, but 249 00:12:36,120 --> 00:12:39,840 Speaker 1: we're containing a lot. So I don't know. All I 250 00:12:39,840 --> 00:12:42,640 Speaker 1: can say is if we get inflish, and I think 251 00:12:42,679 --> 00:12:45,120 Speaker 1: that would be good. That would be a good sign 252 00:12:45,320 --> 00:12:48,360 Speaker 1: that we have adequate demand. It would help lower real 253 00:12:48,400 --> 00:12:52,040 Speaker 1: interest rates, lower real wages. That would help um the 254 00:12:52,080 --> 00:12:54,680 Speaker 1: economy's recovery. So I don't I don't know. I don't 255 00:12:54,679 --> 00:12:56,839 Speaker 1: know what's going to happen, but I don't think we 256 00:12:56,840 --> 00:12:59,960 Speaker 1: should be afraid of getting inflish. Jason Furman, thank you 257 00:13:00,080 --> 00:13:04,680 Speaker 1: so much, the former chairman of President Obama's Council of 258 00:13:04,800 --> 00:13:11,959 Speaker 1: Economic Advisors. Let's do this, bringing Michael Gape in a 259 00:13:12,120 --> 00:13:16,400 Speaker 1: park place right now. Who's more than accomplished here on 260 00:13:16,480 --> 00:13:19,400 Speaker 1: the rates of change? Michael did these stunning numbers? Is 261 00:13:19,480 --> 00:13:23,959 Speaker 1: Lisa frames that beautifully? Do these numbers make you pull 262 00:13:24,160 --> 00:13:28,400 Speaker 1: forward the agony? Do you pull the May job's report, 263 00:13:28,640 --> 00:13:32,080 Speaker 1: you know, showing April statistics? Do you pull that forward 264 00:13:32,120 --> 00:13:36,000 Speaker 1: in your analysis? We do? I mean, I think the 265 00:13:36,040 --> 00:13:39,160 Speaker 1: weekly job less claims data is probably the most important 266 00:13:39,200 --> 00:13:42,800 Speaker 1: piece of data that we got. Now it's it's only 267 00:13:42,840 --> 00:13:46,920 Speaker 1: one week lag, it's fairly contemporaneous about what's happening in 268 00:13:47,000 --> 00:13:50,240 Speaker 1: the economy. When you look at the number last week 269 00:13:50,280 --> 00:13:53,040 Speaker 1: and this week and take those together, you know that 270 00:13:53,200 --> 00:13:57,520 Speaker 1: that's roughly a let's call it, a six percentage point 271 00:13:57,679 --> 00:14:01,840 Speaker 1: rise in the in the April unemployment rate already. And 272 00:14:01,920 --> 00:14:03,840 Speaker 1: we have a few make a few more weeks ago 273 00:14:04,520 --> 00:14:07,880 Speaker 1: for the April employment report, so it's it's not I mean, 274 00:14:07,920 --> 00:14:10,079 Speaker 1: I think it is likely that the unemployment rate will 275 00:14:10,120 --> 00:14:12,880 Speaker 1: be rising above where we saw it in O eight 276 00:14:12,880 --> 00:14:15,319 Speaker 1: oh nine, and and and may come as soon as 277 00:14:15,360 --> 00:14:18,440 Speaker 1: that April employment report, if not certainly into the main report. 278 00:14:18,520 --> 00:14:21,000 Speaker 1: But uh, and if you kind of you know, there's 279 00:14:21,040 --> 00:14:24,600 Speaker 1: a historical relationship between activity and the unemployment rate, so 280 00:14:24,680 --> 00:14:27,800 Speaker 1: you can kind of reverse engineer what might be happening 281 00:14:27,800 --> 00:14:31,240 Speaker 1: to the economy from these jobless claims data, and and 282 00:14:31,280 --> 00:14:34,760 Speaker 1: it it paints just an awful picture. And it's just 283 00:14:34,800 --> 00:14:39,160 Speaker 1: reflective of the cliff effects on economic activity from all 284 00:14:39,200 --> 00:14:41,680 Speaker 1: of these statewide shut sounds that we're seeing. So it's 285 