Speaker 1: This is Bloomberg Business Week. I'm Carol Masser and I'm
Speaker 1: Jason Kelly. We're right here every day bringing you the
Speaker 1: latest news from the world's of business and finance, plus technology, politics, economics,
Speaker 1: all harnessing the power of Business Week reporters and editors,
Speaker 1: and of course Carol that's part of a team of
Speaker 1: twenty seven hundred journalists and analysts more than a hundred
Speaker 1: and twenty countries and Jason. You can download Bloomberg Business
Speaker 1: Week on iTunes, SoundCloud, bl Bloomberg dot com. You can
Speaker 1: also listen to our radio show at two pm Eastern
Speaker 1: on Bloomberg Radio every weekday, or watch us on YouTube
Speaker 1: by searching Bloomberg Global News. Let's set the Business week agenda,
Speaker 1: because we need to figure out what's going on in
Speaker 1: this trade, what's on investor's mind. We've got the perfect
Speaker 1: team assembled to do that. Uh. In the meantime, just
Speaker 1: bring you one headline that the FED will begin buying
Speaker 1: broad portfolio of US corporate bonds. That certainly is going
Speaker 1: to play into the discussions today. Let's talk about what's happening,
Speaker 1: especially on the equity side, with Gina Mark and Adams.
Speaker 1: That's because she's the chief equity strategist for Bloomberg Intelligence.
Speaker 1: She joins us on the phone from New Jersey, Dave Wilson,
Speaker 1: of course, our stocks editor, author of the chart and
Speaker 1: stock of the Day. Uh, Dave, I want to start
Speaker 1: with you because you heard Charlie break down the numbers,
Speaker 1: the swings that we've been seeing. Take us inside the trade,
Speaker 1: help us understand what's what what lovers are moving here. Yeah,
Speaker 1: it looks like things have just kind of stabilized a bit,
Speaker 1: arguably after you know what we saw on Friday with
Speaker 1: stocks getting off to a pretty good early start and
Speaker 1: then not being able to hang on the gains. Today
Speaker 1: it was kind of the opposite where you had the
Speaker 1: early losses and markets come back. Uh. You see technology
Speaker 1: stocks at the forefront. Today you see communications stocks and
Speaker 1: there we're talking about the likes of Google's owner Alphabet
Speaker 1: as well as Facebook. But it's not like anyone group
Speaker 1: is sort of a standout at this point. It's just
Speaker 1: interesting to see the kind of reversals that have gone
Speaker 1: on today's trading. I mean, you know, early on you
Speaker 1: saw take the travel stocks. I mean, they've certainly been
Speaker 1: among the more valuable shares out there, and they were
Speaker 1: down big time early on, and now you look at them.
Speaker 1: I mean, Americans up six tents of a percent. You know,
Speaker 1: Delts is a little changed, and you know cruise lines.
Speaker 1: You've got Cornable down a bit two point three percent,
Speaker 1: but roal Caribbeans barely lower. So you know, we we've
Speaker 1: certainly seen a lot movement in those shares. Uh. Same
Speaker 1: thing with the biggest banks, which are little changed at
Speaker 1: this point after having fallen early on. So a lot
Speaker 1: of recovery going on in today's trading after some early losses.
Speaker 1: Of look mighty familiar in terms of the kinds of
Speaker 1: stocks that we're falling. All right, let's bring Gina Martin Adams.
Speaker 1: Gina Um, you're writing on the Bloomberg. You talk about
Speaker 1: the stocks rebound, stocks bounce back, may remain under fire
Speaker 1: until green shoots emerge. I do feel like we're at
Speaker 1: this juncture. Jason and I were talking about it last week,
Speaker 1: about a week ago exactly that all of a sudden,
Speaker 1: investors were like, wait a minute, like, you know, we've
Speaker 1: gotten way ahead of ourselves. Let's see what the economic
Speaker 1: and corporate profit outlook ultimately is, and we need more
Speaker 1: data on that. I would totally agree. I think what
Speaker 1: actually happened is the first few months of this recovery
Speaker 1: rally was really all about pricing a new Fed policy,
Speaker 1: a new monetary policy regime. Once we got to the
Speaker 1: point where we fully priced extremely low interest race for
Speaker 1: a very long period of time, we sort of lost
Speaker 1: our momentum. And and I think now the next phase
Speaker 1: has to be about, Okay, great, we are willing to
Speaker 1: pay a lot more for equities given just this permanently
Speaker 1: low interest rate landscape, But where is the earnings all
Speaker 1: going to go? And I do think that that's going
Speaker 1: to be the next leg of the rally or not
Speaker 1: rally is sort of the progression of earnings estimates, the
Speaker 1: progression of economic green shoots while we start to see
Speaker 1: some growth, and how does that forecast compare to the
Speaker 1: current consensus expectation, which is sub two percent growth um
Speaker 1: in the next twelve months following the end of this month.
Speaker 1: So expectations are very low, but economic growth is also
Speaker 1: pretty slim, and I think the market is going to
Speaker 1: go back and forth trying to figure out, you know,
Speaker 1: how to pair expectations with reality. So we just got
Speaker 1: to get comfortable with this level of back and forth, Gina,
Speaker 1: I think that's some of it. I think also though,
Speaker 1: if you look at things like factor leadership and sector leadership,
Speaker 1: you have seen some rotation back to more stability, more defensiveness,
Speaker 1: sort of the momentum quality, low volatility trait that really
Speaker 1: dominated pre crisis does appear to be making a little
Speaker 1: bit of headway over the last week or so. And
Speaker 1: I think that's really just about stuff like high volatility
Speaker 1: and high bankruptcy risk and kind of low quality stocks
Speaker 1: really ripped out of the march low so much more
Speaker 1: than they normally do in the first leg of recovery
Speaker 1: that I think that segment of the rally got a
Speaker 1: little bit ahead of itself. And that's the segment where
Speaker 1: you would normally see, you know, growth prospects start to emerge.
