1 00:00:00,160 --> 00:00:03,360 Speaker 1: This is Bloomberg Wall Street Week. What's the state of 2 00:00:03,400 --> 00:00:06,360 Speaker 1: corporate governance? The deficit is a real issue. The US 3 00:00:06,400 --> 00:00:09,800 Speaker 1: economy continues to send mixed signals to the financial stories 4 00:00:09,800 --> 00:00:12,680 Speaker 1: that keep our world fed, action to con concerns over 5 00:00:12,760 --> 00:00:16,240 Speaker 1: dollar liquidity, and encouraging China data. The five hundred wealthiest 6 00:00:16,239 --> 00:00:18,360 Speaker 1: people in the world. Through the eyes of the most 7 00:00:18,480 --> 00:00:22,520 Speaker 1: influential voices, Larry Summers, the former Treasury Secretary, star Ward, CEO, 8 00:00:22,640 --> 00:00:26,360 Speaker 1: Kevin Johnson sec Chairman J Clayton. Bloomberg wool Street Week 9 00:00:26,480 --> 00:00:30,080 Speaker 1: with David Weston from Bloomberg Radio. Caught in the middle 10 00:00:30,560 --> 00:00:33,839 Speaker 1: markets faced some encouraging news on the economic front, some 11 00:00:33,920 --> 00:00:37,040 Speaker 1: troubling news about the COVID nineteen virus, and look for 12 00:00:37,240 --> 00:00:40,560 Speaker 1: news about further help from the government. This is Bloomberg 13 00:00:40,560 --> 00:00:43,800 Speaker 1: Wall Street Week. I'm David Weston. When the virus hit 14 00:00:43,840 --> 00:00:46,519 Speaker 1: ground zero in New York, Dr Stephen Corwyn was on 15 00:00:46,560 --> 00:00:49,280 Speaker 1: the front lines fighting it as CEO of one of 16 00:00:49,320 --> 00:00:52,479 Speaker 1: the largest and most prestigious hospitals in the country, and 17 00:00:52,520 --> 00:00:55,120 Speaker 1: he says that as much progress as we've made, we 18 00:00:55,160 --> 00:00:58,160 Speaker 1: are not out of the woods yet. No question about 19 00:00:58,160 --> 00:01:01,080 Speaker 1: the fact that at our peak we were in about 20 00:01:02,120 --> 00:01:07,280 Speaker 1: cases throughout my hospital system that represented about of our capacity. 21 00:01:08,040 --> 00:01:12,920 Speaker 1: We're down to less than three cases now in our 22 00:01:13,000 --> 00:01:16,160 Speaker 1: in our institutions, and much less in terms of I 23 00:01:16,240 --> 00:01:19,240 Speaker 1: se U care. So we clearly have been on the 24 00:01:19,319 --> 00:01:24,040 Speaker 1: downward trend, and thankfully that's continued and and taking up 25 00:01:24,080 --> 00:01:25,800 Speaker 1: some of the pressure or taking off some of the 26 00:01:25,840 --> 00:01:28,119 Speaker 1: pressure on our system. So the next stage is has 27 00:01:28,160 --> 00:01:30,280 Speaker 1: to be how worried are we about an uptick? We're 28 00:01:30,319 --> 00:01:32,600 Speaker 1: seeing it in some of the states, not big numbers, 29 00:01:32,640 --> 00:01:34,320 Speaker 1: but the rate is disturbing. We also now see it 30 00:01:34,360 --> 00:01:37,000 Speaker 1: in Beijing as well. How concerned are you that here 31 00:01:37,000 --> 00:01:38,760 Speaker 1: in New York we could have an uptick? Well, I'm 32 00:01:38,760 --> 00:01:40,800 Speaker 1: concerned across the country that we're gonna have an uptick. 33 00:01:40,880 --> 00:01:45,039 Speaker 1: You now seeing some hotspots potentially in Houston, Phoenix, parts 34 00:01:45,040 --> 00:01:48,120 Speaker 1: of Florida. You can't let this get out of control 35 00:01:48,200 --> 00:01:51,120 Speaker 1: because then contact tracing goes out in the window, and 36 00:01:51,160 --> 00:01:54,520 Speaker 1: that's when you really put pressure on the hospital system 37 00:01:54,520 --> 00:01:58,600 Speaker 1: as a whole. I'm concerned about people becoming weary about 38 00:01:58,640 --> 00:02:03,320 Speaker 1: social distancing. Uh, even with the opening up, one can 39 00:02:03,360 --> 00:02:06,800 Speaker 1: still maintain social distancing. I think people are weary of that, 40 00:02:07,000 --> 00:02:10,200 Speaker 1: and therefore we need to be wary of an uptaking 41 00:02:10,240 --> 00:02:13,880 Speaker 1: infections and follow that closely in the other areas of 42 00:02:13,880 --> 00:02:17,920 Speaker 1: the country. You need to follow not just the increase 43 00:02:17,919 --> 00:02:19,880 Speaker 1: in infections, because if you test more, you're going to 44 00:02:19,919 --> 00:02:22,960 Speaker 1: find more people have it, but what's the hospitalization rate? 45 00:02:23,000 --> 00:02:26,840 Speaker 1: And that's where I get concerned, Uh, speaking to colleagues 46 00:02:27,520 --> 00:02:30,880 Speaker 1: in Houston and Phoenix, David and so, are we better 47 00:02:30,880 --> 00:02:33,320 Speaker 1: prepared for an uptake at this point from things we've 48 00:02:33,400 --> 00:02:35,360 Speaker 1: learned about the virus and how to treat it and 49 00:02:35,400 --> 00:02:37,280 Speaker 1: for that matter, on some of the equipments issues like 50 00:02:37,400 --> 00:02:41,480 Speaker 1: ventilators and personal protective equipment. Are we better no question about, 51 00:02:41,760 --> 00:02:44,160 Speaker 1: no question about it. We're better prepared. We could We 52 00:02:44,200 --> 00:02:47,400 Speaker 1: could deal with the second wave more effectively, both from 53 00:02:47,400 --> 00:02:51,079 Speaker 1: the standpoint of state and city government as well as 54 00:02:51,120 --> 00:02:53,359 Speaker 1: how hospitals need to prepare for it. We know how 55 00:02:53,360 --> 00:02:56,520 Speaker 1: to surge. We've we've changed the way that we look 56 00:02:56,560 --> 00:03:00,000 Speaker 1: at how much protective equipment we need, how many ventilators 57 00:03:00,040 --> 00:03:02,200 Speaker 1: we need, how much I see you capacity we need. 58 00:03:03,040 --> 00:03:05,480 Speaker 1: So I think we're better prepared for it. But let's 59 00:03:05,600 --> 00:03:10,160 Speaker 1: just remember we still are only talking about supportive therapy. 60 00:03:10,240 --> 00:03:12,240 Speaker 1: We don't have an effective therapy. We don't have an 61 00:03:12,240 --> 00:03:16,960 Speaker 1: effective vaccine, and so keeping the transmission rate less than 62 00:03:17,040 --> 00:03:20,760 Speaker 1: one is how you don't overwhelm the economy or of 63 00:03:20,880 --> 00:03:23,480 Speaker 1: the hospital system. As a practical matter, what is the 64 00:03:23,560 --> 00:03:26,400 Speaker 1: likelihood of an effective treatment or a vaccine. There's a 65 00:03:26,400 --> 00:03:28,240 Speaker 1: lot of talk about it, even by the end of 66 00:03:28,280 --> 00:03:31,639 Speaker 1: the year. It's impossible to know for sure. But what 67 00:03:31,639 --> 00:03:33,359 Speaker 1: what do you think about the prospect? You know, we 68 00:03:33,400 --> 00:03:35,600 Speaker 1: should all be rooting for it, there's no question about it. 69 00:03:35,680 --> 00:03:38,160 Speaker 1: I think there are I think it's more likely that 70 00:03:38,280 --> 00:03:42,480 Speaker 1: we will start to see effective combination therapies before the 71 00:03:42,560 --> 00:03:45,200 Speaker 1: end of the year that we will see an effective vaccine, 72 00:03:45,880 --> 00:03:49,040 Speaker 1: But we hope for both. Uh if passed this prelude. 