WEBVTT - Surveillance: London After Lockdown With Khan 0:00:09.840 --> 0:00:13.800 Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane. Daily 0:00:13.960 --> 0:00:17.560 we bring you insight from the best in economics, finance, investment, 0:00:18.000 --> 0:00:23.480 and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 0:00:23.640 --> 0:00:27.800 Bloomberg dot Com and of course on the Bloomberg Right now. 0:00:28.000 --> 0:00:30.680 The Mayor of London City, Khan, is someone that we 0:00:30.720 --> 0:00:34.519 have spoken too many times and with it the celebration 0:00:34.600 --> 0:00:37.920 of the London economy. What he knows is the United 0:00:38.000 --> 0:00:41.879 Kingdom celebrates something America can't do, which is the return 0:00:42.040 --> 0:00:45.840 of Premier League football. His beloved Liverpool will go out 0:00:45.840 --> 0:00:48.839 in the field, no doubt, with pay cuts involved for 0:00:48.880 --> 0:00:51.839 all the players. But it's so grim and his London. 0:00:52.280 --> 0:00:55.520 The Mayor has taken a pay cut to signify to 0:00:55.600 --> 0:00:59.600 the United Kingdom the urgent need for revenues. It is 0:00:59.640 --> 0:01:02.800 a story sory for America as well. Mayorica, and thank 0:01:02.840 --> 0:01:06.280 you so much for joining us today. How urgent is 0:01:06.319 --> 0:01:10.280 it the Prime Minister Johnson assist your great city. It's 0:01:10.319 --> 0:01:12.639 really important. It's a pleasure to join you and Lisa 0:01:12.640 --> 0:01:16.200 and Bloomberg TV, but it's really important the governments across 0:01:16.200 --> 0:01:21.000 the globe, including my country, understand that the recession we're 0:01:21.040 --> 0:01:24.840 facing could very soon turn into a depression, and that's 0:01:24.840 --> 0:01:29.720 why we need an active industrial strategy as we come 0:01:29.720 --> 0:01:33.360 out of lockdown. And although the government has actually been 0:01:33.520 --> 0:01:38.200 pretty good in helping businesses in relation to staff being furloughed, 0:01:38.600 --> 0:01:41.560 they've been pretty good in the short term, they need 0:01:41.600 --> 0:01:44.480 to realize that as businesses come out of the lockdown, 0:01:44.840 --> 0:01:48.720 they need additional assistance as well. I'll give you two examples, Tom. 0:01:49.080 --> 0:01:53.880 Many public authorities have lost their tax basis from people 0:01:53.880 --> 0:01:56.320 who used to pay what we call council tax now 0:01:57.760 --> 0:02:00.800 in their jobs not paying those tax is. But also 0:02:00.960 --> 0:02:04.480 businesses who used to pay business rates have stopped paying 0:02:04.520 --> 0:02:08.120 business rates because their businesses have basically been incubated for 0:02:08.200 --> 0:02:12.080 the last three months. That means, you know, governments haven't 0:02:12.160 --> 0:02:15.880 Municipal governments haven't got the funds to provide services. So 0:02:15.919 --> 0:02:18.600 I've led by example taken a pack up. But we 0:02:18.639 --> 0:02:21.680 need the government to step in for the medium to 0:02:21.840 --> 0:02:26.200 long term to support not just municipal governments but businesses too, 0:02:26.200 --> 0:02:28.880 and I think governments across the globe will have to 0:02:28.919 --> 0:02:32.440 do this. I'm reading wolf Hall right now, Mervin King 0:02:32.480 --> 0:02:36.160 and I are rereading this Magisterial Hillary Mantell book, and 0:02:36.200 --> 0:02:39.880 it's the spirit of London Mayor in a trading environment 0:02:40.000 --> 0:02:43.680 of the sixteenth century, tell us about the need to 0:02:43.880 --> 0:02:48.760 reopen trade to London and goods and services. How critical 0:02:48.960 --> 0:02:51.480 is it to get the euros start back. How critical 0:02:51.639 --> 0:02:54.440 is it to get the airlines up and running again. 