Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene Jay Ley.
Speaker 1: We bring you insight from the best in economics, finance, investment,
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Speaker 1: we've got a style on this market. What a rally
Speaker 1: we've seen off the bottom over the last counple of months.
Speaker 1: Make Swallick element Sacks joins us now, Mike Friday, What
Speaker 1: did Friday change for you as you look ahead to
Speaker 1: the weeks and months ahead through I think that Friday
Speaker 1: was just an example of a continuation of the impact
Speaker 1: of government policy, so big impact on the TESCO, big
Speaker 1: impact of monetary policy, that the rally can continue because
Speaker 1: the level of support from the government has been so significant,
Speaker 1: creating an enormous amount of cash that is really looking
Speaker 1: for a reason to get invested. I think that when
Speaker 1: you look at the employment report and the discussion you've
Speaker 1: had earlier today about the questions in the number, we're
Speaker 1: a long ways away from getting American workers back to
Speaker 1: work in a very meaningful way. So the job situation
Speaker 1: is going to be one that is going to continue
Speaker 1: to be an issue for the next six months to
Speaker 1: a year, and so I wouldn't necessarily call victory with
Speaker 1: regard to the job picture. I think we have a
Speaker 1: long long way to go, and I think what you're
Speaker 1: seeing right now in markets is the more the impact
Speaker 1: of um UH significant significant policy liquidity, more so than
Speaker 1: confidence in in in reopening. The policy effort is clearly
Speaker 1: were the federal reserved objective was to divorce financial conditions
Speaker 1: from the real economy. We've done that. I think a
Speaker 1: lot of people looking at the date to Mike and
Speaker 1: trying to work out whether the economic conditions catches up
Speaker 1: with where financial conditions has taken us. Is that a
Speaker 1: challenge for the next couple of months or a challenge
Speaker 1: for the turn of the year. UH. That is the
Speaker 1: number one, two, and three questions regard to how you
Speaker 1: think about financial markets here and UM at Goman Sacks.
Speaker 1: But we did last week we have a daily forum
Speaker 1: where we get together all different investors. We brought in
Speaker 1: our multi asset people are fundamental equity investors as well
Speaker 1: as fixed income and had kind of a cage match
Speaker 1: around this topic. And the conclusion that we came to
Speaker 1: is that Number one the financial conditions that have been
Speaker 1: supported by the FED and by uh by governments through
Speaker 1: fiscal policy will dominate in the near term, but in
Speaker 1: the long term it's going to be earnings and jobs
Speaker 1: that are going to matter. And I think that it's
Speaker 1: too early to call victory with regard to where earnings
Speaker 1: are gonna end up. I think a lot of investors
Speaker 1: are saying that, you know, we're going to jump back
Speaker 1: in one to the earnings that we saw in We
Speaker 1: have a long, long way to go, and I think
Speaker 1: that there's a lot more repair that has to happen
Speaker 1: in the economy that we really don't know how companies
Speaker 1: are going to react to a different state of of
Speaker 1: of of a global economy when we have a UH issue,
Speaker 1: a medical issue that's going to be so significant to
Speaker 1: change the way that we do business. So our view
Speaker 1: right now is that for the near term, policy wins
Speaker 1: stay long risk assets, but over the longer term it's
Speaker 1: going to be all about earnings and jobs. Michael Swell,
Speaker 1: I want to go to your work with Goldman Sachs
Speaker 1: and before that with Freeman fbr Is well with your
Speaker 1: expertise and mortgage backed securities. A lot of rents aren't
Speaker 1: being paid. A lot of commercial real estate of every
Speaker 1: gradation isn't going to work out, And there's all the
Speaker 1: loans and the fancy derivative instruments off the back of that.
Speaker 1: Are you troubled at all by a pending real estate
Speaker 1: crisis in the nation because rents are not being paid? Um?