Speaker 1: But we're really starting to question that segment. So I
Speaker 1: think it's going to be a back and forth and
Speaker 1: kind of choppy your market um for the for the
Speaker 1: factor and sector leaders as well. Hey just quickly, um, Gina,
Speaker 1: just about twenty seconds, when can we expect fairly for
Speaker 1: our companies to start saying, okay, here's our outlook. We
Speaker 1: have an outlook to give you how much when when
Speaker 1: should we expect them to be able to do that? Yeah,
Speaker 1: I think that you'll hear a little bit more of
Speaker 1: that in the June at the July quarter. Sorry, So
Speaker 1: with the next learning season really kicks off only a
Speaker 1: month from now, a little less than a month from now, shocking,
Speaker 1: and it at that point, I think we'll hear a
Speaker 1: little bit more about Okay, at least for June. What
Speaker 1: did the reopenings from the US look like? What does
Speaker 1: our do our prospects for growth looks like? You know,
Speaker 1: how are we going to do in terms of liquidity
Speaker 1: and leverage? Those types of things are going to start
Speaker 1: to eat out I think in the July quarter. Great,
Speaker 1: all right, thank you so much. Gina Martin, Adam's chief
Speaker 1: Equity Strategies for Bloomberg Intelligence. Joining us on the phone
Speaker 1: from New Jersey, Dave Wilson. This is Bloomberg Business Week
Speaker 1: with Carol Masser and Jason Kelly on Bloomberg Radio. Well,
Speaker 1: our next guest, Tom Goodmanson is President CEO at the
Speaker 1: customer experience intelligence company Collabrio. They use AI driven analytics
Speaker 1: and they use it to track customer behavior and sentiment
Speaker 1: and they work with their clients using that information. They're
Speaker 1: based in Minneapolis. That's exactly where Tom joins us on
Speaker 1: the phone on this Monday. Tom, Welcome to Bloomberg Radio.
Speaker 1: Nice to have you here with us. You know, I
Speaker 1: have to be honest with you. I read your website
Speaker 1: a couple of times, read a bunch of your press
Speaker 1: releases and some other information. What exactly do you guys
Speaker 1: do using ai UM to kind of bridge gaps between
Speaker 1: customers and clients. Yeah, thanks, Carol. You know, we we
Speaker 1: really put it simply, we sit in contact centers and
Speaker 1: we're listening to what's going on between the customer and
Speaker 1: the and the agent, and we're helping that it would
Speaker 1: be a better, better insight. And so we're doing we
Speaker 1: provide analytic insights by UH record and then and then
Speaker 1: running it through our engines to do things like predictive NPS. NPS,
Speaker 1: we do predictive scoring, we do predictive how how agents think.
Speaker 1: So we really are trying to get in the minds
Speaker 1: of the agent in order to give a better UH
Speaker 1: situation to the end user. And so this plays into
Speaker 1: one of the terms that we have all started to
Speaker 1: use and come to GRIPS with, which is contact tracing
Speaker 1: so help us understand how it fits into that broader effort. Yeah.
Speaker 1: So if you think about this is a very heated
Speaker 1: if somebody's calling in and they've got covid um or
Speaker 1: the other is they find out you know, they get
Speaker 1: the people that have been diagnosed, and they find out
Speaker 1: who they've talked to. You have to have a kind
Speaker 1: of a bedside manner. And so we're helping those agents
Speaker 1: train and understand how to how to help. And then
Speaker 1: the AI is ivan to to maybe see trends. So
Speaker 1: we're not just taking the word of the person calling in,
Speaker 1: but we might be able to spot some other trends
Speaker 1: that are going on in a region in an area.
Speaker 1: So are you learning anything so far through that work
Speaker 1: because we're all trying to figure out what happens next here. Yeah.
Speaker 1: The work we're finding right now is think about how
Speaker 1: much we have to to spin up, right, So the
Speaker 1: work is maybe three to four weeks old in a
Speaker 1: lot of the regions that are just spinning these up
Speaker 1: as we start to open up the world a little
Speaker 1: bit here and so the insights have not started pouring
Speaker 1: in other than people are are scared when they call
Speaker 1: and just trying to provide calming. That's probably the number
Speaker 1: one thing that I'm seeing is just being having a
Speaker 1: calming influence for now. Yeah, you know it's interesting too
Speaker 1: because I think about you guys, you know, play into
Speaker 1: different worlds. You get to you get you have a
Speaker 1: certain window that maybe some of us don't, And I
Speaker 1: do wonder what it says to us about kind of
Speaker 1: where we are in our world, especially as post COVID nineteen.
Speaker 1: We're not done, as many of the doctors we talked
Speaker 1: to and members of the medical community remind us, you
Speaker 1: know that we're not anywhere near to being done, but
Speaker 1: we are reopening and people are making their way back.
