Speaker 1: This is Bloomberg Business Week with Carol Masser and Jason
Speaker 1: Kelly from Bloomberg Radio. I'm Jason Kelly and I'm Carol Masser.
Speaker 1: Welcome to the weekend edition of Bloomberg Business Week. Over
Speaker 1: the next couple of hours, we're gonna bring you news
Speaker 1: of the week, insights from the magazine and more. And Jason,
Speaker 1: it was week working from home, although I did go
Speaker 1: to the office for the first time this week since March.
Speaker 1: So our world is slowly reopening with starts and stops,
Speaker 1: as we know, especially if you look at our schools
Speaker 1: and colleges and universities. We're going to talk about that.
Speaker 1: A lot of backtracking, as you know. But you also
Speaker 1: are back from vacation. You got on a plane. I
Speaker 1: got on a plane and came right back into quarantine.
Speaker 1: So a couple of steps forwards and a few steps back. Uh. Yeah,
Speaker 1: it's sort of an amazing world that we're living in
Speaker 1: right now. You can move around to a point, and
Speaker 1: we talked about all of that with so many of
Speaker 1: our guests across the show this week. What we've seen
Speaker 1: is the confluence of two pandemics. More House College President
Speaker 1: David Thomas, he talked to us about the dual crises
Speaker 1: facing this kind tree and why his school is going
Speaker 1: all online for the fall, plus how Carnival is navigating
Speaker 1: the financial waves caused by the pandemic. We begin with
Speaker 1: this week's issue, a double issue, the vaccine issue. Bloomberg
Speaker 1: News Markets and E t F reporter Claire Balantine and
Speaker 1: the editor of the magazine, Joel Webber, joined us to
Speaker 1: talk about Wall Street's view on what a vaccine could
Speaker 1: do to markets. Joe kicks it off. We put all
Speaker 1: of our muscle on into this vaccine issue double issue,
Speaker 1: and one of the things that you know is just
Speaker 1: uniquely Bloomberg I think, is is you know, bringing it
Speaker 1: back to the markets. And one of the questions that
Speaker 1: we sort of put to the equities team was sort
Speaker 1: of like, okay, well, if there is a vaccine at
Speaker 1: some point, um, what does that mean? What what what
Speaker 1: will that do for for markets? Would there be a
Speaker 1: bump or would that bump be short lived or or
Speaker 1: would there be no bump um? And that was sort
Speaker 1: of where we left it. It was just an open
Speaker 1: ended invite to the equities team, and Claire kind of
Speaker 1: picked that that up and and Claire like you came
Speaker 1: up with a couple of scenarios that UM, that people
Speaker 1: thought could be likely. What what were they? The first
Speaker 1: is sort of a new taper tantrum UM, with the
Speaker 1: idea that the stead which has really stepped in and
Speaker 1: helped UM stabilized markets, begins to slowly kind of draw back.
Speaker 1: That really worries people. And we see sort of the
Speaker 1: new taper tantrum UM, which would obviously be be very negative.
Speaker 1: UM could see stocks and bonds falling. UM. That's sort
Speaker 1: of you know, uh maybe worst case, what else could happen?
Speaker 1: So Claire, just let me interrupt if I can't remind
Speaker 1: us what a taper tantrum really is, because we've seen
Speaker 1: this before, and just remind us what that looks like
Speaker 1: to to an everyday investor, and not to be confused
Speaker 1: a temper tantrum that helped you with with some of
Speaker 1: our bosses or spouses or whatever, my two year old
Speaker 1: or you're a two year old. Well yeah, they have
Speaker 1: they have some similarities, true, some some fear um. You know,
Speaker 1: because the set has really supportive markets. You know what
Speaker 1: happens when they take away that helping hand, and a
Speaker 1: lot of it isn't driven by what has actually happened.
Speaker 1: It's more just the fear of that. UM. So in
Speaker 1: that case, could see stocks and bonds falling in tandem
Speaker 1: a possibility, you know, not definitely, not inevitable or anything
Speaker 1: like that. So what I think and I love number two, UM,
Speaker 1: because I feel like, if anything, the fet isn't going
Speaker 1: to rush away anytime soon. But talk to us a
Speaker 1: little bit about the second scenario here. Yeah, so we
Speaker 1: sort of um that came up with the phrase to
Speaker 1: call this the supercharge status quo. So this means that
Speaker 1: you know, a vaccine is successfully introduced, the markets very
Speaker 1: happy about that, and you know, market goes up um,
Speaker 1: and people are saying that that you know, could happen
Speaker 1: for obvious reasons, but also because the FED isn't gonna
Speaker 1: necessarily step away from these huge stimulus efforts right away. UM.
Speaker 1: A lot of it is because like what we saw
Speaker 1: with the Taper tan turn back in teen, it's very
Speaker 1: hard to undo this quantine of easing. So in that case,
Speaker 1: the market goes up. Also, everything just gets more expensive.
Speaker 1: And so behind door number three is what lea. Well,
Speaker 1: this is the idea that some of these value stocks
Speaker 1: that have really been beaten down in this UM post
Speaker 1: COVID world means that maybe those can start to do well.
Speaker 1: So some of those areas that have really UM been
Speaker 1: hurt hard, like the airlines, UM cyclicals, small caps, those
Speaker 1: could start to outperform UM. And that would be the
Speaker 1: case of a broad named market. You know, we've seen
Speaker 1: the tech stocks do well, but with a vaccine, that
Speaker 1: could be the gateway to many other sectors also doing well.
Speaker 1: And I gotta say, can I just you know, Jill,
Speaker 1: like you look at something like UM United is down
Speaker 1: this year, you know, when things start to get better,
Speaker 1: you know, these are the kinds of name times that
Speaker 1: ultimately will take off. I mean that in in theory,
Speaker 1: right in theory. The airline the airline industry is obviously
Speaker 1: one that I think a lot of people UM have
Speaker 1: focused on. And you know, I think Claire has written
Speaker 1: about the E T F jets, which has become this
Speaker 1: really interesting one of and it's just like basically a record,
Speaker 1: uh set a record for inflows because so many people
Speaker 1: were like trying to call the bottom. And then you know,
Speaker 1: even now though we you know, we still don't have
Speaker 1: a recovery, that is meaningful for that industry. So but
Speaker 1: you know, value, Claire, is something that gets kicked around
Speaker 1: a lot, is something that like, it's just this revival
Speaker 1: is always just around the corner. What why would have
Speaker 1: vaccine in particular help value stocks? Yeah, so value stocks,
Speaker 1: we're talking about shares that are sort of trading at
Speaker 1: low prices. Were their assets UM and so a lot
Speaker 1: of the UM has really been hurt by the fact that,
Speaker 1: you know, we've all been locked down and so you know,
Speaker 1: we can't go out to shopping malls and restaurants things
Speaker 1: like that. So some of these UM areas, with a vaccine,
Speaker 1: people might be able to to get out more to
Speaker 1: give small businesses UM their money, and that could help
Speaker 1: get things more back to a more normal economy. And
Speaker 1: that was Bloomberg Business Week editor Joel Webber joined with
Speaker 1: Claire Ballentine, author of what I thought was one of
Speaker 1: the most important stories this week, because it starts to
Speaker 1: answer the question, Carol, what is this next normal look
Speaker 1: like when it comes to the markets? Gotta say, getting
Speaker 1: back to normal? That would certainly be nice. You're listening
Speaker 1: to Bloomberg Business Week. Coming up, Jason, we head to
Speaker 1: your home state. That's right back to the A T.
Speaker 1: L We're going to hear from Morehouse College President David Thomas,
Speaker 1: why his school, world renowned, is going all online this fault,
Speaker 1: and what it's like to be in Atlanta right now
Speaker 1: facing these many crises. He has been ahead of the
Speaker 1: academic pack. This is Bloomberg. This is Bloomberg Business Week
Speaker 1: with Carol Masser and Jason Kelly from Bloomberg Radio. Welcome
Speaker 1: back to Bloomberg Business Week. This week, we're focusing a
Speaker 1: lot Carol on what it's like to get back to
Speaker 1: business and most notably back to school right and simply
Speaker 1: put Jason, it's not easy. One incredibly thoughtful voice on
Speaker 1: this is Morehouse College President David Thomas. We caught up
Speaker 1: with him in our own Bloomberg News higher education finance
Speaker 1: reporter Janet Lauren. Janet began by giving us the big picture.