Speaker 1: I would say that the residential picture is going to
Speaker 1: be correlated to the job picture. So if we expect
Speaker 1: to continue to get America back to work and we
Speaker 1: can drive the true unemployment rate below ten, we're likely
Speaker 1: not to have a housing more get issue, whether on
Speaker 1: the price issue or whether on the rent issue. Uh.
Speaker 1: And So I think in terms of housing, we we
Speaker 1: don't have oversupply like we had to oversupply in two
Speaker 1: thousand seven, and we don't have um too much leverage
Speaker 1: in the system. We've kind of fixed the very very
Speaker 1: high LTV loan situation, the interest only loan situation. We
Speaker 1: we don't have borrowers that our leverages they were before.
Speaker 1: We're really going to be dependent upon jobs. So I
Speaker 1: think if we continue to see jobs improve, we don't
Speaker 1: have a housing market issue. I do think in the
Speaker 1: commercial real estate market there's a lot of adjustment that
Speaker 1: has to occur. There's gonna be a decent amount of
Speaker 1: restructuring of loans, there's gonna be some defaults, obviously on
Speaker 1: the retail side. But if you look at the commercial
Speaker 1: real estate market, there's a big debate there. If we
Speaker 1: think that we're going to see a lot of companies
Speaker 1: move out of UH, move out of major hubs, major cities,
Speaker 1: and and and and diversify their their exposure, having a
Speaker 1: negative impact on commercial real estate, the other side of
Speaker 1: that is, in a socially distant world, you're finding the
Speaker 1: companies are actually looking for more square footage to be
Speaker 1: able to bring workers back in a a in a
Speaker 1: safe way. So we actually think that the commercial real
Speaker 1: estate market is one that has has still has a
Speaker 1: lot of opportunity. If we see reopening of the economy,
Speaker 1: like the equity market is telling you, you ought to
Speaker 1: see stabilization in the commercial real estate market. And if
Speaker 1: you look in the world that we live in, not
Speaker 1: in the direct commercial real estate market, but in the
Speaker 1: commercial real estate securities market, we have not seen a
Speaker 1: significant recovery in pricing there. If we see the economy
Speaker 1: get back like the equity market is telling you, we
Speaker 1: think there's gonna be a lot of opportunity in some
Speaker 1: of the mezzanine securities and commercial mortgage backed security to
Speaker 1: be able to our an equity like returns. Mike, I'm
Speaker 1: just wondering. You were saying, is it time to stay
Speaker 1: risk on? And certainly a lot of people have been
Speaker 1: risk on. If you look at HILED bonds in the US,
Speaker 1: they've gained twenty two percent since late March, and we've
Speaker 1: seen three and a half billion dollars flow into the
Speaker 1: biggest high old bond et F in the past week alone.
Speaker 1: Don't fight the FED, but you can front run it.
Speaker 1: Has the FED already been front run fully? Or are
Speaker 1: there further opportunities here? I don't think fully. I still
Speaker 1: think there's going to be a lot of demand for
Speaker 1: US credit related assets. Keep in mind, it's not just
Speaker 1: front running the FED, but we're in a global interest
Speaker 1: rate environment where there are no interest rates. We're basically
Speaker 1: zero around the globe, and the US credit market still
Speaker 1: is a market that offers investors yield. Demand for yield
Speaker 1: is very, very significant, and I think people will continue
Speaker 1: to view not only the US treasury market, but also
Speaker 1: the US corporate credit market as in general safe haven,
Speaker 1: so I do think there's more room to run. However,
Speaker 1: more broadly around the question around risk assets and where
Speaker 1: we go from here. In the short term, we do
Speaker 1: think that policy zero rates are going to driver risk
Speaker 1: assets higher from here, but that's not gonna last forever.
