1 00:00:09,840 --> 00:00:13,800 Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane. Daily 2 00:00:13,960 --> 00:00:17,560 Speaker 1: we bring you insight from the best in economics, finance, investment, 3 00:00:18,000 --> 00:00:23,520 Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 4 00:00:23,600 --> 00:00:27,440 Speaker 1: Bloomberg dot Com, and of course on the Bloomberg Joining Us. 5 00:00:27,440 --> 00:00:30,320 Speaker 1: Now placed the side Chris Hobby West fogout Securities, head 6 00:00:30,600 --> 00:00:34,040 Speaker 1: of Equity Strategy, momentum is too rich for our blood. 7 00:00:34,800 --> 00:00:38,239 Speaker 1: Whilst Fog Chris, what does that made? So? What that 8 00:00:38,280 --> 00:00:42,559 Speaker 1: means is excuse me. Momentum strategies have gone too far right. 9 00:00:42,640 --> 00:00:46,160 Speaker 1: Everyone during the recession ran to momentum strategies. They bid 10 00:00:46,200 --> 00:00:48,800 Speaker 1: them up to a level that I don't think is sustainable. 11 00:00:49,159 --> 00:00:51,720 Speaker 1: And this setup is very much what we've seen in 12 00:00:51,800 --> 00:00:55,040 Speaker 1: two thousand three, two thousand and nine. You have a recession, 13 00:00:55,280 --> 00:00:58,160 Speaker 1: everyone runs to the safety momentum, they bid them up 14 00:00:58,200 --> 00:01:01,440 Speaker 1: to a level that's not sustainable. Recovery comes around and 15 00:01:01,520 --> 00:01:05,120 Speaker 1: PM say, oh, I need to get cyclicality. They run 16 00:01:05,160 --> 00:01:08,160 Speaker 1: from momentum. It becomes a contra indicator and next thing 17 00:01:08,160 --> 00:01:10,360 Speaker 1: you know, somebody says we have a two thousand sigma event, 18 00:01:10,640 --> 00:01:13,440 Speaker 1: which isn't true. We have a point of inflection, which 19 00:01:13,440 --> 00:01:16,240 Speaker 1: is what happens when momentum strategies, because ultimately you make 20 00:01:16,240 --> 00:01:18,959 Speaker 1: a deal with the devil. You you buy momentum. It 21 00:01:19,000 --> 00:01:21,600 Speaker 1: continues to go up, it performs, but when it turns, 22 00:01:21,800 --> 00:01:25,080 Speaker 1: it turns very badly, and you need to get out quickly. Chris, 23 00:01:25,120 --> 00:01:28,200 Speaker 1: given the unusually uncertain in the United Kingdom and the 24 00:01:28,280 --> 00:01:31,960 Speaker 1: United States and frankly everywhere else, what is your revenue 25 00:01:32,000 --> 00:01:36,160 Speaker 1: and down the income statement call? What's your actual fundamental 26 00:01:36,240 --> 00:01:40,480 Speaker 1: call on what the stock market will do? So our 27 00:01:40,480 --> 00:01:44,920 Speaker 1: our stock market call for is very pedestrian. We're looking 28 00:01:44,920 --> 00:01:47,360 Speaker 1: at mid single digit returns. And what we've been saying 29 00:01:47,400 --> 00:01:50,760 Speaker 1: to clients for sometimes, if you want higher returns, if 30 00:01:50,760 --> 00:01:53,000 Speaker 1: you want more competitive rates of returns, you need to 31 00:01:53,000 --> 00:01:56,160 Speaker 1: look down the market capitalization, smaller caps, you need to 32 00:01:56,160 --> 00:01:59,920 Speaker 1: add more cyclicality, higher COVID beta, and you need to 33 00:02:00,000 --> 00:02:03,280 Speaker 1: start going into the financials. All right, So Chris, right 34 00:02:03,320 --> 00:02:06,360 Speaker 1: now you say that your antim no MO, You're not 35 00:02:06,360 --> 00:02:08,240 Speaker 1: going to go at the momentum. The price of admission 36 00:02:08,440 --> 00:02:10,840 Speaker 1: is to hy So what do you do with your money? 37 00:02:11,360 --> 00:02:13,480 Speaker 1: So what you do is it's very simple that the 38 00:02:13,480 --> 00:02:16,480 Speaker 1: opposite of MOE is contraring you're looking for opportunities that 39 00:02:16,520 --> 00:02:19,120 Speaker 1: are less picked over. And again I'm gonna sound like 40 00:02:19,120 --> 00:02:21,800 Speaker 1: a broken record. Obviously small caps have worked in it. 41 00:02:21,880 --> 00:02:24,000 Speaker 1: I worked for the last couple of weeks, last couple 42 00:02:24,000 --> 00:02:26,000 Speaker 1: of months, but if you look at a multi year basis, 43 00:02:26,280 --> 00:02:29,639 Speaker 1: they've really underperformed. And we want to look for things 44 00:02:29,639 --> 00:02:32,520 Speaker 1: that give you more value, things that that will work 45 00:02:32,600 --> 00:02:36,080 Speaker 1: in an early recovery, more cyclicality. And you can find 46 00:02:36,080 --> 00:02:38,639 Speaker 1: that in financials, you can find that industrials. You can 47 00:02:38,680 --> 00:02:41,359 Speaker 1: even find that in the commodity space. So we want 48 00:02:41,400 --> 00:02:43,560 Speaker 1: you to be diversified, but we want you to have 49 00:02:43,680 --> 00:02:47,200 Speaker 1: these certain characteristics in your portfolio. Do you stand the 50 00:02:47,240 --> 00:02:50,639 Speaker 1: knot of spice? For that, Chris um you go across 51 00:02:50,680 --> 00:02:54,120 Speaker 1: the globe. So so typically when value works, when cyclicality works, 52 00:02:54,320 --> 00:02:58,160 Speaker 1: it works better overseas. US is very growth heavy, is 53 00:02:58,280 --> 00:03:00,400 Speaker 1: very tech heavy. So I think you can source that 54 00:03:00,400 --> 00:03:02,600 Speaker 1: in a number of different places, including the States, but 55 00:03:02,680 --> 00:03:04,280 Speaker 1: I think the rest of the world is going to 56 00:03:04,320 --> 00:03:09,440 Speaker 1: act a lot better in Chris. If that's the case, 57 00:03:09,919 --> 00:03:12,960 Speaker 1: where's the opportunity now? Where is it running away from US? 58 00:03:13,000 --> 00:03:17,520 Speaker 1: I mean some of these are moon shot trajectories right now, right, 59 00:03:17,919 --> 00:03:20,000 Speaker 1: which is why we say we're antim A lot of 60 00:03:20,000 --> 00:03:22,720 Speaker 1: these companies have had these parabolic moves. There will be 61 00:03:22,760 --> 00:03:25,240 Speaker 1: a day of reckoning the value that you're paying, what 62 00:03:25,440 --> 00:03:28,760 Speaker 1: the costum admission is just too high. And ultimately, when 63 00:03:28,760 --> 00:03:31,440 Speaker 1: you have an alternative, when the economy begins to recover, 64 00:03:31,480 --> 00:03:34,400 Speaker 1: which is what it's doing, people will come back to cyclicality. 