WEBVTT - Most Employers Won't Be Covid Testing Returning Workers 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. Kind 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 --> 0:00:21.880 and on Bloomberg dot com. Well. As US employers continue 0:00:21.960 --> 0:00:25.599 to reopen their businesses and the economy overall, one of 0:00:25.640 --> 0:00:28.880 the key questions being asked is to what degree are 0:00:28.960 --> 0:00:35.000 employers responsible for maintaining a healthy, uh and safe work environment. 0:00:35.200 --> 0:00:37.280 To get some answers, we welcome Ema Court. She's a 0:00:37.280 --> 0:00:40.360 healthcare reporter for Bloomberg News, and thanks so much for 0:00:40.440 --> 0:00:43.000 joining us here. Give us a sense of maybe the 0:00:43.360 --> 0:00:46.480 you know, the whole paradigm of what we're seeing as 0:00:46.640 --> 0:00:49.960 businesses open up, what are they doing to ensure the 0:00:50.000 --> 0:00:53.199 health and safety of their employees coming back? You know, 0:00:54.080 --> 0:00:56.840 work play safety has become you know, a really kind 0:00:56.840 --> 0:01:01.240 of new and different paradigm today. Right as employers, you know, 0:01:01.320 --> 0:01:04.560 some of them have been you know, operating throughout the pandemic. 0:01:04.920 --> 0:01:07.399 Some of them are starting to push to return to work, 0:01:07.480 --> 0:01:10.399 you know, for the first time pushing, you know, maybe 0:01:10.440 --> 0:01:13.959 smaller coherts of employees at the beginning. And as part 0:01:14.000 --> 0:01:16.119 of that, you know, we're seeing a lot of different 0:01:16.120 --> 0:01:18.640 measures being deployed. We're you know, we've been talking about 0:01:18.640 --> 0:01:22.479 temperature screenings for a long time. UM, symptom checkers, which means, 0:01:22.480 --> 0:01:25.080 you know, maybe your employer sends you a list of 0:01:25.120 --> 0:01:27.199 four questions you have to answer before you come into 0:01:27.200 --> 0:01:29.880 the office. You know, do have symptoms? Things like that, 0:01:29.920 --> 0:01:32.520 have you been in high risk situations like a big 0:01:32.560 --> 0:01:36.720 group of people or or an event indoors? Things like that, UM, 0:01:36.800 --> 0:01:40.960 you know, masks that work, you know, even physical barriers 0:01:41.000 --> 0:01:46.480 like plexiglass for instance, hand sanitizer everywhere. UM. But interestingly, 0:01:46.800 --> 0:01:50.040 testing which has become such a first line mechanism of 0:01:50.600 --> 0:01:53.840 ensuring public health in the community. It's it's sort of 0:01:53.880 --> 0:01:57.720 our only option absence of vaccine in terms of ensuring 0:01:57.720 --> 0:02:01.120 this virus doesn't you know, spread really rapidly from person 0:02:01.160 --> 0:02:04.280 to person. That has actually been a really small element 0:02:04.440 --> 0:02:08.079 of employers back to back to work pushes. And there 0:02:08.120 --> 0:02:10.119 are a variety of reasons for that, but a big 0:02:10.160 --> 0:02:13.720 one is caused and and the sort of crucial limitations 0:02:13.800 --> 0:02:16.639 of how these tests can be deployed. You can't really 0:02:16.680 --> 0:02:19.040 test someone and say, okay, you know, you're all clear 0:02:19.080 --> 0:02:22.560 and we don't have to worry about you anymore getting sick. 0:02:22.840 --> 0:02:25.079 You know, That's that's not how these tests work. They're 0:02:25.240 --> 0:02:28.320 the diagnostic tests that we have right now. Say at 0:02:28.360 --> 0:02:30.600 this moment in time, when you were tested, you do 0:02:30.680 --> 0:02:32.720 not have COVID N team. You know, there's also an 0:02:32.760 --> 0:02:35.680 issue of false negative, but mainly there's an issue of 0:02:35.720 --> 0:02:37.640 what if you leave the testing site and you go 0:02:37.680 --> 0:02:39.440 into the parking lot and you get sick. You know that, 0:02:39.720 --> 0:02:42.280 how helpful is the test then? Um, So these are 0:02:42.320 --> 0:02:45.560 things employers are really kind of wrestling with as they 0:02:45.600 --> 0:02:47.840 think about whether to have employees at work