00:14:41,720 --> 00:14:44,400 Speaker 1: just it's a sudden stop in the labor market and 286 00:14:44,440 --> 00:14:46,200 Speaker 1: a in a sudden stop for many parts of the 287 00:14:46,320 --> 00:14:50,240 Speaker 1: U S account. Michael, I'm really struck by how devastating 288 00:14:50,240 --> 00:14:52,600 Speaker 1: these numbers are, because, as John and Tom keep talking 289 00:14:52,640 --> 00:14:55,840 Speaker 1: about all of the human stories behind it, is there 290 00:14:55,880 --> 00:14:59,200 Speaker 1: any tiny little bit of silver lining in that the 291 00:14:59,200 --> 00:15:03,200 Speaker 1: people who file for unemployment benefits are actually getting unemployment 292 00:15:03,240 --> 00:15:05,080 Speaker 1: benefits and at least will be able to pay the 293 00:15:05,120 --> 00:15:08,040 Speaker 1: rent and buy groceries, given the fact that the US 294 00:15:08,120 --> 00:15:12,240 Speaker 1: has expanded those benefits. Yes, I mean, I think that's 295 00:15:12,280 --> 00:15:17,200 Speaker 1: probably you know, the secondary consideration for for the workers, 296 00:15:17,240 --> 00:15:21,080 Speaker 1: but certainly it's it's a reflection of it certainly illustrates 297 00:15:21,080 --> 00:15:24,880 Speaker 1: why we need to get fiscal resources two households and 298 00:15:24,920 --> 00:15:28,320 Speaker 1: business immediately and and make it targeted for for where 299 00:15:28,360 --> 00:15:31,360 Speaker 1: it's needed. So, yes, the fiscal plan, which which up 300 00:15:31,400 --> 00:15:35,400 Speaker 1: to unemployment benefits is certainly the right move and the 301 00:15:35,480 --> 00:15:38,560 Speaker 1: ideas we we need to get resources to these households. 302 00:15:38,880 --> 00:15:42,800 Speaker 1: The hope is that this is a temporary surge and 303 00:15:43,000 --> 00:15:47,520 Speaker 1: unemployment and and if we're successful it UH getting the 304 00:15:47,520 --> 00:15:50,320 Speaker 1: coronavirus under control as we move into June and July, 305 00:15:50,480 --> 00:15:53,680 Speaker 1: maybe a lot of this UH unemployment can come back. 306 00:15:53,880 --> 00:15:57,360 Speaker 1: I just I just worry that, you know, I'm My 307 00:15:57,440 --> 00:16:00,640 Speaker 1: main concern here is for small business that up talking 308 00:16:00,640 --> 00:16:04,320 Speaker 1: about firms, let's say forty nine employees or last exactly 309 00:16:05,480 --> 00:16:09,800 Speaker 1: thirty three million people employed in these businesses, like about 310 00:16:09,800 --> 00:16:12,920 Speaker 1: twenty seven million of them with these services related. So 311 00:16:13,800 --> 00:16:16,720 Speaker 1: my worries we don't get enough resources to those types 312 00:16:16,760 --> 00:16:19,520 Speaker 1: of business. John ferrows some context here, which I think 313 00:16:19,560 --> 00:16:25,120 Speaker 1: is so important. We've lost a Florida of employment. Florida's 314 00:16:25,160 --> 00:16:29,680 Speaker 1: statistic is ten million employed, So in two weeks of 315 00:16:29,720 --> 00:16:34,400 Speaker 1: claims is a generalization we've lost to Florida is a nation. 