0:02:54.639 --> 0:02:56.480 It's crucial. I mean. One of the reasons why I 0:02:56.560 --> 0:02:58.320 say this, and I know you're speaking to me from 0:02:58.320 --> 0:03:00.680 New York, but you'll forgive me Learning is the greatest 0:03:00.680 --> 0:03:03.440 city in the world is because of the people who 0:03:03.480 --> 0:03:06.560 come to our city who make our city great, the students, 0:03:06.880 --> 0:03:11.720 the tourists, the investors, their businesses, their sports fan and 0:03:11.880 --> 0:03:15.360 that stopped over the last four months, and we need 0:03:15.360 --> 0:03:19.240 that to return. I'm very concerned that as the new 0:03:19.280 --> 0:03:23.200 academic year begins, many undergraduates may not come. I'm very 0:03:23.200 --> 0:03:27.359 concerned those who are multinationals who have stopped sending their 0:03:27.360 --> 0:03:30.280 staff here maybe risk averse to come in here. I'm 0:03:30.360 --> 0:03:33.960 very concerned some of our world leading theaters, which have 0:03:34.040 --> 0:03:36.440 been closed for the last four months, may not reopen 0:03:36.720 --> 0:03:39.760 until next year. And you'll know, the world is a 0:03:39.800 --> 0:03:44.200 smaller place now. Globalization has some disadvantages, but many advantages, 0:03:44.600 --> 0:03:47.920 and our strength is our diversity, and that comes from 0:03:47.920 --> 0:03:50.400 our visitors and as part of our DNA. And it's 0:03:50.480 --> 0:03:56.200 really important we safely safely open our doors again to visitors, 0:03:56.200 --> 0:03:59.440 to businesses and to investors, because we want to return 0:03:59.520 --> 0:04:02.280 to not business as usual. But I think a new 0:04:02.360 --> 0:04:06.960 normality will be recognized that actually, what this pandemic has 0:04:07.000 --> 0:04:12.640 done is shut a spotlight on the fragility of society 0:04:12.840 --> 0:04:15.680 and of our business model, and we need to make 0:04:15.680 --> 0:04:20.040 sure the new normal addresses those issues. American I will 0:04:20.040 --> 0:04:23.560 say that our colleague Jonathan Faroe reminds us of the 0:04:23.600 --> 0:04:26.240 pre eminence of London on a regular basis. I do 0:04:26.400 --> 0:04:29.240 wonder going forward about some of the social unrest that 0:04:29.240 --> 0:04:31.680 we're seeing in the biggest cities around the world, with 0:04:31.760 --> 0:04:36.200 Black Lives Matters protests in London that have been ongoing, 0:04:36.279 --> 0:04:39.560 and I'm wondering how this complicates issues that you've been 0:04:39.560 --> 0:04:43.000 calling for more police at a time with lower budgets 0:04:43.040 --> 0:04:46.720 and a time with increasing pressure on that presence. How 0:04:46.760 --> 0:04:48.720 do you go forward here? You know the thing, I'm 0:04:48.720 --> 0:04:51.760 not sure if your American viewers realized this, but the 0:04:51.800 --> 0:04:55.200 brutal killing of George Floyd didn't just have an impact 0:04:55.279 --> 0:04:59.640 in Minnesota, Minneapolis and the USA, an impact around the world, 0:05:00.360 --> 0:05:04.160 And if you're a black Londoner you could relate to 0:05:04.400 --> 0:05:07.240 the awful way George Floyd was killed, but also black 0:05:07.240 --> 0:05:12.160 people across the world could because they endure racism, discrimination 0:05:12.320 --> 0:05:15.919 and inequality. So although I fully support the Black Lives 0:05:16.240 --> 0:05:19.479 the Black Lives Matter movement, my concern has being that 0:05:19.560 --> 0:05:22.440 during a global pandemic, when you're asking people to keep 0:05:22.440 --> 0:05:25.120 their social distance, we're asking people to stay at home 0:05:25.160 --> 0:05:28.000 where they can. What they shouldn't be doing is protesting 0:05:28.320 --> 0:05:31.240 as they are allowed to do, because that may inadvertently 0:05:31.640 --> 0:05:34.560 lead to the virus spreading. But separately, you're rightly so 0:05:34.600 --> 0:05:36.920 this is highlighted that actually, even in London, the most 0:05:36.920 --> 0:05:40.520 progressive city in the world, there's racism against black people, 0:05:40.800 --> 0:05:44.360 discrimination against black people, and inequality faced by black people. 