and what 0:02:47.960 --> 0:02:51.480 kinds of mechanisms to have in placed there, what our 0:02:51.520 --> 0:02:55.000 employer is responsible for and who is regulating that is 0:02:55.040 --> 0:03:01.519 that the unions? Is there anything in federal government suggestions? Yeah, 0:03:01.600 --> 0:03:06.000 there's there's been a variety of recommendations in terms of 0:03:06.000 --> 0:03:09.120 how to return to work, and it sort of depends 0:03:09.120 --> 0:03:11.639 on where you look. Everyone has sort of a booklet 0:03:11.680 --> 0:03:16.760 of recommendations or requirements. In some cases, you know, local governments, 0:03:17.080 --> 0:03:21.959 state governments. The CDC has recommendations. Um, you know, E e 0:03:21.760 --> 0:03:25.600 e o C has put out recommendations even specifically on 0:03:25.720 --> 0:03:28.480 testing thing you can use diagnostic prestoom, but there are 0:03:28.480 --> 0:03:31.040 other kinds of testing. You can't make a requirement to 0:03:31.040 --> 0:03:33.080 go back to work, So it depends on your the 0:03:33.160 --> 0:03:35.960 industry and where you are and and things like that, 0:03:36.120 --> 0:03:38.160 um and it. But it does present the sort of 0:03:38.200 --> 0:03:41.880 patchwork of requirements and recommendations depending on where you are. 0:03:41.920 --> 0:03:44.760 And of course local conditions factor into this a lot too. 0:03:44.920 --> 0:03:47.360 Rite you know, I'm here in New York where you know, 0:03:47.840 --> 0:03:49.920 obviously it was a very big hot spot you know, 0:03:50.000 --> 0:03:53.600 earlier in the pandemic, and now you know, perhaps more 0:03:53.600 --> 0:03:55.760 people are returning to work, whereas other parts of the 0:03:55.800 --> 0:03:59.200 country the situation in terms of COVID nineteen is very different. 0:04:00.120 --> 0:04:02.920 So I am a to what extent do we know 0:04:03.280 --> 0:04:09.160 kind of a liability businesses may have from employees saying 0:04:09.360 --> 0:04:12.920 you're assuming them because you brought me back into a 0:04:13.040 --> 0:04:18.000 unsafe work environment. Yeah, you know, it's a really interesting 0:04:18.040 --> 0:04:21.320 and important question and one that's sort of still being 0:04:21.720 --> 0:04:24.839 figured out right now. I mean, you know, with regards 0:04:24.880 --> 0:04:28.039 to testing specifically, we've seen, you know, a union that 0:04:28.080 --> 0:04:32.800 represents employees and casinos in Vegas to certain casinos saying 0:04:32.839 --> 0:04:34.680 you need to make you know, testing a part of 0:04:34.720 --> 0:04:37.240 the return to work strategy like this has to be 0:04:37.640 --> 0:04:42.040 a mandatory part of this, of this, of this push. 0:04:42.760 --> 0:04:45.400 But we've also seen you know, a lot of lawsuits 0:04:45.440 --> 0:04:48.120 being filed over and this is something that's probably going 0:04:48.160 --> 0:04:51.799 to be litigated for a long time. Um and it's unclear. 0:04:51.960 --> 0:04:54.040 You know, A big question that comes up around that 0:04:54.160 --> 0:04:57.320 is can you prove that you've got coronavirus, you've got 0:04:57.320 --> 0:05:00.760 COVID nineteen out work? And it's not it's clear how 0:05:00.839 --> 0:05:03.479 well anyone would be able to prove that. I mean, 0:05:03.720 --> 0:05:06.520 it depends on what the bar is, you know, how 0:05:06.640 --> 0:05:10.359 how the bar is set by court, well will be 0:05:10.400 --> 0:05:13.200 the test case. Is there a test case out there 0:05:13.240 --> 0:05:14.960 yet or do we have to wait and see for 0:05:14.960 --> 0:05:20.679 a few more months. I think this is gonna take 0:05:20.720 --> 0:05:25.119 a while to settle. You know, many employers, especially large 0:05:25.120 --> 0:05:29.320 employers that operate in many jurisdictions, are still wrestling with 0:05:29.440 --> 0:05:32.400 these issues. And I think we are also going to 0:05:32.400 --> 0:05:37.320 see standards evolved and change, um as testing technology gets better, 0:05:37.440 --> 0:05:41.520 for instance, um as people set standards for different industries. 