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Speaker 1: This is Bloomberg Business Week. I'm Carol Masser and I'm

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Speaker 1: Jason Kelly. We're here every day bringing you the latest

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Speaker 1: news from the world's of business and finance, plus technology, politics, economics,

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Speaker 1: all harnessing the power of Bloomberg Business Week reporters and editors,

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Speaker 1: on iTunes, SoundCloud, or Bloomberg dot com. You can also

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Speaker 1: listen to our radio show weekdays at two pm Eastern

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Speaker 1: only on Bloomberg Radio. One headline, They're just starting to

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Speaker 1: cross and I think, you know, let's remind everybody that

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Speaker 1: there these are the minutes from two FED meetings, both

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Speaker 1: on March three, that emergency meeting that we got and

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Speaker 1: then again that earlier than expected March fifteenth meeting that

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Speaker 1: happened over the weekend. One headline, I've got extremely large

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Speaker 1: degree of uncertainty on the outlook that is coming from

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Speaker 1: that FED meeting and also that rates at zero until

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Speaker 1: the economy, weather, the virus, So some initial thoughts on

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Speaker 1: all of that. Let's get to our team. Kathleen Hayes

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Speaker 1: is with US Global Economics and Policy editor at Bloomberg New.

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Speaker 1: She's on the phone from the Poconos. Dave Wilson also

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Speaker 1: with US, Stocks editor at Bloomberg News, also with us

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Speaker 1: from New Jersey. So, Kathleen, initial thoughts here, as you

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Speaker 1: see these minutes, you know this is interesting because um,

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Speaker 1: you know, we have our entire he said, ECO team

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Speaker 1: UM Washington d C based in any lock up that

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Speaker 1: occurs when the minutes are released. I've been in this

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Speaker 1: lock up, and generally speaking, you go in about an

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Speaker 1: hour forty five minutes before the minutes are released, and

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Speaker 1: you have time to read them and really vet them

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Speaker 1: and make sure whatever headlines you put out, whatever story is,

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Speaker 1: is fully thought over, you know, when you put the

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Speaker 1: most important things first, and the two headlines you read

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Speaker 1: are all we have so far. I have been looking around.

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Speaker 1: I see that Dow Jones, one of our competitors, who

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Speaker 1: also covers a FED very closely, has a brief story out.

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Speaker 1: Not this this outpouring up. Here's what the FED was thinking.

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Speaker 1: It was obviously unusual because there was the unscheduled emergency

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Speaker 1: meeting on March second. So presumably, as we see more

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Speaker 1: headlines are more of a recounting of what the minutes say,

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Speaker 1: we're going to find out, you know, what the debate

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Speaker 1: was there, how urgently they felt they had to act,

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Speaker 1: and of course they cut the key rate. Then they

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Speaker 1: made it very clear that, you know, quantitative using bond purchases,

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Speaker 1: whatever it takes, basically is going to be done. Then

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Speaker 1: we got the minutes of the March fifteenth meeting. So

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Speaker 1: it's something I think it's a bit different today in

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Speaker 1: terms of how the information has been given to the

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Speaker 1: press and what we're waiting to see. But um, it's

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Speaker 1: pretty clear from what we have seen rates at zero

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Speaker 1: until the economy has weathered the virus. So in other words,

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Speaker 1: we have to see and I think that is the question,

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Speaker 1: doesn't it, you guys, that whether what is weathering the virus,

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Speaker 1: is it getting to the point where the virus peaks

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Speaker 1: and comes down, is it having the economy show it's

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Speaker 1: gotten through it? A lot of unanswered questions, Yeah, exactly.

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Speaker 1: And I'm just looking through some of the notes too,

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Speaker 1: and it's talking about, you know, the pace of economic

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Speaker 1: growth abroad was already subdued before the appric I mean

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Speaker 1: they were also looking at, you know that this wasn't

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Speaker 1: just a u S thing that this was obviously a

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Speaker 1: global thing as well, and just looking at you know,

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Speaker 1: uncertainty in the markets, volatility in the markets, conditions in

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Speaker 1: short term funding markets also deteriorated sharply amid a decline

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Speaker 1: in market liquidity and challengers and dealer intermediation. They were

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Speaker 1: specifically going into the weeds of how the financial markets

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Speaker 1: are working or not working, and that is why you

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Speaker 1: saw those unprecedented actions and also the expansion of the

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Speaker 1: balance sheet to make sure that there was liquidity in

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Speaker 1: the markets. It was all about making sure also that

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Speaker 1: those markets were operating accurately. Jason, all right, so Dave Wilson,

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Speaker 1: come on in here. It looks like we're seeing equities

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Speaker 1: take a little bit of a tick up. Not nothing

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Speaker 1: dramatic going on here, but tell us what's underneath. Uh,

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Speaker 1: this trade based on the FED, but also based on

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Speaker 1: everything else that is happening in the world, well back

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Speaker 1: toward its highs of the day, and sort of backed

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Speaker 1: off a bit before the minutes were released. So clearly

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Speaker 1: that's being taken as a positive. Now a whole lot

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Speaker 1: of a positive, but certainly kind of helping things along.

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Speaker 1: You know, what jumps out today's trading. I mean, we

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Speaker 1: were seeing the travel related shares rally as we have

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Speaker 1: for a couple of days. Now, what's different this time?

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Speaker 1: At least it got my attention, And one is we're

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Speaker 1: seeing the home builders with some pretty substantial gains. Poultigroup

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Speaker 1: notable in that score. It's up ten percent in today's trading,

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Speaker 1: uh Leonora, Dr Horton also in the SMP five hundred

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Speaker 1: also showing some pretty substantial gains as well. But even

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Speaker 1: more so, what's going on with the hospital chains? And

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Speaker 1: if you think about an area that's being affected by

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Speaker 1: the virus, I mean you figure that's front and center

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Speaker 1: at this point. You know you've got h C A Healthcare,

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Speaker 1: biggest owner of hospitals on a for profit basis, up

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Speaker 1: more than eleven percent in today's training, and smaller companies

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Speaker 1: doing even better. Community health systems up seventeen and a

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Speaker 1: half percent, ten at Healthcare more than twenty six percent.

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Speaker 1: So whatever is happening, it looks like it's being interpreted

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Speaker 1: as a positive for the hospitals here. Yeah, and I

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Speaker 1: want to talk more about the markets, but I do,

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Speaker 1: and also go back to those FED minutes, and I'm

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Speaker 1: looking at the bond market, because it does look like

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Speaker 1: a slight uptick in yields, if ever so slightly ten

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Speaker 1: years yielding about point seven too before the Fed minutes

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Speaker 1: now up to point seven four. Again minuscule, but nonetheless

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Speaker 1: a little bit of a movement. Five year note was

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Speaker 1: yielding about point four three. Now we're with the yield

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Speaker 1: of point four five two year note, that shorter end

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Speaker 1: of the yield curve res yielding yielding point zero two.

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Speaker 1: It's now I mean sorry, point to uh, it's now

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Speaker 1: yield point to one. It's now yielding point to four.

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Speaker 1: So a little bit of an uptake to uptake. Um, Kathleen,

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Speaker 1: As you said, you know, all of this stuff is

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Speaker 1: just coming across and we're all trying to make sense

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Speaker 1: of it. Um, So treasury is a little bit lower

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Speaker 1: after that Fed mission. Fed minutes officials advocated quote forceful

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Speaker 1: monetary response. That is truly what we got, Kathleen. Well,

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Speaker 1: and we certainly did. And apparently according to the minutes. UM.

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Speaker 1: We're looking at our market live blog, a few preferred

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Speaker 1: to um do a fifty basis point. That's interesting meeting.

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Speaker 1: I get some people saying, hey, let's don't wait. You know,

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Speaker 1: let's let's be as aggressive as we can, etcetera, etcetera. UM.

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Speaker 1: I think for the bond market, UM, what they would

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Speaker 1: fear in something like us is any hint that the

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Speaker 1: FED didn't say what we all we were just talking about,

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Speaker 1: you're going to keep this response in place. You want

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Speaker 1: a forceful monetary response, and you want to keep it

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Speaker 1: in place until the virus has been vanquished. And you know,

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Speaker 1: be FED officials UM have said since then that they

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Speaker 1: know that they can't sure the virus, they can't get

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Speaker 1: test kits out faster, they can't do that. But what

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Speaker 1: they can do is do everything they can to bolster

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Speaker 1: the economy, both to the financial markets throughout so that

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Speaker 1: we don't get a bad financial crisis. There's been all

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Speaker 1: those tresses and strain, but we've also seen that that

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Speaker 1: just you know, you look every day to see if

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Speaker 1: there's another headline on a new FED program. Right, well,

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Speaker 1: and we're going to hear from Sorry to interrupt, Kathleen,

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Speaker 1: but we're running a shot in time. We are going

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Speaker 1: to hear from Jpale tomorrow, right, that's right, And a

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Speaker 1: webinar at ten a m. We heard from Charlie Evans

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Speaker 1: from Chicago, FED speaking to Econo Club of Chicago, by

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Speaker 1: the way, um, and he also sees some you know,

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Speaker 1: long drawn out damage to the economy, so it will

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Speaker 1: be very important to hear what he tells us. All right, Well,

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Speaker 1: thank you both so much. Kathleen Hayes, Global Economics and

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Speaker 1: Policy Editor, joining us with her analysis of the FED mins.