316 00:16:34,680 --> 00:16:37,280 Speaker 1: The numbers are absolutely stunning. And Michael, where we really 317 00:16:37,280 --> 00:16:39,640 Speaker 1: need to help is how to navigate some of the 318 00:16:39,720 --> 00:16:41,720 Speaker 1: dates will get in the coming days. Tomorrow we'll get 319 00:16:41,720 --> 00:16:44,040 Speaker 1: payrolls in around about twenty four hours time. We'll be 320 00:16:44,040 --> 00:16:46,640 Speaker 1: having a conversation with an economist like yourself trying to 321 00:16:46,680 --> 00:16:49,400 Speaker 1: work out how to read a labor market report that 322 00:16:49,440 --> 00:16:52,120 Speaker 1: for many people is incredibly dated. What do we do 323 00:16:52,160 --> 00:16:56,520 Speaker 1: with tomorrow's non farm payrolls report? Honestly, I think we 324 00:16:56,520 --> 00:17:00,480 Speaker 1: we we ignore it because we claimed data are telling 325 00:17:00,480 --> 00:17:02,600 Speaker 1: you what April's going to look like, and so that 326 00:17:03,320 --> 00:17:06,399 Speaker 1: we're likely to see a modest some deterioration or a 327 00:17:06,400 --> 00:17:10,919 Speaker 1: modest deterioration in the labor market from the March employment report. 328 00:17:11,000 --> 00:17:14,720 Speaker 1: But these two initial jobless claims reports from last week 329 00:17:14,720 --> 00:17:16,560 Speaker 1: to this week are telling us April is going to 330 00:17:16,600 --> 00:17:20,920 Speaker 1: be monumentally worse. So honestly, I think March is already old. 331 00:17:20,960 --> 00:17:23,639 Speaker 1: There's and these are the two most important pieces of 332 00:17:23,680 --> 00:17:28,320 Speaker 1: information we've had. Michael, I gotta say, the emotion in 333 00:17:28,359 --> 00:17:32,240 Speaker 1: this number is dramatic. Is there a sense that these 334 00:17:32,280 --> 00:17:34,880 Speaker 1: people will be able to get their jobs back once 335 00:17:34,920 --> 00:17:37,879 Speaker 1: the economy starts to get up and running? In other words, 336 00:17:38,240 --> 00:17:42,240 Speaker 1: how sticky is this really high unemployment rate going to be? 337 00:17:44,280 --> 00:17:47,600 Speaker 1: I think the way that we're thinking about it um 338 00:17:47,920 --> 00:17:50,840 Speaker 1: is that some of this will will likely come back. 339 00:17:51,080 --> 00:17:55,080 Speaker 1: But I think we're you know, we're maybe half of 340 00:17:55,119 --> 00:17:57,720 Speaker 1: it comes back, And I'm worried that there's a longer 341 00:17:57,760 --> 00:17:59,439 Speaker 1: tail from the same by and by the end of 342 00:17:59,440 --> 00:18:03,360 Speaker 1: the year was so likely to have an elevated unemployment rate. 343 00:18:03,760 --> 00:18:06,479 Speaker 1: H So it we can reopen the economy back up, 344 00:18:06,720 --> 00:18:09,760 Speaker 1: but it may be that we're slow to unsocial distance, 345 00:18:09,840 --> 00:18:12,240 Speaker 1: if you will, And I also think they'll be lagged 346 00:18:12,280 --> 00:18:14,960 Speaker 1: effects from other sectors, like certainly there's there will be 347 00:18:15,000 --> 00:18:17,639 Speaker 1: spill over to the energy sector for a long time 348 00:18:17,760 --> 00:18:20,680 Speaker 1: because of where oil is treating UH. And I think 349 00:18:20,680 --> 00:18:23,919 Speaker 1: there will be negative wealth effects on on consumption. And 350 00:18:23,960 --> 00:18:27,480 Speaker 1: this is largely services activity that that we're taking away, 351 00:18:27,480 --> 00:18:30,520 Speaker 1: and it's not so easy to make that up. So 352 00:18:30,720 --> 00:18:33,280 Speaker 1: my certainly, my hope is a lot of this unemployment 353 00:18:33,280 --> 00:18:36,560 Speaker 1: will come back relatively quickly as we move into the 354 00:18:36,640 --> 00:18:39,560 Speaker 1: third quarter. I have concerns that will be a larger 355 00:18:39,680 --> 00:18:42,080 Speaker 1: a large portion of it that that will linger for 356 00:18:42,160 --> 00:18:45,720 Speaker 1: quite some time into next year. Make the