Speaker 1: We're trying to figure out, Okay, what does our world
Speaker 1: look like, what does the marketplace look like? What does
Speaker 1: the economy look like? What would you say? You know,
Speaker 1: that's a good question. And if I had the answer
Speaker 1: to that, I'd probably have my employees back at work. Um,
Speaker 1: you know, where people are, people are really cautious. You're
Speaker 1: seeing a lot of excitement. They're they're tired of being
Speaker 1: at home and home schooling and doing all that stuff.
Speaker 1: But then there's that fear factor. Um, We've got a
Speaker 1: lot of things that you know, people feel that they've
Speaker 1: been left out of but they don't know how quite
Speaker 1: to go back. And so I think as some programs
Speaker 1: like this should allow us that confidence that we're going
Speaker 1: to find UH problems and hotspots more quickly we did
Speaker 1: early this year, UH and and allow us to maybe
Speaker 1: give us a little bit of confidence as we go
Speaker 1: back right and to isolate maybe a little bit more effectively.
Speaker 1: And to that end, Tom, I mean, what's your sense
Speaker 1: about who should ultimately be running these types of operations?
Speaker 1: Because I think a lot of people candidly are skeptical
Speaker 1: of the federal government, but we also know that state
Speaker 1: local governments have different levels of funding. What's the optimal
Speaker 1: system from your perspective? You know, from my perspective, it's
Speaker 1: I think it's a public private type UH partnership UM.
Speaker 1: The public good, the health departments and what have you.
Speaker 1: I think they have the data and the know how
Speaker 1: UM companies like ours have the skill to let them
Speaker 1: get to work and do what they do best. And
Speaker 1: then they between the two of us, then spin up
Speaker 1: and partner with business provider outsourcers so b p o
Speaker 1: s to get them the bodies that they need. Because
Speaker 1: this is a body of intensive as you can imagine.
Speaker 1: The CDC and George Washington University say that we should
Speaker 1: have thirty tracers for every hundred thousand residents. That's a
Speaker 1: lot of that's a lot of people to get spun
Speaker 1: up to make this work. So the whole idea, right,
Speaker 1: Jason had and I've had tons of conversations about the
Speaker 1: importance of testing and tracing and that's how it's going
Speaker 1: to give the confidence. So you guys are working to
Speaker 1: kind of help work places get those programs in place.
Speaker 1: Just got about forty seconds left here. Yeah, we've got
Speaker 1: you know, we've got We're working really hard to help companies,
Speaker 1: but also the state governments. We've engaged with many state governments.
Speaker 1: We think that that's the right place to put the
Speaker 1: biggest centers because each state, as we've seen, has had
Speaker 1: different approaches to and different outbreaks, and so we think
Speaker 1: that that's the best place to help them. And then companies,
Speaker 1: of course, if they do the next level to help
Speaker 1: their employees is a really important step as well. And
Speaker 1: we should point out that you're partnering with Amazon and
Speaker 1: Trilio to UM work on those virtual contact trace seeing
Speaker 1: operations around the US. UM really appreciated. Excuse me your time.
Speaker 1: Tom Goodmanson is president CEO at Collabrio. He is based
Speaker 1: in Minneapolis and that's where he joined us on the
Speaker 1: phone Jason on this Monday. Yeah. Interesting to see. I mean,
Speaker 1: these are going to be massive logistical and somethings and
Speaker 1: almost infrastructure challenges. If you can't offset that with some
Speaker 1: machine learning, obviously that would make sense. Interested to hear
Speaker 1: how this all goes, because through the summer we're going
Speaker 1: to be the new corporate system that you need you
Speaker 1: to write, another thing that you have to have in place.
Speaker 1: This is Bloomberg Business Week with Carol Masser and Jason
Speaker 1: Kelly on Bloomberg Radio. A big headline crossing this morning
Speaker 1: courtesy of the Supreme Court, a decision that really was
Speaker 1: not expected, and I would say even less expected was
Speaker 1: the breakdown in terms of how the justices voted. Let's
Speaker 1: talk about it with Jeff Green, because this is a milestone,
Speaker 1: it feels like, in terms of rights for workers and
Speaker 1: specifically uh lgbt Q workers. Jeff tell us about it. Yeah,
Speaker 1: I mean the thing that a lot of people maybe
Speaker 1: still don't realize is that in a majority of Americans
Speaker 1: are not protected um from discrimination in this country up
Speaker 1: until well today. Um So if you in many states,
Speaker 1: a majority of states in fact, if somebody wanted to
Speaker 1: fire you for being gay or transgender, it was legal.
Speaker 1: It was little, there was no recourse up until the
Speaker 1: Supreme Court basically said that the nineteen sixty four Civil
Speaker 1: Rights Act can be interpreted to cover LGBT rights as well,
Speaker 1: which makes us, you know, pretty much on par with
Speaker 1: the with the gay gay marriage ruling. You know, it's
Speaker 1: interesting to Jeff that Greg store To writing about this
Speaker 1: today and he says more than half of the U
Speaker 1: s States don't cover sexual orientation and gender identity through
Speaker 1: their own anti discrimination laws, and more than half of
Speaker 1: the nation's eight million LGBT workers live in those states.
Speaker 1: So this is a big, big deal, right yeah, And
Speaker 1: it's um, like you said, unexpected to some degree, um
Speaker 1: with the current Supreme Court configuration. And I mean it,
Speaker 1: it gets most of the workers now are protected. I
Speaker 1: mean that the title title seven, as this nineties four
Speaker 1: laws referred to in shorthand, does not cover people who
Speaker 1: work at companies that have less than fifteen employees. And
Speaker 1: that's still probably around ten to fift of Americans work
Speaker 1: at smaller companies that small majority of Americans worker companies
Speaker 1: with less than a thousand people, So there wasn't a
Speaker 1: lot of protection for people who worked at the smallest companies.