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Speaker 1: We're gonna have more on that coming up in just

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Speaker 1: a few minutes, Carol our. Thanks to Dave Wilson as well.

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Speaker 1: He'll be back a little bit later on with his

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Speaker 1: chart and stock of the day. You're listening to Bloomberg

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Speaker 1: Business Week Karl Masser along with Jason Kelly, and our

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Speaker 1: top story certainly at this hour is the release of

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Speaker 1: those minutes from the latest FED meeting meetings March three

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Speaker 1: and also March fifteenth. Let's gettle bit more analysis. Steeplitz

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Speaker 1: is back with US chief US economist at TS Lombard

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Speaker 1: on the phone from New York City. So Steve, hopefully

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Speaker 1: you've had a few minutes to digest it. Although it

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Speaker 1: was a live release, so all of us were scrambling

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Speaker 1: to kind of make sense of it, because usually they're

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Speaker 1: released a little bit of ahead of time. We can

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Speaker 1: you know kind of figure out. Certainly are our journalists

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Speaker 1: are in the lock up? The key points? Um, what

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Speaker 1: stands out for you from what you've read so far? Well, honestly,

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Speaker 1: what's first of all, Hi, everybody, I didn't What stands

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Speaker 1: out to me is it's sort of a time capsule,

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Speaker 1: you know. It's it's like reading the minutes today from

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Speaker 1: something that happened in two thousand and eight. I mean,

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Speaker 1: so much as occurred from the time at which they

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Speaker 1: met in terms of their own actions, as well as, uh,

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Speaker 1: what happened to the economy since then. Uh, it has

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Speaker 1: more of a it's an interesting slice of what they

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Speaker 1: were thinking at the moment. And Uh, I think one

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Speaker 1: of the things that jumps out at me, which I

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Speaker 1: was saying at the time, was there are a number

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Speaker 1: of FOC members who said, well, with all everything that

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Speaker 1: you're doing, don't cut the rate to zero right now,

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Speaker 1: just cut a fifty basis points in leasing room so later.

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Speaker 1: And and I think that was a valid point that

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Speaker 1: that they were making, because everything that fed is done right. Um.

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Speaker 1: To use a phrase that was popular in two thousand

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Speaker 1: and eight was to ring fence. In effect, the government

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Speaker 1: mandated contraction. Uh. And that and the and the financial

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Speaker 1: impact that that created, and to ring fence it from

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Speaker 1: basically spilling into the broader economy to the point that

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Speaker 1: something even worse, you know, gets created. But you can't

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Speaker 1: do that with this right right, The broader economy was

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Speaker 1: impacted from day one pretty much, right right. So what

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Speaker 1: you try and do is by ring fencing, what I

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Speaker 1: mean is make sure all these good businesses that have

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Speaker 1: been are now shuttered or severely impacted, make sure that

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Speaker 1: they have cash that they can open with and that

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Speaker 1: they don't actually go out of business. Um. And then

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Speaker 1: on the market side, make sure that everybody who is

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Speaker 1: stressed in their positions who needed to raise cash could

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Speaker 1: sell securities, that there could be a market price and securities,

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Speaker 1: which if you remember was part of the problem with

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Speaker 1: Bearer with Lahman um that there's a price for these

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Speaker 1: securities and if they have to be in the bid

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Speaker 1: on the office side of the market, that is the

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Speaker 1: FED they will be to allow that. So if you

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Speaker 1: allow that to occur and you push credit where where

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Speaker 1: firms are shuttered, then you the presumption is you have

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Speaker 1: something that's still viable so that when they mandated shut

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Speaker 1: down ends or as it ends, because it's not going

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Speaker 1: to just end to one fell swoop. We know that.

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Speaker 1: But as it ends, then these businesses can come back

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Speaker 1: to life again. Whereas if you don't do that, and

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Speaker 1: this is what I mean by by the uh rein fencing,

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Speaker 1: if you don't do that, then this thing just cascades through.

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Speaker 1: And then when everyone goes back to work, that's great,

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Speaker 1: but so many business will just just be permanently closed.

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Speaker 1: And so what do you want to hear? So we're

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Speaker 1: gonna hear at least from a speech perspective from j

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Speaker 1: Pale tomorrow, we're continuing to hear from FED speakers. What

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Speaker 1: more do you want to hear that? Maybe more up

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Speaker 1: to date and relevant that the FED is thinking about

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Speaker 1: or doing, Given as you say, Steve, that you know this.

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Speaker 1: This feels a little bit outdated these minutes at this

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Speaker 1: moment in time, given how fast the world is moving. Yeah.

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Speaker 1: I think there's two things here, and I think one is, um,

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Speaker 1: what's the simulus plan? Right? So everything they've done is

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Speaker 1: to keep everything together, and I guess the stimulus plan

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Speaker 1: is through the SPVs, and I like to hear more

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Speaker 1: about that and more about we keep getting bits of

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Speaker 1: pieces of information about this lending to main street business

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Speaker 1: and I'd like to hear a little bit more specifically

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Speaker 1: about what that is and how that's gonna work. Um.

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Speaker 1: And but then I guess the stimulus is just for

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Speaker 1: them to support whatever the fiscal side is because there's

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Speaker 1: no more stimulus that they can really offer. And then

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Speaker 1: while it's early to think about this, and I admit that,

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Speaker 1: but triage is not policy. And what is your policy?

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Speaker 1: That that is the FED? What is the FENS policy

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Speaker 1: as we reopened? Because death Comb is on the scales

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Speaker 1: of capital market prices everywhere, they're the both sides of

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Speaker 1: the market almost everywhere. Um, what is their plan? What

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Speaker 1: is their thought to unwind where they are? And are

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Speaker 1: they going to go back to what they were over

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Speaker 1: the last expansion, which is being the leverage for the system,

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Speaker 1: their balance. It was a level of a system to

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Speaker 1: allow um borrowing and and and and an equity issue

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Speaker 1: was to occur at the same time, washing financial sector

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Speaker 1: leverage to be fair, and Steve, we've just got about

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Speaker 1: forty five seconds left here. I mean, the Fed's going

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Speaker 1: to have to watch how this evolves on the other side,

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Speaker 1: just like the rest of us. We don't know what

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Speaker 1: the longer term impact will be. What kind of behavior

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Speaker 1: will we see, you know, in individuals and companies. We

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Speaker 1: just don't know yet. I mean, we were talking to

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Speaker 1: John Worth, I'm well known to the sports industry and

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Speaker 1: saying that is kind of a loss when it comes

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Speaker 1: to sports at this point. So, UM, just got about

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Speaker 1: thirty seconds left here. I I agree with you completely,

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Speaker 1: and I don't expect him to answer that, but I think, um,

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Speaker 1: I think it's something though that we should be thinking

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Speaker 1: about as the economy solely does recover. And remember, our

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Speaker 1: view is that the lows aren't into the equity market.

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Speaker 1: We're looking eighteen dreds thousand. I still see a negative

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Speaker 1: GDP for the third quarter. Um, the overhang of what's

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Speaker 1: occur ard is going to extend basically into the third quarter,

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Speaker 1: very slow return and GDP doesn't get back to where

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Speaker 1: it was in the fourth quarter twenty nineteen until late

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Speaker 1: all Right, we really appreciate that instant analysis. Fast moving

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Speaker 1: this afternoons ficial without that lockout. Steve litz c us

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Speaker 1: economist for T s Lambard joining us on the phone

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Speaker 1: from New York City. Stay safe. This is Bloomberg Business

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Speaker 1: Week with Carol Masser and Jason Kelly on Bloomberg Radio.

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Speaker 1: Let's turn to the doc our guy. Dr Ian LUs Bader,

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Speaker 1: clinical Associate Professor of Medicine at n y U s

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Speaker 1: Lango Medical Center, joining us on the phone from New

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Speaker 1: York City. We love checking in with him because he

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Speaker 1: gets it to a straight Dr leus Bader, how you doing, Hi, Thanks,

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Speaker 1: thanks for having me. Definitely challenging times out there today,

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Speaker 1: having done twenty telemedicine visits many patients with you know,

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Speaker 1: really classic COVID symptoms so loss of smell and see

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Speaker 1: or clough. I personally know about twenty friends and colleagues

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Speaker 1: with diagnosed COVID, A number of physicians who have acquired it,

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Speaker 1: some fortunately, most doing fairly well. Some has unfortunately been hospitalized.

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Speaker 1: So very challenging. Times are really it's all hands on deck.