Speaker 1: In the end, it's going to be about earnings. And
Speaker 1: so in our discussion last week, our cage match around
Speaker 1: where we go from here and have risk guests that's
Speaker 1: gone too far, we definitely came to the conclusion that
Speaker 1: this is going to be a winners and losers market,
Speaker 1: both on the equity side and the credit side, and
Speaker 1: it's time to think a little bit about moving away
Speaker 1: from just kind of being long beta and really focusing
Speaker 1: on the types of companies that will be the survivors
Speaker 1: and will gain market share. And so we do think
Speaker 1: active management will be a very important part of future
Speaker 1: returns versus just the beta they might. We just want
Speaker 1: to know who wins a cage fight, a Golment sacks,
Speaker 1: How does that work out out of the awakened when
Speaker 1: that plays out. I'm six ft five pounds, so I'm
Speaker 1: the biggest person. Who I I was? I was win?
Speaker 1: Um who win the the the answer is short term risk.
Speaker 1: On long term, long term, it's going to really rely
Speaker 1: upon earnings, and that the data that we have so
Speaker 1: far is irrelevant to the longer term macro picture. Stay tuned.
Speaker 1: Follow what's going on in China, Follow what's going on
Speaker 1: in South Korea in terms of reopening, and what's going
Speaker 1: on with consuming or what's going on with corporate earnings
Speaker 1: in those countries, because those will be leading indicators for
Speaker 1: what goes on here. Mike Swell, fantastic work has always
Speaker 1: always appreciate your time. So Mike Swell, that of Gallman
Speaker 1: Sacks joining US now and RITA cent of Energy aspects
Speaker 1: and ridascent is outstanding at the dynamics of supply and demand.
Speaker 1: Em Rita, I want to dovetail your wonderful narrow work
Speaker 1: with those that take a more geopolitical strategic work because
Speaker 1: it folds in. If OPEC plus members and let's go
Speaker 1: with OPEC, if they cheat, how does that affect your
Speaker 1: world of the minutia of supply and demand? Him a
Speaker 1: morning tom Um. I think in terms of the question
Speaker 1: you asked about compliance, Um, if the cheat, which by
Speaker 1: the way, we are ressuming in our balances we just
Speaker 1: cannot see how Iraq, Nigeria, Kazakhstan, given their fiscal broader
Speaker 1: fiscal issues, they just is so cash up will comply.
Speaker 1: It just means that the rebalancing takes longer. It is
Speaker 1: simply that supplies are now falling faster than demand. We've
Speaker 1: been saying this right from the start, that the stock
Speaker 1: draws will start from early June, and they have begun. Um.
Speaker 1: But the more these guys cheat, it just means that
Speaker 1: the overall supply number the reduction from OPEC plus will
Speaker 1: be less than what the headline numbers suggests. MENA. I'm
Speaker 1: struggling to understand the supply demand dynamic right now. A
Speaker 1: lot of people saying that the promised cuts of OPEC
Speaker 1: plus and the potential enforcement of them, which has been
Speaker 1: a challenge for years, that that has been the main
Speaker 1: driver of some of the recent price gains, and other
Speaker 1: people raise the concern that the shale patch is slowly
Speaker 1: starting to bring rigs back on. How much is this
Speaker 1: the story and how much is demand still the main
Speaker 1: driver here? How quickly the global economy can get back
Speaker 1: up to speed. I think you're exactly right, um, I
Speaker 1: think the global demand I at least in our view,
Speaker 1: is still very much the key riper. We did fall
Speaker 1: to record low levels in terms of demand. Now we
Speaker 1: are recovering um and that just means that you do
Speaker 1: need higher supplies now. I still stand by the problem
Speaker 1: we have in the market in you oil, that is,
Speaker 1: the data is opaque, The data is very lagged. We
Speaker 1: still don't know just how much we fell by. So
Speaker 1: if we don't know how much we fell by, but
Speaker 1: the markets assumed we would hit tank tops. I remember
Speaker 1: talking to you guys about that, but we never did.
Speaker 1: Because it may be demandedn't fall by as much as expected,
Speaker 1: even though it was very very weak, and because of
Speaker 1: negative prices, supplies fell tremendously, and that's what caught us
Speaker 1: to overshoot to the downside. In some respect, we have
Speaker 1: overshot to the upside right now, but we do need
Speaker 1: that some of that supply back because now refineries are
Speaker 1: bringing back production and demand is rising. I still think
Speaker 1: we've gone a bit too far because the demand is fragile.