73 00:03:49,120 --> 00:03:54,080 Speaker 1: The earliest development of vaccine took about four years UM 74 00:03:54,120 --> 00:03:57,240 Speaker 1: and that's the Mum's vaccine, So I would be dubious 75 00:03:57,280 --> 00:04:00,920 Speaker 1: to think that we could get mass inoculations uh in 76 00:04:00,920 --> 00:04:04,880 Speaker 1: in in twenty one. I think the first set will 77 00:04:04,920 --> 00:04:09,160 Speaker 1: be people on the front lines volunteering for vaccination. Then 78 00:04:09,200 --> 00:04:11,920 Speaker 1: you have to determine whether it's efficacious over a period 79 00:04:11,920 --> 00:04:15,240 Speaker 1: of time and whether it causes side effects. There are 80 00:04:15,280 --> 00:04:18,479 Speaker 1: some vaccines that can actually worsen the disease, so we 81 00:04:18,600 --> 00:04:21,239 Speaker 1: still have a long road to go, but in terms 82 00:04:21,240 --> 00:04:25,039 Speaker 1: of the amount of effort put into it, let's root 83 00:04:25,120 --> 00:04:28,440 Speaker 1: for our biotech and big pharm affirms to come up 84 00:04:28,480 --> 00:04:32,120 Speaker 1: with something because uh, this this is a very very 85 00:04:32,160 --> 00:04:36,040 Speaker 1: serious disease. Uh and with a high mortality associated with it. 86 00:04:36,040 --> 00:04:38,360 Speaker 1: If you need to be hospitalized, no question about that, 87 00:04:38,800 --> 00:04:40,520 Speaker 1: Dr Corny. When we talk about the tools we have 88 00:04:40,640 --> 00:04:43,880 Speaker 1: to use, We've talked before before there's a pandemic about 89 00:04:43,880 --> 00:04:47,160 Speaker 1: the role of technology. What role is tele medicine playing, 90 00:04:47,200 --> 00:04:50,120 Speaker 1: and it could play a larger role going forward as 91 00:04:50,160 --> 00:04:53,039 Speaker 1: we have problems. Well, we've crossed the rubicon on tellent medicine. 92 00:04:53,040 --> 00:04:55,760 Speaker 1: Before the pandemic, about three percent of our visits were 93 00:04:56,080 --> 00:05:01,440 Speaker 1: telling medicine visits. Post pandemic, we're read about forty to 94 00:05:01,560 --> 00:05:06,000 Speaker 1: forty of our office visits or telemedicine visits. During the pandemic, 95 00:05:06,120 --> 00:05:08,680 Speaker 1: it was almost universal that the only way we would 96 00:05:08,680 --> 00:05:12,000 Speaker 1: see patients with with TELL was with telemedicine. So I 97 00:05:12,000 --> 00:05:15,719 Speaker 1: think that's here to stay. As technology improves, as remote 98 00:05:15,720 --> 00:05:19,000 Speaker 1: patient monitoring improves, will be able to do more with telemedicine. 99 00:05:19,040 --> 00:05:23,560 Speaker 1: It will become part of the way that the physicians 100 00:05:23,760 --> 00:05:27,960 Speaker 1: and nurse practitioners and others see patients and I think 101 00:05:27,960 --> 00:05:30,520 Speaker 1: we can do a better job with that. So this 102 00:05:30,600 --> 00:05:33,520 Speaker 1: is just an acceleration of the trend and I think 103 00:05:33,560 --> 00:05:36,599 Speaker 1: it's Uh, there's no turning back on that at this point. 104 00:05:36,680 --> 00:05:39,000 Speaker 1: So Tellent Medicine is here to stay, no question about 105 00:05:39,120 --> 00:05:41,160 Speaker 1: I have to ask about your colleagues. I mean they've 106 00:05:41,320 --> 00:05:44,840 Speaker 1: been through really a war with all the consequences of that. 107 00:05:44,960 --> 00:05:46,440 Speaker 1: How are they doing? What are you trying to do 108 00:05:46,520 --> 00:05:49,200 Speaker 1: for people who have been exhausted, have seen things that 109 00:05:49,240 --> 00:05:51,320 Speaker 1: no one should have to see. Well, we've put a 110 00:05:51,320 --> 00:05:54,240 Speaker 1: lot of mental health and well being supports in place, 111 00:05:54,720 --> 00:05:58,880 Speaker 1: a lot of anonymous consultative services from our psychiatrists are 112 00:05:58,920 --> 00:06:01,279 Speaker 1: in place. But the first thing for healthcare workers is 113 00:06:01,320 --> 00:06:03,440 Speaker 1: not is to not think that you can just tough 114 00:06:03,440 --> 00:06:06,320 Speaker 1: it out, because that's the way that we train people. 115 00:06:06,440 --> 00:06:08,600 Speaker 1: You can you can get through this, you can tough 116 00:06:08,640 --> 00:06:12,120 Speaker 1: it out. Uh, this is this. This has been horrific. Uh. 117 00:06:12,880 --> 00:06:15,200 Speaker 1: I worry very much about people having to go through 118 00:06:15,200 --> 00:06:18,400 Speaker 1: a second wave of this. So we're offering all sorts 119 00:06:18,400 --> 00:06:23,200 Speaker 1: of emotional support services for all of our workers. Really, 120 00:06:23,520 --> 00:06:27,960 Speaker 1: we had a tragic suicide of a leader of one 121 00:06:28,000 --> 00:06:31,279 Speaker 1: of our emergency departments who went home to Charlottesville on 122 00:06:31,400 --> 00:06:35,280 Speaker 1: leave to try to recover from an episode of depression. 123 00:06:36,080 --> 00:06:40,719 Speaker 1: So this can affect people acutely, and more importantly, people 124 00:06:40,760 --> 00:06:43,760 Speaker 1: have to recognize it can affect people after the fact 125 00:06:43,920 --> 00:06:47,679 Speaker 1: once the pandemic has passed. That was Dr Stephen Corwin 126 00:06:47,760 --> 00:06:51,640 Speaker 1: of New York Presbyterian Hospital coming up. Airlines come to 127 00:06:51,680 --> 00:06:54,080 Speaker 1: grips with a very different world and how they can 128 00:06:54,120 --> 00:06:57,919 Speaker 1: manage a turnaround. We talked with the CEO of Delta Airlines, 129 00:06:58,120 --> 00:07:02,080 Speaker 1: Ed Bastion. That's next on Wall Street Week on Wimbledon. 130 00:07:07,480 --> 00:07:11,680 Speaker 1: This is Bloomberg Will Street Week with David Weston from 131 00:07:11,800 --> 00:07:16,000 Speaker 1: Bloomberg Radio. Airlines have been particularly hard hit by the pandemic, 132 00:07:16,280 --> 00:07:19,600 Speaker 1: but this week they started planning their comeback, albeit with 133 00:07:19,640 --> 00:07:22,560 Speaker 1: some changes, and how we fly and how their businesses 134 00:07:22,640 --> 00:07:25,520 Speaker 1: will work. We talked to the CEO of Delta Airlines, 135 00:07:25,760 --> 00:07:28,960 Speaker 1: Ed Bastion. We're in the process of a recovery, no 136 00:07:29,120 --> 00:07:32,040 Speaker 1: question about it. It's slow, it's gonna take some time, 137 00:07:32,120 --> 00:07:35,120 Speaker 1: but there's there's clear signs. It's the momentum we have 138 00:07:35,240 --> 00:07:39,040 Speaker 1: as meaningful and it's it's continuing to build. We bottomed 139 00:07:39,040 --> 00:07:42,960 Speaker 1: out in mid April with maybe only five of our 140 00:07:43,360 --> 00:07:47,880 Speaker 1: normal customer load traveling today that number is closer to 141 00:07:48,960 --> 00:07:52,040 Speaker 1: so the optimists, and he says, we've tripled over the 142 00:07:52,120 --> 00:07:54,000 Speaker 1: last couple of months, which isn't bad, but we got 143 00:07:54,040 --> 00:07:56,320 Speaker 1: a long ways to go yet. I expect that number 144 00:07:56,320 --> 00:07:58,520 Speaker 1: to get up to in the in the coming weeks. 