futures on 357 00:18:45,720 --> 00:18:48,960 Speaker 1: the screen right now down by eighteen points SMP five, 358 00:18:49,760 --> 00:18:52,520 Speaker 1: we are rather up by sixteen points on SMP five, 359 00:18:52,880 --> 00:18:54,679 Speaker 1: up by six tents of one percent, but raising some 360 00:18:54,720 --> 00:18:56,320 Speaker 1: of the big games we had a little earlier on 361 00:18:56,720 --> 00:18:59,760 Speaker 1: in the session. There will be people asking right now, Michael, 362 00:19:00,080 --> 00:19:02,520 Speaker 1: whether the fiscal life package in Washington is big enough, 363 00:19:03,240 --> 00:19:05,840 Speaker 1: even a two twenty in dollars, Is it big enough? 364 00:19:07,480 --> 00:19:10,040 Speaker 1: We don't think so. We We think that there will 365 00:19:10,200 --> 00:19:13,760 Speaker 1: be a phase for certainly the House wants to direct 366 00:19:13,760 --> 00:19:17,280 Speaker 1: more resources to state local governments, and there's conversations around 367 00:19:17,320 --> 00:19:20,600 Speaker 1: whether we could do more on infrastructure. So we certainly 368 00:19:20,640 --> 00:19:23,600 Speaker 1: think Phase three was was a good down payment, and 369 00:19:23,720 --> 00:19:27,440 Speaker 1: the needle in terms of willingness to support the economy 370 00:19:27,560 --> 00:19:31,239 Speaker 1: flift very quickly in about seven days in Washington. So 371 00:19:31,320 --> 00:19:33,600 Speaker 1: it's a it's a large package at ten percent or 372 00:19:33,600 --> 00:19:37,200 Speaker 1: so of GDP, but I do think more will ultimately 373 00:19:37,200 --> 00:19:39,639 Speaker 1: be needed, and I do think you'll type a number 374 00:19:40,040 --> 00:19:42,800 Speaker 1: I think helps to solidify that. Michael, You've got a 375 00:19:42,840 --> 00:19:45,720 Speaker 1: great international resume as well. Our David Weston is going 376 00:19:45,760 --> 00:19:48,879 Speaker 1: to speak with Vice President Pence here in three hours. Okay, 377 00:19:48,920 --> 00:19:52,960 Speaker 1: great a Florida just fell off the map in terms 378 00:19:52,960 --> 00:19:56,640 Speaker 1: of labor economy, and as John's nation has figured out, 379 00:19:57,040 --> 00:20:00,800 Speaker 1: you have to put the check in. As you brilliantly said, 380 00:20:00,840 --> 00:20:04,440 Speaker 1: the small business hands a service sector that's getting crushed 381 00:20:04,800 --> 00:20:09,480 Speaker 1: when you why can't we do that? Why can't politicians 382 00:20:09,600 --> 00:20:14,960 Speaker 1: just say this is a natural disaster, one off, effective immediately, 383 00:20:15,040 --> 00:20:18,159 Speaker 1: we're cutting blah blah blah blah blah. Why are we 384 00:20:18,240 --> 00:20:21,560 Speaker 1: unable to do that? I don't know. I mean I 385 00:20:21,880 --> 00:20:25,520 Speaker 1: do wish that it were geared a little more like 386 00:20:25,800 --> 00:20:29,440 Speaker 1: the support provided in Europe in the UK, where where 387 00:20:29,280 --> 00:20:33,040 Speaker 1: the arrangement is you keep people on payrolls and will 388 00:20:33,119 --> 00:20:37,239 Speaker 1: foot you know, seventy of of the wage bill for 389 00:20:37,760 --> 00:20:39,560 Speaker 1: you know, call it for three months and then we'll 390 00:20:39,560 --> 00:20:41,479 Speaker 1: we visit if we need to do another three months 391 00:20:41,320 --> 00:20:44,280 Speaker 1: and go from there. So I do wish we were 392 00:20:44,359 --> 00:20:46,880 Speaker 1: directed a little more in that in that way. We 393 00:20:47,200 --> 00:20:49,199 Speaker 1: I don't