0:05:41.800 --> 0:05:44.080 You know, a lot of employers that operate in places 0:05:44.120 --> 0:05:46.800 around the country have tried to, you know, because they're 0:05:46.800 --> 0:05:50.479 facing the sort of patchwork of different requirements UM and 0:05:50.560 --> 0:05:53.360 Guidance have tried to make, you know, meet sort of 0:05:53.400 --> 0:05:56.680 the highest standards, right because it's easier if you're operating 0:05:56.680 --> 0:05:59.880 in multiple jurisdictions UM. But you know, the bar maybe 0:06:00.040 --> 0:06:04.520 lower for you know, small businesses or other kinds of players. 0:06:04.600 --> 0:06:07.240 So it's going to be really interesting to see how 0:06:07.320 --> 0:06:09.559 these things chake out and to see if employers become 0:06:09.839 --> 0:06:11.600 you know, go out there and say we are setting 0:06:11.600 --> 0:06:14.560 the highest possible standards for our workplace here and maybe 0:06:14.640 --> 0:06:17.000 become a big incentive for employees to want to work 0:06:17.040 --> 0:06:19.680 there exactly. It's going to be fascinating. I mean, will 0:06:19.720 --> 0:06:23.160 countries even be suing other countries if travelers brought it 0:06:23.240 --> 0:06:29.360 in our thanks to m Court healthcare reporter from Bloomberg. Now, 0:06:29.440 --> 0:06:31.520 let's move to the oil market, because we're seeing Saudi 0:06:31.560 --> 0:06:34.920 Arabia raise prices, We're seeing equities rally, and that's all 0:06:34.960 --> 0:06:38.320 helping oil to stay above forty arrow. Somebody watching this 0:06:38.400 --> 0:06:41.400 and the natural gas markets very closely is Stephen Short, 0:06:41.480 --> 0:06:44.200 president of the Short Group always thrilled to have Stephen 0:06:44.279 --> 0:06:48.159 on Stephen Saudi is raising prices? Is that a little 0:06:48.200 --> 0:06:50.920 bit dangerous in terms of the balance when it comes 0:06:50.920 --> 0:06:55.000 to OPEC? Absolutely, I think so, Vanni. Look, it is 0:06:55.040 --> 0:06:58.320 the first week of July, which only means we have 0:06:58.400 --> 0:07:02.200 about seven more weeks demand or peak demand left in 0:07:02.279 --> 0:07:05.640 the season. And in fact, when we look at this market, 0:07:05.680 --> 0:07:09.280 historically demand will peak by the end of this month 0:07:09.360 --> 0:07:14.160 beginning of August. So so once we get into August UH, 0:07:14.440 --> 0:07:17.600 this season's peak demand is going to pull off into 0:07:17.640 --> 0:07:20.520 the exit ramp, and then as of course we transition 0:07:20.640 --> 0:07:23.840 into the fall, demand will continue to fall. Now, keep 0:07:23.840 --> 0:07:26.880 in mind this is not obviously a normal year, and 0:07:26.960 --> 0:07:31.560 demand is already supremely lagging relative to normal. For instance, 0:07:31.560 --> 0:07:36.200 here in the United States, we should be boiling upwards 0:07:36.240 --> 0:07:39.760 of well over seventeen million barrels a day UH, and 0:07:39.880 --> 0:07:42.960 last week's e I report we just breached the fourteen 0:07:43.000 --> 0:07:48.000 million barrel a day, So we're accumulating relative to historical norms, 0:07:48.240 --> 0:07:52.320 a significant glut in the market with regard to crude oil, 0:07:52.840 --> 0:07:58.280 the same situation in gasoline. So with the current situation, 0:07:58.920 --> 0:08:01.480 given where we are at this point of the calendar, 0:08:02.200 --> 0:08:05.800 we're certainly playing with a with a dangerous market at 0:08:05.800 --> 0:08:09.200 this point. So, Stephen, the news we woke to this 0:08:09.400 --> 0:08:12.280 morning is that Warren Buffett is buying some assets from 0:08:12.320 --> 0:08:16.440 Dominion Resources the pipeline business. Is that any way and 0:08:16.600 --> 0:08:18.600 should that in any way be interpreted as a call 0:08:18.800 --> 0:08:23.400 that warrants calling the bottom in natural gas prices. Well, 0:08:23.480 --> 0:08:26.120 to be honest with you, I'm certainly relieved that that 0:08:26.240 --> 0:08:30.120 Mr Buffett is making this purchase. Of course, with what 0:08:30.160 --> 0:08:32.560 we saw last week with Chesapeake and some of the 0:08:32.640 --> 0:08:36.680 other major bankruptcies we've seen since the market collapsed back 0:08:36.720 --> 0:08:40.480 in April, UH, certainly the signs were there that we 0:08:40.520 --> 0:08:43.440 were going to see consolidation in this industry. I don't 0:08:43.440 --> 0:08:46.320 think Mr. Buffett's purchase is going to be the the 0:08:46.320 --> 0:08:49.880 the last UH transaction that we've seen in this market. 