Speaker 1: A lot of schools have sent kids home because of
Speaker 1: higher test rates of coronavirus. We saw on earlier this week,
Speaker 1: the University of North Carolina said students should go home
Speaker 1: because a lot of kids were testing positive. Notre Dame
Speaker 1: had eighties students test positive in one day, and they
Speaker 1: decided to pause in person activity for two weeks and
Speaker 1: see what happens in Michigan State said that they would
Speaker 1: they would not be having on campus program. Right, Yeah,
Speaker 1: that's our back draw. Let's bring in David Thomas. He's
Speaker 1: President Morehouse College. He joins us on the phone from
Speaker 1: Atlanta on this Wednesday long. Of course, as you just
Speaker 1: heard with Jenna Lauren, our higher education finance reporter, President Thomas,
Speaker 1: so nice to have you here with us. You know,
Speaker 1: there's a lot on the plate of our countries, colleges
Speaker 1: and universities, the virus, reopening, virtual learning, the cost of education, inequalities.
Speaker 1: What's top of mind for you right now? Well, top
Speaker 1: of top of minds for me is one making sure
Speaker 1: that the quality of what we offer online this semester
Speaker 1: far exceeds what we were able to do last semester,
Speaker 1: and that we're also able to create community in this
Speaker 1: virtual environment, because that's one of the things that draw
Speaker 1: students to more House College. UM, and so we've fired
Speaker 1: all of our faculty who are going to teach UH
Speaker 1: this semester to be certified in online education because one
Speaker 1: of the things we learned is that there's a difference
Speaker 1: between online education and remote instruction. Remote instruction is where
Speaker 1: you essentially do what you do in an in person classroom,
Speaker 1: you just being taked or delivering it on Zoom or
Speaker 1: some other video platform, whereas online education there's actually a
Speaker 1: pedagogy to it that makes it much more dynamics. So
Speaker 1: we've invested in that. And the other thing that you
Speaker 1: know keeps me awake at night is you know whether
Speaker 1: or not we'll be able to bring our students back
Speaker 1: for the spring semester given what we're seeing happen with
Speaker 1: the virus, in particular in the state of Georgia, where
Speaker 1: our positivity rates testing rates are in double digits right now. Well,
Speaker 1: you made the decision quite early on among colleges that
Speaker 1: you could not do in person because there was too
Speaker 1: much risk for everybody, not only the students but also
Speaker 1: the other people working on campus. Now other schools are
Speaker 1: seeing their decisions may not have been such a great
Speaker 1: idea to invite students onto campus, and they're having to
Speaker 1: pivot at a very late date when kids are already there.
Speaker 1: Can you talk about what went into your decision? Yeah,
Speaker 1: it was it was very um, very straightforward. We very
Speaker 1: early on decided that the number one priority for us
Speaker 1: would be keeping our students and our staff and faculty
Speaker 1: say from a health and wellness perspective, and then our
Speaker 1: second priority was ensuring the quality of what we could
Speaker 1: provide educationally. And the last, the third priority was what
Speaker 1: what's going to be the financial impact, because we have
Speaker 1: to stay viable financially, and being clear about that made
Speaker 1: it pretty straightforward for us to move through our decision
Speaker 1: tree and to wind up being among the first schools
Speaker 1: to say that we would be fully remote, especially in
Speaker 1: the context of Georgia, where we also faced a very
Speaker 1: confusing political environment where literally at one point we had
Speaker 1: the governor suing the mayor over whether mass could be
Speaker 1: mandated in the city of Atlanta because the governor was
Speaker 1: not going to allow that to happen in the state
Speaker 1: of Georgia, and we were going to mandate MASK on
Speaker 1: our campus. And it's hard to enforce a rule, you know,
Speaker 1: when students might raise the question, well, that's that's not
Speaker 1: legal in the state. If the mayor can do it,
Speaker 1: how can the college do it? So so that just
Speaker 1: at us on a decision tree, and when we saw
Speaker 1: the rate of positive tests going up, that led us
Speaker 1: to reverse our earlier decision, which was that we would
Speaker 1: be in a low density hybrid format um and uh,
Speaker 1: but it was, you know, in many ways, it was
Speaker 1: pretty straightforward because we just got very clear about, you know,
Speaker 1: what our priorities were in our principles. You may also
Speaker 1: know that we were the first school, first scholarship granting
Speaker 1: school to cancel fall h football in the country, and
Speaker 1: we did that almost three months ago. Uh, and we're
Speaker 1: using the same set of principles. What we've seen is
Speaker 1: the confluence of two pandemics. The first is the COVID
Speaker 1: pandemic and the second is the pandemic of institutionalized racism
Speaker 1: in our institutions and organizations. And you know, if we
Speaker 1: look at COVID, it's revealed just stark inequities in health
Speaker 1: outcomes along lines of race. And then if we look
Speaker 1: at the pandemic of institutionalized racism, what it brings our
Speaker 1: attention to is the fact that there are still policies
Speaker 1: and practices that give license to the conscious and unconscious
Speaker 1: biases that devalue black, black lives and brown lives. That's
Speaker 1: more House College President David Thomas, along with Bloomberg News
Speaker 1: Higher Ed Finance reporter Janet Lauren, those biases and institutionalized
Speaker 1: racism that President Thomas talked about are really, Jason, the
Speaker 1: root of our problems and what struck us as how,
Speaker 1: He's said that well known leaders are now talking about
Speaker 1: it openly and that gives him some hope for some changes.
Speaker 1: And check out that entire conversation on our podcast feed.
Speaker 1: Coming up, How do you think about making sure that
Speaker 1: you're developing a resilient supply chain across a lot of
Speaker 1: different areas. We're going to hear from the President and
Speaker 1: CEO Blue Apron, Linda Kaslowski. This is Bloomberg. This is
Speaker 1: Bloomberg Business Week with Carol Masser and Jason Kelly from
Speaker 1: Bloomberg Radio. So, Jason, food has been a theme, you
Speaker 1: know that we returned to a lot in our show,
Speaker 1: including this week big changes as a result of the virus.
Speaker 1: We're all cooking and eating at home more than ever before.
Speaker 1: No one knows that more than Blue Apron President and
Speaker 1: CEO Linda Kozlowski, who has learned to adapt her business
Speaker 1: and as a leader as things have evolved. You know, obviously,
Speaker 1: when when COVID first hit, it was uncertain, you know,
Speaker 1: when things were going to change, how things were going
Speaker 1: to change, how people's behavior and reactions would adjust as
Speaker 1: as things move forward. And what we are seeing is
Speaker 1: we are seeing continued demand for the products UM as
Speaker 1: as people sort of grapple with the new reality and
Speaker 1: think about how much time they want to spend at
Speaker 1: home versus how much time they want to you know,
Speaker 1: want to be out even as things open again. UM.
Speaker 1: There's a lot of new information out in the in
Speaker 1: the world about about continuing to be cautious and continuing
Speaker 1: to UM to sort of stay inside when possible, and
Speaker 1: and how to safely have contacts with other people. But
Speaker 1: we are seeing sort of the manifestation of the trend
Speaker 1: that we talked about in early May, which is the
Speaker 1: fact that people are telling us that no matter what happens, UM,
Speaker 1: they are starting to plan on cooking at home more. UM.
Speaker 1: This is a habit that they've really started to form.
Speaker 1: UM Again, internal and external researches all pointing pointing to
Speaker 1: the same thing that no matter what happens, as things
Speaker 1: start to ease up and restaurants open, what have you,
Speaker 1: that people have gotten what more confident in the kitchen
Speaker 1: and they plan on continuing to cook at home and
Speaker 1: they want interesting solutions to help them think about how
Speaker 1: to make that time more connected to family and less
Speaker 1: focused on preparation and planning. So we're continuing to see
Speaker 1: that trend. I do wonder landed too. You know, when
Speaker 1: you think about scenario planning, right, you think about those
Speaker 1: things that you know out of the box that could
Speaker 1: happen in the pandemic is certainly one of those things.
Speaker 1: But I do think as you look down the road,
Speaker 1: I think you know, when normal returns, you know, what
Speaker 1: are you doing though, and are you thinking about, you know,
Speaker 1: managing and an inevitable fall off in your business? Do
Speaker 1: you anticipate that? Well, I think that's a little bit
Speaker 1: of what UM, what I was referring to earlier. UM,
Speaker 1: you know, there's always going to be ebbs and flows
Speaker 1: as people have different needs. But what we're planning for
Speaker 1: is staying on the thing strategy we wrong before. So
Speaker 1: before we actually got into the pandemic, we had a
Speaker 1: growth strategy that was obviously not based on a pandemic.
