WEBVTT - Bill Hwang Was a $20 Billion Whale, Then Lost It All in Two Days 0:00:00.800 --> 0:00:04.040 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside 0:00:04.040 --> 0:00:06.920 my co host Matt Miller. Every business day, we bring 0:00:06.960 --> 0:00:11.520 you interviews from CEOs, market pros, and Bloomberg experts, along 0:00:11.560 --> 0:00:15.600 with essential market moving news. Find the Bloomberg Markets Podcast 0:00:15.640 --> 0:00:18.479 on Apple Podcasts or wherever you listen to podcasts, and 0:00:18.480 --> 0:00:22.880 at Bloomberg dot com slash podcast. Well, boy, I'll tell 0:00:22.920 --> 0:00:26.680 you what has been a fascinating story in Wall Street 0:00:27.000 --> 0:00:29.560 has been Bill Hwang and Archagos Capital. I mean, it 0:00:29.680 --> 0:00:32.640 just bursts onto the scenes a week ago, twenty billion 0:00:32.680 --> 0:00:35.400 dollar fund. Nobody had heard about it until we all 0:00:35.520 --> 0:00:37.120 heard about it at the same time. And I'll tell 0:00:37.120 --> 0:00:40.080 you Eric Shatsker and his team at Bloomberg News they 0:00:40.080 --> 0:00:44.240 were very very early on this story. They were absolutely 0:00:44.280 --> 0:00:46.960 and they've been on top of it ever since. Eric 0:00:47.040 --> 0:00:49.479 joins us now with the latest. Eric Schatsker, He's at 0:00:49.479 --> 0:00:51.920 her large at Bloomberg News. Eric, thanks so much for 0:00:52.000 --> 0:00:55.240 joining us here. This is just an extraordinary story. The 0:00:55.400 --> 0:00:59.360 numbers are just amazing. Twenty billion dollars and then gone 0:00:59.520 --> 0:01:02.520 in two days. What's the latest, Paul? It is absolutely 0:01:03.000 --> 0:01:05.800 mind boggling. If you think about it. A guy who 0:01:05.880 --> 0:01:07.960 had been a hedge fund manager, so let's give him 0:01:08.000 --> 0:01:11.479 some credit. Bill Wong starts a family office in with 0:01:11.959 --> 0:01:14.200 you know, as we understand, it's something north of two 0:01:14.600 --> 0:01:18.319 million dollars, so he's already rich. And he builds this 0:01:18.360 --> 0:01:21.640 family office over time, making bets mostly in tech stocks, 0:01:21.680 --> 0:01:25.000 Expedia LinkedIn. Some of those are kind of names from 0:01:25.000 --> 0:01:27.560 the past, because Lincoln was acquired by Microsoft, of course, 0:01:27.600 --> 0:01:29.760 but he also bet on Google, he bet on Amazon, 0:01:30.400 --> 0:01:34.080 and over the years he steadily took on more and 0:01:34.200 --> 0:01:37.119 more and more leverage. And as we all know, having 0:01:37.640 --> 0:01:40.840 watched and in your case, participated in Wall Street for 0:01:40.840 --> 0:01:43.160 many years, leverage is a double edged sword. When things 0:01:43.160 --> 0:01:46.480 are going your way, you can become fabulously successful. And 0:01:46.520 --> 0:01:49.840 in his case, yes, his fortune actually at one point 0:01:49.920 --> 0:01:54.360 exceeded thirty billion dollars. But the times things started to 0:01:54.360 --> 0:01:57.680 go pear shaped. Right week of March twenty two, Viacom 0:01:57.680 --> 0:02:01.480 trades down, Mare Jean Carl alarm bell start ringing, and 0:02:01.520 --> 0:02:05.680 Bill Joan goes from twenty to zero effectively overnight. Yeah. 0:02:05.720 --> 0:02:08.480 The one thing I one thing I don't get is 0:02:08.680 --> 0:02:11.680 how did he go from so much to so little 0:02:11.840 --> 0:02:15.120 just trading options? Because he not options these were swap 0:02:15.160 --> 0:02:22.359 agreem so so so, but he's trading derivatives that um no, no, no, no, 0:02:22.400 --> 0:02:25.800 he's he's he is entering into swap agreements just so 0:02:25.840 --> 0:02:29.200 that everybody understands it, because it is complicated derivative stuff. 