1 00:00:09,840 --> 00:00:13,800 Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane. Daily 2 00:00:13,960 --> 00:00:17,560 Speaker 1: we bring you insight from the best in economics, finance, investment, 3 00:00:18,000 --> 00:00:23,480 Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 4 00:00:23,640 --> 00:00:27,400 Speaker 1: Bloomberg dot Com, and of course on the Bloomberg. Joining 5 00:00:27,520 --> 00:00:30,080 Speaker 1: us now, someone who had to sit there with student 6 00:00:30,160 --> 00:00:33,080 Speaker 1: yelling and straighten her out, Joseph Stiglers joins us the 7 00:00:33,120 --> 00:00:37,160 Speaker 1: Nobel Laureate from Columbia University. Joe Stiglers, What was Cherry 8 00:00:37,280 --> 00:00:40,600 Speaker 1: Yelling like as a student? She was great. She was 9 00:00:40,640 --> 00:00:43,879 Speaker 1: one of the best students I had. She was one 10 00:00:43,880 --> 00:00:46,519 Speaker 1: of my students in the very beginning of my teaching. 11 00:00:47,320 --> 00:00:50,879 Speaker 1: She looked up to her promise and I'll say the 12 00:00:50,960 --> 00:00:53,120 Speaker 1: least probably she taught you some things while she was 13 00:00:53,159 --> 00:00:56,720 Speaker 1: your student as well. She was that acclaimed without questions 14 00:00:56,760 --> 00:00:59,959 Speaker 1: through all of her work. Joe Stiglets, I wanted dovetail 15 00:01:00,000 --> 00:01:03,320 Speaker 1: in your the political season or the economics at hand. 16 00:01:03,800 --> 00:01:07,680 Speaker 1: Joe Biden is a certain kind of Democrat. If he 17 00:01:07,880 --> 00:01:13,080 Speaker 1: takes the trophy, can the Democratic Party find a middle ground, 18 00:01:13,680 --> 00:01:18,000 Speaker 1: a common voice with the rest of America to actually 19 00:01:18,160 --> 00:01:25,200 Speaker 1: pass legislation and make policy? Oh? Absolutely, I believe actually 20 00:01:25,240 --> 00:01:29,440 Speaker 1: there's a broadnsensus in America on a whole wide range 21 00:01:29,440 --> 00:01:33,120 Speaker 1: of issues, and I think Biden is is in a 22 00:01:33,160 --> 00:01:37,080 Speaker 1: position to create that middle ground, to get that common 23 00:01:37,160 --> 00:01:43,319 Speaker 1: agenda adopted. For instincts. Uh, we're concerned. Everybody is concerned 24 00:01:43,360 --> 00:01:47,000 Speaker 1: about healthcare, at the cost of healthcare, access to healthcare. 25 00:01:47,920 --> 00:01:52,800 Speaker 1: The proposal of public option is a good way of 26 00:01:52,840 --> 00:01:55,680 Speaker 1: getting it to everybody. So you're looking at this with 27 00:01:55,760 --> 00:02:00,320 Speaker 1: your new book, People Power and Profits, Progressive Capitalism for 28 00:02:00,400 --> 00:02:04,080 Speaker 1: an Age of Discontent, Joe, you brought that where you 29 00:02:04,200 --> 00:02:09,079 Speaker 1: brought our Steinbeck over to the American economic mind with discontent. 30 00:02:09,320 --> 00:02:16,000 Speaker 1: This discontent now is absolutely extraordinary. What can a legitimate 31 00:02:16,040 --> 00:02:21,560 Speaker 1: Biden policy accomplish? What's the first order condition? You see, 32 00:02:22,639 --> 00:02:26,480 Speaker 1: the first order is getting the economy going again. And 33 00:02:26,600 --> 00:02:30,640 Speaker 1: Janet was absolutely right. There is right now a need 34 00:02:30,680 --> 00:02:36,240 Speaker 1: for fiscal support, especially at the bottom. You know, people 35 00:02:36,280 --> 00:02:39,680 Speaker 1: talk about a K shaped recovery. It's absolutely true those 36 00:02:39,720 --> 00:02:43,200 Speaker 1: of the bottom are having a very hard time. Uh. 37 00:02:43,240 --> 00:02:47,960 Speaker 1: The unemployment rate among uh certain groups of the population 38 00:02:48,040 --> 00:02:53,079 Speaker 1: are very elevated. Uh So, Uh, that's one thing, But 39 00:02:53,120 --> 00:02:56,480 Speaker 1: there are certain sectors of the economy that are badly 40 00:02:56,520 --> 00:02:59,919 Speaker 1: afflicted and they need assistance brings things. I'm in one 41 00:03:00,000 --> 00:03:05,160 Speaker 1: of those, the education sector, research sector, and those are 42 00:03:05,240 --> 00:03:07,920 Speaker 1: sectors that are going to be vital to the country's future. 43 00:03:08,360 --> 00:03:11,840 Speaker 1: If we let those uh weekend, we're not going to 44 00:03:12,040 --> 00:03:14,880 Speaker 1: have uh We're gonna have a weak economy now, but 45 00:03:14,919 --> 00:03:17,160 Speaker 1: we're gonna have an even weaker economy in the future. 46 00:03:17,960 --> 00:03:20,120 Speaker 1: One thing we've been talking a lot about Professor Siglat's 47 00:03:20,200 --> 00:03:22,079 Speaker 1: in the past few months has been g d P 48 00:03:22,520 --> 00:03:24,880 Speaker 1: and how it's going to go down dramatically on the 49 00:03:24,880 --> 00:03:27,600 Speaker 1: heels of the pandemic. And you were recently quoted in 50 00:03:27,639 --> 00:03:30,720 Speaker 1: a Bloomberg article about how this is not a great 51 00:03:30,800 --> 00:03:34,160 Speaker 1: measure of people's well being. You also said high prices 52 00:03:34,160 --> 00:03:36,920 Speaker 1: in the stock market are an even worse indicator of 53 00:03:36,960 --> 00:03:39,839 Speaker 1: societal well being. Focusing on the wrong things can lead 54 00:03:39,960 --> 00:03:43,920 Speaker 1: to taking the wrong actions. What wrong actions have we 55 00:03:44,040 --> 00:03:49,280 Speaker 1: been taking up till now. Well, the focus on the 56 00:03:49,320 --> 00:03:53,840 Speaker 1: stock market really is perverse because we know underlying the 57 00:03:53,880 --> 00:03:58,720 Speaker 1: growth in the stock market are a few companies Silicon Valley, 58 00:03:58,840 --> 00:04:02,560 Speaker 1: the digital giants doing very well, UH as a result 59 00:04:02,600 --> 00:04:06,840 Speaker 1: of their monopoly power. UH. People going the stock market 60 00:04:06,880 --> 00:04:10,320 Speaker 1: because interest rates are so low returns, the bonds are 61 00:04:10,360 --> 00:04:13,680 Speaker 1: so low that they're piling into the stock market, and 62 00:04:13,760 --> 00:04:16,680 Speaker 1: wages are not doing very well, and that helps the 63 00:04:16,680 --> 00:04:20,159 Speaker 1: stock market. But all those are things that are weakening 64 00:04:20,240 --> 00:04:24,600 Speaker 1: our economy, so it's almost perverse. The strong stock market 65 00:04:25,880 --> 00:04:29,400 Speaker 1: is almost assigned that things are not going well in 66 00:04:29,440 --> 00:04:32,760 Speaker 1: other parts of the economy. So precisely, we need to 67 00:04:32,839 --> 00:04:36,120 Speaker 1: focus on the role of market power in our economy. 68 00:04:36,640 --> 00:04:40,839 Speaker 1: The low wages, the fact that at the bottom wages 69 00:04:40,880 --> 00:04:43,920 Speaker 1: are the same as they work sixty five years ago, 70 00:04:44,040 --> 00:04:49,200 Speaker 1: adjusted for inflation. Uh, And most importantly, we need the 71 00:04:49,279 --> 00:04:53,919 Speaker 1: aggregate demand going up so that the economy so that 72 00:04:54,000 --> 00:04:58,920 Speaker 1: their jobs are there for uh, for all Americans, and 73 00:04:59,080 --> 00:05:01,800 Speaker 1: that won't happen been uh if we don't have that 74 00:05:01,880 --> 00:05:06,320 Speaker 1: fiscal stock stimulus that Janet was talking about yesterday. This 75 00:05:06,360 --> 00:05:10,359 Speaker 1: is an incredibly important point, the idea that the prices 76 00:05:10,400 --> 00:05:14,359 Speaker 1: on stocks could actually be evidence of something counter to 77 00:05:14,440 --> 00:05:17,200 Speaker 1: what may be the healthiest for the underlying economy. Do 78 00:05:17,279 --> 00:05:19,719 Speaker 1: you think that the response from the Federal Reserve, the 79 00:05:19,760 --> 00:05:23,960 Speaker 1: US Treasure Department in Congress has actually increased the disparity 80 00:05:23,960 --> 00:05:27,360 Speaker 1: and access to funding for small and larger companies at 81 00:05:27,360 --> 00:05:34,600 Speaker 1: a time when we see unprecedented bankruptcies among smaller businesses. Well, actually, actually, uh, 82 00:05:34,920 --> 00:05:38,360 Speaker 1: very many aspects of what you just raised. Um. There 83 00:05:38,440 --> 00:05:41,159 Speaker 1: was a program created at the very beginning called p 84 00:05:41,279 --> 00:05:46,200 Speaker 1: PP that was intended to get money to small businesses, 85 00:05:46,720 --> 00:05:51,080 Speaker 1: but it was very badly administered. Uh, and it did work. 86 00:05:51,120 --> 00:05:53,799 Speaker 1: It got money to the richest of the small businesses, 87 00:05:54,160 --> 00:05:58,159 Speaker 1: many of whom were owned by very very rich people. Uh. 88 00:05:58,200 --> 00:06:02,400 Speaker 1: So the intent was perhaps good, but the way it 89 00:06:02,480 --> 00:06:06,919 Speaker 1: was executed by the Trump administration and by the banks, 90 00:06:07,000 --> 00:06:13,160 Speaker 1: quite frankly, uh, was a disaster. Joe. Broadly, the monetary 91 00:06:13,200 --> 00:06:17,200 Speaker 1: policies that we've conducted since the Great Financial Crisis two 92 00:06:17,240 --> 00:06:22,279 Speaker 1: thousand and eight of keeping interest rates very low has 93 00:06:22,600 --> 00:06:26,640 Speaker 1: stimulated the growth and the value of equities. And the 94 00:06:26,760 --> 00:06:30,919 Speaker 1: equities are overwhelmingly owned by the people in the top 95 00:06:30,920 --> 00:06:34,320 Speaker 1: ten percent to one percent, top one tenth of one percent. 