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Speaker 1: Are friends who are in dermatology, urology are being called

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Speaker 1: into the hospital to really help manage the huge volume

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Speaker 1: of patients. So it's it's a challenge. So when you

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Speaker 1: read are you know here Anthony Faucci as we know

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Speaker 1: at the National Institute of Allergy and Infectious Diseases, you

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Speaker 1: know very well known now because of the virus updates

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Speaker 1: and SEANTA daily basis. When he says, um Dr les

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Speaker 1: Bader that the start of a turnaround in the fight

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Speaker 1: against the virus could come after this week, how do

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Speaker 1: you see that? How do you interpret it? Because I

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Speaker 1: think it is important that we not run into fast

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Speaker 1: But how do you interpret that? Thinking? Well, Dr Faucci

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Speaker 1: is is a legend. I remember him from the HIV

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Speaker 1: days back in the eighties, and so he is. He

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Speaker 1: is a very credible expert for a long time. And uh,

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Speaker 1: and and hopefully the models are correct, and hopefully the

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Speaker 1: numbers are correct. I can tell you the system, certainly,

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Speaker 1: the hospital system is that max capacity and certainly very strained.

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Speaker 1: UM it's always challenging when when some of your colleagues

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Speaker 1: are succumbing to the same disease that that you're treating.

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Speaker 1: And I think we have frustrations. I think a lot

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Speaker 1: of the numbers we have are inaccurate because we really

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Speaker 1: don't have testing. Getting um Miley symptomatic patients tested, UH

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Speaker 1: is very difficult. You know, what's advertised as sort of

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Speaker 1: the fifteen minute turnaround is very very limited. People are

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Speaker 1: asking intelligently, I must say, patients asking about antibody testing

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Speaker 1: they think they had it. Is it safe to go

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Speaker 1: out those i GM early antibodies and i G G antibodies.

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Speaker 1: So many people, including physicians, would like to be tested,

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Speaker 1: and I think when we do test all those people

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Speaker 1: were going to see the case number much much higher

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Speaker 1: than what's officially reported. So hopefully he's right. Hopefully the

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Speaker 1: the peak is sort of cresting at this time because

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Speaker 1: the system certainly is is strained. I myself will be

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Speaker 1: on call on the hospital next weekend, so certainly I

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Speaker 1: would it would be great if the numbers begin to

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Speaker 1: come down. And we also really need better, better treatment.

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Speaker 1: A lot of patients are in studies for that plaquinal

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Speaker 1: hydroxy chloroquine and zpac io sex inhibitors, but we really

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Speaker 1: also are lacking data on what's the right approach to

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Speaker 1: treat people. So that's a lot of supportive care. My senses,

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Speaker 1: when all this data is in and all the ventilators

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Speaker 1: have arrived, the storm will have passed and in June

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Speaker 1: or July will have ten thousand extra ventilators and lots

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Speaker 1: of studies and uh, you know, most of the storm

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Speaker 1: will have passed. Unfortunately, so only got about a minute left.

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Speaker 1: Dr les Bader, I gotta ask you just from a

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Speaker 1: very practical perspective, because we're talking about it in our house.

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Speaker 1: When do we are a mask? You know, in general,

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Speaker 1: I think it's good to be safe. Most people in

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Speaker 1: their household, if they've had it, they've probably exposed to

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Speaker 1: other people. So unless someone for sure in the house

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Speaker 1: knows you're in quarantine, you haven't no one else did,

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Speaker 1: that's reasonable. It is reasonable to wear outside, although I

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Speaker 1: must say there are so few people on the street

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Speaker 1: you haven't more you know you've got. But I think

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Speaker 1: if you're going into a closer space, that's reasonable if

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Speaker 1: you're sure you haven't had it to where it play

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Speaker 1: it safe. You know, Gloves, if you wash your hands regularly,

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Speaker 1: are probably unnecessary. So I think it more is better

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Speaker 1: when it comes comes to masks, I think that's reasonable

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Speaker 1: to do. I'm going to replay that from my teenage

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Speaker 1: daughter who keeps fighting me on it, like I can't

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Speaker 1: breathe through it. I'm like, just put it on or

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Speaker 1: just wear it. Figure it out. Figure it out. You

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Speaker 1: do get used to it, and I think this is

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Speaker 1: also a time to think about I hate to say

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Speaker 1: it advanced directives many patients who are older who are sick.

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Speaker 1: We know they get in the I c U. It's

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Speaker 1: a mortality to the I see you think about it

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Speaker 1: doesn't hurt to sort of say, what do I want

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Speaker 1: to important to think about that? All Right, We're gonna

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Speaker 1: put We're gonna talk with you more about that the

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Speaker 1: next time we catch up. And we've been very fortunate

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Speaker 1: that you're able to spend some time with us just

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Speaker 1: about every week. We really appreciate Dr Ian Lesibator, stay

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Speaker 1: safe out there, Clinical Associate Professor of Medicine over at

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Speaker 1: Lango Medical Center. This is Bloomberg Business Week with Carol

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Speaker 1: Masser and Jason Kelly on Bloomberg Radio. I also think

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Speaker 1: it's notable, and I just want to take a moment

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Speaker 1: to point out that Newsom also has been doing some

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Speaker 1: fairly remarkable things in terms of not just allocating his

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Speaker 1: states resources within the state, but also reallocating them when

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Speaker 1: they're not needed, sending ventilators to New Yorks. Yeah. I mean,

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Speaker 1: it's really just amazing to think about how important New York,

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Speaker 1: California and all of this is, especially as we move on,

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Speaker 1: as you say, to this next phase, it's really um

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Speaker 1: it's an important thing to to keep track of. And

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Speaker 1: as you say, it's it's ventilators, but you know the

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Speaker 1: PPE and everything else. Yeah, exactly. I mean they said

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Speaker 1: their initial goals were five hundred million PPE, you know,

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Speaker 1: and it's all its various forms. And then of course

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Speaker 1: as the you know, the trendline and how the virus um,

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Speaker 1: you know, the models, how they played out has given

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Speaker 1: them an opportunity to kind of take a second look

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Speaker 1: at that, and then that's how they've been able to

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Speaker 1: certainly spread out the equipment not just to their state,

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Speaker 1: but to other states. So I think I don't listen

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Speaker 1: to you. I listened to you, listen to feel free

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Speaker 1: to tweet me. Does he always listen to me? And

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Speaker 1: don't think I mostly listen to you? You know who

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Speaker 1: I always listen to and read? Though? Is Michelle what

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Speaker 1: a rock star during all of this? Because we're always

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Speaker 1: interested in what's going on in Wall Street, maybe now

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Speaker 1: more than ever because at the crux of this geographically

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Speaker 1: but also in terms of the recovery, really important to

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Speaker 1: understand what's going on there. She joins us on the

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Speaker 1: phone from Vermont. Michelle Davis does Financial Reporter her story yesterday.

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Speaker 1: I feel like set the tone for everything that's happening.

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Speaker 1: Greed and fear collide. Wall Street calls traders back to

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Speaker 1: the office. So Michelle, help us understand what's going on

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Speaker 1: when it comes to Wall Street people going to work,

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Speaker 1: not going to work. What do you find? So we

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Speaker 1: have been hearing from traders across Wall Streets that they

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Speaker 1: are getting pressure from managers to go back into the

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Speaker 1: office even as you know, infections rise around them, you know,

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Speaker 1: not only around New York City, but in some cases

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Speaker 1: on the trading floors that they had been working on UM.

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Speaker 1: And I think this is a really important story because

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Speaker 1: when we talk about Wall Street and traders, you know,

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Speaker 1: these are white collar workers that you know, they're not

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Speaker 1: a group of people that tends to realizeit much empathy

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Speaker 1: from the public, but there are people who are facing

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Speaker 1: serious pressure here to choose between you know, keeping their

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Speaker 1: jobs in some cases that they're if people senior to

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Speaker 1: them are pressuring them to come in UM and putting

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Speaker 1: themselves and their families at risk, or training are straining

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Speaker 1: the health system. I gotta tell you, greed and fear collide.

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Speaker 1: That has been our theme since we saw it on

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Speaker 1: the Bloomberg terminal because it does feel like as there

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Speaker 1: are more Michelle, you know, optimistic trend lines when it

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Speaker 1: comes to the virus, hardly are we out of it?

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Speaker 1: But um, you can see that folks are saying, I

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Speaker 1: saw it in my neighborhood. My daughter and I were

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Speaker 1: walking your dog and there were more people out yesterday

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Speaker 1: and we were like, what's going on here? Because we

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Speaker 1: still you know, we've still got to be in this

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Speaker 1: shutdown mode in order to make sure that the models

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Speaker 1: you know, work for us here. So, um, you know,

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Speaker 1: what are you so what are you hearing from individuals?

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Speaker 1: Are they they're feeling pressured? Um? What are you hearing

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Speaker 1: from the firms who say, wait, we're not pressuring them.

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Speaker 1: So it's of course, uh, very mixed. There are some

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Speaker 1: firms like Goldmen Stocks that have said publicly that you know,

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Speaker 1: very high percentage more than nine of their employees are

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Speaker 1: working from home and have been able to successfully do that.

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Speaker 1: At JP Morgan for for the trading workforce, that it's

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Speaker 1: closer to eight percent working from on the trading floor.

