WEBVTT - "We're Halfway There" to 10-15% Correction: Jim Bianco 0:00:01.400 --> 0:00:04.120 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney. Along 0:00:04.160 --> 0:00:06.240 with my co host of Bonnie Quinn. Every business day 0:00:06.240 --> 0:00:10.360 we bring you interviews from CEOs, market pros, and Bloomberg experts, 0:00:10.400 --> 0:00:13.560 along with essential market moving news. Kind the Bloomberg Markets 0:00:13.600 --> 0:00:17.000 Podcast on Apple podcast or wherever you listen to podcasts, 0:00:17.000 --> 0:00:20.680 and on Bloomberg dot com. It is time now to 0:00:20.720 --> 0:00:23.520 introduce our first guest. Also, somebody who has been around 0:00:23.760 --> 0:00:29.080 for some time and will remember very very vividly eleven 0:00:29.200 --> 0:00:32.360 and that's Jim bianco founder and president of Bianco Research 0:00:32.440 --> 0:00:34.839 based in Chicago. And I'm sure Jim, you know it 0:00:34.880 --> 0:00:38.040 would have been a fearsome size to be watching that 0:00:38.240 --> 0:00:42.200 on the floor, on the trading floor in Chicago. Yeah, 0:00:43.320 --> 0:00:45.960 in a lot of ways, like it was yesterday, and 0:00:46.000 --> 0:00:48.519 it was you know, I've been in the markets for 0:00:48.560 --> 0:00:52.040 thirty three years and it still remains one of the 0:00:52.120 --> 0:00:57.560 seminal days of my career. Jim, you know, it's been 0:00:57.600 --> 0:01:00.920 a difficult time recently, and you know today obviously is 0:01:01.000 --> 0:01:03.520 it's extra difficult for a lot of people. But the 0:01:03.600 --> 0:01:06.320 difficulty that we've seen in the last few months, does 0:01:06.360 --> 0:01:08.360 it persist through the end of the year. And into 0:01:08.360 --> 0:01:11.840 the next year in terms of economic fundamentals, in terms 0:01:11.880 --> 0:01:15.399 of just general suffering out there. We'll get to the 0:01:15.400 --> 0:01:19.840 markets in a moment. Yeah, you're You're right to point 0:01:19.840 --> 0:01:23.200 out that there's the economy and what's happening with the economy. 0:01:23.280 --> 0:01:25.040 And I do think that what we've seen is a 0:01:25.120 --> 0:01:29.440 series of stumbles. The economic recovery off the COVID low 0:01:29.520 --> 0:01:33.120 and may seem to have stalled around July. The need 0:01:33.240 --> 0:01:37.560 for stimulus, because remember the government shut down the economy 0:01:37.800 --> 0:01:40.120 and a lot of people lost their jobs because of that, 0:01:40.800 --> 0:01:43.280 seems to be dead now since to at least past 0:01:43.360 --> 0:01:46.880 the election, and that's going to also kind of drag 0:01:47.000 --> 0:01:50.160 on the economy as well too. So I don't think 0:01:50.240 --> 0:01:53.440 the economy is going backwards. I just think that the 0:01:53.520 --> 0:01:58.600 recovery to something that was a pre COVID normal has stalled, 0:01:58.880 --> 0:02:00.800 and we've got more AVID instead, it's going to be 0:02:00.840 --> 0:02:04.160 even harder to get back there. So the economy itself, 0:02:04.840 --> 0:02:07.840 um seems to have just slottened out at a lower level, 0:02:07.920 --> 0:02:10.360 and net net, that's not the best place to be, 0:02:11.080 --> 0:02:14.360 so Jim. And given that backdrop, and given the fact 0:02:14.440 --> 0:02:17.440 that Congress looks like I will be unable to deliver 0:02:17.880 --> 0:02:21.520 at least a near term fiscal stimulus. What are investors 0:02:21.560 --> 0:02:25.000 to do? Are they just simply leaning back on that backstop, 0:02:25.040 --> 0:02:27.400 which is a federal reserve and ECB just you know, 0:02:27.480 --> 0:02:29.560 providing tremendous liquidity in the market, And is that all 0:02:29.600 --> 0:02:33.080 we need? Well, that's what we have. Let's put it 0:02:33.120 --> 0:02:35.960 that way, because we talked about with the economy. Let's 0:02:36.000 --> 0:02:39.320 add in then that if you look at valuations and 0:02:39.400 --> 0:02:41.720 you look at the forward pe ratios, even if you 0:02:41.760 --> 0:02:45.000 take out the Fang stocks, you're near the two thousand 0:02:45.040 --> 0:02:47.920 bubble peaks in terms of how overvalued this market is 0:02:47.960 --> 0:02:50.560 by a lot of metrics. Others aren't, but a lot are. 0:02:50.639 --> 0:02:53.400 So this is by no stretches as a cheap market. 