0:08:49.920 --> 0:08:53.280 We're going to see a marketplace that is much smaller 0:08:53.720 --> 0:08:58.640 as UH companies with with good acreage, prime assets that 0:08:58.679 --> 0:09:02.640 are having difficulty UH we'll look to bail on this market. 0:09:03.120 --> 0:09:06.960 So so clearly what we're looking at here is is 0:09:06.960 --> 0:09:10.120 a market that you know, primarily natural gas as as 0:09:10.200 --> 0:09:13.720 that fuel of the future, UH, certainly giving its stance 0:09:13.760 --> 0:09:17.439 in the marketplace. That is the thinking man's uh choice 0:09:17.800 --> 0:09:21.320 to be had as we look forward. My only caveat 0:09:21.400 --> 0:09:25.240 here is are my concern I should say, is kind 0:09:25.240 --> 0:09:28.360 of the the the lurch that we're seeing with certain 0:09:28.400 --> 0:09:33.319 aspects in the government UH going away or discouraging investment 0:09:33.440 --> 0:09:38.880 in and in hydrocarbons, especially natural gas. But Mr Buffett's 0:09:39.040 --> 0:09:41.720 entry into this market at this juncture, it makes sense 0:09:42.280 --> 0:09:45.800 these assets are being had on the cheap. Obviously, he's 0:09:45.840 --> 0:09:48.800 Warren Buffett, he knows what he's doing, uh, And I'm 0:09:48.840 --> 0:09:51.760 taking it as a relief because my concerns regarding government 0:09:52.160 --> 0:09:55.120 uh interference in this market side. I don't think he'd 0:09:55.120 --> 0:09:57.960 be making this assumption if that was really something to 0:09:58.000 --> 0:10:01.960 be concerned about. You know, it goes again tuition, Stephen, 0:10:02.000 --> 0:10:03.920 not that we should really ever use tuition on anything, 0:10:03.920 --> 0:10:06.760 particularly on the markets. But natural gas producers for the 0:10:06.880 --> 0:10:12.640 thirty six consecutive months have boosted production at these prices. 0:10:12.640 --> 0:10:16.400 How does that make sense? Yeah, absolutely it is. It 0:10:16.480 --> 0:10:18.360 is a bit of a head scratcher. A lot of 0:10:18.400 --> 0:10:22.840 that production Vanni over, as you said, of the past 0:10:22.880 --> 0:10:26.520 three years has been what's called associated gas production, so 0:10:26.559 --> 0:10:28.520 that that is gas making its way to the market 0:10:28.520 --> 0:10:31.200 that that's not being drilled for. That is to say, 0:10:31.360 --> 0:10:34.880 this was crude al UH that's being drilled for, and 0:10:35.120 --> 0:10:39.719 gas deposits associated with the those barrels being pulled out 0:10:39.720 --> 0:10:41.880 of the ground. That gas is coming up as well, 0:10:41.960 --> 0:10:45.040 and that is certainly adding to the pool. So I 0:10:45.080 --> 0:10:48.319 do think we're at that point. UH. For instance, here 0:10:48.320 --> 0:10:51.839 in Pennsylvania, which is now the epicenter of basically the 0:10:52.160 --> 0:10:55.800 global natural gas market, we've seen a significant decline in 0:10:55.920 --> 0:10:59.880 drilling permits since February so and in fact, apple h 0:11:00.000 --> 0:11:04.240 in natural gas production Pennsylvania, Ohio, West Virginia specifically UH, 0:11:04.360 --> 0:11:07.560 that production has been falling month over month now for 0:11:07.720 --> 0:11:09.840 about the last seven or eight months. So it's been 0:11:09.920 --> 0:11:13.240 a slow catch up. I think, Fannie that the issue 0:11:13.400 --> 0:11:16.920 here is that the gas market is there's a limit 0:11:17.280 --> 0:11:19.600 engineering wise to the amount of gas you can actually 0:11:19.600 --> 0:11:22.560 pull off. But now it's a demand side. Hey, Stephen, 0:11:22.559 --> 0:11:25.319 thanks so much as always for that update on all 0:11:25.360 --> 0:11:27.960 things energy. It was appreciate