65 00:03:34,639 --> 00:03:37,440 Speaker 1: They'll want the old economy and they'll run very quickly 66 00:03:37,480 --> 00:03:40,080 Speaker 1: from it. But to answer your question, yes, every day 67 00:03:40,080 --> 00:03:43,000 Speaker 1: we go higher, we feel like we're stealing from tomorrow. 68 00:03:43,360 --> 00:03:45,680 Speaker 1: There's a limited amount of opportunity here and it's getting 69 00:03:45,720 --> 00:03:49,280 Speaker 1: less and less every day. An time out. You've been 70 00:03:49,320 --> 00:03:56,040 Speaker 1: at home with the kids too long. Chris could not 71 00:03:56,200 --> 00:04:00,360 Speaker 1: be more right. Chris crib to catch up. Thanks for 72 00:04:00,400 --> 00:04:03,440 Speaker 1: depend My best to you and a family. Sell me 73 00:04:03,560 --> 00:04:10,800 Speaker 1: that wowst Fago. I can't say I've never done this, 74 00:04:10,920 --> 00:04:13,680 Speaker 1: but I don't think I've ever done this. We just 75 00:04:13,720 --> 00:04:16,640 Speaker 1: talk about a job's day twenty twenty one days ahead 76 00:04:16,680 --> 00:04:19,839 Speaker 1: of schedule. It's a late job's day. January eight. Tom 77 00:04:19,880 --> 00:04:24,520 Speaker 1: Purcelli joins with RBC Capital Markets. Tom frame up that 78 00:04:24,800 --> 00:04:30,240 Speaker 1: key January eight report. How grim is it gonna be? Yeah? 79 00:04:30,240 --> 00:04:32,280 Speaker 1: I mean, look it's still a little early, but we 80 00:04:32,279 --> 00:04:35,480 Speaker 1: we are acknowledging that you could see another decline UM 81 00:04:35,839 --> 00:04:38,760 Speaker 1: in for that December report, and you just haven't seen 82 00:04:38,760 --> 00:04:42,160 Speaker 1: a lot of real improvement in in UH continuing claims. 83 00:04:42,160 --> 00:04:45,080 Speaker 1: Obviously we've seen UM initial claims arise at it, but 84 00:04:45,160 --> 00:04:47,200 Speaker 1: it's it's a continuing part that's really gonna feed most 85 00:04:47,680 --> 00:04:49,839 Speaker 1: UH into the you know, sort of what our what 86 00:04:49,880 --> 00:04:51,520 Speaker 1: our call is going to be as relates to the 87 00:04:51,600 --> 00:04:54,240 Speaker 1: peril reports. So yeah, I think I think, Look, it's 88 00:04:54,240 --> 00:04:56,320 Speaker 1: not just this December report. I mean, I think the 89 00:04:56,600 --> 00:05:00,360 Speaker 1: reality is UM, if states continue to shut down, then 90 00:05:00,760 --> 00:05:04,520 Speaker 1: you're going to see UM perhaps even the January report, 91 00:05:05,320 --> 00:05:07,760 Speaker 1: the report for January come in come in negative. So 92 00:05:07,920 --> 00:05:09,960 Speaker 1: I think we're gonna go through a rough patch. Now look, 93 00:05:10,040 --> 00:05:12,000 Speaker 1: let me be clear, UM and I'm happy to talk 94 00:05:12,040 --> 00:05:14,040 Speaker 1: about sort of the near term as as much as 95 00:05:14,080 --> 00:05:16,200 Speaker 1: you like. But while we're gonna go through his rough 96 00:05:16,240 --> 00:05:18,520 Speaker 1: patch here, we have to recognize that twenty one is 97 00:05:18,560 --> 00:05:22,080 Speaker 1: shaping up to be a pretty good year. You know, 98 00:05:22,120 --> 00:05:23,560 Speaker 1: all the p or I should say it this way, 99 00:05:23,720 --> 00:05:25,440 Speaker 1: all the pieces are in place for twenty one to 100 00:05:25,480 --> 00:05:28,000 Speaker 1: be a pretty good year. What does Q two Q 101 00:05:28,279 --> 00:05:31,000 Speaker 1: three look like when does the service sector go back 102 00:05:31,040 --> 00:05:35,760 Speaker 1: to work? Based on RBC research. Yeah, so we as 103 00:05:35,800 --> 00:05:39,080 Speaker 1: my daughter rolls through the shot up that you gave 104 00:05:39,080 --> 00:05:42,400 Speaker 1: her ten of time, you gave her ten dollars? Did 105 00:05:42,480 --> 00:05:47,000 Speaker 1: you give her ten dollars to shovel the driveway this morning? Time? 106 00:05:47,080 --> 00:05:51,120 Speaker 1: You gotta go bigger, You gotta go twenty dollars. Welcome 107 00:05:52,080 --> 00:05:55,920 Speaker 1: twenty dollars. You gotta go twenty dollars. They won't shovel 108 00:05:55,920 --> 00:05:59,080 Speaker 1: it for anything under that. Yeah. Um, and and now 109 00:05:59,120 --> 00:06:01,160 Speaker 1: I see through the corner. My my dog is about 110 00:06:01,160 --> 00:06:05,000 Speaker 1: to walk through as well. We love. I think the 111 00:06:05,080 --> 00:06:09,760 Speaker 1: question was about when do we get back to uh 112 00:06:10,120 --> 00:06:12,640 Speaker 1: gaining jobs? And look, I think the reality is we 113 00:06:12,640 --> 00:06:15,560 Speaker 1: we could be gaining jobs. Um, you know, sort of 114 00:06:15,600 --> 00:06:18,279 Speaker 1: shortly into the into the new year. You know, it 115 00:06:18,320 --> 00:06:20,400 Speaker 1: was funny, Tom. I think one of the things that 116 00:06:20,480 --> 00:06:23,880 Speaker 1: I think is being really underappreciated is think about, um, 117 00:06:23,920 --> 00:06:25,880 Speaker 1: some of the recent reports that we got from the 118 00:06:25,960 --> 00:06:27,839 Speaker 1: n f I B or from I s M or 119 00:06:27,880 --> 00:06:31,080 Speaker 1: even the Beige Book. They were talking about labor tightness. 120 00:06:31,560 --> 00:06:33,599 Speaker 1: We think about that they were talking about labor tightness 121 00:06:33,640 --> 00:06:35,880 Speaker 1: and it's all of this. So I think, what one 122 00:06:36,000 --> 00:06:38,320 Speaker 1: up happening is as we continue into the year, as 123 00:06:38,440 --> 00:06:41,479 Speaker 1: states start the process of reopening again, we think you 124 00:06:41,480 --> 00:06:43,839 Speaker 1: could easily be back down toward full employment by the 125 00:06:43,839 --> 00:06:45,680 Speaker 1: middle of the year. I mean, I think that that's 126 00:06:45,720 --> 00:06:48,520 Speaker 1: a foregone conclusion from our perspective. I think the bigger 127 00:06:48,600 --> 00:06:50,680 Speaker 1: question is, you know, how much progress do we make 128 00:06:51,040 --> 00:06:54,160 Speaker 1: over the balance of the year, beyond beyond the middle 129 00:06:54,200 --> 00:06:56,640 Speaker 1: of the year, so you could be below full employment 130 00:06:56,640 --> 00:06:58,800 Speaker 1: by by the end of twenty one, Tom, I feel 131 00:06:58,839 --> 00:07:00,880 Speaker 1: like we're part of your family. It's really lovely, I've 132 00:07:00,880 --> 00:07:02,719 Speaker 1: got to say. And you're doing a great job just 133 00:07:02,839 --> 00:07:06,000 Speaker 1: plowing through with all the distractions in the background