96 00:06:34,839 --> 00:06:40,680 Speaker 1: And it's absolutely unambiguous that that monetary policy has increased 97 00:06:40,680 --> 00:06:44,120 Speaker 1: wealth inequalities. Joe Stick, let's us talking with our Sally 98 00:06:44,200 --> 00:06:47,239 Speaker 1: bag Will, who's really really looking at the great divide 99 00:06:47,240 --> 00:06:49,400 Speaker 1: that we see on the streets of New York or frankly, 100 00:06:49,440 --> 00:06:52,719 Speaker 1: I think across any of this nation of small business 101 00:06:52,800 --> 00:06:57,600 Speaker 1: flat on their back. We have financialized the world, there's 102 00:06:57,600 --> 00:07:00,160 Speaker 1: no question we've done that for the benefits it of 103 00:07:00,240 --> 00:07:03,400 Speaker 1: the upper x per cent or others. How do we 104 00:07:03,520 --> 00:07:08,839 Speaker 1: get back to it? How do we escape and definancialize 105 00:07:09,000 --> 00:07:14,280 Speaker 1: in a constructive way? Well, I think first of all, 106 00:07:14,680 --> 00:07:19,160 Speaker 1: we have to uh do two things, uh three things. 107 00:07:20,000 --> 00:07:23,120 Speaker 1: We have to rewrite the rules of the market economy. 108 00:07:23,160 --> 00:07:26,400 Speaker 1: There's too much market power at the top. We talked 109 00:07:26,440 --> 00:07:29,320 Speaker 1: about it in terms of the silk on valley giants, 110 00:07:29,360 --> 00:07:33,120 Speaker 1: but there's a lot more throughout the economy. We've weakened 111 00:07:33,120 --> 00:07:36,560 Speaker 1: the market power bargaining power workers, and that has contributed 112 00:07:36,720 --> 00:07:40,680 Speaker 1: to inequality. We have rules that have led to the 113 00:07:40,720 --> 00:07:46,880 Speaker 1: excessive financialization that you talked about before. Secondly, we have 114 00:07:46,960 --> 00:07:50,880 Speaker 1: a tax system where those are the very top actually 115 00:07:50,880 --> 00:07:54,840 Speaker 1: pay a smaller percentage of their income than those down below. 116 00:07:55,080 --> 00:07:58,800 Speaker 1: You know, Warren Buffett actually complained about it, saying, you know, 117 00:07:58,840 --> 00:08:01,360 Speaker 1: it was wrong that he was paying a lower tax 118 00:08:01,480 --> 00:08:05,640 Speaker 1: rate than his secretary. You're a lot of wealthy people 119 00:08:05,640 --> 00:08:09,280 Speaker 1: who recognize that this is actually back for our economy 120 00:08:09,440 --> 00:08:12,520 Speaker 1: and more. Yeah, Joe, I mean, if you sum up 121 00:08:12,560 --> 00:08:14,760 Speaker 1: the taxes that the rich guys are paying. It's a 122 00:08:14,760 --> 00:08:17,440 Speaker 1: pretty high marginal bracket. It may not be you know, 123 00:08:17,560 --> 00:08:21,400 Speaker 1: Rockefeller s and all that. But if we some if 124 00:08:21,400 --> 00:08:24,120 Speaker 1: we sell every tax up, it's there. How do we 125 00:08:24,600 --> 00:08:32,480 Speaker 1: defense the financialize and deploy capital. Two people starving for capital? 126 00:08:32,760 --> 00:08:36,880 Speaker 1: Apple computer is not starving for capital. They can get 127 00:08:36,880 --> 00:08:41,199 Speaker 1: any billions they want. What about the small businessperson on 128 00:08:41,320 --> 00:08:46,520 Speaker 1: a corner in Tulsa, Oklahoma. Well, that's where we we 129 00:08:46,640 --> 00:08:51,720 Speaker 1: have to refocus our banking system. You know, banks were 130 00:08:51,760 --> 00:08:57,719 Speaker 1: always at the center of providing capital small medium sized businesses. 131 00:08:58,080 --> 00:09:01,720 Speaker 1: You know, if you're a small business, you go raise 132 00:09:01,880 --> 00:09:05,640 Speaker 1: money on the capital market. Uh, you go to your bank. 133 00:09:06,320 --> 00:09:09,480 Speaker 1: And the problem is that the banks over the last 134 00:09:09,600 --> 00:09:13,280 Speaker 1: thirty years have focused their attention on things like issuing 135 00:09:13,360 --> 00:09:21,880 Speaker 1: derivatives CDSS UH, trading UH, commodities UH. They found a 136 00:09:21,960 --> 00:09:25,480 Speaker 1: lot more lucrative ways of making money. Some of it 137 00:09:25,720 --> 00:09:30,160 Speaker 1: actually market manipulation. So if we stop some of their 138 00:09:30,200 --> 00:09:36,320 Speaker 1: bad activities market manipulate manipulation, predatory lending, and encourage them 139 00:09:36,360 --> 00:09:39,000 Speaker 1: to do what their mandate is, which is lending to 140 00:09:39,080 --> 00:09:43,920 Speaker 1: small businesses, I think it would actually create much more opportunities. 141 00:09:43,960 --> 00:09:45,880 Speaker 1: I mean, Lisa, this is the heart of the matter. 142 00:09:45,960 --> 00:09:49,000 Speaker 1: I'm just old enough, unlike the ancient Stiglets who really 143 00:09:49,000 --> 00:09:52,480 Speaker 1: really remembers us out of Gary, Indiana. But Lisa, there 144 00:09:52,640 --> 00:09:56,000 Speaker 1: actually was a time where you did business with your 145 00:09:56,040 --> 00:09:59,719 Speaker 1: local bank or maybe the regional bank. And it's a 146 00:10:00,040 --> 00:10:03,960 Speaker 1: paraded and actually the regional banks anecdotally have been pulling 147 00:10:03,960 --> 00:10:06,720 Speaker 1: back on credit. Professor Siglets, I'm not going to refer 148 00:10:06,800 --> 00:10:09,960 Speaker 1: to your tenure or you know, in terms of teaching 149 00:10:10,080 --> 00:10:13,079 Speaker 1: or anything that Tom was talking about in terms of 150 00:10:13,120 --> 00:10:16,400 Speaker 1: ancient history. I will say, though, going forward, how does 151 00:10:16,400 --> 00:10:19,440 Speaker 1: the economic profession, how do you, as a Nobel laureate, 152 00:10:19,840 --> 00:10:22,120 Speaker 1: get your voice heard to the degree that it needs 153 00:10:22,120 --> 00:10:25,640 Speaker 1: to be heard by policymakers who say economists have gotten 154 00:10:25,679 --> 00:10:29,240 Speaker 1: it wrong numerous times? Why should we follow a theory 155 00:10:29,600 --> 00:10:32,920 Speaker 1: when free market economics has led to the power of 156 00:10:32,960 --> 00:10:37,480 Speaker 1: the United States over the long term, What actually hasn't 157 00:10:37,520 --> 00:10:41,200 Speaker 1: been free market economics has led to the success If 158 00:10:41,280 --> 00:10:44,679 Speaker 1: you look at all the innovations that have been the 159 00:10:44,760 --> 00:10:50,119 Speaker 1: basis of us success, all those innovations have been supported 160 00:10:50,160 --> 00:10:54,840 Speaker 1: by the government. Uh, you know the Internet, Uh, the 161 00:10:54,920 --> 00:10:59,439 Speaker 1: advances in medicine that we're all looking for. Who did 162 00:10:59,480 --> 00:11:02,160 Speaker 1: the research that led to d NA who did the 163 00:11:02,240 --> 00:11:05,959 Speaker 1: research that led to all the major advances in biology. 164 00:11:06,240 --> 00:11:09,400 Speaker 1: Thanks the government. So one of the things I called 165 00:11:09,440 --> 00:11:13,079 Speaker 1: for in my book People Power and Profits is recognized 166 00:11:13,559 --> 00:11:17,040 Speaker 1: recognizing the success of the United States has in the 167 00:11:17,120 --> 00:11:21,520 Speaker 1: past been based on a balance between the market, the government, 168 00:11:21,520 --> 00:11:25,880 Speaker 1: and civil society. We lost that balance beginning with Reagan. 