getting your view, Stephen Short, 0:11:28.520 --> 0:11:33.200 president of the Short Group in Pennsylvania, talking about UH 0:11:33.520 --> 0:11:37.080 crude oil globally, natural gas, particularly here in the US. Again, 0:11:37.160 --> 0:11:41.240 Warren Buffett buying the pipeline or certain pipeline assets from 0:11:41.280 --> 0:11:46.960 Dominion Energy. Well, for many investors in this market, given 0:11:46.960 --> 0:11:50.560 the voluntility, they are simply trying to preserve wealth as 0:11:50.600 --> 0:11:53.120 best they can. Uh. And that includes some of the 0:11:53.200 --> 0:11:55.800 ultra wealthy as well. Michael Sane felt he's a chairman 0:11:55.840 --> 0:11:57.959 of founder of Tiger twenty one, and Tiger twenty one 0:11:58.000 --> 0:12:00.720 is really a unique organization. It's a peer a member 0:12:00.720 --> 0:12:05.359 ship organization for high net worth uh, wealth creators and preservers. 0:12:05.360 --> 0:12:09.319 So Michael gets a really interesting viewpoint there from his members, uh, 0:12:09.360 --> 0:12:11.360 and he joins us now. Michael SnO felt, thanks so 0:12:11.440 --> 0:12:14.240 much for joining us once again again. I guess since 0:12:14.280 --> 0:12:16.520 the last time we talked to you, we've had just 0:12:16.559 --> 0:12:21.520 this tremendous pandemic sweep the world, creating a tremendous amount 0:12:21.520 --> 0:12:26.560 of economic uh, you know, uncertainty. How are your members 0:12:26.800 --> 0:12:30.800 viewing the world today and how are they positioning their portfolios? Great? 0:12:30.840 --> 0:12:33.640 Thanks for having me, Paul. You know, our members have 0:12:33.720 --> 0:12:36.280 been weathering the storm, and and that's how they think 0:12:36.320 --> 0:12:41.080 about it. Are members are primarily not exclusively first generation 0:12:41.240 --> 0:12:47.600 wealth creators and mostly entrepreneurs, investors, and executives. So these 0:12:47.600 --> 0:12:49.920 are these are the people who've had to create wealth 0:12:50.000 --> 0:12:53.240 over an entire generation, and they've been through different storms. 0:12:53.280 --> 0:12:56.280 This is certainly unique, but they've been doing two things, 0:12:57.080 --> 0:13:00.640 always looking for opportunities, very select of lee. It's not 0:13:00.800 --> 0:13:03.640 business as usual. The way we say it is our 0:13:03.679 --> 0:13:07.720 window for business is open. Individuals say this, our window 0:13:07.800 --> 0:13:10.400 for business is open, but the bar is much higher. 0:13:10.760 --> 0:13:15.040 But also we've been raising cash because right now everything 0:13:15.040 --> 0:13:19.000 seems very rosy. It's not just today's ebulent market. The 0:13:19.080 --> 0:13:21.240 last couple of weeks, the market has been coming back, 0:13:21.880 --> 0:13:24.840 but members aren't convinced that it's a one way street. 0:13:24.920 --> 0:13:27.720 You could have some rough times coming up later this 0:13:27.800 --> 0:13:31.360 year when p p P runs out. Uh And obviously 0:13:31.400 --> 0:13:35.280 the pandemic has hit different businesses quite differently. If you're 0:13:35.360 --> 0:13:39.040 a retailer, you're thinking very differently than if you're a 0:13:39.120 --> 0:13:43.360 tech company that's doing extremely well. Yeah, the PPP you 0:13:43.440 --> 0:13:46.520 reopened today. The new deadline to apply is August eight, 0:13:46.600 --> 0:13:48.800 so a few more weeks for people to apply. Michael 0:13:48.800 --> 0:13:54.160 any idea how much wealth was destroyed by the pandemic. Well, um, 0:13:54.360 --> 0:13:58.720 most of our members, because they have a low exposure 0:13:58.760 --> 0:14:03.880 to the public market. It's only about are in the 0:14:04.080 --> 0:14:07.600 around breaking even. You know, if you were a high 0:14:07.640 --> 0:14:11.760 tech investor, the Nasdaq is ahead for the year quite amazingly. 