know why we don't do it. It's just 394 00:20:49,240 --> 00:20:52,720 Speaker 1: not it's just not what we do. Uh. And and 395 00:20:52,800 --> 00:20:56,080 Speaker 1: it's I think it's potentially a problem because I worry, 396 00:20:56,119 --> 00:20:58,960 Speaker 1: as I said before, about gaps that we don't get 397 00:20:59,000 --> 00:21:02,280 Speaker 1: the resources down owned the spectrum of from large firms 398 00:21:02,280 --> 00:21:05,359 Speaker 1: down to small firms, and and I worry about potential 399 00:21:05,520 --> 00:21:08,680 Speaker 1: cracks and gaps, and and we don't get resources to 400 00:21:08,720 --> 00:21:11,760 Speaker 1: where they're needed most. But yes, if if I had 401 00:21:11,920 --> 00:21:15,160 Speaker 1: a magic wand, I would have designed the fiscal stimulus 402 00:21:15,200 --> 00:21:18,320 Speaker 1: a little more into that direction. Is direct income support 403 00:21:18,760 --> 00:21:22,640 Speaker 1: through business to household, keep people on payrolls, keep them 404 00:21:22,680 --> 00:21:26,120 Speaker 1: getting benefits, and and just have the government support that bill. 405 00:21:26,720 --> 00:21:29,320 Speaker 1: Michael Cain of banc Leys really appreciate your time this 406 00:21:29,359 --> 00:21:32,480 Speaker 1: morning at difficult time for everyone worldwide. At the moment 407 00:21:36,160 --> 00:21:38,560 Speaker 1: yesterday we spoke to the likes of the Abby Joseph 408 00:21:38,640 --> 00:21:43,200 Speaker 1: Cohen Olivia Blanchard. We spoke earlier this morning to Jeffrey 409 00:21:43,240 --> 00:21:45,960 Speaker 1: Sachs and Jason Firm, and none of this matters because 410 00:21:46,000 --> 00:21:49,240 Speaker 1: all they want to do is hear from Jonathan Miller, Miller, 411 00:21:49,359 --> 00:21:52,280 Speaker 1: Samuel right now in real estate, in this New York 412 00:21:52,320 --> 00:21:57,000 Speaker 1: real estate in all the major cities of this nation. Uh, Jonathan, 413 00:21:57,080 --> 00:22:00,680 Speaker 1: I can't imagine what you have bleeded in your data 414 00:22:00,840 --> 00:22:04,960 Speaker 1: and your study and your embedded knowledge of our real estate. 415 00:22:05,640 --> 00:22:10,720 Speaker 1: How does this rent conundrum play out? Millions can't pay, 416 00:22:11,080 --> 00:22:15,119 Speaker 1: landlords aren't going to get the rent they have financing do. 417 00:22:15,920 --> 00:22:19,800 Speaker 1: How does it play out? Well? I think though, what 418 00:22:20,240 --> 00:22:23,080 Speaker 1: is a reversal from the financial crisis? I think the 419 00:22:23,200 --> 00:22:25,000 Speaker 1: banks are going to be the one that are going 420 00:22:25,040 --> 00:22:30,000 Speaker 1: to do the heavy lifting on supporting landlords um as 421 00:22:30,040 --> 00:22:34,760 Speaker 1: they see a huge drop in you come over the 422 00:22:34,800 --> 00:22:37,240 Speaker 1: next couple of months. I don't think there's any way 423 00:22:37,240 --> 00:22:40,960 Speaker 1: around it. If there's excuse me, Lisa, I'm sorry, Lisa. 424 00:22:41,000 --> 00:22:44,800 Speaker 1: Go ahead, well, Jonathan, and heading into this, property evaluations 425 00:22:44,840 --> 00:22:47,600 Speaker 1: were already declining in New York City, And Jonathan, I'm 426 00:22:47,600 --> 00:22:53,160 Speaker 1: wondering how much you see property valuations declining further from here, 427 00:22:53,880 --> 00:22:57,359 Speaker 1: given what we're seeing in terms of just a complete 428 00:22:57,400 --> 00:23:02,240 Speaker 1: shutdown of the city that never sleeps, right. It's uh, 429 