0:05:44.640 --> 0:05:47.119 And those of us in positions of parent influence can't 0:05:47.120 --> 0:05:49.719 be tone deaf to that. We've got to understand that, 0:05:50.279 --> 0:05:52.640 empathize with that, but also take steps to address that. 0:05:52.680 --> 0:05:55.200 This is a moment which I think we'd kick ourselves 0:05:55.560 --> 0:05:58.320 if we didn't take advantage of to address the structural 0:05:58.480 --> 0:06:02.799 racism that's that exist around the world in black people 0:06:03.040 --> 0:06:05.600 now too much to talk about American We truly look 0:06:05.640 --> 0:06:09.200 forward to seeing you when we revisit London soon and 0:06:09.320 --> 0:06:16.560 again a city con the Mayor of London. Right now, 0:06:16.600 --> 0:06:18.839 we have good news and that is Torsten Slock of 0:06:18.880 --> 0:06:22.440 Deutsche Bank. He and Peter Hooper have been doing absolutely 0:06:22.520 --> 0:06:27.599 spectacular work on a global basis, thinking about where we 0:06:27.680 --> 0:06:32.159 are and thinking about the ramifications of all these actions 0:06:32.240 --> 0:06:35.600 by central banks. And one of them is is overused 0:06:35.800 --> 0:06:41.280 word zombie, the idea of a zombie company, a zombie nation, 0:06:41.640 --> 0:06:45.480 or even a zombie global economy. Dr Slack joins us 0:06:45.600 --> 0:06:49.200 this morning, Torston Slack, what is the Deutsche Bank distinction 0:06:49.600 --> 0:06:53.039 when you address the word zombie is the definition of 0:06:53.080 --> 0:06:56.160 a zombie company is a company that simply has so 0:06:56.240 --> 0:06:59.880 much depth, so much leverage, that they do not have 0:07:00.080 --> 0:07:03.719 enough profits to pay for the debt servicing costs. And 0:07:03.760 --> 0:07:06.800 the problem is that since the Finanti crisis without NADA nine, 0:07:06.960 --> 0:07:10.200 we're interest rates were very low and zero. It incentivized 0:07:10.240 --> 0:07:13.040 the corporate sectors to go out and borrow. It incentivized 0:07:13.080 --> 0:07:16.680 an increase in leverage across the non financial corporate sector. 0:07:16.880 --> 0:07:19.440 So the consequence was that pet levels have gone up 0:07:19.440 --> 0:07:21.120 for the last ten years. And this was the problem 0:07:21.280 --> 0:07:25.000 even before the pandemic arrived here in March. And therefore, 0:07:25.240 --> 0:07:27.880 what was the answer from the pandemic once the virus 0:07:27.880 --> 0:07:30.280 came from pology Megan sydemic. Well, the answer was that 0:07:30.320 --> 0:07:33.160 when when that was no cash flow coming into the 0:07:33.200 --> 0:07:36.960 corporate sector, it was substituted by more debt, by more 0:07:37.040 --> 0:07:40.440 loans in i G. High yields across the board, commercial paper. 0:07:40.640 --> 0:07:43.080 And therefore we have just magnified some of these problems 0:07:43.080 --> 0:07:46.000 that we already had with a significant yf the economy 0:07:46.040 --> 0:07:49.920 being something companies even before the virus came along in March. Okay, 0:07:49.960 --> 0:07:52.400 but tourist to its stempre terian, we've got to clear 0:07:52.440 --> 0:07:56.400 the markets. Are we just simply afraid to go bankrupt? So, 0:07:56.640 --> 0:07:59.400 I mean, the problem here is that the BIS started 0:07:59.440 --> 0:08:01.000 looking at this a few years ago and we have 0:08:01.040 --> 0:08:03.480 simply just updated what they have done. If you look 0:08:03.520 --> 0:08:06.720 at the number of listed companies on exchanges in the 0:08:06.760 --> 0:08:09.240 U it's not about eight thousand companies. And look at 0:08:09.240 --> 0:08:12.560 the share of those that have higher depth servicing costs 0:08:12.560 --> 0:08:15.720 than they have profits and here processes profits before interest payments. 0:08:16.080 --> 0:08:18.680 That means that the interest coveras ratio for those companies 0:08:18.720 --> 0:08:21.040 is below one. Well, that share has now gone up, 0:08:21.040 --> 0:08:23.040 so that of all listed companies do now have that 0:08:24.240 --> 0:08:26.120 are now in a situate they're not able to service 0:08:26.160 --> 0:08:28.320 their death And this is of course something that becomes 0:08:28.320 --> 0:08:31.720 more problematic because the bigger share you have of companies 0:08:31.760 --> 0:08:34.120 that don't have enough revenue, the more it would actually 0:08:34.120 --> 0:08:36.480 hold down the potential growth rate in economy, the more 0:08:36.480 --> 0:08:38.560 it will weigh on the outlook for the economy and 0:08:38.640 --> 0:08:42.320 long run welfare and long run limits of standards