0:02:29.200 --> 0:02:32.080 As you say, Mat, he enters into a swab agreement, 0:02:32.080 --> 0:02:35.679 it gives him exposure to the underlying stock. It's like 0:02:36.080 --> 0:02:39.040 owning the stock, except that you don't actually have it 0:02:39.040 --> 0:02:41.880 in your possession. But because you're levered, because the swap 0:02:41.919 --> 0:02:45.200 agreement allows you to level up five times, you know 0:02:45.240 --> 0:02:48.079 what happens if you're five times levered, right, stock goes down, 0:02:49.160 --> 0:02:53.919 your equity is gone. And his portfolio cratered the week 0:02:53.960 --> 0:02:57.519 of March twenty two. That's how whatever margin he'd posted disappeared, 0:02:57.840 --> 0:03:01.280 and that's how his equity blue to smithering, so much 0:03:01.320 --> 0:03:05.000 so that the banks which ended up owning the risk 0:03:05.120 --> 0:03:07.760 and having to sell it. And we've seen that, Credit Swiss, 0:03:07.760 --> 0:03:11.600 Golvin Sachs, Morgan Stanley selling shares of viacom g s 0:03:11.880 --> 0:03:16.360 x i Q, all of his positions. Some of those banks, 0:03:16.880 --> 0:03:20.520 Credit Swiss among them, ended up taking enormous losses four 0:03:20.520 --> 0:03:22.760 point seven billion dollars the head of the investment bank 0:03:22.880 --> 0:03:24.720 is gone, the head of risk is gone, another half 0:03:24.919 --> 0:03:30.440 half dozen executives gone. It's incredible how much damage one 0:03:30.520 --> 0:03:35.040 guy running his own family office. Your story paints this 0:03:35.160 --> 0:03:39.880 incredible dichotomy because on one hand, he's by all accounts, 0:03:39.880 --> 0:03:45.520 a very nice guy. Um. You know, Julian Robertson loves him. Um, 0:03:45.560 --> 0:03:49.560 he's religious, he's got a big charity that he cares about. 0:03:49.680 --> 0:03:52.800 Charity and family are two of his three main things. Right. 0:03:53.520 --> 0:03:58.160 On the other hand, Um, he had a sixty million 0:03:58.200 --> 0:04:02.560 dollar settlement for insider trading, his hedge fund pled guilty 0:04:02.600 --> 0:04:07.120 to wire fraud. Um. And he seems kind of like 0:04:07.160 --> 0:04:11.400 a traitor sociopath because he says he's not afraid of 0:04:11.440 --> 0:04:15.320 death or money, which you see how that ends up? Right, Yes, 0:04:15.480 --> 0:04:19.160 we we have. I would say, without using the words sociopath, 0:04:19.560 --> 0:04:23.720 that what you've just sketched out is the internal paradox 0:04:24.320 --> 0:04:26.719 of a Bill Wong. On the one hand, pillar of 0:04:26.800 --> 0:04:31.480 his church community. This guy helped thirteen hundred North Koreans 0:04:31.960 --> 0:04:35.279 escape the Hermit Kingdom to freedom. The guy is doing 0:04:35.320 --> 0:04:40.240 good stuff. And on the other hand, he's got this addiction. Effectively, 0:04:40.680 --> 0:04:43.560 or what appears to be an addiction to casino like 0:04:43.839 --> 0:04:47.480 risk taking. He's a gambler. Most of the great gamblers 0:04:47.480 --> 0:04:49.240 in the world no one to take some chips off 0:04:49.279 --> 0:04:52.279 the table. This guy never took any chips off the table. 0:04:52.320 --> 0:04:54.120 The only chips he took off the table he put 0:04:54.160 --> 0:04:57.039 into his foundation. And thank goodness he did, because it's 0:04:57.040 --> 0:04:58.840 gone on to do good work and will continue to 0:04:58.880 --> 0:05:01.320 do good work because, so far as we understand it 0:05:01.400 --> 0:05:04.559 wasn't exposed in this blow up. So Eric about thirty 0:05:04.560 --> 0:05:07.679 seconds left. This seems to be I guess the second 0:05:07.720 --> 0:05:10.720 life for Bill Huang? Is there a third? It's actually 0:05:10.760 --> 0:05:13.040 the Yeah, we're with the third act. Right, he was 0:05:13.160 --> 0:05:15.560 tiger than he had, his own hedge fund, had archaeos. 0:05:15.960 --> 0:05:18.960 Where does he go from here? If risk taking is 0:05:19.040 --> 0:05:22.760 in his blood and he just like you know, Michael Jordan, 0:05:22.839 --> 0:05:27.280 can't stop making legats, right, you'll see him back doing something. 