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Speaker 1: And you know, the banks say that this is all

428
00:23:05,440 --> 00:23:08,920
Speaker 1: a balancing act. They are trying to juggle keeping markets

429
00:23:08,960 --> 00:23:13,040
Speaker 1: functioning like traders are an essential part of market stability

430
00:23:13,080 --> 00:23:14,800
Speaker 1: and and people say that if we were to just

431
00:23:14,880 --> 00:23:17,399
Speaker 1: close markets everyone could stay home, it would lead to

432
00:23:17,480 --> 00:23:20,000
Speaker 1: way deeper issues in terms of stability and and you

433
00:23:20,040 --> 00:23:23,400
Speaker 1: know of the market structure and liquidity. But the people

434
00:23:23,400 --> 00:23:25,639
Speaker 1: I'm talking to sday at least at JP Morgan, we

435
00:23:26,359 --> 00:23:30,280
Speaker 1: got our hands on this email that showed that UM

436
00:23:30,520 --> 00:23:35,040
Speaker 1: senior credit head had told his employees that even though

437
00:23:35,440 --> 00:23:37,600
Speaker 1: overall at the firm, you know that the directive has

438
00:23:37,600 --> 00:23:40,640
Speaker 1: been please work from home if you can. UM this

439
00:23:40,760 --> 00:23:43,720
Speaker 1: manager had said, you are you have to be on

440
00:23:43,760 --> 00:23:45,080
Speaker 1: the trading floor. You have to be in the office

441
00:23:45,119 --> 00:23:48,120
Speaker 1: unless you have a condition and you have a doctor's note.

442
00:23:48,160 --> 00:23:51,120
Speaker 1: So the banks are saying, you know, they would never

443
00:23:51,200 --> 00:23:53,920
Speaker 1: force anyone to come in who doesn't feel comfortable coming in.

444
00:23:54,000 --> 00:23:56,359
Speaker 1: But yeah, but you know how that is. Jason and

445
00:23:56,400 --> 00:23:58,919
Speaker 1: I talked about that's the thing. So that is the

446
00:23:58,960 --> 00:24:00,760
Speaker 1: thing that I keeps your in on Carol and I

447
00:24:00,840 --> 00:24:03,600
Speaker 1: both Michelle, which is this notion of there is a

448
00:24:03,720 --> 00:24:06,320
Speaker 1: very big difference. I think we're all learning it between

449
00:24:06,359 --> 00:24:10,040
Speaker 1: someone saying, listen, if you don't feel comfortable, you don't

450
00:24:10,080 --> 00:24:13,000
Speaker 1: have to come in and basically saying, look, we are

451
00:24:13,040 --> 00:24:14,960
Speaker 1: doing this for your own good and for the good

452
00:24:14,960 --> 00:24:17,320
Speaker 1: of the firm, and for the good of society. Candidly,

453
00:24:17,720 --> 00:24:20,000
Speaker 1: I do feel like that's a vast difference that you

454
00:24:20,040 --> 00:24:23,000
Speaker 1: guys really zeroed in on this story. And we know

455
00:24:23,080 --> 00:24:25,960
Speaker 1: about ambition, we know about you know, people wanting to

456
00:24:26,000 --> 00:24:28,000
Speaker 1: do a good job and provide for their families and

457
00:24:28,040 --> 00:24:30,720
Speaker 1: all those different things. But at what cost. And this

458
00:24:30,840 --> 00:24:33,439
Speaker 1: isn't just about you know, someone saying well, I'm a

459
00:24:33,440 --> 00:24:36,720
Speaker 1: tough guy. This is about like the number of people

460
00:24:36,720 --> 00:24:39,240
Speaker 1: who are out in social distance and and the spread

461
00:24:39,240 --> 00:24:42,359
Speaker 1: of this virus. Right yeah, And and I talked to

462
00:24:42,400 --> 00:24:45,879
Speaker 1: people who who pushed back on this idea that you know,

463
00:24:45,960 --> 00:24:47,960
Speaker 1: they needed to be at the office to be able

464
00:24:48,000 --> 00:24:50,800
Speaker 1: to to you know, appropriately do their jobs. Some of

465
00:24:50,800 --> 00:24:52,280
Speaker 1: the people I talked to you had been working from

466
00:24:52,359 --> 00:24:56,359
Speaker 1: home already, and and things had been going smoothly, and

467
00:24:56,400 --> 00:24:59,000
Speaker 1: then they got calls from manager or pressure from other

468
00:24:59,000 --> 00:25:02,560
Speaker 1: people to come back and just I guess, to differentiate

469
00:25:02,640 --> 00:25:05,200
Speaker 1: themselves from other terms that that maybe had a larger

470
00:25:05,200 --> 00:25:07,919
Speaker 1: workforce at home. I think this is going to be

471
00:25:08,000 --> 00:25:11,400
Speaker 1: so fascinating to watch, you know, especially again, like this

472
00:25:11,480 --> 00:25:14,240
Speaker 1: is our sandbox that we plan Wall Street and you

473
00:25:14,320 --> 00:25:16,600
Speaker 1: cover it as we said so well, Michelle, but you know,

474
00:25:16,840 --> 00:25:19,200
Speaker 1: as a lot of New York, especially when it goes

475
00:25:19,359 --> 00:25:21,920
Speaker 1: comes to finance, as New York finance goes, so goes

476
00:25:22,240 --> 00:25:24,000
Speaker 1: a lot of the rest of the world, And you

477
00:25:24,040 --> 00:25:27,359
Speaker 1: do just wonder what this looks like on the other side,

478
00:25:27,400 --> 00:25:30,200
Speaker 1: and whether you do have a meaningful number of people, Carol,

479
00:25:30,200 --> 00:25:32,000
Speaker 1: who stand up and say, you know what, No, I'm

480
00:25:32,000 --> 00:25:33,840
Speaker 1: not going to do that. That's not it's not good

481
00:25:33,880 --> 00:25:36,600
Speaker 1: for me, it's not good for my family, and I

482
00:25:37,040 --> 00:25:39,640
Speaker 1: can't I can't do this anymore. Yeah, exactly. And we've

483
00:25:39,640 --> 00:25:41,959
Speaker 1: seen this in organizations right where this has gone on,

484
00:25:42,040 --> 00:25:44,040
Speaker 1: where you know, it's not until we feel like a

485
00:25:44,160 --> 00:25:46,639
Speaker 1: number of people or our managers are doing it that

486
00:25:46,680 --> 00:25:49,600
Speaker 1: we feel comfortable about doing it. Setting the tone absolutely

487
00:25:49,600 --> 00:25:52,040
Speaker 1: all right, Michelle Davis, Thank you so much. Always good

488
00:25:52,040 --> 00:25:54,960
Speaker 1: to catch up with you. Michelle Davis, finance reporter, rock

489
00:25:55,000 --> 00:25:58,399
Speaker 1: star for Bloomberg. Been all over this story joining us

490
00:25:58,760 --> 00:26:01,760
Speaker 1: on the phone from Vermont, Carol, Yeah, I think it's

491
00:26:01,760 --> 00:26:04,000
Speaker 1: really important, and I just think this is going to

492
00:26:04,080 --> 00:26:06,280
Speaker 1: be key in terms of when we get on the

493
00:26:06,280 --> 00:26:08,400
Speaker 1: other side of this and how we all go back

494
00:26:08,440 --> 00:26:09,760
Speaker 1: to it, and I think there's going to have to

495
00:26:09,760 --> 00:26:14,640
Speaker 1: be some coordination between companies and organizations and certainly within governments,

496
00:26:14,640 --> 00:26:16,679
Speaker 1: even though states are going to probably do it at

497
00:26:16,720 --> 00:26:20,439
Speaker 1: different times. This is Bloomberg Business Week with Carol Masser

498
00:26:20,560 --> 00:26:24,359
Speaker 1: and Jason Kelly on Bloomberg Radio. Well, I feel like

499
00:26:24,400 --> 00:26:26,960
Speaker 1: we've just been been having the show of like our

500
00:26:27,000 --> 00:26:30,280
Speaker 1: favorites in in many ways home coming it really is

501
00:26:30,440 --> 00:26:33,240
Speaker 1: and virus COVID nineteen version. I know, we go from

502
00:26:33,240 --> 00:26:36,679
Speaker 1: Michelle Davis to to now one of our one of

503
00:26:36,680 --> 00:26:39,040
Speaker 1: my long term friends, a friend of the show, uh

504
00:26:39,119 --> 00:26:42,679
Speaker 1: Dan Morgan, down with Senovis in Atlanta. Known him for

505
00:26:42,680 --> 00:26:45,240
Speaker 1: a long time and looking at the markets and he's

506
00:26:45,320 --> 00:26:49,199
Speaker 1: really done some thoughtful analysis. So Dan, great to have

507
00:26:49,359 --> 00:26:51,360
Speaker 1: you with us. And first of all, how are you doing.

508
00:26:51,400 --> 00:26:54,000
Speaker 1: How's it going down in Atlanta? Oh? Thanks are good?