0:02:53.960 --> 0:02:56.480 So if you're an investor, you're saying, look, the economy 0:02:56.520 --> 0:03:00.160 is stalling, the market's overvalued. Boy, let's sound like a 0:03:00.320 --> 0:03:02.520 really that mixed. Why am I in this market? Well, 0:03:02.680 --> 0:03:06.040 you've got the federal reserve and you've got the government 0:03:06.080 --> 0:03:08.280 that's been promising to build out the airline industry and 0:03:08.320 --> 0:03:10.840 the cruise ship industry, and they're not going to go 0:03:10.880 --> 0:03:14.400 down without a fight. To at least protect investors, we 0:03:14.440 --> 0:03:17.200 could debate whether or not that's you know, eth a 0:03:17.280 --> 0:03:19.359 color or proper for them to do it, but that's 0:03:19.360 --> 0:03:22.320 what they are doing, and that's a big support for 0:03:22.360 --> 0:03:24.600 the market. And I think I don't know if there's 0:03:24.720 --> 0:03:27.359 enough to push the market up, but if you it's 0:03:27.480 --> 0:03:30.440 enough to really temper being very barished at this point. 0:03:30.760 --> 0:03:32.320 So that's why I think we're gonna have a ten 0:03:32.360 --> 0:03:35.240 to fifteent correction. We've already got eight of it done, 0:03:35.280 --> 0:03:39.320 so we're already halfway there and probably continue to grind 0:03:39.360 --> 0:03:42.320 sideways for the next several months. Jim being a fixed 0:03:42.320 --> 0:03:45.280 in common voultility expert, what do you do in a 0:03:45.360 --> 0:03:47.840 market like this? Do you traders? Do you stay on 0:03:47.840 --> 0:03:51.760 the sidelines? Yeah? The bond market has been a real 0:03:51.880 --> 0:03:55.440 tough one for traders because there's nothing to trade. It 0:03:55.440 --> 0:03:59.000 doesn't do anything. We're now down to watching three basis 0:03:59.040 --> 0:04:02.400 point moves which are not very significant, and pre COVID 0:04:02.480 --> 0:04:06.640 world as something meaningful, but they're really not um I 0:04:06.680 --> 0:04:08.360 think the way you want to look at the bond 0:04:08.400 --> 0:04:11.880 market is the big basic question is does all of 0:04:12.000 --> 0:04:14.960 the stimulus and all of the Federal Reserve action and 0:04:15.040 --> 0:04:18.120 everything worldwide, Let's put all the central banks in there 0:04:18.560 --> 0:04:22.960 lead to inflation sometime next year. I think the answer 0:04:23.000 --> 0:04:25.240 is yes, and I think that's going to put upward 0:04:25.240 --> 0:04:28.080 pressure on interest rates at least in a year or so, 0:04:28.360 --> 0:04:32.039 not immediately. Uh. And that would be my bias towards 0:04:32.120 --> 0:04:35.599 trading the market. But your basic question is right, it's 0:04:35.600 --> 0:04:38.520 a tough market to trade because it doesn't do much 0:04:38.560 --> 0:04:40.560 of anything right now. It's been one of the narrowest 0:04:40.640 --> 0:04:42.960 ranges we've seen in the history of the bond market 0:04:42.960 --> 0:04:45.719 over the last three or four months. Alright, So Jim 0:04:45.760 --> 0:04:49.000 sticking with the bond market, Where in terms are we 0:04:49.040 --> 0:04:52.640 seeing credit quality issues creeping into this market in a 0:04:52.720 --> 0:04:54.920 meaningful way? We had early on in the pandemic to 0:04:55.320 --> 0:04:58.240 you know, some of the retailers, you know, file and 0:04:58.640 --> 0:05:01.600 kind of talk and you know, disclose the financial hardship 0:05:01.680 --> 0:05:03.480 they are having. Are we seeing more of that in 0:05:03.760 --> 0:05:07.080 other sectors? Yeah? You know, credit quality you can look 0:05:07.080 --> 0:05:09.200 at it one of two ways. You can look at 0:05:09.279 --> 0:05:12.040 just the fundamentals of the companies that are issuing debt 0:05:12.040 --> 0:05:15.600 and saying how court worthy are they? And the answer 0:05:15.640 --> 0:05:18.200 there is yeah, you