Speaker 1: This is Bloomberg Business Week. I'm Carol Masser. Every day
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Speaker 1: Global News. As Lisa and I were just discussing, you know,
Speaker 1: as it relates to the pandemic, it's kind of on
Speaker 1: a tale of two cities. On on the one one hand,
Speaker 1: you've got surge in cases, but on the other hand
Speaker 1: you have that vaccines coming to the market and increasing quantities.
Speaker 1: So we have to play those two off one another.
Speaker 1: Let's get the latest on all things as it relates
Speaker 1: to the pandemic. We do that with Dr Ian LUs Better,
Speaker 1: clinical Associate Professor of Medicine at the n y U
Speaker 1: Lenggo and Medical Center, joining us on the phone from
Speaker 1: New York. Dr LUs Better, thanks once again so much
Speaker 1: for joining us. I wonder if you could just give
Speaker 1: us a sense as a real lates to the virus
Speaker 1: and the cases we're seeing right now. Um, is it
Speaker 1: manageable in the New York City or the greater metro
Speaker 1: health system. We can do a better job this time
Speaker 1: that perhaps we did back in March and April when
Speaker 1: we were just blindsided. Yeah, I think we've learned a lot.
Speaker 1: And Happy Friday, Lisa and Paul, thanks for having me. Um. Yeah,
Speaker 1: New York definitely is is really now in sort of
Speaker 1: the lower third of new cases compared to nationally, And
Speaker 1: I think a lot of that is based on on
Speaker 1: the very rough March and April we had where really
Speaker 1: the system was stretched to its max. Literally every bed
Speaker 1: plush was assigned to COVID patients and all of the
Speaker 1: major medical centers, auditoriums were used, halways were used, uh
Speaker 1: you know, tensor set up as we remember, even Mount
Speaker 1: Sinai in in Central Park. So we really were stressed
Speaker 1: at that point. I think a number of New Yorkers
Speaker 1: have antibodies. They may have lost them along the way,
Speaker 1: but I believe a part of the reason New York
Speaker 1: is at this point in terms of new cases at
Speaker 1: the lower third nationally. Unfortunately, states like you know, Tennessee,
Speaker 1: California really still have you know, Wisconsin still have a
Speaker 1: huge number of new cases coming. Part of that probably
Speaker 1: due to the Thanksgiving a bump. You know, we knew
Speaker 1: families were getting together, kids were coming back from college,
Speaker 1: so we sort of expected, uh, you know, attend a
Speaker 1: period of from Thanksgiving when there really would be a
Speaker 1: bump in cases. But New York so far has been
Speaker 1: faring pretty well. There's a lot to unpack here, I've
Speaker 1: got to say, just you flicking at those tents in
Speaker 1: Central Park reminds me of some pretty dark days in
Speaker 1: New York City. I remember running past those and thinking,
Speaker 1: is this the United States of America? I am wondering, though,
Speaker 1: is there an inference that we can make about the
Speaker 1: hospitalization numbers being much lower now than they used to be.
Speaker 1: Is it just that more people are getting tested, so
Speaker 1: we're getting more positives, or is the actual care for
Speaker 1: people who are diagnosed much better with the knowledge that
Speaker 1: we've developed. Lisa, good question. I think it's a little
Speaker 1: bit of both. Um, we certainly are treating patients differently. Uh.
Speaker 1: Originally we had a very low threshold for intibating patients
Speaker 1: putting them in the ICU. UM. A lot of the
Speaker 1: critical care specialists now watch patients UM who may be
Speaker 1: sick with COVID uh not everyone UM as their blood
Speaker 1: oxygen the so called saturation drops you know, into ninety
Speaker 1: or even blow ninety if patients are comfortable. They're also
Speaker 1: just observed closely. They're not put on breathing machines, and
Speaker 1: there was a certain risk and morbidity associated with that.
Speaker 1: There's also a much lower threshold to start steroids early.
Speaker 1: We've learned about that UM you know, rimdescit here. There's
Speaker 1: been a lot of you know, pros and cons, but uh,
Speaker 1: we sort of refined kind of how those ill patients
Speaker 1: are treated, including blood thinners. So I think our mortality
Speaker 1: is going down, the total number of cases is going up,
Speaker 1: and you're right. Part of that is that we're testing
Speaker 1: more people much more frequently. So we're often getting people
Speaker 1: with really mild cases. They may have nasal congestion, call
Speaker 1: for cold, they get a little panicky, Oh my gosh,
Speaker 1: my my nasal swab was positive. What should I do?
Speaker 1: Unfortunately a year later, we don't have anything like camouflew
Speaker 1: for them. Although there are a number of physicians it's
Speaker 1: interesting that have reported on iver mactin and a couple
Speaker 1: of other uh not to get to controversial medications that
Speaker 1: may be very helpful. So that's worth looking into. But
Speaker 1: I think that combination of UH of more patients being
Speaker 1: managed at home UH and and less intubated is giving
Speaker 1: us some better numbers. Whenever we talk to frontline workers
Speaker 1: like you, I always want to get a sense of
Speaker 1: how are your people doing? How are the people at
Speaker 1: n y u Lango and Medical Center. It's one of
Speaker 1: the region's largest. It's just a world class facility. But
Speaker 1: how are the people doing in the e R and
Speaker 1: in the in the wards that really have to deal
Speaker 1: with this? You know. I think it's an amazing staff
Speaker 1: and everyone is very positive and energetic. You know, we're
Speaker 1: going on almost a year, and I think there is
Speaker 1: a lot of fatigue from patients and staff. Um. You know,
Speaker 1: patients I think are much Uh they're they're emotionally drained. UH.