Speaker 1: Most of the large corporations, like most of the Fortune
Speaker 1: five hundred SMP five already have some sort of a
Speaker 1: regulation protecting LGBT workers. So the law was really meant
Speaker 1: to protect you know that the law really was sort
Speaker 1: of not covering people who were outside of those big
Speaker 1: and so what does this mean? You know, Jeff, you
Speaker 1: and your team do such a great job sort of
Speaker 1: covering diversity in all of its aspects on the managing
Speaker 1: university team at Bloomberg, and I do wonder is you
Speaker 1: guys have talked about it. What are the practical uh
Speaker 1: implications for this? Are there sort of economic factors that
Speaker 1: enter in here? What what does it really mean when
Speaker 1: we get down to brass tax Well, I mean it
Speaker 1: means job security, legal protection for a group of and
Speaker 1: maybe it make it a little more likely that people
Speaker 1: will be out at work. I mean. One of the
Speaker 1: big issues with gay marriage UM was that a lot
Speaker 1: of companies had been offering benefits same sex benefits UM
Speaker 1: and when gay marriage was legal in all fifty states.
Speaker 1: There was this idea that we don't need that anymore
Speaker 1: because now you can get married and get the benefits.
Speaker 1: But a lot of people were concerned that if they
Speaker 1: lived in a state where it was legal to fire
Speaker 1: me for being gay, then I really didn't want to
Speaker 1: betise my marriage or I didn't want to get married,
Speaker 1: so I would lose my my healthcare, um, unless I
Speaker 1: got married, and then I could be fired. So there
Speaker 1: was sort of this catch funny too, and that's now
Speaker 1: sort of taken away, um, at least when it comes
Speaker 1: to domestic implications. There's so global implications to being gay
Speaker 1: and married in other countries, but as of today, for
Speaker 1: most Americans, that is not an issue. Yeah, now it's
Speaker 1: great and uh, we really appreciate you bringing us the
Speaker 1: details of this. Jeff Green Menjing, diversity reporter for Bloomberg
Speaker 1: joining us. Uh from Detroit. This felt seismic in anyways.
Speaker 1: You said it at the top. Unexpected to have, you know,
Speaker 1: Neil Neil Gorsuch, who's conservative to have also John Roberts,
Speaker 1: the Chief Justice, also conservative. Gorsch was the surprise for me.
Speaker 1: I mean, Roberts has has emerged swing vote this swing
Speaker 1: vote right, um, and in many ways, uh, you know,
Speaker 1: seeing Neil Gorsuch not only vote that way but right
Speaker 1: for the majority, right right exactly. I mean that is
Speaker 1: really taking a big step in terms of what that
Speaker 1: decision was all about. And I do think, you know,
Speaker 1: we look at the three branches of our government, um,
Speaker 1: and how they are supposed to kind of checks and
Speaker 1: balances on one another, and this, you know, shows to
Speaker 1: me at least that it continues to be an independent
Speaker 1: Supreme Court, which is such an important part for this
Speaker 1: government functioning. And I do think, you know, when it
Speaker 1: comes to rights of all individuals, I think there was
Speaker 1: a segment of the population that looked at this that
Speaker 1: has been rightly agitated at an upset and at least said,
Speaker 1: all right, here's a little bit of good news as
Speaker 1: we press forward. Yeah, considering certainly that the recent backdrop
Speaker 1: This is Bloomberg Business Week with Carol Masser and Jason
Speaker 1: Kelly on Bloomberg Radio. So no doubt about it. What
Speaker 1: happens from here largely depends on what happens next with
Speaker 1: the virus, the economy, what type of bounce back we
Speaker 1: see as the country in the world reopen depends on
Speaker 1: whether or not people feel safe enough to go back
Speaker 1: to work and resume economic activities. This is happening on
Speaker 1: a day when new outbreaks in the US have some
Speaker 1: states concerning whether to pause reopening. So in today's Business
Speaker 1: Week Economics edition, we thought we got to look at
Speaker 1: where we are when it comes to the virus with us.
Speaker 1: As Michelle Cortez, health science and medical technology reporter at
Speaker 1: Bloomberg News, she joins us back with us on the
Speaker 1: phone from Minneapolis, Minnesota. Michelle, it is good to have
Speaker 1: you here. Where are we like, you know, people talk
Speaker 1: about second wave reopenings, Maybe we should pause them. What
Speaker 1: are you hearing? What do we need to know? Well?
Speaker 1: I think that what we're learning is that this virus
Speaker 1: is a virus when all the other viruses, as we
Speaker 1: would have expected. The fact that most people in the
Speaker 1: world are still completely vulnerable to this new new type
Speaker 1: of a bug. There's no natural immunity to it. People
Speaker 1: had hoped that because it does fall into this kind
Speaker 1: of seasonal arrangement of viruses, that we would see a
Speaker 1: waning of its impact in the summer months. We're not
Speaker 1: seeing that. We're seeing it's still going from one person
Speaker 1: to the next person. As long as there are people
Speaker 1: to be infected, that virus wants to infect them. And
Speaker 1: we haven't seen a drop, so we're not going to
Speaker 1: see a second peak. We might just see an increasing acceleration.