that 134 00:07:06,080 --> 00:07:08,880 Speaker 1: you clearly see in the back of your eye. I 135 00:07:08,920 --> 00:07:11,440 Speaker 1: do wonder, you know, a lot of people discount some 136 00:07:11,480 --> 00:07:14,200 Speaker 1: of the data that we're getting, saying it's messy, it's noisy, 137 00:07:14,320 --> 00:07:16,640 Speaker 1: it's complicated because the numbers are so big, and they're 138 00:07:16,640 --> 00:07:20,000 Speaker 1: reporting from states. Has been called into question. But there 139 00:07:20,040 --> 00:07:23,440 Speaker 1: has been a transformation in the labor force to a 140 00:07:23,560 --> 00:07:26,200 Speaker 1: more technological society. And I was looking today at a 141 00:07:26,240 --> 00:07:29,560 Speaker 1: story that talked about Amazon warehouse workers and how they 142 00:07:29,560 --> 00:07:33,320 Speaker 1: are paid pretty low wages and a great number of 143 00:07:33,360 --> 00:07:36,120 Speaker 1: them have to receive food stamps. What are we going 144 00:07:36,160 --> 00:07:38,040 Speaker 1: to see on the other side of this pandemic in 145 00:07:38,160 --> 00:07:41,240 Speaker 1: terms of the transformation and they and the ability for 146 00:07:41,320 --> 00:07:45,520 Speaker 1: people to get middle income jobs on the other side. Yes, 147 00:07:45,680 --> 00:07:48,600 Speaker 1: so look, I think again the Job Openings report is 148 00:07:48,600 --> 00:07:50,320 Speaker 1: going to be pretty instructive in this regard. And I 149 00:07:50,360 --> 00:07:51,560 Speaker 1: think what we have to keep in mind be able 150 00:07:51,560 --> 00:07:54,080 Speaker 1: the most seven million job openings um and and they're 151 00:07:54,120 --> 00:07:56,440 Speaker 1: fairly broad based. I mean again, look when you look 152 00:07:56,440 --> 00:07:58,880 Speaker 1: at the IM report, you know, the i M Report, 153 00:07:58,920 --> 00:08:02,080 Speaker 1: they're not necessarily tough about how you know, lack of 154 00:08:02,080 --> 00:08:05,800 Speaker 1: of ability to hire for you know, ultra um you know, 155 00:08:06,120 --> 00:08:08,800 Speaker 1: high level executive jobs. I mean, they're they're looking for 156 00:08:08,840 --> 00:08:12,200 Speaker 1: people on basically you know, sort of UM in the 157 00:08:12,200 --> 00:08:15,520 Speaker 1: manufacturing space UM. And they're having a hard time finding 158 00:08:15,800 --> 00:08:19,800 Speaker 1: workers in that capacity. So there are jobs out there. 159 00:08:19,800 --> 00:08:21,640 Speaker 1: I think it's just gonna take time for for this 160 00:08:21,760 --> 00:08:25,160 Speaker 1: healing process to to to continue. UM. But I think 161 00:08:25,200 --> 00:08:27,280 Speaker 1: by the time again, I think next year at this time, 162 00:08:27,440 --> 00:08:29,320 Speaker 1: and you know, let's let's let's promise to have another 163 00:08:29,360 --> 00:08:32,880 Speaker 1: conversation on December seventeenth, assuming that's not a weekend UM 164 00:08:32,960 --> 00:08:36,040 Speaker 1: And I think, well, the story will be very, very different. 165 00:08:36,200 --> 00:08:39,520 Speaker 1: I think that it's you're going to be below full 166 00:08:39,520 --> 00:08:43,400 Speaker 1: employment by that point next year, we'll be talking about 167 00:08:43,400 --> 00:08:45,640 Speaker 1: how hot the fetes running it some you think in 168 00:08:45,760 --> 00:08:49,600 Speaker 1: nine months, I do, Jonathan. I think that you know 169 00:08:50,040 --> 00:08:51,959 Speaker 1: again here too, we think the conversation is going to 170 00:08:52,080 --> 00:08:55,080 Speaker 1: change pretty abruptly. I mean, I've said many times I 171 00:08:55,080 --> 00:08:57,599 Speaker 1: think even to you all, that you know, Powell is 172 00:08:57,679 --> 00:09:01,520 Speaker 1: not incentivized to talk pause typically about the economic backdrop, 173 00:09:01,640 --> 00:09:04,160 Speaker 1: right He's he's more incentivized to, you know, say, hey, 174 00:09:04,200 --> 00:09:06,640 Speaker 1: we're we're we're cautious, we're ready to do what we 175 00:09:06,760 --> 00:09:09,760 Speaker 1: can in etcetera. But I think there's gonna have to 176 00:09:09,800 --> 00:09:12,360 Speaker 1: be at some point of pivot over the course of 177 00:09:12,800 --> 00:09:15,559 Speaker 1: twenty one where we move from this, hey things are 178 00:09:15,640 --> 00:09:18,040 Speaker 1: you know, sort of looking really bad too. Hey, actually 179 00:09:18,320 --> 00:09:20,240 Speaker 1: things are looking pretty good and we're actually starting to 180 00:09:20,240 --> 00:09:22,560 Speaker 1: see some inflationary pressures really start to build. We wouldn't 181 00:09:22,559 --> 00:09:25,160 Speaker 1: be the least bit surprised if the FED moves away 182 00:09:25,160 --> 00:09:27,559 Speaker 1: from this notion of you know, hey, we're gonna we're 183 00:09:27,559 --> 00:09:29,480 Speaker 1: not gonna be able to raise rates until twenty three 184 00:09:29,600 --> 00:09:32,240 Speaker 1: or beyond. We can easily make an argument that you 185 00:09:32,280 --> 00:09:34,640 Speaker 1: could see a rate hike in in twenty two. Now, 186 00:09:34,720 --> 00:09:36,880 Speaker 1: before anyone falls out of their chair, I think what 187 00:09:36,920 --> 00:09:39,000 Speaker 1: people have to keep in mind is we're not talking 188 00:09:39,040 --> 00:09:42,240 Speaker 1: about you know, there's a difference between hiking rates and 189 00:09:42,440 --> 00:09:46,920 Speaker 1: actually having tight policy. The removals and combination in and 190 00:09:46,920 --> 00:09:49,920 Speaker 1: of itself doesn't mean that you have tight policy. It 191 00:09:50,040 --> 00:09:52,840 Speaker 1: means that you're removing some accommodation. And so if the 192 00:09:52,840 --> 00:09:55,360 Speaker 1: backdrop evolves as we think, which is to say, you know, 193 00:09:55,440 --> 00:09:59,320 Speaker 1: five percent growth with upside risk uh core inflation, that's 194 00:09:59,320 --> 00:10:02,000 Speaker 1: you know, north of two percent and even touches two 195 00:10:02,000 --> 00:10:04,920 Speaker 1: and a half percent over the course of twenty one, 196 00:10:05,120 --> 00:10:07,000 Speaker 1: I think it's gonna be really difficult for the FED 197 00:10:07,080 --> 00:10:08,719 Speaker 1: to latch onto this notion that they're not going to 198 00:10:08,800 --> 00:10:11,160 Speaker 1: do anything until twenty three. I mean that, uh you 199 00:10:11,200 --> 00:10:13,280 Speaker 1: know that, that to me is just entirely too far fetch. 