00:23:02,280 --> 00:23:07,520 Speaker 1: it's interesting because the real estate brokerage business, specifically in 430 00:23:07,520 --> 00:23:11,240 Speaker 1: New York City or it was considered a non essential 431 00:23:11,280 --> 00:23:15,800 Speaker 1: business until yesterday and Cuomo reversed it. And so now 432 00:23:15,920 --> 00:23:19,000 Speaker 1: we we could have real estate agents, uh, you know, 433 00:23:19,200 --> 00:23:25,760 Speaker 1: some running around selling property, which is counterproductive on on 434 00:23:25,800 --> 00:23:29,240 Speaker 1: the concept of shelter in place. Um. If you look 435 00:23:29,240 --> 00:23:34,199 Speaker 1: at the last two big events in in this market, 436 00:23:34,760 --> 00:23:37,639 Speaker 1: one was nine eleven and one was the Lehman moment, 437 00:23:37,760 --> 00:23:42,760 Speaker 1: which didn't um, you know, removing the tragedy components side 438 00:23:42,760 --> 00:23:45,480 Speaker 1: and just looking at housing, we're looking at you know, 439 00:23:45,520 --> 00:23:48,520 Speaker 1: we could be looking at a short term price drop 440 00:23:48,520 --> 00:23:52,720 Speaker 1: anywhere from twenty five tot because you simply don't have 441 00:23:53,119 --> 00:23:56,160 Speaker 1: well we saw before, and then a quick rebound. That's 442 00:23:56,240 --> 00:23:58,520 Speaker 1: right where I wanted to go in terms of what 443 00:23:58,600 --> 00:24:01,360 Speaker 1: a bear market is in let's say, because the elasticities 444 00:24:01,400 --> 00:24:04,520 Speaker 1: are totally different than mortgage in the leverage and that 445 00:24:05,960 --> 00:24:09,679 Speaker 1: is the history of this John Miller, that we see 446 00:24:10,280 --> 00:24:12,960 Speaker 1: decline in real estate in the major cities and across 447 00:24:13,000 --> 00:24:17,600 Speaker 1: this nation. So I think there's the high probability of 448 00:24:17,600 --> 00:24:22,520 Speaker 1: of significant price drops in the short term. The variable 449 00:24:22,600 --> 00:24:26,520 Speaker 1: here is how long you know, in each region does 450 00:24:26,600 --> 00:24:30,639 Speaker 1: this UH virus play out? Therefore, how much damage does 451 00:24:30,680 --> 00:24:33,600 Speaker 1: it due to the economy there before? How much damage 452 00:24:33,640 --> 00:24:36,000 Speaker 1: does it do the housing market? And I think it's clear, 453 00:24:36,119 --> 00:24:38,560 Speaker 1: pretty clear. Uh. You know, there was a lot of 454 00:24:38,600 --> 00:24:42,399 Speaker 1: optimism coming into the year in harder hit areas like 455 00:24:42,440 --> 00:24:45,960 Speaker 1: New York that things were starting to that we were 456 00:24:46,000 --> 00:24:49,200 Speaker 1: bottoming and we were looking better. But really all that's 457 00:24:49,200 --> 00:24:52,680 Speaker 1: out the door. You can't look backwards behind this event. 458 00:24:52,760 --> 00:24:56,000 Speaker 1: It's not relevant. Um, We're what we're seeing now is 459 00:24:56,040 --> 00:25:01,280 Speaker 1: we're seeing inventory falls sharply, which sounds good, but really 460 00:25:01,280 --> 00:25:03,880 Speaker 1: what it is is that consumers are not putting their 461 00:25:03,920 --> 00:25:08,760 Speaker 1: properties on the market. UM. I think landlords in rentals 462 00:25:08,800 --> 00:25:12,520 Speaker 1: are going to do everything they can to uh to 463 00:25:12,560 --> 00:25:18,440 Speaker 1: accelerate the renewals because it's difficult for people to run 464 00:25:18,440 --> 00:25:20,119 Speaker 1: around and look at property. I think they're