WEBVTT - Why Homebuilder Taylor Morrison Just Had Its Best Month Ever 0:00:01.400 --> 0:00:04.120 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, along 0:00:04.120 --> 0:00:06.240 with my co host of Bonnie Quinn. Every business day 0:00:06.240 --> 0:00:10.400 we bring you interviews from CEOs, market pros, and Bloomberg experts, 0:00:10.400 --> 0:00:13.600 along with essential market moving news. Find the Bloomberg Markets 0:00:13.600 --> 0:00:17.000 Podcast on Apple Podcasts or wherever you listen to podcasts, 0:00:17.000 --> 0:00:21.599 and on Bloomberg dot com. Well, it's clear that the 0:00:21.640 --> 0:00:26.160 pandemic has changed consumer behaviors. It's changed how businesses conduct 0:00:26.200 --> 0:00:28.760 their business. Uh, that's very much the case in the 0:00:28.760 --> 0:00:31.280 residential real estate market. So to get some more color 0:00:31.360 --> 0:00:33.920 on that, we welcome Cheryl Palmer, chairman and chief executive 0:00:33.960 --> 0:00:36.360 officer of Tayla Marlin Marrison. Taylor Marson is the fifth 0:00:36.440 --> 0:00:40.520 largest home builder and developer in the United States. Joints 0:00:40.560 --> 0:00:42.879 us on the phone from Scottsdale. Cheryl, thanks so much 0:00:42.880 --> 0:00:46.360 for joining us here. I know your company has been 0:00:46.440 --> 0:00:51.800 moving more towards virtual sales of residential real estate. So 0:00:51.840 --> 0:00:54.800 this pandemic, I'm guessing as accelerated that process. Talk to 0:00:54.880 --> 0:00:59.000 us about kind of how your business is changing. Good morning. 0:00:59.040 --> 0:01:02.120 Thank you for having me. Of course. You know, um, 0:01:02.560 --> 0:01:05.840 I call it the silver lining of COVID that you know, 0:01:05.920 --> 0:01:10.200 our industry has really had to make some adjustments on 0:01:11.000 --> 0:01:14.319 how we communicate. We've we've you know, always been known 0:01:14.319 --> 0:01:17.200 for being a little kind of archaic and the way 0:01:17.200 --> 0:01:19.480 we build houses. But I think the first step was 0:01:19.520 --> 0:01:22.960 really how we market and interact with consumers the way 0:01:23.000 --> 0:01:25.560 they want to be interacted with. So you're absolutely right. 0:01:25.840 --> 0:01:30.560 When the pandemic started and everybody went home and we 0:01:30.640 --> 0:01:34.440 had to generally lock our sales office doors and put 0:01:34.480 --> 0:01:37.399 safety protocols in, we had to, you know, communicate with 0:01:37.440 --> 0:01:40.880 our buyers differently. And we had introduced a new website 0:01:41.280 --> 0:01:45.360 late last year that had an infrastructure with the intentions 0:01:45.400 --> 0:01:49.560 of really creating a virtual environment. And so what we've 0:01:49.640 --> 0:01:54.440 seen is the consumer really just loved this virtual environment. 0:01:54.480 --> 0:01:58.280 In fact, we introduced I think it was early April, 0:01:58.360 --> 0:02:02.880 we introduced this online of apointment system, and our customers 0:02:02.920 --> 0:02:06.320 could schedule an appointment to either come in and meet 0:02:06.320 --> 0:02:10.000 with someone privately and get a private tour, or they 0:02:10.040 --> 0:02:13.960 could schedule an appointment to be walked through a virtual 0:02:14.080 --> 0:02:17.880 three D tour of our homes or maybe just to talk. 0:02:17.919 --> 0:02:20.600 We found about eight percent of the customers still wanted 0:02:20.639 --> 0:02:23.760 to come in for that private tour, but many did not, 0:02:24.760 --> 0:02:29.720 and UM since then, we've introduced self guided tours so 0:02:29.880 --> 0:02:32.760 they could you walk into one of our inventory homes. 0:02:33.200 --> 0:02:36.680 We've introduced an online reservation system where they can just 0:02:37.400 --> 0:02:40.520 hold a house and then you know, go directly to contract. 