Speaker 1: It was based on product improvements, marketing improvements, and audience expansions,
Speaker 1: and we already thought that come together into one UM.
Speaker 1: And now we're continuing to see that those products improvements,
Speaker 1: which we are continuing to do as we sort of
Speaker 1: ease out of the pandemic. Um are engaging people and
Speaker 1: and keeping them involved with the product. So it's there
Speaker 1: will always be ebbs and flows to the business. And
Speaker 1: again there's seasonality trends um when we return to whatever
Speaker 1: that new normal is. But we're more focused on the
Speaker 1: longer term growth potential of some of the product improvements
Speaker 1: that we're putting in around variety, flexibility, healthier options, and
Speaker 1: continuing to drive new ways to create that variety in
Speaker 1: our business, while also managing the complexity and being able
Speaker 1: to expand our operations without having to put significant capital
Speaker 1: at that operations given we already have so much ability
Speaker 1: to do that now. We we made a lot of
Speaker 1: investments early on that are now paying off in in
Speaker 1: automation and the and the ability to um to scale
Speaker 1: with labor essentially. So Linda talk to us about sort
Speaker 1: the supply chain and the logistics side of this, were
Speaker 1: there are things that you had to sort of resolve
Speaker 1: along the way. I mean, you've got folks obviously working physically,
Speaker 1: but you've got other folks working remotely. You're dealing with
Speaker 1: different suppliers. Talk to us about that process of maybe
Speaker 1: solving some of those issues. Yes, so I think the
Speaker 1: the initial thing that we did was very similar to
Speaker 1: what a lot of people did, which is, how do
Speaker 1: you think about making sure that you're developing a resilient
Speaker 1: supply chain across across a lot of different areas at
Speaker 1: the same time. Simplicity is key when faced with UM
Speaker 1: rapidly changing environments. So early on we did make some
Speaker 1: modifications to our menu to to simplify and streamline some
Speaker 1: of the recipe availability, to make it faster and easier
Speaker 1: to pack and to manage logistics than Over time, we
Speaker 1: reintroduced that complexity back in and then it can again
Speaker 1: continued to evolve the products itself with new product offerings
Speaker 1: UM as we were able to manage some of those
Speaker 1: ebbs and flows and continue you to bring labor into
Speaker 1: the facility. So UM a lot of people had to
Speaker 1: streamline their their menus and and look at ways to
Speaker 1: to to avoid some complexity early on, and we're really
Speaker 1: happy that we're able to start bringing that complexity back in.
Speaker 1: We're already back up the full service on our our
Speaker 1: family menu and UM and very close to full variety
Speaker 1: on our two person menu, and so we're going to
Speaker 1: continue to do that along with introducing the new products
Speaker 1: and variety that we have into play. On the supply
Speaker 1: chain side, that's some a scenario where we've had an
Speaker 1: advantage for quite some time because we've worked so closely
Speaker 1: with the producers and because UM we have really really
Speaker 1: high quality standards for our ingredients. UM, we've always had
Speaker 1: really great relationships with our suppliers. We can considit move
Speaker 1: very quickly depending on supply, and we also have the
Speaker 1: ability to substitute and swap out if there's ever a
Speaker 1: challenge UM because of the nature of how our recipes
Speaker 1: are built, and so we're able to really flex that
Speaker 1: supply chain to make sure that we don't have to
Speaker 1: sacrifice any quality during this time where we continue need
Speaker 1: to ramp volume. And that's Blue Apron President and CEO
Speaker 1: Linda Kozlowski back with us. One of the things we're learning, Carol,
Speaker 1: we're gonna be acting differently going forward, and we're gonna
Speaker 1: be eating and cooking more at home, no doubt about that.
Speaker 1: You're listening to Bloomberg Business Week coming up. No one
Speaker 1: wants thousands of people. Carnival Corporation CEO and president Arnold
Speaker 1: Donald on how Carnival is getting back to the high seas.
Speaker 1: This is Bloomberg. This is Bloomberg Business Week with Carol
Speaker 1: Masser and Jason Kelly from Bloomberg Radio. Well, Carol, while
Speaker 1: I was on vacation, I was not notably on a cruise,
Speaker 1: but you got to look at the future of that business. Wow. Yeah, exactly.
Speaker 1: An exclusive interview we caught up with Carnival Corporations Arnold Donald.
Speaker 1: We know the cruise industry is one of the hardest
Speaker 1: hit because of the virus, so many issues at play.
Speaker 1: They're losing money, they're raising billions more, they're selling off ships.
Speaker 1: Bottom line though, it's all about getting passengers back to
Speaker 1: see First of all, you know, our primary responsibilities and
Speaker 1: therefore our top priority is always compliance, environmental protection and
Speaker 1: the health, safety and well being of our guests, of
Speaker 1: the people in the places we go, and of course
Speaker 1: our Carnival family, our shipboard and short side personnel. So
Speaker 1: you know, the interests of public health is always in
Speaker 1: the forefront for us. And how do we get people
Speaker 1: back on ships when there's some social gathering and society
Speaker 1: has developed the compensating measures that is comfortable with that
Speaker 1: we have effectively mitigated the spread of COVID nineteen, and
Speaker 1: then we'll be able to cruise again. And there are
Speaker 1: a lot of people, as you know, Caro, who are
Speaker 1: ready to cruise right now. And in fact, we're looking
Speaker 1: at starting up in Europe where the spread has been
Speaker 1: mitigated substantially, in places like Germany and Italy, and we're
Speaker 1: looking at starting up in September there and a few
Speaker 1: um cruise lines have but there's a lot of pin
Speaker 1: up demand, you know, for travel in general, and especially
Speaker 1: for cruise. Well, and when I wonder, Arnold, though, can
Speaker 1: you kind of drill down a little bit what are
Speaker 1: some of the specific protocols that you might put in
Speaker 1: place to get ships safely back at sea. I've been reading,
Speaker 1: you know, about different folks and what they might be
Speaker 1: considering different cruise lines. They're talking about no buffets, constant
Speaker 1: um temperature checks, constant testing, maybe no excursions. What specific
Speaker 1: protocols will you be putting in place? Well, again, as
Speaker 1: you well know, we we have a lot of measures
Speaker 1: in place already on cruise that often short side destinations
Speaker 1: don't already have or didn't have prior to COVID nineteen.
Speaker 1: We do medical screens. We were already doing temperature checks
Speaker 1: in many cases. UM, we had hand sanitizers throughout the
Speaker 1: ship and signs all over about washing your hands because
Speaker 1: we've had to deal with viruses and the over seven
Speaker 1: ports and destinations we go to annually for many years now.
Speaker 1: Of course, CORVID nineteen is especially unique because the whole
Speaker 1: world is shut down, and because of that, there's still
Speaker 1: a lot of learning around COVID nineteen. As you know
Speaker 1: from all the scientists, they're still a line around epidemiology,
Speaker 1: they're lying around testing, their a line around the role
Speaker 1: of testing. The one thing everybody right now is aligned on, though,
Speaker 1: is that you know, good personal care in terms of
Speaker 1: wearing a mask, washing your hands, um, using hand sanitizers,
Speaker 1: you know, physical distancing at appropriate times, but wearing a
Speaker 1: mask is a great way to mitigate the spread. So
Speaker 1: for the time being, any cruises that will happen will
Speaker 1: certainly incorporate some physical distancing and you know, wearing masks.
Speaker 1: And of course what we already had was the the
Speaker 1: hand sanitizers, excetera. Beyond that, UM, there's a plethora of possibilities,
Speaker 1: but it depends on the destination, depends on the level
Speaker 1: of community spreading that destination, etcetera. So there could be
Speaker 1: various testing protocols. I mean, that's the possibility for the US.
Speaker 1: It's premature. You know, we're not ready to sail here yet.
Speaker 1: Obviously the community spread is still pretty vibrant here in
Speaker 1: the US, and when we're out of position to sail here,
Speaker 1: and we're walking cautiously in the other places too, because
Speaker 1: our primary interests is to stand with everyone else in
Speaker 1: mitigating the spread of COVID nineteen. But I did read
Speaker 1: your your Coster Cruise is safety protocols and you talked
Speaker 1: about three tests for crew members before boarding. UM. You
Speaker 1: also talked about, of course social distancing, new filters. UM
Speaker 1: Entertainment will have more shows on during the day so
Speaker 1: that they're smaller groups. And then also no self service restaurants,
Speaker 1: so no buffets, which for many of you go on
Speaker 1: a cruise, they're pretty used to it. So there are
Speaker 1: some changes coming. Oh yeah, absolutely for the ones that
Speaker 1: are going to sail now, we have to be ready.