Speaker 1: They've been told to, you know, be very careful for
Speaker 1: going on a year now. UH. They missed families often
Speaker 1: family events are you know, where are not attended? And
Speaker 1: so I think there's a real psychologic toll, and I
Speaker 1: think that's true to some degree. You know, there's mask fatigue.
Speaker 1: I mean literally every day when you're in the hospital
Speaker 1: and in the private offices too. You put on goggles,
Speaker 1: you put on an in ninety I've masked. That takes
Speaker 1: a toll on everyone along the way. But I think
Speaker 1: there's a positive, you know, attitude. The staff is great.
Speaker 1: We started getting vaccines this week for frontline workers. I'm
Speaker 1: getting my vaccine Monday. So I think we are seeing
Speaker 1: some light at the end of the tunnel. UM and hopefully,
Speaker 1: you know, we do think you get some immunity within
Speaker 1: you know, a week or two, not complete immunity. That
Speaker 1: um efficacy is really after two shots. The second shot
Speaker 1: you know, in three to four weeks. Same for the
Speaker 1: maderna vaccine that just got approved. So uh, you can't
Speaker 1: be reckless, but I think people will feel a little
Speaker 1: better psychologically. When will someone like myself be able to
Speaker 1: get the vaccine, I think really within the next couple
Speaker 1: of months. You know, we are doing the frontline healthcare workers.
Speaker 1: It's really amazing. In December, UM, certainly in this area
Speaker 1: north Well colleagues have already been getting their vaccines, mainly
Speaker 1: hospital workers, and then that gets pushed out to the
Speaker 1: private practices mant and that may take certainly another few weeks.
Speaker 1: Same at n y U we've already been giving over
Speaker 1: the last few days the you know, I see you staffer,
Speaker 1: staff and so forth. Doctors and nurses have gotten it,
Speaker 1: and then the practices over next week we'll start to
Speaker 1: get that as well. Not mandatory, you know, they're not
Speaker 1: making everyone take it, ironically, unlike the flu shot where
Speaker 1: you have to take it in order to see patients. Uh,
Speaker 1: it is voluntary, but I think most half is enthused.
Speaker 1: All the people I know who have taken the vaccine,
Speaker 1: minimal side effects, a little ache at the site, kind
Speaker 1: of like the flu shot, low grade fiver, none of
Speaker 1: the allergic reactions I've I've heard about that. We've seen
Speaker 1: just a couple of sporadic cases. Um, you know outside
Speaker 1: of this area. Uh. And I think for regular patients
Speaker 1: and my patients like Julius are saying, hey, when can
Speaker 1: I get it? Um. N y U does plan to
Speaker 1: give it out to our our patients. Uh. You know
Speaker 1: in the next couple of months, is more shipments come
Speaker 1: in which VECs SAN we'll have to see Maderna was
Speaker 1: just approved. Those are two shots J and J is
Speaker 1: one shot which makes it all up more convenient. That
Speaker 1: has yet to be approved. Uh, And then we think
Speaker 1: the local pharmacy, CBS, Walgreens, etcetera. So you should be vaccinated.
Speaker 1: I think within eight weeks hopefully, you know, we're getting
Speaker 1: it out to elderly and nursing homes. And I really
Speaker 1: think by next summer we will have a fairly normal
Speaker 1: looking country. Maybe not economically due to the real damage
Speaker 1: that's occurred, but in terms of behavior, I think people
Speaker 1: will will get back to a pretty normal life by
Speaker 1: you know, spring and early summer is my guestimate at
Speaker 1: this point. Well, I have to say that was probably
Speaker 1: the most self serving question that's ever been asked, being like,
Speaker 1: this is our personal desire. Everyone is asking that question question,
Speaker 1: that's right, So actually we don't really we can't say
Speaker 1: yet you know you're alpha adic or you're a certain age,
Speaker 1: you're going to get it. All of those details really
Speaker 1: are going to be worked out, and I think, but
Speaker 1: but the timeframe is somewhere. We think in the next
Speaker 1: eight to ten weeks will be very likely. But you
Speaker 1: know how that's going to be done. It's really a
Speaker 1: massive vaccination. We haven't done this, uh, you know, in
Speaker 1: a very long time, so this is really a little
Speaker 1: bit of uncharted territory. The good news is, look, it's
Speaker 1: not an emergency, and again most people who get this
Speaker 1: are going to be fine. But we do certainly want
Speaker 1: to get up to her immunity as soon as possible,
Speaker 1: and and I think that will happen in the next
Speaker 1: few months. Dr lust bede A. I've been reading some
Speaker 1: some stories recently, some news stories that perhaps one dose
Speaker 1: of the fiser and potentially the maderna might be enough
Speaker 1: and that might allow certain people, or that might allow
Speaker 1: a quicker rollout since you wouldn't have to bring use
Speaker 1: another dose for the same patient. What is your thoughts
Speaker 1: on that? What? What? What? What? Do you know? You know,
Speaker 1: there's no questions. Some antibodies are formed after one dose. Again,
Speaker 1: that m R and A gets in your cells, makes
Speaker 1: that viral protein, that spike protein, which seems to be uh,
Speaker 1: you know, the most antigenic. Your body then forms antibodies
Speaker 1: to that over the course of you know, days, two weeks,
Speaker 1: and then when the virus if you see the virus,
Speaker 1: you already have antibodies to it, so it should make
Speaker 1: it a much more um rapid response. Optimally, the data
Speaker 1: so far really is those two shots, and many vaccines
Speaker 1: are like that, shingles vaccine, pneumonia. You know, a number
Speaker 1: of vaccines really require two shots to get an optimal
Speaker 1: antibody response. It is my belief that the smart thing,
Speaker 1: based on the data at this point would be to
Speaker 1: get the two shots. I think most healthcare providers are
Speaker 1: planning to get two shots um. But look, certainly people
Speaker 1: will begin to be protected even after one shot. I
Speaker 1: don't think we're going to have to fight over vaccine numbers.