0:05:27.680 --> 0:05:31.159 Is he going to be given the same kind of leverage? No? 0:05:31.600 --> 0:05:34.320 Almost certainly not right. Uh, there's just too many black 0:05:34.400 --> 0:05:36.520 marks on his record now for any bank to want 0:05:36.520 --> 0:05:40.479 to give him. But will he be doing something you 0:05:40.520 --> 0:05:43.560 know that involves incredible risk taking. You'd have to expect 0:05:43.600 --> 0:05:46.240 that he would because it's as as we've learned the 0:05:46.240 --> 0:05:49.279 course of our reporting, it's in his nature. Well, yeah, 0:05:49.360 --> 0:05:51.880 I mean this is also a thing I was thinking 0:05:51.920 --> 0:05:54.120 about as I was reading your piece, Eric, Where does 0:05:54.160 --> 0:05:55.720 he go from here? Because you want to see him 0:05:55.760 --> 0:05:57.760 come back again. You almost want to see him get 0:05:57.800 --> 0:06:01.159 back in right. Um, and maybe now that sports betting 0:06:01.320 --> 0:06:04.239 is becoming more acceptable in the US, he can figure 0:06:04.240 --> 0:06:06.200 out a way to do that. In any case, Eric 0:06:06.200 --> 0:06:09.960 Shasker writes the cover story for Bloomberg Business Week. Um, 0:06:10.040 --> 0:06:12.480 definitely check it out, if not on the newsstands, at 0:06:12.560 --> 0:06:18.520 least online or on the Bloomberg terminal. You're talking about 0:06:18.520 --> 0:06:23.240 the initial job claims number, and Um, it's interesting that 0:06:23.240 --> 0:06:28.880 we've seen these initial job jobs claims numbers still at 0:06:28.920 --> 0:06:31.960 a very high level. I think, Um, I'm not sure, 0:06:32.000 --> 0:06:36.400 but I think we still haven't come down under the 0:06:36.520 --> 0:06:41.160 record high from the Great Financial Crisis. In any week, 0:06:41.240 --> 0:06:43.560 Let's bring in Lindsay Pieza to talk about this. She's 0:06:43.640 --> 0:06:49.080 chief economist at Steeple Financial out of Chicago. Lindsay, what's 0:06:49.120 --> 0:06:51.359 the problem with the labor market and that you know, 0:06:51.400 --> 0:06:55.080 we add nine sixteen thousand jobs and we have these 0:06:55.160 --> 0:06:58.720 incredible manufacturing figures I s M is off the charts, 0:06:59.200 --> 0:07:01.760 p M I is off the charts. Everything looks like 0:07:01.839 --> 0:07:04.719 it's coming back full force, but we keep getting huge 0:07:04.720 --> 0:07:09.400 initial jobless claims weeks. Well, I think this recognizes the 0:07:09.440 --> 0:07:12.520 fact that the recovery is going to be somewhat uneven. 0:07:12.960 --> 0:07:15.480 It's not going to be this very simple flip the 0:07:15.520 --> 0:07:18.320 switch scenario everyone goes back to work. It's going to 0:07:18.360 --> 0:07:22.240 be this back and forth as ebbing and flowing of improvement. 0:07:22.800 --> 0:07:25.960 And yes, we have seen payrolls jumped, we've also seen 0:07:26.040 --> 0:07:29.280 jobless claims remain elevated. So again, this really speaks to 0:07:29.320 --> 0:07:31.600 the notion that it's going to be some time before 0:07:31.640 --> 0:07:36.560 the US economy recovers to a sustainable upward trajectory. I 0:07:36.600 --> 0:07:38.800 think also when we see this on evenness in the 0:07:38.880 --> 0:07:42.800 labor market in it imparts reflects some of the policy 0:07:42.800 --> 0:07:45.440 measures that we've seen out of Washington. Remember we're still 0:07:45.480 --> 0:07:51.480 talking about extremely generous unemployment benefits, and some businesses, particularly 0:07:51.520 --> 0:07:54.800 small businesses in the service sector, have reported that it's 0:07:54.920 --> 0:07:58.600 uh it's very difficult to reconnect with employees because of 0:07:58.640 --> 0:08:01.960 these very generous unemployed this benefits. So I think there's 0:08:01.960 --> 0:08:04.520 a number of moving pieces a number of different variables. 0:08:04.560 --> 0:08:07.040 But the take home is really it's not going to 0:08:07.080 --> 0:08:10.960 be as simple as we're vaccinated. Let's reopen the economy 0:08:11.080 --> 0:08:15.280 back to pre pandemic activity levels. All right, So, lindsay, 0:08:15.520 --> 0:08:18.880 you know, right now we're taking a look at the 0:08:18.920 --> 0:08:22.040 President of Biden's latest fiscal stimulus plan at two point 0:08:22.080 --> 0:08:26.640 to five trillion dollar plan. What do you make of that? Is? That? 0:08:26.920 --> 0:08:29.840 Is it? Do you think that the focus and the 0:08:29.920 --> 0:08:33.120 strategies behind it our sound or what would you like 0:08:33.160 --> 0:08:36.720 to see in fiscal stimulus? Well, at this point, with 0:08:36.840 --> 0:08:41.760 the economy showing