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Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, along

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Speaker 1: with my co host of Bonnie Quinn. Every business day

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Speaker 1: we bring you interviews from CEOs, market pros, and Bloomberg experts,

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Speaker 1: along with essential market moving news. Kind the Bloomberg Markets

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Speaker 1: Podcast on Apple Podcasts or wherever you listen to podcasts,

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Speaker 1: and on Bloomberg dot com. Well. As US employers continue

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Speaker 1: to reopen their businesses and the economy overall, one of

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Speaker 1: the key questions being asked is to what degree are

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Speaker 1: employers responsible for maintaining a healthy, uh and safe work environment.

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Speaker 1: To get some answers, we welcome Ema Court. She's a

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Speaker 1: healthcare reporter for Bloomberg News, and thanks so much for

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Speaker 1: joining us here. Give us a sense of maybe the

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Speaker 1: you know, the whole paradigm of what we're seeing as

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Speaker 1: businesses open up, what are they doing to ensure the

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Speaker 1: health and safety of their employees coming back? You know,

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Speaker 1: work play safety has become you know, a really kind

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Speaker 1: of new and different paradigm today. Right as employers, you know,

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Speaker 1: some of them have been you know, operating throughout the pandemic.

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Speaker 1: Some of them are starting to push to return to work,

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Speaker 1: you know, for the first time pushing, you know, maybe

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Speaker 1: smaller coherts of employees at the beginning. And as part

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Speaker 1: of that, you know, we're seeing a lot of different

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Speaker 1: measures being deployed. We're you know, we've been talking about

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Speaker 1: temperature screenings for a long time. UM, symptom checkers, which means,

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Speaker 1: you know, maybe your employer sends you a list of

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Speaker 1: four questions you have to answer before you come into

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Speaker 1: the office. You know, do have symptoms? Things like that,

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Speaker 1: have you been in high risk situations like a big

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Speaker 1: group of people or or an event indoors? Things like that, UM,

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Speaker 1: you know, masks that work, you know, even physical barriers

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Speaker 1: like plexiglass for instance, hand sanitizer everywhere. UM. But interestingly,

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Speaker 1: testing which has become such a first line mechanism of

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Speaker 1: ensuring public health in the community. It's it's sort of

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Speaker 1: our only option absence of vaccine in terms of ensuring

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Speaker 1: this virus doesn't you know, spread really rapidly from person

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Speaker 1: to person. That has actually been a really small element

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Speaker 1: of employers back to back to work pushes. And there

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Speaker 1: are a variety of reasons for that, but a big

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Speaker 1: one is caused and and the sort of crucial limitations

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Speaker 1: of how these tests can be deployed. You can't really

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Speaker 1: test someone and say, okay, you know, you're all clear

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Speaker 1: and we don't have to worry about you anymore getting sick.

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Speaker 1: You know, That's that's not how these tests work. They're

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Speaker 1: the diagnostic tests that we have right now. Say at

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Speaker 1: this moment in time, when you were tested, you do

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Speaker 1: not have COVID N team. You know, there's also an

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Speaker 1: issue of false negative, but mainly there's an issue of

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Speaker 1: what if you leave the testing site and you go

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Speaker 1: into the parking lot and you get sick. You know that,

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Speaker 1: how helpful is the test then? Um, So these are

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Speaker 1: things employers are really kind of wrestling with as they

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Speaker 1: think about whether to have employees at work and what

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Speaker 1: kinds of mechanisms to have in placed there, what our

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Speaker 1: employer is responsible for and who is regulating that is

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Speaker 1: that the unions? Is there anything in federal government suggestions? Yeah,

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Speaker 1: there's there's been a variety of recommendations in terms of

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Speaker 1: how to return to work, and it sort of depends

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Speaker 1: on where you look. Everyone has sort of a booklet

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Speaker 1: of recommendations or requirements. In some cases, you know, local governments,

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Speaker 1: state governments. The CDC has recommendations. Um, you know, E e

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Speaker 1: e o C has put out recommendations even specifically on

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Speaker 1: testing thing you can use diagnostic prestoom, but there are

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Speaker 1: other kinds of testing. You can't make a requirement to

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Speaker 1: go back to work, So it depends on your the

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Speaker 1: industry and where you are and and things like that,

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Speaker 1: um and it. But it does present the sort of

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Speaker 1: patchwork of requirements and recommendations depending on where you are.