Speaker 1: Supplies from the US are going to start to come back,
Speaker 1: so you know, it's not like a slamdown that of
Speaker 1: course prices should be from here. I'm rated do you
Speaker 1: find the supply in the United States is more elastic
Speaker 1: when prices roll over aggressively than when they rally. Yes,
Speaker 1: I think that the rate of change is absolutely the
Speaker 1: critical thing. But you know the main thing I will
Speaker 1: say for right now, especially because you ask about the
Speaker 1: US and in relation to gasoline demand, it's unemployment on
Speaker 1: our all our economic models. That's the biggest driver, even
Speaker 1: more so than prices. I just want to fit in
Speaker 1: a final question as well. I'm rating New York City reopening.
Speaker 1: I think we're all trying to get our hands around
Speaker 1: how quickly demand recovers. This is a slow, slow process
Speaker 1: for New York City, but going global to the United
Speaker 1: States beyond China, where we have at least the longer
Speaker 1: data set, what's the recovery and demand look like at
Speaker 1: the moment? I'm rated for these economies reopening. I mean,
Speaker 1: if you believe that the demand felt by about million
Speaker 1: barrels per day at the bottom, which was in April,
Speaker 1: we have easily recovered about ten to twelve million barrels
Speaker 1: per day in May alone, and right now we believe
Speaker 1: global all demand is about ninety million barrels. But they
Speaker 1: give ortake again China parts of China actually back above
Speaker 1: last year's levels because the government has um it's basically
Speaker 1: driving a big stimulus package. Europe isn't. US isn't. It's
Speaker 1: going to take a long time, particularly in the aviation sector.
Speaker 1: But yes, economies are opening up around the world because
Speaker 1: lockdown simply isn't sustainable for growth in the medium. Tom,
Speaker 1: I'm really sent ad energy aspects. I'm very fantastic to
Speaker 1: catch up with you to get your thoughts. As always,
Speaker 1: we're going to do a lot of this through this
Speaker 1: week of Bloomberg surveillance, market analysis, and there's no one
Speaker 1: better to coalesce all of these emotions, intentions, and Daniel
Speaker 1: Morris sees with BNP Perry, but with market strategy as well. Daniel,
Speaker 1: we have come so far, so fast in this equity market.
Speaker 1: How do you restructure? How do you reframe on the
Speaker 1: Monday morning in June. Well, I think it depends on
Speaker 1: the attitude that you had before we got all the
Speaker 1: news and we've been in the camp. I think, like
Speaker 1: a lot of people, it had been too much, too soon,
Speaker 1: and if we got more and sooner than we had before,
Speaker 1: you've either capitulated or you've just become that much more
Speaker 1: nervous and unfortunate. We're probably to stop much more nervous.
Speaker 1: I mean, certainly the data was good, it's helpful, but
Speaker 1: when you try to think about how things are going
Speaker 1: to be three and six months from now, and in
Speaker 1: particular when you look at earnings forecast for the end
Speaker 1: of the year, there still seems to be a fairly
Speaker 1: significant disconnect that if anything has gotten bigger. Okay, I
Speaker 1: totally take that point in the chart of the earnings
Speaker 1: disconnect is known by anybody listening and watching this program. Great,
Speaker 1: Then what it comes down to a central bank support?
Speaker 1: Did that go away over the weekend? Well, I guess
Speaker 1: it comes down to how what's the mechanism for that
Speaker 1: central bank support? I mean, if we think about low
Speaker 1: interest rates, right, we've had that for for a very
Speaker 1: long time. The increase in money supply, you know, certainly
Speaker 1: there's no lack of liquidity, but I don't think it's
Speaker 1: necessarily that that's strugging up to market. So on the margin,
Speaker 1: guess it comes back to if you do have any
Speaker 1: kind of setback, if there's any disappointments when we get
Speaker 1: into the fall and increase in infections and concerns about
Speaker 1: the reimposition of the lockdowns. You know, we will come
Speaker 1: back inevitably either to the question, you know, how much
Speaker 1: more consentral banks do when they've already done so much,
Speaker 1: and or if it's been the need for further fiscal stimulus.