145 00:07:58,520 --> 00:08:00,960 Speaker 1: We're adding a bunch more flying with in July and 146 00:08:01,000 --> 00:08:04,920 Speaker 1: again in August a thousand flights a day each month 147 00:08:05,040 --> 00:08:08,320 Speaker 1: added on the next couple of months, and so by 148 00:08:08,320 --> 00:08:11,200 Speaker 1: the end of the third quarter here you know, we 149 00:08:11,280 --> 00:08:14,600 Speaker 1: hopefully are back to about thirty of our loads that 150 00:08:14,680 --> 00:08:17,880 Speaker 1: we are we are carrying so being very disciplined, taking 151 00:08:17,880 --> 00:08:20,520 Speaker 1: good care of our people and customers on the journey. 152 00:08:20,800 --> 00:08:23,480 Speaker 1: But the recovery is started. So how much visibility do 153 00:08:23,560 --> 00:08:25,960 Speaker 1: you feel you have beyond that third quarter? I mean, 154 00:08:26,000 --> 00:08:28,480 Speaker 1: if you go up to does they keep rising at 155 00:08:28,520 --> 00:08:31,120 Speaker 1: a fairly steady pace or is there possibly a plateau? 156 00:08:31,240 --> 00:08:33,240 Speaker 1: What do you anticipate going for when will you move 157 00:08:33,240 --> 00:08:36,160 Speaker 1: back to essentially full usage. Well, there's never been more 158 00:08:36,240 --> 00:08:40,080 Speaker 1: uncertainty given what we're addressing with both the pandemic and 159 00:08:40,160 --> 00:08:44,199 Speaker 1: the result in economic impact and changes in business travel 160 00:08:44,240 --> 00:08:48,240 Speaker 1: patterns will also impact this industry, so our crystal ball 161 00:08:48,360 --> 00:08:51,560 Speaker 1: is a little murkier than normal. But I do expect 162 00:08:51,640 --> 00:08:54,960 Speaker 1: after Labor Day it's going to be an important milestone 163 00:08:54,960 --> 00:08:57,440 Speaker 1: and pivot point for us because that's typically when business 164 00:08:57,440 --> 00:09:00,120 Speaker 1: travel starts to pick up again. Right now, the the 165 00:09:00,200 --> 00:09:04,079 Speaker 1: vast majority of our customer base is leisure people going out. 166 00:09:04,120 --> 00:09:06,920 Speaker 1: There's some good bargains uh, not just in the air 167 00:09:06,960 --> 00:09:10,000 Speaker 1: but on the ground as as hotels and theme parks 168 00:09:10,000 --> 00:09:12,680 Speaker 1: and casinos are all opening. But we need businesses to 169 00:09:12,720 --> 00:09:15,440 Speaker 1: start opening, and right now they're they're most businesses are 170 00:09:15,480 --> 00:09:19,360 Speaker 1: still largely closed, big corporate businesses, and as they start 171 00:09:19,360 --> 00:09:21,960 Speaker 1: to open, hopefully after Labor Day, you'll start to see 172 00:09:21,960 --> 00:09:25,079 Speaker 1: an improve mix of revenue flow and that that then 173 00:09:25,120 --> 00:09:28,040 Speaker 1: will be the next stage of the recovery force. A 174 00:09:28,160 --> 00:09:30,640 Speaker 1: key element for all businesses seeking to reopen is the 175 00:09:30,720 --> 00:09:33,920 Speaker 1: confidence of customers that they will be safe when they 176 00:09:33,960 --> 00:09:35,800 Speaker 1: go to the business. What are you doing at Delta 177 00:09:35,800 --> 00:09:37,360 Speaker 1: Give us a sense of how what the sort of 178 00:09:37,440 --> 00:09:40,960 Speaker 1: operational changes you're making to try to reassure travelers that 179 00:09:41,000 --> 00:09:43,560 Speaker 1: they will be okay on your aircraft. That's that's our 180 00:09:43,640 --> 00:09:47,040 Speaker 1: that's our most important task here is protecting the safety 181 00:09:47,080 --> 00:09:48,960 Speaker 1: and the welfare of both our people as well as 182 00:09:49,000 --> 00:09:52,200 Speaker 1: our customers, and we're we're doing a tremendous on We're 183 00:09:52,200 --> 00:09:54,680 Speaker 1: a customer safety. Safety is in our DNA that that's 184 00:09:54,720 --> 00:09:57,560 Speaker 1: what we sell. We sell safety in this guy and 185 00:09:57,600 --> 00:10:00,560 Speaker 1: we now have added another deman mention of that as 186 00:10:00,600 --> 00:10:04,200 Speaker 1: safety from the virus. Safety with respect to the hygiene 187 00:10:04,480 --> 00:10:08,160 Speaker 1: and the sanitization on board our aircraft. We've we've for 188 00:10:08,200 --> 00:10:10,120 Speaker 1: those of you that haven't been out traveling the s 189 00:10:10,360 --> 00:10:13,720 Speaker 1: a lot of changes and I think significant improvements in 190 00:10:13,760 --> 00:10:17,439 Speaker 1: the experience as you go forward. Masks are required both 191 00:10:17,480 --> 00:10:20,480 Speaker 1: in the airports, as you board the plane, as you're 192 00:10:20,480 --> 00:10:23,120 Speaker 1: on the plane, and bar and masks. I get a 193 00:10:23,160 --> 00:10:26,080 Speaker 1: lot of questions about masks. Masks are They're not just 194 00:10:26,160 --> 00:10:28,839 Speaker 1: to protect you, just protect others as well on board. 195 00:10:29,000 --> 00:10:30,920 Speaker 1: One of the most important layers of protection we can 196 00:10:30,960 --> 00:10:35,559 Speaker 1: have is using masks throughout society today, we've put distancing 197 00:10:35,600 --> 00:10:40,120 Speaker 1: protocols in place. We've kept load factors on Delta. We 198 00:10:40,200 --> 00:10:43,600 Speaker 1: will not board planes more than sixty percent full, which 199 00:10:43,640 --> 00:10:47,040 Speaker 1: guarantees the seat next to you, every seat next to 200 00:10:47,080 --> 00:10:50,080 Speaker 1: you is open on board the plane. There's no no 201 00:10:50,160 --> 00:10:55,120 Speaker 1: middle seats being sold at all. We've put electrostatic fiving 202 00:10:55,160 --> 00:10:58,839 Speaker 1: in place before every single flight that takes off, and 203 00:10:58,920 --> 00:11:04,120 Speaker 1: we've also added a considerable amount of time and attention 204 00:11:04,280 --> 00:11:07,320 Speaker 1: focus on the filtration systems on board our planes. We 205 00:11:07,360 --> 00:11:10,560 Speaker 1: have heap of filters, which are the highest quality filters 206 00:11:10,840 --> 00:11:13,680 Speaker 1: one can find. It's what's used by hospitals in their 207 00:11:13,720 --> 00:11:17,880 Speaker 1: in their operating rooms and clean room