Speaker 1: We really have a number of vaccine makers that over
Speaker 1: the next few weeks and months are going to becoming available,
Speaker 1: So I don't think we have to worry about rationing
Speaker 1: um vaccine at this point. But I do think we
Speaker 1: need to focus on the most vulnerable, you know, population
Speaker 1: within the elderly and so forth. Dr inlus Better, thank
Speaker 1: you so much once again for joining us. We always
Speaker 1: appreciate your perspective and your knowledge, uh and the way
Speaker 1: you can kind of get across some of this difficult
Speaker 1: science here. Dr inlus Better, Clinical socio Professor of medicine,
Speaker 1: at the n y U Lango Medical Center joining us
Speaker 1: on the phone from New York City, and that was
Speaker 1: that eight week numbers is something that jumped out of me. Encouraging, right,
Speaker 1: and it would be kind of exciting to get it
Speaker 1: pretty soon and then get on a plane and go
Speaker 1: on vacation. Not that that's where my mind is right now,
Speaker 1: but my god, palm trees. So I mean, the scientists
Speaker 1: have just done in a outstanding job. Now it's up
Speaker 1: to the supply chain, folks. I guess that's way I'm
Speaker 1: looking at. One of the clearest signs of the economic
Speaker 1: harm being done to America in general, but certainly in
Speaker 1: the Greater New York area, is the empty storefront and
Speaker 1: that is obviously reflective of businesses that have gone out
Speaker 1: of business, and that's obviously challenging for those businesses and
Speaker 1: challenging for the landlords for those buildings in which those
Speaker 1: businesses reside in. Bloomberg Business Week has a great article
Speaker 1: on that. Joel Lubber, editor for Bloomberg Business Week, joins
Speaker 1: us here from remote access from Brooklyn. Devin Leonard, projects,
Speaker 1: an investigations reporter for Bloomberg Business Week, also joins us
Speaker 1: on the phone from New York City and Joel, this
Speaker 1: is a big story, the retail story and the landlord
Speaker 1: and the real estate story all rolled into one in
Speaker 1: New York. Yeah, it really focuses on on Midtown Manhattan,
Speaker 1: and that also represents you know, midtown districts throughout the country,
Speaker 1: if not world. And Devin's story really centers on on
Speaker 1: a fascinating character, Aby Rosen, who in the commercial real
Speaker 1: estate world is actually a really big name. The reason
Speaker 1: that he's especially relevant to New York right now is
Speaker 1: that he's actually in the process of of doing a
Speaker 1: really extensive renovation of the Chrysler Building. And of all
Speaker 1: the things that you could be doing in the middle
Speaker 1: of a pandemic, you know, doing a you know, gikantic
Speaker 1: renovation of iconic building that um commercial tenants are probably
Speaker 1: looking at but maybe not um biting on right now,
Speaker 1: is probably not one of them. Um. And that was
Speaker 1: why we wanted to talk to him, because you know,
Speaker 1: this has serious implications for the economy as well as
Speaker 1: cities right like New York is is really in the
Speaker 1: jaws of something right now, and somebody like Abe can
Speaker 1: kind of illuminate, you know, what it's like to be
Speaker 1: a developer in all of this. So, so, Devin, what
Speaker 1: did you learn from talking with him? Oh? Well, all
Speaker 1: kinds of things. But but I think the biggest thing
Speaker 1: was just, you know, getting him to take me up
Speaker 1: to the Chrysler building because it was fascinating to see
Speaker 1: what he's gonna do. You know, it's his hist you know,
Speaker 1: two hundred you know, two million dollar plan to to
Speaker 1: to renovate this sort of historic building. But there's there
Speaker 1: was nobody there. You know, there was I mean, the
Speaker 1: you know, the lobby was empty, you know there you know,
Speaker 1: his publicist was commenting, I couldn't believe it was like
Speaker 1: a Sunday morning and meanwhile, it's ago Wednesday afternoon and
Speaker 1: about you know, five o'clock and we ran into one
Speaker 1: tenant and he was leaving, and it was it was
Speaker 1: just you know, it was just it was it was
Speaker 1: just it was kind of a amazing me. I was,
Speaker 1: you know, I was just there at my taper quarter on,
Speaker 1: but I was just like, this is it. This is
Speaker 1: the opening of the story, because you know, I don't
Speaker 1: know any other way to to you know, to describe
Speaker 1: to you know, describe what's going on right now. So Devin,
Speaker 1: I was struck by this sort of trying to seem
Speaker 1: optimistic on the front and then underneath having true anxiety.