Speaker 1: At some point, we've got to worry about the death
Speaker 1: that's being issued. So I think if there is one
Speaker 1: good thing that has come out about this, and I
Speaker 1: think you alluded to it a bit sooner, you know,
Speaker 1: we may not now get as much stimulus in the
Speaker 1: next rounds from the US as you would have thought
Speaker 1: before given this data. And you know, I really actually
Speaker 1: think that is a good thing, because it is because
Speaker 1: the data is better, so you don't need it. And
Speaker 1: then also again we are going to have to worry
Speaker 1: about the dead levels at some point, and at least
Speaker 1: on the margin, that's not quite as big of a
Speaker 1: problem as you might have feared. Dan. A lot of
Speaker 1: people say that the rally in stocks hasn't been entirely
Speaker 1: driven by FED stimulus, but just the fact that Facebook, Amazon,
Speaker 1: My or soft Apple have all done well in this
Speaker 1: environment with a push to the digital and if you
Speaker 1: look at the combined capitalization of the top five holdings
Speaker 1: in the S and P it has doubled since two
Speaker 1: thousand thirteen. How much can we see this rotation into
Speaker 1: the other sectors that are less loved, given the fact
Speaker 1: that we're not clear on how much of a fundamental
Speaker 1: recover we have that in the economy. Yeah, I think
Speaker 1: it's exactly the right way to be thinking about it.
Speaker 1: And I would actually divide up the market and probably
Speaker 1: three different bins. So one, you certainly have technology, which
Speaker 1: we all understand is going to be a long term
Speaker 1: winner from the pandemic. But at the same time we
Speaker 1: also appreciate that valuations have gotten very high. Just by
Speaker 1: one measure of price to book for the sector is
Speaker 1: eight times, which is the all time high for the sector.
Speaker 1: So even if you know, we love those growth prospects,
Speaker 1: you're paying a lot for that right now. So without
Speaker 1: question of vulnerability, at least in the near tom poor technology.
Speaker 1: I think the other part where we've seen those parts
Speaker 1: of the market that had massively the underperformed until recently.
Speaker 1: You think anything around tourism, uh and leisure and so on,
Speaker 1: you know, a pretty significant opportunity there for those sectors
Speaker 1: to rebound. Now, maybe not sustainably because a lot of
Speaker 1: this will come down ultimately how optimistic we are about
Speaker 1: getting a virus excuse me of vaccine and when. But
Speaker 1: you know, from evaluation point of view, that's clearly an opportunity.
Speaker 1: And then I think the other risk we need to
Speaker 1: keep in mind are exactly those defensive sectors that have
Speaker 1: done well, but have done well because we've been living
Speaker 1: under lockdowns because we haven't had a vaccine. And as
Speaker 1: that starts to ease, these sectors, which have also become
Speaker 1: quite expensive, aren't going to see that long term earning
Speaker 1: support the way you see in technology. So you think around,
Speaker 1: say the market excusing the hypermarkets, you think about, you know,
Speaker 1: cleaning supplies and any other defensive sectors. I think that's
Speaker 1: probably the other key vulnerability that you need to keep
Speaker 1: in mind when you're looking at your portfolio. Dan, is
Speaker 1: the market right now pricing in a second wave? I
Speaker 1: think that the questions to fold, so when will there
Speaker 1: be a second wave? And I think most people are
Speaker 1: pretty sure that there will be. I mean, it certainly
Speaker 1: seems likely, but it's trying to anticipate then what the
Speaker 1: response is going to be. And I think there's at
Speaker 1: least there there's some ground for optimism that even if
Speaker 1: there is a second wave, the economic impact won't necessarily
Speaker 1: be so great. I think there's two reasons for that one.
