Speaker 1: This is Bloomberg Business Week. I'm Charle Masser and I'm
Speaker 1: Bloomberg Quick Takes Tim Stanabek. We're here every day bringing
Speaker 1: you the latest news from the world of business and finance,
Speaker 1: plus technology, politics, economics, all parnessing the power of Business
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Speaker 1: Bloomberg Business Week and iTunes, SoundCloud, or Bloomberg dot Com.
Speaker 1: You can also listen to our radio show at two
Speaker 1: pm Eastern Time on Bloomberg Radio or watch us on
Speaker 1: YouTube search Bloomberg Global News. Well, it does feel like
Speaker 1: a big step forward. Tim and I have been kind
Speaker 1: of joking about it, laughing about it, kind of excited
Speaker 1: about it, about Americans being able to now pack their
Speaker 1: bags for European vacations, the EU lifting those travel curbs
Speaker 1: for residents of the U S. However, Tim, non essential
Speaker 1: travel between the US and Canada is going to be
Speaker 1: banned for another month, despite mounting pressure from businesses on
Speaker 1: Justin Trudeau's government to ease and restrictions. And then we
Speaker 1: talked about the UK recording the most coronavirus cases in
Speaker 1: a day since mid February. That Delta variant really making
Speaker 1: death going there. Yeah, let's get into it all with
Speaker 1: Dr Ian last Beata, clinical professor of medicine at n
Speaker 1: y UN's Lango in a medical Center, joining us on
Speaker 1: the phone from New York City. Dr LUs Beda, it
Speaker 1: is great to have you with us this afternoon. Help
Speaker 1: us make sense of what exactly is going on with
Speaker 1: the Delta variant in the UK where vaccination rates are
Speaker 1: really high. So happy Friday, everyone, hope everyone is doing well. Uh.
Speaker 1: The Depta variant is really a concern and on this
Speaker 1: program we've talked about it over the last several weeks,
Speaker 1: really almost a month ago when we noticed cases in
Speaker 1: India where really less than ten percent of the population
Speaker 1: had been vaccinated, which is really a perfect kind of
Speaker 1: Petrie dish to have viral replication and mutations, and we've
Speaker 1: seen COVID certainly has a predisposition to mutate, and unfortunately
Speaker 1: the Delta variant or the Indian variant, Uh, it's not
Speaker 1: only a more infectious but has more complications, so people
Speaker 1: have a higher viral load before they really feel sick.
Speaker 1: A lot of the symptoms are really common cold symptoms,
Speaker 1: and people don't even realize until they deteriorate that they
Speaker 1: have it. Running knows, headache, fever, even cough. It seems
Speaker 1: very much like a common cold, but the viral levels
Speaker 1: are much higher. It's much more transmissible, so that when
Speaker 1: people call for spread it, it's at a much higher level. Fortunately,
Speaker 1: our vaccines so far, the MR and A vaccines um
Speaker 1: appear to be about effective. So this is yet another
Speaker 1: good reason if you haven't been vaccinated, please do get vaccinated,
Speaker 1: because there's a lot of data that if you do
Speaker 1: get COVID there are short term and long term complications
Speaker 1: that may be problematic, and we can talk about those later. Well.
Speaker 1: And one thing I want to ask you about is
Speaker 1: the CDC came out I believe it was maybe yesterday
Speaker 1: or the day before, and they said that the delta
Speaker 1: that highly transmits vel transmissible COVID incteen variant that first
Speaker 1: came from India, first identified in India, now makes up
Speaker 1: at least ten percent of all US cases. Is that troubling,
Speaker 1: especially as we still need a lot of people vaccinated
Speaker 1: here in the US. It's definitely troubling because there are
Speaker 1: many parts, especially in the Southern States, um due to
Speaker 1: vaccine hesitancy that have not been vaccinated, and so that
Speaker 1: ten percent could certainly grow higher. We know it's a
Speaker 1: dominant strain uh in Europe and the UK, so they've
Speaker 1: they sort of supplanted the UK variant, you know, with
Speaker 1: the delta or Indian variant. So that really is a
Speaker 1: problem because for people who are not vaccinated, there was
Speaker 1: a much higher transmissibility. So, yes, I think that ten
Speaker 1: percent in the US is going to get worse, and
Speaker 1: I think that's a real problem. So what's the guidance
Speaker 1: to all of us who are increasingly walking around with
Speaker 1: no masks out and about in the world. If your
Speaker 1: vaccinated did as you said, we're okay, right, we're protected
Speaker 1: against this one. Right. It does look that the mRNA
Speaker 1: vaccines provide about an ad protection. Now, UH. Part of
Speaker 1: the reason that you want to try and get as
Speaker 1: much of the globe vaccinated as can be is because
Speaker 1: you want to break that chain of constant infections. And
Speaker 1: the more viruses replicate, the more chance they have to mutate.
Speaker 1: So the real issue is if that delta variant continues
Speaker 1: to migrate and continues to mutate, there's a significant risk
Speaker 1: that it could become pierce the vaccination protection that's currently
Speaker 1: going on right now, that doesn't appear to be the case.