of 0:08:42.400 --> 0:08:45.199 living over the next few years. Sosten, This is the 0:08:45.360 --> 0:08:49.480 key question whether we are sacrificing longer term higher growth, 0:08:49.760 --> 0:08:54.120 higher productivity for stability now in the near term. And 0:08:54.160 --> 0:08:57.199 as we repeat that again and again and again every 0:08:57.240 --> 0:09:00.280 time we come across a contraction, a pant a, make 0:09:00.600 --> 0:09:03.480 a recession, whatever it might be, does it make it 0:09:03.559 --> 0:09:07.760 more difficult to make the opposite decision. That's exactly right, John, 0:09:07.800 --> 0:09:10.040 It's a trade off between the short run. Of course, 0:09:10.160 --> 0:09:12.520 everything that fit did was correct. They did save the 0:09:12.600 --> 0:09:15.760 financial system, they did stabilize financial markets that have made 0:09:15.760 --> 0:09:18.760 sure that we don't have this significant amount of volatility intervelence. 0:09:18.800 --> 0:09:20.400 We had in much, but it has come with a 0:09:20.480 --> 0:09:23.160 number of side effects, and one side effect is exactly 0:09:23.160 --> 0:09:25.559 this issue that the lack of revenue. When the doors 0:09:25.640 --> 0:09:28.080 closed in corporate America and there were no dollars coming 0:09:28.120 --> 0:09:31.840 into the bottom line, companies turned around to borrowing markets 0:09:31.880 --> 0:09:36.160 and basically started borrowing in corporate I G. And high 0:09:36.240 --> 0:09:39.360 yields and commercial paper markets. And that was essentially magnifying 0:09:39.760 --> 0:09:42.160 a problem that we already had going into the virus. 0:09:42.360 --> 0:09:45.360 So you're absolutely right, this is increasing the share of companies. 0:09:45.360 --> 0:09:48.240 This is not only the US, this is also in Germany, France, UK, 0:09:48.600 --> 0:09:50.560 around the world. The few of course, is that we 0:09:50.600 --> 0:09:52.600 will begin to look somewhat similar to Japan in the 0:09:52.640 --> 0:09:55.079 nine nineties, where you also had very high dead levels 0:09:55.080 --> 0:09:57.320 in the corporate sector. And this is the problem down 0:09:57.320 --> 0:10:01.800 the road that can companies survive these significant amounts of debtload, 0:10:01.840 --> 0:10:04.080 the significant amounts of leverage that we now have that 0:10:04.120 --> 0:10:08.600 are being magnified accelerated upwards because of the response from 0:10:08.640 --> 0:10:11.600 the pharaohs. There's an irony baked in here. Tourist in 0:10:12.000 --> 0:10:14.599 or the more that are surprises are kept up and 0:10:14.640 --> 0:10:18.920 these companies are kept afloat with respect to higher debt loads, 0:10:19.200 --> 0:10:22.640 the more people can have confidence in investing in these 0:10:22.679 --> 0:10:25.920 even though growth is slowing. Do you expect that paradigm 0:10:25.960 --> 0:10:28.840 to continue, for these zombies to be kept alive and 0:10:28.880 --> 0:10:32.199 not allowed to go bankrupt period full stop? To Tom's point, 0:10:32.480 --> 0:10:35.120 allowing the asset prices to continue to climb despite the 0:10:35.160 --> 0:10:38.320 lack of growth, You're right, Lea. I mean, think about 0:10:38.320 --> 0:10:40.840 the FATS response to what has sort of trickered the 0:10:40.880 --> 0:10:43.120 lift in the share of companies that are zombies or 0:10:43.120 --> 0:10:45.199 they don't have enough revenue to pay for the interest 0:10:45.240 --> 0:10:49.040 statements that was triggered by low interest rates. And now 0:10:49.080 --> 0:10:50.679 not only do we again have low interest rates, but 0:10:50.720 --> 0:10:53.120 we actually also have the FAT actively buying I G 0:10:53.440 --> 0:10:55.840 and buying phone angels. And what does that mean. That 0:10:55.880 --> 0:10:59.960 means that they have also incentivized even furthermore credit extension 0:11:00.120 --> 0:11:03.480 and more leverage increase in the corporate sector. And of 0:11:03.520 --> 0:11:06.920 course you're non financials in particular have therefore resolved the 0:11:06.960 --> 0:11:09.880 problem with the lack of revenue by adding on mode. 0:11:10.240 --> 0:11:14.240 So somewhat ironically, we have exactly