169 00:11:26,640 --> 00:11:29,760 Speaker 1: Uh that said the government was the problem. We now 170 00:11:29,840 --> 00:11:33,559 Speaker 1: in this pandemic have seen that an ill prepared government 171 00:11:34,360 --> 00:11:38,200 Speaker 1: is not there when we need it. And I think 172 00:11:38,400 --> 00:11:43,000 Speaker 1: the strongest argument for UH, what I called for in 173 00:11:43,040 --> 00:11:45,920 Speaker 1: my book People Power and Profits, for a new social 174 00:11:45,960 --> 00:11:50,040 Speaker 1: contract with a new balance, has been precisely the failures 175 00:11:50,080 --> 00:11:53,439 Speaker 1: that we've just seen in this pandemic. Just because you've 176 00:11:53,440 --> 00:11:55,079 Speaker 1: got to leave it there, Thank you so much, and 177 00:11:55,200 --> 00:11:58,360 Speaker 1: particularly thank you for your comments on chariol and early 178 00:11:58,520 --> 00:12:01,160 Speaker 1: in this good discussion, the lawyer from Columbia out with 179 00:12:01,160 --> 00:12:09,120 Speaker 1: a new book on people Power and Profits. Julius Now 180 00:12:09,120 --> 00:12:12,880 Speaker 1: Amy were Silverman obviously capital markets equity derivative strategist. Amy, 181 00:12:12,920 --> 00:12:15,720 Speaker 1: fantastic to get you with us on the program two 182 00:12:15,720 --> 00:12:19,000 Speaker 1: weeks away from an election. It's your world. Volatility was 183 00:12:19,080 --> 00:12:21,880 Speaker 1: so elevated a number of weeks ago. Then people faded it. 184 00:12:21,920 --> 00:12:23,960 Speaker 1: Then we came back a little bit more. What's the 185 00:12:23,960 --> 00:12:28,960 Speaker 1: approach now, I met, Yeah, it's It's been fascinating to 186 00:12:29,040 --> 00:12:31,320 Speaker 1: watch because, as you said, I think the last time 187 00:12:31,360 --> 00:12:35,920 Speaker 1: we spoke, uh, the options market was clearly pricing a 188 00:12:36,000 --> 00:12:40,520 Speaker 1: contested and protracted election with uncertainty very high in December. 189 00:12:40,960 --> 00:12:44,360 Speaker 1: That's completely gone away now. And and to be quite honest, 190 00:12:44,679 --> 00:12:48,360 Speaker 1: the options market is pricing a fairly boring term structure, 191 00:12:48,360 --> 00:12:51,080 Speaker 1: which always makes me a little bit nervous with you know, 192 00:12:51,160 --> 00:12:55,040 Speaker 1: two weeks ago until a pretty major event happening. Uh. 193 00:12:55,240 --> 00:12:57,560 Speaker 1: If I do say, I think at this point we're 194 00:12:57,600 --> 00:13:02,000 Speaker 1: probably under pricing the likelihood that you get that protracted, 195 00:13:02,040 --> 00:13:05,000 Speaker 1: contested election, and we're also pricing a tail of it, 196 00:13:05,120 --> 00:13:08,600 Speaker 1: which is that Trump actually wins the election. Obviously the 197 00:13:08,640 --> 00:13:12,440 Speaker 1: poles say that those are less likely. Um, but remember 198 00:13:12,520 --> 00:13:16,120 Speaker 1: those tales have become fatter in than I would say 199 00:13:16,160 --> 00:13:19,559 Speaker 1: in other years. Any some of the measurements here. Christopher 200 00:13:19,559 --> 00:13:22,120 Speaker 1: own was on the Great Technician the other day was 201 00:13:22,160 --> 00:13:24,440 Speaker 1: trtigous and he was really talking about the breadth of 202 00:13:24,440 --> 00:13:27,680 Speaker 1: this market improving. Do you see that on a fundamental basis? 203 00:13:29,400 --> 00:13:32,360 Speaker 1: I do, And you know, I think There's two things 204 00:13:32,400 --> 00:13:36,000 Speaker 1: that sort of happened. In August. We had unbelievably narrow 205 00:13:36,040 --> 00:13:39,320 Speaker 1: breadth that was really just all tech. Um. You know, 206 00:13:39,400 --> 00:13:42,640 Speaker 1: two things changed coming. The first is people started putting 207 00:13:42,640 --> 00:13:45,720 Speaker 1: on more macro hedges, just simply because we have a U. 208 00:13:45,760 --> 00:13:48,160 Speaker 1: S election, but also just because we're coming into your end. 209 00:13:48,200 --> 00:13:51,120 Speaker 1: So most people who are doing well in their portfolios 210 00:13:51,120 --> 00:13:54,200 Speaker 1: are putting on overall market hedges. And the second is, 211 00:13:54,480 --> 00:13:56,880 Speaker 1: you know, as we head into earning season, people are 212 00:13:56,920 --> 00:14:01,400 Speaker 1: playing names other than obviously they're still paying of playing Facebook, Amazon, 213 00:14:01,600 --> 00:14:04,440 Speaker 1: what have you, but they're also playing other names. So 214 00:14:04,480 --> 00:14:07,640 Speaker 1: we do have improvement in breadth, which obviously helps with 215 00:14:07,679 --> 00:14:10,840 Speaker 1: some of the correlations we're seeing on the index levels. 216 00:14:11,080 --> 00:14:12,800 Speaker 1: I want to build on something that you said to Amy. 217 00:14:12,840 --> 00:14:15,760 Speaker 1: You said that we are currently probably under pricing the 218 00:14:15,880 --> 00:14:19,880 Speaker 1: risk of a contested election. Just how contested does that 219 00:14:19,920 --> 00:14:22,560 Speaker 1: election have to be before it royals the market? And 220 00:14:22,600 --> 00:14:27,880 Speaker 1: how significant could the hell off be? Yeah, two great questions. 221 00:14:27,960 --> 00:14:32,119 Speaker 1: So the time frame that the options market was obsessed 222 00:14:32,160 --> 00:14:36,080 Speaker 1: with was call it November twenty through December eighteenth. So 223 00:14:36,120 --> 00:14:39,520 Speaker 1: that's the period of time between the two options experts. 224 00:14:40,000 --> 00:14:43,640 Speaker 1: We saw that you know, three to four volatibility points, 225 00:14:43,720 --> 00:14:47,720 Speaker 1: fully elevated relative to everything else, and now that's completely 226 00:14:47,720 --> 00:14:51,520 Speaker 1: come down to the point where it's actually under November UM. 227 00:14:51,600 --> 00:14:54,120 Speaker 1: So you know, that tells us that people are not 228 00:14:54,240 --> 00:14:57,280 Speaker 1: focused on that December fourteenth state where the state electors 229 00:14:57,320 --> 00:15:01,000 Speaker 1: are supposed to submit their ballots. That's the time frame originally, Lisa, 230 00:15:01,080 --> 00:15:03,560 Speaker 1: that people were very, very worried about. So call it, 231 00:15:03,600 --> 00:15:07,240 Speaker 1: you know, after election by you know, four weeks UM. 232 00:15:07,320 --> 00:15:09,280 Speaker 1: And then look in terms of the downside that the 233 00:15:09,360 --> 00:15:12,800 Speaker 1: bets we are seeing place has the market down you know, 234 00:15:12,880 --> 00:15:15,120 Speaker 1: at least five percent, but more down to ten percent. 235 00:15:15,200 --> 00:15:17,320 Speaker 1: So those are the hedges. Those are the strikes of 236 00:15:17,400 --> 00:15:19,680 Speaker 1: the hedges that we're seeing places in the market right now. 237 00:15:20,800 --> 00:15:22,720 Speaker 1: So let's talk about how you invest around the Samy. 238 00:15:22,800 --> 00:15:24,560 Speaker 1: I think for a lot of people outside of Wall Street, 239 00:15:24,600 --> 00:15:27,520 Speaker 1: whenever the Amy wi Silverman's, the Julian Emmanuel is the 240 00:15:27,520 --> 00:15:30,520 Speaker 1: Mandy Zoo's come on, people get confused by the language 241 00:15:30,560 --> 00:15:33,320 Speaker 1: the jargon you guys use about this market volatility, you 242 00:15:33,360 --> 00:15:35,960 Speaker 1: know the story. Can you advise people outside of that 243 00:15:36,000 --> 00:15:38,200 Speaker 1: world what on earth they're meant to do going into 244 00:15:38,240 --> 00:15:41,800 Speaker 1: the back end of this year? Sure, you know, I 245 00:15:41,840 --> 00:15:43,720 Speaker 1: think it's just to think of this way. The first 246 00:15:43,960 --> 00:15:46,640 Speaker 1: is I would just think if it is there is 247 00:15:47,320 --> 00:15:50,680 Speaker 1: there is downside concern that that is building, and we 248 00:15:50,760 --> 00:15:54,080 Speaker 1: see that in hedges being placed, but not nearly to 249 00:15:54,160 --> 00:15:58,200 Speaker 1: the extent that we would expect given this environment and 250 00:15:58,240 --> 00:16:01,720 Speaker 1: given this event. So basically the market is not as 251 00:16:01,760 --> 00:16:04,440 Speaker 1: well prepared as it normally is for these kind of 252 00:16:04,440 --> 00:16:08,240 Speaker 1: downside events. And the second is, obviously, if you're looking 253 00:16:08,280 --> 00:16:11,960 Speaker 1: to place a bet to the downside yourself buying put 254 00:16:11,960 --> 00:16:15,760 Speaker 1: options something straightforward where you're protecting against that downside. It's 255 00:16:15,760 --> 00:16:20,000 Speaker 1: still relatively inexpensive because the option market prices for that 256 00:16:20,120 --> 00:16:22,560 Speaker 1: type of protection has declined in the last few weeks 257 00:16:22,560 --> 00:16:25,000 Speaker 1: and has made it cheaper to do that. If I 258 00:16:25,040 --> 00:16:27,880 Speaker 1: look at soap, Proctor and Gamble is a proxy for 259 00:16:28,000 --> 00:16:32,320 Speaker 1: boring within blue chip multinationals. It's a wonderful log linear 260 