Speaker 1: And that's an argument for the Southern States or people
Speaker 1: who have not been vaccinated to get vaccinated. And I
Speaker 1: understand there's vaccine hesitancy and things on the internet that
Speaker 1: scare people about, you know, clots and for hility and
Speaker 1: a whole host of things. Vaccines are not a hundred
Speaker 1: percent safe, but it is much safer to get a
Speaker 1: vaccine than to suffer COVID UH and to suffer the
Speaker 1: short term and potentially now we're seeing longer term potential
Speaker 1: consequences of COVID, including perhaps brain effects. So so getting
Speaker 1: vaccinated is really key to break that chain of viral replication.
Speaker 1: Talk a little bit about Dr about that doctor less
Speaker 1: better was something I was going to ask you about.
Speaker 1: There's concern that a new COVID study is is sort
Speaker 1: of pointing to a potential loss of tissue from the
Speaker 1: brain um. This is from a warning from Dr Scott Gottlieb,
Speaker 1: former Commissioner of the FDA. He was tweeting about this,
Speaker 1: right So, there is a study in the UK where
Speaker 1: they did look at brain scans and did see a
Speaker 1: loss of brain tissue cortex, which is uh, the outer
Speaker 1: part of the brain, and that's really a concern. You know,
Speaker 1: we know the virus really effectual organs. It's really a
Speaker 1: vascular tropic virus, and so it can affect the heart
Speaker 1: with myocarditis, and the lungs with lung clots. And we
Speaker 1: see loss of smell very commonly. Loss of smell and
Speaker 1: taste is one of the most common early indications of
Speaker 1: of the infection with COVID, and part of that maybe
Speaker 1: because of a brain effects actually not peripheral like your
Speaker 1: sense of smell in the nose, but actually CNS or
Speaker 1: brain effects, and that is really terrifying. We don't really
Speaker 1: know long term if people are losing brain tissue what
Speaker 1: that's going to do in the future. Two incidents of
Speaker 1: dementia or other complications longer term another argument to get vaccinated,
Speaker 1: right right, there's no there's things we don't know about
Speaker 1: the longer term impacts of somebody having COVID. Well, we've
Speaker 1: talked a lot about the toll beyond the death toll,
Speaker 1: beyond the hospitalizations, beyond the numbers of COVID, And there's
Speaker 1: a story in Bloomberg on Bloomberg dot Com today by
Speaker 1: our own Katya Dmitriev and read pick her talking about
Speaker 1: opioids ripping through the US workforce. Death's at a record level,
Speaker 1: a record nine seven hundred and twenty two overdosed deaths
Speaker 1: in the US for the year through November twenty. Dr
Speaker 1: Iain LUs Bader is clinical professor of medicine at n
Speaker 1: y un n Y US Lingo and Medical Center. He
Speaker 1: joins us once again, um, Dr LUs Bader. What we've
Speaker 1: talked so much about this with you. The idea that
Speaker 1: the death toll is from COVID is it's it's beyond
Speaker 1: what we saw from COVID. It's also people in isolation,
Speaker 1: people in loneliness. And I think this wondering what you
Speaker 1: think of these death toll numbers coming from the opioid crisis.
Speaker 1: You know, I think the COVID nineteen pandemic and home isolation,
Speaker 1: social isolation has taken a real toll on um. Not
Speaker 1: only our lives or psyches, are many, many elements of
Speaker 1: social fabric. And we talked about is in almost a
Speaker 1: humorous way, the that people at home become either hunks, drunks,
Speaker 1: or meaning they they they either embrace the pain and
Speaker 1: the challenge and say I'm going to use this opportunity
Speaker 1: to improve myself, or they say, um, I'm really stressed
Speaker 1: and I'm going to hide whether it's an alcohol or
Speaker 1: food or opioids and really become a little self destructive.
Speaker 1: And I think the healthiest approach is one to reduce
Speaker 1: the availability and doctors should be very cautious about prescribing opioids,
Speaker 1: which I think they are, but also empower patients and say, look,
Speaker 1: if you're feeling down, if you're feeling sad, what's the
Speaker 1: best approach, And candidly, the best approach is to help
Speaker 1: other people turn that inward looking I'm in pain, I'm
Speaker 1: having trouble dealing with things. If possible to look outward
Speaker 1: and say, how can I make a positive impact on
Speaker 1: people around me? On a friend, on a family member?
Speaker 1: Can I make a call? Can I do a good
Speaker 1: deed for someone? That is the most energizing way to
Speaker 1: say I have an important role in life, and um,
Speaker 1: and I'm not going to take something to ease my
Speaker 1: own pain and potential risk. Well before the pandemic, the
Speaker 1: Trump administration was working a lot on addressing the opioid
Speaker 1: epidemic in the United States, And I'm wondering if you
Speaker 1: think that one of the ramifications of the pandemic is
Speaker 1: that we just don't have the attention of this as
Speaker 1: a public health crisis, given the fact that we are
Speaker 1: going through another public health crisis right now. It can
Speaker 1: be your right. Often it's hard for people to do
Speaker 1: multiple multitasking. And the opioid crisis never went away. It's
Speaker 1: been here with us for many years at a good
Speaker 1: point with with with um fentinel and other synthetic substances
Speaker 1: coming over the border, and it's something that we took
Speaker 1: our eye off the ball and need to refocus on it.