can see some definite signs of 0:05:18.279 --> 0:05:20.960 credit quality issues. The only way you can look at 0:05:21.000 --> 0:05:25.039 it is. How about investors are they demanding more uh, 0:05:25.080 --> 0:05:28.000 you know, tougher standards in order to ballrow or let 0:05:28.040 --> 0:05:30.720 companies follow. And the answers now, they've just been head 0:05:30.720 --> 0:05:32.920 over heels and grabbing anything that they can get their 0:05:32.920 --> 0:05:37.440 hands on because we've been setting issuance records. Um, we've 0:05:37.440 --> 0:05:40.440 already broke the the yearly record and it's only September 0:05:40.560 --> 0:05:44.239 right now. So yeah, companies, shake your companies are allowed 0:05:44.279 --> 0:05:47.760 to trade thatt and investors are stepping up on it. 0:05:47.839 --> 0:05:50.800 Why our investors buying to shake your debt? Hate to 0:05:50.839 --> 0:05:53.279 come back to the same issue again. The photow Reserve 0:05:53.360 --> 0:05:55.960 is buying the stuff too, and that there's a perception 0:05:56.000 --> 0:05:58.800 that they're backdropped in there. And the battle cry on 0:05:58.880 --> 0:06:01.720 Wall Street has been called invest with the Fed. If 0:06:01.760 --> 0:06:04.480 they're going to buy corporate bonds in corporate et bond 0:06:05.120 --> 0:06:07.680 e t F tied to corporate bonds, you should too. 0:06:07.800 --> 0:06:11.400 Don't get blong up on the credit quality issues. And 0:06:11.440 --> 0:06:15.160 that seems to be what has driven this absolute need 0:06:15.240 --> 0:06:18.440 by corporate investors to buy corporate bonds even no matter 0:06:18.480 --> 0:06:21.440 what the credit quality is. Is it wise for companies 0:06:22.200 --> 0:06:24.479 to continue to issue Jim, I mean I suppose the 0:06:24.480 --> 0:06:27.359 obvious answer is yes, right, issue as much as you 0:06:27.360 --> 0:06:30.599 can until this era is over. But at the same time, well, 0:06:30.640 --> 0:06:33.200 companies have a headache after all of this. Well, it 0:06:33.200 --> 0:06:35.280 depends on why the company is issuing. You know, if 0:06:35.279 --> 0:06:38.640 you take a company like six Flags or Carnival Crews, Uh, 0:06:38.760 --> 0:06:41.760 they issued a tremendous amount of debt early on in 0:06:41.839 --> 0:06:45.159 April and May, so that they had enough cash that 0:06:45.279 --> 0:06:47.800 if they if they never opened use six Flags, if 0:06:47.839 --> 0:06:50.400 they never opened their theme parks, they're still going to 0:06:50.440 --> 0:06:53.359 be in business next year. And so that made sense 0:06:53.480 --> 0:06:55.960 that they were looking over the ravine and trying to 0:06:55.960 --> 0:06:59.520 get to the other side. But if you're a company 0:06:59.720 --> 0:07:02.080 like Apple or one of the things, you don't need 0:07:02.160 --> 0:07:04.880 the money, Should I just go out and ball it 0:07:05.000 --> 0:07:08.560 just because I can? That could be a situation where 0:07:08.720 --> 0:07:10.800 down the road you could say, why did I do this? 0:07:11.080 --> 0:07:13.160 You know, it just puts an extra burden on me. 0:07:13.360 --> 0:07:15.280 I didn't need the money, but now I gotta pay 0:07:15.280 --> 0:07:18.600 it back as well. So it's not always a good 0:07:18.640 --> 0:07:22.000 thing to ball unless there's a specific reason. Carnival and 0:07:22.280 --> 0:07:24.640 six Flags had a specific reason. Some of these other 0:07:24.680 --> 0:07:29.480 companies don't. So Jim if investors are searching for yield, 0:07:29.520 --> 0:07:31.960 and maybe they're willing to go down the credit chain 0:07:32.040 --> 0:07:35.440 a little bit potentially having that FED reserve backstop About 0:07:35.480 --> 0:07:37.840 emerging markets, is that too far out or there's some 0:07:37.920 --> 0:07:41.600 areas there that you're seeing some opportunities. You know, that 0:07:41.720 --> 0:07:44.920 might be a little too far out because there is 0:07:44.960 --> 0:07:50.000 no backstop there. For one two, they are really allvered 0:07:50.120 --> 0:07:53.680 play on the emerging markets are an allovered play on 0:07:53.800 --> 0:07:57.000 the global recovery. If you think the economy, the global 0:07:57.040 --> 0:08:00.360 economy is going to recover from the pandemic, they should 0:08:00.400 --> 0:08:03.560 do better because they will benefit from it. Uh I 0:08:03.640 --> 0:08:05.800 see it even if you take China out of the equation, 0:08:05.840 --> 0:08:08.440 because there's such a big player in it. But really 0:08:08.760 --> 0:08:10.720 you've got to look at that a little bit differently. 