200 00:10:13,480 --> 00:10:16,920 Speaker 1: Even Powell himself has acknowledged that things in the medium 201 00:10:17,160 --> 00:10:20,320 Speaker 1: that they're upside risks in the medium term. Um you 202 00:10:20,360 --> 00:10:22,720 Speaker 1: know that, that to us is he's he's right to 203 00:10:22,720 --> 00:10:25,080 Speaker 1: say that because we think that there are um and 204 00:10:25,120 --> 00:10:27,760 Speaker 1: in that context, there's gonna be no scenario again short 205 00:10:27,800 --> 00:10:30,440 Speaker 1: of things really collapsing again that they're gonna, you know, 206 00:10:30,880 --> 00:10:34,400 Speaker 1: not be able to touch rates until twenty three and 207 00:10:34,400 --> 00:10:39,400 Speaker 1: and I would be mindful of time, but I think 208 00:10:39,400 --> 00:10:40,840 Speaker 1: we have to keep in mind. I think everyone's looking 209 00:10:40,840 --> 00:10:45,360 Speaker 1: for the steepener in in one look, and I'm sympathetic 210 00:10:45,400 --> 00:10:47,360 Speaker 1: to the idea of a bit more steepening here in 211 00:10:47,400 --> 00:10:50,880 Speaker 1: the immediate term. But I think as the year progresses again, 212 00:10:50,920 --> 00:10:52,240 Speaker 1: as you get towards the back end of the year, 213 00:10:52,280 --> 00:10:54,000 Speaker 1: I can make the argument that the curse actually starts 214 00:10:54,000 --> 00:10:56,120 Speaker 1: to flight because I think the front end of the 215 00:10:56,160 --> 00:10:58,080 Speaker 1: market will start to sniff out pretty early. The FED 216 00:10:58,160 --> 00:11:00,360 Speaker 1: is actually gonna be late to the party, and thus 217 00:11:00,360 --> 00:11:02,760 Speaker 1: I could see again the curve is gonna rise in general, 218 00:11:02,800 --> 00:11:06,199 Speaker 1: but I see two year yields rising faster than tents, 219 00:11:06,240 --> 00:11:08,040 Speaker 1: and you can actually see some curve flattening as the 220 00:11:08,080 --> 00:11:10,679 Speaker 1: year progressive. It's the time. Let's build on this. Let's 221 00:11:10,679 --> 00:11:12,360 Speaker 1: think about a little bit more of the communication that 222 00:11:12,400 --> 00:11:14,839 Speaker 1: we've had in the last twenty four hours. It's the 223 00:11:14,920 --> 00:11:19,160 Speaker 1: quantitative outcome based guidance. A feature or a buck do 224 00:11:19,160 --> 00:11:24,480 Speaker 1: you think? Uh So? I love this question. Um, they 225 00:11:24,520 --> 00:11:26,880 Speaker 1: wanted to be a feature, but I think it's a bug. 226 00:11:27,080 --> 00:11:29,960 Speaker 1: I mean I think it's really hard. Look there, the 227 00:11:30,000 --> 00:11:32,760 Speaker 1: reality is we don't know, you know. Powell's asked one 228 00:11:32,760 --> 00:11:35,439 Speaker 1: of the reporters asked him a great question yesterday and 229 00:11:35,480 --> 00:11:37,439 Speaker 1: it was basically and it was basically, how do we know, 230 00:11:37,920 --> 00:11:39,760 Speaker 1: you know when when when we've sort of when when 231 00:11:39,760 --> 00:11:42,360 Speaker 1: we've met your objectives? Um? You know, is the step 232 00:11:42,480 --> 00:11:45,440 Speaker 1: a good summary of economic projections? Is that a good 233 00:11:45,480 --> 00:11:48,960 Speaker 1: guy post? And basically said no, He's like, it's not 234 00:11:49,000 --> 00:11:51,480 Speaker 1: a good guy post because he doesn't know exactly what 235 00:11:51,520 --> 00:11:53,440 Speaker 1: it is. And I'm sympathetic to that, but I think 236 00:11:53,480 --> 00:11:56,120 Speaker 1: there's the problem with this, this you know, quote unquote 237 00:11:56,120 --> 00:11:59,240 Speaker 1: outcome based guidance. If we don't really know what output 238 00:11:59,280 --> 00:12:02,079 Speaker 1: we're aiming for, then how do you know when you've arrived? Um? 239 00:12:02,120 --> 00:12:04,960 Speaker 1: So I think this whole notion of of of shifting 240 00:12:04,960 --> 00:12:07,160 Speaker 1: the framework, I think it's gonna want to proving to 241 00:12:07,160 --> 00:12:09,600 Speaker 1: be quite messy for the FED down the road because 242 00:12:09,600 --> 00:12:11,240 Speaker 1: we just don't have the guide post in place. And 243 00:12:11,720 --> 00:12:14,360 Speaker 1: again I'm sort of sympathetic to them on some level, 244 00:12:14,360 --> 00:12:16,240 Speaker 1: but on the other you know, I don't know why 245 00:12:16,280 --> 00:12:19,080 Speaker 1: they had to actively down this path, um, particularly if 246 00:12:19,120 --> 00:12:20,480 Speaker 1: you're not going to set up the right guid post 247 00:12:20,720 --> 00:12:23,559 Speaker 1: and we don't know what they are within your enthusiasm? 248 00:12:23,640 --> 00:12:27,560 Speaker 1: Do you just assume service sector inflation reverts to its 249 00:12:27,559 --> 00:12:32,160 Speaker 1: three percentage? Mean? Yeah, Tom, So I think we do. 250 00:12:32,240 --> 00:12:33,880 Speaker 1: I mean I think you know. One of the things 251 00:12:33,880 --> 00:12:36,600 Speaker 1: that people I think are are you know, seem to 252 00:12:36,600 --> 00:12:40,520 Speaker 1: forget is that we we we are from a service 253 00:12:40,559 --> 00:12:44,400 Speaker 1: sector inflation perspective, it just persistently runs it around a 254 00:12:44,440 --> 00:12:47,240 Speaker 1: three percent page um. And guess where we have a 255 00:12:47,280 --> 00:12:49,880 Speaker 1: lot of room to make up from a spending perspective. 256 00:12:50,000 --> 00:12:53,559 Speaker 1: In twenty one services right, goods have killed it. You know, 257 00:12:53,720 --> 00:12:57,520 Speaker 1: they're well north of where we were pre COVID. Services 258 00:12:57,960 --> 00:12:59,920 Speaker 1: is the ladder um and that's going to be the 259 00:13:00,040 --> 00:13:05,640 Speaker 1: area that we really make if services are lagging? Does 260 00:13:05,679 --> 00:13:08,000 Speaker 1: that mean you pay fifty dollars to your daughter to 261 00:13:08,080 --> 00:13:12,000 Speaker 1: shovel the driveway? Actually, that's why she just ran away. 262 00:13:12,040 --> 00:13:18,400 Speaker 1: She's she's going right. Who we really want to meet 263 00:13:18,480 --> 00:13:22,720 Speaker 1: is young Preston, poor Sally who understands up to date? 264 00:13:24,240 --> 00:13:28,520 Speaker 1: Is he around? Tom? He's crushed it this year. He 265 00:13:28,559 --> 00:13:35,320 Speaker 1: has set from our VC. Send our regards to the family, Tom, 