0:02:41.040 --> 0:02:44.160 It's been tremendous. We've had probably in the last eight 0:02:44.160 --> 0:02:47.880 ten weeks UM, something like two fifty sales without a 0:02:47.880 --> 0:02:50.560 customer ever walking in the sales office. And your months 0:02:50.560 --> 0:02:53.440 of June was your best months ever. You sold sev 0:02:53.840 --> 0:02:57.000 hundred and fifteen homes, So congratulations on that. I'm looking 0:02:57.000 --> 0:02:59.639 at your website and there really is a huge variety, 0:03:00.040 --> 0:03:03.880 starting in the two thirties range and going right up 0:03:03.880 --> 0:03:07.440 to you know, even past half a million dollars in 0:03:07.760 --> 0:03:11.400 some areas of Arizona. What about prices though, in general? 0:03:11.600 --> 0:03:17.040 Have they been dropping during the pandemic. I would tell 0:03:17.120 --> 0:03:20.240 you that if you were to go back to late 0:03:20.320 --> 0:03:24.359 March early April, everybody was speaking to understand what was 0:03:24.800 --> 0:03:28.400 going to happen with the consumers, you know, kind of mindset, 0:03:28.560 --> 0:03:30.920 what was going to happen with jobs, and I would 0:03:30.919 --> 0:03:33.040 tell you there was a freeze on prices. I don't 0:03:33.040 --> 0:03:35.840 think because the inventory has always been so tight coming 0:03:35.880 --> 0:03:39.600 into the pandemic and even tighter today. I don't think 0:03:39.600 --> 0:03:42.160 you saw this tremendous dropping prices at all. I mean, 0:03:42.160 --> 0:03:44.560 you had situations, you could have had a close out, 0:03:44.680 --> 0:03:47.760 things that have been very typical to the industry. But 0:03:47.880 --> 0:03:52.440 in total, I'd say no prices have held, and if anything, 0:03:52.520 --> 0:03:54.600 over the last many weeks, I would tell you that 0:03:54.640 --> 0:03:59.280 there's been very thoughtful price increases going on across the industry. 0:03:59.320 --> 0:04:02.000 But once again, you have to remember that we are 0:04:02.040 --> 0:04:05.600 sitting at very very low inventories in both the resell 0:04:06.000 --> 0:04:09.480 and the new home market, and I think as you 0:04:09.560 --> 0:04:13.360 look at kind of the way the consumers thinking about 0:04:13.440 --> 0:04:17.160 the relationship with the home, we've really started to see 0:04:17.160 --> 0:04:20.320 a bias to new We've seen that. You know, there's 0:04:20.320 --> 0:04:22.839 a lot of reasons why people are moving today, right 0:04:22.960 --> 0:04:25.520 It could be because they need more rooms, they need 0:04:25.560 --> 0:04:31.520 more office space, really around wellness features, um and so 0:04:31.760 --> 0:04:35.240 it's it has helped, it has kept prices pretty healthy. 0:04:35.640 --> 0:04:38.200 Sure are you seeing you know, the phenomena we've seen 0:04:38.480 --> 0:04:40.800 or heard about a right about since the pandemic is 0:04:40.839 --> 0:04:44.200 a kind of a de urbanization move, and you know, 0:04:44.240 --> 0:04:47.679 as people try to get to a less dense living environment. 0:04:47.720 --> 0:04:50.560 Do you think that it's a longer term trend or 0:04:50.560 --> 0:04:55.800 maybe just a short term effect from the pandemic. It's 0:04:55.839 --> 0:04:58.599 such an important question, and it's some that's gotten a 0:04:58.680 --> 0:05:01.360 question that's gotten a lot of kind of i'd say 0:05:01.440 --> 0:05:04.440 chatter over the last um, you know, ten twelve weeks. 0:05:04.520 --> 0:05:06.760 Interestingly enough, I would tell you at the beginning it 0:05:06.880 --> 0:05:09.039 was just that it was a lot of talk. Um. 0:05:09.120 --> 0:05:12.760 We UM do a lot of research and talking to 0:05:12.880 --> 0:05:16.719 our buyers are shoppers that are walking in the door, 0:05:16.839 --> 0:05:19.560 the folks that are coming on through our website, and 0:05:19.600 --> 0:05:22.479 we've been doing that every week since this started. And 0:05:22.560 --> 0:05:25.320 for the first time, I would tell you that we 0:05:25.360 --> 0:05:29.440 are seeing in our buyer data, UM this I don't 0:05:29.440 --> 0:05:32.200 want to call it a flight to rural or suburban, 0:05:32.880 --> 0:05:36.120 but we're absolutely seeing those numbers rise. And I think 0:05:36.160 --> 0:05:38.440 what you're really seeing is that people are thinking about 0:05:38.440 --> 0:05:40.400 being able to work home and not having to do 0:05:40.440 --> 0:05:44.960 those commutes. I'm being able to buy and you know, 0:05:45.080 --> 0:05:48.240 