Speaker 1: And when we were first talking about this idea that
Speaker 1: Aby would have a really good view on this, well,
Speaker 1: he wants to also portray things in a certain way.
Speaker 1: And one of the best parts of the story was
Speaker 1: him how going with this guy and saying, hey, if
Speaker 1: you leave, trust me. The line to take the space
Speaker 1: we pretty long, and the guy says, I hope so,
Speaker 1: and then and then Aby says, don't leave. Pay the
Speaker 1: high rent. Come on. How much fear is there, Devin, Well,
Speaker 1: I think it depends who you are, you know. I
Speaker 1: think there's there's there's a certain amount of you know,
Speaker 1: degree of fear for all these guys. I mean even
Speaker 1: you know, you know they're they're really big names. And
Speaker 1: that's why you saw a lot of them calling tenants, uh,
Speaker 1: you know, in the falls in the fall and saying, hey,
Speaker 1: you gotta bring you gotta bring your people back, because
Speaker 1: they're worried that the longer, the longer people stay out,
Speaker 1: the more people are going to get used to working
Speaker 1: at home, you know, the less demand there's there's gonna be,
Speaker 1: you know, for you know, for their space and things
Speaker 1: like that, so so so so the longer Longerest goes
Speaker 1: on and just sort of you know, potentially the values
Speaker 1: the values their buildings. You know. On the other hand,
Speaker 1: you know people I guess I'll gree you new of
Speaker 1: you know one Vander, but you know, the newest the
Speaker 1: newest guy script in the mid time, people like you
Speaker 1: know in aby Rose, and they're they're a much better
Speaker 1: position that than than people with you know, class B buildings,
Speaker 1: you know intendants, So they're going out of business. But
Speaker 1: even so, you know, you know, imagine if you are,
Speaker 1: you know, you just put a new skyscraper and you're
Speaker 1: trying to market it in the middle of this. I mean,
Speaker 1: you'd be anxious to actually devin one of the things.
Speaker 1: Let's just stay in the Crystler building here for a second,
Speaker 1: because one of the most interesting things I learned about
Speaker 1: the Crysler building is that while he owns the building,
Speaker 1: he doesn't actually own the land the building is built on,
Speaker 1: and those payments are actually only going to go up.
Speaker 1: Um talk to us about that guy, em because also
Speaker 1: who he has to pay is an interesting side story too. Yeah,
Speaker 1: I mean, it's it's not a totally on you know,
Speaker 1: uncommon thing in in New York real estate. For I
Speaker 1: guess you you buy an effect you know, a building
Speaker 1: or basically buy a leasehold or a long term leasehold
Speaker 1: in the building. But then you have to pay you
Speaker 1: you know, you know, you the code unquipe building owner.
Speaker 1: You have to pay rent to somebody who owns the
Speaker 1: ground underneath. And in this case, uh, you know, wasn't
Speaker 1: it you know, in his partner Signal group from Austria,
Speaker 1: they have to pay thirty two million dollars a year
Speaker 1: to coop reunion. Uh you know, you know, you know,
Speaker 1: you know a college that that's basically they got into
Speaker 1: financial trouble a couple of years ago. They started charging tuition.
Speaker 1: You know, they they've been found, they were founded, they've
Speaker 1: been founded. Uh you know, you know in the nineteenth century,
Speaker 1: you know, to offer free free education to you know,
Speaker 1: working class kids. Well they're trying to get back to
Speaker 1: to charge to not charging tuition. They're counting on that money.
Speaker 1: They're kind of that thirty two million dollars a year
Speaker 1: from the Chrysler building and it goes up to forty
Speaker 1: one in a couple of years. So that's a big
Speaker 1: nut to cover every year, and that's sort of a
Speaker 1: big challenge for Abe. Devin. Can we also just talk
Speaker 1: about some of the singers in the story because he
Speaker 1: had he had some stuff to say. Um, let's start
Speaker 1: with the Blasia. Yeah, well that's why. That's why he's
Speaker 1: he's so great, Uh, you know, such such a great
Speaker 1: you know, lens to to look at this all through. Well,
Speaker 1: he's It's interesting because because in September, you know, more
Speaker 1: than a hundred and sixty business leaders wrote a letter
Speaker 1: basically criticizing the Blasio start of pleading with him to
Speaker 1: do something about you know, rising crime and trash on
Speaker 1: the streets and things like that. Well, Rosen didn't sign
Speaker 1: didn't sign the letter because he's friends with the Blasio.