266 00:13:35,360 --> 00:13:38,360 Speaker 1: thank you. I love about this year. There's only one 267 00:13:38,360 --> 00:13:39,960 Speaker 1: thing I love about this year because this year has 268 00:13:40,000 --> 00:13:42,920 Speaker 1: been terrible for so many reasons for everybody. How natural 269 00:13:42,960 --> 00:13:45,760 Speaker 1: that's now become. Remember when they have an interviewers in 270 00:13:45,840 --> 00:13:48,120 Speaker 1: Hong Kong several years ago and the child walked in 271 00:13:48,200 --> 00:13:50,600 Speaker 1: and it was like, whoa, there's a child in the room. 272 00:13:50,720 --> 00:13:52,559 Speaker 1: And then at the start of this everyone was like, whoa, 273 00:13:52,600 --> 00:13:55,959 Speaker 1: there's Now it's just yeah, everyone's working at home. Who 274 00:13:55,960 --> 00:14:01,200 Speaker 1: else is going to come in? Bring the dog? Right now? 275 00:14:01,200 --> 00:14:04,079 Speaker 1: We're gonna migrate to this pandemic into what to do? 276 00:14:04,440 --> 00:14:07,239 Speaker 1: What to do can be personified by a given restaurant 277 00:14:07,720 --> 00:14:10,880 Speaker 1: in New York, in Chicago, in l A and points 278 00:14:10,960 --> 00:14:14,760 Speaker 1: in between. The Lieutenant Governor of the Empire State is 279 00:14:14,840 --> 00:14:17,800 Speaker 1: Kathy Hokel, and she joins us this morning on any 280 00:14:17,880 --> 00:14:21,600 Speaker 1: number of topics. Cathy, there's snow in New York. It's 281 00:14:21,640 --> 00:14:24,920 Speaker 1: not gonna work outdoors today. It's not going to work 282 00:14:25,000 --> 00:14:30,640 Speaker 1: indoors either. How badly the small business? How badly do 283 00:14:30,800 --> 00:14:38,000 Speaker 1: local and state need this fiscal stimulus? We definitely need it. 284 00:14:38,200 --> 00:14:40,640 Speaker 1: I've been saying this for months. Governor Como has been 285 00:14:40,640 --> 00:14:44,200 Speaker 1: saying this for month. Governor Como leaves the National Governor's 286 00:14:44,200 --> 00:14:49,000 Speaker 1: Association a bipartisan group, every one of them, Republicans and Democrats, 287 00:14:49,000 --> 00:14:52,080 Speaker 1: have been clamoring for help from Congress to give to 288 00:14:52,160 --> 00:14:55,960 Speaker 1: state local governments, but also direct relief for our small businesses. 289 00:14:56,000 --> 00:14:59,320 Speaker 1: In particular. I was in the city just yesterday day 290 00:14:59,360 --> 00:15:02,560 Speaker 1: before the restaurants. I sat down with restaurant owners. They 291 00:15:02,560 --> 00:15:05,640 Speaker 1: are starving, They're literally starving. We have to help them. 292 00:15:05,920 --> 00:15:08,760 Speaker 1: The Settle government can right now help with a stimulus plan. 293 00:15:08,840 --> 00:15:11,440 Speaker 1: It doesn't help the state local governments, which is pathetic, 294 00:15:12,120 --> 00:15:14,800 Speaker 1: the abdication of their responsibility. So we are in trouble, 295 00:15:14,840 --> 00:15:17,160 Speaker 1: but at least get some money to the small businesses. 296 00:15:17,520 --> 00:15:20,880 Speaker 1: Right now, the reporting, including our Kevin surreally is state 297 00:15:20,920 --> 00:15:23,520 Speaker 1: and local aid won't be in this bill. I guess 298 00:15:23,520 --> 00:15:26,720 Speaker 1: it's gonna get done. You know the timeline as well, 299 00:15:27,160 --> 00:15:31,520 Speaker 1: What is your and Governor Cuomo's timeline to where things 300 00:15:31,680 --> 00:15:34,800 Speaker 1: fall apart if you don't get aid in the stimulus 301 00:15:36,760 --> 00:15:39,600 Speaker 1: we right now, our expectations are that it's not going 302 00:15:39,640 --> 00:15:41,680 Speaker 1: to be in there, and what we're being told unless 303 00:15:41,680 --> 00:15:44,160 Speaker 1: there's some uh you know howiday gift that's going to 304 00:15:44,280 --> 00:15:46,680 Speaker 1: come our way, which we pray for, but not if 305 00:15:46,760 --> 00:15:49,720 Speaker 1: we manage our expectations, it doesn't come. What we're going 306 00:15:49,760 --> 00:15:52,480 Speaker 1: to do is to be able to allocate one point 307 00:15:52,560 --> 00:15:56,479 Speaker 1: five billion dollars of state money to the essential services 308 00:15:56,560 --> 00:15:59,560 Speaker 1: that otherwise would not be funded. You cannot have a 309 00:15:59,640 --> 00:16:03,080 Speaker 1: plan to have a mass distribution of vaccinations throughout the 310 00:16:03,120 --> 00:16:06,680 Speaker 1: state and at the same time cut healthcare workers from 311 00:16:06,760 --> 00:16:10,040 Speaker 1: hospitals and clinics. It doesn't work. So we're planning on 312 00:16:10,400 --> 00:16:13,320 Speaker 1: a Joe Biden presidency. We expect that we'll be able 313 00:16:13,320 --> 00:16:16,320 Speaker 1: to get more help from from the federal government. And 314 00:16:16,360 --> 00:16:19,360 Speaker 1: I'll tell you it all comes down in Georgia. Amazing 315 00:16:19,400 --> 00:16:21,560 Speaker 1: that the destiny of New York State is going to 316 00:16:21,600 --> 00:16:24,640 Speaker 1: come down to who wins the election in the Senate races, 317 00:16:24,680 --> 00:16:27,320 Speaker 1: in the in the runoffs in Georgia in the early January. 318 00:16:27,600 --> 00:16:30,440 Speaker 1: If it's if we can have a majority of Democrats, 319 00:16:30,480 --> 00:16:33,960 Speaker 1: they understand this, they've lived this, they actually have empathy 320 00:16:34,000 --> 00:16:36,520 Speaker 1: for people, they'll be able to get the job done. 321 00:16:36,840 --> 00:16:38,680 Speaker 1: Short of that, and we're gonna have to deal with 322 00:16:38,760 --> 00:16:41,360 Speaker 1: this in our budget in March, and we'll have to 323 00:16:41,440 --> 00:16:44,200 Speaker 1: make serious, serious cuts at that time. But right now, 324 00:16:44,440 --> 00:16:46,200 Speaker 1: we're just not going to do We're not going to 325 00:16:46,280 --> 00:16:48,320 Speaker 1: lay off teachers, We're not going to lay off health 326 00:16:48,320 --> 00:16:51,000 Speaker 1: care workers. We're not going to lay off police officers 327 00:16:51,120 --> 00:16:55,560 Speaker 1: right now just because Washington is failing abjectively. So we're 328 00:16:55,600 --> 00:16:57,400 Speaker 1: going to get it done in New York State will 329 00:16:57,400 --> 00:16:59,760 Speaker 1: be in financial trouble, but we'll have to deal with 330 00:16:59,800 --> 00:17:01,720 Speaker 1: it in on budget in March. All right, let's talk 331 00:17:01,760 --> 00:17:03,680 Speaker 1: about what that means. You say major cuts, Does it 332 00:17:03,760 --> 00:17:07,840 Speaker 1: also mean raising taxes? That is absolutely on the table. 