environments. Heppa filters 208 00:11:18,240 --> 00:11:22,360 Speaker 1: completely circulate and recirculate the air every two to four minutes, 209 00:11:22,640 --> 00:11:25,800 Speaker 1: with that air coming from fresh outside the cabin, so 210 00:11:26,120 --> 00:11:28,640 Speaker 1: the area breathing is completely changed out every couple of 211 00:11:28,640 --> 00:11:31,320 Speaker 1: minutes on board the flight, throughout the entire journey, and 212 00:11:31,360 --> 00:11:34,280 Speaker 1: the tests and the monitors that we've been using because 213 00:11:34,280 --> 00:11:36,760 Speaker 1: we've got sensors now on board our plane to test 214 00:11:36,800 --> 00:11:39,480 Speaker 1: the quality of the air. It's it's the it's the 215 00:11:39,520 --> 00:11:42,600 Speaker 1: purest air quality you'll find anywhere. It's it's it's ten 216 00:11:42,679 --> 00:11:46,400 Speaker 1: times better than a building environment or retail. It's it's 217 00:11:46,400 --> 00:11:49,200 Speaker 1: really phenomenal. As as you start to see all these 218 00:11:49,280 --> 00:11:51,760 Speaker 1: layers of protection head up and the results of our 219 00:11:51,800 --> 00:11:55,120 Speaker 1: customers are telling us they have never felt safer traveling, 220 00:11:55,120 --> 00:11:57,480 Speaker 1: they've never felt better about the experience or net promoter 221 00:11:57,559 --> 00:12:00,120 Speaker 1: scores or up at least ten points over where they 222 00:12:00,120 --> 00:12:02,040 Speaker 1: were just a couple of months ago. And our people 223 00:12:02,080 --> 00:12:04,880 Speaker 1: that were also safe on board. You know, I've we've 224 00:12:04,880 --> 00:12:08,200 Speaker 1: monitored the health and the welfare of our people continuously 225 00:12:08,240 --> 00:12:11,560 Speaker 1: on board. We've got about thousand people in the customer 226 00:12:11,600 --> 00:12:14,520 Speaker 1: service area. The rate of infection that we've seen over 227 00:12:14,559 --> 00:12:17,200 Speaker 1: the last couple of months amongst our own people is 228 00:12:17,320 --> 00:12:21,680 Speaker 1: five times lower than the national average of infection across 229 00:12:21,880 --> 00:12:24,280 Speaker 1: our entire country. And these are people that live in 230 00:12:24,320 --> 00:12:26,800 Speaker 1: the airport and live on plane. So while all the 231 00:12:26,880 --> 00:12:29,920 Speaker 1: steps are indicating it's safe to travel from and confidence 232 00:12:29,960 --> 00:12:32,160 Speaker 1: is starting to return, right, all of which is very 233 00:12:32,280 --> 00:12:35,800 Speaker 1: must be very encouraging to people using Delta Airlines. At 234 00:12:35,800 --> 00:12:37,680 Speaker 1: the same time, is there a trade off here? You 235 00:12:37,720 --> 00:12:40,920 Speaker 1: mentioned load factors expert, a low factor that historically has 236 00:12:40,920 --> 00:12:44,600 Speaker 1: been an indicator of profitability for airlines. It has always 237 00:12:44,600 --> 00:12:46,319 Speaker 1: been sort of a tough business in the airline business. 238 00:12:46,600 --> 00:12:49,600 Speaker 1: Can you get a good business with reduced load factors? 239 00:12:49,640 --> 00:12:52,520 Speaker 1: As a practical matter, doesn't that really hit your profitability? Well, 240 00:12:52,520 --> 00:12:55,040 Speaker 1: the steps that we're taking are certainly temporary. You know, 241 00:12:55,080 --> 00:12:58,240 Speaker 1: once there is a vaccine, once there are therapeutics to 242 00:12:58,280 --> 00:13:01,800 Speaker 1: deal with the virus. Once there's purty community, whatever combination 243 00:13:01,880 --> 00:13:05,199 Speaker 1: of factors get involved with respect to society feeling safe 244 00:13:05,200 --> 00:13:08,199 Speaker 1: to be out in public once again. Obviously we'll start 245 00:13:08,240 --> 00:13:11,520 Speaker 1: to increase the load factor caps and eventually take the 246 00:13:11,520 --> 00:13:14,720 Speaker 1: caps off, but for now, while there's still public and scern, 247 00:13:15,000 --> 00:13:17,720 Speaker 1: I want to instill confidence in the travel experience and 248 00:13:17,840 --> 00:13:20,480 Speaker 1: give customers the assurance that when you put on Delta 249 00:13:20,840 --> 00:13:22,720 Speaker 1: you will have space on board, you'll have that seat 250 00:13:22,880 --> 00:13:25,720 Speaker 1: next to you open, and when we get up too 251 00:13:25,720 --> 00:13:28,679 Speaker 1: close to six because right now we're about fifty percent full, 252 00:13:29,080 --> 00:13:31,880 Speaker 1: so in some markets were already bumping against the cap. 253 00:13:31,960 --> 00:13:34,520 Speaker 1: That's the key to add more flights, add bigger planes 254 00:13:34,559 --> 00:13:38,520 Speaker 1: back into the system. Can Delta be profitable without a vaccine? Yeah, 255 00:13:38,600 --> 00:13:41,000 Speaker 1: I think so. I think so. You know, next year 256 00:13:41,040 --> 00:13:43,600 Speaker 1: will be the test of that. We'll see when the 257 00:13:43,640 --> 00:13:46,199 Speaker 1: when the vaccine comes in. Uh, you know, right now, 258 00:13:46,280 --> 00:13:49,079 Speaker 1: we've we've been very focused on reducing our cash burn 259 00:13:49,840 --> 00:13:53,040 Speaker 1: When with the pandemic started, we were burning almost a 260 00:13:53,120 --> 00:13:56,280 Speaker 1: hundred million dollars a day in cash for the month 261 00:13:56,320 --> 00:13:59,840 Speaker 1: of June. Just ninety days later, we've gotten that cash 262 00:14:00,000 --> 00:14:02,320 Speaker 1: and down to about thirty million dollars a day. So 263 00:14:02,360 --> 00:14:04,480 Speaker 1: we've done a very good job taken our costs down. 264 00:14:05,000 --> 00:14:08,840 Speaker 1: Our costs within the current quarter. We've reduced fifty of 265 00:14:08,920 --> 00:14:13,080 Speaker 1: the cost within the current quarter and will continue to 266 00:14:13,360 --> 00:14:15,880 Speaker 1: keep cost at a at a very discipline level as 267 00:14:15,920 --> 00:14:18,319 Speaker 1: we add back capacity. And so as you say, that's 268 00:14:18,320 --> 00:14:20,560 Speaker 1: why I mentioned where a fiftent revenues to be able 269 00:14:20,560 --> 00:14:22,760 Speaker 1: to get to thirty percent over the next two to 270 00:14:22,880 --> 00:14:25,680 Speaker 1: three months, keeping the cost at that fifty percent level, 271 00:14:25,720 --> 00:14:29,040 Speaker 1: and they'll eventually, I would imagine by the spring next year, 272 00:14:29,080 --> 00:14:31,280 Speaker 1: be at a point where we're break even. And I 273 00:14:31,320 --> 00:14:33,560 Speaker 1: also think that's the time when people will have more 274 00:14:33,600 --> 00:14:36,640 Speaker 1: and more confidence being out in public, more accustomed to 275 00:14:36,880 --> 00:14:39,720 Speaker 1: the safety protocols, and then your word of mouth from 276 00:14:39,760 --> 00:14:41,560 Speaker 1: consumers as they get out and they travel and they 277 00:14:41,600 --> 00:14:43,760 Speaker 1: see it's actually not as scary as people think. That 278 00:14:43,880 --> 00:14:48,320 Speaker 1: was Ed Bastion, CEO of Delta Airlines coming up. The 279 00:14:48,360 --> 00:14:50,560 Speaker 1: Bank of England was the latest central bank to weigh 280 00:14:50,560 --> 00:14:52,800 Speaker 1: in on what needs to be done for the economy, 281 00:14:53,280 --> 00:14:56,560 Speaker 1: stepping up its bond buying program by one billion pounds. 