signs of improvement, vast improvement in the 0:08:41.880 --> 0:08:46.560 labor market, in manufacturing and services and housing, I think 0:08:46.559 --> 0:08:48.839 we really need to take a pause in terms of 0:08:49.720 --> 0:08:53.840 any additional fiscal um spending at this point. Remember, the 0:08:53.880 --> 0:08:57.280 President just passed is near two trillion dollars spending package 0:08:57.600 --> 0:09:00.240 just a few weeks ago. So the impact of APT 0:09:00.679 --> 0:09:03.160 has not even filtered through the economy. We're not even 0:09:03.160 --> 0:09:05.720 seeing that in the data yet. The March non farm 0:09:05.760 --> 0:09:10.480 payroll report more more likely reflected the December stimulus that 0:09:10.520 --> 0:09:14.880 we saw under President Trump. Excuse me, So I do 0:09:14.960 --> 0:09:17.000 think that at this point the government should be taking 0:09:17.000 --> 0:09:20.520 a breath. They should be looking at thinking maybe more 0:09:20.559 --> 0:09:23.960 of a longer term reopening plan and perhaps getting a 0:09:24.040 --> 0:09:26.520 second plan in place should we see a second route 0:09:26.880 --> 0:09:31.800 pandemic occur in our in our near terms. So I 0:09:31.840 --> 0:09:34.320 don't think additional spending is the answer at this point. 0:09:34.520 --> 0:09:37.000 I am very concerned about the debt level. I'm very 0:09:37.040 --> 0:09:42.559 concerned about inflation longer term, and this this unsatiable appetite 0:09:42.600 --> 0:09:44.920 for federal spending I think really needs to be nipped 0:09:44.960 --> 0:09:48.199 in the bud. It's crazy if you're a journalist, though, 0:09:48.240 --> 0:09:51.160 I mean, what a story to cover? I mean, how 0:09:51.200 --> 0:09:54.520 many times in history have we spent you know, five 0:09:54.559 --> 0:09:58.360 trillion extra dollars in a twelve month period, and you 0:09:58.360 --> 0:10:01.040 know the Fed is stepped up with how much emergency 0:10:01.559 --> 0:10:08.240 uh you know balance sheets trillions more like like seven 0:10:08.280 --> 0:10:13.120 trillion more. It's the numbers are mind bottling, As Adam 0:10:13.200 --> 0:10:18.280 Johnson used to say, But how how does that create inflation? Um? 0:10:18.400 --> 0:10:21.360 Is it? Does it just create transitory inflation? Or do 0:10:21.400 --> 0:10:25.200 we get some real inflation from that kind of spending? Well, 0:10:25.280 --> 0:10:27.840 so when we talk about the transitory concerns of inflation 0:10:27.880 --> 0:10:30.360 that the FETE has been mentioning, they're not referring to 0:10:30.400 --> 0:10:33.240 the massive expansion of the money supply per se. What 0:10:33.360 --> 0:10:36.200 they're referencing is the fact that we do expect prices 0:10:36.280 --> 0:10:39.840 on an annual basis to take higher because those low 0:10:39.960 --> 0:10:43.439 loads of twenty twenty are actually falling out of the calculation. 0:10:43.840 --> 0:10:46.360 So just by the nature of the mathematical equation, we 0:10:46.440 --> 0:10:49.839 expect that headline index to take higher in the coming 0:10:49.880 --> 0:10:53.360 month as we move further into the summer. But from 0:10:53.400 --> 0:10:56.600 their standpoint, they're saying this, this calculation is falling out 0:10:56.640 --> 0:10:59.400 of reature prices is going to be temporary, and they 0:10:59.440 --> 0:11:02.480 expected inflation to remain nearer that to FIR set level 0:11:02.840 --> 0:11:06.800 by the end of one going forward. However, when we 0:11:06.800 --> 0:11:10.120 talk about this massive expansion of the federal the federal 0:11:10.120 --> 0:11:14.400 government balance sheet, all of these dollars flooding into the marketplace, 0:11:14.800 --> 0:11:18.640 chasing after goods, chasing after production, that's where we see 0:11:18.720 --> 0:11:22.640 that that increase in inflation, and that's where the market 0:11:22.720 --> 0:11:25.680 is concerned will drive the Fed's hand, or force the 0:11:25.720 --> 0:11:29.400 Fed's hand to raise race sooner than they're telling us 0:11:29.440 --> 0:11:32.840 they will. Lindsay, thank you so much for joining us 0:11:32.920 --> 0:11:36.880 yet again. Lindsay PEGSA, Chief Economists for Stephle joining us 0:11:36.880 --> 0:11:41.199 on the phone from Chicago, talking to us about fiscal stimulus. 