00:16:32,400 --> 00:16:36,040 Speaker 1: trend for ten years and then like a moonshot P 261 00:16:36,200 --> 00:16:38,680 Speaker 1: and G goes straight up. They've got a three to 262 00:16:38,800 --> 00:16:42,280 Speaker 1: at best four percent dividend growth, yet they're trading at 263 00:16:42,280 --> 00:16:49,520 Speaker 1: a twenty seven multiple. Is that in the textbooks you studied? Yeah, 264 00:16:49,720 --> 00:16:52,320 Speaker 1: you know, look the look a lot of things that 265 00:16:52,360 --> 00:16:54,480 Speaker 1: have happened in this market I have learned are not 266 00:16:54,600 --> 00:16:57,000 Speaker 1: in the textbooks I studies. One of my professors was 267 00:16:57,120 --> 00:17:00,520 Speaker 1: Burton Malkiel, who wrote A random walk. There's pretty good 268 00:17:00,560 --> 00:17:03,960 Speaker 1: and you know he's really good, but you know, he 269 00:17:04,119 --> 00:17:06,919 Speaker 1: taught us about the efficient market hypothesis at for incident 270 00:17:06,960 --> 00:17:08,720 Speaker 1: and then I got into Wall Street and I said, 271 00:17:09,160 --> 00:17:13,440 Speaker 1: works aren't that efficient unfortunately, So yeah, I mean, John, 272 00:17:13,480 --> 00:17:16,520 Speaker 1: this is a really important observation by miss Silverman. You're 273 00:17:16,560 --> 00:17:20,480 Speaker 1: the idea, the idea. We forget John about where these 274 00:17:20,560 --> 00:17:23,760 Speaker 1: valuations are. And yes, some have maximum revenue growth or 275 00:17:23,800 --> 00:17:27,639 Speaker 1: maybe apple profitability, but you know, boring stuff, John, whether 276 00:17:27,680 --> 00:17:30,400 Speaker 1: in London or in America, is just priced the perfection. 277 00:17:30,400 --> 00:17:33,600 Speaker 1: Now that we've never seen this, well, there's a reason 278 00:17:33,640 --> 00:17:35,199 Speaker 1: for that with some of these brands. And later or 279 00:17:35,200 --> 00:17:37,639 Speaker 1: now you can speak to this. It was always about 280 00:17:37,680 --> 00:17:41,000 Speaker 1: the brands that you recognize and everyone just rants towards them. 281 00:17:41,160 --> 00:17:42,879 Speaker 1: In the pandemic. I caught it with PepsiCo and the 282 00:17:42,880 --> 00:17:44,679 Speaker 1: CFO about this a number of months ago, and that 283 00:17:44,760 --> 00:17:48,199 Speaker 1: was really the story brand recognition and a gravitation of 284 00:17:48,200 --> 00:17:50,920 Speaker 1: the consumers towards the brands they recognize at a time 285 00:17:50,920 --> 00:17:54,040 Speaker 1: of stress. How sticky that demand is I think we're 286 00:17:54,040 --> 00:17:56,440 Speaker 1: about to find out. Lisa, Yeah, And I really find 287 00:17:56,440 --> 00:17:59,440 Speaker 1: it fascinating a social study in terms of how people 288 00:17:59,480 --> 00:18:03,600 Speaker 1: respond to a pandemic. Lisole sales absolutely on fire, and 289 00:18:03,640 --> 00:18:06,719 Speaker 1: the company that makes them Banks Bank is sir. It's 290 00:18:06,720 --> 00:18:09,119 Speaker 1: sort of a similar story to what we saw with 291 00:18:09,200 --> 00:18:12,760 Speaker 1: Procter and gamble up. More people want clean homes, and 292 00:18:12,760 --> 00:18:15,639 Speaker 1: they're going to be obsessive about it. I mean with 293 00:18:15,720 --> 00:18:18,240 Speaker 1: Silverman of obviously grand to catch up. I mean, thanks 294 00:18:18,240 --> 00:18:19,879 Speaker 1: for being with us a couple of weeks away from 295 00:18:19,880 --> 00:18:25,280 Speaker 1: an election. There's any number of ways to go with 296 00:18:25,359 --> 00:18:29,480 Speaker 1: Isaac Boltanski's a compass point, rights acute, cute notes on 297 00:18:29,600 --> 00:18:32,320 Speaker 1: what's going on. I do want to focus Isaac on 298 00:18:32,440 --> 00:18:36,600 Speaker 1: something that's in every interview, which is the outcome of 299 00:18:36,760 --> 00:18:41,120 Speaker 1: a blue president but a continued red Senate. What will 300 00:18:41,240 --> 00:18:47,280 Speaker 1: Gridlock look like under a Biden presidency? So I think 301 00:18:47,400 --> 00:18:50,919 Speaker 1: there are two main points to make it. That Number 302 00:18:50,920 --> 00:18:55,040 Speaker 1: one is you would be far more difficult for President 303 00:18:55,119 --> 00:18:59,240 Speaker 1: Biden in that scenario to actually get his nominees through 304 00:18:59,520 --> 00:19:02,679 Speaker 1: a republic the concentate, and so a lot of the 305 00:19:02,720 --> 00:19:06,640 Speaker 1: regulatory agenda that my clients have focused on, whether that's energy, 306 00:19:06,760 --> 00:19:11,040 Speaker 1: the environment, healthcare, financial services. A lot of their fears 307 00:19:11,080 --> 00:19:14,080 Speaker 1: around that would not materialize simply because it would be 308 00:19:14,080 --> 00:19:17,560 Speaker 1: difficult to get those personnel in the second point is 309 00:19:17,600 --> 00:19:20,320 Speaker 1: really about what we've all been focused on this morning, 310 00:19:20,359 --> 00:19:24,359 Speaker 1: which is taxes and stimulus, And in that scenario with 311 00:19:24,640 --> 00:19:28,520 Speaker 1: a Biden White House and a Republican Senate, investors should 312 00:19:28,520 --> 00:19:32,240 Speaker 1: expect any stimulus to be smaller than the base case 313 00:19:32,359 --> 00:19:36,240 Speaker 1: right now, and for the tax increases that the former 314 00:19:36,320 --> 00:19:41,360 Speaker 1: Vice president has proposed to not come to pass. So 315 00:19:41,680 --> 00:19:45,000 Speaker 1: aside from the taxes, there's also this regulatory overhang that 316 00:19:45,080 --> 00:19:48,840 Speaker 1: was sort of highlighted this morning with this headline that 317 00:19:49,000 --> 00:19:52,120 Speaker 1: the antitrust suit against Google will go forward, a long 318 00:19:52,160 --> 00:19:56,200 Speaker 1: anticipated one. Isaac, how much political will is there among 319 00:19:56,280 --> 00:19:59,399 Speaker 1: Democrats if there is a blue wave to engage in 320 00:19:59,520 --> 00:20:03,919 Speaker 1: true regulatory scrutiny of big tech that could affect their earnings. 321 00:20:05,680 --> 00:20:08,919 Speaker 1: I gotta tell you, the big tech narrative reminds me 322 00:20:08,960 --> 00:20:12,639 Speaker 1: of infrastructure and that everyone in d C agrees that 323 00:20:12,840 --> 00:20:16,160 Speaker 1: something should be done, but once you start to drill down, 324 00:20:16,320 --> 00:20:19,560 Speaker 1: there's very little agreement in what should actually be done. 325 00:20:19,920 --> 00:20:23,000 Speaker 1: So in big tech, just look at the different issue sets. 326 00:20:23,359 --> 00:20:28,720 Speaker 1: Are we focusing on content, competition, data, privacy, the numerous 327 00:20:28,760 --> 00:20:31,240 Speaker 1: different avenues to follow, and then you've got to add 328 00:20:31,240 --> 00:20:33,600 Speaker 1: on top there are just too many cooks in the kitchen, 329 00:20:34,040 --> 00:20:36,480 Speaker 1: is at the d J, the FTC, the state, A 330 00:20:36,640 --> 00:20:40,160 Speaker 1: g S, Congress in a blue wave scenario. So look, 331 00:20:40,160 --> 00:20:43,240 Speaker 1: there will be continued headline pressure, but when you actually 332 00:20:43,320 --> 00:20:46,720 Speaker 1: drill down and you use the benefit of history, whether 333 00:20:46,760 --> 00:20:50,840 Speaker 1: it's Microsoft, the Bells, or IBM, you see that there 334 00:20:50,840 --> 00:20:53,800 Speaker 1: really aren't that many tools at the moment to quote 335 00:20:53,880 --> 00:20:57,320 Speaker 1: unquote break up these companies. So the headlines will persist, 336 00:20:57,800 --> 00:21:00,800 Speaker 1: but in terms of practical impact, I think very limited, 337 00:21:02,119 --> 00:21:04,240 Speaker 1: and in the end, the market addresses the issue. We 338 00:21:04,280 --> 00:21:08,159 Speaker 1: saw that with Microsoft, Democrats talking about anti trust, Republicans 339 00:21:08,200 --> 00:21:11,199 Speaker 1: talking about censorship. Let me just talk about the Senate 340 00:21:11,200 --> 00:21:14,240 Speaker 1: and the composition of ISAAC if it does turn democrats, 341 00:21:14,280 --> 00:21:17,200 Speaker 1: just how moderate will that Senate be and how much 342 00:21:17,200 --> 00:21:19,560 Speaker 1: of a radical progressive agenda if it was to go 343 00:21:19,640 --> 00:21:22,720 Speaker 1: through the House, could actually pass in a democratic lets Senate. 344 00:21:24,440 --> 00:21:27,240 Speaker 1: So this is something that I've been highlighting the clients. 