as Jonger said, We've 0:11:14.240 --> 0:11:16.240 been making some trade halls. In the short run, we're 0:11:16.240 --> 0:11:19.640 stabilizing things, but we still have this very important problem 0:11:19.920 --> 0:11:22.160 that we need to look at the fundamental structure of 0:11:22.160 --> 0:11:25.120 the corporate sector. And again the comparisons with Japan. Before 0:11:25.200 --> 0:11:27.400 it was all about inflation, and that's of course also 0:11:27.440 --> 0:11:30.280 still a debate, but now they're more parallels with Japan 0:11:30.520 --> 0:11:32.720 that are coming into the radar screen. That becomes very 0:11:32.720 --> 0:11:35.800 important for investors to your thinking about is it all 0:11:35.880 --> 0:11:37.960 starts in the SUP or all list stocks in the 0:11:38.000 --> 0:11:40.040 US that needs to go up, or are there very 0:11:40.040 --> 0:11:43.520 important sector differences in terms of this leverage increase that 0:11:43.559 --> 0:11:45.640 we have seen in some Texas and not another toast 0:11:45.720 --> 0:11:48.360 And this is not capitalism. We should not pretend it is. 0:11:48.760 --> 0:11:51.240 What is this So I would say, I know this 0:11:51.360 --> 0:11:53.200 might sound very academic, but I would say this is 0:11:53.240 --> 0:11:56.600 interfering with the process of creative destruction. I mean creative 0:11:56.600 --> 0:11:59.560 destruction is of course that some companies go under. Some 0:11:59.640 --> 0:12:02.600 company is open up every day on a normal day, 0:12:02.800 --> 0:12:05.280 that's about one thousand, six hundred companies in the U 0:12:05.400 --> 0:12:07.560 S that go out of business. And if you have 0:12:07.600 --> 0:12:09.600 one thousand, six hundred companies that go out of business 0:12:09.600 --> 0:12:12.360 every day in the US. Now that artificially i G 0:12:12.520 --> 0:12:14.880 spreads have been narrowed and also, credit spreads have been 0:12:14.920 --> 0:12:17.199 narrowed and the cost of capital have been lowered, which 0:12:17.240 --> 0:12:19.800 makes complete sense from a business side perspective. That's just 0:12:19.840 --> 0:12:21.640 beginning to open up a lot of questions. What does 0:12:21.679 --> 0:12:24.679 this mean for the process of creative instructions of companies 0:12:25.080 --> 0:12:28.199 give starting and companies going on too, And what does 0:12:28.240 --> 0:12:30.440 that mean then how we think about how dynamic the 0:12:30.520 --> 0:12:32.960 US economy normally is. It's already the most dynamic economy 0:12:33.000 --> 0:12:35.000 in the world, is able to generate a lot of 0:12:35.040 --> 0:12:38.559 growth and innovestative ideas and products and ways of being 0:12:38.640 --> 0:12:41.040 much more productive and other countries. But the problem is 0:12:41.080 --> 0:12:43.520 here that now, well, how is that process actually looking 0:12:43.559 --> 0:12:46.040 going forward? If you shot me have a share and 0:12:46.040 --> 0:12:48.680 a rising share of the corporate sector that is just 0:12:48.760 --> 0:12:52.400 no longer able to do those significant increases and advances 0:12:52.480 --> 0:12:54.920 innovations and in productivity that we have been so used 0:12:54.960 --> 0:12:57.520 to for all these years. Tost and fascinating conversation on 0:12:57.640 --> 0:12:59.720 one that we are going to have to continue for 0:12:59.760 --> 0:13:02.880 a tome to com Tustin's look that of Deutsche Bank. 0:13:06.520 --> 0:13:10.200 John you nicely framed that is the economics and maybe 0:13:10.240 --> 0:13:13.840 the financial discussion of a Morgan Stanley or other optimists 0:13:13.840 --> 0:13:16.680 that are out there, But then there is the reality 0:13:16.920 --> 0:13:19.840 of opening up and no one wants to open up 0:13:19.840 --> 0:13:22.800 with the agony that we've seen down south of large 0:13:23.040 --> 0:13:27.800 gatherings which maybe lead to potential infection. The Lieutenant Governor 0:13:27.800 --> 0:13:30.960 of the Empire State has provided leadership on this with 0:13:31.040 --> 0:13:35.120 her Governor Cuomo to open up in a responsible way. 0:13:35.200 --> 0:13:39.600 Lieutenant Governor Kathy Hokel joins us this morning. Lieutenant Governor, 