0:08:10.760 --> 0:08:13.600 I look at that more fundamentally and answer that basic question, 0:08:14.040 --> 0:08:17.520 are you expecting a global recovery? Well, we flattened out 0:08:17.520 --> 0:08:20.160 in the U S in the case, cons in Europe 0:08:20.280 --> 0:08:24.440 are back to their April peaks. Sounds like a recovery 0:08:24.600 --> 0:08:28.560 continuing again, not necessarily going backwards, but continuing is going 0:08:28.600 --> 0:08:31.200 to be difficult, at least for the next several weeks 0:08:31.280 --> 0:08:34.240 or a few months. And I think that emerging markets 0:08:34.360 --> 0:08:37.720 are gonna you know, stall in that mix until we 0:08:37.760 --> 0:08:40.160 see some clarity on whether or not we're back on 0:08:40.200 --> 0:08:42.200 the road to getting to something to what we call 0:08:42.280 --> 0:08:45.280 pre COVID normal. Jimm, are you spending more time looking 0:08:45.320 --> 0:08:47.920 at Europe these days? There's definitely a little more action 0:08:48.160 --> 0:08:53.720 in Europe. Yeah, there's uh, yeah, exactly. I have been 0:08:53.760 --> 0:08:56.600 spending more time, you know, with the strength in the 0:08:56.600 --> 0:09:01.160 euro and with the uh the higher case counts of 0:09:01.280 --> 0:09:04.960 COVID and the lack of of their markets not being 0:09:05.160 --> 0:09:08.880 as overvalued as the US markets are. They're not back 0:09:08.920 --> 0:09:12.120 to their highs. Europe has presented itself as some interesting 0:09:12.160 --> 0:09:14.760 opportunities with a lot of cross currents. It's a mix 0:09:14.880 --> 0:09:17.600 to try and figure it out. Yep, Hm, text so much. 0:09:17.720 --> 0:09:22.559 Jim Bianco founder, president Bianco Research. I'm going to talk 0:09:22.559 --> 0:09:26.360 about something that is really emblematic of this really hot 0:09:26.480 --> 0:09:29.520 market we're in, and that is the blank check companies. 0:09:29.559 --> 0:09:34.600 We used to call them spack special purpose uh issues. Um, 0:09:34.640 --> 0:09:36.839 they're all the rates here, you know, and they're getting 0:09:36.880 --> 0:09:40.760 some big name financiers going out with blank check companies 0:09:40.760 --> 0:09:43.640 to get more details on that. We're fortunate, Crystal say 0:09:44.080 --> 0:09:47.480 she's a Bloomberg News reporter. Crystal tell us just first, 0:09:47.559 --> 0:09:51.000 what is a blank check company and why is it 0:09:51.040 --> 0:09:55.880 the rate today? Yeah? Um, blank check companies. They are 0:09:55.920 --> 0:10:00.800 called special purpose acquisition vehicles UM all blank check or SPACs. 0:10:00.800 --> 0:10:03.559 We these are companies that go through the ip A 0:10:03.640 --> 0:10:08.720 process raise a pool of money from investors without knowing 0:10:08.920 --> 0:10:12.480 a target, without having an operating business, and further down 0:10:12.520 --> 0:10:15.800 the line, usually twenty four months later, they identify a 0:10:15.840 --> 0:10:20.680 target and they acquire usually a minority state. And we 0:10:20.720 --> 0:10:22.800 are really in this moment in time where we're seeing 0:10:22.840 --> 0:10:25.640 a huge boom of these deals in the market. Like 0:10:26.120 --> 0:10:29.360 I think there's been thirty five billion of deal has 0:10:29.480 --> 0:10:32.360 been raised this year and that's like more than ninety 0:10:32.640 --> 0:10:36.240 SPAC deals so far, and and we're seeing all these 0:10:36.240 --> 0:10:39.720 big names coming. Yeah, Crystal, how does the SPAC sponsor 0:10:39.760 --> 0:10:42.040 decide what kind of size of SPAK he wants to 0:10:42.080 --> 