look at the difference in what happens to prices as 0:05:48.279 --> 0:05:51.640 you move out into kind of the suburban market. Um, 0:05:51.680 --> 0:05:54.080 we are seeing a lot more interest and a lot 0:05:54.400 --> 0:05:58.000 of interest as people are in that shopping mode as well. 0:05:58.560 --> 0:06:01.680 It's not just for single family I think that, um, 0:06:01.720 --> 0:06:06.239 that's probably going to be the beneficiary. But we're seeing 0:06:06.240 --> 0:06:10.480 a lot of interest around town homes as well. UM, 0:06:10.520 --> 0:06:13.480 but yeah, not not kind of in the central core, Cheryl, 0:06:13.520 --> 0:06:14.720 we have to leave it there, but a pleasure to 0:06:14.760 --> 0:06:17.520 speak with you. Cheryl Homer is chairman and CEO of 0:06:17.560 --> 0:06:21.920 Taylor Morrison based in Scottsdale, Arizona, but with a presence 0:06:21.960 --> 0:06:26.280 in many many states, primarily Arizona and California and Colorado, Florida, 0:06:26.400 --> 0:06:32.600 but also in sort of the more north states like Oregon, 0:06:32.760 --> 0:06:36.440 and then some of the southeastern states as well. We 0:06:36.520 --> 0:06:39.120 have Washington in there and some really beautiful homes on 0:06:39.160 --> 0:06:41.359 this website. Poll you could get someft in very easily. 0:06:42.279 --> 0:06:44.280 I got plenty of real estate right now, the fifth 0:06:44.400 --> 0:06:49.960 largest home builder in the United States. So what exactly 0:06:50.080 --> 0:06:52.320 is going on in bond markets here in the United States? 0:06:52.440 --> 0:06:54.240 If you give your money away to the US government 0:06:54.279 --> 0:06:57.159 for ten years, you get sixty basis points right now, 0:06:57.279 --> 0:06:59.240 which doesn't seem like a whole lot. Let's bring in 0:06:59.320 --> 0:07:03.080 someone who's been working in the field for a long time, 0:07:03.160 --> 0:07:06.800 Tim Vogel and Financial Couple Markets, and he joins us 0:07:06.880 --> 0:07:09.240 from Memphis, Tennessee. Of course, f h N is a 0:07:09.360 --> 0:07:13.400 national fixed income dealer, as we all know, Jim, are 0:07:13.440 --> 0:07:16.640 you board right now? Let's just let's just be blunt 0:07:16.640 --> 0:07:19.400 about it. Are there interesting moves in the bond markets 0:07:19.480 --> 0:07:21.280 right now? Are you just waiting for the Fed to 0:07:21.400 --> 0:07:23.400 start getting out of the way so that you know, 0:07:23.480 --> 0:07:27.400 other buyers have influence again, Well, this week has been 0:07:28.040 --> 0:07:31.040 interesting because as we came into the third quarter, people 0:07:31.080 --> 0:07:34.320 were concerned that we may not see demanded treasury auctions 0:07:34.360 --> 0:07:37.440 to finance all the stimulus spending. Instead, we have seen 0:07:37.480 --> 0:07:41.800 an excellent response to the treasury supply, even as it 0:07:41.840 --> 0:07:45.720 grows every single month, and that's translated into lower interest 0:07:45.800 --> 0:07:50.480 rates because the fear of supply is diminished. So, Jim, 0:07:50.920 --> 0:07:53.480 let's talk about the FED here. Um, you know the 0:07:53.480 --> 0:07:56.160 phrase I'd like to use in people listening kind of know, 0:07:56.280 --> 0:07:59.880 this is the FEDS kind of back stopping the market here. 0:08:00.760 --> 0:08:02.920 How long do you think they can continue to do that? 0:08:05.320 --> 0:08:10.320 Two to three years? Well? Yes, Um, they've got a 0:08:10.440 --> 0:08:16.800 proven track record of managing expectations that long. And there's 0:08:16.840 --> 0:08:19.840 going to be a long period of time before people 0:08:19.880 --> 0:08:23.120 are convinced that the economic we can recover to the 0:08:23.120 --> 0:08:26.840 point that inflation is going to return and send rates 0:08:27.000 --> 0:08:30.680 up from obviously low levels. Yeah. I mean it's interesting 0:08:30.680 --> 0:08:33.560 the Fed literally, with its with its forecast, has you know, 0:08:33.920 --> 0:08:35.640 sort of hinted it to to three years, if not 0:08:35.880 --> 0:08:39.560 explicitly outright said it. But it will only take for 0:08:39.600 --> 0:08:41.760 the market to get a whiff of inflation