509
00:26:54,240 --> 00:26:56,800
Speaker 1: Hi Jason and Carol. It's a little quiet down here

510
00:26:56,840 --> 00:26:58,560
Speaker 1: when you're driving around on the streets. I don't know

511
00:26:58,560 --> 00:27:01,080
Speaker 1: if it's like that in New York, but uh, uh yeah,

512
00:27:01,240 --> 00:27:04,040
Speaker 1: it's like that everywhere. I guess, yeah, I do wonder,

513
00:27:04,320 --> 00:27:06,600
Speaker 1: you know, just to dwell for a minute on this,

514
00:27:06,800 --> 00:27:09,760
Speaker 1: Uh Dan, you know, Atlanta. Obviously it's been different in

515
00:27:10,040 --> 00:27:12,280
Speaker 1: our listeners and and poor Carroll have had me listening

516
00:27:12,280 --> 00:27:15,800
Speaker 1: to had to listen to me, you know, talk about maybe, uh,

517
00:27:15,840 --> 00:27:18,840
Speaker 1: the governor of Georgia being a little bit but behind

518
00:27:18,880 --> 00:27:21,560
Speaker 1: the curve in terms of closing things down and sheltering

519
00:27:21,560 --> 00:27:24,040
Speaker 1: in place. But it sounds like Atlanta is taking a

520
00:27:24,080 --> 00:27:27,639
Speaker 1: little more seriously these days in Georgia. Yeah, you're right, Jason.

521
00:27:27,680 --> 00:27:29,800
Speaker 1: I think initially it was kind of a thought that

522
00:27:30,040 --> 00:27:32,560
Speaker 1: there were these kind of epicenters like New York City

523
00:27:32,560 --> 00:27:35,360
Speaker 1: in San Francisco, and it wasn't quite as a big

524
00:27:35,400 --> 00:27:38,399
Speaker 1: deal here in Georgia. But you know, the number of

525
00:27:38,440 --> 00:27:40,840
Speaker 1: cases picked up and it's become more of an issue,

526
00:27:40,840 --> 00:27:43,840
Speaker 1: and I think they have taken on pretty much the

527
00:27:43,920 --> 00:27:47,000
Speaker 1: same precautions now they're just pretty much everywhere. Eld Hey,

528
00:27:47,119 --> 00:27:49,199
Speaker 1: you know, Dan, is there an understanding like, you know,

529
00:27:49,240 --> 00:27:52,000
Speaker 1: it's hard for us certainly here in New York. You know,

530
00:27:52,160 --> 00:27:54,800
Speaker 1: we see it firsthand. We understand how serious it is,

531
00:27:54,840 --> 00:27:57,040
Speaker 1: and we're all in lockdown. But I do wonder how

532
00:27:57,080 --> 00:27:58,920
Speaker 1: other states are feeling when they're like, you know, it's

533
00:27:58,960 --> 00:28:01,480
Speaker 1: not so bad here, but do we all understand kind

534
00:28:01,480 --> 00:28:04,320
Speaker 1: of we're all in this together, do you think. Yeah?

535
00:28:04,320 --> 00:28:06,560
Speaker 1: I think so, Carol. I mean, you know, like initially,

536
00:28:06,560 --> 00:28:08,159
Speaker 1: I think it was thought that it was kind of

537
00:28:08,359 --> 00:28:12,320
Speaker 1: a separatist type of thing, but I think now, um,

538
00:28:12,359 --> 00:28:15,280
Speaker 1: you know, we have the Disease Center here in downtown Atlanta,

539
00:28:15,359 --> 00:28:17,480
Speaker 1: so you know President Trump is down here very often

540
00:28:18,080 --> 00:28:21,399
Speaker 1: doing conferences. So I think, you know, I think at

541
00:28:21,440 --> 00:28:23,080
Speaker 1: this point, like you said, Carol, I think we all

542
00:28:23,119 --> 00:28:25,600
Speaker 1: feel like it's something that everyone has to fight together.

543
00:28:26,040 --> 00:28:28,800
Speaker 1: All right. So you're an investor. At the end of

544
00:28:28,800 --> 00:28:30,639
Speaker 1: the day, you look at the markets, you look at

545
00:28:30,680 --> 00:28:33,280
Speaker 1: individual stocks. Dan, what do you make of this? And

546
00:28:33,280 --> 00:28:35,680
Speaker 1: as I alluded to, you've been doing this for some time.

547
00:28:35,720 --> 00:28:39,160
Speaker 1: You've seen some downturns, you've seen some crises. How do

548
00:28:39,240 --> 00:28:42,360
Speaker 1: you approach this one maybe a little bit differently? Well,

549
00:28:42,360 --> 00:28:44,440
Speaker 1: you are right, Jason, I mean you think about it.

550
00:28:44,480 --> 00:28:46,040
Speaker 1: I hate to admit this on the air in front

551
00:28:46,040 --> 00:28:47,920
Speaker 1: of everyone, but I've been in the business since nineteen

552
00:28:49,160 --> 00:28:51,560
Speaker 1: and when I started, the Dow was at two thousand,

553
00:28:51,800 --> 00:28:54,600
Speaker 1: and I went to Black Monday, and the Dow is

554
00:28:54,640 --> 00:28:56,960
Speaker 1: now with twenty two thousand. So I have a little

555
00:28:57,000 --> 00:28:59,320
Speaker 1: different perspective than maybe somebody who just got in the

556
00:28:59,360 --> 00:29:01,600
Speaker 1: market maybe the last five or ten years ago. But

557
00:29:02,120 --> 00:29:05,080
Speaker 1: you know, this is obviously a huge pullback. It's you know,

558
00:29:05,520 --> 00:29:07,800
Speaker 1: in terms of you know, from top to bottom. You know,

559
00:29:07,800 --> 00:29:10,600
Speaker 1: it's about a third. It wasn't quite as bad as

560
00:29:10,680 --> 00:29:13,040
Speaker 1: the housing bubble. You know, that was what fifty six

561
00:29:13,160 --> 00:29:15,640
Speaker 1: percent from the top to the bottom. So you know,

562
00:29:15,800 --> 00:29:19,000
Speaker 1: it's it's not as bad. But you know, I don't

563
00:29:19,000 --> 00:29:20,840
Speaker 1: know about you guys, but I'm kind of taking and

564
00:29:20,920 --> 00:29:23,680
Speaker 1: stride um. You know, it's it is a huge negative.

565
00:29:23,720 --> 00:29:27,720
Speaker 1: There's sectors that have been absolutely obliterated, but there's also

566
00:29:28,000 --> 00:29:31,120
Speaker 1: you know, there's also some interesting opportunities out there in

567
00:29:31,200 --> 00:29:35,400
Speaker 1: terms of various stocks and sectors that UH investors could

568
00:29:35,440 --> 00:29:37,840
Speaker 1: kind of think about, you know, going forward in this

569
00:29:37,920 --> 00:29:41,520
Speaker 1: kind of new COVID nineteen environment. So tell us about

570
00:29:41,520 --> 00:29:43,760
Speaker 1: some of those What are you thinking about? Yeah, well,

571
00:29:43,800 --> 00:29:46,960
Speaker 1: you know, technology, you know, that's my eerie of focus. Um,

572
00:29:47,240 --> 00:29:49,560
Speaker 1: you know, and again it's you know a lot of

573
00:29:49,600 --> 00:29:51,440
Speaker 1: the core themes that we kind of started off the

574
00:29:51,520 --> 00:29:55,320
Speaker 1: year talking about Jason McCarroll I think are still in place.

575
00:29:55,360 --> 00:29:57,440
Speaker 1: I mean, you think about you know, the big build

576
00:29:57,440 --> 00:29:59,600
Speaker 1: out in terms of the data center space in terms

577
00:29:59,600 --> 00:30:03,040
Speaker 1: of infra structure as a service, in terms of cloud.

578
00:30:03,360 --> 00:30:06,680
Speaker 1: I mean that's still I don't expect to really change um,

579
00:30:06,840 --> 00:30:09,560
Speaker 1: so that should be a good area going forward. You

580
00:30:09,600 --> 00:30:12,520
Speaker 1: also think about the roll out of five G. Everybody's

581
00:30:12,520 --> 00:30:14,320
Speaker 1: saying now that Apple is going to probably push that

582
00:30:14,360 --> 00:30:17,560
Speaker 1: into the first quarter of calendar twenty one, but I

583
00:30:17,600 --> 00:30:21,360
Speaker 1: still expect that to continue to roll forward. So even

584
00:30:21,360 --> 00:30:23,440
Speaker 1: though we know about all the bad stuff that's going

585
00:30:23,480 --> 00:30:26,280
Speaker 1: to happen, right you know, and some of these sectors

586
00:30:26,280 --> 00:30:28,120
Speaker 1: that you can just keep reporting about it all day long,

587
00:30:28,160 --> 00:30:30,480
Speaker 1: it's so depressing, it's nice to kind of take a

588
00:30:30,480 --> 00:30:31,920
Speaker 1: step back and say, wait a minute, you know, it's

589
00:30:31,920 --> 00:30:33,920
Speaker 1: not all that bad. There are some certain things that

590
00:30:33,960 --> 00:30:36,040
Speaker 1: are good out there, and there are some certain sectors

591
00:30:36,040 --> 00:30:38,160
Speaker 1: and companies that are actually going to benefit from this. Dan,

592
00:30:38,240 --> 00:30:40,040
Speaker 1: I gotta ask you because one of the stories that

593
00:30:40,120 --> 00:30:42,840
Speaker 1: Jason I talked about specifically for our New York audience

594
00:30:42,880 --> 00:30:45,200
Speaker 1: was about the creation of a w f H e

595
00:30:45,320 --> 00:30:48,120
Speaker 1: t F Work from Home e t F, about the

596
00:30:48,200 --> 00:30:51,200
Speaker 1: expectations that more people will ultimately be working from home

597
00:30:51,560 --> 00:30:53,320
Speaker 1: after we get through this virus, and that's going to

598
00:30:53,440 --> 00:30:56,200
Speaker 1: benefit cloud companies and a few others do you buy

599
00:30:56,200 --> 00:30:59,400
Speaker 1: into that? Well, Carol, can I be a part of

600
00:30:59,440 --> 00:31:01,120
Speaker 1: this so that I can be like saying and get

601
00:31:01,120 --> 00:31:03,120
Speaker 1: a code name and get some sort of copyright off

602
00:31:06,960 --> 00:31:08,719
Speaker 1: you know, that would be awesome? Yeah, I think so.