0:10:45.520 go to market with? Because technically, if they don't know 0:10:45.640 --> 0:10:49.360 in advance what they're target is, right, what company they're 0:10:49.360 --> 0:10:52.319 targeting to to reverse merge with and and go public with, 0:10:52.840 --> 0:10:55.640 then they could literally sort of you know, look at 0:10:55.679 --> 0:10:59.439 any kind of size of company. And yet you have 0:10:59.640 --> 0:11:03.520 like Cliff Robbins raising sey million, but you like a 0:11:03.559 --> 0:11:08.000 black man raising four billion. Yeah, the strategy used to 0:11:08.040 --> 0:11:10.960 be you raise a very small spack in the beginning, 0:11:11.040 --> 0:11:14.040 and then you add on with a pipe investment to 0:11:14.120 --> 0:11:16.079 finance the deal at the end. So it gives you 0:11:16.120 --> 0:11:18.800 a little bit of flexibility because in the beginning, like 0:11:18.840 --> 0:11:20.959 you said, you have no idea what you're gonna buy. 0:11:21.040 --> 0:11:24.640 But I think in reality a lot of responsors have 0:11:24.760 --> 0:11:26.800 a little bit of an idea what they want, at 0:11:26.880 --> 0:11:29.400 least in the size of what they want. For instance, 0:11:29.400 --> 0:11:32.960 when Bill Aggon raises four billion dollars back, he said 0:11:33.000 --> 0:11:34.880 in the perspectives that he's looking for a mature you 0:11:34.920 --> 0:11:38.000 unicon that has a market cap or market value of 0:11:38.080 --> 0:11:41.080 like ten billions. So they do have a site, they 0:11:41.120 --> 0:11:43.040 do have a size. If you have a target, they 0:11:43.120 --> 0:11:45.760 most likely have a sector in mine as well. A 0:11:45.760 --> 0:11:47.719 lot of the target. A lot of the time they 0:11:47.840 --> 0:11:50.160 tell you in the perspectives that they target either like 0:11:50.160 --> 0:11:52.959 consumer companies, tech is a very hot one, and then 0:11:52.960 --> 0:11:55.840 they're obviously general at SPACs, but like sector focus back 0:11:56.000 --> 0:11:59.920 a lot more common. So Crystal can any I mean, 0:12:00.360 --> 0:12:02.640 you have to be a bill actman to really kind 0:12:02.640 --> 0:12:06.760 of get these special purpose entities done. I mean it 0:12:06.920 --> 0:12:09.280 just you can't just be some hotshot trader, can you. 0:12:10.840 --> 0:12:14.199 So our and in our research we found that sixty 0:12:14.320 --> 0:12:18.320 percent of the issuers that race back this year has 0:12:18.360 --> 0:12:22.800 never done at before. So the the the entry barrier 0:12:23.160 --> 0:12:26.600 seems to have seems to be a little you know 0:12:26.679 --> 0:12:29.880 lower these days. But but does it mean that investor 0:12:29.920 --> 0:12:32.719 will give anybody money? I don't think that's the case. UM. 0:12:33.400 --> 0:12:36.440 Spack is a very much of a charismatic driven product. 0:12:36.840 --> 0:12:39.800 It's very much up to how much the investor trust 0:12:39.840 --> 0:12:42.559 that the sponsor has the ability to find a good target. 0:12:43.080 --> 0:12:46.480 So UM, at the end of it, like, it's always 0:12:46.520 --> 0:12:50.720 helps having some celebrity investors or even someone who just 0:12:50.800 --> 0:12:53.079 has who just is a household name to be on 0:12:53.160 --> 0:12:56.600 the spectboard or a spec director UM to be able 0:12:56.600 --> 0:12:59.000 to get a deal done. It's for sure feels like 0:12:59.080 --> 0:13:01.800 if you are the company getting acquired that it might 0:13:01.840 --> 0:13:06.320 be nicer to go with somebody who is going to 0:13:06.360 --> 0:13:09.840 be accountable to the public markets rather than say private 0:13:09.840 --> 0:13:12.880 equity for example. But is that the only reason these 0:13:12.920 --> 0:13:18.800 companies are choosing SPACs isn't that they can't go public 0:13:18.840 --> 0:13:22.640 on their own? I feel like there is an element 0:13:22.720 --> 0:13:25.520 of it. Like some companies on its own, they don't 0:13:25.559 --> 0:13:28.080 have a story, they don't have an easy story to 0:13:28.160 --> 0:13:31.200 tell in an I p O process, or they really 0:13:31.240 --> 