282 00:14:57,080 --> 00:15:00,560 Speaker 1: Our contributors Stephanie Flanders on what the BOE just Asian means. 283 00:15:01,080 --> 00:15:09,480 Speaker 1: That's next on Wall Street Week on Bloomboard. This is 284 00:15:09,520 --> 00:15:13,960 Speaker 1: Bloomberg Wall Street Week with David Weston from Bloomberg Radio. 285 00:15:14,200 --> 00:15:17,200 Speaker 1: England has its own version of economic problems, triggered by 286 00:15:17,240 --> 00:15:19,960 Speaker 1: its response to the pandemic, layered on top of the 287 00:15:20,040 --> 00:15:23,400 Speaker 1: uncertainty surrounding its leaving the European Union. This week, the 288 00:15:23,400 --> 00:15:25,520 Speaker 1: Bank of England took steps to shore up the British 289 00:15:25,560 --> 00:15:29,080 Speaker 1: economy by increasing its bond buying program, although it stopped 290 00:15:29,080 --> 00:15:32,040 Speaker 1: short of taking steps toward a negative interest rate. We 291 00:15:32,160 --> 00:15:36,080 Speaker 1: talked to Stephanie Flanders. She's senior executive editor for Economics 292 00:15:36,080 --> 00:15:38,720 Speaker 1: of Bloomberg and also a Wall Street Week contributor, and 293 00:15:38,760 --> 00:15:41,360 Speaker 1: Stephanie said that the bank along and had some surprises 294 00:15:41,440 --> 00:15:43,400 Speaker 1: for us this week. Well, it was it was widely 295 00:15:43,440 --> 00:15:45,920 Speaker 1: expected and actually was. It was a hundred billion pounds, 296 00:15:45,920 --> 00:15:47,640 Speaker 1: which is even worth a little bit more than a 297 00:15:47,720 --> 00:15:49,720 Speaker 1: hundred billion dollars, although I'm sure we'll get there in 298 00:15:49,720 --> 00:15:54,480 Speaker 1: the end. But they've added to the bomb buying. But 299 00:15:54,560 --> 00:15:58,040 Speaker 1: they also the surprise for the markets was that they 300 00:15:58,200 --> 00:16:02,360 Speaker 1: were suggesting that they might sort of taper off the 301 00:16:02,440 --> 00:16:04,120 Speaker 1: bond buying by the end of the year. At least 302 00:16:04,120 --> 00:16:06,520 Speaker 1: in terms of their formal plans. They're saying they think 303 00:16:06,520 --> 00:16:09,200 Speaker 1: it could end at the end of the year. I'm 304 00:16:09,200 --> 00:16:12,440 Speaker 1: not sure that we really believe that they won't that 305 00:16:12,480 --> 00:16:14,680 Speaker 1: they won't buy more at that point, but it does 306 00:16:14,760 --> 00:16:17,800 Speaker 1: speak to the uncertainty they see. Remember, the UK is 307 00:16:18,160 --> 00:16:22,840 Speaker 1: has really not got very far along lifting the restrictions 308 00:16:22,880 --> 00:16:26,280 Speaker 1: on the economy, were well behind continental Europe on that. 309 00:16:26,600 --> 00:16:30,040 Speaker 1: So the uncertainty about what this crisis is going to 310 00:16:30,200 --> 00:16:34,400 Speaker 1: leave behind, let alone worries about second wave and other things, 311 00:16:34,560 --> 00:16:37,320 Speaker 1: is really great and I think policymakers, both on the 312 00:16:37,360 --> 00:16:40,920 Speaker 1: government side and on the Bank of England side are 313 00:16:41,120 --> 00:16:44,480 Speaker 1: factoring that into their considerations. They don't want to commit 314 00:16:44,520 --> 00:16:47,680 Speaker 1: themselves before they really see what the scope of the damages. So, 315 00:16:47,720 --> 00:16:50,480 Speaker 1: as you say, Stephanie, you've got the COVID nineteen issues 316 00:16:50,600 --> 00:16:52,920 Speaker 1: and those are devilishly difficult, as we've proven here in 317 00:16:52,960 --> 00:16:55,000 Speaker 1: the United States. You also have that little thing called 318 00:16:55,040 --> 00:16:58,520 Speaker 1: Brexit that's hanging out there. What will buying more bond 319 00:16:58,600 --> 00:17:01,400 Speaker 1: a hundred billion pounds more are What will that do 320 00:17:01,520 --> 00:17:04,359 Speaker 1: for the economy in the UK. It's very It's the 321 00:17:04,720 --> 00:17:07,280 Speaker 1: same question that you raises everywhere, but it is you 322 00:17:07,359 --> 00:17:09,800 Speaker 1: notice that there's a lot more going on in the UK, 323 00:17:10,119 --> 00:17:13,639 Speaker 1: even the potential The government has not been very effective 324 00:17:13,640 --> 00:17:17,040 Speaker 1: in dealing with the public health crisis, although the measures 325 00:17:17,040 --> 00:17:19,639 Speaker 1: to support the economy have been effective. We've had this 326 00:17:19,720 --> 00:17:23,320 Speaker 1: prolonged shutdown, which may mean we have the biggest decline 327 00:17:23,320 --> 00:17:27,879 Speaker 1: in GDP of all the major economies. So to add 328 00:17:27,960 --> 00:17:32,800 Speaker 1: to that, the decision to just move out of very 329 00:17:32,880 --> 00:17:35,760 Speaker 1: long term in P forty year relationship with the European 330 00:17:35,840 --> 00:17:39,439 Speaker 1: Union obviously on the outside looks a little crazy, but 331 00:17:39,560 --> 00:17:41,760 Speaker 1: I guess that the positive spin on it is that 332 00:17:41,840 --> 00:17:45,200 Speaker 1: whatever cost that one sees associated with Brexit, whether it's 333 00:17:45,200 --> 00:17:48,359 Speaker 1: a few percentage of GDP, that seemed like much bigger 334 00:17:48,440 --> 00:17:51,439 Speaker 1: number a year ago than when we started seeing these big, 335 00:17:51,480 --> 00:17:55,360 Speaker 1: big numbers related to the shock of the COVID crisis. 336 00:17:55,359 --> 00:17:57,840 Speaker 1: So I can't help thinking that's what ministers are thinking. 