at some point, 0:08:41.760 --> 0:08:44.120 if you get you know, a few more gang blusters, 0:08:44.559 --> 0:08:47.400 jobs numbers or what have you, for the curve to 0:08:47.440 --> 0:08:49.920 steep in quite sharply again, right, Jim, have you seen 0:08:49.920 --> 0:08:54.000 this before? Is it an actual risk? Absolutely? Uh? Curve 0:08:54.040 --> 0:08:57.679 steeping in? Is the question really for the next at 0:08:57.760 --> 0:09:01.040 least the next six months, if not for uh, an 0:09:01.080 --> 0:09:05.520 extended period in which is why it's so interesting that 0:09:05.640 --> 0:09:09.720 this week we absorbed the long part of the treasury supply. 0:09:10.400 --> 0:09:14.439 Their treasuries were sort of left um by the side 0:09:14.440 --> 0:09:17.680 of the road during the stock market um excitement during 0:09:17.720 --> 0:09:22.440 the second quarter, and now treasuries aren't necessarily rebounding, but 0:09:22.520 --> 0:09:24.839 they're certainly getting a lot more attention than they did 0:09:24.880 --> 0:09:28.160 over the previous two months. Such where you know, right now, 0:09:28.200 --> 0:09:31.400 given where we stand, given kind of the economic outlook, 0:09:31.400 --> 0:09:33.920 given some of the uncertainties about some of these states 0:09:33.960 --> 0:09:37.240 that are seeing a surge in cases. Where do you 0:09:37.320 --> 0:09:42.160 see value or opportunity in the fixing come markets today? Uh, 0:09:42.320 --> 0:09:45.440 you have to pay very careful attention and try to 0:09:45.520 --> 0:09:48.959 find the best corporate bonds that you can. If you 0:09:49.080 --> 0:09:53.960 are trying to produce a little bit extra yield, you've 0:09:54.000 --> 0:09:57.840 got to consider lower cupon mortgage backed securities. But then 0:09:57.840 --> 0:10:01.600 in terms of the all important yield curve strategy, all 0:10:01.640 --> 0:10:05.520 of our work this week that tested different scenarios suggested 0:10:05.559 --> 0:10:09.240 that concentrating around the seven year, it's a great place 0:10:09.280 --> 0:10:13.119 for an awful lot of intermediate bond portfolios to concentrate 0:10:13.600 --> 0:10:16.680 around the seven year. That's interesting, Well, who who would 0:10:16.679 --> 0:10:19.400 they be hoped us about flows? Brian Shapata had a 0:10:19.480 --> 0:10:22.199 nice column today about pension funds, and you know how 0:10:22.760 --> 0:10:25.120 it's conceivable that they could actually sort of do to 0:10:25.400 --> 0:10:27.600 debt markets what they used to be able to do 0:10:27.720 --> 0:10:29.600 or are able to do to equity markets, and that 0:10:29.640 --> 0:10:32.280 has moved the market. Did you see it? What do 0:10:32.360 --> 0:10:34.440 you make of that idea or what do you make 0:10:34.440 --> 0:10:37.840 of that idea? Jim? Pension funds are critical, particularly at 0:10:37.840 --> 0:10:40.520 the long end of the market. They are critical to 0:10:40.679 --> 0:10:44.160 the credit um markets in terms of their demand there, 0:10:44.600 --> 0:10:49.120 but in terms of current flows, the massive size away 0:10:49.160 --> 0:10:55.040 from the FED is from households UH that have basically 0:10:55.080 --> 0:10:58.240 put their their spare cash to the extent it's not 0:10:58.320 --> 0:11:02.080 in stocks, into mutual real funds and into bank deposits. 0:11:02.280 --> 0:11:05.319 The bank deposit growth, even taking out some of the 0:11:05.360 --> 0:11:10.599 stimulus payments, et cetera, has been extraordinary this year, Jim. 0:11:10.640 --> 0:11:13.440 You know, it's we're several months into this pandemic and 0:11:13.480 --> 0:11:17.160 several months into the economic fallout from it. What's your 0:11:17.200 --> 0:11:19.800 thought about credit quality? Are we're seeing We're going to 0:11:19.880 --> 0:11:22.080 see the bank's report next week. You're gonna set aside 0:11:22.120 --> 0:11:25.199 some more big reserves. But as you look across your portfolio, 0:11:25.200 --> 0:11:28.040 are you starting to see some concerns as it relates 0:11:28.040 --> 0:11:33.160 to credit quality? Not yet, because the big worry about 0:11:33.200 --> 0:11:36.920 credit quality inter recession is that the