Speaker 1: He talks to him a lot and talks about city policies.
Speaker 1: But so basically, but he usually disappointed whether he said,
Speaker 1: this is what I tell the Blasio, and I tell
Speaker 1: I tell him I'm disappointed with what he's that are
Speaker 1: not done with school reopening and basically he said de Blasio.
Speaker 1: So he sits around and says, I maybe you know
Speaker 1: what can I do? Mean? But I want to do
Speaker 1: it's negative and you know, I can't make a decision,
Speaker 1: and Rosen said he's done, he's checked out. Wow, So
Speaker 1: I mean, is the expectation real quickly? Do you think
Speaker 1: that a thinks things are going to get better, come
Speaker 1: back to normal, New York come back? Well, I think
Speaker 1: he thinks long term they will, and I think I
Speaker 1: think I think he thinks that that next year doesn't
Speaker 1: be a new mayor and that you know, you know,
Speaker 1: that should be an improvement right there. But he was
Speaker 1: also talking about, you know, Joe Biden is gonna win
Speaker 1: and he's going to get all this money for for
Speaker 1: New York. And we now know well, you know the
Speaker 1: at the Senate stands fpublic publican had excuse me, that's
Speaker 1: that may not happen. So so you have that there's uncertainty,
Speaker 1: but do the next mayor is and and then you
Speaker 1: have you know, the the you know, budget deficis and
Speaker 1: things like that. So you know, if you know this,
Speaker 1: I think everybody thinks New York will come back. Depressions
Speaker 1: when when? When? Exactly right? Joel Weber, thank you so
Speaker 1: much for joining us and bring us this story. Editor
Speaker 1: for Bloomberg Business Week on the remote from Brooklyn and
Speaker 1: Devin fantastic reporting on this story. We really appreciate it.
Speaker 1: Really rich story, products, projects and investigations. Reporter for Bloomberg
Speaker 1: Business Week on the phone from New York City. Uh.
Speaker 1: Devin's story is featured in the new issue of Business
Speaker 1: Week magazine, available on a newsstands and at Bloomberg dot com.
Speaker 1: And for those of you listening in New York, d
Speaker 1: C in San Francisco and watching on YouTube, Bloomberg Business
Speaker 1: Week continues. If you're listening on Bloomberg one oh six
Speaker 1: one in Boston based eight Business is next and Lesa,
Speaker 1: this is that New York real estate issue. Um, when
Speaker 1: you think about all that new construction that was gone
Speaker 1: up over the last four or five six years, you've
Speaker 1: gotta wonder how that's gonna play out going forward. You're
Speaker 1: listening to Bloomberg Business Week with Carol Masser on Bloomberg Radio.
Speaker 1: This is Bloomberg Business Week with Paul Sqweene alongside Lisa Brahmins.
Speaker 1: We were sitting in for Carol Masser today and the
Speaker 1: news of the day, as it has been for the
Speaker 1: last several weeks, is, uh, what's going on in Washington
Speaker 1: in terms of fiscal stimulus that doesn't look right now
Speaker 1: that the congressmen are working well with each other in
Speaker 1: their sandbox, Let's get the latest. We do that with
Speaker 1: Laura Litvan, congressional reporter for Bloomberg News. She joins us
Speaker 1: on the phone from Washington and d C. Laura, there
Speaker 1: seems to be a snag every other day. Just when
Speaker 1: you think some momentum might be building for some type
Speaker 1: of even limited stimulus, politics seems to get in the way.
Speaker 1: What's the latest. Well, I do think there ultimately will
Speaker 1: be a deal. But um John Thune, who has been
Speaker 1: umber two Republican leaders, just told reporters that this could
Speaker 1: stretch into Monday before maybe something comes together and you
Speaker 1: can get a vote in the Senate. They are wrestling
Speaker 1: over the number of issues, but a leading issue, probably
Speaker 1: the number one run, number one issue holding up the
Speaker 1: trucks right now, is how to handle the federal reserves
Speaker 1: UM emergency loan programs that were set up in the
Speaker 1: Care's Act, the Pandemic Relief Act that past in March.
Speaker 1: Um Republicans like Pat too Mey and Mike Crepo want
Speaker 1: to ensure that, uh, those those programs can't be revived,
Speaker 1: you know, they say those were supposed to be temporary
Speaker 1: in nature. Democrats are balking, and the Biden transition team
Speaker 1: is weighed in. Democrats are saying that it hurts the
Speaker 1: FED ability to respond to future crises. Republicans are concerned
Speaker 1: that a lot of these moneys could be used for
Speaker 1: state locally, which they have been bristling at, and they're
Speaker 1: trying to work that out. You know, Soon just expressed
Speaker 1: some confidence that something can be worked out, but things
Speaker 1: could drag into the weekend and we have a potentially
Speaker 1: all government shutdown occurring if they can't just agree on
Speaker 1: the stopgap measure to buy them a little more time
Speaker 1: tonight or why are we talking about this now at
Speaker 1: the eleventh hour. Well, and that's kind of how these
Speaker 1: things often work out. They do come down to the wire.