337 00:17:57,880 --> 00:18:00,920 Speaker 1: We just need to get Brexit over with because anything, 338 00:18:00,960 --> 00:18:04,280 Speaker 1: any negative effects will be kind of lost in this 339 00:18:04,520 --> 00:18:08,159 Speaker 1: emergency over COVID. Definitely go across the channel and talk 340 00:18:08,240 --> 00:18:10,160 Speaker 1: about Europe and what's going on in Europe right now. 341 00:18:10,200 --> 00:18:12,479 Speaker 1: The ECB certainly has stepped up the plate and really 342 00:18:12,520 --> 00:18:14,280 Speaker 1: tried to support the economy. They are quite a bit. 343 00:18:14,480 --> 00:18:16,960 Speaker 1: How is it working out? You know, I think when 344 00:18:16,960 --> 00:18:18,880 Speaker 1: I think back to the experience of the global financial 345 00:18:18,920 --> 00:18:21,919 Speaker 1: crisis and then the Eurozone crisis coming after that, that 346 00:18:22,040 --> 00:18:26,520 Speaker 1: Eurozone crisis was partly because the Eurozone had not grappled 347 00:18:26,600 --> 00:18:29,119 Speaker 1: quickly with the problems that the Europe faced as a 348 00:18:29,160 --> 00:18:32,160 Speaker 1: result of the global financial crisis, and they had made 349 00:18:32,160 --> 00:18:35,960 Speaker 1: that mistake of tightening fiscal policy too soon. We're really 350 00:18:36,000 --> 00:18:39,720 Speaker 1: seeing a different approach this time play out, where actually 351 00:18:39,760 --> 00:18:42,040 Speaker 1: they're teaching the rest of the world lessons. We have 352 00:18:42,200 --> 00:18:45,800 Speaker 1: massive fiscal support, but the European Central Bank another record 353 00:18:46,040 --> 00:18:50,399 Speaker 1: draw down of those cheap special long term loans for 354 00:18:50,440 --> 00:18:54,960 Speaker 1: the banking sector, another over a trillion euros going out 355 00:18:55,000 --> 00:18:57,560 Speaker 1: the door. You know, they are not putting the brakes 356 00:18:57,760 --> 00:19:00,480 Speaker 1: on the credit side of the economy, and we're just 357 00:19:00,520 --> 00:19:03,680 Speaker 1: starting to see economies reopen um. And as I said, 358 00:19:03,720 --> 00:19:06,080 Speaker 1: we're also getting that we've talked in the past, there's 359 00:19:06,119 --> 00:19:08,160 Speaker 1: going to be a bit further fiscal support, and you're 360 00:19:08,240 --> 00:19:11,760 Speaker 1: seeing Germany in France in particular, coming back pretty quickly 361 00:19:11,800 --> 00:19:14,600 Speaker 1: that v shaped recovery. We are seeing even on the 362 00:19:14,640 --> 00:19:17,919 Speaker 1: consumption side in the latest numbers. So how do you 363 00:19:17,960 --> 00:19:20,159 Speaker 1: put together, on the one hand, the economic side, some 364 00:19:20,200 --> 00:19:24,040 Speaker 1: of the similars being given monetary and coming first call 365 00:19:24,280 --> 00:19:27,159 Speaker 1: with how you're handling COVID nineteen. It's hard for all 366 00:19:27,160 --> 00:19:28,800 Speaker 1: of us to stort out right now, how much of 367 00:19:28,800 --> 00:19:30,840 Speaker 1: this is the economy, how much of this is consumer 368 00:19:30,880 --> 00:19:33,320 Speaker 1: confidence as people can come back into the market place. 369 00:19:33,440 --> 00:19:35,720 Speaker 1: I think it's a really striking lesson, especially when you 370 00:19:35,720 --> 00:19:38,640 Speaker 1: look at the data coming from Germany and France, as 371 00:19:38,680 --> 00:19:42,200 Speaker 1: the fear of the virus and fear of getting infected, 372 00:19:42,240 --> 00:19:43,879 Speaker 1: they actually have a measure of that that they've been 373 00:19:43,920 --> 00:19:46,359 Speaker 1: pulling people for six months or or more. In In 374 00:19:46,760 --> 00:19:49,840 Speaker 1: a few months in Germany, as that fear goes down, 375 00:19:51,160 --> 00:19:54,080 Speaker 1: you've seen consumers go back. I talked to my colleagues 376 00:19:54,119 --> 00:19:57,600 Speaker 1: in Germany, a German economists. Their families are going out, 377 00:19:57,640 --> 00:20:00,960 Speaker 1: eating pizza, going back to swimming pool. It's starting to 378 00:20:01,000 --> 00:20:03,760 Speaker 1: feel normal in only a few weeks. And I think 379 00:20:03,760 --> 00:20:06,560 Speaker 1: that's because there's confidence in the strategy, confidence that the 380 00:20:06,600 --> 00:20:09,720 Speaker 1: government has got the disease under control. Where you have 381 00:20:10,880 --> 00:20:13,800 Speaker 1: in the US some states where cases are going up, 382 00:20:14,240 --> 00:20:17,120 Speaker 1: or Sweden, for example, where they never had big lockdown 383 00:20:17,160 --> 00:20:20,919 Speaker 1: requirements but people had been worried about going out. You 384 00:20:21,000 --> 00:20:23,800 Speaker 1: may see a much slower pace of recovery, but it's 385 00:20:23,840 --> 00:20:25,560 Speaker 1: it's a really good example. If you get it right, 386 00:20:25,960 --> 00:20:28,360 Speaker 1: you can have that V shaped recovery that so many 387 00:20:28,400 --> 00:20:31,040 Speaker 1: investors are betting on. That was Wall Street Week contributor 388 00:20:31,119 --> 00:20:34,080 Speaker 1: Stephanie Flanders. Coming up. We wrap up the week with 389 00:20:34,119 --> 00:20:37,480 Speaker 1: our special contributor Larry Summers of Harvard. That's next on 390 00:20:37,520 --> 00:20:46,000 Speaker 1: Wall Street Week on Bloomberg. This is Bloomberg Wall Street 391 00:20:46,040 --> 00:20:49,720 Speaker 1: Week with David Weston from Bloomberg Radio. Help us pulled 392 00:20:49,760 --> 00:20:52,399 Speaker 1: together the strands from this week on Global Wall Street. 393 00:20:52,520 --> 00:20:55,960 Speaker 1: Welcome now our special contributor Larry Summers of Harvard. So, Larry, 394 00:20:56,000 --> 00:20:58,639 Speaker 1: normally we take a straw macro look at what's happened 395 00:20:59,200 --> 00:21:01,080 Speaker 1: this week. Let's take a look. You suggested that it's 396 00:21:01,080 --> 00:21:03,080 Speaker 1: sort of micro. Let's go sector by sector. Take two 397 00:21:03,119 --> 00:21:05,720 Speaker 1: or three sectors. Start with airlines. We just heard on 398 00:21:05,760 --> 00:21:09,000 Speaker 1: this program from at Baston, the CEO of Delta, that 399 00:21:09,040 --> 00:21:11,000 Speaker 1: they're on their way back. It's gonna take a little while, 400 00:21:11,000 --> 00:21:12,959 Speaker 1: but they're really on their back. And stocks by the way. 401 00:21:12,960 --> 00:21:15,480 Speaker 1: Airline stocks came up this week as the reports of 402 00:21:15,480 --> 00:21:18,480 Speaker 1: more bookings. What are we learning about the economy and 403 00:21:18,600 --> 00:21:21,320 Speaker 1: the markets from what's going with the airlines. Well, I'm 404 00:21:21,359 --> 00:21:24,600 Speaker 1: surprised at what's happened to the total value of airlines. 405 00:21:25,119 --> 00:21:27,840 Speaker 1: They look at their equity plus the value of their 406 00:21:27,960 --> 00:21:32,400 Speaker 1: dad it's remarkably close to UH where it had been 407 00:21:32,840 --> 00:21:38,199 Speaker 1: UH before UH covid. I wonder whether the market's a 408 00:21:38,200 --> 00:21:43,280 Speaker 1: little ahead of itself with respect to UH the airlines. 409 00:21:43,480 --> 00:21:46,880 Speaker 1: I think there are a number of stocks Hurts UH 410 00:21:47,400 --> 00:21:51,440 Speaker 1: was another one as it was going through bankruptcy that 411 00:21:51,600 --> 00:21:56,479 Speaker 1: retail has been piling into as a kind of bat 412 00:21:56,880 --> 00:22:01,960 Speaker 1: that this crisis is going to resolve itself UH fairly quickly. 