taps get turned 0:11:36.960 --> 0:11:39.920 off too quickly and so that it's really not a 0:11:40.080 --> 0:11:43.480 credit problem, it's a liquidity problem, and that's certainly what 0:11:43.640 --> 0:11:48.000 aggravated the financial crisis twelve years ago. Here we've got 0:11:48.040 --> 0:11:51.280 plenty of liquidity thanks to the FED into those flows 0:11:51.280 --> 0:11:54.079 that we've already talked about and so we will not 0:11:54.360 --> 0:11:59.840 see the um the real credit problems outside specific industries 0:12:00.120 --> 0:12:03.960 developed probably until early part of next year. So we'll 0:12:04.080 --> 0:12:07.920 be looking for signs that credit might deteriorate. But right 0:12:07.920 --> 0:12:11.079 now people have have banked, in effect, so much debt 0:12:11.160 --> 0:12:13.560 on their balance sheet that they won't need to come 0:12:13.600 --> 0:12:17.760 to market uh to to raise new funds unless they 0:12:17.880 --> 0:12:21.880 unless the economy improves and they start spending those dollars again. Jim, 0:12:21.920 --> 0:12:24.480 what coronavirus data do you watch to give you any 0:12:24.520 --> 0:12:28.560 hint about what might happen in the treasury market. We 0:12:28.640 --> 0:12:33.280 look very carefully at transmission rates by state. We look 0:12:33.440 --> 0:12:37.560 very carefully at what we call real time mortality rates 0:12:37.559 --> 0:12:41.400 and how they are shifting as Sun Belt states undergo 0:12:41.960 --> 0:12:46.520 a tremendous increase in their cases. And the bond market 0:12:46.600 --> 0:12:50.840 has been watching, in fact, a slower pace of COVID 0:12:50.920 --> 0:12:55.440 nineteen statistics compared with the stock market that reacts every 0:12:55.480 --> 0:13:00.280 single day to daily data. Unfortunately, from an economic perspect if, 0:13:00.720 --> 0:13:04.120 daily data are just too erratic and have too many 0:13:04.160 --> 0:13:08.240 reporting lags and errors to really be a dependable source 0:13:08.640 --> 0:13:12.360 for what's happening in the bond market. So right here, 0:13:12.440 --> 0:13:14.720 what are some sectors Jim May on the corporate side. 0:13:14.720 --> 0:13:16.440 You're mentioned might as they go to the corporate side 0:13:16.440 --> 0:13:18.319 to get some yield. There's some sectors that you find 0:13:18.360 --> 0:13:23.840 attractive here. You've got to keep looking at the pharmaceuticals, 0:13:24.120 --> 0:13:27.840 the obviously the tech sector never really needs cash, but 0:13:27.880 --> 0:13:30.679 there's an awful lot of attractive paper out there. And 0:13:30.760 --> 0:13:37.439 then you have to selectively look at lower rated industrials 0:13:37.440 --> 0:13:40.920 when they get out of line with stock market performance. 0:13:41.240 --> 0:13:45.319 So in particular, you want to try to take advantage 0:13:45.520 --> 0:13:49.120 of wider credit spreads down the curve or down the 0:13:49.160 --> 0:13:55.560 credit curve when stock market volatility rises. Well, it's always 0:13:55.559 --> 0:13:58.240 a tutorial to speak with Jim Fola. I have to say, Jim, 0:13:58.280 --> 0:14:01.719 thank you. How are things in Memphis? Very briefly, Uh, 0:14:02.160 --> 0:14:06.240 quite well. Uh we had a spike, as many places 0:14:06.280 --> 0:14:09.520 did in the South, um in recent weeks and that 0:14:09.720 --> 0:14:13.880 appears to have leveled off. Thanks, We'll stay safe. Jim 0:14:13.960 --> 0:14:18.240 Vogel is with f h N Financial Markets, and obviously 0:14:18.320 --> 0:14:21.200 it's a primary dealer. Jim has been steeped in treasury 0:14:21.200 --> 0:14:24.520 market activity for a little while now. Yeah, it's actually 0:14:24.560 --> 0:14:26.560 it's great to speak speak to Jim and kind of 0:14:26.600 --> 0:14:29.080 looking at he's saying, if you need yield here, you 0:14:29.120 --> 0:14:31.760 might have to look on the corporate credit side, given 0:14:31.760 --> 0:14:34.320 where treasury rates are. So we'll certainly pay attention to 0:14:34.440 --> 0:14:38.160 that coming up. Balance of power with David Weston for 0:14:38.320 --> 0:14:43.800 Vannie Quinn and Paul Sweeney, and this is Bloomberg. Well, 0:14:43.840 --> 0:14:47.440 I guess the narrative about the pandemic right now is 0:14:47.520 --> 0:14:51.520 one of trying to balance the medical risk of reopening 0:14:51.560 --> 0:14:55.600 the economy with the economic risk of not reopening the economy, 0:14:55.600 --> 0:15:00.000 and that's being played out across the country with varying effects. 