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Speaker 1: And of course local conditions factor into this a lot too.

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Speaker 1: Rite you know, I'm here in New York where you know,

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Speaker 1: obviously it was a very big hot spot you know,

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Speaker 1: earlier in the pandemic, and now you know, perhaps more

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Speaker 1: people are returning to work, whereas other parts of the

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Speaker 1: country the situation in terms of COVID nineteen is very different.

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Speaker 1: So I am a to what extent do we know

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Speaker 1: kind of a liability businesses may have from employees saying

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Speaker 1: you're assuming them because you brought me back into a

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Speaker 1: unsafe work environment. Yeah, you know, it's a really interesting

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Speaker 1: and important question and one that's sort of still being

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Speaker 1: figured out right now. I mean, you know, with regards

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Speaker 1: to testing specifically, we've seen, you know, a union that

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Speaker 1: represents employees and casinos in Vegas to certain casinos saying

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Speaker 1: you need to make you know, testing a part of

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Speaker 1: the return to work strategy like this has to be

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Speaker 1: a mandatory part of this, of this, of this push.

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Speaker 1: But we've also seen you know, a lot of lawsuits

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Speaker 1: being filed over and this is something that's probably going

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Speaker 1: to be litigated for a long time. Um and it's unclear.

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Speaker 1: You know, A big question that comes up around that

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Speaker 1: is can you prove that you've got coronavirus, you've got

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Speaker 1: COVID nineteen out work? And it's not it's clear how

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Speaker 1: well anyone would be able to prove that. I mean,

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Speaker 1: it depends on what the bar is, you know, how

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Speaker 1: how the bar is set by court, well will be

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Speaker 1: the test case. Is there a test case out there

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Speaker 1: yet or do we have to wait and see for

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Speaker 1: a few more months. I think this is gonna take

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Speaker 1: a while to settle. You know, many employers, especially large

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Speaker 1: employers that operate in many jurisdictions, are still wrestling with

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Speaker 1: these issues. And I think we are also going to

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Speaker 1: see standards evolved and change, um as testing technology gets better,

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Speaker 1: for instance, um as people set standards for different industries.

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Speaker 1: You know, a lot of employers that operate in places

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Speaker 1: around the country have tried to, you know, because they're

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Speaker 1: facing the sort of patchwork of different requirements UM and

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Speaker 1: Guidance have tried to make, you know, meet sort of

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Speaker 1: the highest standards, right because it's easier if you're operating

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Speaker 1: in multiple jurisdictions UM. But you know, the bar maybe

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Speaker 1: lower for you know, small businesses or other kinds of players.

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Speaker 1: So it's going to be really interesting to see how

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Speaker 1: these things chake out and to see if employers become

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Speaker 1: you know, go out there and say we are setting

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Speaker 1: the highest possible standards for our workplace here and maybe

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Speaker 1: become a big incentive for employees to want to work

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Speaker 1: there exactly. It's going to be fascinating. I mean, will

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Speaker 1: countries even be suing other countries if travelers brought it

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Speaker 1: in our thanks to m Court healthcare reporter from Bloomberg. Now,

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Speaker 1: let's move to the oil market, because we're seeing Saudi

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Speaker 1: Arabia raise prices, We're seeing equities rally, and that's all

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Speaker 1: helping oil to stay above forty arrow. Somebody watching this

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Speaker 1: and the natural gas markets very closely is Stephen Short,

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Speaker 1: president of the Short Group always thrilled to have Stephen

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Speaker 1: on Stephen Saudi is raising prices? Is that a little

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Speaker 1: bit dangerous in terms of the balance when it comes

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Speaker 1: to OPEC? Absolutely, I think so, Vanni. Look, it is

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Speaker 1: the first week of July, which only means we have

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Speaker 1: about seven more weeks demand or peak demand left in

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Speaker 1: the season. And in fact, when we look at this market,

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Speaker 1: historically demand will peak by the end of this month

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Speaker 1: beginning of August. So so once we get into August UH,

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Speaker 1: this season's peak demand is going to pull off into

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Speaker 1: the exit ramp, and then as of course we transition

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Speaker 1: into the fall, demand will continue to fall. Now, keep

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Speaker 1: in mind this is not obviously a normal year, and

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Speaker 1: demand is already supremely lagging relative to normal. For instance,