Speaker 1: But that's what we're looking at, hitting some places harder
Speaker 1: than others. But it has not gone away entirely from anywhere.
Speaker 1: And so Michelle and you and your colleagues have done
Speaker 1: such a good job of synthesizing this. I mean, this
Speaker 1: is ultimately the clash that we are seeing, which is
Speaker 1: public health versus economics and and and economic health. In
Speaker 1: some ways, different states, different localities are dealing with it
Speaker 1: in a different way. What are we learning maybe on
Speaker 1: a on a state by state basis what jumps out
Speaker 1: at you that it sort of gives us a sense
Speaker 1: of where we may be headed. Well, the thing that
Speaker 1: is really jumping out at me is the extent to
Speaker 1: which this is is circumfortble circumfortable for all of us.
Speaker 1: It you have to make your own individual decision. You're
Speaker 1: going to have to make decisions for your family. You're
Speaker 1: going to have to make decisions for your city, your account,
Speaker 1: You're gonna have to make decisions for your states and
Speaker 1: for your country. You really can't get away from that
Speaker 1: when it comes with the situation. Michelle, what do you
Speaker 1: make about the story about Beijing over the weekend and
Speaker 1: that about a new outbreak in Beijing that reached nearly
Speaker 1: a hundred infections over the weekend. They talked about again
Speaker 1: linked to a vegetable market, you know, linked to a market. Um,
Speaker 1: I don't know what is what? How do you take
Speaker 1: that into account? Well, that's exactly the situation right there
Speaker 1: is no escaping this virus. That's what we have learned.
Speaker 1: So we really did think that, you know that they
Speaker 1: were done in China. They had a terrible outbreak in Muhan.
Speaker 1: They closed everything down. They you know, they really handled
Speaker 1: it very aggressively and there was nothing happening there for
Speaker 1: fifty days. They had no cases. But you just have
Speaker 1: to let one or two people in, you get that
Speaker 1: bounding again. And when you still have this completely vulnerable
Speaker 1: population because they haven't had this virus, and that's it.
Speaker 1: Like herd Immunity says, somewhere between six people either have
Speaker 1: to be immunized and you can't do that because it
Speaker 1: doesn't exist, or you have to be infected that's only
Speaker 1: going to give you one outlet. But again, to your point,
Speaker 1: we can't shut down the world, so we're going to
Speaker 1: have to figure out how to live with it. Yeah,
Speaker 1: and so to that exact point, Michelle, what seems to
Speaker 1: have worked from a public health perspective, barring complete shutdown,
Speaker 1: which I think it's safe to say a lot of
Speaker 1: government officials, state officials especially are really resisting, and certainly
Speaker 1: we know that that's going to be resisted at the
Speaker 1: federal level. What seems to be working. It seems like
Speaker 1: this virus is actually pretty fragile. If you hit it
Speaker 1: with any kind of cleaning supplies, it seems to take
Speaker 1: care of the virus if you wear a mask. The
Speaker 1: numbers that were sting, I mean, there were studies early
Speaker 1: on that showed that people who were living with the
Speaker 1: very first people who were infected, when we knew almost
Speaker 1: nothing about it, they could live with somebody who was
Speaker 1: infected in the same household and not pass it along.
Speaker 1: We saw some cases when it came to the destroyer
Speaker 1: and the aircraft carriers. The number of patients who came
Speaker 1: out of that that it was dramatic. If you wore
Speaker 1: a mask and tried to social distance at all. You
Speaker 1: were so much more protected than if you weren't. So
Speaker 1: we're going to have to drill down and get a
Speaker 1: little more clarity on that. But it is undisputably true
Speaker 1: that if you are taking actions to protect yourself, those
Speaker 1: are having significant effects, and you might have even more
Speaker 1: dramatic effects than anyone realizes. So I know that it's
Speaker 1: you know, our country's kind of come divided about whether
Speaker 1: you wear a mask, What does that mean? What is
Speaker 1: that telling other people? But that's the concern I think
Speaker 1: in some of these places like Florida and Texas, where
Speaker 1: we have people going to bars and going to beaches
Speaker 1: and they're not wearing masks, they're not protecting themselves, and
Speaker 1: we're seeing these surging infections. So it's like wearing a seatbelt.
Speaker 1: I mean, it's not going to hurt you to word
Speaker 1: at this point, right, It's so simple. And I felt
Speaker 1: like I saw a lot of that over the weekend, Michelle,
Speaker 1: depending on where I was, where people were really good
Speaker 1: about wearing masks. Then I saw people, you know, close
Speaker 1: to one another with their masks kind of half off
Speaker 1: their face and talking and socializing. So and I saw
Speaker 1: restaurants where their tables were out and parking lots, and
Speaker 1: they were well spread out, and they were very clear
Speaker 1: about what you could and couldn't do. Um you know,
Speaker 1: but you're right, it's so simple, Jason. You keep talking
Speaker 1: about that it's not just about protecting yourself, but it's
Speaker 1: about protecting your others by wearing a mask. And also,
Speaker 1: I'm just gonna echo what Michelle just said, wear a
Speaker 1: mask that had said. And and actually I'm going to
Speaker 1: steal that line Michelle that you just used, which is
Speaker 1: it is like wearing a seatbelt. You know, it's partially
Speaker 1: about your safety, but it's partially about the safety of
Speaker 1: those around you. So really appreciate it. Great context. This
Speaker 1: is the conversation we needed to have to sort of
Speaker 1: set the table for where we are, especially here at
Speaker 1: the beginning of the week. Michelle Cortez Health sign to
Speaker 1: me Osiense and Medical Technology reporter for a Bloomberg Award
Speaker 1: winning journalist on this story, She's just been a stalwart
Speaker 1: on this right and if you want things to get
Speaker 1: back to normal, in other words, participate in whether you
Speaker 1: want to be going out to stories, going to restaurants,
Speaker 1: or something, going back to your office. You know, it's
Speaker 1: so simple, wear a mask, and that really reduces your
Speaker 1: risks dramatically and the risks of others, because this is
Speaker 1: what it's all about. Yeah, and I do keep hearing that,
Speaker 1: and I do hope that that continues to build, and
Speaker 1: that's smarter and smarter people continue to pick that up.