0:15:00.080 --> 0:15:03.840 Laurence Sour, Assistant Professor of Emergency Medicine that JOHNS Hopkins 0:15:04.080 --> 0:15:06.760 uh School of Medicine, joins us on the phone. I 0:15:06.800 --> 0:15:08.720 should note that the Bloomberg School of Public Health is 0:15:08.720 --> 0:15:13.200 supported by Michael Bloomberg, founder Bloomberg LP and Bloomberg Philanthropies. Lauren, 0:15:13.240 --> 0:15:16.000 thanks so much for joining us here. I think the conversation. 0:15:16.600 --> 0:15:19.920 One of the more recent aspects of this conversation is 0:15:20.160 --> 0:15:24.080 schools reopening schools in the fall. What do you think 0:15:24.080 --> 0:15:30.320 as the most prudent um path there? Yeah, so there's 0:15:30.360 --> 0:15:33.000 been a lot of conversation about schools and what it 0:15:33.040 --> 0:15:36.400 means and the pros and cons of reopening. I think 0:15:36.480 --> 0:15:39.840 everybody wants to see schools reopening, and we understand that 0:15:39.960 --> 0:15:43.560 not being in school and and missing as much classroom 0:15:43.640 --> 0:15:46.440 time as they have is going to be detrimental to 0:15:46.520 --> 0:15:49.600 varying degrees to students and kids across the country and 0:15:50.000 --> 0:15:53.040 truly across the world. The thing is, we have to 0:15:53.080 --> 0:15:55.200 do it safely or else we'll just be back in 0:15:55.240 --> 0:15:58.200 this situation and it'll be even more disruptive in a 0:15:58.240 --> 0:16:01.440 few months or next years. So we have to take 0:16:01.480 --> 0:16:03.320 the time of the summer to plan how to do 0:16:03.360 --> 0:16:06.600 it safely. Our schools don't have a ton of resources already. 0:16:07.120 --> 0:16:09.320 Um so the idea that they could bring in additional 0:16:09.360 --> 0:16:11.280 resources to do all the things that are being asked 0:16:11.320 --> 0:16:14.760 to them to bring kids back safely is really hard. Yeah. 0:16:14.800 --> 0:16:18.000 I mean it strikes me that, I mean, one child 0:16:18.120 --> 0:16:21.240 gets it and that's that's schooled one for for you know, 0:16:21.400 --> 0:16:24.560 for a long time, right, Lauren. Yeah, I think we're 0:16:24.600 --> 0:16:28.640 still trying to understand how it, how virus transmission happens 0:16:28.640 --> 0:16:30.480 and kids and what it looks like. We know that 0:16:30.840 --> 0:16:33.600 in general kids seem to have less severe disease um, 0:16:33.760 --> 0:16:35.480 but we are still doing a lot of work on 0:16:35.520 --> 0:16:38.160 how transmissibile it is and kids and how they spread 0:16:38.160 --> 0:16:41.200 the virus. And we also have to think about the parents, UM, 0:16:41.480 --> 0:16:44.360 and the teachers and the administrators in these schools and 0:16:44.400 --> 0:16:46.280 how it could impact them if they have a sick 0:16:46.400 --> 0:16:49.720 kid who maybe is in symptomatic asymptomatic and brings the 0:16:49.800 --> 0:16:51.320 virus to school and then all of a sudden, all 0:16:51.360 --> 0:16:53.480 your teachers are sick and several of your kids are sick, 0:16:53.520 --> 0:16:57.040 and then their parents and their families get sick too. So, Lauren, 0:16:57.080 --> 0:17:00.760 what's the latest thinking on second way? I mean, here 0:17:00.760 --> 0:17:03.680 in the New York metropolitan area, I think we've generally 0:17:03.720 --> 0:17:06.679 done a quite a good job, as well as the 0:17:06.760 --> 0:17:09.480 Massachusetts even in Maryland and you're where where you are, 0:17:09.920 --> 0:17:13.560 UM is there it is it still fair to think 0:17:13.600 --> 0:17:16.280 about a second wave because I look what's happening in 0:17:16.320 --> 0:17:18.920 California and Florida and Texas, and to me that is 0:17:18.960 --> 0:17:21.000 not so much as a second wave but almost their 0:17:21.160 --> 0:17:23.399 first wave quite frankly, So, how how did