345 00:21:27,280 --> 00:21:31,720 Speaker 1: About fifty or so of Biden supporters say they support 346 00:21:32,160 --> 00:21:35,480 Speaker 1: Biden because he's not Trump and to me, that suggests 347 00:21:35,480 --> 00:21:39,199 Speaker 1: that the Democratic Coalition could have some fractures if they 348 00:21:39,280 --> 00:21:41,080 Speaker 1: end up winning, and we will have a far more 349 00:21:41,119 --> 00:21:43,960 Speaker 1: progressive House in terms of policy then we will have 350 00:21:44,040 --> 00:21:46,440 Speaker 1: in the Senate. And this is important because there are 351 00:21:46,480 --> 00:21:51,199 Speaker 1: going to be at least three, possibly even five centrist 352 00:21:51,520 --> 00:21:55,159 Speaker 1: red state Democrats in the Senate from states like Montana, 353 00:21:55,359 --> 00:22:00,000 Speaker 1: West Virginia, Arizona, and I think that contingent will push 354 00:22:00,119 --> 00:22:04,600 Speaker 1: back on the most aggressive and progressive policies that come 355 00:22:04,600 --> 00:22:08,199 Speaker 1: out of the House. And so that's what informs some 356 00:22:08,359 --> 00:22:10,120 Speaker 1: of my views when it comes to a blue wave 357 00:22:10,240 --> 00:22:12,480 Speaker 1: in Texas. You mean is I think I happen to 358 00:22:12,480 --> 00:22:14,919 Speaker 1: think you're you're absolutely dead on here about the power 359 00:22:14,960 --> 00:22:18,320 Speaker 1: of the centrist Democrats greatly underrated. And it goes back 360 00:22:18,320 --> 00:22:21,639 Speaker 1: to Hubert Humphrey and Scoop Jackson from another time and place. 361 00:22:21,800 --> 00:22:23,840 Speaker 1: How does that set up for two thousand twenty two? 362 00:22:24,200 --> 00:22:27,359 Speaker 1: Because the race for two thousand twenty two begins that 363 00:22:27,480 --> 00:22:31,880 Speaker 1: Wednesday in November, doesn't it. In some ways, we're we're 364 00:22:31,920 --> 00:22:34,760 Speaker 1: gearing up for it right now. And so look to 365 00:22:34,840 --> 00:22:36,680 Speaker 1: your point, it's not just going to be the ones 366 00:22:36,760 --> 00:22:39,560 Speaker 1: that are there, it's also going to be in the 367 00:22:39,600 --> 00:22:43,000 Speaker 1: fact that their ranks will be bolstered by some of 368 00:22:43,080 --> 00:22:46,720 Speaker 1: these more purple states, whether that's North Carolina or South 369 00:22:46,720 --> 00:22:50,200 Speaker 1: Carolina or made so their ranks will grow furthermore when 370 00:22:50,200 --> 00:22:53,320 Speaker 1: we look out too, they're going to be some open 371 00:22:53,480 --> 00:22:58,359 Speaker 1: seat races in again purple states like Pennsylvania and like 372 00:22:58,480 --> 00:23:02,320 Speaker 1: North Carolina, and I think that will inform Schumer's thinking 373 00:23:02,320 --> 00:23:04,760 Speaker 1: in terms of policy making and trying to attack more 374 00:23:04,840 --> 00:23:08,960 Speaker 1: towards the center. It just quickly in the time we 375 00:23:09,000 --> 00:23:12,240 Speaker 1: have left. Does the debate happen on Thursday? Given the 376 00:23:12,280 --> 00:23:15,960 Speaker 1: noise around it, still you assume it still happens. Well, 377 00:23:16,040 --> 00:23:17,800 Speaker 1: I think we're going to have a debate. I think 378 00:23:17,840 --> 00:23:21,679 Speaker 1: that the two minute muting function will be interesting, But 379 00:23:22,200 --> 00:23:25,360 Speaker 1: the remainder of those fifteen minute segments, beyond those two 380 00:23:25,440 --> 00:23:31,800 Speaker 1: two minute mute periods, it's still going to be the messy, convoluted, 381 00:23:32,480 --> 00:23:35,600 Speaker 1: just deeply concerning mess that we saw the first time. 382 00:23:35,640 --> 00:23:38,080 Speaker 1: So yes, I think it happens. Yes, I think it'll 383 00:23:38,119 --> 00:23:40,440 Speaker 1: be messy, And no, I don't think it's really going 384 00:23:40,480 --> 00:23:43,640 Speaker 1: to impact the election because most voters have already made 385 00:23:43,680 --> 00:23:47,320 Speaker 1: up their minds. And isn't that the point? Isaac Boltanski 386 00:23:47,520 --> 00:23:50,879 Speaker 1: Compass Point Research, Managing director for Policy Research, Isaac right 387 00:23:50,920 --> 00:23:58,720 Speaker 1: to catch up, sir, right owver this John Gull and 388 00:23:58,840 --> 00:24:01,879 Speaker 1: what's wonderful about and galub Is if you were to 389 00:24:01,920 --> 00:24:06,040 Speaker 1: see his notes in Credit suitees, there's great, great sector specificity. 390 00:24:06,080 --> 00:24:08,080 Speaker 1: We haven't done that in a while with all the 391 00:24:08,119 --> 00:24:10,560 Speaker 1: distractions that we have. Let's go there right now, Jonathan 392 00:24:10,960 --> 00:24:14,760 Speaker 1: Credit Swee, chief US equity strategists. What is the sector 393 00:24:14,840 --> 00:24:19,640 Speaker 1: distinction right now? John? What is the research topic of 394 00:24:19,640 --> 00:24:25,040 Speaker 1: those fancy xcel spreadsheets? You do? Well? If I if 395 00:24:25,040 --> 00:24:27,119 Speaker 1: I kind of summarize it into four what I like 396 00:24:27,160 --> 00:24:31,240 Speaker 1: to call super sexuality radio companies. The company is the 397 00:24:31,359 --> 00:24:35,679 Speaker 1: big the broadly defined tech universe, which would include you know, 398 00:24:35,800 --> 00:24:38,399 Speaker 1: Google and Facebook, which are really officially part of the 399 00:24:38,400 --> 00:24:41,639 Speaker 1: communications sector. But if you include all that together, the 400 00:24:41,720 --> 00:24:45,000 Speaker 1: real key is that they are delivering better earnings in 401 00:24:46,320 --> 00:24:51,040 Speaker 1: than they did in seventy five or more of the time. 402 00:24:51,480 --> 00:24:53,800 Speaker 1: And that is the number one driver of socks. So 403 00:24:53,840 --> 00:24:57,720 Speaker 1: when everybody is looking at the FED the election as 404 00:24:57,720 --> 00:25:02,320 Speaker 1: a driver, look at which company is are totally untouched 405 00:25:02,320 --> 00:25:04,679 Speaker 1: by this down turn and those are the winners. And 406 00:25:04,720 --> 00:25:06,840 Speaker 1: that's what you're saying, John, I looked at Procter and 407 00:25:06,840 --> 00:25:11,119 Speaker 1: Gamble today, three five year dividend growth. That's terrible, folks, 408 00:25:11,600 --> 00:25:17,320 Speaker 1: And they got a multiple. How is that? Gosh? I mean? 409 00:25:17,520 --> 00:25:19,720 Speaker 1: And and I can't speak to practicing company. But the 410 00:25:19,760 --> 00:25:22,119 Speaker 1: real but the real story here, Thomas, is that the 411 00:25:22,480 --> 00:25:26,600 Speaker 1: discount rate is really low. Or putting it put it alternatively, 412 00:25:27,000 --> 00:25:30,120 Speaker 1: the look at whether it's Procter and Gamble or any 413 00:25:30,160 --> 00:25:35,080 Speaker 1: other companies in the consumer staples space, the yield you're 414 00:25:35,080 --> 00:25:39,040 Speaker 1: getting on those is so much higher than a treasury yield, 415 00:25:39,080 --> 00:25:42,560 Speaker 1: which is as a yield under eight basis points, that 416 00:25:42,680 --> 00:25:44,879 Speaker 1: they're just begging to be bought. And I think that 417 00:25:44,920 --> 00:25:47,800 Speaker 1: what's going to happen here is that the two categories 418 00:25:47,880 --> 00:25:51,280 Speaker 1: took about different sectors. The the non cyclical part of 419 00:25:51,280 --> 00:25:54,280 Speaker 1: the market, which is like healthcare and staples, or the 420 00:25:54,320 --> 00:25:56,840 Speaker 1: tech related part of the market are going to trade 421 00:25:57,000 --> 00:26:01,400 Speaker 1: at really really high multiples because of the interest rate 422 00:26:01,480 --> 00:26:03,880 Speaker 1: in addition to their own business process. That's right where 423 00:26:03,880 --> 00:26:06,440 Speaker 1: I wanted to go, Jonathan. How much does this entire 424 00:26:06,520 --> 00:26:10,280 Speaker 1: call hinge on benchmark rates, tenure treasury yields staying where 425 00:26:10,280 --> 00:26:14,280 Speaker 1: they are going lower? Um? I don't. First of all, 426 00:26:14,440 --> 00:26:16,520 Speaker 1: the tenure treasure yeld. I don't think it's going to 427 00:26:16,520 --> 00:26:18,560 Speaker 1: go lower, and in the near term, if it picks up, 428 00:26:18,600 --> 00:26:21,359 Speaker 1: it'll be a sign of some economic health. But but 429 00:26:21,520 --> 00:26:24,879 Speaker 1: I think with interest rates this low, you're talking about 430 00:26:24,960 --> 00:26:27,320 Speaker 1: pe multiples on the market that are going to probably 431 00:26:27,359 --> 00:26:30,600 Speaker 1: average in the mid twenties for the next decade, not 432 00:26:30,720 --> 00:26:33,480 Speaker 1: for the next six months. And um, and I think 433 00:26:33,600 --> 00:26:37,919 Speaker 1: that