Speaker 1: You know, our friends got Galloway. I saw a tweet
Speaker 1: of his over the weekend where he was citing a
Speaker 1: study similar to what Michelle was talking about, where if
Speaker 1: you wear a mask, if you do some basic, very
Speaker 1: basic social distancing stuff, the chances of its spreading are dramatically,
Speaker 1: dramatically lower. Yeah. Yeah, and that's worth noting, especially as
Speaker 1: we're all are kind of just you know, I just
Speaker 1: want to get back to normal. I'm just gonna say it. Well,
Speaker 1: we always love matching up with Andy Brown, and so
Speaker 1: let's continue our discussion around the world of economics, because
Speaker 1: this pandemic has really upset in many ways the economic
Speaker 1: almost ethos of every year that's going on here. Carol Andy,
Speaker 1: of course, is the editorial director for Bloomberg New Economy
Speaker 1: Joints on the phone from New Hampshire. So, Andy, as
Speaker 1: you try and make sense of all of this. We
Speaker 1: rely on you for your column every week to sort
Speaker 1: of set the stage. What were you thinking about this week?
Speaker 1: So really this week thinking about agenda, um, the new
Speaker 1: Bloomberg New Economy agenda for the rest of this year. Um,
Speaker 1: you know, which which kind of acknowledges the central reality
Speaker 1: that the global economy is now at this turning point, um,
Speaker 1: you know, and and it faces a whole set of
Speaker 1: really stock choices. And you know, my Michael Bloomberg was
Speaker 1: writing last week in the inaugural edition of Bloomberg Green
Speaker 1: as Phenomenal magazine, and you know, he said he was
Speaker 1: talking about the trillions of dollars that are about to
Speaker 1: be flushed into the global economy, and he was talking
Speaker 1: about the environment. He said, Look, the choice is clear, right,
Speaker 1: I mean, we either invest in clean infrastructure to create jobs,
Speaker 1: improve public health, or we keep protecting polluting industry. And
Speaker 1: guess what, you know, the Trump administration has chosen to
Speaker 1: bail out oil and and and gas companies. Um. You know,
Speaker 1: but exactly the same set of choices affects area after
Speaker 1: area of the global economy. Well, and you know what's
Speaker 1: interesting too, I do feel like and Andy, we've had
Speaker 1: some conversations Kathy would over at our investment who you know,
Speaker 1: consistently reminds us that during times of stress and disruption
Speaker 1: in our world and our economies, that's when you can
Speaker 1: kind of pivot and make some really big changes. And
Speaker 1: I do feel like, whether it's as you write on
Speaker 1: the climate, whether it's on finance, whether it's on public health,
Speaker 1: whether it's on cities, how we look at things right now,
Speaker 1: we can make some decisions that will really change our
Speaker 1: course longer term. Right well, we we We've just heard
Speaker 1: on the news headlines just just just now how the
Speaker 1: FED is going to invest in a broader range of
Speaker 1: corporate bonds. I mean, so you know, the economist Muhamadada
Speaker 1: Hilarium was writing about this in the Financial Times last
Speaker 1: week and talking about these unprecedented sums of money that
Speaker 1: are being used to plug revenue shortfalls in companies, and
Speaker 1: he said, look, the question is, you know, is it
Speaker 1: are these funds going to be used for short term
Speaker 1: financial engineering, share buy backs, padding the pay of of
Speaker 1: global CEOs, or is it going to be used to
Speaker 1: shore up the fundamentals you know that the long term
Speaker 1: base of the economy. And and surely if you look
Speaker 1: at it that way, Um, you know, an obvious choice
Speaker 1: would be to engineer a new deal for workers, right
Speaker 1: the essential workers who have held the whole thing together
Speaker 1: during this coronavirus pandemic, the gig workers who are now
Speaker 1: out of a job, the migrant workers in developing countries
Speaker 1: all over the world who've been sent back, you know,
Speaker 1: to their to their villages. We need a new deal.
Speaker 1: Are we going to get a new deal out of
Speaker 1: these out of this massive finance, um that that that
Speaker 1: is flowing from from the COVID nineteen stimulus. What are
Speaker 1: the chances? I don't know, you see, I mean, it's
Speaker 1: it's kind of depressing because in an area after area,
Speaker 1: you know, governments seemed to be making the wrong choices
Speaker 1: if you look at trade, you know, I mean, the
Speaker 1: question now is do we do we keep going with
Speaker 1: this multi lateral trading system, which has brought unprecedented global prosperity,
Speaker 1: lifted hundreds of millions of people out of poverty, has
Speaker 1: been a ladder to middle class, middle income status for
Speaker 1: developing countries all over the world. Or are we going
Speaker 1: to turn inward and guess what's happening? We see trade tariffs,
Speaker 1: we see barriers to goods. We see barriers two people
Speaker 1: even at the risk of precipitating a great depression, you know,
Speaker 1: coming out of out of the out of the recession. Um.