0:11:41.200 --> 0:11:45.520 Here again, we've haven't really felt the full benefits, arguably 0:11:45.640 --> 0:11:49.560 of the most recent two trillion dollars, while more is 0:11:49.559 --> 0:11:56.160 being exactly in Berlin, Germany. I guess not, Matt. You know, 0:11:56.160 --> 0:11:58.480 we're so fortunate here am Radio to be able to 0:11:58.480 --> 0:12:02.760 tap into the expertise of leading physicians and scientists from 0:12:02.760 --> 0:12:05.880 around the world UH during these past fourteen months to 0:12:05.920 --> 0:12:08.240 really get a sense of and and really learn more 0:12:08.280 --> 0:12:13.199 about the virus UH therapeutics and now about vaccines. And 0:12:13.240 --> 0:12:16.760 our next guest certainly is on that list. Dr Stephen Corwin. 0:12:16.880 --> 0:12:19.760 He's a president and chief executive officer of New York 0:12:19.760 --> 0:12:22.640 Presbyterian Hospital. He joined us on the phone from New 0:12:22.720 --> 0:12:25.400 York City. UH. Dr Corwyn, thanks so much for joining 0:12:25.480 --> 0:12:28.320 us here. I guess where we're at right now is 0:12:28.840 --> 0:12:32.200 you know people are they absolutely feel like we're just 0:12:32.320 --> 0:12:34.880 on the precipice of getting to the other side of this. 0:12:35.040 --> 0:12:39.480 The vaccinations are ramping up, yet we're seeing cases surge 0:12:39.480 --> 0:12:42.319 in certain parts of the country like Michigan and others. 0:12:42.960 --> 0:12:46.880 How do you think people should be I guess conducting 0:12:46.920 --> 0:12:52.240 themselves these days here as we're right on the edge. Well, 0:12:52.280 --> 0:12:54.160 I think we're at the beginning of the end, but 0:12:54.240 --> 0:12:57.240 we're not at the end. And for for people who 0:12:57.320 --> 0:12:59.640 are football fans, you don't want to spike the ball 0:12:59.679 --> 0:13:03.320 at the five yard line. I think that. I think 0:13:03.360 --> 0:13:06.800 the reality is we still have to be careful. We 0:13:06.840 --> 0:13:10.000 still have the variant floating around. We still haven't vaccinated 0:13:10.040 --> 0:13:13.320 it everybody. We haven't gotten to hurt immunity. So if 0:13:13.360 --> 0:13:16.440 we can hold on a little bit longer, uh, let's 0:13:16.520 --> 0:13:20.160 try not to have people at a Texas Rangers game. 0:13:20.840 --> 0:13:24.080 We'll get there, um, but it's a race between the 0:13:24.200 --> 0:13:27.960 variants and how much we open versus getting people vaccinated. 0:13:28.120 --> 0:13:31.439 And you know, I'm really hopeful that by summertime we'll 0:13:31.520 --> 0:13:34.240 be in in terrific shape. But we've just got to 0:13:34.320 --> 0:13:37.040 hang in there. And look, I know it's daunting. Kids 0:13:37.160 --> 0:13:39.679 home from school, people want to get back to the 0:13:39.679 --> 0:13:43.680 way things were, um, et cetera. But we still have 0:13:43.800 --> 0:13:47.360 to be cautious. How do you think the vaccine rollout 0:13:47.480 --> 0:13:49.680 is going. I mean, I know it's going quickly in 0:13:49.720 --> 0:13:54.040 the US. I think more than sixty five million people 0:13:54.080 --> 0:13:57.880 have received at least one shot, But is it um. 0:13:58.640 --> 0:14:06.080 Is it being distributed uh equally across all different classes, races, creeds. 0:14:06.120 --> 0:14:08.679 I don't know what to say exactly. You get my point, right? 0:14:08.760 --> 0:14:10.880 Is there? Of course? Of course there are a problem 0:14:11.240 --> 0:14:14.840 that we've I think there's been a great deal of emphasis. 0:14:14.880 --> 0:14:19.160 Certainly we've placed a great deal of emphasis on equitability 0:14:19.200 --> 0:14:22.000 and giving people access to this. I would say two 0:14:22.080 --> 0:14:27.360 things to preface my following remarks. The first is, I 0:14:27.400 --> 0:14:30.280 think that the Trump administration got a lot of things 0:14:30.280 --> 0:14:35.120 wrong with with COVID, but they got the vaccine development 0:14:35.160 --> 0:14:39.560 program right, and the Biden administration has capitalized on that 0:14:39.920 --> 0:14:42.600 in terms of getting this rolled out as quickly as possible. 