people aren't really haven't really adjusted. Thinking historically a 434 00:26:38,000 --> 00:26:42,240 Speaker 1: fifteen multiple first for for a stock is normal, and 435 00:26:42,280 --> 00:26:44,600 Speaker 1: now we're gonna be trading at much much higher levels 436 00:26:44,640 --> 00:26:47,320 Speaker 1: for a persistent throughout the time. Okay, right now, tenure 437 00:26:47,320 --> 00:26:49,920 Speaker 1: treasure yields under eight tents of a percentage point. I'm 438 00:26:49,920 --> 00:26:53,920 Speaker 1: wondering at what point does the yield rise to high 439 00:26:54,040 --> 00:26:59,760 Speaker 1: enough level that it's stymies this call. Um, you know, 440 00:27:00,000 --> 00:27:03,520 Speaker 1: I you would have to get interest rates back into 441 00:27:03,520 --> 00:27:06,359 Speaker 1: the mid ones or or you know, if you have 442 00:27:06,520 --> 00:27:09,840 Speaker 1: an interest rate even below two never mind you that 443 00:27:09,880 --> 00:27:12,600 Speaker 1: sounds like an incredible number. But we started the year 444 00:27:12,640 --> 00:27:16,359 Speaker 1: at one point nine and um, we're so much for 445 00:27:16,520 --> 00:27:18,320 Speaker 1: you know, so far below that. But if you even 446 00:27:18,359 --> 00:27:20,639 Speaker 1: got back towards where we were at the beginning of 447 00:27:20,640 --> 00:27:25,800 Speaker 1: the year, it's still supports super high multiples in UM 448 00:27:25,800 --> 00:27:29,760 Speaker 1: in areas like staples and healthcare and tech related companies. 449 00:27:30,080 --> 00:27:34,439 Speaker 1: And so I don't see a near term pick up 450 00:27:34,520 --> 00:27:38,679 Speaker 1: and interest rates as a threat to valuations or the 451 00:27:39,280 --> 00:27:41,200 Speaker 1: you know, the sustainability of the returns you've had in 452 00:27:41,240 --> 00:27:42,919 Speaker 1: these kind of stocks. What do you say to the 453 00:27:42,960 --> 00:27:45,879 Speaker 1: idea that the consensus trade right now is the election 454 00:27:45,920 --> 00:27:47,840 Speaker 1: will be just fine, and you'll get a blue wave 455 00:27:47,920 --> 00:27:50,240 Speaker 1: and there'll be a great fiscal support bill and everybody 456 00:27:50,240 --> 00:27:52,439 Speaker 1: will be happy and hold hands and say kumbaya in 457 00:27:52,440 --> 00:27:55,359 Speaker 1: the economy will get back on track, and stocks will soar. 458 00:27:55,680 --> 00:27:58,800 Speaker 1: That's the consensus right now. Do you buy it? I don't. 459 00:27:58,840 --> 00:28:01,439 Speaker 1: I don't not buy I do think that there's a 460 00:28:01,520 --> 00:28:05,560 Speaker 1: near term risk that that people are are missing here UM. 461 00:28:05,640 --> 00:28:08,240 Speaker 1: If we're not, it doesn't look like the chances are 462 00:28:08,280 --> 00:28:11,760 Speaker 1: we're not going to get a simulus bill which is 463 00:28:11,800 --> 00:28:15,720 Speaker 1: going to support UM small businesses and people who are 464 00:28:15,760 --> 00:28:20,719 Speaker 1: unemployed until after the new president is sworn in. And 465 00:28:20,760 --> 00:28:22,960 Speaker 1: that means that people who are unemployed or have small 466 00:28:22,960 --> 00:28:25,760 Speaker 1: businesses depend on these government checks are not going to 467 00:28:25,960 --> 00:28:31,040 Speaker 1: see that until February, maybe even March. If that happens, 468 00:28:31,200 --> 00:28:33,040 Speaker 1: I just think that you're going to have a pick 469 00:28:33,160 --> 00:28:36,199 Speaker 1: up in the number of individuals and small businesses that 470 00:28:36,240 --> 00:28:39,560 Speaker 1: are are gonna be declaring bankruptcy or not making loan payments. 471 00:28:39,840 --> 00:28:41,920 Speaker 1: And I think that there's some near term risk in 472 00:28:41,920 --> 00:28:44,400 Speaker 1: the market. And I'll tell you that that Trump is 473 00:28:44,400 --> 00:28:47,680 Speaker 1: going to borrow money like crazy and stimulate. Biden is 474 00:28:47,720 --> 00:28:51,080 Speaker 1: going to borrow money like crazy and stimulate. UM. So 475 00:28:51,160 --> 00:28:53,280 Speaker 1: I don't think that the candidates are as big a 476 00:28:53,320 --> 00:28:55,920 Speaker 1: difference UM as we think, what are the two things 477 00:28:55,960 --> 00:28:58,480 Speaker 1: that matter making sure that we have currently in the 478 00:28:58,560 --> 00:29:00,920 Speaker 1: near that we get through this next were months. And 479 00:29:01,000 --> 00:29:03,840 Speaker 1: the second thing is this pickup in COVID really could 480 00:29:04,080 --> 00:29:07,600 Speaker 1: um could derail things. But COVID and the stimulus check 481 00:29:07,840 --> 00:29:10,480 Speaker 1: is the stimulus program in the next four months. It's 482 00:29:10,560 --> 00:29:14,200 Speaker 1: far more important than the election. I've got the chart 483 00:29:14,280 --> 00:29:17,960 Speaker 1: up of sp X center and force and the bottom 484 00:29:18,040 --> 00:29:21,800 Speaker 1: line is since two thousand sixteen, before the Trump election, 485 00:29:21,880 --> 00:29:25,960 Speaker 1: but certainly ascribed to the Trump years, is a linear 486 00:29:26,000 --> 00:29:28,800 Speaker 1: function of a great bull market. There was a pause 487 00:29:28,840 --> 00:29:31,560 Speaker 1: in the fourth quarter of eighteen. There was a pause 488 00:29:31,560 --> 00:29:35,720 Speaker 1: in the shock of this natural disaster. But we're in trend. 489 00:29:36,000 --> 00:29:40,040 Speaker 1: Are we still in a bull market? I think that 490 00:29:40,080 --> 00:29:43,360 Speaker 1: we probably are. But but if you look Tom at 491 00:29:43,600 --> 00:29:45,920 Speaker 1: what's in the market you're talking about, you know, the 492 00:29:45,920 --> 00:29:49,520 Speaker 1: focus we have on on sectors. The SMP is a living, 493 00:29:49,600 --> 00:29:52,520 Speaker 1: breathing thing. It's not the same thing over time. Um 494 00:29:54,120 --> 00:29:57,160 Speaker 1: of the SMP right now is tech related. If you 495 00:29:57,280 --> 00:30:01,240 Speaker 1: add healthcare as kind of intellectual pretty as well, more 496 00:30:01,280 --> 00:30:04,760 Speaker 1: than half of the SMP is intellectual property companies. Well 497 00:30:04,800 --> 00:30:07,600 Speaker 1: should that be a surprise there? Am I right? That 498 00:30:07,680 --> 00:30:11,120 Speaker 1: they are displaying the most persistent revenue growth and persistent 499 00:30:11,240 --> 00:30:15,440 Speaker 1: cash flow and and the highest margins and the lowest 500 00:30:15,520 --> 00:30:18,840 Speaker 1: levels of debt and the highest return on equity. Now, 501 00:30:18,840 --> 00:30:21,320 Speaker 1: if you compare that, though, Tom and you talk about 502 00:30:21,320 --> 00:30:23,280 Speaker 1: the market, but there's not one market. If you compare 503 00:30:23,360 --> 00:30:27,560 Speaker 1: this to European stocks, or global stocks outside of North America, 504 00:30:27,960 --> 00:30:31,480 Speaker 1: or small cap stocks or value stocks, you're not seeing 505 00:30:31,520 --> 00:30:34,440 Speaker 1: something that looks at all like this. The the SMP, 506 00:30:35,200 --> 00:30:38,479 Speaker 1: or really more more importantly, the growth stocks within the 507 00:30:38,600 --> 00:30:42,440 Speaker 1: SMP don't look like the benchmark, but they are what's 508 00:30:42,520 --> 00:30:45,280 Speaker 1: driving the stock market. And so you really have to 509 00:30:45,320 --> 00:30:50,040 Speaker 1: find where in the market those opportunities, uh, those opportunities lie, 510 00:30:50,200 --> 00:30:52,040 Speaker 1: and folks to take it down on this day of 511 00:30:52,080 --> 00:30:57,400 Speaker 1: the Google lawsuit. I'm gonna sum up Apple, Microsoft, Amazon, Facebook, 512 00:30:57,480 --> 00:31:10,240 Speaker 1: and the double alphabets through five sixty two three is 513 00:31:10,240 --> 00:31:16,480 Speaker 1: those tech stocks above Berkshire Hathaway. And that's extraordinary concentration. John, 514 00:31:16,640 --> 00:31:19,000 Speaker 1: How do you play that you don't sell out of those? 515 00:31:19,120 --> 00:31:21,320 Speaker 1: What do you do? You you take fresh cash and 516 00:31:21,360 --> 00:31:25,200 Speaker 1: position away from those. Well, Tommy, first you have to 517 00:31:25,200 --> 00:31:30,600 Speaker 1: ask why are they doing well? They're delivering much better Um, 518 00:31:31,240 --> 00:31:35,120 Speaker 1: they're delivering better profits and so. And while they're a 519 00:31:35,160 --> 00:31:39,000 Speaker 1: little bit less than twenty of the markets earnings, Um, 520 00:31:39,080 --> 00:31:42,400 Speaker 1: they're really disproportionately um, you know, strong in terms of 521 00:31:42,440 --> 00:31:45,960 Speaker 1: earnings and profits and profit and like. Um. I mean, 522 00:31:45,960 --> 00:31:47,960 Speaker 1: we looked at we did an interesting analyst of time. 523 00:31:48,000 --> 00:31:52,440 Speaker 1: We looked at which characteristics are winning in the market. 