Speaker 1: Just like hotels today, any hotel that's open the day
Speaker 1: has to deal with the current situation and the limited
Speaker 1: knowledge thereas And so for Costa we are deploying a
Speaker 1: number of testing protocols. Obviously for our crew, we have
Speaker 1: not only testing, but quarantine, etcetera. Because it's really important
Speaker 1: for us to have the clue crew UM, you know,
Speaker 1: safe from the beginning and then to keep them safe.
Speaker 1: And obviously UM once we get guests on board, will
Speaker 1: have protocols on board for them. I do wonder how
Speaker 1: you do it safely. I mean, Arnold, you know this
Speaker 1: industry better than everyone, uh and better than most in
Speaker 1: terms of lay personnel. But I wonder how you do
Speaker 1: it safely because there have been some smaller cruise operations
Speaker 1: that have come out of Europe, come out of Alaska, Tahiti, UM,
Speaker 1: and I believe there are less at least ten crew
Speaker 1: members aboard UM your Aida cruise ships out of Germany
Speaker 1: that contacted the virus ahead of you getting ready to
Speaker 1: kind of get back to the seas UM. That was
Speaker 1: in August. So I just wonder how do you do
Speaker 1: this safely when even when some small cruise operations are
Speaker 1: starting to go back out on the water and still
Speaker 1: having problems with the virus and people are contacting the virus.
Speaker 1: Carol think this two stage. Just one is you want
Speaker 1: to reduce the risk of having UM the COVID nineteen
Speaker 1: come on board from shore. So that's the first thing.
Speaker 1: So you test UM, and you monitor, and you quarantine
Speaker 1: in the case of the crew, So the ones you
Speaker 1: mentioned on Aida, you know, those crew members were tested
Speaker 1: before they left their home country, and then they were
Speaker 1: tested again once they arrived in Germany and we got
Speaker 1: some positives. They were then retested again and a couple
Speaker 1: of in several of those cases the individuals got a
Speaker 1: double negative test after that, which meant they had a
Speaker 1: false positive, and then the others were obviously isolated in quarantine,
Speaker 1: and so the risk of them spreading it on board
Speaker 1: with zero, because we wouldn't have them sail. Okay. Now,
Speaker 1: once you're at that level, the next question is what
Speaker 1: else are you're doing to mitigate spread? And that's why
Speaker 1: all the other practices on board. Any event you do
Speaker 1: get someone on board who has COVID nineteen, if it's
Speaker 1: in society, UM, if it's out there in general, chances
Speaker 1: are you eventually will have someone on board the ship
Speaker 1: that will have it. And so the trick then, of course,
Speaker 1: is to make certain that you are able to quickly
Speaker 1: identify that you can isolate the person and that during
Speaker 1: the time they were exposed there was plenty of mitigation
Speaker 1: of risk protocols in place, so the probability of spread
Speaker 1: has been greatly reduced. And that's where you know, wearing masks,
Speaker 1: physical distancing, washing your hands, um using a hand, sandit,
Speaker 1: sizis that are all come into play. They do also
Speaker 1: wonder know what are your plans for passengers and crew
Speaker 1: members who do get sick in the future. You know,
Speaker 1: you know the horror stories of ships that were you know,
Speaker 1: basically lost at sea they couldn't find a homeport. You
Speaker 1: I know and your team have spent you know, a
Speaker 1: long time repatriating you know, your crew members back home.
Speaker 1: So what do you do? Will there be a way
Speaker 1: to airlift passengers off ships? What will you do? You're
Speaker 1: absolutely right, you know, we had to repay trade over
Speaker 1: eighty thousand crew members and it took us quite a
Speaker 1: while with boorders closed and airlines shut down, et cetera.
Speaker 1: So it took us several months to effectively do that,
Speaker 1: but we were eventually able to do it. In regards
Speaker 1: to now, you know, that was before now there's enough
Speaker 1: understanding we would not go to a destination where we
Speaker 1: did not have a plan already any event that there
Speaker 1: was COVID on board. We're not going to tie up
Speaker 1: thousands of people off of one positive COVID case or
Speaker 1: a couple of positive COVID cases. You know, we would
Speaker 1: have the protocols in place to ensure one that the
Speaker 1: individual is taken care of whoever has it, that we
Speaker 1: can get them the care they need, um. And then
Speaker 1: number two that everyone else uh is an effected. You know,
Speaker 1: we would have some form of contact tracing on boards
Speaker 1: so we know who we're the most exposed people. But
Speaker 1: we have to have those protocols for each destination. We
Speaker 1: go to seven hundred ports and destinations around the world,
Speaker 1: so they're all not going to have the exact same
Speaker 1: protocols and and but we will not go to a
Speaker 1: place where we haven't established exactly any event there is
Speaker 1: a COVID case, exactly what's going to happen, all right,
Speaker 1: But you're not worried about as we know, this virus
Speaker 1: you know, spread so so quickly, um that you could
Speaker 1: go out to see and end up with a handful
Speaker 1: of passengers or a lot more passengers, hundreds of passengers
Speaker 1: and be kind of stuck at sea again. I mean,
Speaker 1: I'm just curious in that game, we won't we won't
Speaker 1: sail on this situation where we could be stuck at sea.
Speaker 1: I think again, there's a lot more knowledge now than
Speaker 1: when that was happening. Number one, you know, we will
Speaker 1: have some capability of testing on board. When that happened before,
Speaker 1: we didn't. We Well, there's a lot of understanding now
Speaker 1: about how to mitigate spread. Back then, nobody was talking about,
Speaker 1: you know, why you were cruising. You know, potentially wearing
Speaker 1: masks are physical distancing that that kind of thing. And similarly,
Speaker 1: we have to look at the incidents of spreading a community.
Speaker 1: You know, we're not going to probably sell out of
Speaker 1: a community where the incidents are spread is very high
Speaker 1: because you're almost certainly they're gonna have it, have it
Speaker 1: on board. We have a great UM group of advisors
Speaker 1: UM scientific advisors. A number of them participated in a
Speaker 1: summit on COVID that we held with the World Travel
Speaker 1: and Tourism Council. Wasn't about travel, it wasn't about cruise,
Speaker 1: it was about the science of COVID and UM a
Speaker 1: number of our advisors participated in that um that that
Speaker 1: we we produced and and my co hosted with Gloria
Speaker 1: Gavira from w TCC, and so we're using their advice.
Speaker 1: And of course every destination is studying this, every port,
Speaker 1: every city, every nation and is always be in compliance. UH.
Speaker 1: And so we'll all have a protocol in place because
Speaker 1: no one wants you know, thousands of people you know
Speaker 1: stuck s C. Nobody wants, no doubt about that. I mean,
Speaker 1: what are you hearing, Arnold right now from the CDC
Speaker 1: about what they want to see specifically from Carnival before
Speaker 1: heading out at sea again. Well, CDC is concentrating initially
Speaker 1: on what we call the pause. You know a number
Speaker 1: of US volunteer to stop sailing and so on. Then
Speaker 1: the CDC issued on no sale orders and so they've
Speaker 1: concentrated on the ships because even though we're in a pause,
Speaker 1: we still have twelve thousand crew required to minimally man
Speaker 1: our ships. The ships are still out there to still operating,
Speaker 1: and so the CDC focus on that initially. UH. And
Speaker 1: now they've started beginning to ask for public input and
Speaker 1: UH to be submitted in terms of consideration for crews
Speaker 1: going forward, But there have been no specific direction given
Speaker 1: on what's expected, what we're gonna do is again use
Speaker 1: our expert advisory group to inform us to use the
Speaker 1: experiences around the world that we have and others have,
Speaker 1: and we'll put together, you know, the appropriate protocol at
Speaker 1: the time we think that it makes sense to begin
Speaker 1: to consider cruising again. That's Carnival Corporation Presidency Arnold Donald.
Speaker 1: Check out that full conversation. It is Jason our extra
Speaker 1: podcast this week. It is indeed great conversation that wraps
Speaker 1: up the first hour of the weekend edition of Bloomberg
Speaker 1: Business Week from Bloomberg Radio. I'm Jason Kelly and I'm
Speaker 1: Carol Masser. Plenty coming up in our next hour, including
Speaker 1: the interview with the man who is called every presidential
Speaker 1: election outcome correctly in the past four decades. Is my
Speaker 1: favorite conversation of the week, I have to confess. Plus
Speaker 1: another great conversation, Mind Buddy founder executive chairman Rick Stollmeyer.