0:13:33.360 need the capital that therefore they can't go for the 0:13:33.440 --> 0:13:36.200 direct listening process. By the way, that is changing because 0:13:36.240 --> 0:13:39.839 direct listening now allow companies to raise capital. But but 0:13:40.000 --> 0:13:42.200 I think everything combined and if you if you're a 0:13:42.200 --> 0:13:44.600 company and you look at the sponsor team, you look 0:13:44.640 --> 0:13:46.840 at the bill Acman, and you think this team is 0:13:46.840 --> 0:13:49.120 going to help you with your business, and it's going 0:13:49.160 --> 0:13:51.599 to raise the profile of your company, then going with 0:13:51.640 --> 0:13:55.520 the fact does come with that UM expertise and they 0:13:55.600 --> 0:13:59.640 do come with that stamp of approval UM. But but 0:14:00.160 --> 0:14:02.800 other benefits of going with a private equity there's still 0:14:02.840 --> 0:14:05.600 are because there's still private and you know, accountable the 0:14:05.600 --> 0:14:10.199 public market. UM. But I do think there is increasingly UM. 0:14:10.559 --> 0:14:14.440 Increasingly tech companies or like high profile companies are more accepted, 0:14:15.080 --> 0:14:17.280 are more receptive to this idea of selling to a 0:14:17.320 --> 0:14:21.400 spect so Crystal, there are those in the market that 0:14:21.480 --> 0:14:24.080 are saying, boy, these things are really speculed off. They 0:14:24.200 --> 0:14:28.320 are perhaps a signal of frothiness or top in the market. 0:14:28.680 --> 0:14:32.320 What did you hear when you're doing your reporting, if 0:14:32.680 --> 0:14:35.920 history is any guide the laws broom that we see 0:14:36.080 --> 0:14:39.680 or this this size and scope, it's in two thousand 0:14:39.720 --> 0:14:41.600 and seven, two thousand and eight, and we oh know 0:14:41.720 --> 0:14:45.920 what happened after that. UM. So so there is a 0:14:45.960 --> 0:14:50.120 little bit of vindicator that this is roughly and there's 0:14:50.120 --> 0:14:52.320 a lot of money in the market. There's you know, 0:14:52.400 --> 0:14:56.760 the interest rates low people looking for for alpha spects 0:14:56.800 --> 0:15:00.480 seems to be the product to be UM. But we 0:15:00.520 --> 0:15:04.480 are also seeing sort of different different signs that that 0:15:04.760 --> 0:15:08.360 even even the sack market is showing the slowdown. UM. 0:15:08.480 --> 0:15:10.840 But but I guess we will see. But but it's 0:15:10.880 --> 0:15:15.960 this frothy I think definitely. So you know, what's the 0:15:15.960 --> 0:15:18.680 typical length of time, because yes, you do have two years, 0:15:18.680 --> 0:15:20.760 and of course you can extend the two years. But 0:15:20.960 --> 0:15:23.080 I feel like these days a lot of this money 0:15:23.080 --> 0:15:25.960 has been raised with the notion of taking advantage of 0:15:26.000 --> 0:15:32.600 pandemic era valuations. Yeah, so twenty four months is UM. Legally, 0:15:32.680 --> 0:15:35.760 when they how long they have UM, they can apply 0:15:35.840 --> 0:15:38.840 for usually a three month extension. But what is interesting 0:15:38.920 --> 0:15:44.240 is that we are seeing UM these facts closing deal sooner. UM. 0:15:44.360 --> 0:15:47.040 They used to close deal probably like a year out 0:15:47.040 --> 0:15:49.720 of a year ahead of the closing of the I 0:15:49.840 --> 0:15:52.640 p O. But for instance, the deal that we reported 0:15:52.760 --> 0:15:58.200 yesterday um Social Capital Um they found a target after 0:15:58.640 --> 0:16:02.800 three months of of listing, and that is backed by 0:16:02.880 --> 0:16:07.720 Schamaz which took Virgin Galactic public right. So that's the 0:16:07.840 --> 0:16:11.400 high profile viewser Yeah, the high profile is a closing spooner. 0:16:11.880 --> 0:16:14.400 But we we haven't seen much of the sort of 0:16:14.520 --> 0:16:17.440 second tier mid market one Crystal, thank you so much 0:16:17.440 --> 0:16:20.200 for joining us, Crystal, say, Bloomberg IPO reporter on a 0:16:20.280 --> 0:16:23.400 fascinating story about these these SPACs, if you will, the 0:16:23.480 --> 0:16:27.880 blank check companies. Uh, they're certainly popularly this year as 0:16:27.880 --> 0:16:30.960 Crystals reporting just billions of dollars raised, uh, and then 0:16:31.240 --> 0:16:34.000 kind of getting mergers done and getting into the public markets. 