333 00:17:08,000 --> 00:17:10,000 Speaker 1: The last thing we've wanted to do in New York 334 00:17:10,040 --> 00:17:13,760 Speaker 1: State is to raise taxes, particularly in these troubled times. 335 00:17:13,800 --> 00:17:17,520 Speaker 1: We understand that that is not a good plan. The 336 00:17:17,560 --> 00:17:19,679 Speaker 1: plan A, it's it's not a good plan. B. It's 337 00:17:19,680 --> 00:17:21,760 Speaker 1: not a good plan. See. But we may get to 338 00:17:21,800 --> 00:17:25,119 Speaker 1: that point if we don't get that that essential assistance 339 00:17:25,160 --> 00:17:28,840 Speaker 1: from the federal government to help offset the fifteen billion 340 00:17:28,880 --> 00:17:32,000 Speaker 1: dollars that we're now faced and the whole we're facing. Uh, 341 00:17:32,240 --> 00:17:34,520 Speaker 1: we're going to need to do something we don't want 342 00:17:34,560 --> 00:17:37,639 Speaker 1: to have to do that the federal government can alleviate that. Again, 343 00:17:37,720 --> 00:17:40,479 Speaker 1: this is not because of how New York manages its finance. 344 00:17:40,720 --> 00:17:43,920 Speaker 1: This is because of a global pandemic. This is not 345 00:17:44,000 --> 00:17:46,880 Speaker 1: anything we had any control over. We're doing the very 346 00:17:46,880 --> 00:17:49,720 Speaker 1: best we can and we get this vaccine out. I'm 347 00:17:49,720 --> 00:17:51,640 Speaker 1: telling you sure that I'm standing here in New York 348 00:17:51,680 --> 00:17:54,760 Speaker 1: State will be the very first state to be COVID 349 00:17:54,840 --> 00:17:56,919 Speaker 1: free because we're going to be very aggressive about this. 350 00:17:57,000 --> 00:17:59,200 Speaker 1: That should be good news to businesses in New York 351 00:17:59,240 --> 00:18:02,159 Speaker 1: to know the states across this country. I'm not going 352 00:18:02,240 --> 00:18:03,640 Speaker 1: to be what we are in a few months. We're 353 00:18:03,640 --> 00:18:06,320 Speaker 1: going to be very aggressive about this. It requires us 354 00:18:06,400 --> 00:18:09,320 Speaker 1: to have money for healthcare workers to get that vaccine 355 00:18:09,320 --> 00:18:11,800 Speaker 1: in people's arms. So let's talk about the process of 356 00:18:11,880 --> 00:18:13,760 Speaker 1: rolling out the vaccine. You said that New York State 357 00:18:13,760 --> 00:18:17,000 Speaker 1: will be among the first. What is the timetable for 358 00:18:17,080 --> 00:18:20,240 Speaker 1: the rollout as you see it now? It's going on 359 00:18:20,359 --> 00:18:23,640 Speaker 1: right now. We have different phases. We are in Phase one, 360 00:18:23,720 --> 00:18:27,800 Speaker 1: which is nursing home residents, staff, high risk costol workers. 361 00:18:27,840 --> 00:18:31,360 Speaker 1: Those are literally out there being administered in hospitals all 362 00:18:31,400 --> 00:18:33,679 Speaker 1: over the state of New York. And we're proud that 363 00:18:33,680 --> 00:18:36,600 Speaker 1: New York State had the very first individual one of 364 00:18:36,600 --> 00:18:40,960 Speaker 1: our footline workers in Queens be the first in the nations. 365 00:18:41,000 --> 00:18:44,040 Speaker 1: So we're excited about that. So we are also planning 366 00:18:44,080 --> 00:18:48,280 Speaker 1: for phase two. Phase two will be essential workers and 367 00:18:48,800 --> 00:18:53,520 Speaker 1: priority general public meeting knows with co morbidity underlying health conditions, 368 00:18:53,520 --> 00:18:55,720 Speaker 1: so will be focusing on them as well. So we 369 00:18:55,800 --> 00:18:59,000 Speaker 1: don't think that's going to come until later January. But 370 00:18:59,040 --> 00:19:02,160 Speaker 1: I'll tell you, if we can get more supplies begin 371 00:19:02,240 --> 00:19:04,000 Speaker 1: this would be a wonderful gift. Or we can get 372 00:19:04,240 --> 00:19:07,320 Speaker 1: more supplies when Maderna gets approved and Fightser is able 373 00:19:07,359 --> 00:19:09,920 Speaker 1: to come up with more, we will have no problem 374 00:19:10,000 --> 00:19:13,639 Speaker 1: getting this out two New Yorkers. We have a very 375 00:19:14,200 --> 00:19:16,360 Speaker 1: crest of plan that we've been working on since last 376 00:19:16,440 --> 00:19:19,680 Speaker 1: July to get this into communities all over the state 377 00:19:19,760 --> 00:19:22,320 Speaker 1: and in rural areas and in communities of color that 378 00:19:22,359 --> 00:19:23,800 Speaker 1: have been hard. As said, we're going to have to 379 00:19:23,840 --> 00:19:26,960 Speaker 1: overcome a lot of reluctance and that's part of our 380 00:19:27,000 --> 00:19:31,640 Speaker 1: public relations campaign that's going on as we speak. Lieutenant Government, 381 00:19:31,720 --> 00:19:33,680 Speaker 1: we only have so much time, about sixty seconds left. 382 00:19:33,680 --> 00:19:35,119 Speaker 1: But if you could tell me where we are just 383 00:19:35,200 --> 00:19:37,840 Speaker 1: in terms of considering another lockdown, We've had a lot 384 00:19:37,840 --> 00:19:39,520 Speaker 1: about that in the last couple of weeks. What's your 385 00:19:39,520 --> 00:19:42,600 Speaker 1: take at the moment, we don't have to do that. 386 00:19:43,000 --> 00:19:46,720 Speaker 1: There's there is a plan if people right now change 387 00:19:46,760 --> 00:19:50,240 Speaker 1: their behavior. Those who have been ignoring the mask mandates 388 00:19:50,280 --> 00:19:53,359 Speaker 1: and ignoring our request that they stay socially distance. If 389 00:19:53,359 --> 00:19:56,240 Speaker 1: they change their behavior, literally, we can get through these 390 00:19:56,240 --> 00:19:58,520 Speaker 1: holidays and we'll start seeing a decline. Right now in 391 00:19:58,520 --> 00:20:01,000 Speaker 1: New York state is about six per that inspection rate. 392 00:20:01,800 --> 00:20:04,200 Speaker 1: That is still the fourth lowest in the nation. So 393 00:20:04,240 --> 00:20:06,000 Speaker 1: I give a lot of credit to New Yorkers for 394 00:20:06,080 --> 00:20:08,639 Speaker 1: its hearing to this, but it's trending upward, and we're 395 00:20:08,680 --> 00:20:12,840 Speaker 1: worried about hospitalization capacity. Right now, we're about for the 396 00:20:12,880 --> 