Speaker 1: He talked to us about the importance of wellness and
Speaker 1: fitness during the pandemic. Fast moving business, no doubt about that.
Speaker 1: This is Bloomberg. This is Bloomberg Business Week with Carol
Speaker 1: Masser and Jason Kelly from Bloomberg Radio. Carol Masser and
Speaker 1: I'm Jason Kelly. Plenty ahead for you in this hour
Speaker 1: of the weekend edition of Bloomberg Business Week. Don't worry
Speaker 1: about the ads, the speeches, the debates, the tricks of
Speaker 1: the campaign. Keep your eye on the big picture. American
Speaker 1: University professor of history Alan Lickman. He is really really
Speaker 1: good at predicting presidential elections. You're gonna be talking about
Speaker 1: this one for sure. Plus Mind Body founder and executive
Speaker 1: chairman Rick Stollmeyer. He's writing a book about how to
Speaker 1: start a fitness company. He should know. He started when
Speaker 1: in his garage. We're going to kick off this hour, though,
Speaker 1: Jason with a very thoughtful conversation with Yates enterprise founder
Speaker 1: and trauma surgeon Dr William Yates. He took his experiences
Speaker 1: in the operating room created a company to help solve
Speaker 1: some of our current problems like gun safety and the virus.
Speaker 1: We caught up with him in Chicago and began with
Speaker 1: asking how his city is doing. To go outside, it
Speaker 1: looks like a ghost town. The schools are paralyzed. They
Speaker 1: don't know what to do. The people that constitute Wins
Speaker 1: are afraid, they're anxious, they're unsure about the future. When
Speaker 1: I'm out all the time, people say, Doc, what's gonna happen?
Speaker 1: What are we gonna do? Not to mention it's an
Speaker 1: economic catastrophe here. The Tribute just wrote an article four
Speaker 1: thousand small businesses have gone out of business, and they
Speaker 1: expect a lot more to go out of business even
Speaker 1: with all that stimulus check money. And of course one
Speaker 1: of the good things I see this come out the
Speaker 1: digital dependence is like increase which has made you know,
Speaker 1: remote work better, telemedicine and e commerce is kind of flourishing.
Speaker 1: But other than that, it's pretty much bad news. I
Speaker 1: would say, well, and you know, it's interesting that you
Speaker 1: bring that up up. I do wonder, Dr Yates. You know, unfortunately,
Speaker 1: times of stress and disconnect often lead to better ways
Speaker 1: of doing things. And I do wonder as you look
Speaker 1: at this world, and I don't want to see anybody
Speaker 1: lose their business. I don't want to see anybody be
Speaker 1: out of work. Um, but I do wonder do we
Speaker 1: get to a better side, whether it's you know how
Speaker 1: you run business in businesses, how you do things you
Speaker 1: know more online, more digitally, you know how education is run.
Speaker 1: Do we get to a better side of medical you know,
Speaker 1: we see a lot more telemedicine happening. Do we get
Speaker 1: to a better side in your view, because I feel
Speaker 1: like you understand kind of the old ways of doing
Speaker 1: something and then also embracing technology right well, I mean
Speaker 1: in every catastrophe, something good comes out of it. And
Speaker 1: I say, what I see good coming out of this
Speaker 1: right now is that everybody has to be aware of,
Speaker 1: say of the business supply chain, that we can't be
Speaker 1: dependent on other countries to feed us. That we have
Speaker 1: to become autonomous and we're that's very clear without explaining why.
Speaker 1: And the other thing is the digital platform has shown
Speaker 1: us how sophisticated it can be and how good it is.
Speaker 1: Say it like for education, I was thinking that, you know,
Speaker 1: some of the best teachers in the world can now
Speaker 1: reach some of the worst schools in the world with
Speaker 1: the digital platform, so that can be expanded. That's something
Speaker 1: good has come out. And I think the other thing
Speaker 1: that we should concentrate on there should be more information
Speaker 1: sharing between countries globally, because if that had happened in
Speaker 1: the beginning, I don't think, you know, we'd be in
Speaker 1: this situation. So that's what I think the best things
Speaker 1: that have come out of this and other than we
Speaker 1: all have to be united, which has not happened in
Speaker 1: the United States. Is so fragmented. These people do this,
Speaker 1: these do that. That's why the numbers keep increasing. Well
Speaker 1: and dr yates what one area of fragmentation for sure
Speaker 1: is something you alluded to, which is the world of education,
Speaker 1: and Caroline, I talked about it all the time from
Speaker 1: a personal perspective, both at school aged kids. Um, you know,
Speaker 1: we're seeing these headlines from University of North Carolina, We're
Speaker 1: seeing it from you know, all sorts of places across
Speaker 1: the country. New York City sort of going its own
Speaker 1: way versus Los Angeles and San Francisco and Washington, d C.
Speaker 1: And other places. I read a great New York article
Speaker 1: today about love at school down in my hometown of Atlanta.
Speaker 1: How should we be thinking about schools? This is something
Speaker 1: you've done some specific work. You've got equipment installed in
Speaker 1: schools doing thermal temperature checks. But how should we be
Speaker 1: thinking about education? I think there's a way to actually
Speaker 1: go back to school and go back safely. College is
Speaker 1: another aspect of this, because you have a school basically
Speaker 1: with an assisted living facility. So that's something altogether different.
Speaker 1: But I think schools can open safely if you do
Speaker 1: a couple of things. Are actually four things. Protect the
Speaker 1: students and everyone knows what that means, wearing a mask,
Speaker 1: standing six ft apart um, sanitizing, and then you need
Speaker 1: to screen for potential patients or kids or anyone that
Speaker 1: has the virus. And the way that you do that
Speaker 1: is questionnaires seem to be good, and also with objective
Speaker 1: data of fever because anybody who's infected, the number one
Speaker 1: sign is usually going to be a fever. Now that
Speaker 1: won't catch the asymptomatic people, but still we know that
Speaker 1: people who are symptomatic will have a fever. The third
Speaker 1: thing I think is just broad testing, baseline testing. Everybody
Speaker 1: has to be tested and has to be tested often
Speaker 1: to know if they've contracted the virus. And fourth is
Speaker 1: basically tracking. When you see clusters, you have to track, isolate, quarantine,
Speaker 1: whatever you need to do. And in the school system specifically,
Speaker 1: we've also developed kind of pod units where the students
Speaker 1: can be separated by best basically a plastic partition. And
Speaker 1: it's no way if you do these things. If everybody
Speaker 1: does it, the teachers, administrators and the students you will
Speaker 1: not get coronavirus. So I gotta say it was fascinating
Speaker 1: reading about your background. Tell me how you came to
Speaker 1: be a trauma surgeon to or tell our audience, since
Speaker 1: I've already read a little bit about it, tell our
Speaker 1: audience about how you went from being a trauma surgeon
Speaker 1: to creating this company, and why you decided to focus on,
Speaker 1: you know, these various devices, whether it's metal detectors or
Speaker 1: whether it's you know, being able to take temperatures. Tell
Speaker 1: us a bit about that progress. Well. As a trauma surgeon,
Speaker 1: I just became irritated with hearing over and over again
Speaker 1: about mass school shootings and violence and all the pain
Speaker 1: that it causes on the back end and the front end.
Speaker 1: So I always felt that a simple solution was being missed,
Speaker 1: such as metal detectors just being deployed in schools, open areas,
Speaker 1: municipalities and the like. So what I did was I
Speaker 1: started a company partnered with the manufacturer, started distributing metal
Speaker 1: detectors X ray equipment to different schools. Anybody that would
Speaker 1: listen to me about the effectiveness of this equipment, and
Speaker 1: that's the enterprise founder Dr William Yates and entrepreneur, a
Speaker 1: trauma surgeon, and really someone who's trying to make the
Speaker 1: world a better place. Carol, Yeah, taking his firsthand experience
Speaker 1: and fixing some of today's vexing problems. You're listening to
Speaker 1: Bloomberg Business Week. Up next, The Keys to the White
Speaker 1: House from the history professor who has correctly called the
Speaker 1: last four years of presidential elections. This is Bloomberg. This
Speaker 1: is Bloomberg Business Week with Carol Masser and Jason Kelly
Speaker 1: from Bloomberg Radio. Well, Carol, so much going on this week,
Speaker 1: but politics front and center because we're seventy plus days
Speaker 1: away from a big election. And Jason, safe to say,
Speaker 1: one of our more entertaining interviews this week it was
Speaker 1: with Alan Lickman. He's distinguished professor of history at American University.