0:13:39.720 --> 0:13:43.440 I want you to give us one anecdote of what 0:13:43.600 --> 0:13:46.840 it's like to open up state that people in the 0:13:46.840 --> 0:13:50.240 bigger cities can understand. What is one of those tension 0:13:50.360 --> 0:13:54.400 points that's been instructive for you. Well, thank you for 0:13:54.440 --> 0:13:56.240 having me on the show again. And I have been 0:13:56.320 --> 0:13:59.520 all over upstate in person, Rochester down to Jamestown. I 0:13:59.640 --> 0:14:02.400 was in Look Tiny Only and yesterday, and I'll tell 0:14:02.440 --> 0:14:05.840 you what I see. I'm seeing business owners who understand 0:14:05.880 --> 0:14:09.200 the gravity of the situation. They have been shut down, 0:14:09.240 --> 0:14:11.560 they've lost their income for three and a half months. 0:14:11.600 --> 0:14:14.439 In order to them to survive, they know that they 0:14:14.480 --> 0:14:17.360 need to first of all, create an environment that's safe, 0:14:17.760 --> 0:14:19.800 that you walk in the door, that you are six 0:14:19.800 --> 0:14:23.160 ft apart from other customers, that everybody wears the mask 0:14:23.320 --> 0:14:25.600 or you don't walk in the door, and there's disrespected 0:14:25.680 --> 0:14:28.440 on the counter shops. I've seen it everywhere. Because here's 0:14:28.480 --> 0:14:32.520 where this is fast. We are all aligned in our interests, governments, 0:14:32.760 --> 0:14:34.800 those of us who have been leading this charge. Governor 0:14:34.840 --> 0:14:37.040 Cromo first of all, wants to make sure we get 0:14:37.040 --> 0:14:39.800 it right. The business owners want to get it right. 0:14:39.840 --> 0:14:41.400 They do not want to be in the news as 0:14:41.440 --> 0:14:45.080 being the next hot spot or being uh blown in 0:14:45.120 --> 0:14:48.280 by their employees or customers as being violators. So the 0:14:48.360 --> 0:14:51.360 public interests, the business interests, and the government interests are 0:14:51.360 --> 0:14:53.320 all aligned here to get it right. So I saw 0:14:53.440 --> 0:14:57.320 countless examples walking down these streets. Business is proud to 0:14:57.360 --> 0:14:59.960 put up they're open for business signs and whilst me 0:15:00.120 --> 0:15:02.600 people back and they are being smart about it. And 0:15:02.600 --> 0:15:06.359 that's all it takes. This is not a complicated concept 0:15:06.400 --> 0:15:09.400 to doing what we've been doing while we've had this slow, 0:15:09.920 --> 0:15:14.480 well thought out, methodical reopening. And it works here. It 0:15:14.560 --> 0:15:17.640 works here, Lieutenant Governor. We hope it continues to work. 0:15:17.720 --> 0:15:19.640 But you know, we all know the hard work of 0:15:19.680 --> 0:15:23.240 this state can be undone by failures out swear, what 0:15:23.320 --> 0:15:26.040 are you doing to protect New York from the outbreaks 0:15:26.080 --> 0:15:28.720 that we're seeing in other states across this country. Yeah, 0:15:28.720 --> 0:15:31.640 the irony of this is just incredible to consider that 0:15:31.800 --> 0:15:35.440 just a few months ago we're the epicenter of this pandemic, 0:15:35.720 --> 0:15:38.600 and other states for telling their residents not to come 0:15:38.640 --> 0:15:40.680 to New York. Or if you're a New Yorker driving 0:15:40.720 --> 0:15:43.880 the Floridas for your vacation, you were told you had 0:15:43.880 --> 0:15:47.600 a quarantine for fourteen days. So it is extraordinary in 0:15:48.120 --> 0:15:51.120 the turnaround and the fact that we are now have 0:15:51.240 --> 0:15:53.640 the state with the lowest rate of in effective So, yes, 0:15:53.680 --> 0:15:56.880 we are concerned. The Governor addressed this yesterday when asked 0:15:56.880 --> 0:15:59.440 about what about places like Florida what we have in 0:15:59.480 --> 0:16:03.160 New York. It's a lot of New York residents have 0:16:03.280 --> 0:16:05.800 gone to Florida that becomes Snowberg. I guess they're technically 0:16:05.800 --> 0:16:08.080 Florida residents then, but they come back to their summer 0:16:08.120 --> 0:16:12.040 homes uh in the city, the Long Island area or upstate. 