Speaker 1: But there have been some very strong feelings on both
Speaker 1: sides on um some of these issues and a lot
Speaker 1: of the details. Um, you know, the state local aid
Speaker 1: in the size of the package has been something that
Speaker 1: Republicans have pushed back against for months. Um. But you know,
Speaker 1: these are really they often do take these things right
Speaker 1: down to the wire, and then you know, there's a
Speaker 1: lot of confidence being expressed by leaders of both parties
Speaker 1: that a deal will come together. They're not going to
Speaker 1: leave count until they get one. And we actually do
Speaker 1: know the brought outlines of this this deal. It's going
Speaker 1: to be around nine billions. It's expected to have three
Speaker 1: hundred dollars a week, and enhanced unemployment benefits UH around
Speaker 1: three d billion dollars for the Paychex Protection program which
Speaker 1: helps small businesses, direct payments of around six billion dollars
Speaker 1: for individuals, and some fun thing for transportation including airlines,
Speaker 1: for back to thee distribution and for reopening school. And
Speaker 1: really what they need to do is just to free
Speaker 1: on a few final things and get the language drafted
Speaker 1: and everyone agreed to it, and try to move that
Speaker 1: through in a few days. Boy, I think a Congression
Speaker 1: reporter lare, that's a tough beat, cover these folks all day,
Speaker 1: every day. I don't know how you do it. Um. So,
Speaker 1: you know, it seems like the fiscal STIDMENTUS talks are
Speaker 1: kind of bearing the lead a little bit here because
Speaker 1: we need to fund this government going forward. It's just
Speaker 1: the metrics of what happens tonight the weekend. Are we
Speaker 1: going to get a stop gap for a week or
Speaker 1: a day? What's that side of the equation, Well, what
Speaker 1: they seem to be looking at is around two days,
Speaker 1: maybe a little longer. They have to see what people
Speaker 1: will agree through and what they really need. The House
Speaker 1: would probably vote on something tonight and the Senate would
Speaker 1: then take that and try to see if they can
Speaker 1: lose it by unanimous consent. They need that because in
Speaker 1: the Senate it always takes more time to new things,
Speaker 1: and there are some senators who are saying I might
Speaker 1: not go along with this just because are some things
Speaker 1: in the stimulus bill that I'm not sure I'm gonna like.
Speaker 1: I want to know more detail about what's going to
Speaker 1: look like first. So there's at least some possibility they
Speaker 1: won't pass the stopgap bill. But if they don't, there's
Speaker 1: some ability by the administration if it's clear that something
Speaker 1: is coming soon behind it, that will fix the problem
Speaker 1: that they can delay any furloughs for a few days
Speaker 1: if the funding is seen as likely to pass them
Speaker 1: in their future. So from a political perspective, I don't
Speaker 1: understand why Republicans wouldn't be trying to expedite this since
Speaker 1: a number of different surveys show it would help them
Speaker 1: in the Georgia election. Well, the leaders at this point
Speaker 1: are trying to do that. And Mitch McConnell in a
Speaker 1: call with other Republican senators this week as we brought
Speaker 1: in the Georgia's racism and said that moving this along
Speaker 1: would be helpful. What's happened is there are some lawmakers
Speaker 1: in both parties, in particularly we are seeing in the
Speaker 1: Republican side right now who are saying they could hold
Speaker 1: up that stop bill m over over these provisions that
Speaker 1: they want to see changed on the letting facilities. And
Speaker 1: another issue is this is bipartisan. Thep Senator Josh Holly
Speaker 1: and Independent Senator Bernie Sanders both want in direct payments
Speaker 1: and um, they're saying that they want to make sure
Speaker 1: there's at least the generalists, you know, direct payment a
Speaker 1: check to people in the final deal. And they're saying
Speaker 1: they aren't ready to say they'll look that stockcap measure
Speaker 1: go through until they're sure of that. Are the folks
Speaker 1: in converss are they surprised that we're not hearing much,
Speaker 1: if at all, from the White House what the president
Speaker 1: may want, what the President is willing to support. Well,
Speaker 1: Stephen the Niche in the Treasury Secretary has been at
Speaker 1: the table in these talks, and you know, so there's
Speaker 1: some belief that Trump would sign it, but I think
Speaker 1: we all know that there can always be surprises with
Speaker 1: President Trump at the last minute. He does want UH
Speaker 1: direct payments, that's the biggest ship for him. They brought
Speaker 1: that in late into the talks. Minuchin and the leaders
Speaker 1: are looking at six hundred, you know, the six checks,
Speaker 1: and we haven't heard that Trump is objecting to that.
Speaker 1: And one thing I will tell you is that Holly
Speaker 1: himself spoke directly with Trump had in the last twenty
Speaker 1: four hours. He told us about this and he said
Speaker 1: the President did not bring it up, saying that he
Speaker 1: was objecting to what's going forward. Laura litt Van, thank
Speaker 1: you so much for being with us a Bloomberg News
Speaker 1: congressional reporter. And it just is amazing how it always
Speaker 1: does come down to the wire. But we've been to
Speaker 1: other wires, Paul. That's the thing. This isn't the first wire.