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Speaker 1: here in the United States, we should be boiling upwards

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Speaker 1: of well over seventeen million barrels a day UH, and

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Speaker 1: last week's e I report we just breached the fourteen

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Speaker 1: million barrel a day, So we're accumulating relative to historical norms,

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Speaker 1: a significant glut in the market with regard to crude oil,

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Speaker 1: the same situation in gasoline. So with the current situation,

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Speaker 1: given where we are at this point of the calendar,

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Speaker 1: we're certainly playing with a with a dangerous market at

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Speaker 1: this point. So, Stephen, the news we woke to this

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Speaker 1: morning is that Warren Buffett is buying some assets from

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Speaker 1: Dominion Resources the pipeline business. Is that any way and

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Speaker 1: should that in any way be interpreted as a call

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Speaker 1: that warrants calling the bottom in natural gas prices. Well,

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Speaker 1: to be honest with you, I'm certainly relieved that that

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Speaker 1: Mr Buffett is making this purchase. Of course, with what

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Speaker 1: we saw last week with Chesapeake and some of the

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Speaker 1: other major bankruptcies we've seen since the market collapsed back

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Speaker 1: in April, UH, certainly the signs were there that we

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Speaker 1: were going to see consolidation in this industry. I don't

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Speaker 1: think Mr. Buffett's purchase is going to be the the

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Speaker 1: the last UH transaction that we've seen in this market.

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Speaker 1: We're going to see a marketplace that is much smaller

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Speaker 1: as UH companies with with good acreage, prime assets that

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Speaker 1: are having difficulty UH we'll look to bail on this market.

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Speaker 1: So so clearly what we're looking at here is is

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Speaker 1: a market that you know, primarily natural gas as as

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Speaker 1: that fuel of the future, UH, certainly giving its stance

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Speaker 1: in the marketplace. That is the thinking man's uh choice

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Speaker 1: to be had as we look forward. My only caveat

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Speaker 1: here is are my concern I should say, is kind

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Speaker 1: of the the the lurch that we're seeing with certain

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Speaker 1: aspects in the government UH going away or discouraging investment

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Speaker 1: in and in hydrocarbons, especially natural gas. But Mr Buffett's

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Speaker 1: entry into this market at this juncture, it makes sense

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Speaker 1: these assets are being had on the cheap. Obviously, he's

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Speaker 1: Warren Buffett, he knows what he's doing, uh, And I'm

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Speaker 1: taking it as a relief because my concerns regarding government

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Speaker 1: uh interference in this market side. I don't think he'd

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Speaker 1: be making this assumption if that was really something to

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Speaker 1: be concerned about. You know, it goes again tuition, Stephen,

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Speaker 1: not that we should really ever use tuition on anything,

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Speaker 1: particularly on the markets. But natural gas producers for the

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Speaker 1: thirty six consecutive months have boosted production at these prices.

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Speaker 1: How does that make sense? Yeah, absolutely it is. It

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Speaker 1: is a bit of a head scratcher. A lot of

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Speaker 1: that production Vanni over, as you said, of the past

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Speaker 1: three years has been what's called associated gas production, so

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Speaker 1: that that is gas making its way to the market

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Speaker 1: that that's not being drilled for. That is to say,

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Speaker 1: this was crude al UH that's being drilled for, and

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Speaker 1: gas deposits associated with the those barrels being pulled out

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Speaker 1: of the ground. That gas is coming up as well,

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Speaker 1: and that is certainly adding to the pool. So I

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Speaker 1: do think we're at that point. UH. For instance, here

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Speaker 1: in Pennsylvania, which is now the epicenter of basically the

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Speaker 1: global natural gas market, we've seen a significant decline in

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Speaker 1: drilling permits since February so and in fact, apple h

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Speaker 1: in natural gas production Pennsylvania, Ohio, West Virginia specifically UH,

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Speaker 1: that production has been falling month over month now for

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Speaker 1: about the last seven or eight months. So it's been

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Speaker 1: a slow catch up. I think, Fannie that the issue

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Speaker 1: here is that the gas market is there's a limit

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Speaker 1: engineering wise to the amount of gas you can actually

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Speaker 1: pull off. But now it's a demand side. Hey, Stephen,

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Speaker 1: thanks so much as always for that update on all

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Speaker 1: things energy. It was appreciate getting your view, Stephen Short,