0:16:12.320 --> 0:16:15.920 And unfortunately, we are starting to see paces where they're 0:16:15.960 --> 0:16:19.160 bringing the virus now to us. And so the governor 0:16:19.240 --> 0:16:21.880 is weighing all his options to speaking to experts about 0:16:21.920 --> 0:16:24.920 what rights we have to protect us because we have 0:16:25.040 --> 0:16:27.680 suffered too long and we've come back on a long, 0:16:28.400 --> 0:16:30.480 slow road to get it right, and we're not going 0:16:30.520 --> 0:16:33.720 to take any steps backwards because of what's going on elsewhere. 0:16:33.720 --> 0:16:35.360 If we can, we can help it. You know, New 0:16:35.440 --> 0:16:38.080 Yorkers cannot go through this twice. We will get through 0:16:38.120 --> 0:16:40.440 this because we're continuing to ask people to follow the 0:16:40.480 --> 0:16:43.160 social distinct, wear the mask, and we won't end up 0:16:43.200 --> 0:16:46.040 like the other states. They're literally putting a halt order 0:16:46.080 --> 0:16:49.080 on some of the reopenings and that's that's psychologically devastating 0:16:49.080 --> 0:16:52.040 and it's horrible for the economy. Lieutenant Governor, how close 0:16:52.120 --> 0:16:55.000 are we to having to actually cut services as a 0:16:55.040 --> 0:16:57.600 result of the budget deficits in New York State? It's 0:16:57.640 --> 0:17:00.520 almost inevitable. I mean, the only life time that we're 0:17:00.560 --> 0:17:06.120 waiting for is have Congress and the President understand that 0:17:06.480 --> 0:17:09.879 you cannot have a full economic recovery in this nation 0:17:09.960 --> 0:17:12.280 without helping out states like New York there were the 0:17:12.280 --> 0:17:15.439 hardest hit. We are an economic engine that has to 0:17:15.480 --> 0:17:18.000 get some fuel back into us. And when we get 0:17:18.040 --> 0:17:20.639 that money and we get that assistance, which we believe 0:17:20.680 --> 0:17:23.760 should happen, and don't be playing politics. This is not 0:17:23.880 --> 0:17:26.240 the time to talk about red states and blue states. 0:17:26.520 --> 0:17:28.840 We are an important entity and important part of the 0:17:28.880 --> 0:17:31.560 comeback for the nation, not just our state. So there 0:17:31.600 --> 0:17:34.280 would be cutbacks. The reality is there will be cutbacks 0:17:34.320 --> 0:17:36.800 if we don't get that support from the settle government. 0:17:36.920 --> 0:17:39.720 But the governor has had conversations with the President. We're 0:17:39.760 --> 0:17:41.880 speaking to our leaders in Congress, and we hope they 0:17:41.920 --> 0:17:44.880 get it that we all want this economy to come back. 0:17:44.960 --> 0:17:47.320 And I heard you speaking about, uh, you know that 0:17:47.480 --> 0:17:49.760 the ten year decline, and you know it's going to 0:17:49.840 --> 0:17:52.720 take a long time, and it doesn't have to. We 0:17:52.760 --> 0:17:55.520 can come back much quicker and supports to settle government 0:17:55.560 --> 0:17:58.399 spending with revenues from New York since we already donor state. 0:17:58.720 --> 0:18:00.440 But we just need a little help during this time, 0:18:00.440 --> 0:18:03.000 and we expected to get it, Lieutenant Governor, very quickly. 0:18:03.000 --> 0:18:05.199 Here I had the clearest memory of the riots of 0:18:05.280 --> 0:18:08.320 nineteen sixty four in Rochester, New York. It has been 0:18:08.359 --> 0:18:12.320 a path with the courage of Nelson Rockefeller and others 0:18:12.359 --> 0:18:16.119 to provide for African Americans in this nation and in 0:18:16.200 --> 0:18:19.879 this state. Are you going to see a national holiday 0:18:19.960 --> 0:18:22.440 off of what we saw from your governor a few 0:18:22.480 --> 0:18:25.800 days ago on Juneteenth, two thousand and twenty. I can 0:18:25.800 --> 0:18:27.359 only speak to what we're doing in the state of 0:18:27.400 --> 0:18:29.880 New York, but I will tell you many times, when 0:18:29.880 --> 0:18:33.840 New York leads, others follow, whether it's the lgbt Q rights, 0:18:33.880 --> 0:18:36.280 whether it's women's rights, whether it's maybe many of the 0:18:36.280 --> 0:18:39.879 civil rights initiatives, labor rights, environment rights, all those movements 0:18:39.920 --> 0:18:42.160 started in New York. And