0:14:12.200 --> 0:14:15.920 So we have members who, if they have well diversified portfolios, 0:14:16.360 --> 0:14:20.240 have losses in the single digits. But just like the 0:14:20.280 --> 0:14:23.600 average of a man and a horse's three legs, some 0:14:23.760 --> 0:14:27.320 of our members have done extremely well and others are 0:14:27.440 --> 0:14:30.240 learning from them how they were positioned to do so 0:14:30.320 --> 0:14:35.280 well and thinking about how to be protective on the downside. 0:14:35.320 --> 0:14:38.800 So it's it's across the board, but generally it's probably 0:14:38.840 --> 0:14:41.760 a break even to just down one or two or 0:14:41.800 --> 0:14:45.400 three points at this point. So, Michael's interesting the on 0:14:45.440 --> 0:14:47.040 the M and A front. Just over the last twenty 0:14:47.080 --> 0:14:51.240 four hours, we saw famed at value investor Warren Buffett 0:14:51.480 --> 0:14:55.160 make a ten billion dollar acquisition of some uh liquid fieda, 0:14:55.480 --> 0:14:58.960 some natural gas assets, some pipelines, suggesting to a lot 0:14:58.920 --> 0:15:01.400 of investors that maybe he sees the bottom in that 0:15:01.480 --> 0:15:05.400 particular subset of the market. Art your members are they saying, Hey, 0:15:05.760 --> 0:15:09.400 I'm going to take advantage of this market uh, you 0:15:09.400 --> 0:15:14.000 know meltdown that we've seen, even despite the partial comeback 0:15:14.000 --> 0:15:16.240 we've had, that's maybe an opportunity to really bottom fish 0:15:16.240 --> 0:15:19.640 in certain sectors. Oh for sure. You know. I think 0:15:19.720 --> 0:15:25.000 what's made our members a unique cohord is the fact 0:15:25.080 --> 0:15:28.280 that they can roll up their shirt sleeves and uh 0:15:28.520 --> 0:15:32.000 chuck and jive if you will, to opportunities. And so 0:15:32.200 --> 0:15:35.160 they've they've kind of had a twist in their portfolio. 0:15:35.320 --> 0:15:39.800 On the one hand, they've bolstered their cash. We uh, 0:15:40.200 --> 0:15:44.000 we recognize over the last ten years um through our 0:15:44.080 --> 0:15:49.320 asset allocation how members are diversifying their portfolio and cash 0:15:49.360 --> 0:15:53.320 has been around twelve percent. Well, in the last three months, 0:15:53.400 --> 0:15:58.680 cash has grown to It's a dramatic change, call it 0:15:58.720 --> 0:16:01.800 a flight to safety. But what that really means is 0:16:01.880 --> 0:16:06.400 members are building resources to pounce on opportunities. I know, 0:16:06.560 --> 0:16:10.400 in one when the real estate market was down, I 0:16:10.440 --> 0:16:14.120 bought a portfolio for twenty cents on the dollar that 0:16:14.240 --> 0:16:17.280 tripled in value over the next few years. And these 0:16:17.360 --> 0:16:21.360 kind of opportunities only occur uh in times like this. 0:16:21.480 --> 0:16:24.960 So you have to both have the security to know 0:16:25.080 --> 0:16:28.000 that you can weather the storm, but that allows you 0:16:28.040 --> 0:16:30.760 to be on the lookout for unique opportunities. And I 0:16:30.840 --> 0:16:34.000 would say that balance that twist, if you will, more 0:16:34.080 --> 0:16:38.760 security and working really hard to find opportunities characterize as 0:16:38.800 --> 0:16:41.520 a good number of our members. Very briefly, Michael, what's 0:16:41.560 --> 0:16:44.800 the relationship to real estate? How has it changed? Well, 0:16:44.960 --> 0:16:48.760 real estate is our biggest allocation, about twenty percent of 0:16:48.760 --> 0:16:52.239 our assets, and today we have about eighty billion dollars 0:16:52.280 --> 0:16:55.960 and we don't manage money. It's our members individual managing 0:16:56.640 --> 0:17:01.000 over seven ninety members. Um. Real state is the story 0:17:01.000 --> 0:17:04.320 of the pandemic. If you're in the retail area or 0:17:04.400 --> 0:17:07.720 the hotel area, it's uh, you know, been a heap 0:17:07.760 --> 0:17:12.640 of trouble, but industrial real estate has done amazingly well. Uh, 0:17:12.680 --> 0:17:16.280 and adjust as you were asking me, pouncing on opportunities. Obviously, 0:17:16.840 --> 0:17:20.639 if you were diversified, well, even if you were in 0:17:20.680 --> 0:17:24.720 the real estate in retail, you hopefully have other assets 0:17:24.760 --> 0:17:27.080 now and now there are opportunities to look at. So 0:17:27.119 --> 0:17:31.000 we have members looking at shopping malls and hotel chains 0:17:31.480 --> 0:17:33.520 to see where the opportunities are because there's going to 0:17:33.600 --> 0:17:35.879 be great opportunities there. Michael, we will check back in 0:17:35.920 --> 0:17:38.000 with you on that, Michael Sonofeld, chairman and founder of 0:17:38.040 --> 0:17:42.440 Tiger twenty one. Well, we are broadcasting live from the 0:17:42.480 --> 0:17:46.520 Homburg Interactive Broger Studio and it is time for Bloomberg Opinion. 