Speaker 1: The reasons for it and how to address it, I
Speaker 1: think are absolutely right. I think that's worsened it, but
Speaker 1: it was always with us right that fentanyl and this
Speaker 1: story talks about this UM and they talk about it
Speaker 1: that it can be a hundred times more potent and
Speaker 1: morphine more than opiod. Deaths in the twelve months through
Speaker 1: November stem from such drugs, these synthetic opioids UM and
Speaker 1: they talk about people thinking they're taking cocaine or or
Speaker 1: they're taking xanix and then finding out that it's it's
Speaker 1: not it's got ventinl in it. You know, the interesting
Speaker 1: part is, UM listen. It has a toll in our
Speaker 1: society in so many different ways, but it also has
Speaker 1: an economic impact by these people. The White House once
Speaker 1: gave out a number two and a half trillion dollars
Speaker 1: costing the U. S economy from because of the opioid crisis.
Speaker 1: I mean, this is something that we've got to figure out.
Speaker 1: Dr Les Beder, I think we have to interdict the
Speaker 1: flow of synthetic sentinel and opioids which are coming from overseas,
Speaker 1: not not friends sending it. And it's highly addictive and
Speaker 1: highly dangerous, much more potent and much more life threatening.
Speaker 1: And we all should need to address Americans dependence or
Speaker 1: a preference to try that. And so I think we
Speaker 1: need to work at both. And right now there is
Speaker 1: a flood coming in across the border, and I think
Speaker 1: we also need to work on our predilection for using it.
Speaker 1: They want to end on a high note, just in
Speaker 1: the last thirty seconds that we have UM a positive note.
Speaker 1: I'm wondering if one thing that that we can all
Speaker 1: do this weekend to help us all relax as we
Speaker 1: get into summer. I definitely think there are plenty of
Speaker 1: alternative approaches. Meditation. Regular exercise TM has been shown to
Speaker 1: be very effective. Exercise, but socialize and help someone else
Speaker 1: do a good deed, make someone else feel better, make
Speaker 1: a positive contribution, recycle anything positive will not only make
Speaker 1: you feel better, it will make the recipient feel better.
Speaker 1: It's a great way to wrap it up. Hey, listen,
Speaker 1: uh and you always make us feel better and just
Speaker 1: giving us so much information, just giving us up to date.
Speaker 1: Dr Alas better have a great weekend, clinical Professor of
Speaker 1: medicine and why you lend going medical center. You're listening
Speaker 1: to Bloomberg Business Week with Carol Messer and Bloomberg Quick
Speaker 1: Takes Tim Stinovic on Bloomberg Radio. So cashing in finally
Speaker 1: college athletes are getting ready to finally score Tim some
Speaker 1: serious cash. Joining us now is Bailey lip Schultz, Equities
Speaker 1: reporter at Bloomberg News, on the phone from New York City. Bailey,
Speaker 1: It's great to have you. What Carol's referring to is
Speaker 1: coming next month July for student athletes in at least
Speaker 1: six states, including Alabama, Florida, Georgia, and Texas. They will
Speaker 1: be able to earn money by doing things like marketing
Speaker 1: themselves on social media and selling autographs. So what does
Speaker 1: that mean for US Congress for laws for legislation, Well,
Speaker 1: the big push right now has been for Congress to
Speaker 1: pass a national standards, something that will have a level
Speaker 1: playing field for off fifty states. Um. But there's been
Speaker 1: a big divide. We've seen at least eight bills introduced
Speaker 1: in the last year. There's kind of a widespread on
Speaker 1: both sides, whether they want to include health insurance, whether
Speaker 1: players should be to get paid towards a longer term,
Speaker 1: whether they can be union eye or be seen as employees.
Speaker 1: There's a huge debate on uh Capitol Hill about what
Speaker 1: that could look like. UM, So there's kind of a crunch,
Speaker 1: but as of now, it doesn't seem like they're going
Speaker 1: to get something in ahead of that July one date.
Speaker 1: It's been a long time coming. I mean, we have
Speaker 1: done so many stories here at Bloomberg, and we know
Speaker 1: other news outlets have done the same ballet about the
Speaker 1: amount of money that we know in college sports, where
Speaker 1: universities and coaches paid millions of dollars and the college
Speaker 1: athletes get paid nothing. Um, I'm assuming the college is
Speaker 1: a lot of them, not so happy about this. Well,
Speaker 1: the big thing is that they just want a level
Speaker 1: playing field. And it's not that they would get paid.