I hope that the rest 0:18:42.200 --> 0:18:44.399 of the the nation will be aware of what we did 0:18:44.440 --> 0:18:47.439 in New York by finally giving the recognition that the 0:18:47.480 --> 0:18:50.560 African Americans deserved to have as part of an important 0:18:50.560 --> 0:18:53.760 part of their history, which was the Emancipation Proclamations finally 0:18:53.800 --> 0:18:58.320 being uh enacted and actually executed in Texas, which was 0:18:58.359 --> 0:19:00.560 a two year hold up. This is I've marched in 0:19:00.640 --> 0:19:03.720 June Chief's Paris for the last twenty five years, and 0:19:03.760 --> 0:19:05.880 I'm so delighted to see a year after year, more 0:19:05.880 --> 0:19:09.520 people coming out, more people understanding this history and understanding 0:19:09.560 --> 0:19:13.480 that the root of racism goes back centuries and it's 0:19:13.480 --> 0:19:15.639 a time to right that wrong and have a have 0:19:15.720 --> 0:19:18.439 an acknowledgment of that dark part of our history, but 0:19:18.520 --> 0:19:21.560 also realizing that we can come into a brighter area 0:19:21.960 --> 0:19:25.800 era if we become cognizant of that history and why 0:19:25.880 --> 0:19:28.040 that may still be the remnists of that are still 0:19:28.040 --> 0:19:31.600 affecting society today. Why there is systemic racism that goes 0:19:31.640 --> 0:19:34.200 back to that time. Kathy. I think we all hope 0:19:34.200 --> 0:19:36.680 we can make more progress. Fantastic to catch up with you, 0:19:36.880 --> 0:19:39.880 as always, Lieutenant Governor of New York, Kathy how called 0:19:39.880 --> 0:19:42.639 there on reopening at an important day for this nation. 0:19:47.160 --> 0:19:50.000 Let's bring in about Michael. This is this is someone 0:19:50.040 --> 0:19:52.879 that we know so well from our talk on the 0:19:52.920 --> 0:19:55.320 yield market and course on the show The Real Yield. 0:19:55.320 --> 0:19:59.240 Look for that coming up soon, folks, Bloomberg Television. Bob Michael. 0:19:59.280 --> 0:20:02.840 Where is the yield? Bob Michael? When do I get 0:20:02.880 --> 0:20:06.320 a real yield back? I know it just seems to 0:20:06.440 --> 0:20:09.720 have been another one of these casualties of the crisis. 0:20:09.960 --> 0:20:13.080 I guess we'll know things are further returning to normal 0:20:13.160 --> 0:20:16.399 when it comes back, because by then all the value 0:20:16.440 --> 0:20:18.919 will have been squeezed out of the bond market. Well, 0:20:19.440 --> 0:20:21.960 you sound like you've become more constructive in the last 0:20:21.960 --> 0:20:23.800 couple of weeks. Can you walk us through whether you 0:20:23.840 --> 0:20:28.720 have and why for sure we have and when we 0:20:28.760 --> 0:20:35.320 look at the overwhelming response by policy makers, both monetary 0:20:35.480 --> 0:20:39.159 and on the fiscal side. It's been dramatic. It's not 0:20:39.240 --> 0:20:42.679 just been a handful of developed markets. It's been in 0:20:42.720 --> 0:20:45.320 the emerging markets. In the last couple of days, you've 0:20:45.359 --> 0:20:48.480 had rate cuts out of Indonesia, You've had a rate 0:20:48.480 --> 0:20:51.880 cut out of Brazil. Uh, you had a rate cut 0:20:51.880 --> 0:20:55.720 out of Russia. I looked at where Brazil central bank 0:20:55.760 --> 0:20:58.920 rates are there two and a quarter percent. That's where 0:20:58.960 --> 0:21:04.439 the US was a year ago. So the policymakers have 0:21:04.720 --> 0:21:09.640 no interest in watching the pandemic continue to shut down 0:21:09.680 --> 0:21:12.960 the global economy. They're doing everything they can. Is this 0:21:13.000 --> 0:21:15.199 a case if there is no alternative for you that 0:21:15.200 --> 0:21:16.720 you've got to put this money to work and need 0:21:16.800 --> 0:21:19.120 to return and the assets that he used to get 0:21:19.119 --> 0:21:21.680 a return on just down there anymore, Bob? Or is 0:21:21.760 --> 0:21:25.720 it something more constructive than that. Um, it's a combination 0:21:25.760 --> 0:21:29.720 of both. I love Torsten. I was a little disappointed 0:21:30.520 --> 0:21:34.120 that in his list of zombies he didn't list the 0:21:34.119 --> 0:21:38.760