Speaker 1: You know, cities, you talk about cities. I was just
Speaker 1: on the on the phone talking to uh uh dr
Speaker 1: Oak Cities Barbos, the New York Health Commissioner, looking at
Speaker 1: the issue of inequality in New York, which is driving
Speaker 1: so many of these street protests. And you know, she's
Speaker 1: from the South Bronx. And in the South Bronx, life
Speaker 1: expectancy there is literally thirty years shorter than it is
Speaker 1: in a place like Greenwich, Connecticut. Right of people living
Speaker 1: in the in the Bronx suffered from food insecurity. You know,
Speaker 1: they're they're the ones that are carrying around the block
Speaker 1: in the in the food lines, you know. And and
Speaker 1: what are we gonna do with inequality and cities? Are
Speaker 1: we going to wait for these for our cities to
Speaker 1: be to be torn apart um? Or are we going
Speaker 1: to fundamentally re engineers and reinvent the education system, healthcare systems,
Speaker 1: you know, to to to reduce these these grotesque disparities.
Speaker 1: That's the choice we face in city, right and as
Speaker 1: in most things, these are big problems, global problems. Uh. Andy,
Speaker 1: I know you guys look at it, and we'll see
Speaker 1: what kind of collaborations we get global collaborations going forward.
Speaker 1: And I know you guys are gonna you guys are
Speaker 1: gonna be covering this, uh in the next year. So
Speaker 1: we'll look forward to that. Andy Brown, thank you as always,
Speaker 1: editorial director of Bloomberg New Economy on the phone from
Speaker 1: New Hampshire. And they're gonna be focusing on those five
Speaker 1: areas Jason, Climate, finance, trade, public health and cities over
Speaker 1: the next year or so. So we'll look forward to
Speaker 1: that continued coverage. It's it's I feel like we're at
Speaker 1: a very important moment in time. Absolutely, no for sure,
Speaker 1: and I think you know, looking at the economy globally
Speaker 1: is more important than ever and that's what we really
Speaker 1: rely on Andy for. As we said ROC Journal, Yeah,
Speaker 1: but you let me drive. Oh no, no, no, no,
Speaker 1: who's going to dr home? Honey? Please, I'll do the
Speaker 1: riding drivel. I want to drive, Just drive, baby, the
Speaker 1: questions trying. This is the drive to the Globe Commune. Thanks,
Speaker 1: We'll drive us to dawn. On bloom Bird Radio. It
Speaker 1: is time for the drive to the clothes back with us.
Speaker 1: As Mark Travis, He's president and CEO at Intrepid Capital.
Speaker 1: He joins us once again on the phone from Jacksonville, Florida,
Speaker 1: and market is good to have you back with us.
Speaker 1: I gotta ask you first, though, Man, We're seeing headlines
Speaker 1: out of Florida about virus cases and I'm just curious,
Speaker 1: what are you seeing. What's it like in Florida right now?
Speaker 1: Because you know, safe to say, what goes on in
Speaker 1: the virus is going to determine our economic outlook, our capital,
Speaker 1: you know, our corporate profit outlook, business is getting back
Speaker 1: to normal, and ultimately our market outlook. And I think
Speaker 1: the pause in the equity markets really showed that last week.
Speaker 1: So what do you see in Well, interestingly enough, Carol,
Speaker 1: it's probably not only the heat but the unbearable humidity already.
Speaker 1: But in my corner of the Sunshine State, which is
Speaker 1: northeast Florida, um, you know, Jacksonville, Saint Augustine, that area,
Speaker 1: then the number of case has been really quite contained
Speaker 1: relative to Dad and Broward's. So I don't follow on
Speaker 1: a case by case basis in the community, but we've
Speaker 1: we've been very fortunate in terms of number of deaths
Speaker 1: in this part of the state and or cases. So
Speaker 1: maybe we you know, flattened the curve early, uh to help,
Speaker 1: but it doesn't seem to be at least geographically to
Speaker 1: this region. It doesn't seem to be meaningfully impacted. And
Speaker 1: so that certainly is you allude to. Mark isn't necessarily
Speaker 1: the case across the country. And so as you try
Speaker 1: to get a reasonable and honest economic picture and how
Speaker 1: that may play through, whether it's consumer spending or business
Speaker 1: continuity and folks getting back to the office, how do
Speaker 1: you factor that into your investment thesis? Well, Jason, you know,
Speaker 1: I think that um uh. One of my favorite buffet
Speaker 1: quotes among many is when the tiger goes out, you
Speaker 1: get to see who's swimming nack it. And I think
Speaker 1: that what we've done for twenty five years and Trepid
Speaker 1: is focused on free cash flow, rational business valuation, strong
Speaker 1: balance sheets, and so that's coming back into focus. Um
Speaker 1: you know, I think that, um, so we're we're always
Speaker 1: looking for that and that's um you know, I think
Speaker 1: that's really critical as we go through this. To me,
Speaker 1: who knows if we have a second wave or we
Speaker 1: have a second lockdown, um and how that affects business.