524 00:31:52,480 --> 00:31:55,240 Speaker 1: So is there something about these individual stocks or is 525 00:31:55,280 --> 00:31:58,200 Speaker 1: it like, are they just in the right place? Okay? 526 00:31:58,320 --> 00:32:02,320 Speaker 1: Sales growth number one. Number two is high profit margins. 527 00:32:02,520 --> 00:32:05,920 Speaker 1: Number three is low debt. And if you look at 528 00:32:05,960 --> 00:32:09,160 Speaker 1: each of those five companies, they took all three boxes. 529 00:32:09,240 --> 00:32:11,720 Speaker 1: If you took the whole SMP five hundred and say, 530 00:32:11,880 --> 00:32:14,280 Speaker 1: show me companies that are in the top ten percent 531 00:32:14,880 --> 00:32:18,840 Speaker 1: on sales growth, high profit margins and low debt would 532 00:32:18,920 --> 00:32:21,280 Speaker 1: all be doing it. So can you position Russell two 533 00:32:21,360 --> 00:32:25,920 Speaker 1: thousand for those attributes and sift Russell two thousand forty 534 00:32:25,960 --> 00:32:29,640 Speaker 1: two John Gallup stocks? You surely can. As a matter 535 00:32:29,640 --> 00:32:32,560 Speaker 1: of fact, yesterday we took in a universe that doesn't 536 00:32:32,560 --> 00:32:34,360 Speaker 1: look at what we did this for non US socks. 537 00:32:34,440 --> 00:32:37,960 Speaker 1: Yesterday we published a list of thirty companies and we said, 538 00:32:38,000 --> 00:32:39,800 Speaker 1: I want to go and find global companies with the 539 00:32:39,840 --> 00:32:42,760 Speaker 1: exact same characteristics that I can give you one name. 540 00:32:42,880 --> 00:32:47,320 Speaker 1: I know you can't. I'll tell I'll tell you what people. 541 00:32:47,400 --> 00:32:50,600 Speaker 1: If people email me, I will I will go if 542 00:32:50,600 --> 00:32:55,200 Speaker 1: they if they send me an email on Bloomberg never again, 543 00:32:56,080 --> 00:32:58,480 Speaker 1: I'll send up a copy of the report. But you 544 00:32:58,520 --> 00:33:00,680 Speaker 1: know the problem also, by the way, with the small 545 00:33:00,760 --> 00:33:04,240 Speaker 1: kept universe, there's a huge number of companies that are 546 00:33:04,240 --> 00:33:07,120 Speaker 1: not profitable or have really really weak margins. So can 547 00:33:07,160 --> 00:33:10,480 Speaker 1: you find those names? Yes, but there's just there's just 548 00:33:10,520 --> 00:33:13,280 Speaker 1: far fewer of Lisa jump in here, please, Well, there's 549 00:33:13,280 --> 00:33:15,840 Speaker 1: a theory I like that. Mike Wilson of Morgan Stanley, 550 00:33:15,840 --> 00:33:19,040 Speaker 1: he's been bull bo bo bo bull and now he's bearished. 551 00:33:19,360 --> 00:33:22,200 Speaker 1: He actually sees the big potential for a ten percent 552 00:33:22,280 --> 00:33:24,960 Speaker 1: pullback in the near term. Long term, he remains the 553 00:33:24,960 --> 00:33:29,200 Speaker 1: bull that he has been. You buy him at Yeah, 554 00:33:29,200 --> 00:33:31,160 Speaker 1: I don't know if I would. I mean, first of all, 555 00:33:31,160 --> 00:33:33,200 Speaker 1: we have at call between now and the end of 556 00:33:33,200 --> 00:33:36,320 Speaker 1: the year, um because of some of the these near 557 00:33:36,440 --> 00:33:39,560 Speaker 1: term risks that I was talking about UM around stimulus 558 00:33:39,600 --> 00:33:42,040 Speaker 1: and COVID like. But if you said to me, am 559 00:33:42,040 --> 00:33:44,680 Speaker 1: I really bullish looking between you know, through the election 560 00:33:44,920 --> 00:33:47,720 Speaker 1: towards the end of next year. Absolutely so, I don't 561 00:33:47,720 --> 00:33:49,480 Speaker 1: know exactly the nuance of his call, but the way 562 00:33:49,520 --> 00:33:52,240 Speaker 1: you've described it, I'm on the same page. John Gollubs, 563 00:33:52,240 --> 00:33:54,600 Speaker 1: thank you so much, greatly appreciate love the sector, work, 564 00:33:54,680 --> 00:34:02,200 Speaker 1: the acuity. They're really really especial joining us right now. 565 00:34:02,240 --> 00:34:06,640 Speaker 1: I'm with JOHNS. Hopkins Center for Health Security and really 566 00:34:06,720 --> 00:34:11,600 Speaker 1: quite expert at the world dynamics of global dynamics of 567 00:34:11,640 --> 00:34:15,960 Speaker 1: this pandemic. Yesterday I witnessed I got so upset with 568 00:34:16,239 --> 00:34:21,040 Speaker 1: my you know, faulty biological background, microbiology background, that I 569 00:34:21,120 --> 00:34:24,520 Speaker 1: put out photos of Saban and Salk and of people 570 00:34:24,680 --> 00:34:29,360 Speaker 1: in those polio cans from the nineteen fifties in the forties. 571 00:34:29,760 --> 00:34:33,759 Speaker 1: Is a president on the campaign Trail once again belittled 572 00:34:33,920 --> 00:34:37,840 Speaker 1: your world. How do we push back and say that 573 00:34:38,040 --> 00:34:42,320 Speaker 1: science matters. I think we just have to keep telling 574 00:34:42,360 --> 00:34:45,520 Speaker 1: people about how human life has improved because of science 575 00:34:45,520 --> 00:34:49,160 Speaker 1: and scientists, because of work buying Jonas Salt and Albert Saban, 576 00:34:49,440 --> 00:34:52,799 Speaker 1: because of work of people like Anthony Fauci. And I 577 00:34:52,800 --> 00:34:56,080 Speaker 1: think it's obvious to anybody that looks at the reason 578 00:34:56,120 --> 00:34:58,799 Speaker 1: why we have lifespans of seventies and eighties and then 579 00:34:58,880 --> 00:35:01,200 Speaker 1: looks back at the work that's science and medicine is done, 580 00:35:01,200 --> 00:35:03,920 Speaker 1: with vaccination, with public health. I don't think that this 581 00:35:04,000 --> 00:35:06,160 Speaker 1: is a disputable type of thing. And to hear the 582 00:35:06,200 --> 00:35:09,040 Speaker 1: President called Dr Faucier allude to him as being quote 583 00:35:09,080 --> 00:35:11,760 Speaker 1: unquote an idiot, really just shows that he has complete 584 00:35:11,840 --> 00:35:15,239 Speaker 1: envy for somebody like Dr Fauci, who has real credentials 585 00:35:15,239 --> 00:35:17,719 Speaker 1: and has a real track record and has expertise that 586 00:35:17,800 --> 00:35:20,239 Speaker 1: he will never gain. And I think that's that's that's 587 00:35:20,239 --> 00:35:22,239 Speaker 1: what we have to think about. This is very neholistic 588 00:35:22,280 --> 00:35:25,239 Speaker 1: to keep going after science and experts because it is 589 00:35:25,280 --> 00:35:27,640 Speaker 1: science that will get us through this pandemic. And it 590 00:35:27,680 --> 00:35:29,799 Speaker 1: has been the ignoring of science that has led to 591 00:35:29,800 --> 00:35:32,160 Speaker 1: over two deaths in the United States, So this is 592 00:35:32,200 --> 00:35:37,080 Speaker 1: really deplorable from the President. When we distribute a vaccine 593 00:35:37,120 --> 00:35:39,200 Speaker 1: and we know that the first one will not be 594 00:35:39,320 --> 00:35:42,480 Speaker 1: as efficacious as the second, the third, the fourth tranch, 595 00:35:42,800 --> 00:35:45,719 Speaker 1: we may need boosters like when we were kids, etcetera. 596 00:35:46,200 --> 00:35:49,759 Speaker 1: What should be the approach to give confidence on a 597 00:35:49,880 --> 00:35:55,120 Speaker 1: successful first vaccine. The approach is to make sure that 598 00:35:55,520 --> 00:35:59,560 Speaker 1: this whole process has been insulated from political considerations, that 599 00:35:59,640 --> 00:36:03,640 Speaker 1: this hasn't become hydroxy floricu or this doesn't become convalescent plasma. 