Speaker 1: There's no pay to play. Pay to play is not
Speaker 1: something that's considered. But the players want to be able
Speaker 1: to do local ads. If you're a quarterback for Alabama,
Speaker 1: they want to be able to sign UM to talk
Speaker 1: about the local car dealership for example. UM. And that's
Speaker 1: something that a lot of these players want to Obviously,
Speaker 1: as you said, the n C double it makes a
Speaker 1: lot of money on these players. The coaches make a
Speaker 1: lot of money. They're huge facilities, but the players can't
Speaker 1: do anything um. Which really stands out because if you're
Speaker 1: an entrepreneur at the Harvard you can feel free to
Speaker 1: make money, but if you're a football player, you can't
Speaker 1: do anything. It's not just the the players that the
Speaker 1: athletes that will potentially cash in. They need those marketplaces,
Speaker 1: those platforms Bailey that you write about in order to
Speaker 1: do so. Talk to us about marketplaces like open sponsorship
Speaker 1: and playbooked. Yeah. So Playbook is a company that was
Speaker 1: founded by an n ai athlete. The n ai A
Speaker 1: different athletic associations for smaller schools. UM. They actually were
Speaker 1: allowed to stay passing an I O N I L
Speaker 1: law back in October. So those players are making you know,
Speaker 1: fifty bucks for a Twitter Twitter post or something like that,
Speaker 1: and open sponsors a company that really just pairs, so
Speaker 1: they are taking a cut, but their whole role is
Speaker 1: to be a one stop platform where players can kind
Speaker 1: of put themselves and their best foot forward, and companies
Speaker 1: can reach out and try to get paired up and
Speaker 1: you know, whether to tweets, an Instagram post, an actual
Speaker 1: ad um. That's kind of their vision of what this
Speaker 1: would look like. Hey, Bailey States moving on this? Will
Speaker 1: that put pressure on the federal government to do something.
Speaker 1: That's been the push and that's what the n C
Speaker 1: double A has been asking for. People had said July
Speaker 1: first obviously a huge deadline. Now it's looking like year
Speaker 1: end might be something that's on the table. But there's
Speaker 1: such a such a divide between what Congress would want
Speaker 1: what the federal government would want that it's kind of
Speaker 1: a lot of question has been put on the NST
Speaker 1: double A itself, and they have a huge meeting next
Speaker 1: week to discuss an I L legislation. Do you think
Speaker 1: the conversation has really shifted in recent years from this
Speaker 1: being something that is okay, totally acceptable by the American people.
Speaker 1: College athletes should be paid. I think it has and
Speaker 1: I think the main thing is depending on who you
Speaker 1: talk to, it's been a long time coming. We've known
Speaker 1: that July first could be a date. We knew two
Speaker 1: would be the date. The NT double as really sad
Speaker 1: on their hands, and Congress hasn't done much. But if
Speaker 1: you sit down and really think about it, you should
Speaker 1: be able to maximize at least the people were fans
Speaker 1: of it. Should be able to maximize on your athletic
Speaker 1: abilities because you're only kind of in that spotlight once
Speaker 1: and you only have a certain periods or stretched where
Speaker 1: you're you know, have the opportunity to cash in. And
Speaker 1: that's the thing that really spread across a lot of
Speaker 1: people point to college basketball and college football. But if
Speaker 1: you're a woman's gymnast at U c l A, you
Speaker 1: could make a lot a lot of money off of
Speaker 1: selling your name, image and likeness, right exactly. Companies are
Speaker 1: they kind of excited though about this prospect opening up
Speaker 1: in terms of branding and collaborations and partnerships with collegiate athletes.
Speaker 1: I think though, and it seems like that that would
Speaker 1: be the consensus. It would make sense if you could
Speaker 1: market you know, when Zion Williamson was a duke, if
Speaker 1: you could get him in kind of an Adidas or
Speaker 1: a Jordan's sweatshirt or even a Subway ad then you
Speaker 1: could really strike while the iron is hot when these
Speaker 1: people are when these athletes are younger and have their
Speaker 1: own stage, and if you look at a quarterback like
Speaker 1: Trevor Lawrence from Clemston, I can imagine there are a
Speaker 1: number of companies that would have loved to take advantage
Speaker 1: of that well, and that's how you tap into a
Speaker 1: younger audience too. You've got these younger athletes tap thing
Speaker 1: into a younger audience, grabbing them and then having them
Speaker 1: for decades. Hey Bailey, when you think about this from
Speaker 1: a perspective of just dollars and cents, like how much money?
Speaker 1: You know, obviously they are the huge names, the people
Speaker 1: you mentioned, the household names at this point. But does
Speaker 1: it mean that the typical college player on a D
Speaker 1: one team is going to be able to actually make
Speaker 1: some money? Yeah, that's been the thing that playbook has wanted,
Speaker 1: and that's kind of what some of these depending who
Speaker 1: you talk to in the industry, they're saying, is it's
Speaker 1: it's a story, right, So if there's the back of
Speaker 1: long snap Arom, the text Longhorns has a really good story,
Speaker 1: or you know as a vet, there's going to be
Speaker 1: an opportunity to make money there because people will want
Speaker 1: to tell that story through their products. And I think
Speaker 1: it's it spreads much further than most people think. Most
Speaker 1: people would think it's the Alabama quarterback, you Ohio State
Speaker 1: running back, the Syracuse point guard. But there are a
Speaker 1: lot of markets in a lot of places that look
Speaker 1: up to these college athletes. And as you said, if
Speaker 1: they have a couple of thousand followers on TikTok, that's
Speaker 1: an easy way for them to make money and partnered
Speaker 1: in sponsored posts. Hey, how likely is it, LA that
Speaker 1: we're going to see UM kind of a quilt of
Speaker 1: state moves versus federal legislation anytime soon? Could we could
Speaker 1: we see that? Ultimately? I think so, at least to
Speaker 1: start UM as as we've said, you know, July one
Speaker 1: is right around the corner. The n C double A
Speaker 1: has a big council meeting UM next week at the
Speaker 1: start of next week. But everyone I talked to in
Speaker 1: the industry, doesn't expect them to pass some blanket law
Speaker 1: that will look through a national level. So it seems
Speaker 1: like it will be states individually picking up where they can,
Speaker 1: players in schools putting pressure on those states. UM. But
Speaker 1: it definitely will be an interesting, interesting ride to see
Speaker 1: how this plays out because there is a lot of
Speaker 1: money on the line. Well, Alabama, Florida, Georgia, Texas, these
Speaker 1: are big states, big sports states. I mean, how come
Speaker 1: is that just because there is so much sports in
Speaker 1: there that that's how this that's why that this got done.