Speaker 1: You know, as opposed to the first wave, we know
Speaker 1: this one is coming, or at least we can anticipate it,
Speaker 1: so we'll be more prepared, you know, hopefully hospitals will
Speaker 1: be ready, we'll have you know, better capability around tracking
Speaker 1: and tracing, so hopefully we can have a more focused,
Speaker 1: targeted response to whatever increase we do see, and we
Speaker 1: won't need to have nationwide lockdowns where we've had so far.
Speaker 1: So again, the economic impact will be hopefully much less
Speaker 1: than we saw in the first round. And I think
Speaker 1: the second thing that certainly changed over the last couple
Speaker 1: of weeks is to some degree you could argue the
Speaker 1: media attention has shifted a bit. It's not every day
Speaker 1: on the front page, seven on the TV about the pandemic.
Speaker 1: And you think about the psychological impact to that, you know,
Speaker 1: people's desire to consume, to go out. If by the
Speaker 1: time we get to the autumn, if the media attention
Speaker 1: has faded someone, I think that will be at least
Speaker 1: beneficial in terms of psychology, even though it's with our
Speaker 1: questions are going to be a very serious health health issue.
Speaker 1: People maybe may not feel quite so concerned and stressed
Speaker 1: about the environment, and therefore you will have on the
Speaker 1: margin a greater propensity to consume in a way that
Speaker 1: we haven't seen over the last several months. Night, and
Speaker 1: we've got to leave you that down. Always great to
Speaker 1: catch out with you, Mike down mars that have been
Speaker 1: prepared on this market. One of the great things that
Speaker 1: is true is we take it for granted. And what
Speaker 1: we take for granted is very simply the getting around
Speaker 1: of New York. It can be seventy thod plus people,
Speaker 1: It can be by any means of conveyance, but it
Speaker 1: looks a lot easier than it actually is. Patrick Foy
Speaker 1: is with us on this day of reopening for New
Speaker 1: York City. We welcome in and across this nation and
Speaker 1: to a worldwide audience. He is a small job as
Speaker 1: chief executive Officer of the MTA, the Metropolitan Transit Authority. Patrick,
Speaker 1: congratulations on getting to this point in this pandemic. It
Speaker 1: has been an extraordinary effort. Give us an update on
Speaker 1: the last two months. What surprised you about what needed
Speaker 1: to be done in this City for the m t
Speaker 1: A first. Thanks for having me. It's not a surprise,
Speaker 1: but I am awe struck uh and overwhelmed by the
Speaker 1: job that the m t A operating folks did subways, buses,
Speaker 1: metro North Long Island Railroad, bridges and tunnels. They were
Speaker 1: literally heroes, moving hero uh. The pandemic has obviously had
Speaker 1: the epicenter has been New York City and the New
Speaker 1: York New Jersey region UH, and the losses, whether fatalities,
Speaker 1: nous is economic damage had been extensive. But the MTA
Speaker 1: workforce has done a tremendous job. The second thing that
Speaker 1: strikes me, obviously is the precipitous decline in ridership, which
Speaker 1: paradoxically in this context is a good thing. It was
Speaker 1: New Yorkers responding to Governor Cuomo's directive and suggestions directive
Speaker 1: by executive order with the force of state law, but
Speaker 1: also his suggestions that the way to minimize the number
Speaker 1: of cases and fatalities UH in New York, New York
Speaker 1: City and New York State was for people to stay
Speaker 1: home and not ride public transit except for first responders
Speaker 1: and essential employees. And New Yorkers answered that call happily
Speaker 1: today we're restoring full service on the subway services good
Speaker 1: this morning. Last week we did a physical survey of
Speaker 1: about the nearly fifty thousand customers, and mass compliance, which
Speaker 1: is now a part of state law, was the most
Speaker 1: important that our customers. Sorry, the most important thing our
Speaker 1: customers can do is to wear masks to protect themselves
Speaker 1: and their co commuters, and our and our employees. And
Speaker 1: that is an impressively high number. In one we want
Speaker 1: to drive higher. How are you going to police usage
Speaker 1: of mass I'm on a train, I'm on a bus,
Speaker 1: and there's that one idiot, those two idiots without a mask.