0:14:43.160 --> 0:14:45.960 And you know, we now have Fiser Maderna and Jay 0:14:46.040 --> 0:14:48.960 and Ja that were now giving and we have to 0:14:49.040 --> 0:14:53.760 evaluate Astra Zeneca in light of uh, some concerns about 0:14:53.840 --> 0:14:57.960 data safety monitoring. That being said, I think that you 0:14:58.040 --> 0:15:01.920 have to educate everybody to sort overcome vaccine hesitancy and 0:15:02.000 --> 0:15:05.840 so truly get population hurt immunity. We're gonna have to 0:15:05.840 --> 0:15:08.640 start vaccinating kids, which is probably not going to really 0:15:08.680 --> 0:15:11.800 happen until we get into the fall and the winter, 0:15:12.000 --> 0:15:15.080 meaning children under the age of twelve. So we still 0:15:15.120 --> 0:15:17.160 have a ways to go in terms of children getting 0:15:17.200 --> 0:15:19.760 hurt immunity. I think we can get the hurt immunity 0:15:19.800 --> 0:15:23.200 by in the September time frame for the adult population. 0:15:23.840 --> 0:15:25.600 And I think we're making a lot of strides on 0:15:25.640 --> 0:15:30.640 equitability of distribution. Uh. Dr Cormyn. I'd love to get 0:15:30.680 --> 0:15:35.280 a sense of how the frontline workers at New York 0:15:35.280 --> 0:15:38.920 Presbyterian are doing. I mean, you know, hospitals across the country, 0:15:38.920 --> 0:15:40.840 but I really think about New York City a year 0:15:40.880 --> 0:15:45.280 ago from today and and how incredibly taxed they were. 0:15:45.360 --> 0:15:49.440 How are the frontline folks doing at New York Presbyterian. Well, 0:15:49.440 --> 0:15:54.880 you know, look, uh running towards danger on this one, right. 0:15:55.040 --> 0:15:59.840 I think we have just absolutely terrific people. I think 0:15:59.840 --> 0:16:02.800 they've done an amazing job, but they're getting tired. Uh 0:16:02.840 --> 0:16:05.160 and we still have a lot of COVID in the environment. 0:16:05.280 --> 0:16:08.880 So um, I think that people see that we were 0:16:08.960 --> 0:16:12.200 turning the corner. But it's been a it's been a 0:16:12.240 --> 0:16:14.720 tough fifteen months for the country and as certainly a 0:16:14.760 --> 0:16:17.920 tough fifteen months for the front line workers. But everybody 0:16:17.960 --> 0:16:19.920 in the country should be proud of the effort that 0:16:20.520 --> 0:16:23.400 all the front line workers across the country put into 0:16:23.480 --> 0:16:25.160 this because we wouldn't be where we are as a 0:16:25.200 --> 0:16:28.440 country without it. And I can't thank every one of 0:16:28.480 --> 0:16:31.680 our employees enough for everything that they did. And many 0:16:31.720 --> 0:16:34.560 of them lost family members during the course of this pandemic, 0:16:34.640 --> 0:16:38.160 and I'm sure you guys know people that were lost. 0:16:38.240 --> 0:16:42.200 It really has been pretty horrific. But it also I 0:16:42.240 --> 0:16:45.880 think shines a spotlight on how hard health care professionals work. 0:16:45.960 --> 0:16:48.560 I mean, just in terms of sheer hours. It's pretty 0:16:48.560 --> 0:16:52.400 shocking to people from any other industry. Do you think 0:16:52.600 --> 0:16:55.320 there's some kind of progress that can be made in 0:16:55.880 --> 0:17:00.800 either paying them better or getting them safer working conditions? Well, look, 0:17:00.840 --> 0:17:04.440 I think that, uh, we collectively made a mistake as 0:17:04.440 --> 0:17:06.679 a country in terms of the amount of ppe we 0:17:06.720 --> 0:17:12.240 had in stock. The supply chain was very fragile. So yeah, 0:17:12.280 --> 0:17:16.040 we have to really solidify our supply chains, make sure 0:17:16.080 --> 0:17:19.760 that we have more onture manufacturing, make sure that the 0:17:19.760 --> 0:17:22.000 supply chains are more robusts so we don't have a 0:17:22.040 --> 0:17:26.479 repeat of that that was really quite tenuous. As as 0:17:26.520 --> 0:17:30.440 as you will remember in terms of paying people more. Look, 0:17:31.280 --> 0:17:34.480 I'm a firm believer, uh that you have to pay 0:17:34.520 --> 0:17:38.200 people uh for for what they do. The minimum wage 0:17:38.240 --> 0:17:40.679 that we pay is nineteen dollars an hour. I know 0:17:40.760 --> 0:17:43.520 people are talking about what should the minimum wage in 0:17:43.520 --> 0:17:46.840 the country be, but we people deserve to be able 0:17:46.880 --> 0:17:49.440 to make a fair living, and if they're in healthcare, 0:17:49.640 --> 0:17:53.280 they should be paid appropriately. In my opinion, Dr Stephen Corowen, 0:17:53.320 --> 0:17:55.960 thanks so much for your time. Really appreciated, Dr Stephen 0:17:55.960 --> 0:18:00.080 Corowin the CEO and presidency of New York Presbyteria in 0:18:00.119 --> 0:18:04.160 which did so much to help a city under siege. 0:18:04.280 --> 0:18:09.000 Really and I think um, at least in the US 0:18:09.119 --> 0:18:13.840 or worldwide, everyone's appreciative of healthcare professionals. This is Bloomberg. 0:18:16.840 --> 0:18:19.479 It is time for Bloomberg Opinion. We're joined today by 0:18:19.520 --> 0:18:22.360 Jared Dillion. He's a columnist for Bloomberg Opinion. He's also 0:18:22.520 --> 0:18:25.680 editor and publisher of the Daily Dirt Map and investment 0:18:25.720 --> 0:18:30.360 stratagist at Malden Economics. He's based in Myrtle Beach, South Carolina. 0:18:30.400 --> 0:18:34.679 Is that with a fascinating column here arguing that quote 0:18:34.680 --> 0:18:38.680 SPACs aren't the only examples of late capitalism. Needs suggests 0:18:38.720 --> 0:18:41.720 that excess is throughout the financial system, raised the odds 0:18:41.760 --> 0:18:44.480 that the next recession could be our last as a 0:18:44.520 --> 0:18:47.480 free market economy. Jared, thanks so much for joining us here. 0:18:47.920 --> 0:18:50.239 Tell us about why you think the next recession might 0:18:50.280 --> 0:18:53.400 be the last one in this economy. You know what's 0:18:53.440 --> 0:18:58.199 funny because when I started to write this article, I was, um, 0:18:58.240 --> 0:19:00.840 I have a I have a cat that is overweight, 0:19:01.680 --> 0:19:04.320 and we were buying her a food puzzle. I don't 0:19:04.320 --> 0:19:05.879 know if you know what the food puzzle is, but 0:19:06.320 --> 0:19:08.639 it makes it difficult for a cat to get the food. 0:19:09.240 --> 0:19:12.600 And you know, I looked this up on Amazon and 0:19:12.640 --> 0:19:15.399 I ordered it in two seconds and I had it 0:19:15.480 --> 0:19:18.280 delivered to my house in two days. And it kind 0:19:18.280 --> 0:19:21.600 of reminded me of two thousand seventeen, when you know, 0:19:21.680 --> 0:19:23.720 if you're on if you spend any time on Twitter, 0:19:23.760 --> 0:19:26.840 there was all this discussion on weight capitalism and all 0:19:26.880 --> 0:19:30.520 this excesses of capitalism, and that got me thinking about 0:19:30.600 --> 0:19:32.679 SPACs and a lot of the stuff that's going on today. 0:19:34.880 --> 0:19:38.159 But but but but what so it's going to be 0:19:38.200 --> 0:19:40.080 the end? I mean, what does that mean if if 0:19:40.080 --> 0:19:43.159 there's another big recession, we're going to have the state 0:19:43.359 --> 0:19:49.280 really take over. I think there was I think what's 0:19:49.280 --> 0:19:53.159 happening is that from a sentiment standpoint, the bull market 0:19:53.200 --> 0:19:55.280 has gone on for so far, and we're starting to 0:19:55.280 --> 0:19:59.960 see a lot of excesses of capitalism. Money has gotten easy. 0:20:00.040 --> 0:20:02.960 And yes, I do think that we'll see more state 0:20:03.000 --> 0:20:06.600 interference in the economy if we have another downturn. And 0:20:06.680 --> 0:20:10.000 you know, we're trying very hard to prevent a downturn, 0:20:10.080 --> 0:20:13.320 but that has taken the position that it's actually trying 0:20:13.359 --> 0:20:16.280 to prevent recessions. It's a very different feed than what 0:20:16.359 --> 0:20:20.959 we had twenty years ago. All right, So, Jared, I mean, 0:20:21.200 --> 0:20:23.280 we we step back here and we take a look 0:20:23.280 --> 0:20:26.480 at the marketplace and just over the last yeah called 0:20:26.480 --> 0:20:29.000 six or twelve months, you know, during this pandemic, we've 0:20:29.040 --> 0:20:32.240 had some of the Reddit trades, the game stops of 0:20:32.280 --> 0:20:36.720 the world, We've had this explosion in SPACs. I mean, 0:20:37.359 --> 0:20:40.040 you know, one of the lot of folks are saying, boy, 0:20:40.080 --> 0:20:42.080 this is a lot of froth in this market. There's 0:20:42.080 --> 0:20:44.360 a lot of excess in this market. There's a lot 0:20:44.359 --> 0:20:48.920 of speculation in this market. Do you see that as well? Yeah, 0:20:48.960 --> 0:20:51.600 I do see that. And you know, the SPACs in particularly. 