00:20:16,280 Speaker 1: state available and if that starts getting much lower, then 397 00:20:16,320 --> 00:20:19,040 Speaker 1: we have to talk about shutdown. But that is not 398 00:20:19,119 --> 00:20:21,600 Speaker 1: our that that is where we hope not to end up. 399 00:20:21,600 --> 00:20:23,159 Speaker 1: And we're not going to talk about that right now 400 00:20:23,200 --> 00:20:25,600 Speaker 1: because we don't know what the behavior of people will 401 00:20:25,640 --> 00:20:28,879 Speaker 1: be over the holidays. So we can't control that. Individuals 402 00:20:28,880 --> 00:20:30,680 Speaker 1: can control that, and we may not have to talk 403 00:20:30,680 --> 00:20:33,199 Speaker 1: about any more shutdowns. That is the last thing you 404 00:20:33,240 --> 00:20:35,119 Speaker 1: want to do here in the state of New York. Kathy, 405 00:20:35,119 --> 00:20:38,040 Speaker 1: thank you, New York LI Toennant Governor that Kathy, Kathy, 406 00:20:38,040 --> 00:20:44,160 Speaker 1: thank you very much. I'm going far away and John 407 00:20:44,160 --> 00:20:47,720 Speaker 1: Farrell knows this shows matthre Wererik and Steven Stanley lived 408 00:20:47,760 --> 00:20:50,879 Speaker 1: it with AMers Pierrepont. It was called plug and chug. 409 00:20:50,960 --> 00:20:53,680 Speaker 1: You got a formula something new Tony and and you 410 00:20:53,840 --> 00:20:55,920 Speaker 1: throw in the data and come up with an answer. 411 00:20:56,119 --> 00:20:59,000 Speaker 1: Steven Stanley, can you plug and chug now on the 412 00:20:59,040 --> 00:21:02,240 Speaker 1: American economy? Me? Can you take the data, throw it 413 00:21:02,280 --> 00:21:05,359 Speaker 1: in and actually come up with an outlook? Not if 414 00:21:05,400 --> 00:21:08,640 Speaker 1: you're using your pre pandemic formulas. There's no doubt about 415 00:21:08,640 --> 00:21:10,439 Speaker 1: it that the data have changed. I think with the 416 00:21:10,480 --> 00:21:13,080 Speaker 1: claims numbers, you know, a big part of the issue 417 00:21:13,160 --> 00:21:16,399 Speaker 1: is the changes in the program. The extra benefits that 418 00:21:16,440 --> 00:21:20,320 Speaker 1: were on offer UM earlier in the year just led 419 00:21:20,359 --> 00:21:23,119 Speaker 1: to a lot of unusual activity, people filing that were 420 00:21:23,160 --> 00:21:26,479 Speaker 1: ineligible before, probably a lot of people filing that didn't 421 00:21:26,880 --> 00:21:29,639 Speaker 1: you know, shouldn't have gotten benefits. So the levels of 422 00:21:29,680 --> 00:21:33,360 Speaker 1: those claims numbers are definitely off UM. But I think 423 00:21:33,400 --> 00:21:36,080 Speaker 1: to Mike's point from before, the fact that it is 424 00:21:36,240 --> 00:21:38,800 Speaker 1: rising is consistent with what we're saying out there, which 425 00:21:38,840 --> 00:21:42,040 Speaker 1: is that as the pandemic intensifies UM, you're starting to 426 00:21:42,080 --> 00:21:44,080 Speaker 1: see a little bit of retrenchment some of those high 427 00:21:44,119 --> 00:21:48,159 Speaker 1: contact industries. Thanks maving in the wrong direction state and 428 00:21:48,200 --> 00:21:50,240 Speaker 1: it's the semi seven st still early. But if you 429 00:21:50,240 --> 00:21:52,959 Speaker 1: have two pencil in a cold for the payrolls report 430 00:21:53,000 --> 00:21:56,760 Speaker 1: for this month, what would it be right now? Yeah, 431 00:21:57,040 --> 00:22:01,399 Speaker 1: my forecast, but I'm gonna say probably UM, still positive, 432 00:22:01,440 --> 00:22:04,879 Speaker 1: but certainly weaker than in November. UM. I think, you know, 433 00:22:04,920 --> 00:22:08,480 Speaker 1: the areas that are most sensitive to the pandemic, restaurants 434 00:22:08,520 --> 00:22:11,240 Speaker 1: and some of the service categories are probably going to 435 00:22:11,320 --> 00:22:13,800 Speaker 1: be down in December. But there's still, you know, a 436 00:22:13,800 --> 00:22:16,080 Speaker 1: good amount that's going on that's good in the in 437 00:22:16,119 --> 00:22:19,600 Speaker 1: the economy right now, certainly housing, I think, manufacturing, UM 438 00:22:19,680 --> 00:22:22,480 Speaker 1: and some other categories. So we'll see how it plays out. 439 00:22:22,520 --> 00:22:25,600 Speaker 1: But I think, you know, the markets have concluded that 440 00:22:25,640 --> 00:22:29,040 Speaker 1: whatever happens in November December, UM, things are going to 441 00:22:29,160 --> 00:22:31,320 Speaker 1: turn up next year. So you know, I think in 442 00:22:31,359 --> 00:22:33,959 Speaker 1: some ways it's less important now what happens in the 443 00:22:33,960 --> 00:22:38,359 Speaker 1: near term because of the prospect of vaccines, experience, the 444 00:22:38,359 --> 00:22:40,240 Speaker 1: experience of this year staven that we can turn the 445 00:22:40,240 --> 00:22:42,320 Speaker 1: economy off, turn it back on again, and it was 446 00:22:42,359 --> 00:22:45,679 Speaker 1: snapped right back really quickly, and that the parallel is 447 00:22:45,680 --> 00:22:48,280 Speaker 1: not what happened ten years ago in the financial crisis, 448 00:22:48,480 --> 00:22:50,399 Speaker 1: it's what happened maybe in China through this year. If 449 00:22:50,440 --> 00:22:53,359 Speaker 1: we can get a vaccination program ramped up, then what 450 00:22:53,520 --> 00:22:55,600 Speaker 1: China has managed to achieve we can achieve in Europe 451 00:22:55,640 --> 00:22:57,639 Speaker 1: and the United States. Do you share that view, Stephen, 452 00:22:57,760 --> 00:23:00,159 Speaker 1: I've heard so many times in the last couple of weeks. 453 00:23:01,400 --> 00:23:03,719 Speaker 1: I absolutely do. I I thought that from the beginning 454 00:23:03,760 --> 00:23:07,120 Speaker 1: that the recovery would be faster and more vigorous than 455 00:23:07,240 --> 00:23:09,520 Speaker 1: than most people thought. I mean, that was certainly true 456 00:23:09,560 --> 00:23:12,200 Speaker 1: in the spring and summer. UM. We've had a bit 457 00:23:12,200 --> 00:23:15,119 Speaker 1: of a setback now, which is understandable given the evolution 458 00:23:15,119 --> 00:23:18,040 Speaker 1: of the pandemic UM. But you know, I do see 459 00:23:18,040 --> 00:23:20,639 Speaker 1: the economy getting back to something close to normal in 460 00:23:20,680 --> 00:23:22,720 Speaker 1: the second half of next year. One thing that John 461 00:23:22,800 --> 00:23:24,520 Speaker 1: was talking about is this churn that we're seeing in 462 00:23:24,560 --> 00:23:27,600 Speaker 1: the labor market. Initially people who are getting laid off 463 00:23:27,600 --> 00:23:31,120 Speaker 1: for the lower wage workers. Is that changing, I mean, 464 00:23:31,200 --> 00:23:35,120 Speaker 1: is this churn leading to more higher paid UH wage 465 00:23:35,400 --> 00:23:39,639 Speaker 1: higher paid wage employees getting laid off and trying to 466 00:23:39,640 --> 00:23:43,399 Speaker 1: find something perhaps with lower income Well, I mean, I 467 00:23:43,400 --> 00:23:47,239 Speaker 1: think the impetus at the margin um is still going 468 00:23:47,280 --> 00:23:50,400 Speaker 1: to be that low paid. It's it's those high contact industries. 