413 00:22:02,400 --> 00:22:05,199 Speaker 1: I think airlines will work themselves out of this some 414 00:22:05,320 --> 00:22:08,600 Speaker 1: which way. They will cut costs, they will cut the 415 00:22:08,640 --> 00:22:11,760 Speaker 1: number of flights UH they are running. They will probably 416 00:22:11,840 --> 00:22:18,200 Speaker 1: jack up prices to cover the costs of lower lower 417 00:22:18,240 --> 00:22:23,439 Speaker 1: occupancy UH factors. But I suspect it's gonna be a 418 00:22:23,480 --> 00:22:29,159 Speaker 1: difficult period ahead UH for the airline industry. And I 419 00:22:29,280 --> 00:22:34,359 Speaker 1: think that the world has changed because of what technology 420 00:22:34,800 --> 00:22:38,480 Speaker 1: is making possible, and they're gonna be many fewer road 421 00:22:38,480 --> 00:22:44,040 Speaker 1: warriors in American business than there ever have been before. 422 00:22:44,680 --> 00:22:52,520 Speaker 1: And that's gonna take a lasting toll on airline uh bookings. 423 00:22:52,560 --> 00:22:57,359 Speaker 1: So I kind of think this is a microcosm of 424 00:22:57,400 --> 00:23:00,080 Speaker 1: an issue that we have generally in the account of 425 00:23:00,119 --> 00:23:04,479 Speaker 1: me that markets uh maybe getting a little ahead of 426 00:23:05,000 --> 00:23:09,840 Speaker 1: some genuinely uh favorable news that we are turning back. 427 00:23:10,440 --> 00:23:13,919 Speaker 1: But in some areas, I think markets are probably a 428 00:23:13,960 --> 00:23:16,720 Speaker 1: bit ahead of reality. So so, so that's the airline industry. 429 00:23:16,840 --> 00:23:20,520 Speaker 1: Let's talk about digital right now. Technology in particular, that 430 00:23:20,520 --> 00:23:22,800 Speaker 1: technology really has been on a terror for some time now. 431 00:23:22,920 --> 00:23:25,560 Speaker 1: The COVID nineteen has not slowed it down much at all. 432 00:23:26,000 --> 00:23:29,040 Speaker 1: At the same time, there is this issue about digital taxation, 433 00:23:29,119 --> 00:23:31,840 Speaker 1: as as countries around the world is saying we want 434 00:23:31,840 --> 00:23:34,000 Speaker 1: to tax on what you're doing right now. We thought 435 00:23:34,000 --> 00:23:37,240 Speaker 1: we were negotiating an international deal about how we're gonna 436 00:23:37,280 --> 00:23:40,000 Speaker 1: have digital services Texas, and then the US actually pulled out. 437 00:23:40,040 --> 00:23:43,240 Speaker 1: Steven Nuten, the Treasure Sectary pulled out. The Europeans didn't 438 00:23:43,280 --> 00:23:45,120 Speaker 1: take it well. They said it was a very provocative act. 439 00:23:45,119 --> 00:23:47,680 Speaker 1: They're gonna go their own way. What might this mean 440 00:23:47,760 --> 00:23:50,840 Speaker 1: for the future of digital and technology. Well, let's separate 441 00:23:51,359 --> 00:23:56,480 Speaker 1: two issues. Uh, this is a good time for technology companies. 442 00:23:56,880 --> 00:23:59,920 Speaker 1: The fact that we're all working out of our homes, 443 00:24:00,520 --> 00:24:04,160 Speaker 1: the fact that we're all doing our shopping out of 444 00:24:04,240 --> 00:24:07,320 Speaker 1: our homes, the fact that we're all having our social 445 00:24:07,359 --> 00:24:12,399 Speaker 1: interactions out of our homes. The platform companies that enable 446 00:24:12,480 --> 00:24:17,400 Speaker 1: all of that, this is a terrific opportunity. They are 447 00:24:17,840 --> 00:24:24,560 Speaker 1: rapidly growing companies that have secure cash flows well into 448 00:24:24,640 --> 00:24:28,040 Speaker 1: the future in an era when interest rates have come 449 00:24:28,080 --> 00:24:31,679 Speaker 1: way down, so their long duration companies, to put it 450 00:24:31,720 --> 00:24:35,640 Speaker 1: in financial parlance, and that's also contributed to the strength 451 00:24:36,240 --> 00:24:40,879 Speaker 1: of their stocks. So it's a good time to be 452 00:24:41,040 --> 00:24:45,320 Speaker 1: a big technology platform company. It's a time when they're 453 00:24:45,359 --> 00:24:49,439 Speaker 1: earning more rents than they ever have before. There was 454 00:24:49,480 --> 00:24:54,640 Speaker 1: an important, very substantial issue of their under taxation. Before 455 00:24:55,560 --> 00:24:59,480 Speaker 1: the nature of their business made it very difficult to 456 00:24:59,600 --> 00:25:04,040 Speaker 1: trace their income to any individual country, and therefore they 457 00:25:04,040 --> 00:25:08,439 Speaker 1: were able to locate income in tax havens in some 458 00:25:08,560 --> 00:25:11,239 Speaker 1: of the lowest tax countries in the world, or they 459 00:25:11,240 --> 00:25:14,480 Speaker 1: were able to locate income in cyberspace where it wasn't 460 00:25:14,560 --> 00:25:17,600 Speaker 1: deemed to be part of any country, and therefore, on 461 00:25:17,640 --> 00:25:21,720 Speaker 1: a global basis, those companies have paid remarkably little in 462 00:25:21,800 --> 00:25:26,920 Speaker 1: taxes relative to their market value. It's actually been at 463 00:25:26,920 --> 00:25:32,639 Speaker 1: the edge of abusive for UH some years it was 464 00:25:32,720 --> 00:25:37,480 Speaker 1: exactly the right kind of thing that globalization negotiation should 465 00:25:37,480 --> 00:25:41,159 Speaker 1: be about, to try to take on that problem and 466 00:25:41,200 --> 00:25:45,000 Speaker 1: to have a global cooperative regime so that we could 467 00:25:45,720 --> 00:25:52,840 Speaker 1: tax the profits of these extraordinarily fortunate companies and uh 468 00:25:53,200 --> 00:25:58,520 Speaker 1: their stockholders. I don't know what exactly the right position 469 00:25:58,760 --> 00:26:03,399 Speaker 1: is on the details of the negotiation, and I recognize 470 00:26:03,520 --> 00:26:07,080 Speaker 1: that there is some risk of a gang up on 471 00:26:07,160 --> 00:26:12,440 Speaker 1: America aspect in this, because most of the companies UM 472 00:26:13,400 --> 00:26:17,960 Speaker 1: that have this tremendous platform capacity are American. Think of 473 00:26:18,000 --> 00:26:24,240 Speaker 1: Amazon or Google or Facebook, Microsoft or UH microsost Microsoft, Apple. 474 00:26:25,000 --> 00:26:29,000 Speaker 1: But God, the job of the Secretary of the Treasury 475 00:26:29,240 --> 00:26:32,000 Speaker 1: is to be standing up for three and thirty million 476 00:26:32,000 --> 00:26:37,840 Speaker 1: American citizens, not tan American tech companies that pay less 477 00:26:37,880 --> 00:26:41,920 Speaker 1: taxes than the secretaries who work within the pay as 478 00:26:41,920 --> 00:26:46,199 Speaker 1: a share of UH income. And so to see the 479 00:26:46,280 --> 00:26:52,560 Speaker 1: United States adding this negotiation over global tax fairness to 480 00:26:52,680 --> 00:26:58,879 Speaker 1: the list of negotiations, it's torpedoed um in UH recent years. 