0:20:51.600 --> 0:20:54.320 The interesting thing about SPACs is, you know, I actually 0:20:54.359 --> 0:20:57.159 think SPACs player play an important role. I mean, the 0:20:57.200 --> 0:20:59.959 I P O process is kind of broken. It's kind 0:21:00.080 --> 0:21:03.840 of compresome, and there's been some actually really great companies 0:21:04.240 --> 0:21:07.720 that have gone public as SPACs, but there's also been 0:21:07.960 --> 0:21:11.080 a lot of stuff that is terrible and uh is 0:21:11.080 --> 0:21:14.360 a joke. So you know this is there's a lot 0:21:14.400 --> 0:21:17.840 of excesses in this ball market, and if it continues, 0:21:17.840 --> 0:21:22.000 we're going to get more excesses. So I wonder, though, 0:21:22.040 --> 0:21:26.160 what um society looks like after the end of free 0:21:26.160 --> 0:21:29.639 market capitalism. Have you ever seen the movie, the animated 0:21:29.640 --> 0:21:36.880 film Wally, because I love I love the dystopian future 0:21:37.040 --> 0:21:41.600 of me getting amazingly fat, sitting in a chair that 0:21:41.640 --> 0:21:45.200 moves around a cruise ship, just drinking slurpees all day 0:21:45.240 --> 0:21:47.560 and watching TV. Like, I'm not opposed to that. If 0:21:47.560 --> 0:21:50.720 the robots take over and we just get paychecks, is 0:21:50.720 --> 0:21:54.400 that how it's gonna work? Uh? You know what, it's 0:21:54.440 --> 0:21:56.879 it's actually funny. I mean it's bringing up the uh 0:21:57.160 --> 0:22:00.399 you know, getting paychecks. Uh here a myrtle b This 0:22:00.520 --> 0:22:02.560 is uh, you know, changing the subject a little bit. 0:22:03.040 --> 0:22:05.120 You know, this is a hospitality town. I mean it's 0:22:05.119 --> 0:22:08.200 a vacation town. So it's it's hotels and restaurants. That's 0:22:08.200 --> 0:22:11.320 basically what we have here and the Myrtle Beach is 0:22:11.359 --> 0:22:17.639 in right because they cannot attract any talent to help 0:22:17.680 --> 0:22:21.359 out at these businesses as housekeepers and as stubbs or 0:22:21.400 --> 0:22:25.560 as cooks, because we are paying people to stay home, 0:22:26.359 --> 0:22:30.720 and it's it's you can't get you can't get meals, 0:22:30.720 --> 0:22:33.119 you can't get dinner reservations, you check into your hotel 0:22:33.119 --> 0:22:36.600 at midnight. This isn't really extreme situation here on Myrtle Beach. 0:22:36.680 --> 0:22:39.360 I don't think this the story has really gotten out yet. 0:22:40.800 --> 0:22:44.280 That is fascinating. I mean, you know, I we we 0:22:44.320 --> 0:22:48.000 get these jobs claims numbers that we got uh this morning, Jared, 0:22:48.480 --> 0:22:51.399 and yet I walked down main street of any town 0:22:51.560 --> 0:22:54.240 in New Jersey and almost every store has a help 0:22:54.359 --> 0:22:57.240 wanted not rant it it's uh, it's I'm assuming it's 0:22:57.280 --> 0:23:00.160 a it's a low wage kind of clerk tie type 0:23:00.200 --> 0:23:03.600 of role, but every business is looking for people. Lindsay 0:23:03.720 --> 0:23:06.000 just told us Pault. We just interviewed this DEFHIL economist 0:23:06.000 --> 0:23:08.159 Lindsay Giggs, and she said, well, one of the reasons 0:23:08.160 --> 0:23:11.040 you get these huge initial jobless claims numbers is that 0:23:11.080 --> 0:23:13.720 people get paid so much to be jobless. Right now, 0:23:13.920 --> 0:23:15.639 I don't want to sound like a jerk when I 0:23:15.680 --> 0:23:18.040 say that, because you know, there are a lot of 0:23:18.040 --> 0:23:21.360 people that I'm sure would rather have a job than 0:23:21.520 --> 0:23:23.919