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Speaker 1: president of the Short Group in Pennsylvania, talking about UH

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Speaker 1: crude oil globally, natural gas, particularly here in the US. Again,

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Speaker 1: Warren Buffett buying the pipeline or certain pipeline assets from

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Speaker 1: Dominion Energy. Well, for many investors in this market, given

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Speaker 1: the voluntility, they are simply trying to preserve wealth as

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Speaker 1: best they can. Uh. And that includes some of the

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Speaker 1: ultra wealthy as well. Michael Sane felt he's a chairman

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Speaker 1: of founder of Tiger twenty one, and Tiger twenty one

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Speaker 1: is really a unique organization. It's a peer a member

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Speaker 1: ship organization for high net worth uh, wealth creators and preservers.

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Speaker 1: So Michael gets a really interesting viewpoint there from his members, uh,

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Speaker 1: and he joins us now. Michael SnO felt, thanks so

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Speaker 1: much for joining us once again again. I guess since

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Speaker 1: the last time we talked to you, we've had just

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Speaker 1: this tremendous pandemic sweep the world, creating a tremendous amount

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Speaker 1: of economic uh, you know, uncertainty. How are your members

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Speaker 1: viewing the world today and how are they positioning their portfolios? Great?

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Speaker 1: Thanks for having me, Paul. You know, our members have

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Speaker 1: been weathering the storm, and and that's how they think

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Speaker 1: about it. Are members are primarily not exclusively first generation

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Speaker 1: wealth creators and mostly entrepreneurs, investors, and executives. So these

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Speaker 1: are these are the people who've had to create wealth

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Speaker 1: over an entire generation, and they've been through different storms.

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Speaker 1: This is certainly unique, but they've been doing two things,

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Speaker 1: always looking for opportunities, very select of lee. It's not

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Speaker 1: business as usual. The way we say it is our

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Speaker 1: window for business is open. Individuals say this, our window

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Speaker 1: for business is open, but the bar is much higher.

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Speaker 1: But also we've been raising cash because right now everything

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Speaker 1: seems very rosy. It's not just today's ebulent market. The

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Speaker 1: last couple of weeks, the market has been coming back,

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Speaker 1: but members aren't convinced that it's a one way street.

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Speaker 1: You could have some rough times coming up later this

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Speaker 1: year when p p P runs out. Uh And obviously

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Speaker 1: the pandemic has hit different businesses quite differently. If you're

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Speaker 1: a retailer, you're thinking very differently than if you're a

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Speaker 1: tech company that's doing extremely well. Yeah, the PPP you

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Speaker 1: reopened today. The new deadline to apply is August eight,

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Speaker 1: so a few more weeks for people to apply. Michael

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Speaker 1: any idea how much wealth was destroyed by the pandemic. Well, um,

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Speaker 1: most of our members, because they have a low exposure

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Speaker 1: to the public market. It's only about are in the

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Speaker 1: around breaking even. You know, if you were a high

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Speaker 1: tech investor, the Nasdaq is ahead for the year quite amazingly.

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Speaker 1: So we have members who, if they have well diversified portfolios,

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Speaker 1: have losses in the single digits. But just like the

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Speaker 1: average of a man and a horse's three legs, some

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Speaker 1: of our members have done extremely well and others are

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Speaker 1: learning from them how they were positioned to do so

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Speaker 1: well and thinking about how to be protective on the downside.

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Speaker 1: So it's it's across the board, but generally it's probably

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Speaker 1: a break even to just down one or two or

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Speaker 1: three points at this point. So, Michael's interesting the on

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Speaker 1: the M and A front. Just over the last twenty

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Speaker 1: four hours, we saw famed at value investor Warren Buffett

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Speaker 1: make a ten billion dollar acquisition of some uh liquid fieda,

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Speaker 1: some natural gas assets, some pipelines, suggesting to a lot

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Speaker 1: of investors that maybe he sees the bottom in that

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Speaker 1: particular subset of the market. Art your members are they saying, Hey,

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Speaker 1: I'm going to take advantage of this market uh, you

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Speaker 1: know meltdown that we've seen, even despite the partial comeback

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Speaker 1: we've had, that's maybe an opportunity to really bottom fish

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Speaker 1: in certain sectors. Oh for sure. You know. I think

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Speaker 1: what's made our members a unique cohord is the fact

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Speaker 1: that they can roll up their shirt sleeves and uh

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Speaker 1: chuck and jive if you will, to opportunities. And so

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Speaker 1: they've they've kind of had a twist in their portfolio.