600 00:36:03,880 --> 00:36:05,799 Speaker 1: That we know that the FDA is going through the 601 00:36:05,840 --> 00:36:08,560 Speaker 1: exact measures that they would for any other vaccine. And 602 00:36:08,600 --> 00:36:11,200 Speaker 1: it's going to be important also for professional societies like 603 00:36:11,239 --> 00:36:14,800 Speaker 1: the American Academy of Pediatrics, the Infectious Disease Society of America, 604 00:36:15,040 --> 00:36:17,960 Speaker 1: as well as people like Dr Fauci to really be 605 00:36:17,960 --> 00:36:21,480 Speaker 1: behind this vaccine and tell the American people very transparently 606 00:36:21,600 --> 00:36:23,799 Speaker 1: what the risks are, what the benefits are, so that 607 00:36:23,840 --> 00:36:27,000 Speaker 1: they have confidence, because if we don't get enough people vaccinated, 608 00:36:27,480 --> 00:36:30,320 Speaker 1: we are still going to be dealing with hospitals getting 609 00:36:30,600 --> 00:36:33,640 Speaker 1: patients that they can't handle and continue to have this 610 00:36:33,719 --> 00:36:36,480 Speaker 1: kind of limbo of this pan of pandemic control. So 611 00:36:36,520 --> 00:36:38,200 Speaker 1: we have to be very clear and do a lot 612 00:36:38,200 --> 00:36:40,680 Speaker 1: of public health detailing to the American public, because if 613 00:36:40,719 --> 00:36:42,440 Speaker 1: you go back to two thousand nine in H one 614 00:36:42,520 --> 00:36:46,040 Speaker 1: n one, during that pandemic, only about of Americans got 615 00:36:46,040 --> 00:36:48,719 Speaker 1: that vaccine. We can't have a failure like that. We 616 00:36:48,760 --> 00:36:50,919 Speaker 1: need to get a confidence in the public. In order 617 00:36:50,920 --> 00:36:52,319 Speaker 1: to do that, we've got to make sure that these 618 00:36:52,320 --> 00:36:55,239 Speaker 1: steps have actually been fallen followed, and I do think 619 00:36:55,239 --> 00:36:57,840 Speaker 1: the pharmaceutical company CEOs as well as months have slowly 620 00:36:57,880 --> 00:37:01,120 Speaker 1: from operation worst speed, have increase my confidence that this 621 00:37:01,120 --> 00:37:02,880 Speaker 1: will be something that doesn't get meddled with the way 622 00:37:02,960 --> 00:37:06,360 Speaker 1: hydroxy chloroquin did Dr ADULTA. In the meantime, as we 623 00:37:06,400 --> 00:37:09,800 Speaker 1: wait for a vaccine, any parent out there is juggling 624 00:37:09,960 --> 00:37:12,640 Speaker 1: whether we're going back to remote school, whether their kids 625 00:37:12,640 --> 00:37:14,759 Speaker 1: are going to see their friends. What is the appropriate 626 00:37:14,840 --> 00:37:18,560 Speaker 1: level of SoC social interaction and this matters frankly, especially 627 00:37:18,600 --> 00:37:21,440 Speaker 1: as an increasing number of kids feel isolated and depressed 628 00:37:21,560 --> 00:37:24,719 Speaker 1: and this affects their social development. What is the appropriate 629 00:37:24,800 --> 00:37:28,759 Speaker 1: level of contact at this point taking into consideration these 630 00:37:28,760 --> 00:37:31,080 Speaker 1: mental health issues at a time when a lot of 631 00:37:31,120 --> 00:37:34,360 Speaker 1: science experts are saying, hey, all of these small gatherings, 632 00:37:34,400 --> 00:37:39,480 Speaker 1: these these groups of plateates, they're not acceptable. Is this 633 00:37:39,520 --> 00:37:41,160 Speaker 1: is something that's a very hard question to answer, and 634 00:37:41,200 --> 00:37:42,799 Speaker 1: a lot of it has to do with your risk 635 00:37:42,840 --> 00:37:45,319 Speaker 1: tolerance and who in the household has risk factors for 636 00:37:45,440 --> 00:37:47,839 Speaker 1: severe disease. I do think that there is a real 637 00:37:47,840 --> 00:37:51,080 Speaker 1: psychosocial toll that this pandemic has been playing on children 638 00:37:51,080 --> 00:37:53,400 Speaker 1: who are unable to socialize, who are unable to have 639 00:37:53,480 --> 00:37:56,440 Speaker 1: in personal learning, and we have to prioritize that. Thankfully, 640 00:37:56,520 --> 00:37:59,480 Speaker 1: children still tend to be spared from the worst consequence 641 00:37:59,520 --> 00:38:02,120 Speaker 1: of this disease. They're not likely to be hospitalized, not 642 00:38:02,239 --> 00:38:04,560 Speaker 1: likely to die, and even the younger ones less than 643 00:38:04,560 --> 00:38:07,160 Speaker 1: sixth grade and below are probably less likely to spread it. 644 00:38:07,200 --> 00:38:10,080 Speaker 1: So I do think that children can socialize in small 645 00:38:10,080 --> 00:38:12,680 Speaker 1: groups with with the caveat that you're making sure that 646 00:38:12,719 --> 00:38:15,279 Speaker 1: no one there is at least overtly sick, and that 647 00:38:15,400 --> 00:38:17,920 Speaker 1: you take notice of the fact that you're going to 648 00:38:18,000 --> 00:38:19,480 Speaker 1: be at a little bit of a higher risk. But 649 00:38:19,520 --> 00:38:22,120 Speaker 1: I do think in some situations you have to look 650 00:38:22,160 --> 00:38:24,600 Speaker 1: at what the value is being pursued, and might in 651 00:38:24,719 --> 00:38:27,080 Speaker 1: social interaction is a real value and look at the 652 00:38:27,160 --> 00:38:28,719 Speaker 1: risk and it's gonna be a little bit different for 653 00:38:28,719 --> 00:38:30,520 Speaker 1: each person in each family, But I think that there 654 00:38:30,560 --> 00:38:32,719 Speaker 1: are ways to do this safely, and I do think 655 00:38:32,760 --> 00:38:35,600 Speaker 1: we have to prioritize getting this outbreak under control and 656 00:38:35,719 --> 00:38:37,960 Speaker 1: having schools open in person, because if we can have 657 00:38:38,280 --> 00:38:40,880 Speaker 1: fans and stadiums, we need to be able to have 658 00:38:40,960 --> 00:38:44,040 Speaker 1: children in schools talk to what we talk about the 659 00:38:44,080 --> 00:38:46,640 Speaker 1: economy and trying to address one issue often what happens 660 00:38:47,000 --> 00:38:49,560 Speaker 1: as we cause problems outswhere, And I appreciate before I 661 00:38:49,600 --> 00:38:52,200 Speaker 1: ask this question how challenging it is to explore with me, 662 00:38:52,480 --> 00:38:54,520 Speaker 1: But what are we learning about the medical issues we're 663 00:38:54,560 --> 00:38:58,160 Speaker 1: causing elsewhere as we try and tackle this specific one. 664 00:38:59,760 --> 00:39:03,840 Speaker 1: We definitely know that when hospitals were asked to stop 665 00:39:04,040 --> 00:39:06,719 Speaker 1: with their quote unquote elective procedures, and elective procedures is 666 00:39:06,760 --> 00:39:08,800 Speaker 1: kind of a bad word because people think cosmetic, but 667 00:39:08,880 --> 00:39:12,359 Speaker 1: elective means things like scheduled aortic valve surgery. And we 668 00:39:12,400 --> 00:39:14,480 Speaker 1: know that there's an ink that that all of those 669 00:39:14,560 --> 00:39:17,759 Speaker 1: other medical conditions did have increased morbidity and mortality. We 670 00:39:17,800 --> 00:39:21,400 Speaker 1: know vaccinations dropped during the height of the economic shutdowns. 671 00:39:21,600 --> 00:39:25,680 Speaker 1: We know that cancer chemotherapies were delayed. We know that 672 00:39:25,760 --> 00:39:29,600 Speaker 1: psychiatric care also kind of went through the cracks. Felt 673 00:39:29,600 --> 00:39:31,600 Speaker 1: everything fell through the cracks during that shutdown. So we 674 00:39:31,640 --> 00:39:34,120 Speaker 1: have to balance not not just balance it, but realize 675 00:39:34,120 --> 00:39:36,200 Speaker 1: that we have to think long term. It's just so 676 00:39:36,239 --> 00:39:38,960 Speaker 1: hard for policy makers in the middle of a crisis 677 00:39:39,120 --> 00:39:41,080 Speaker 1: to think long term, even though that's what they should 678 00:39:41,120 --> 00:39:44,480 Speaker 1: have been doing, knowing that we can't trade short term 679 00:39:44,600 --> 00:39:49,440 Speaker 1: benefits for COVID against long term uh, long term problems 680 00:39:49,440 --> 00:39:51,520 Speaker 1: with cancer and other diseases. So I do think that 681 00:39:51,600 --> 00:39:54,839 Speaker 1: this is something that people recognized, and that's why it's 682 00:39:54,840 --> 00:39:57,279 Speaker 1: so important that we have hospital capacity and that we 683 00:39:57,320 --> 00:40:00,640 Speaker 1: expand hospital capacity to make sure hospitals have an of resources, 684 00:40:00,680 --> 00:40:03,680 Speaker 1: because if they can't do their ordinary care for heart disease, 685 00:40:03,719 --> 00:40:07,680 Speaker 1: for cancer, for surgeries, for for pediatric and psychiatric care, 686 00:40:08,080 --> 00:40:10,399 Speaker 1: we're going to suffer long term consequences. And I think 687 00:40:10,400 --> 00:40:12,680 Speaker 1: that no one wants to make those same mistakes again. 688 00:40:14,560 --> 00:40:16,799 Speaker 1: Praise that you're exploring such a difficult issue. Olka, thank 689 00:40:16,840 --> 00:40:19,040 Speaker 1: you and me sit down to that of Jon's help Kins. 690 00:40:19,400 --> 00:40:23,600 Speaker 1: Thanks for listening to the Bloomberg Surveillance podcast. Subscribe and 691 00:40:23,640 --> 00:40:28,960 Speaker 1: listen to interviews on Apple Podcasts, SoundCloud, or whichever podcast 692 00:40:29,040 --> 00:40:33,280 Speaker 1: platform you prefer. I'm on Twitter at Tom Keane Before 693 00:40:33,280 --> 00:40:37,120 Speaker 1: the podcast, you can always catch us worldwide. I'm Bloomberg 694 00:40:37,200 --> 00:40:37,520 Speaker 1: Radio