469 00:23:50,400 --> 00:23:52,679 Speaker 1: I mean, restaurants is kind of the poster child for 470 00:23:52,720 --> 00:23:55,879 Speaker 1: that dynamic, and those are still going to be mostly uh, 471 00:23:56,240 --> 00:23:59,440 Speaker 1: lower wage jobs. I think the you know, the white 472 00:23:59,480 --> 00:24:03,280 Speaker 1: color um phenomenon that you discussed is one that's gonna 473 00:24:03,280 --> 00:24:06,120 Speaker 1: be much slower moving. So it is there in the background, 474 00:24:06,200 --> 00:24:09,800 Speaker 1: but it's gonna get overwhelmed most months, I think, until 475 00:24:09,800 --> 00:24:12,879 Speaker 1: the pandemic is done, simply because the greater churn is 476 00:24:12,920 --> 00:24:16,399 Speaker 1: occurring in those service industries. Meanwhile, given the uncertainty that 477 00:24:16,400 --> 00:24:19,520 Speaker 1: you're talking about, Steven, with respect to the actual numbers, 478 00:24:19,760 --> 00:24:22,040 Speaker 1: when do they matter? When do they change the trajectory 479 00:24:22,040 --> 00:24:26,160 Speaker 1: of the recovery too well? I think when when we've 480 00:24:26,920 --> 00:24:29,400 Speaker 1: kind of turned the corner on the pandemic really. I mean, 481 00:24:29,800 --> 00:24:32,600 Speaker 1: it sounds like from the public health officials that we're 482 00:24:32,600 --> 00:24:36,000 Speaker 1: talking about probably the spring, when most people will have 483 00:24:36,080 --> 00:24:38,760 Speaker 1: access to a vaccine. And I think at that point, 484 00:24:39,119 --> 00:24:42,440 Speaker 1: you know, the the that's when we're really going to 485 00:24:42,520 --> 00:24:45,320 Speaker 1: have a sense of how much of what we've seen 486 00:24:45,600 --> 00:24:48,560 Speaker 1: is going to be structural as opposed to just strictly 487 00:24:48,800 --> 00:24:51,520 Speaker 1: short term. And I think that's the real question from 488 00:24:51,560 --> 00:24:53,760 Speaker 1: the markets perspective. I mean, do you do you get 489 00:24:53,800 --> 00:24:56,040 Speaker 1: all the way back to where we were in February 490 00:24:56,040 --> 00:24:59,440 Speaker 1: of or are you only going to get part way 491 00:24:59,440 --> 00:25:01,359 Speaker 1: back or you're gonna have an unemployment rate at six 492 00:25:01,400 --> 00:25:04,840 Speaker 1: percent or five percent UM? And you know, I think 493 00:25:04,920 --> 00:25:07,000 Speaker 1: that's really the question at this point that the markets 494 00:25:07,000 --> 00:25:10,760 Speaker 1: are probably most focused on UM heading into next year. 495 00:25:11,040 --> 00:25:16,000 Speaker 1: Steven Stanley, You've got a great clarity about what they do, 496 00:25:16,680 --> 00:25:21,600 Speaker 1: not what they say. What are corporations in America doing 497 00:25:21,960 --> 00:25:24,960 Speaker 1: right now? Not the pr not the lip service, not 498 00:25:25,080 --> 00:25:28,920 Speaker 1: the CEO blather, What are they really doing in terms 499 00:25:28,960 --> 00:25:34,000 Speaker 1: of investment and in terms of strategy given this economy? Well, 500 00:25:34,040 --> 00:25:37,040 Speaker 1: I mean, certainly, the durable goods numbers that we've gotten 501 00:25:37,040 --> 00:25:40,119 Speaker 1: so far this year have been surprisingly and consistently better 502 00:25:40,160 --> 00:25:45,400 Speaker 1: than expected. So investment, especially in equipment has been UM 503 00:25:45,440 --> 00:25:48,600 Speaker 1: I think encouraging. It suggests that businesses are willing to 504 00:25:48,640 --> 00:25:51,080 Speaker 1: look past this and and certainly I think businesses have 505 00:25:51,119 --> 00:25:54,400 Speaker 1: a longer UH time horizon and their decision making than 506 00:25:54,440 --> 00:25:57,919 Speaker 1: most households. So that makes sense. UM. Again, as the 507 00:25:58,520 --> 00:26:00,960 Speaker 1: as the hope that we can get back to something 508 00:26:01,000 --> 00:26:04,560 Speaker 1: close to normal UH gets closer and closer, I think 509 00:26:04,600 --> 00:26:07,440 Speaker 1: businesses are gonna get back more and more toward a 510 00:26:07,560 --> 00:26:10,679 Speaker 1: business as usual approach. That's I think, you know, to 511 00:26:10,760 --> 00:26:13,280 Speaker 1: your point, though, that's mostly for big businesses. If you're 512 00:26:13,320 --> 00:26:15,360 Speaker 1: a small business and you're in one of these sectors 513 00:26:15,400 --> 00:26:19,480 Speaker 1: that's being restrained by social distancing rules, then obviously it 514 00:26:19,520 --> 00:26:23,080 Speaker 1: becomes a day to day, maybe week to week endeavor 515 00:26:23,119 --> 00:26:25,840 Speaker 1: just to stay alive. So, um, you know, hoping to 516 00:26:25,880 --> 00:26:28,520 Speaker 1: see something from Congress this week, but there are a 517 00:26:28,560 --> 00:26:30,800 Speaker 1: lot of businesses I think that are just hoping to 518 00:26:30,920 --> 00:26:34,440 Speaker 1: make it to next month and next year. Small business 519 00:26:34,440 --> 00:26:37,240 Speaker 1: in the labor markets certainly asking for it much much 520 00:26:37,240 --> 00:26:39,560 Speaker 1: more loudly. In the last couple of wait stament. Thank 521 00:26:39,600 --> 00:26:44,080 Speaker 1: you Stamen Stanley ms Pappon, Chief Economist, Thanks for listening 522 00:26:44,160 --> 00:26:48,720 Speaker 1: to the Bloomberg Surveillance podcast. Subscribe and listen to interviews 523 00:26:48,720 --> 00:26:53,960 Speaker 1: on Apple Podcasts, SoundCloud, or whichever podcast platform you prefer. 524 00:26:54,520 --> 00:26:57,840 Speaker 1: I'm on Twitter at Tom Keane before the podcast. You 525 00:26:57,880 --> 00:27:01,280 Speaker 1: can always catch us worldwide. I'm Bloomberg Radio.