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Speaker 1: On the one hand, they've bolstered their cash. We uh,

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Speaker 1: we recognize over the last ten years um through our

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Speaker 1: asset allocation how members are diversifying their portfolio and cash

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Speaker 1: has been around twelve percent. Well, in the last three months,

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Speaker 1: cash has grown to It's a dramatic change, call it

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Speaker 1: a flight to safety. But what that really means is

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Speaker 1: members are building resources to pounce on opportunities. I know,

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Speaker 1: in one when the real estate market was down, I

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Speaker 1: bought a portfolio for twenty cents on the dollar that

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Speaker 1: tripled in value over the next few years. And these

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Speaker 1: kind of opportunities only occur uh in times like this.

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Speaker 1: So you have to both have the security to know

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Speaker 1: that you can weather the storm, but that allows you

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Speaker 1: to be on the lookout for unique opportunities. And I

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Speaker 1: would say that balance that twist, if you will, more

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Speaker 1: security and working really hard to find opportunities characterize as

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Speaker 1: a good number of our members. Very briefly, Michael, what's

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Speaker 1: the relationship to real estate? How has it changed? Well,

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Speaker 1: real estate is our biggest allocation, about twenty percent of

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Speaker 1: our assets, and today we have about eighty billion dollars

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Speaker 1: and we don't manage money. It's our members individual managing

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Speaker 1: over seven ninety members. Um. Real state is the story

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Speaker 1: of the pandemic. If you're in the retail area or

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Speaker 1: the hotel area, it's uh, you know, been a heap

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Speaker 1: of trouble, but industrial real estate has done amazingly well. Uh,

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Speaker 1: and adjust as you were asking me, pouncing on opportunities. Obviously,

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Speaker 1: if you were diversified, well, even if you were in

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Speaker 1: the real estate in retail, you hopefully have other assets

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Speaker 1: now and now there are opportunities to look at. So

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Speaker 1: we have members looking at shopping malls and hotel chains

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Speaker 1: to see where the opportunities are because there's going to

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Speaker 1: be great opportunities there. Michael, we will check back in

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Speaker 1: with you on that, Michael Sonofeld, chairman and founder of

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Speaker 1: Tiger twenty one. Well, we are broadcasting live from the

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Speaker 1: Homburg Interactive Broger Studio and it is time for Bloomberg Opinion.

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Speaker 1: At ten forty nine on Wall Streets, It's time to

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Speaker 1: check in with Bloomberg Opinion columnist, author of a biography

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Speaker 1: of Henry Kissinger, the author of Civilization, The West and

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Speaker 1: the Rest, and of course senior fellow at the Hoover

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Speaker 1: Institution at Stanford. Neil Ferguson is very welcome to the program. Neil,

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Speaker 1: you're the man who coined the word chi America, and

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Speaker 1: you say in one of your latest columns that you

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Speaker 1: agree with Henry Kissinger that we've seen the opening gambit

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Speaker 1: in a cold war to this between the US and China.

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Speaker 1: How did relations between Beijing and Washington, Sara is so

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Speaker 1: badly Well, it's a it's a great question. I was

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Speaker 1: one of the people who came up with shi America

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Speaker 1: back in two thousand seven, along with Mark Shilrik, but

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Speaker 1: we always said it wouldn't last. The word shi America

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Speaker 1: was a pun on the word chimera. The only question

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Speaker 1: was when things would unravel. I thought it would be

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Speaker 1: around the financial crisis, but that didn't happen. I think

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Speaker 1: the real turning point has been J and pings increasingly

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Speaker 1: assertive foreign policy, and I see the presidency of Donald

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Speaker 1: Trump is in some motion just a reaction to that,

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Speaker 1: because it kind of the penny dropped with ordinary Americans

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Speaker 1: that China was getting most of the benefits of chi America.

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Speaker 1: And finally someone came long from outside the political class

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Speaker 1: and articulated that concern, and that somebody was Donald Trump. Alright, So, Neil,

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Speaker 1: from your perspective, what do you think China strategy is here? Well,

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Speaker 1: I think there's obviously a priority on readying writing the

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Speaker 1: economic ship, and I think one has to recognize that

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Speaker 1: the principal concern for Juan Ping is actually making sure

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Speaker 1: that the Chinese economy, whether it's the storm of COVID nineteen.