Speaker 1: Uh kind of first over some other places. Well, a
Speaker 1: lot of places have signed laws, so like California assigned legislation,
Speaker 1: Michigan assigned legislation, but they go on too affect at
Speaker 1: a later date. UM. Some of these other states, like
Speaker 1: you you met in Alabama or Mississippi, UM, kind of
Speaker 1: pushed forth sooner rather than later. Florida actually earlier, earlier
Speaker 1: in the spring, had pushed to delay it a year,
Speaker 1: and then two days later did a complete one eight
Speaker 1: again and actually said, you know what, we'll have a
Speaker 1: going effect this year because quarterbacks, UM, like the ones
Speaker 1: from Miami and Florida state. We're putting pressure and saying
Speaker 1: it's ridiculous to keep delaying this. Not let us have
Speaker 1: an opportunity to make money on things that rightly they
Speaker 1: they believe they should. Hey Bailey, before we go, just
Speaker 1: in ten seconds, the big names, the big n C
Speaker 1: Double A athletes, what's a realistic expectation for how much
Speaker 1: money they'll be able to pull in each year? But
Speaker 1: the estimate that it could be north of the six
Speaker 1: figures just depending on the following It really truly depends
Speaker 1: on Twitter, TikTok, Instagram posts. Will be big money things
Speaker 1: for these players. Not bad for a college job right now,
Speaker 1: exactly right, that's before you even get out. Great stuff.
Speaker 1: That was a great question, Billy Lipscheltz, Great story, Equities
Speaker 1: reporter at Bloomberg News the phone from New York City.
Speaker 1: You're listening to Bloomberg Business Week with Carol Messer and
Speaker 1: Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. Well, yesterday
Speaker 1: President Biden signed federal law saying that Juneteenth would be
Speaker 1: a national holiday, a federal holiday. Juneteenth is the June
Speaker 1: nineteenth federal holiday to commemorate the end of slavery in
Speaker 1: the US. Joining us now. Shinny Bastik, Wall Street reporter
Speaker 1: at Bloomberg News. She's here with us in the Interact
Speaker 1: Bloomberg Interactive Broker Studio in New York. Shy, you spent
Speaker 1: so much of yesterday on the phone talking to sources,
Speaker 1: speaking to them about what exactly was going on. Talk
Speaker 1: to me about the scramble that financial institutions went through
Speaker 1: yesterday to try to understand, Okay, how are we going
Speaker 1: to commemorate this now that it's a federal holiday. I mean,
Speaker 1: no jokes. Some of them were like, what is everybody
Speaker 1: else saying? Yeah? So that's how much they were scrambling?
Speaker 1: Were they really? And you know, the thing is, I've
Speaker 1: been asking for a month because last year was when
Speaker 1: financial firms really had started to come out and either
Speaker 1: or give a floating holiday or partial day off, uh something. Really,
Speaker 1: I'm so glad you said that you've you've been asking
Speaker 1: for a month because I think too many observers right
Speaker 1: now and Carol mentioned this just a few minutes ago,
Speaker 1: it seems like, okay, well this was you know, more
Speaker 1: than a d fifty years than making. But also I
Speaker 1: think to a lot of people felt very quick. So
Speaker 1: why did it catch so many companies off guard. I
Speaker 1: don't know. I bet they're their diversity and inclusion you know,
Speaker 1: exactly knew that this was coming. They've spent a lot
Speaker 1: of money in DNA in the last couple of months,
Speaker 1: billions of dollars right over the last twelve months. They've
Speaker 1: hired people to hold them accountable on stuff like this.
Speaker 1: So the June tenth of you know, the thing that's
Speaker 1: surprising is many federal holidays have become market holidays. There
Speaker 1: is no consensus yet on whether this will be a
Speaker 1: market holiday, though they are looking into it for next year.
Speaker 1: We'll see how it all plays out. We have talked
Speaker 1: to a lot of people, especially a lot of former
Speaker 1: black bankers as well, and some of them say this
Speaker 1: is the least they could do is give the day off.