603
00:31:08,800 --> 00:31:10,920
Speaker 1: I mean if you think about the names in that group, right,

604
00:31:10,960 --> 00:31:13,560
Speaker 1: we all know them, right, Zoom Video Technology, which did

605
00:31:13,560 --> 00:31:16,719
Speaker 1: an I p O you know recently and it's just

606
00:31:16,760 --> 00:31:19,200
Speaker 1: done fabulous, right, That's been one of the plays in

607
00:31:19,240 --> 00:31:22,200
Speaker 1: that space. Um, you know you think of Microsoft with

608
00:31:22,240 --> 00:31:26,760
Speaker 1: their team's app. That's another area, Slack, which isn't quite profitable,

609
00:31:27,320 --> 00:31:29,080
Speaker 1: and then like you said, Carol, you start to kind

610
00:31:29,080 --> 00:31:30,760
Speaker 1: of take that out and say, well what does that

611
00:31:30,800 --> 00:31:32,520
Speaker 1: mean for the cloud? Right? And then you think of

612
00:31:32,560 --> 00:31:35,960
Speaker 1: like Amazon and a w S and Aser with Microsoft,

613
00:31:36,040 --> 00:31:38,840
Speaker 1: and then you look down at the grandeur level in

614
00:31:38,960 --> 00:31:42,280
Speaker 1: terms of who's producing the data center chips like Nivada

615
00:31:42,360 --> 00:31:44,640
Speaker 1: and a m D and so forth. So I think

616
00:31:44,680 --> 00:31:46,880
Speaker 1: you could put something together like that that would be

617
00:31:46,960 --> 00:31:50,400
Speaker 1: really cool and uh, you know, trade market or code

618
00:31:50,480 --> 00:31:52,960
Speaker 1: name it and uh then everyone will refer it to that,

619
00:31:53,400 --> 00:31:55,920
Speaker 1: and then you can have the trademark, you know, revenue

620
00:31:55,960 --> 00:31:59,600
Speaker 1: that comes off of it. And so how much do

621
00:31:59,640 --> 00:32:04,000
Speaker 1: you worry. I guess Dan that some of these gains

622
00:32:04,040 --> 00:32:05,920
Speaker 1: when it comes to some of the tech names and

623
00:32:06,640 --> 00:32:09,920
Speaker 1: are are short lived only because the world sort of

624
00:32:10,000 --> 00:32:12,640
Speaker 1: reverts back. How do you sort of make the call

625
00:32:12,800 --> 00:32:15,840
Speaker 1: between what is? And you and I used to talk

626
00:32:15,840 --> 00:32:18,440
Speaker 1: about this, and we talked about something conductors, like what

627
00:32:18,560 --> 00:32:22,240
Speaker 1: cyclical and what secular in terms of you know, these changes.

628
00:32:22,840 --> 00:32:25,960
Speaker 1: How wary are you of the of the world snapping back?

629
00:32:26,000 --> 00:32:28,560
Speaker 1: Are you so convinced like many are, that the world

630
00:32:28,560 --> 00:32:31,960
Speaker 1: has just fundamentally changed? Well, I think it has to

631
00:32:32,000 --> 00:32:34,600
Speaker 1: some degree, Jason. And like the names that we just

632
00:32:34,640 --> 00:32:36,719
Speaker 1: talked about in some of these themes, they were in

633
00:32:36,800 --> 00:32:40,479
Speaker 1: place before and now we're kind of saying, Wow, it's

634
00:32:40,520 --> 00:32:43,080
Speaker 1: even bigger than we thought. So I would expect that

635
00:32:43,160 --> 00:32:45,680
Speaker 1: to continue going forward. And you know, I would agree

636
00:32:45,720 --> 00:32:47,000
Speaker 1: with you. I think it's gonna be a little bit

637
00:32:47,040 --> 00:32:50,320
Speaker 1: slower coming out of the second quarter than people would

638
00:32:50,320 --> 00:32:52,560
Speaker 1: have originally expected. I think most of research I was

639
00:32:52,600 --> 00:32:55,160
Speaker 1: seeing initially was going to be like a V shape recovery.

640
00:32:55,720 --> 00:32:57,680
Speaker 1: But now we go back and we see what's happening

641
00:32:57,680 --> 00:32:59,680
Speaker 1: over in China and we see how kind of slow

642
00:32:59,760 --> 00:33:02,320
Speaker 1: they are to get back on board. You start to

643
00:33:02,360 --> 00:33:04,360
Speaker 1: wonder if this thing is going to really linger throughout

644
00:33:04,400 --> 00:33:06,600
Speaker 1: the remainder of the year. So I would agree with

645
00:33:06,640 --> 00:33:09,000
Speaker 1: your first point, Jason, and that is that, you know,

646
00:33:09,080 --> 00:33:12,479
Speaker 1: this is kind of a post COVID nineteen environment, and

647
00:33:12,800 --> 00:33:14,320
Speaker 1: I don't know if we're ever going to go back

648
00:33:14,320 --> 00:33:16,360
Speaker 1: to the way it was before and our thinking and

649
00:33:16,840 --> 00:33:19,600
Speaker 1: you know, these are still fundamentally sound themes that I

650
00:33:19,600 --> 00:33:22,320
Speaker 1: think will play out even if we see that reversion,

651
00:33:22,400 --> 00:33:26,600
Speaker 1: like you met, going back to the more traditional legacy sectors.

652
00:33:26,880 --> 00:33:28,480
Speaker 1: So Dan, when you sit back and just take a

653
00:33:28,520 --> 00:33:31,479
Speaker 1: break and you think about like you know, you, like Jason,

654
00:33:31,560 --> 00:33:33,200
Speaker 1: like myself, like a lot of others. You know, we

655
00:33:33,280 --> 00:33:36,160
Speaker 1: have seen different crises, whether it was not eleven, whether

656
00:33:36,160 --> 00:33:39,480
Speaker 1: it was certainly the financial crisis, you know, other economic

657
00:33:39,520 --> 00:33:42,960
Speaker 1: and market meltdowns. This one, though, like folks are saying,

658
00:33:42,960 --> 00:33:45,160
Speaker 1: you're gonna be telling your grandkids about this one, you know,

659
00:33:45,200 --> 00:33:48,240
Speaker 1: provided that your grandkids, you know, aren't giving you the

660
00:33:48,280 --> 00:33:51,760
Speaker 1: next version of COVID. You know, that was the Michael

661
00:33:51,840 --> 00:33:54,320
Speaker 1: Lewis line, right, Yeah, thank you for giving him credit

662
00:33:54,320 --> 00:33:56,080
Speaker 1: because it was like classic, Like I read it this

663
00:33:56,160 --> 00:34:00,000
Speaker 1: morning and I'm thinking, yeah, like I don't know how

664
00:34:00,080 --> 00:34:01,520
Speaker 1: do you see this when you when your brain is

665
00:34:01,560 --> 00:34:04,120
Speaker 1: a moment to breathe and you just think about kind

666
00:34:04,120 --> 00:34:07,040
Speaker 1: of what we're going through and the impact it's having

667
00:34:07,080 --> 00:34:09,160
Speaker 1: and will have maybe longer term. I don't know what

668
00:34:09,239 --> 00:34:11,799
Speaker 1: comes to mind. Well, you're right, Carol, because you know,

669
00:34:11,840 --> 00:34:14,160
Speaker 1: you go back and you look at all these other

670
00:34:14,719 --> 00:34:18,160
Speaker 1: so called pandemics, right, that have occurred recently, right that

671
00:34:18,239 --> 00:34:20,719
Speaker 1: we can remember, right, the stars, you know, you think

672
00:34:20,719 --> 00:34:23,040
Speaker 1: of the bowla, you think of all these different things

673
00:34:23,040 --> 00:34:26,480
Speaker 1: are out there yet bird flu Zeka. So this is

674
00:34:26,560 --> 00:34:29,239
Speaker 1: kind of you know, I think initially that's how we

675
00:34:29,280 --> 00:34:31,319
Speaker 1: looked at it. Right when the news started coming out

676
00:34:31,320 --> 00:34:33,719
Speaker 1: of China. We're kind of like, okay, well, yeah I

677
00:34:33,760 --> 00:34:35,520
Speaker 1: get that, and yeah we may get a little bit

678
00:34:35,520 --> 00:34:38,080
Speaker 1: of a pull back, and but I don't you know,

679
00:34:38,120 --> 00:34:39,879
Speaker 1: like you said, Carol, I don't think we could ever

680
00:34:40,080 --> 00:34:43,560
Speaker 1: have anticipated, you know, kind of the complete shutdown of

681
00:34:43,600 --> 00:34:45,960
Speaker 1: the economy for the next couple of months, and you

682
00:34:46,000 --> 00:34:48,719
Speaker 1: know what would be the impact of that. So, you know,

683
00:34:49,040 --> 00:34:50,960
Speaker 1: if you go back and you think in terms of

684
00:34:51,200 --> 00:34:53,719
Speaker 1: you know, these previous huge corrections, and of course the

685
00:34:53,760 --> 00:34:56,800
Speaker 1: one that always comes to mind because you know, basically

686
00:34:56,840 --> 00:34:59,120
Speaker 1: the fact that it's the most recent that most people

687
00:34:59,160 --> 00:35:02,440
Speaker 1: can you know, rem member is obviously the big housing bubble.