0:17:46.680 --> 0:17:49.439 At ten forty nine on Wall Streets, It's time to 0:17:49.520 --> 0:17:53.040 check in with Bloomberg Opinion columnist, author of a biography 0:17:53.040 --> 0:17:56.399 of Henry Kissinger, the author of Civilization, The West and 0:17:56.440 --> 0:17:58.680 the Rest, and of course senior fellow at the Hoover 0:17:58.760 --> 0:18:02.680 Institution at Stanford. Neil Ferguson is very welcome to the program. Neil, 0:18:02.720 --> 0:18:05.760 you're the man who coined the word chi America, and 0:18:06.000 --> 0:18:07.800 you say in one of your latest columns that you 0:18:07.840 --> 0:18:10.959 agree with Henry Kissinger that we've seen the opening gambit 0:18:11.119 --> 0:18:14.520 in a cold war to this between the US and China. 0:18:14.840 --> 0:18:17.960 How did relations between Beijing and Washington, Sara is so 0:18:18.040 --> 0:18:22.240 badly Well, it's a it's a great question. I was 0:18:22.760 --> 0:18:24.880 one of the people who came up with shi America 0:18:24.920 --> 0:18:27.600 back in two thousand seven, along with Mark Shilrik, but 0:18:27.600 --> 0:18:30.840 we always said it wouldn't last. The word shi America 0:18:31.000 --> 0:18:34.720 was a pun on the word chimera. The only question 0:18:34.800 --> 0:18:37.240 was when things would unravel. I thought it would be 0:18:37.400 --> 0:18:40.800 around the financial crisis, but that didn't happen. I think 0:18:40.840 --> 0:18:44.240 the real turning point has been J and pings increasingly 0:18:44.680 --> 0:18:48.840 assertive foreign policy, and I see the presidency of Donald 0:18:48.880 --> 0:18:51.600 Trump is in some motion just a reaction to that, 0:18:51.720 --> 0:18:54.919 because it kind of the penny dropped with ordinary Americans 0:18:54.960 --> 0:18:58.400 that China was getting most of the benefits of chi America. 0:18:58.800 --> 0:19:02.040 And finally someone came long from outside the political class 0:19:02.040 --> 0:19:06.520 and articulated that concern, and that somebody was Donald Trump. Alright, So, Neil, 0:19:06.720 --> 0:19:14.119 from your perspective, what do you think China strategy is here? Well, 0:19:14.280 --> 0:19:18.800 I think there's obviously a priority on readying writing the 0:19:19.040 --> 0:19:21.720 economic ship, and I think one has to recognize that 0:19:22.119 --> 0:19:26.639 the principal concern for Juan Ping is actually making sure 0:19:26.840 --> 0:19:30.600 that the Chinese economy, whether it's the storm of COVID nineteen. 0:19:31.560 --> 0:19:37.320 But meanwhile, I think the subplot is asserting China's power 0:19:37.920 --> 0:19:40.800 not only regionally but globally in a whole range of 0:19:41.200 --> 0:19:45.960 different ways, ranging from the One Belt, One Road initiative, 0:19:46.000 --> 0:19:52.040 which is very much Sejan Ping's brainchild, two more conventional 0:19:52.080 --> 0:19:55.439 assertions of power in the South China Sea and with 0:19:55.600 --> 0:19:59.040 perspect to Taiwan, and then fighting the tech war, which 0:19:59.160 --> 0:20:01.920 which I think is really he here. Sometimes people forget 0:20:01.960 --> 0:20:05.520 that that that the tech war over the future of 0:20:05.560 --> 0:20:08.720 Hawei and its role in global five D network is 0:20:08.720 --> 0:20:11.919 more important than the trade war that Donald Trump launched 0:20:11.960 --> 0:20:16.120 in early tween, and I think from a Chinese bantage point, 0:20:16.160 --> 0:20:19.520 it's a very major concern that right now there's a 0:20:19.760 --> 0:20:25.760 Damocles sword over Huawei. In September, the Commerce Department is 0:20:25.840 --> 0:20:30.440 intending to cut Huawei off from imported semi conductors from 0:20:30.480 --> 0:20:34.760 companies like Taiwan TSMC. So there's a whole range of 0:20:34.760 --> 0:20:38.399 different ways in which this told war is being waged. 