Speaker 1: How do you police that? So here here's an answer
Speaker 1: to that question. First, we're starting from a good place,
Speaker 1: which is compliance. I spent forty minutes in Grand Central
Speaker 1: Terminal this morning. Uh and frankly, the customer compliance look
Speaker 1: higher than that. What the m t A is doing
Speaker 1: this morning in subway stations throughout the entire system is
Speaker 1: distributing this week two million masks. We've got a million
Speaker 1: masks donated by the state and the city each. We've
Speaker 1: got MTA employees and volunteers from both the state and
Speaker 1: the city, and the MT a helping distribute those masks.
Speaker 1: So the most important action that can be taken by
Speaker 1: our customers is wearing masks. A pretty good start. We're
Speaker 1: gonna monitor it and report it coming forward. On top
Speaker 1: of that, we are disinfecting every subway car, every bus,
Speaker 1: every Metro North and Long Island Railroad, commuter rail at
Speaker 1: least once a day, and in the case of subways
Speaker 1: and busses and commuter rails multiple times a day. We're
Speaker 1: disinfecting our stations, all of them at least twice a day.
Speaker 1: We had asked a couple of weeks ago the great
Speaker 1: news that ultra violet see white, according to research by
Speaker 1: Dr David Brenner at Columbia University, kills the COVID nineteen virus.
Speaker 1: And we're piloting that right this week, last week, this week,
Speaker 1: and next week on subways and buses, will roll it
Speaker 1: out to Metro North Railroad. Beyond that, we're also looking
Speaker 1: at anti microbials, which promised to have the ability to
Speaker 1: eradicate the COVID nineteen virus. Also to do that and
Speaker 1: months after application, Mr Foy, let me bring in my
Speaker 1: colleague Lisa. Lisa, Well, Terry, you know one thing that
Speaker 1: I'm struggling to understand is how quickly ridership has to
Speaker 1: get back up to near where it was in the
Speaker 1: past in order for the m t A to remain
Speaker 1: solvent without federal government help or additional borrowing perhaps through
Speaker 1: the FEDS new facility. So at least a great question. Obviously,
Speaker 1: in the Care's Act, the m t A received over
Speaker 1: three point eight billion dollars the Heroes Act, which was
Speaker 1: passed by a Speaker Pelosi, and both of those wheel
Speaker 1: great thanks and have to acknowledge the work that Senator
Speaker 1: Schumer and the New York Congressional delegation did on a
Speaker 1: bipartisan basis. Like every transit agency in the country and
Speaker 1: around the world, ridership has the client precipitously. That's the
Speaker 1: flip side obviously of New Yorkers, and responding the Governor
Speaker 1: Cromos directive and request that people stay home today is
Speaker 1: an important day, phase one of the recovery of New York.
Speaker 1: We expect that anecdotally. First of all, we're providing really solid,
Speaker 1: reliable subway and bus service. Uh this more ing there
Speaker 1: have been no delays reported. We see mass compliance at
Speaker 1: a very high level, and we believe that ridership is
Speaker 1: is headed higher. Obviously, we are in the phase one,
Speaker 1: significantly below the ridership in pre pandemic days. We and
Speaker 1: every other transit agency you're gonna require federal aid to
Speaker 1: get us through. About half of our revenue is based
Speaker 1: on fairs and tolls. The other half is on a
Speaker 1: package of dedicated taxes and subsidies which are economically sensitive
Speaker 1: or transaction UH based the FEDS action last week on
Speaker 1: the municipal liquidity facility is important. Governor Cuomo is dedicated
Speaker 1: the named rather the m t A as one of
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