Speaker 1: We've had other wires. Just that this wire is actually
Speaker 1: going to trip something major, which is a government shutdown,
Speaker 1: so it seems a little bit more realistic. But still
Speaker 1: this has been dragging out. It has been and I
Speaker 1: liked your question about the FED. What shocked I guess
Speaker 1: it surprise me is I hadn't heard this about the
Speaker 1: FED until today. I think, you know, you know, maybe
Speaker 1: I wasn't paying attention, but it's kind of my job
Speaker 1: to pay attention to this stuff. But it just seems
Speaker 1: like a fundamental issue to come out. It's not like
Speaker 1: we've been debating this for weeks. It just seems like
Speaker 1: another way to trip up the talks here for whatever
Speaker 1: political game. May you know, that's why it's stuffed down
Speaker 1: there in Washington. And you know, folks like Laura Lipin
Speaker 1: have been covering Congress for a long time. They're so
Speaker 1: valuable to us because they kind of know how things
Speaker 1: work down there. So but but yeah, but it's it's
Speaker 1: just curious to me because the main issues were state
Speaker 1: and local funding and liability with respect to COVID, and
Speaker 1: now we're talking about the powers of the federal Reserve.
Speaker 1: You just wonder what other aspects are going to come
Speaker 1: out of the woodwork as we head towards the last
Speaker 1: minute here a journal now, But you let me drive,
Speaker 1: Oh no, no, no, no, honey, please, I'll do the
Speaker 1: right I want to drive. Drive good questions this drive
Speaker 1: to the globe dawn radio. Welcome back everybody. We are
Speaker 1: heading towards the market close here in about ten minutes time.
Speaker 1: We have green, red, and green across the screen here.
Speaker 1: It's basically a churn. It's been a churn all day,
Speaker 1: NASDAC eating out about a half a percent of gains,
Speaker 1: the SMP down just about two tenths of a percent.
Speaker 1: The question is how much are people reassessing the momentum bets,
Speaker 1: how much are people reassessing the incredible gains that we've
Speaker 1: seen so far this month and this week and just
Speaker 1: basically not doing much with that joining it was? Right
Speaker 1: now is Tony Roth, chief investment officer at Wilmington's Trust,
Speaker 1: And Tony, I love your sense. Do you think the
Speaker 1: momentum has gotten over its skis at this point? Hey, Lisa,
Speaker 1: thanks for having me. Uh No, I don't think so.
Speaker 1: I think we're seeing a little bit of nervousness around
Speaker 1: the stimulus, uh you know, to protracted stimulus and goitiation
Speaker 1: or discussion if you will. There's been it seems like
Speaker 1: every day the market has been up expecting the stimulus package,
Speaker 1: yet it never seems to arrive. Right. So everyone's waiting
Speaker 1: for the stimulus package, and right now we're dealing with
Speaker 1: situation where they're yet again a hamstrong there, and yet
Speaker 1: people are banking on stimulus and that's been baked into
Speaker 1: the valuations. How do you square that as an investor
Speaker 1: heading into your end Well, it's a great question. We
Speaker 1: just released our capital market forecast, which is of course
Speaker 1: our outlook for next year, and we made a lot
Speaker 1: of changes to portfolios this week in order to reflect
Speaker 1: that outlook. And so specifically, we added to emerging markets
Speaker 1: where we already had an overweight. We added to small
Speaker 1: cap where we were neutral and we're now overweight. We
Speaker 1: also added to commodities to bring it up to neutral,
Speaker 1: and we added to tips from a severe underway to
Speaker 1: a moderate underway. So all across those trades, these added
Speaker 1: to beta in the portfolios. Because when we look at
Speaker 1: the outlook, we know we're going to get this stimulus package.
Speaker 1: We don't know it's going to be today, over the weekend,
Speaker 1: next week, maybe passi BI natural early next year, but
Speaker 1: I would doubt it would take that long. And when
Speaker 1: you combine that with the fact that these vaccines that
Speaker 1: are arriving, vaccinations are occurring, and you continue to have
Speaker 1: a FED which is extremely committed to accommodation, You're gonna
Speaker 1: have a pretty good year next year and this tremendous
Speaker 1: pent up demand in the economy. All right, And I
Speaker 1: just want to clarify I was checking the wrong screen.
Speaker 1: I apologize Nazac as a pee both doubt about six
Speaker 1: tents of a present. I'm wondering, though, is this the
Speaker 1: kind of dip that you buy or is this basically, uh,
Speaker 1: nothing in particular and you just kind of hold what
Speaker 1: you've been holding into next year. Well, it's not much
Speaker 1: of a dip yet, right, we're pretty close to those
Speaker 1: all time highs. Having said that, we may not get
Speaker 1: a huge dip before we race forward next year. So
Speaker 1: on the extreme margin, anytime the market goes down, um
Speaker 1: by even a percent, it's a buying opportunity if you're
Speaker 1: not fully invested relative to your long term plan. So Tony,
Speaker 1: if fascinated by your e M hall because we've had
Speaker 1: a lot of cross currents on emerging markets, Uh, is
Speaker 1: this what's driving your call? And kind of where do
Speaker 1: you see the best opportunities in emerging markets? So you
Speaker 1: have fall a couple of things. First, thing is that
Speaker 1: if you think about the changes wrought through COVID, the
Speaker 1: signal impact that is going to be singular when we
Speaker 1: look forward UM or when we look back at this
Speaker 1: period from the future, is going to be the acceleration
Speaker 1: of digital, the digitization of the consumer. And when we
Speaker 1: look at the e M, what you see is tremendous
Speaker 1: supply side set up for the e M to supply infrastructure, semiconductors, cloud,
Speaker 1: all those kinds of things for digitization of our society.