481 00:26:58,920 --> 00:27:04,359 Speaker 1: I really wasn't uh happy uh to uh see that. 482 00:27:04,640 --> 00:27:08,840 Speaker 1: And I think that the Secretary of the Treasury should 483 00:27:08,920 --> 00:27:12,520 Speaker 1: be looking to be as constructive as he can with 484 00:27:12,600 --> 00:27:16,879 Speaker 1: respect to a very difficult problem, not to be doing 485 00:27:17,080 --> 00:27:22,760 Speaker 1: battle for the economic interests of trillion dollar companies that, 486 00:27:23,200 --> 00:27:27,399 Speaker 1: between them don't employ one percent of the American people. 487 00:27:28,359 --> 00:27:30,560 Speaker 1: And finally, Larry, let's take a sector near and dear 488 00:27:30,560 --> 00:27:33,199 Speaker 1: to your heart. That's higher education. You're not only a 489 00:27:33,240 --> 00:27:36,000 Speaker 1: professor Harvard, you ran Harvard for a time, and of 490 00:27:36,040 --> 00:27:38,440 Speaker 1: course you know higher education very very well. How is 491 00:27:38,520 --> 00:27:40,399 Speaker 1: higher education the United States going to come out of 492 00:27:40,440 --> 00:27:43,280 Speaker 1: this pandemic? Because there's a lot of uncertainty about kids 493 00:27:43,280 --> 00:27:46,000 Speaker 1: going back to school come September. So the issue everybody 494 00:27:46,040 --> 00:27:49,399 Speaker 1: is excited about is what's going to happen in September. 495 00:27:49,520 --> 00:27:54,600 Speaker 1: And truth is, nobody knows. Everybody's watching, uh everybody else, 496 00:27:54,760 --> 00:27:57,720 Speaker 1: and they've got to be very careful because, if you 497 00:27:57,760 --> 00:28:00,760 Speaker 1: think about it, a college dorm is a lot like 498 00:28:01,720 --> 00:28:05,879 Speaker 1: a cruise ship. People who are in close uh quarters, 499 00:28:06,400 --> 00:28:12,360 Speaker 1: people who are often uh inebriated, people who are looking 500 00:28:12,400 --> 00:28:17,440 Speaker 1: for companionship, uh shall we say? And cruise ships are 501 00:28:18,119 --> 00:28:23,600 Speaker 1: um hotbeds of contagion, and college dorms maybe as well. 502 00:28:23,640 --> 00:28:27,560 Speaker 1: And the first obligation of any university president is to 503 00:28:27,600 --> 00:28:33,439 Speaker 1: make sure that her university isn't a major source of 504 00:28:33,480 --> 00:28:38,480 Speaker 1: contagion UH to UH the community. So I think they've 505 00:28:38,520 --> 00:28:42,280 Speaker 1: got to be very careful, even as important as it 506 00:28:42,480 --> 00:28:48,480 Speaker 1: is with respect to UH bringing kids back. But really 507 00:28:49,320 --> 00:28:54,720 Speaker 1: the question is is this moment going to be the 508 00:28:54,880 --> 00:29:03,240 Speaker 1: catalyst for major structural reform and higher education that emphasizes 509 00:29:03,360 --> 00:29:10,479 Speaker 1: the capacity of technology to cause materials to reach a 510 00:29:10,600 --> 00:29:16,480 Speaker 1: very large scale. Rather than calculus being taught five thousand 511 00:29:16,520 --> 00:29:21,120 Speaker 1: times every false semester in five thousand different high schools, 512 00:29:21,280 --> 00:29:26,720 Speaker 1: UH and colleges, are we gonna figure out to use technology. 513 00:29:27,400 --> 00:29:32,080 Speaker 1: Use technology to bring the best performances of instruction to 514 00:29:32,160 --> 00:29:37,400 Speaker 1: the most people. Use technology to permit personalization where you 515 00:29:37,480 --> 00:29:40,840 Speaker 1: receee the input at a rate that depends on your 516 00:29:40,880 --> 00:29:44,840 Speaker 1: own ability to absorb it, which is being measured continuously 517 00:29:44,960 --> 00:29:51,280 Speaker 1: with UH little quizes. Use technology to enable customization and 518 00:29:51,440 --> 00:29:57,400 Speaker 1: tailoring of intellectual materials to the individual student. What should 519 00:29:57,440 --> 00:30:03,640 Speaker 1: be happening is univer mercy should be stretching and competing 520 00:30:04,160 --> 00:30:08,880 Speaker 1: to be the leader. I'm not sure, frankly, that universities 521 00:30:08,920 --> 00:30:11,960 Speaker 1: had the courage to be so dynamic, and we're gonna 522 00:30:11,960 --> 00:30:14,720 Speaker 1: find that that's the world. According to Larry Summers, which 523 00:30:14,720 --> 00:30:16,400 Speaker 1: is the world we always want to see right here 524 00:30:16,400 --> 00:30:18,880 Speaker 1: on Wall Street. Week you heard about it from him, 525 00:30:18,920 --> 00:30:22,280 Speaker 1: about the higher education as well as digital as well 526 00:30:22,320 --> 00:30:25,320 Speaker 1: as aviation. It's been an eventful week, a lot of 527 00:30:25,400 --> 00:30:27,320 Speaker 1: ups and downs with not a lot of direction in 528 00:30:27,320 --> 00:30:30,080 Speaker 1: the markets, but Larry Summers took us through those three 529 00:30:30,400 --> 00:30:34,760 Speaker 1: critical UH sectors. So thank you very much, Larry Summers. Finally, buddy, 530 00:30:34,800 --> 00:30:37,720 Speaker 1: can you spare a dime or a nickel or a quarter. 531 00:30:38,240 --> 00:30:40,640 Speaker 1: We learned this week from FED Chair J Powell that 532 00:30:40,680 --> 00:30:43,320 Speaker 1: it's not just jobs and corporate profits were running short 533 00:30:43,320 --> 00:30:46,680 Speaker 1: of we're running short of coins. What's happened is that 534 00:30:46,760 --> 00:30:50,120 Speaker 1: with the partial closure of the economy, the the flow 535 00:30:50,160 --> 00:30:53,480 Speaker 1: of coins through the economy has gotten all it's kind 536 00:30:53,480 --> 00:30:56,160 Speaker 1: of stopped. It turns out that despite all the talk 537 00:30:56,200 --> 00:30:59,720 Speaker 1: about cryptocurrencies and electronic payments, when things get rough, we 538 00:30:59,800 --> 00:31:02,680 Speaker 1: all want to hold onto cold, hard cash, which is 539 00:31:02,720 --> 00:31:06,320 Speaker 1: meant that banks are depositing less coins with the FED 540 00:31:06,440 --> 00:31:09,320 Speaker 1: this year than last year. And it's not just coins 541 00:31:09,360 --> 00:31:12,440 Speaker 1: that we're all hoarding, it's also bills. The amount of 542 00:31:12,440 --> 00:31:15,600 Speaker 1: bills and circulation has gone up by in the period 543 00:31:15,640 --> 00:31:18,520 Speaker 1: February to May over a year ago, so if we 544 00:31:18,560 --> 00:31:21,040 Speaker 1: want some indication of how confident we all are in 545 00:31:21,040 --> 00:31:24,480 Speaker 1: the future, we might just want to start counting our pennies. 546 00:31:25,760 --> 00:31:27,800 Speaker 1: That does it for this episode of Wall Street Week. 547 00:31:27,920 --> 00:31:40,000 Speaker 1: I'm David Weston. This is Bloomberg. See you next week.