you think 0:17:23.440 --> 0:17:26.720 about that? Yeah? I completely agree with you. I think 0:17:26.840 --> 0:17:29.159 most places we're not feeling like we're out of the 0:17:29.200 --> 0:17:31.040 first wave. I think there's been a lot of talk 0:17:31.080 --> 0:17:35.360 about second wave. Um, But when we're seeing six cases 0:17:35.480 --> 0:17:39.280 or more across the country, UM, you know, and having 0:17:39.320 --> 0:17:44.800 our our repeatedly having our our largest days of increased cases, UM, 0:17:44.840 --> 0:17:47.399 it's hard to think about that as a second wave. Uh. 0:17:48.359 --> 0:17:50.080 I think there will be a second wave, but I 0:17:50.119 --> 0:17:51.480 think we have to get to the end of the 0:17:51.560 --> 0:17:55.040 first wave first, and I don't think we're there yet. Lauren, 0:17:55.320 --> 0:17:58.240 what do you make of the idea that airborne particles 0:17:58.240 --> 0:18:00.240 now should we looked at the w H O been 0:18:00.800 --> 0:18:02.919 you know, refusing or at least not really taking it 0:18:03.000 --> 0:18:05.959 up seriously, And there's a growing consensus now that perhaps 0:18:05.960 --> 0:18:10.359 it should. Yeah. Several hundred scientists wrote a letter, I believe, 0:18:10.359 --> 0:18:12.840 to the New York Times UM, indicating that they wanted 0:18:12.840 --> 0:18:16.840 the WHO to take the role of airborne particles more 0:18:16.880 --> 0:18:20.960 seriously in the spread of COVID nineteen. And I think 0:18:21.600 --> 0:18:23.840 the guidance has changed a bit, and the w H 0:18:23.840 --> 0:18:26.159 two is thinking has changed a bit. Um. We are 0:18:26.240 --> 0:18:29.000 continually learning about the virus and how it spreads. I 0:18:29.040 --> 0:18:33.359 still do believe that droplet transmission, so those bigger droplets 0:18:33.400 --> 0:18:36.560 are what's driving the bulk of transmission. And I think 0:18:36.600 --> 0:18:40.520 there is a role for aerosol transmission or airborne transmission. 0:18:40.520 --> 0:18:44.960 But it's in specific circumstances like inside close quarters things 0:18:45.000 --> 0:18:48.480 like singing or loud talking or yelling, UM, places where 0:18:48.520 --> 0:18:51.680 the ventilation is not great. So there are specific circumstances 0:18:51.720 --> 0:18:53.560 where those are going to be the drivers. Those are 0:18:53.840 --> 0:18:56.280 that that airsol transmission is going to be the driver. 0:18:56.640 --> 0:19:00.440 But it's those very specific circumstances. Lauren, you're just mentioning 0:19:00.480 --> 0:19:03.879 the World Health organizations. How important is it that the 0:19:04.000 --> 0:19:07.600 US is pulling out of the w h O. UM. 0:19:07.880 --> 0:19:11.080 I hope that that it doesn't happen. I think it's 0:19:11.119 --> 0:19:14.240 incredibly important to put resources towards making sure that it 0:19:14.280 --> 0:19:16.800 doesn't happen and that we truly evaluate the impact of 0:19:16.800 --> 0:19:19.880 a decision like that. UM. We will lose a lot 0:19:19.960 --> 0:19:22.760 of access to a lot of international expertise, a lot 0:19:22.800 --> 0:19:27.639 of international information, UM, global collaboration around the exact things 0:19:27.720 --> 0:19:29.719 that we are having such a hard time handling here 0:19:29.720 --> 0:19:32.320 in the US right now. UM. So it will impact 0:19:32.359 --> 0:19:38.920 our ability to UH manage and understand the seasonal flu vaccines, UM, 0:19:39.040 --> 0:19:44.600 the potential for COVID vaccines, UH, global therapeutic trials, all 0:19:44.640 --> 0:19:47.000 of those things. UM. The w h O has a 0:19:47.119 --> 0:19:49.800 very large role in and we support the w h O, 0:19:49.920 --> 0:19:53.600 and we participate through our relationship with the WHO and 0:19:53.640 --> 0:19:55.760 our role in the w h O. And so the 0:19:55.800 --> 0:19:59.119 idea that we would pull out simply because of a 0:20:00.400 --> 0:20:03.919 a disagreement on how this COVID nineteen response has been 0:20:03.960 --> 0:20:08.720 managed by them is truly unbelievable and very very shortsighted. Basically, Lauren, 0:20:08.880 --> 0:20:11.560 do you stop getting updates on not on the latest 