Speaker 1: Others say, I don't care whether they give us the
Speaker 1: day off or not. There should be parody when it
Speaker 1: comes to pay and promotion. That's what they what people
Speaker 1: want to see at the end of the day. Well,
Speaker 1: you know, you're We had Pharrell Williams on yesterday and
Speaker 1: who said, listen, obviously this is important, this is great,
Speaker 1: but there's still a lot of work to be done
Speaker 1: exactly when it comes to you know, equality in d
Speaker 1: and I certainly within the Wall Street community. I do
Speaker 1: wonder about the pressure among black employees at these firms
Speaker 1: and what kind of sway they might have. Well, that's
Speaker 1: so interesting to ask, because the numbers are still so poor, right,
Speaker 1: The numbers are very low when it comes to black
Speaker 1: employees at the firms, and the executive ranks are less
Speaker 1: than three percent typically. So that's that's how stark it is.
Speaker 1: And we know the broader population is closer. So the
Speaker 1: banks do have a long way to go. And what
Speaker 1: it really comes down to is watching year after year.
Speaker 1: It's not really enough to kind of do things when
Speaker 1: everybody is looking, right, It's a matter of consistency and
Speaker 1: making sure people follow up the year after, the year
Speaker 1: after and the year after. Right, we'll talk about why
Speaker 1: markets closing isn't just an easy thing for you know,
Speaker 1: a market to decide to do. I mean, these these
Speaker 1: are publicly traded companies, the NASTAC and you know Intercontinental Exchange,
Speaker 1: the parent company of the New York Stock Exchange. You
Speaker 1: lose money if you do that, Yeah, you lose money.
Speaker 1: The thing that's interesting is it is it easy to do.
Speaker 1: I've talked to some current and former executives and what
Speaker 1: they've told me is, listen, when a former president dies,
Speaker 1: you close the market pretty quickly, and in the case
Speaker 1: of a natural disaster, the same would be the case.
Speaker 1: So it's not that it's hard to do or impossible
Speaker 1: to do by any means. But with that side, it
Speaker 1: takes banks, broker dealers signed off by the regulators, and
Speaker 1: it's not when when you ask anyone they say it's
Speaker 1: the market's decision, Well who is the market? So that's
Speaker 1: where the complication lines. But I always think about, you know,
Speaker 1: walking the talk, like if you really want to send
Speaker 1: a very strong message right away, like to have had
Speaker 1: the president maybe sign it, then everybody saying okay, Monday
Speaker 1: is a holiday, like you know what I mean, or
Speaker 1: you know, to kind of do that would send a
Speaker 1: very strong message about especially when you know you've been
Speaker 1: talking to all of these big banks and members from
Speaker 1: their community about the importance of diversity and inclusion, um.
Speaker 1: But we still continue to talk about well, all right,
Speaker 1: that's talk, whereas the actions this could have been a
Speaker 1: very big, big sign and a big action, huge sign.
Speaker 1: And also the thing is people act like it's a
Speaker 1: holiday for a portion of the population. No, this is
Speaker 1: a holiday that is now a federal holiday. And that's
Speaker 1: the point, right, A lot of our reporters have been
Speaker 1: speaking to a lot of people about today. There's a
Speaker 1: new corporate kind of speech now where it's an American holiday.
Speaker 1: It's an American holiday exactly. It's not a holiday just
Speaker 1: for a subset of people. So that's something to consider
Speaker 1: as we consider how to yea, is it so if
Speaker 1: if if the banks decide to make this a holiday,
Speaker 1: so I have decided to make it a floating holiday. Um,
Speaker 1: does that sort of foretell that markets will be closed?
Speaker 1: Because for all intents and purposes. No. No. The interesting
Speaker 1: thing is now some of the banks, particularly investment banks,
Speaker 1: have been waiting for kind of broader consensus from the
Speaker 1: securities industry. But the interesting thing and the strongest moves
Speaker 1: we've seen so far our Bank of America and JP Morgan,
Speaker 1: the two biggest lenders, closing their branches starting next year
Speaker 1: on June team So that is that that's another right,
Speaker 1: why does the market need to be open if the
Speaker 1: two largest lenders decide that branches. Do you see what
Speaker 1: I'm saying? It feels like there's a little testing in
Speaker 1: the waters. I mean basically the SEC or something Right
Speaker 1: or finwork came out and said, yea, we're going to
Speaker 1: close markets. I mean, obviously then that's a done deal.
Speaker 1: And I do wonder someone like a Jamie Diamond Wright
Speaker 1: could come out and say this is what we're gonna do.
Speaker 1: We're gon shut it all down. I bet a lot
Speaker 1: of folks would follow or not or not, but they
Speaker 1: wanted to be level right the exact because there is,
Speaker 1: as you say, money to be made and everything could
Speaker 1: just be closed next year. We don't know how we
Speaker 1: will play out in the end, Yeah, exactly, who knows?
Speaker 1: I know. None of this is straightforward. And what is
Speaker 1: amazing though, Caroline and Chanoli and we you know, Shanalie
Speaker 1: and I anchored to quick take focus on this today.
Speaker 1: It's like this was more than a d fifty years
Speaker 1: in the making. Many states had already observed it, but
Speaker 1: it's still caught a lot of companies off guard. Yeah.