688
00:35:02,520 --> 00:35:04,160
Speaker 1: And yeah, you know, the only thing I can say,

689
00:35:04,200 --> 00:35:06,720
Speaker 1: and again it's it's kind of strange because everybody's so negative.

690
00:35:06,760 --> 00:35:08,840
Speaker 1: But I'm I'm trying to stay positive. And that is that,

691
00:35:09,120 --> 00:35:11,120
Speaker 1: you know, if we look at where the economy was

692
00:35:11,239 --> 00:35:14,880
Speaker 1: back then, let's say, you know, in two thousand seven,

693
00:35:14,960 --> 00:35:18,120
Speaker 1: around this in twenty seconds, my friend, Okay, I'm sorry,

694
00:35:18,480 --> 00:35:20,799
Speaker 1: the economy is in much better shape than it was

695
00:35:20,840 --> 00:35:23,359
Speaker 1: back then if we look at unemployment and other things

696
00:35:23,440 --> 00:35:26,200
Speaker 1: such as household debt and all these other variables that

697
00:35:26,239 --> 00:35:28,880
Speaker 1: we look at. So I'm I'm still optimistic, guys, and

698
00:35:28,920 --> 00:35:32,120
Speaker 1: I hope you guys can stay on the show. Right, well,

699
00:35:32,160 --> 00:35:35,200
Speaker 1: we can talk. You're optimistic having talked to you, absolutely

700
00:35:35,200 --> 00:35:38,200
Speaker 1: all right, Happy Easter, Dan worried. Hope you get to

701
00:35:38,280 --> 00:35:40,880
Speaker 1: at least virtually celebrated down there at Christ the King

702
00:35:41,880 --> 00:35:52,200
Speaker 1: brother Journal. But you let me drive? Oh no, no, no no, no, please,

703
00:35:52,320 --> 00:36:01,560
Speaker 1: I'll do the ridings. I want to drive. Just drive, baby,

704
00:36:02,239 --> 00:36:12,200
Speaker 1: good question, trying. This is the drive to the globe.

705
00:36:13,400 --> 00:36:17,239
Speaker 1: Thanks well, drying us on Bloomberg Radio. Yes, and do

706
00:36:17,320 --> 00:36:19,759
Speaker 1: need time for the drive to the close on this

707
00:36:19,800 --> 00:36:22,959
Speaker 1: Wednesday or twice is with US chief investment Officer Multi

708
00:36:23,000 --> 00:36:27,840
Speaker 1: Assets Strategies at American Century Investments, some four billion in

709
00:36:27,880 --> 00:36:30,799
Speaker 1: assets under management. He joins us on the phone in

710
00:36:30,920 --> 00:36:33,239
Speaker 1: Los Angeles. Rich, nice to have you here with the

711
00:36:33,760 --> 00:36:36,680
Speaker 1: here with us. How are you doing. Oh, we're hanging

712
00:36:36,680 --> 00:36:39,239
Speaker 1: in out here. You know. The wave hasn't come out yet.

713
00:36:39,560 --> 00:36:43,520
Speaker 1: We're obviously watching you guys very closely, but we're doing Okay,

714
00:36:43,760 --> 00:36:46,680
Speaker 1: you're doing it. Yeah, it's it's been interesting. I feel

715
00:36:46,680 --> 00:36:50,440
Speaker 1: like to watch from across the country what's going on

716
00:36:50,480 --> 00:36:53,120
Speaker 1: out there, and probably vice versa. There, Rich, you know,

717
00:36:53,120 --> 00:36:55,200
Speaker 1: we've got and Carol and I've talked a lot about this.

718
00:36:55,280 --> 00:36:58,960
Speaker 1: You've got Andrew Cuomo here, Gavin Newsom there. Um, you know,

719
00:36:59,000 --> 00:37:02,160
Speaker 1: two guys who've really seemingly stepped to the fore and

720
00:37:02,160 --> 00:37:06,480
Speaker 1: and obviously for similar reasons, because heavily populated states very

721
00:37:07,200 --> 00:37:12,040
Speaker 1: critical to the economy and critical for for the economies

722
00:37:12,080 --> 00:37:14,040
Speaker 1: of both states to to get back on their feet.

723
00:37:14,120 --> 00:37:17,000
Speaker 1: Clearly that is on their minds as well, I would imagine.

724
00:37:17,400 --> 00:37:20,560
Speaker 1: Oh yeah, no question, we're very appreciative of the actions

725
00:37:20,600 --> 00:37:23,920
Speaker 1: of both governors of both states. But you know, we're

726
00:37:23,960 --> 00:37:26,280
Speaker 1: not taking it for granted out here. I can't speak

727
00:37:26,280 --> 00:37:30,319
Speaker 1: for everyone, but we're definitely preparing for the world and

728
00:37:30,400 --> 00:37:33,799
Speaker 1: hoping for the best like everyone else. Well, I'm curious then,

729
00:37:33,840 --> 00:37:37,080
Speaker 1: you know how your clients are feeling at this point too.

730
00:37:37,120 --> 00:37:41,040
Speaker 1: I mean, this has been you know, we have seen crises.

731
00:37:41,120 --> 00:37:44,160
Speaker 1: We've all lived through the financial crisis, but the volatility,

732
00:37:44,239 --> 00:37:46,960
Speaker 1: the swings that we saw certainly in the market, and

733
00:37:47,000 --> 00:37:49,920
Speaker 1: then to see our economy, not just a sector of

734
00:37:49,920 --> 00:37:53,439
Speaker 1: the economy, but the economy in the United States really

735
00:37:53,440 --> 00:37:59,160
Speaker 1: come to a standstill that is unprecedented, certainly in our lifetime. Oh,

736
00:37:59,280 --> 00:38:03,280
Speaker 1: no question. And investor reactions as you'd expect, or running

737
00:38:03,280 --> 00:38:06,840
Speaker 1: the gamut or spanning the full spectrum from fear to

738
00:38:06,920 --> 00:38:10,759
Speaker 1: greed and back again. Um. And it's it's following a

739
00:38:10,840 --> 00:38:12,840
Speaker 1: number of things, not the least of which is the

740
00:38:12,960 --> 00:38:17,400
Speaker 1: trajectory of the coronavirus. Right that this is an unusual

741
00:38:17,480 --> 00:38:22,400
Speaker 1: situation where the cause and the remedies are from outside

742
00:38:22,440 --> 00:38:25,799
Speaker 1: the realm of the economic and financial world. Right, it's

743
00:38:26,320 --> 00:38:29,239
Speaker 1: if you want a good forecast of stock earnings, you

744
00:38:29,239 --> 00:38:32,399
Speaker 1: really need to ask a medical doctor at this point. Well,

745
00:38:32,440 --> 00:38:35,319
Speaker 1: that's exactly right. I mean, and and that fear versus greed.

746
00:38:35,360 --> 00:38:37,840
Speaker 1: You know, we were trying to we were taping Caroline,

747
00:38:37,880 --> 00:38:41,279
Speaker 1: I were our weekend show Are we Can Radio show

748
00:38:41,360 --> 00:38:43,520
Speaker 1: this morning, sort of piecing together some of the good

749
00:38:43,560 --> 00:38:46,160
Speaker 1: interviews that we've had this week. And you know, the

750
00:38:46,560 --> 00:38:50,880
Speaker 1: two things that we identified were fear versus greed and

751
00:38:50,920 --> 00:38:53,480
Speaker 1: markets versus medical. You know, those seem to be the

752
00:38:53,520 --> 00:38:57,080
Speaker 1: things that everyone's wrestling with. So as an investor, and

753
00:38:57,080 --> 00:38:59,880
Speaker 1: now we've had the FED you know, sort of retroactively

754
00:39:00,120 --> 00:39:02,680
Speaker 1: in with these minutes today, what do you make of it?