0:20:11.560 --> 0:20:13.200 science if you pull out of the w h O. 0:20:13.320 --> 0:20:15.040 Or are they not obliged to sort of share it 0:20:15.040 --> 0:20:18.520 with the world anyway, They are bliged to share it 0:20:18.560 --> 0:20:21.000 with the world. But but, and we would receive that 0:20:21.080 --> 0:20:24.960 information purely as a recipient, just like any UM anyone else. 0:20:25.359 --> 0:20:29.239 But we currently have a role at the table in 0:20:29.320 --> 0:20:34.440 decision making, in in primary information sharing and information gathering, 0:20:34.640 --> 0:20:40.560 and supporting policy development, supporting operational response decisions and all 0:20:40.600 --> 0:20:43.320 of those things. We would simply be on the receiving 0:20:43.440 --> 0:20:46.439 end of the actions, not UM as an active and 0:20:46.440 --> 0:20:49.439 willing participant and not as a you know, a global 0:20:49.440 --> 0:20:52.800 public health authority. UM. So when you're not in the 0:20:52.800 --> 0:20:56.600 beginning edge of that conversation, you have no say in 0:20:56.640 --> 0:20:59.000 how the conversation plays out until you're at the end 0:20:59.040 --> 0:21:02.040 of it. Wow, all right, Lauren, Thank you always learned 0:21:02.080 --> 0:21:05.400 something new from our conversations. Lawrence Hower is Assistant Professor 0:21:05.400 --> 0:21:08.280 of Emergency Medicine at Johns Hopkins School of Medicine, and 0:21:08.280 --> 0:21:10.119 of course, the Bloomberg School of Public Health is supported 0:21:10.160 --> 0:21:13.720 by Michaelaurd Bloomberg, founder of Bloomberg LP, Bloomberg Philanthropies, and 0:21:13.760 --> 0:21:18.399 Bloomberg News. So, as Dave Wilson was telling us earlier, 0:21:18.480 --> 0:21:22.080 Michael Batnik at ridholes Well Management talks about comparisons between 0:21:22.160 --> 0:21:25.000 US tex stocks gains and the bubble twenty years ago. 0:21:25.080 --> 0:21:27.320 I particularly want to bring this up with our next guest, 0:21:27.320 --> 0:21:30.479 now is David Kat's, chief investment officer at Matrix Asset 0:21:30.560 --> 0:21:33.439 Advisors with more than eight hundred million dollars in assets 0:21:33.520 --> 0:21:35.960 under management. David, it is great to speak with you. 0:21:36.080 --> 0:21:38.840 I know that one of your sort of areas of 0:21:38.920 --> 0:21:42.920 expertise is the tech sector. You've obviously, you know, been 0:21:42.960 --> 0:21:46.000 following that area in the melt up for for many years, 0:21:46.000 --> 0:21:48.600 decades even, and and you did like some of those docks. 0:21:48.840 --> 0:21:51.040 What do you make of the idea that we might 0:21:51.080 --> 0:21:53.560 have a lot further to go. If you look at 0:21:53.880 --> 0:21:56.480 comparisons between how the NASDAC one hundred sword in the 0:21:56.480 --> 0:21:58.720 five years leading up to the March two thousand peak 0:21:59.119 --> 0:22:03.640 and how it's it's been quote unquote soaring up to now. Yeah, 0:22:03.720 --> 0:22:05.840 we would not look at that and say, oh, good, 0:22:05.880 --> 0:22:07.920 you have five years and take comfort in the current 0:22:07.920 --> 0:22:11.040 melt up because it ended hideously and it took ten 0:22:11.119 --> 0:22:13.359 years for the Nattic to get back to break even. 0:22:13.920 --> 0:22:16.359 Uh So, we think the market is going to be 0:22:16.440 --> 0:22:18.880 higher over the next nine to twelve months, but we're 0:22:18.920 --> 0:22:23.040 getting increasingly wary about the tech melt up right now, 0:22:23.160 --> 0:22:26.680 and we would not be using the higher stock prices 0:22:26.720 --> 0:22:30.280 every day as a signal to jump aboard. We think 0:22:31.040 --> 0:22:33.960 best case, a lot of returns have already been made 0:22:33.960 --> 0:22:36.720 in that area. We think that there are a lot 0:22:36.760 --> 0:22:39.560 more risky in terms of the downside, and we do 0:22:39.640 --> 0:22:41.280 think there are lots of the areas of the market 0:22:41.280 --> 0:22:44.399 that have been left behind entirely by the recovery and 0:22:44.400 --> 0:22:47.160 are selling a pretty attractive valuation. So you've got parts 0:22:47.160 --> 0:22:49.679