Speaker 1: He has a predictive model for figuring out US presidential
Speaker 1: winners and you know what, everybody, it consistently works. The
Speaker 1: fundamental insight behind the Keys model is that elections are
Speaker 1: essentially votes up or down on the strength and performance
Speaker 1: of the party holding the White House. That's what the
Speaker 1: thirteen Keys gauge. So forget the polls, forget the pundit
Speaker 1: to get who's up and down on a daily basis.
Speaker 1: Don't worry about the ads, the speeches, the debates, the
Speaker 1: tricks of the campaign. Keep your eye on the big picture.
Speaker 1: And that's what the Keys looked at, the big picture
Speaker 1: of incumbent strength and for formers things like a midterm
Speaker 1: election results, third parties, long and short term economy, scandal,
Speaker 1: social undress, policy change, foreign policy successes and faigures. And
Speaker 1: the way it works, it's six or more of the keys.
Speaker 1: Any six or more, it's nonlinear go against the party
Speaker 1: holding the White House. They are predicted losers, fewer than six,
Speaker 1: they are predicted winners. All right, So take us back
Speaker 1: to before we get to this current election that we're experiencing,
Speaker 1: take us back briefly to what was it that ultimately
Speaker 1: tipped it to Canada. Trump. Yeah, that was probably the
Speaker 1: most difficult and closest call I've ever made in my
Speaker 1: Washington Post interview or I predicted Trump's when I said,
Speaker 1: the Keys very very narrowly point to Trump. And you know, uh,
Speaker 1: I hate to say it, but Bernie Sanders one of
Speaker 1: the Keys, and this was exactly a six key elections.
Speaker 1: So if any he had not turned Clinton would have one,
Speaker 1: and one of the keys that turned was the internal
Speaker 1: nomination contest for the party holding the lighthouse by so
Speaker 1: strongly contesting Hillary Clinton. Uh. Bernie Sanders turned to kay,
Speaker 1: I'm not blaming him. He as a right to do that.
Speaker 1: But that was a very close call. Another very close
Speaker 1: call was the third parties, which we know were quite
Speaker 1: strong in two thousand and sixteen. Gary Johnson went over
Speaker 1: in some of the polls. So those were two of
Speaker 1: the late breaking keys that were incredibly close that turned
Speaker 1: the tide against the Democrats, along with other keys such
Speaker 1: as the lack of a big foreign policy achievement, not
Speaker 1: following up the Affordable Care Act with Republicans in control
Speaker 1: of Congress with another big policy change, losing uh the
Speaker 1: mid term election. Very very tight and tough call. This
Speaker 1: is what's the call away, But go ahead now, please
Speaker 1: go ahead. Right here on my wall, I have this
Speaker 1: note written on a copy of the Washington Post ride
Speaker 1: predicted Trump swin that says professor, congrats, good call, and
Speaker 1: big sharpie letters signed Donald J. Trump. So they followed,
Speaker 1: they follow this. It's so cool though, these thirteen keys,
Speaker 1: and you've mentioned something. You've mentioned them strong long term economy,
Speaker 1: strong short term economy, you know, a third party scandal,
Speaker 1: um for military success, no, social unrest, um, charismatic incumbent,
Speaker 1: un charismatic challenger. I mean, these are the things that
Speaker 1: you're looking at. It's not just about the economy stupid
Speaker 1: as so many have said. No, that's a huge mistake
Speaker 1: that a lot of analysts have made. If you were
Speaker 1: just looking at the economy, Hillary Clinton should have won
Speaker 1: going away. The economy was quite strong in two thousand
Speaker 1: and sixteen. Voters are not that never mind. That's the
Speaker 1: two things that make the keys different is one, I
Speaker 1: don't look at any of the conventional campaigning, pole driven
Speaker 1: punditry models. And two they're not fixated on the economy
Speaker 1: like most econometric and political science models. All right, so
Speaker 1: let's talk about this election. Uh if we can. Um,
Speaker 1: as you go through the keys, how close is it
Speaker 1: and what are the things you're most focused on? As
Speaker 1: you say, it's nonlinear, but they really As you were
Speaker 1: going through all those keys, I'm going check check, check,
Speaker 1: check check. Talk Yeah exactly, So talk to us about
Speaker 1: what this looks like. Yeah, so I'll break it up.
Speaker 1: The end of two thousand nineteen, Trump was only down
Speaker 1: four keys. You have two key cushion uh demandate key.
Speaker 1: Obviously they had lost in the mid term elections. Scandal key.
Speaker 1: You know, the only h only the third president in
Speaker 1: the history impeached by the full House. Not to mention
Speaker 1: other issues, the lack of a big foreign policy success
Speaker 1: any where in the world. Am I most controversial on
Speaker 1: the fact that he was not one of those once
Speaker 1: in a generation truly inspirational candidates with groat appeal like
Speaker 1: Reagan in the nineteen eighties who brought in all those
Speaker 1: raigan Democrats. Trump's strong approval rating is only between twenty
Speaker 1: five and six and more. Don't like him and don't
Speaker 1: think he's on it, but he was only down four.
Speaker 1: Then we get hit with the pandemic and the crist
Speaker 1: for social and racial justice and what Trump acknowledge My
Speaker 1: prediction he didn't understand the system, which is remember it's governing,
Speaker 1: not campaigning that counts. And instead of substantively dealing with
Speaker 1: these problems, he reverted to his two thousand and sixteen
Speaker 1: playbook and thought he can talk his way out of him.
Speaker 1: It didn't work. It cost him three more keys. The
Speaker 1: short term economy key, which is defined by an election
Speaker 1: year recession, which we have the long term economy. He
Speaker 1: because we had such a negative growth that brought this
Speaker 1: average well down and the social unrescued because of what's
Speaker 1: raging across the land. Never in the history of the
Speaker 1: United States has the party holding the White House experienced
Speaker 1: such a dramatic reversal of fortune. In a matter of
Speaker 1: three months, Trump goes from four keys down to seven
Speaker 1: keys down, one more than is needed to predict that
Speaker 1: he is going to lose in November. You have been
Speaker 1: spot on for forty years, but you've also back tested
Speaker 1: it for a hundred twenty years of US presidential history.
Speaker 1: I mean, you checked it out and it has really
Speaker 1: panned out. But I've got to ask you, and I
Speaker 1: know other people have have um kind of pushed you
Speaker 1: on this. You did call al Gore in two thousand. Yes, yes, yes, Look,
Speaker 1: I'll make two comments on that one. You want to
Speaker 1: say I'm right out of eight of nine, that's fine.
Speaker 1: I like how you think, Uh, what was the right call?
Speaker 1: In two thousand, I correctly called al Gore to win
Speaker 1: the popular vote. He didn't win the electoral college because
Speaker 1: he lost by five or and thirty seven votes in
Speaker 1: Florida when the Streme Court stopped the recount. That was
Speaker 1: a stolen election. Al Gore should have won Florida going away.
Speaker 1: And I proved this in my two thousand and one
Speaker 1: report to the United States Commission on Civil Rights, when
Speaker 1: I showed that there was this huge disproportion of discarded
Speaker 1: votes between African Americans and Lights. And then if you
Speaker 1: correctly assess the intention of voters about that suppression, al
Speaker 1: Gore would have won going away. That's American University Professor
Speaker 1: of History Alan Lickman, voter suppression something that is he noted,
Speaker 1: we are concerned about again along with foreign meddling. Jason,
Speaker 1: when it comes to this November's outcome. Absolutely love that conversation.
Speaker 1: You're listening to Bloomberg Business Week. Coming up, we head
Speaker 1: to Miami check in with the seat of the related group.
Speaker 1: He's been watching real estate for four decades. There's a
Speaker 1: lot come yeah, and some interesting new trends. This is Bloomberg.