Speaker 1: I really find that interesting, shocking. A lot of words adjectives, um, Shinali,
Speaker 1: good stuff as always Bloomberg News Wall Street reporter Shinali
Speaker 1: Bossi in our Interactive Brokers studio. Check our out to
Speaker 1: a Shinali Bossik on Twitter. This is Bloomberg Radio. I'm
Speaker 1: bro journal. Yeah, but you let me drive. Oh no, no, no, no, honey, please,
Speaker 1: I'll do the revels. I want to drive. Just drive, baby,
Speaker 1: good questions Dry. This is the Drive to the Globe
Speaker 1: Community Radio. So just about ten and a half minutes
Speaker 1: left in today's trading session. Charlie bringing down, uh, the
Speaker 1: latest on the trade for you, and it's definitely a
Speaker 1: down days, particularly when it comes to the down Jones
Speaker 1: Industrial Average down one point three percent, one percent who
Speaker 1: were on the SNP and the NASAC down three quarters
Speaker 1: of a percent. Michael Clogan just saying, you know, kind
Speaker 1: of markets doing the fed's work for it, and the
Speaker 1: FED pricking the bubble bubble a little bit when it
Speaker 1: comes to some asset prices. So let's get into it though.
Speaker 1: Time for the Drive to the Clothes and we're gonna
Speaker 1: do it with Alan Zaffron. He's founding partner in co
Speaker 1: CEO at I e Q Capital. He joins us on
Speaker 1: the phone from Foster City, California. Alan, It's nice to
Speaker 1: have you here. It's been an interesting week. We're all
Speaker 1: still trying to make sense of what the FED did,
Speaker 1: but it does feel like, you know, maybe they took
Speaker 1: some of the froth out of the markets here. Hey, Carol,
Speaker 1: great to be on. No mission accomplished exactly right, right,
Speaker 1: isn't it exactly what they wanted? We're going to have
Speaker 1: inflation run a little fast than we thought, maybe it
Speaker 1: runs a year or two a little hot faster we thought,
Speaker 1: and then we get to our two percent inflation rate.
Speaker 1: And who would have thought massive printing from the FED
Speaker 1: as a result of a pandemic. Let's be said, finally
Speaker 1: get to that two percent inflation level that we haven't
Speaker 1: seen in over a decade. So mission accomplished. Let's let's
Speaker 1: get not a lot, just a little tiny bit of
Speaker 1: air out of the bubble, and then let's recalibrate, because
Speaker 1: once we get in the next year, we're gonna be
Speaker 1: back in the slow growing, plogging economy we knew from
Speaker 1: two thousand ten to two thousand nine. And in that
Speaker 1: kind of environment, the companies that can still have competitive modes,
Speaker 1: strong balance sheets, and growth despite this slow economy are
Speaker 1: going to dominate. That's why you're seeing this rotation right now.
Speaker 1: It's people are already looking ahead, and they're saying, Wow,
Speaker 1: there really isn't a lot of growth in this economy,
Speaker 1: and that's why the thirty year intainer bondyields have plummeted
Speaker 1: in the last two trading sessions. We're flattening on the
Speaker 1: yield curves and we're starting here. It's gonna take time,
Speaker 1: but we're starting here to reposition back to what the
Speaker 1: markets and the economy looked like before COVID. How much
Speaker 1: more going on right now and how much more air
Speaker 1: can be let out of out of the bubble. Well, hey,
Speaker 1: I don't like that term bubble because I'm going to
Speaker 1: tell you I don't think we are in a bubble
Speaker 1: as it relates to the US stock market. I think
Speaker 1: we are in the world where valuations for stocks are
Speaker 1: going to continue to trade well above long term averages
Speaker 1: because in a world of low interest rates and very
Speaker 1: little returns on cash or bond, and the money has
Speaker 1: got to go somewhere, it goes into stocks, and so
Speaker 1: you know, our valuations a little bit high potentially on
Speaker 1: selected software companies or biotech companies, or certainly on third
Speaker 1: tier value oriented commodity companies that needed an excessively fast
Speaker 1: economy to persist. Yeah, maybe a little, but things aren't
Speaker 1: grossly over valued. Money has got to go somewhere. Cash
Speaker 1: is trash, long term tax rebonds are left to one percent.
Speaker 1: Stocks are a better deal. So we kind of go out,
Speaker 1: go back to what we saw after the financial crisis
Speaker 1: and the reset there. We know it was pretty dismal
Speaker 1: for a while, but we then were slow and low
Speaker 1: for a long time. Is that ultimately where you think
Speaker 1: we go back to. Yeah, it is. And here's why.
Speaker 1: Number one, we have an aging population, so just take
Speaker 1: a look at Japan, look at Europe, something like ten
Speaker 1: thousand people a day turn age six five, the whole
Speaker 1: baby boomer generation. When you get older, you spend less,
Speaker 1: so that slows down economic growth. Secondly, it's got this
Speaker 1: massive debt twenty eight trillion incounting for the US government.
Speaker 1: It's got to be paid for, and paying that debt
Speaker 1: off slows down economic growth. It crowds out private investment.
Speaker 1: And certainly if you're in the U. S. Government, you
Speaker 1: can't afford for interest rates to go it too high
Speaker 1: because you've got to financi your debt. And so for
Speaker 1: all those reasons, um, you're gonna end up in the
Speaker 1: slow plotting, long environment, and to make matters even more
Speaker 1: accentuated on interest rates, they're getting actually some real technological
Speaker 1: advances pushing prices down and eliminating jobs. There's less wage inflation,
Speaker 1: which is the biggest component of inflation. So interest rates
Speaker 1: aren't going to go anywhere. If you had an aging population,
Speaker 1: a big deadload and technological advances, RACH just can't go
Speaker 1: up much. But but the economy still grows just enough
Speaker 1: for solid businesses with growth to keep turning out their profits.