0:16:34.040 --> 0:16:40.120 That way, fascinating story in this market. Right here, it 0:16:40.200 --> 0:16:43.440 is time for Bloomberg Opinion and the latest column from 0:16:43.440 --> 0:16:47.360 Tim O'Brien is entitled of Course Trump couldn't resist Bob 0:16:47.360 --> 0:16:50.400 Woodward subtitled once again he was takenly trusted in his 0:16:50.440 --> 0:16:53.720 own ability to steer the story. We welcome now Timothy O'Brien, 0:16:53.760 --> 0:16:57.760 a senior columns to for Bloomberg Opinion. So obviously the 0:16:57.800 --> 0:17:01.440 story has sort of gotten out of it in Trump's hands. 0:17:01.560 --> 0:17:04.280 Is there any way that he didn't know this is 0:17:04.320 --> 0:17:06.680 going to happen? I mean, it's Bob woodword after all, 0:17:06.720 --> 0:17:08.359 And this isn't the first time, even in the Trump 0:17:08.359 --> 0:17:12.480 presidency that this has happened to him. Well, Bonnie, yes, 0:17:12.960 --> 0:17:17.440 there is a possibility actually didn't foresee this spinning out 0:17:17.480 --> 0:17:21.240 the way it has because he doesn't think strategically or 0:17:21.320 --> 0:17:25.000 think ahead in that regard. But the other so that's 0:17:25.040 --> 0:17:29.160 a weakness. The other thing is he doesn't usually care 0:17:29.320 --> 0:17:32.360 about the fallout from a lot of this stuff anyway. 0:17:32.480 --> 0:17:36.000 In in in an odd way, it's a strange strength because 0:17:36.119 --> 0:17:39.400 this is what has allowed him to spend decades plowing 0:17:39.520 --> 0:17:45.239 through adverse media coverage and and um and and some 0:17:45.320 --> 0:17:47.320 of it does authentically get to him. But by and 0:17:47.400 --> 0:17:50.680 large he's very unusual because the things that make him 0:17:50.800 --> 0:17:55.280 um apathetic and sort of lacking in compassion for other 0:17:55.280 --> 0:17:58.320 people's struggles are the very things that makes some of 0:17:58.320 --> 0:18:02.160 the stuff roll off of his act like water. Uh. 0:18:02.600 --> 0:18:07.320 The problem is every it's different when you're president, quite obviously, 0:18:07.520 --> 0:18:09.160 and and the things that he was used to doing 0:18:09.160 --> 0:18:14.720 as a private businessman or as a celebrity. Um had far, 0:18:15.200 --> 0:18:20.000 you know, less significant implications than things he's doing now 0:18:20.160 --> 0:18:24.160 that he fessed up too in the Woodward interview, including uh, 0:18:24.320 --> 0:18:29.680 you know, irresponsibly and I think horrifyingly knowing that the 0:18:29.680 --> 0:18:33.840 pandemic was far more dangerous than he was letting on publicly. Tim, 0:18:33.880 --> 0:18:37.560 I'm so glad that you. I was actually fully expecting 0:18:37.600 --> 0:18:40.719 a column something like this to him, because you're unique 0:18:40.760 --> 0:18:44.560 history with President Trump, having written a book about him 0:18:44.560 --> 0:18:47.119 and then have been litigation with him. Is this just 0:18:47.160 --> 0:18:52.719 a case where, like with you, he craves this type 0:18:52.760 --> 0:18:55.600 of exposure and he's just not worried about the downside 0:18:55.600 --> 0:18:58.520 per se. I think that's a big part of it, Paul. 0:18:58.520 --> 0:19:01.120 I think that's spot on. I think the other thing 0:19:01.160 --> 0:19:03.560 is he regards it as a challenge. He he has 0:19:03.600 --> 0:19:06.960 this belief that he has this magic wand extending from 0:19:06.960 --> 0:19:09.760 his index finger that he can wave across the media 0:19:09.840 --> 0:19:14.480 landscape and around the heads of reporters and uh, they 0:19:14.520 --> 0:19:17.560 will suddenly have the same sense of high regard for 0:19:17.640 --> 0:19:21.479 Trump that he has for himself. And even if the 0:19:21.520 --> 0:19:25.080 fact pattern suggests otherwise. And when I you know, when 