going to 465 00:25:20,160 --> 00:25:22,800 Speaker 1: try to retain the tenants that they have, and I 466 00:25:22,800 --> 00:25:27,040 Speaker 1: think there's going to be some price compression. Jonathan, taking 467 00:25:27,040 --> 00:25:30,000 Speaker 1: a step back, I want to talk about the behavior 468 00:25:30,240 --> 00:25:33,040 Speaker 1: of Americans and whether we are going to see a 469 00:25:33,119 --> 00:25:36,159 Speaker 1: shift out of some of the bigger cities where you 470 00:25:36,240 --> 00:25:40,080 Speaker 1: see more concentrated populations to uh, you know, the suburbs 471 00:25:40,160 --> 00:25:43,560 Speaker 1: and beyond. In response to the threat of a pandemic. 472 00:25:43,640 --> 00:25:46,560 Speaker 1: We've seen that on the peripheries. Is that going to accelerate? 473 00:25:48,320 --> 00:25:51,160 Speaker 1: I don't. I don't think so. I I do think 474 00:25:51,200 --> 00:25:54,199 Speaker 1: that in the short term will have and we already 475 00:25:54,400 --> 00:25:57,439 Speaker 1: saw in the last over the last month of people 476 00:25:57,480 --> 00:26:00,000 Speaker 1: trying to do short term rentals in the suburban market. 477 00:26:00,040 --> 00:26:04,760 Speaker 1: It's but they physically couldn't move their their stuff out 478 00:26:04,760 --> 00:26:07,840 Speaker 1: of the city because many buildings have done allow movers 479 00:26:08,520 --> 00:26:11,560 Speaker 1: to come in and out. Um. But I don't I 480 00:26:11,560 --> 00:26:15,119 Speaker 1: don't see a massive restructuring, But I do see a 481 00:26:15,600 --> 00:26:18,880 Speaker 1: short term advantage to the to the suburbs. I think. 482 00:26:19,320 --> 00:26:22,480 Speaker 1: I think we do have short memories, as as we've 483 00:26:22,520 --> 00:26:24,520 Speaker 1: seen in the past. What do you see in Florida 484 00:26:24,600 --> 00:26:26,480 Speaker 1: right now, johannilor what do you what do you see 485 00:26:26,520 --> 00:26:28,840 Speaker 1: down there? The dynamics are different down there than some 486 00:26:28,920 --> 00:26:32,480 Speaker 1: of these other cities. Yeah, we aren't. Um, you know, 487 00:26:33,119 --> 00:26:37,320 Speaker 1: they're having the operak. The state just had the lockdown. Uh. 488 00:26:37,520 --> 00:26:41,040 Speaker 1: I think where New York is probably two, two or 489 00:26:41,080 --> 00:26:45,359 Speaker 1: three weeks ahead of Florida in terms of um stalling 490 00:26:45,480 --> 00:26:49,919 Speaker 1: or pausing simply because of the pragmatic element of people 491 00:26:50,000 --> 00:26:53,600 Speaker 1: not being able to view property. I think the idea 492 00:26:53,840 --> 00:26:57,840 Speaker 1: of of someone buying virtually right now is still a 493 00:26:57,840 --> 00:27:01,679 Speaker 1: concept that is going to accelerate in popularity, but it's 494 00:27:01,720 --> 00:27:04,200 Speaker 1: really out margin. I don't think it's going to replace 495 00:27:04,440 --> 00:27:08,600 Speaker 1: people physically looking at property. Jonathan Miller, Thank you so 496 00:27:08,680 --> 00:27:11,919 Speaker 1: much for Miller Samuel this morning. Thanks for listening to 497 00:27:11,960 --> 00:27:16,480 Speaker 1: the Bloomberg Surveillance podcast. Subscribe and listen to interviews on 498 00:27:16,560 --> 00:27:22,400 Speaker 1: Apple Podcasts, SoundCloud, or whichever podcast platform you prefer. I'm 499 00:27:22,440 --> 00:27:25,720 Speaker 1: on Twitter at Tom Keane before the podcast. You can 500 00:27:25,760 --> 00:27:28,960 Speaker 1: always catch us worldwide. I'm Bloomberg Radio.