Speaker 1: This is Bloomberg Business Week with Carol Masser and Jason
Speaker 1: Kelly from Bloomberg Radio. Well real estate, Carol, we know
Speaker 1: it is a fascinating area, very important where you live
Speaker 1: and how you live. One guy who knows a ton
Speaker 1: about that related group CEO or hey, perez right, They've
Speaker 1: got a portfolio of more than forty billion in real
Speaker 1: estate holdings, largely a Jason in South Florida. And before
Speaker 1: getting into property trends and the real estate market, we
Speaker 1: did ask him about the virus in his home state
Speaker 1: and home city. Yes, you know, we have not reacted
Speaker 1: well in Miami to the virus. It's been a bit
Speaker 1: of an epicenter of new cases. UM. We've you know,
Speaker 1: opened up and then had to close back up the
Speaker 1: you know, the interior restaurants, interior of restaurants. UM. And uh,
Speaker 1: it's been not an easy ride here. UM. Unfortunately, we UM,
Speaker 1: we're not so good here at following instructions. A very
Speaker 1: surprised that I still go out for a walk and uh,
Speaker 1: almost half the people are not wearing masks and in
Speaker 1: the streets. So UM, we need to do a much
Speaker 1: better job at at following directions and and and keeping safe. UM.
Speaker 1: Other than that, you know, Miami has been helped in
Speaker 1: a way by the movement of people from the northeast, UM,
Speaker 1: towards Miami. We we had been seeing that um previously
Speaker 1: previously to the pandemic UM due to the high taxes
Speaker 1: in in places like New York. I think this has accelerated.
Speaker 1: You know, our single family luxury home has been doing
Speaker 1: extremely well. UM A lot of buyers looking to move UM,
Speaker 1: carl Icon and other Wall Street people have uh made
Speaker 1: the announcement that they're moving permanently down to Miami from
Speaker 1: New York and other areas. So in in in that respect,
Speaker 1: I think we are the beneficiaries. You know, the open air,
Speaker 1: the sea, the ocean. I just came from from a
Speaker 1: house that we have an aspen and aspen is even
Speaker 1: that on steroids. Everybody wants to now own a house
Speaker 1: in places that they see as being less congested, less
Speaker 1: prone to um catching the buyrus. Yeah, it is pretty amazing.
Speaker 1: So when you think about you know, you're in the
Speaker 1: entire portfolio and also things that are in development and
Speaker 1: under construction, wor Hey, how has that part of it
Speaker 1: gone in terms of your ability to sort of keep
Speaker 1: going with your business? Well, we we've been. It's been
Speaker 1: a radical change. You know. We we had to be
Speaker 1: very rapidly throughout how do we work efficient and first
Speaker 1: from home and then how do we make our office
Speaker 1: safe for employees to return and and work there. You know,
Speaker 1: we we we reacted very rapidly to that. UM. You know,
Speaker 1: zoom has become you know, the new trend. We communicate
Speaker 1: every day. UM. We've set up UM what what's op
Speaker 1: system and a text system so all the key executives
Speaker 1: and and their groups are constantly in communication. So our
Speaker 1: technology has improved tremendously UM because of the virus. I think, uh,
Speaker 1: this is something that we're going to see into the future.
Speaker 1: You know, we we have become much better, much more
Speaker 1: efficient at working from home, at communicating without being face
Speaker 1: to face. But it's been a real change in the
Speaker 1: way UM we we communicate, we talk to people, we
Speaker 1: execut you orders. UM. Fortunately for us, we are in
Speaker 1: the multi family business, which is probably the sector that
Speaker 1: has been least affected UM by the virus. Retail as
Speaker 1: you know, and hotels UM, convention places, restaurants UM have
Speaker 1: all been affected to a much greater extent than we have.
Speaker 1: Our collections UM have in these months been all over
Speaker 1: which is UM you know above the national lapp UM.
Speaker 1: So you know, we have been relatively lucky as a
Speaker 1: company in that we've adapted rapidly. We dropped a lot
Speaker 1: of the urban jobs, all the retail jobs. We moved
Speaker 1: suburb to suburban locations UM rapidly in our development and
Speaker 1: I think for the next at least year, that is
Speaker 1: going to be the preferred UM housing type. You know,
Speaker 1: people are afraid of being in close environment UM. So
Speaker 1: I think we can see it. Are high rises have
Speaker 1: taken a much greater hit than our suburban products UM
Speaker 1: and and and it's been a shift, you know. And
Speaker 1: we are used to, you know, Florida. I always think
Speaker 1: of Florida as a roller coaster, so we're used to
Speaker 1: up and down and up and down and moving very
Speaker 1: rapidly to adapt the change. That's the related group CEO
Speaker 1: Jorge Perez and Jason as we just heard from him,
Speaker 1: it's all about the pivot related group to that very
Speaker 1: quickly moving from urban to suburban projects during the pandemic. Yeah,
Speaker 1: the city's the burbs where people are going to live.
Speaker 1: It's one of the big questions we keep asking. You're
Speaker 1: listening to Bloomberg Business this week, One thing we know
Speaker 1: people are working out. We discussed the importance of wellness
Speaker 1: amid the new world order. Our conversation with mind Body
Speaker 1: founder Rick Stallmeyer it is so important. This is Bloomberg
Speaker 1: Vases Bloomberg Business Week with Carol Masser and Jason Kelly
Speaker 1: from Bloomberg Radio. As we wrap up this week, Jason,
Speaker 1: we know one of the things we've talked about all
Speaker 1: lots until we've all been working from home so much
Speaker 1: is about staying mentally and physically fit. Absolutely no better
Speaker 1: person to talk about that than the founder and executive
Speaker 1: chairman of Mind Body. They are the guts of the
Speaker 1: entire fitness business. Talking about Rick Stallmeyer. Check it out.
Speaker 1: What we're seeing right now is they supply constrained market.
Speaker 1: People want their fitness classes, they want their wellness services
Speaker 1: and experiences more than ever. And you know, one of
Speaker 1: the well I guess one of the unintended consequences of
Speaker 1: this mishmash of state and regional reactions or responses to
Speaker 1: COVID is that what we've seen around the country, as
Speaker 1: you know, some states never really closed down completely. Other
Speaker 1: states reopened very quickly. Um, we all know those stories.
Speaker 1: You know, you're in the Tristate area, which has been
Speaker 1: probably the model of how how discipline the approach has been. Um,
Speaker 1: what we've seen in every one of those cases when
Speaker 1: the businesses are open or when they reopen, Uh, they
Speaker 1: get flooded with consumer interest because people's wellness has been
Speaker 1: severely impacted by this pandemic. Yeah, I do think it's interesting.
Speaker 1: So you talk about people flooding back, and I do
Speaker 1: think about what about new folks who may be thought, Okay,
Speaker 1: it's not that important. I've got work to do or
Speaker 1: I've got you know, X to do, And now they're saying,
Speaker 1: wait a minute, this has got to be fitness. Wellness
Speaker 1: have to be a part of my regular living. Well,
Speaker 1: that's right. I mean we all know, of course, you know,
Speaker 1: the pre existing conditions around obesity, hypertension, heart disease, cardiovascual disease,
Speaker 1: type two diabetes. Those things, of course have been shown
Speaker 1: to be major risk factors for COVID. And I think
Speaker 1: people a lot of people have gotten that memo. I
Speaker 1: mean people that I talked to, people that I see
Speaker 1: at the same time being restricted to our homes for
Speaker 1: such an extended period of time. You know, for many
Speaker 1: people that they put on weight, for many people their
Speaker 1: their their fitness has struggled. Um. And then lastly, you know,
Speaker 1: wellness isn't just physical, is it right, It's also emotional wealthy,
Speaker 1: it's a sense of social connection, it's community, and I
Speaker 1: think we're all suffering in this country, in fact in
Speaker 1: most of the world, from the impact of having all
Speaker 1: of that so severely disrupted. And it's why we remain
Speaker 1: very bullish about the industry we serve for the long term.
Speaker 1: But of course this is a really challenging time on
Speaker 1: both the consumer side and the business owners. What we
Speaker 1: have we have been doing what we can to advocate UM,
Speaker 1: both in UH in Washington as well as at the
Speaker 1: state capitals. I planned personal to do a lot more
Speaker 1: of that, you know, as you alluded to at the
Speaker 1: beginning here. UM, I've just transitioned from being CEO, I mean,
Speaker 1: a role that I've had for twenty years, handled the
Speaker 1: baton to Josh McCarter. He's our new CEO, and Senel
Speaker 1: Roger Say, who was our CTO, has been elevated to
Speaker 1: president and CTO. I mean, this is a dream team.