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Speaker 1: But meanwhile, I think the subplot is asserting China's power

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Speaker 1: not only regionally but globally in a whole range of

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Speaker 1: different ways, ranging from the One Belt, One Road initiative,

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Speaker 1: which is very much Sejan Ping's brainchild, two more conventional

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Speaker 1: assertions of power in the South China Sea and with

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Speaker 1: perspect to Taiwan, and then fighting the tech war, which

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Speaker 1: which I think is really he here. Sometimes people forget

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Speaker 1: that that that the tech war over the future of

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Speaker 1: Hawei and its role in global five D network is

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Speaker 1: more important than the trade war that Donald Trump launched

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Speaker 1: in early tween, and I think from a Chinese bantage point,

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Speaker 1: it's a very major concern that right now there's a

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Speaker 1: Damocles sword over Huawei. In September, the Commerce Department is

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Speaker 1: intending to cut Huawei off from imported semi conductors from

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Speaker 1: companies like Taiwan TSMC. So there's a whole range of

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Speaker 1: different ways in which this told war is being waged.

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Speaker 1: But I think the key thing is is not assume

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Speaker 1: that somehow Donald Trump started it. I think it's much

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Speaker 1: more accurate to say that China started in and Trump

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Speaker 1: was in some ways a reaction to that. And in fact, Neil,

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Speaker 1: what you're saying brings up the question of whether she

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Speaker 1: Jin Ping is actually committed to market reform to the

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Speaker 1: extent that predecessors, or is he willing to give up

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Speaker 1: some free market you know, developments, if you like, in

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Speaker 1: order to return his community to sort of a more

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Speaker 1: communist community. Well, well, I think it's crucial to realize

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Speaker 1: that she j and Ping has quite consciously shifted away

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Speaker 1: from policies of economic liberalization, and that one of the

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Speaker 1: signatures of his time as General Secretary of the Communist Party,

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Speaker 1: has been an increase in the power of the state

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Speaker 1: owned enterprises, and also, I think, perhaps just as importantly,

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Speaker 1: a real tightening ideologically, which is very obvious in Chinese universities.

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Speaker 1: I'm a visiting professor at SIWA, but I've seen the

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Speaker 1: atmosphere change from one of relative openness to one in

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Speaker 1: which people are losing their jobs or or indeed being

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Speaker 1: subjected to arrest for essentially lecturing on the realities of

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Speaker 1: Chinese history and expressing criticism of the of this new

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Speaker 1: ideological tightening. I do think there's one qualification, though. One

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Speaker 1: way that the Chinese are trying to counter Trump is

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Speaker 1: by appealing to Wall Street and saying, yeah, we may,

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Speaker 1: we may become in as, but come on in to

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Speaker 1: our financial markets and we will make it easier for

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Speaker 1: you to come in, not to get out, of course,

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Speaker 1: because China still has capital controls. But I think one

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Speaker 1: of the interesting subplots here is the way in which

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Speaker 1: Beijing is pitching to Wall Street, and that's a pitch

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Speaker 1: that getting quite a warm reception from companies ranging from

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Speaker 1: JP Morgan to the big credit card companies. That that's

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Speaker 1: an exception that the basic trend. It's a reimposition of

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Speaker 1: the party's control and a shift away from the more

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Speaker 1: the more liberal era when we used to talk about

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Speaker 1: ultimately the remnumb being a conversible currency. I think that's

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Speaker 1: all forgotten that. Neil, thank you so much for joining us.

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Speaker 1: Appreciate your thoughts on this important and evolving topic. Neil Ferguson,

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Speaker 1: He's a senior fellow at the Hoover Institution at Stanford University,

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Speaker 1: is also a Bloomberg Opinion columns. Thanks for listening to

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Speaker 1: Bloomberg Markets podcast. You can subscribe and listen to interviews

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Speaker 1: at Apple Podcasts or whatever a podcast platform you prefer.

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Speaker 1: I'm Bonnie Quinn. I'm on Twitter at Bonnie Quinn, and

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Speaker 1: I'm Paul Sweeney. I'm on Twitter at pt Sweeney. Before

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Speaker 1: the podcast, you can always catch us worldwide at Bloomberg Radio.