755
00:39:02,760 --> 00:39:04,839
Speaker 1: What do you do at this moment in terms of

756
00:39:04,840 --> 00:39:08,879
Speaker 1: helping folks manage a portfolio? Sure, well, a number of things,

757
00:39:08,960 --> 00:39:11,560
Speaker 1: you know, if you if you look out at the environment. Um,

758
00:39:11,600 --> 00:39:14,799
Speaker 1: there's some good news more recently, the easing of the

759
00:39:14,880 --> 00:39:19,640
Speaker 1: credit crunch, the hoped for oil deal being imminent, the

760
00:39:19,760 --> 00:39:22,319
Speaker 1: likelihood that this is a V shape as opposed to

761
00:39:22,360 --> 00:39:25,799
Speaker 1: a U shape recovery. Uh, there's good news coming out

762
00:39:25,880 --> 00:39:28,480
Speaker 1: from uh, you know, a number of countries and states

763
00:39:28,480 --> 00:39:32,200
Speaker 1: on the trajectory of the virus, the medical front regarding treatment,

764
00:39:32,840 --> 00:39:36,720
Speaker 1: massive monetary and fiscal stimulus, and and likely another phase

765
00:39:37,040 --> 00:39:39,560
Speaker 1: phase four to come. But a lot of that good

766
00:39:39,560 --> 00:39:42,200
Speaker 1: news is not so much good news as it is

767
00:39:42,320 --> 00:39:45,040
Speaker 1: an attenuation of the bad news. You know, it's not

768
00:39:45,120 --> 00:39:48,120
Speaker 1: as bad as we thought, kind of like red meat

769
00:39:48,280 --> 00:39:50,359
Speaker 1: or my high school friends. You know, it's not as

770
00:39:50,360 --> 00:39:52,640
Speaker 1: bad as we thought, but it's still pretty bad. And

771
00:39:53,480 --> 00:39:57,680
Speaker 1: there's a big difference between um turning the corner and

772
00:39:57,719 --> 00:39:59,640
Speaker 1: just seeing the light at the end of the tunnel.

773
00:40:00,280 --> 00:40:03,200
Speaker 1: It is likely, we believe that we haven't hit the

774
00:40:03,239 --> 00:40:06,120
Speaker 1: true bottom yet. It's still pretty murky down. Their credit

775
00:40:06,160 --> 00:40:11,960
Speaker 1: downgrades keep coming. Uh, there's rising defaults and bankruptcies, supply

776
00:40:12,160 --> 00:40:15,880
Speaker 1: chain disruptions economically around the world are really not fully

777
00:40:15,960 --> 00:40:19,960
Speaker 1: fleshed out. There's many secondary and tertiary effects to come.

778
00:40:20,040 --> 00:40:24,399
Speaker 1: So we are we are not jumping back into this

779
00:40:24,520 --> 00:40:28,960
Speaker 1: market um full bore. Now. If if there are speculative

780
00:40:29,000 --> 00:40:31,640
Speaker 1: moneys and you have clients that have a very high

781
00:40:31,719 --> 00:40:33,839
Speaker 1: tolerance for risk by all means, and they have some

782
00:40:33,880 --> 00:40:36,680
Speaker 1: powder that they kept dry, there's a lot of bottom

783
00:40:36,760 --> 00:40:40,120
Speaker 1: feeding going on. But for many of our clients, especially

784
00:40:40,120 --> 00:40:44,160
Speaker 1: in our one choice target eight funds, these are retirement assets.

785
00:40:44,960 --> 00:40:46,920
Speaker 1: As we've said many times, you want to treat your

786
00:40:46,920 --> 00:40:49,320
Speaker 1: four oh one K like you treat your face and

787
00:40:49,320 --> 00:40:54,319
Speaker 1: not touch it. That's good. That's really good. I'm going

788
00:40:54,400 --> 00:40:58,960
Speaker 1: to use that. That's really really working on that one. Uh. Actually,

789
00:40:59,400 --> 00:41:03,719
Speaker 1: to be honest, they barred it, but it's a good one. Interview. No,

790
00:41:03,880 --> 00:41:06,279
Speaker 1: but I do wonder, you know every time we you know,

791
00:41:06,480 --> 00:41:08,120
Speaker 1: so many folks though, do come on and say, well,

792
00:41:08,120 --> 00:41:09,880
Speaker 1: it's a long term you're you know, your folks for

793
00:41:09,880 --> 00:41:11,920
Speaker 1: the long term, you know, not a time to sell. Well,

794
00:41:11,920 --> 00:41:14,200
Speaker 1: certainly not time to sell at the bottom. But you know,

795
00:41:14,840 --> 00:41:18,000
Speaker 1: people lost a lot of money even though we've bounced back.

796
00:41:18,200 --> 00:41:20,759
Speaker 1: I mean, this whole idea of preservation of capital that

797
00:41:20,840 --> 00:41:23,160
Speaker 1: needs to be you know, part of your investment thesis,

798
00:41:24,280 --> 00:41:28,400
Speaker 1: no question. Now, you know, hoping or assuming your portfolio

799
00:41:28,520 --> 00:41:31,520
Speaker 1: is well set up from the get go. Uh. You

800
00:41:31,560 --> 00:41:33,840
Speaker 1: know that is in terms of its asset allocation. You

801
00:41:34,360 --> 00:41:36,319
Speaker 1: it's not that you want to stick your head in

802
00:41:36,320 --> 00:41:39,120
Speaker 1: the sand and not do anything. Um. Certainly we would

803
00:41:39,160 --> 00:41:42,240
Speaker 1: not advise knee jerk reacting or selling in a panic,

804
00:41:42,640 --> 00:41:47,120
Speaker 1: but managing your asset allocation through a steady or methodical

805
00:41:47,280 --> 00:41:51,560
Speaker 1: rebalancing algorithm is a tried and true way to navigate

806
00:41:51,640 --> 00:41:55,440
Speaker 1: times like these. In other words, as the market moves

807
00:41:55,480 --> 00:41:59,880
Speaker 1: and your portfolio drifts away from your strategic or normal

808
00:42:00,120 --> 00:42:03,080
Speaker 1: or targeted asset allocation, you want to rebalance back to

809
00:42:03,160 --> 00:42:07,600
Speaker 1: that target periodically so that you stay true to your

810
00:42:08,280 --> 00:42:11,759
Speaker 1: appropriate asset allocation and risk tolerance. You now, if you

811
00:42:12,120 --> 00:42:14,480
Speaker 1: if you do it ad hoc or knee jerk, it's

812
00:42:14,520 --> 00:42:16,640
Speaker 1: not gonna work. If if you do it too often,

813
00:42:16,680 --> 00:42:20,000
Speaker 1: you're too frequently, then incur a lot of transaction costs

814
00:42:20,000 --> 00:42:23,040
Speaker 1: and just you don't be subject to whip sign But

815
00:42:23,400 --> 00:42:28,040
Speaker 1: a steady, methodical program of rebalancing your asset allocation is

816
00:42:28,080 --> 00:42:32,799
Speaker 1: always a smart move, especially in volatile times. All right, well,

817
00:42:32,840 --> 00:42:35,839
Speaker 1: we really appreciate the time you've given us. Uh some nice,

818
00:42:36,080 --> 00:42:38,520
Speaker 1: nice little quotable quotes, some sound bites were definitely gonna

819
00:42:38,560 --> 00:42:42,480
Speaker 1: be stealing from you going forward. Shirts and bumper stickers

820
00:42:42,640 --> 00:42:45,279
Speaker 1: and exactly, I really, I really like it. All right.

821
00:42:45,360 --> 00:42:48,880
Speaker 1: Rich Wise is chief investment officer of multi assets Strategies

822
00:42:48,920 --> 00:42:51,439
Speaker 1: for American Century Investments. They look after about a hundred

823
00:42:51,480 --> 00:42:54,280
Speaker 1: fifty four billion dollars. He joined us on the phone

824
00:42:54,520 --> 00:42:58,320
Speaker 1: from California. So a big money manager, and you've gotta listen.

825
00:42:58,400 --> 00:43:00,840
Speaker 1: They're managing so much money for so many different people.

826
00:43:00,920 --> 00:43:03,320
Speaker 1: You've got to have some pretty coaching advice I would mage,

827
00:43:03,360 --> 00:43:06,080
Speaker 1: but this is another reminder and lesson that. Right, you know,

828
00:43:06,360 --> 00:43:09,959
Speaker 1: when the markets are constantly hitting record high after record high,

829
00:43:09,960 --> 00:43:11,560
Speaker 1: it doesn't mean it's going to always go that way,

830
00:43:11,600 --> 00:43:14,239
Speaker 1: and you never know when something can come out you

831
00:43:14,280 --> 00:43:17,840
Speaker 1: know that nobody was predicting, like the virus and really

832
00:43:17,840 --> 00:43:19,920
Speaker 1: bring down your investments a lot. So if you're closer

833
00:43:19,960 --> 00:43:22,240
Speaker 1: to retirement, you have to make sure that you're protecting

834
00:43:22,280 --> 00:43:27,200
Speaker 1: yourself against these unforeseen stresses on the market. Thanks for

835
00:43:27,200 --> 00:43:29,719
Speaker 1: listening to Bloomberg Business Week. You can subscribe to the

836
00:43:29,760 --> 00:43:32,839
Speaker 1: podcast on iTunes, SoundCloud, or Bloomberg dot com. You can

837
00:43:32,920 --> 00:43:35,399
Speaker 1: also listen to our radio show every weekday at two

838
00:43:35,400 --> 00:43:37,520
Speaker 1: pm Eastern only on Bloomberg Radio