Speaker 1: And from a supply side, they're frankly ahead in Southeast
Speaker 1: Asia of the rest of the world when it when
Speaker 1: it comes to casual society, telehealth, UM, contactless payment, all
Speaker 1: those kinds of things. As the world becomes more and
Speaker 1: more digital, UM e M set up for that. And
Speaker 1: then the second thing, of course, is that there are
Speaker 1: a lot cheaper relatively speaking from a historical perspective than
Speaker 1: the developed equity markets are. And then maybe a third
Speaker 1: order factor is the weakening dollar, which helps all non
Speaker 1: US equities. So there's quite a number of things that
Speaker 1: are lining up here because the just EM is the
Speaker 1: place today. So I guess I'm looking at this and
Speaker 1: I'm thinking everyone has been coming out with a similar
Speaker 1: kind of call, this feeling of continue with momentum emerging
Speaker 1: markets over the US, Europe over the US, although that's
Speaker 1: a more controversial call. Does it concern you that there
Speaker 1: is a degree of group think that, according to some measures,
Speaker 1: is the most years. Well, I guess it won't always
Speaker 1: have to be worried about that. I mean, I think
Speaker 1: that when I think it's about the group think right now,
Speaker 1: it's just this general optimism. Um. I think sentiment is
Speaker 1: incredibly strong now for all equities. So that does concern me.
Speaker 1: But when you look at value sations and you consider
Speaker 1: where rates are as high a valuations are where nowhere
Speaker 1: nears where we work during the bubbles of the late
Speaker 1: nineties and such, And so I think that with rates
Speaker 1: the slow and the FED committed to keeping blow at
Speaker 1: least for another eighteen months or so. I know they're saying,
Speaker 1: let's face that, no one really knows where we're gonna
Speaker 1: be after eighteen months. That's a pretty far window. I
Speaker 1: think that there's justification for for this um enthusiasm in markets.
Speaker 1: And again, these vaccines are game changing, and by our estimate,
Speaker 1: there's probably a trillion and a half dollars of pentoff
Speaker 1: savings that are waiting to spill out into the server
Speaker 1: side of the economy next year. That is a huge number. Yeah,
Speaker 1: you can put me in that camp, that's for sure. Uh,
Speaker 1: Tony about vacation right, hit darn right, exactly, Hop on
Speaker 1: a plane. Um. Tony talked to us about the rotation
Speaker 1: trade here, you know, you know, out of maybe some
Speaker 1: of the tech growth lightning up there, a little bit
Speaker 1: on some of those big growth gainers, uh, and maybe
Speaker 1: putting some more cap into some of the cyclical names,
Speaker 1: maybe even smaller cap. How do you think about that? Yeah?
Speaker 1: I think, I think that you need to be balanced,
Speaker 1: and I do I do think you can ignore the
Speaker 1: cyclical slash value trade that's happening right now small caps
Speaker 1: race thinking have we just moved to an overweight on
Speaker 1: small cap? I do think that we're going to continue
Speaker 1: to see a catch up from those cheaper, junkier names
Speaker 1: in both large cap and just more broadly in small cap.
Speaker 1: And so when you think about areas like energy, UM,
Speaker 1: infrastructure UM, areas of healthcare, materials, even financials, I think
Speaker 1: over the next six months we're going to continue to
Speaker 1: see hard rotations, hard rotations into those areas. But that
Speaker 1: doesn't mean that you take it necessarily out of the
Speaker 1: big cap tech names that there's four or five names Microsoft, Apple, Amazon, Um, Google,
Speaker 1: arguably Facebook. Maybe maybe not, depending on what happens there
Speaker 1: with the antitrust overhead. Those platforms are going to be
Speaker 1: the venues upon which the consumer is digitized going forward,
Speaker 1: virtual reality, reality, It's just gonna go on and on
Speaker 1: with those platforms. So you can't afford to kick those
Speaker 1: platforms out of your portfolio. Tony Roth, chief investment officer
Speaker 1: at Wilmington Trust with a hundred and twenty four billion
Speaker 1: dollars in management, joining us on the phone from Philadelphia. Paul,
Speaker 1: I gotta say the Russell's two thousand up twenty eight
Speaker 1: percent since the end of October alone. I know that
Speaker 1: is the trade. Yeah, it really is the trade. And
Speaker 1: we've seen that rotation play. You really start in September
Speaker 1: and then just gain a tremendous men momentum and it's
Speaker 1: you know again, don't fight the Fed, Lisa, and Chairman
Speaker 1: Pal has been very clear as to what he views
Speaker 1: the rate environment going through at least. Thanks so much
Speaker 1: for listening to Bloomberg Business Week Download the podcast on iTunes, SoundCloud,
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