Speaker 1: And to me, it comes back to leverage. And I
Speaker 1: think what's probably helped the market today as you all
Speaker 1: know the markets, you know, preopening, we're off six or
Speaker 1: seven hundred doll points and the Fed came in said, oh,
Speaker 1: they really are going to buy corporate bonds. To me,
Speaker 1: it comes back to debt. And you know, whether you're
Speaker 1: a mortgage holder at a on a mall and you
Speaker 1: know cheesecake factory says, oh, we stopped paying rent on
Speaker 1: our two stores, or you know you're a private equity
Speaker 1: investor with a lot of leverage on top of your equity.
Speaker 1: Everybody's focused on that leverage and supporting the credit markets
Speaker 1: step one. But I also think, frankly that's probably where
Speaker 1: some of the best, better risk adjusted opportunities are for
Speaker 1: people in the capital markets. Okay, so talk to us
Speaker 1: about that. I am curious what kind of moves you
Speaker 1: guys have been doing. You've got a bunch of funds.
Speaker 1: I think you're the lead on the interpred Capital fund.
Speaker 1: There's you guys have a balanced portfolio and you know
Speaker 1: an income fund. So talk to us about those funds
Speaker 1: in particular. What kind of adjustments maybe have you been
Speaker 1: making in this environment. Well, let's talk about the income
Speaker 1: fund first, because what we've always done, Carol is we're
Speaker 1: a short duration, high yield fixed income investors, So our
Speaker 1: duration has always been short, whether it should be or not.
Speaker 1: We're really looking for what I call a three foot puts,
Speaker 1: so we typically don't lend more than about three years.
Speaker 1: I chuckle when I thought about this being the drive
Speaker 1: time because of my next suggestion, I would not suggest
Speaker 1: you in jest before you try to drive, particularly out
Speaker 1: of Manhattan, which would be something that produces a marijuana
Speaker 1: I believe or not. We've found a couple of marijuana
Speaker 1: bonds that we're excited about. The number of medical marijuana
Speaker 1: users in the state of Florida has gone up substantially. Uh.
Speaker 1: There's talk of legislation to allow uh, you know, banks
Speaker 1: to bank producers. And so there are a couple of
Speaker 1: issues here that I think I have merit. One is
Speaker 1: the purely term loan of one of twenty four and
Speaker 1: the other one is um true leave, which is a
Speaker 1: here right in front of me is a also a
Speaker 1: twenty four issue. It's a nine and three quarter of coupon.
Speaker 1: So we think these are very well covered. And there's
Speaker 1: a strong demand for CBD oil and a medical marijuana
Speaker 1: and so those are something a little bit off the
Speaker 1: grid UM that we actually own in our income fund.
Speaker 1: And so where else do you invest in UH in
Speaker 1: a place like this. You know, you talked about balance sheets,
Speaker 1: you talked about free cash flow? Are there? I mean,
Speaker 1: I think you've invested in some of the dollar stores,
Speaker 1: if I'm not mistaken you one that's worked out really well.
Speaker 1: Jason has been Dollar General. You know, as you're probably familiar,
Speaker 1: KKR took a private years back and then has come
Speaker 1: back public and it's done well since thence. So that's
Speaker 1: one that's really worked out. The one that we're still
Speaker 1: anticipating improvement on is Dollar Tree. You know, they merge
Speaker 1: with family Dollar stores, and I think the Dollar Tree
Speaker 1: management has been excellent trying to kind of rationalize the
Speaker 1: family dollar older stores, if you will, UM and and
Speaker 1: refurbish them to the point where they're they're producing like
Speaker 1: they had hoped. UM. But you know, Dollar Tree, it's
Speaker 1: funny if you're for me at all, with UM party
Speaker 1: City things like UM, you know, helium, the supply of
Speaker 1: helium effects stores like Dollar Tree and Party City because
Speaker 1: people go there for for chot skis, for birthday parties
Speaker 1: and what have you. So, but UM, that type of
Speaker 1: disc kind of retailer doesn't is not is um subject
Speaker 1: to being Amazon. In our view if you if you
Speaker 1: follow me and it um, it tends to be more
Speaker 1: impulsive purchase and tends to serve probably a lower income
Speaker 1: strata that is not UM as you know, Internet centric
Speaker 1: of buyer as somebody in your neighborhood might be. Yeah, absolutely,
Speaker 1: all right. Well, as we wrap up, I just gotta
Speaker 1: have I gotta ask you one more question, which is
Speaker 1: in your backyard? Are we going to see what was
Speaker 1: formerly known as the world's largest cocktail party with your
Speaker 1: Georgia Bulldogs playing the Gators this fall? What's your protection?
Speaker 1: You know, it's interesting you mentioned that. I certainly hope so.
Speaker 1: Because the SEC football is such a large part of
Speaker 1: this part of the world. I think the challenge for
Speaker 1: all the SEC schools is a large majority of the
Speaker 1: revenue comes from ticket sales and a people in their stadiums,
Speaker 1: whether it's at the Swamp in Gainesville or in Sanford
Speaker 1: Stadium and Athens Georgia as you mentioned, um, you know,
Speaker 1: so whereas say Sean Khan owns the Jacksonal Jaguars is
Speaker 1: a tv TV contract and I'm not sure they care
Speaker 1: if you show up, but let's hope so, because it's
Speaker 1: one hell of a party it is. Yeah, that would
Speaker 1: be a fun, fun afternoon for sure. All Right, Really
Speaker 1: good to spend some time with you. Mark Travis joining
Speaker 1: us from Jacksonville, President CEO of Intrepid Capital. Thanks so
Speaker 1: much for listening to Bloomberg Business Week. Download the podcast
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