Speaker 1: And that's why, Tim, we get back to the higher
Speaker 1: than average evaluation. Money has got to go somewhere. And
Speaker 1: I gotta tell you, if I were a policymaker and
Speaker 1: now we're listening to you right now, I would I
Speaker 1: would kind of be freaking out right now because I
Speaker 1: would say, wait a second. What we want to do
Speaker 1: is we want to see stronger growth than we saw
Speaker 1: from We want to see uh employment uh. We want
Speaker 1: to see employees get paid more. We want to see
Speaker 1: wage growth. What are policymakers to do? You're correct? That's why,
Speaker 1: as an example, one of the said governor's meal cash
Speaker 1: parties arguing we say and raise rates until two thousand
Speaker 1: twenty three. He's in the minority now, but he saying
Speaker 1: we haven't given enough employment a chance. So there is
Speaker 1: this tension, if you will, between trying to stoke inflation
Speaker 1: and frankly, trying to broaden the wealth so a brighter,
Speaker 1: a broader amount of citizens across the entirety of the
Speaker 1: US versus not letting it inflation get out of control.
Speaker 1: Of course, the problem is it's incredibly difficult for a
Speaker 1: centralized organization like the Subtle Reserves to pinpoint perfectly where
Speaker 1: rates should be to get the perfect amount of growth.
Speaker 1: They can't, they can't be three years forward. They're doing
Speaker 1: the best they can. But it is as a policy
Speaker 1: mact policymaker, it is probably to the degree that you're
Speaker 1: trying to broaden out full employment, especially in a world
Speaker 1: where job um, the high paying job, certainly being challenged
Speaker 1: from technological progress. Um, it's it's we're going to have
Speaker 1: continued economic inequality. That problem is not going away anytime soon. Yeah, exactly,
Speaker 1: And I feel like it's it's it's something we've been
Speaker 1: talking about about reskilling of workers to really meet the
Speaker 1: new jobs that are in demand at this point. So, Okay,
Speaker 1: as you pointed, out so rightly. Alan at the beginning
Speaker 1: is that when it comes to investing, you know, investors
Speaker 1: are constantly you know, seeking yield. I've said that a
Speaker 1: million times over the last couple of years, and you're
Speaker 1: constantly comparing you know, as a class to asset class.
Speaker 1: So in the meantime equities it's going to be It
Speaker 1: looks like a smart argument. But again, where do you
Speaker 1: want to be, well, you want to be as relates
Speaker 1: to stock during the slow growing environment. This is why
Speaker 1: growth stocks out before in value stocks over the last
Speaker 1: ten years. Slow growing economy mandates that a company can
Speaker 1: grow its profits regardless of the economic environment. So you
Speaker 1: tilt more in the long run towards those growth stocks
Speaker 1: as relates to yield, to the extent that you still
Speaker 1: have reasonable real estate choices, not necessarily urban office space,
Speaker 1: but in general, selected real estate reefs certainly would make
Speaker 1: a lot of sense in this environment. And lastly, senior
Speaker 1: float in great debt in the world of low interest rates,
Speaker 1: that are selected ways in which to create yield that
Speaker 1: go beyond conventional long term you know, low yielding fixed
Speaker 1: income vehicles. So you have to be a little more
Speaker 1: choosy about where you put your capital if you're looking
Speaker 1: for a yield, but you still need to make sure
Speaker 1: that the underlying fundamentals or credit worthiness to where you're
Speaker 1: getting your yield are still fundamentally solid. Don't go chasing
Speaker 1: highly leveraged businesses. When the economy flows, it may not
Speaker 1: end well. Allen, talk more about where you're seeing the
Speaker 1: opportunity for equity, specifically when it comes to international. Is
Speaker 1: there a market that you're particularly interested in? Um? Well,
Speaker 1: I would tell you technology transcends borders. So again in
Speaker 1: technology is the biggest place to grab cloth, and they're
Speaker 1: absolutely there is. Um I would still argue that environments
Speaker 1: both in Asia, certain reflective parts of emerging Asia, as
Speaker 1: well as even in continental Europe aren't actually up to
Speaker 1: speed on various technological advances as you would think. So
Speaker 1: I always software the service is a place to look,
Speaker 1: and I would tell you that the pullback we had
Speaker 1: with the value rotation up until a couple of days ago,
Speaker 1: I still think on a long term basis, getting large
Speaker 1: global franchises that happen to sell into non US markets
Speaker 1: is a better way to play it. I think the
Speaker 1: businesses are managed better within the US. All Right, good stuff,
Speaker 1: as always and we always appreciate when you join us. Allen,
Speaker 1: thanks so much, have a great weekend. Alan Zafran, who
Speaker 1: founding partners co CEO of I e Q Capital, on
Speaker 1: the phone with us once again from Foster City, California.
Speaker 1: Thanks for listening to Bloomberg Business Week. Download the podcast
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