0:20:38.800 --> 0:20:41.720 But I think the key thing is is not assume 0:20:41.880 --> 0:20:44.880 that somehow Donald Trump started it. I think it's much 0:20:44.880 --> 0:20:48.439 more accurate to say that China started in and Trump 0:20:48.520 --> 0:20:52.040 was in some ways a reaction to that. And in fact, Neil, 0:20:52.520 --> 0:20:54.879 what you're saying brings up the question of whether she 0:20:55.080 --> 0:20:58.280 Jin Ping is actually committed to market reform to the 0:20:58.359 --> 0:21:01.880 extent that predecessors, or is he willing to give up 0:21:01.960 --> 0:21:06.120 some free market you know, developments, if you like, in 0:21:06.240 --> 0:21:10.320 order to return his community to sort of a more 0:21:12.480 --> 0:21:17.679 communist community. Well, well, I think it's crucial to realize 0:21:17.760 --> 0:21:21.440 that she j and Ping has quite consciously shifted away 0:21:21.600 --> 0:21:25.760 from policies of economic liberalization, and that one of the 0:21:25.880 --> 0:21:31.000 signatures of his time as General Secretary of the Communist Party, 0:21:31.040 --> 0:21:34.120 has been an increase in the power of the state 0:21:34.160 --> 0:21:39.000 owned enterprises, and also, I think, perhaps just as importantly, 0:21:39.040 --> 0:21:43.960 a real tightening ideologically, which is very obvious in Chinese universities. 0:21:44.000 --> 0:21:46.840 I'm a visiting professor at SIWA, but I've seen the 0:21:46.880 --> 0:21:50.480 atmosphere change from one of relative openness to one in 0:21:50.520 --> 0:21:55.000 which people are losing their jobs or or indeed being 0:21:56.000 --> 0:22:01.320 subjected to arrest for essentially lecturing on the realities of 0:22:01.400 --> 0:22:05.680 Chinese history and expressing criticism of the of this new 0:22:06.119 --> 0:22:10.960 ideological tightening. I do think there's one qualification, though. One 0:22:11.000 --> 0:22:15.119 way that the Chinese are trying to counter Trump is 0:22:15.200 --> 0:22:18.959 by appealing to Wall Street and saying, yeah, we may, 0:22:19.000 --> 0:22:21.320 we may become in as, but come on in to 0:22:21.400 --> 0:22:24.000 our financial markets and we will make it easier for 0:22:24.040 --> 0:22:26.160 you to come in, not to get out, of course, 0:22:26.200 --> 0:22:29.240 because China still has capital controls. But I think one 0:22:29.240 --> 0:22:31.640 of the interesting subplots here is the way in which 0:22:31.920 --> 0:22:34.960 Beijing is pitching to Wall Street, and that's a pitch 0:22:35.000 --> 0:22:39.040 that getting quite a warm reception from companies ranging from 0:22:39.880 --> 0:22:42.440 JP Morgan to the big credit card companies. That that's 0:22:42.480 --> 0:22:46.280 an exception that the basic trend. It's a reimposition of 0:22:46.359 --> 0:22:49.880 the party's control and a shift away from the more 0:22:50.560 --> 0:22:53.080 the more liberal era when we used to talk about 0:22:53.520 --> 0:22:57.120 ultimately the remnumb being a conversible currency. I think that's 0:22:57.119 --> 0:23:00.800 all forgotten that. Neil, thank you so much for joining us. 0:23:00.880 --> 0:23:04.440 Appreciate your thoughts on this important and evolving topic. Neil Ferguson, 0:23:04.760 --> 0:23:08.360 He's a senior fellow at the Hoover Institution at Stanford University, 0:23:08.440 --> 0:23:13.320 is also a Bloomberg Opinion columns. Thanks for listening to 0:23:13.359 --> 0:23:17.200 Bloomberg Markets podcast. You can subscribe and listen to interviews 0:23:17.200 --> 0:23:20.520 at Apple Podcasts or whatever a podcast platform you prefer. 0:23:20.760 --> 0:23:23.760 I'm Bonnie Quinn. I'm on Twitter at Bonnie Quinn, and 0:23:23.800 --> 0:23:26.399 I'm Paul Sweeney. I'm on Twitter at pt Sweeney. Before 0:23:26.400 --> 0:23:29.600 the podcast, you can always catch us worldwide at Bloomberg Radio.