Speaker 1: These guys in the executive team around them by far
Speaker 1: the strongest we've ever had. So I can feel very
Speaker 1: confident in and the company's continue growth and innovation. And
Speaker 1: what I want to spend more of my time doing
Speaker 1: is that outwardly facing role. Um, these these businesses are
Speaker 1: almost all small business owners, even if you owned an
Speaker 1: Orange their Fitness or an S forty five franchise. For example,
Speaker 1: the classic FRANCHISEZ is a typically like two spouses who
Speaker 1: invested in this business and are running at hands on
Speaker 1: every day. And of course so many these businesses are
Speaker 1: just independent Mama Papa shops, and no one has been
Speaker 1: advocating on their behalf, even looking at how the states
Speaker 1: generally have have issued edicts around whether they could open
Speaker 1: and close as sort of a broad brush. You know,
Speaker 1: no gyms can open, so it doesn't matter if it's
Speaker 1: a eighty thou square foot health club with hundreds of
Speaker 1: people streaming through the door, or small little yoga pilates
Speaker 1: or a group exercise studio, and it maybe in normal
Speaker 1: times might have had twenty people in class and now
Speaker 1: with social distancing, they have maybe eight people. I mean,
Speaker 1: these it's not high risk. They we have seen firsthand.
Speaker 1: If you take the proper precautions, the social distancing, the
Speaker 1: mask wearing, you can go in and have a great
Speaker 1: experience very safely. And I'm not sure I don't think
Speaker 1: many people are telling that story to our government leaders
Speaker 1: who are making new decisions. So, Rick, you and I
Speaker 1: caught up a little earlier in the pandemic for the
Speaker 1: Bloomberg Business of Sports podcast, and you know, one of
Speaker 1: the things we're talking about is, and this goes back
Speaker 1: to where we left off in our conversation, these are
Speaker 1: small businesses. Many of these boutique studios, especially mom and
Speaker 1: pop type shops. Uh, a lot of them are just
Speaker 1: going to go out of business. I think you would
Speaker 1: even predicted maybe a quarter of them, uh would just
Speaker 1: ultimately have to hang it up, pulled up shop. What
Speaker 1: do you what do you make of that prediction? Now, well,
Speaker 1: it hasn't happened yet. Um, these businesses have proven far
Speaker 1: more resilience than we've hope. And of course we've been
Speaker 1: rooting farm from the very beginning of the of the pandemic.
Speaker 1: And you know, immediately when the as the lockdown started
Speaker 1: in the late March, they started adapting. And of course
Speaker 1: the most obvious thing was delivering their classes and experiences
Speaker 1: be a video and so live streaming video and then
Speaker 1: putting up libraries a video on demand. They started doing
Speaker 1: that spontaneously, and my body has been innovating rapidly. We
Speaker 1: now have virtual wellness platform enables them to do that
Speaker 1: in a way that they can sustainable businesses. And you
Speaker 1: and I talked about that, Jason. Now what you see,
Speaker 1: of course, is a lot more of these activities going
Speaker 1: on outside UM. And the science indicates it. Being outside
Speaker 1: is just simply safer than being in a room which
Speaker 1: we sustulating air. And lastly, of course it's just immaculate cleanliness.
Speaker 1: A lot more distance between workout station UM and everybody
Speaker 1: wearing maths. And you know, we've what we have seen UM,
Speaker 1: I think is a remarkable adaptation of an industry that
Speaker 1: being said, you know, this kind of brutal two steps forward,
Speaker 1: one step back, one step forward, two steps back. Uh.
Speaker 1: You know at some point you're gonna start taking a pole. Uh.
Speaker 1: And UM, you know we were rooting for all of
Speaker 1: these businesses, UM. But I think we're still are probably
Speaker 1: going to expect some some notable amounts of business failures
Speaker 1: in the months ahead, given what it just appears that
Speaker 1: dependemic and how it's going to develop. And then we're
Speaker 1: not going to get out of this very challenging situation
Speaker 1: right for at least a few quarters probably. Yeah. It
Speaker 1: kind of breaks my heart about those who have as
Speaker 1: you said to him, it's it's a couple who started
Speaker 1: a business and they're just not going to make it through. UM.
Speaker 1: You talk about live streaming, there's in studio, there's outdoor classes,
Speaker 1: depending on you know, kind of where you live. You know, Rick,
Speaker 1: what we love about talking with you is, you know,
Speaker 1: you guys do have the platform where you you get
Speaker 1: inside into so many different businesses. What other data points
Speaker 1: are you able to kind of see that are revealing
Speaker 1: about what's going on right now and what might continue
Speaker 1: for for sometimes kind of stay with us as we
Speaker 1: all kind of pivot and and kind of embrace some
Speaker 1: of these change ways of doing things, including working out
Speaker 1: and staying well well. First of all, we're seeing you know,
Speaker 1: rising consumer demand for these activities of all types, of
Speaker 1: all categories, and of course fitnesses leading part of that. UM,
Speaker 1: we see high sensitivity in the consumer side. We've been
Speaker 1: serving you know, millions of consumers on our platform, uh,
Speaker 1: and we've been serving people in a scientific way, and
Speaker 1: you know, more than consumers indicate that yes, rigorous santizis
Speaker 1: santization is important. About three fourths of them say the
Speaker 1: new layouts are really important and they like what they're seeing.
Speaker 1: If you haven't visited one of these studios in a
Speaker 1: long time or since the pandemic started, I encourage you
Speaker 1: to go look at him and understand it. UM. We
Speaker 1: can now leverage tech knowledgy in ways that really just
Speaker 1: minimize the kind of contact for example, contact with check
Speaker 1: in and contact with payments. UM. That's extremely important to
Speaker 1: consumers today and I think that it is going to
Speaker 1: be challenging for these businesses. But but the ones that
Speaker 1: do get through this to do that, whether there's are
Speaker 1: going to face a really remarkable market. UM. And for
Speaker 1: some of the most forward leaning businesses, what they're doing
Speaker 1: is as they see UH. In downtown retail areas, of course,
Speaker 1: businesses of all types have been failing. That's opening up
Speaker 1: space and you see the more well capitalized brands swooping
Speaker 1: in because it was really a shortage of prime retail
Speaker 1: space that was holding back the industry before COVID hit.
Speaker 1: And so I think you're gonna see a real changeover. UM. Lastly,
Speaker 1: the ability if I'm going to commit to a membership
Speaker 1: or a prepaid package at this particular studio, well, I
Speaker 1: want to know that regardless of what happens whatever the
Speaker 1: state of of social distancing restrictions or lockdowns in my region.
Speaker 1: So I'm gonna be able to keep engaging. So just
Speaker 1: being able to have hybrid memberships is very important to
Speaker 1: people today, and we see that happening already in the
Speaker 1: businesses that we're serving. If I can just follow them,
Speaker 1: I also do wonder by having such a platform as
Speaker 1: your own, it kind of creates a tracing platform that
Speaker 1: you know, if a case breaks out at a certain
Speaker 1: you know, studio or workout or gym in a place
Speaker 1: that immediately you can say, okay, these were the people
Speaker 1: that were there, and we can kind of be right
Speaker 1: on top of it from the get go. We haven't
Speaker 1: been asked to the bulge that data. I mean, we
Speaker 1: treat in a confidentiality both businesses confidential data and consumers
Speaker 1: confidential data very seriously. So um, it's not something that
Speaker 1: that that we would just um easily offer up. But
Speaker 1: if there were some kind of organized process, uh, you
Speaker 1: know that we could assist, and of course we'd have
Speaker 1: to get people's permission I think to allow us to
Speaker 1: share what you're talking about. That's my Body founder and
Speaker 1: executive chairman, Rick Stollmeyer, and it was interesting because we
Speaker 1: do know his platform, right Jason, They have access to
Speaker 1: a lot of data, and I do wonder you know
Speaker 1: how people might use that, specially in a COVID nineteen
Speaker 1: era to make sure that they can open up their businesses,
Speaker 1: but also keep everybody who goes to gyms and work
Speaker 1: out facilities make sure we keep them safe. Yeah, certainly
Speaker 1: watch this space. It's fast moving and really important, maybe
Speaker 1: more important than ever as we think about how to
Speaker 1: stay healthy going into the fall. Well, that's going to
Speaker 1: wrap up the weekend addition to Bloomberg Business Week from
Speaker 1: Bloomberg Radio. Thank you so much for joining us. I'm
Speaker 1: Jason Kelly and I'm Carol Massa. Wrapping up week twenty
Speaker 1: two from most of us still working from home. Be
Speaker 1: sure to check out our daily show Monday through Friday,
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