0:19:25.080 --> 0:19:27.159 I wrote the book about him. I had spent the 0:19:27.240 --> 0:19:30.840 previous decade episodically covering him. I had interviewed him for 0:19:30.960 --> 0:19:35.760 another book I had done in the mid nineties on gambling. Um. 0:19:35.800 --> 0:19:37.119 And then I was at The New York Times in 0:19:37.160 --> 0:19:39.240 the early two thousands, where I was covering him in 0:19:39.280 --> 0:19:43.280 the news pages very critically. Uh. And then we did 0:19:43.359 --> 0:19:45.520 the book together, and he wanted to do the book 0:19:45.600 --> 0:19:47.520 with me, and we spent a ton of time together. 0:19:47.560 --> 0:19:50.440 I think I've spent more time with him than any 0:19:50.440 --> 0:19:55.040 other reporter. It was dozens of interviewer interviews and you know, 0:19:55.119 --> 0:20:00.560 scores of hours together. And UM, he just didn't have, 0:20:00.920 --> 0:20:03.240 I think, a sense that maybe he needed to be 0:20:03.359 --> 0:20:07.240 more uh judicious about what he was saying or how 0:20:07.280 --> 0:20:09.840 we were engaging. And I'm not unique in that regard. 0:20:09.840 --> 0:20:13.600 It's it's that's probably informed every interaction he's had with 0:20:13.640 --> 0:20:16.200 reporters over the years. Tim, how do you feel about 0:20:16.200 --> 0:20:19.800 the question of whether Bob Woodward really had an ethical 0:20:19.920 --> 0:20:22.720 or moral duty to release some of the content of 0:20:22.720 --> 0:20:26.080 these tapes before the book actually got written. Well, you know, 0:20:26.119 --> 0:20:28.520 Margaret Stulti in the media the media columnists for the 0:20:28.560 --> 0:20:33.200 Washington Post did a lengthy or you know, an interview 0:20:33.240 --> 0:20:38.879 with with Bob about that. His response was, when um, 0:20:38.960 --> 0:20:41.919 he began reporting this, you know, the first conversation they had, 0:20:41.960 --> 0:20:45.560 it was in February earlier this year. No one really 0:20:45.600 --> 0:20:47.800 knew at that point what a full blown public health 0:20:47.840 --> 0:20:53.920 crisis the epidemic of the pandemic would become. And um uh, 0:20:54.000 --> 0:20:57.840 and he wanted to spend more time coming to understand 0:20:58.119 --> 0:21:01.240 the administration view on all this and didn't and had 0:21:01.240 --> 0:21:04.959 an evolving understanding of it himself. Um. You know, I 0:21:05.000 --> 0:21:07.880 think that that's that's all fine and good, and say 0:21:07.880 --> 0:21:11.000 the first three months of it, but certainly by April, 0:21:11.240 --> 0:21:13.600 you know, lockdowns began in mid March. By April, we 0:21:13.680 --> 0:21:16.960 all certainly knew there was a crisis of foot, and 0:21:18.600 --> 0:21:20.280 I think it would have been useful for for him 0:21:20.280 --> 0:21:22.960 to disclose some of that. I do think by April 0:21:23.320 --> 0:21:26.240 we knew there was already public information that the White 0:21:26.240 --> 0:21:29.679 House knew the pandemic was far more serious than they 0:21:29.680 --> 0:21:32.679 were letting on and had known that earlier. So that 0:21:32.760 --> 0:21:34.840 had come out from other sources at that point too. 0:21:35.000 --> 0:21:36.720 But I think that's a good question to be asked 0:21:36.760 --> 0:21:40.399 of of any book writer who holds onto important information, 0:21:42.080 --> 0:21:44.680 especially in the midst of a crisis like this, Tim, 0:21:44.680 --> 0:21:47.359 do you think the contents of this book, you know, 0:21:47.480 --> 0:21:49.199 and and the heels of all the other books that 0:21:49.240 --> 0:21:53.359 have been written just recently let have any impact on 0:21:53.400 --> 0:21:56.600 this election? Or will it be like it seems like 0:21:56.640 --> 0:21:59.879 all the other noise and information out there, it just 0:22:00.040 --> 0:22:05.600 won't stick or turn the needle, um, you know, move 0:22:05.680 --> 0:22:10.240 the needle, you know. I here's the thing. I partisans 0:22:10.280 --> 0:22:14.159 who don't like Trumps and partisans who love Trump aren't 0:22:14.320 --> 0:22:16.439