Speaker 1: This is Bloomberg Business Week. I'm Carol Masser and I'm
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Speaker 1: listen to our radio show weekdays at two pm Eastern
Speaker 1: only on Bloomberg Radio. Now. One story that struck um my.
Speaker 1: We struck me earlier and really caught my attention about
Speaker 1: government's finally getting the message that they're going to have
Speaker 1: to run exponentially bigger budget deficits to keep economies afloat
Speaker 1: as the coronavirus brings the world to a sudden halt.
Speaker 1: So there's lots of scrambling going on. I do want
Speaker 1: to talk a bit about the economy and what we're seeing.
Speaker 1: Diane Swank certainly friend to Bloomberg, Chief economists at Grant Thornton.
Speaker 1: She's on the phone from Chicago. Diane, good to have
Speaker 1: you here. YouTube. We you know, we were talking earlier
Speaker 1: about folks who have seen a lot of different cycles,
Speaker 1: market cycles, economic cycles, user we have seen several Where
Speaker 1: does this stack up. There's just nothing to compare it
Speaker 1: to the extraordinary, just absolute stop and economic activity. That's
Speaker 1: nothing that there is any precedence for. I mean, the
Speaker 1: losses that we saw a compound during the height of
Speaker 1: the crisis. We're still done over the course of weeks
Speaker 1: and months, not literally overnight, as cities were shut down. Um,
Speaker 1: we're shutting down manufacturing, in the service sector, everything all
Speaker 1: at once, and there's no ability for many consumers to
Speaker 1: actually go out and spend, even if they do get
Speaker 1: these stop gap measures. That doesn't mean the stock gat
Speaker 1: measures aren't absolutely necessary. We can't stop recession from coming. Um,
Speaker 1: we do have to go through this virus induced recession,
Speaker 1: but we can keep people afloat in COVID tainted waters
Speaker 1: that allow us to have a better rebound once we
Speaker 1: can ramp up again and the outbreak has abated. And
Speaker 1: so Diane, let's talk about the FED because obviously, you know,
Speaker 1: we were to come up with almost a metaphor. You've
Speaker 1: got j Pali sort of running through the arsenals that
Speaker 1: we're opening every cabinet that he can, taking out every weapon,
Speaker 1: what's been the most effective? What else does he and
Speaker 1: the team need to do here or can they do well?
Speaker 1: You know, it's interesting the UM up ed piece written
Speaker 1: by former FED chairs Bernacki and Yellen, who actually, you know,
Speaker 1: have the value of hindsight and knowing exactly how bad
Speaker 1: a financial crisis can be, suggesting that the FED, you know,
Speaker 1: reopen UM, revisit Congress and restart the long term asset
Speaker 1: backed lending facility program that allows them to lend more
Speaker 1: aggressively and get credit to households and businesses, but also
Speaker 1: asking Congress for permission to UM actually buy in the
Speaker 1: corporate bond market, which is seizing up. They have the
Speaker 1: value of high indsight and knowing the actual you know,
Speaker 1: we don't want this health crisis. It is already metastasizing
Speaker 1: into a financial crisis. We have to stop that. And
Speaker 1: UM the FED is going to need a lot more latitude.
Speaker 1: And actually their wings were clipped in the wake of
Speaker 1: the cry this because Comngress didn't want them to have
Speaker 1: that latitude. Well now you want them to have a
Speaker 1: lot more latitude. So literally they can start using the
Speaker 1: three D printer to print up a new arsenal of
Speaker 1: tools to deal with an intervene and credit markets where
Speaker 1: they belong. To keep the oil of the market machinery
Speaker 1: sort of in there. Without it, the market itself well
Speaker 1: sees up, the entire economy will see up. Credit markets
Speaker 1: are the oil of the market machine. So keeping that
Speaker 1: machinery of the market as well as uh the economy running,
Speaker 1: Diane at this point as much as we can. At
Speaker 1: this point. During the financial crisis, we got an unbelievable
Speaker 1: amount of coordination. I felt along all different branches of
Speaker 1: the government, of central banks, of bankers, I really felt
Speaker 1: like the global community we saw come together. Are we
Speaker 1: seeing that necessary coordination that we need to combat this
Speaker 1: on a health level as well as a market level
Speaker 1: and economy level. Badly, I wish we had a lot
Speaker 1: more coordination. I mean, first of all, we have fewer tools,
Speaker 1: um than we did back then. You really had a
Speaker 1: sense that all or as are in the water globally
Speaker 1: to try to get us from turbulent waters to land.
Speaker 1: During the height of the financial crisis, the coordination has
Speaker 1: you know, we've seen you know, a lot of breaks
Speaker 1: in our coordination, and that is showing up in not
Speaker 1: only are dealing with the crisis, but how the crisis
Speaker 1: have sped from country to country. And I think you
Speaker 1: know the thing we always forget is we all have
Speaker 1: a common enemy here. We have to fight this global
Speaker 1: phenomena that there's a health crisis together, and the common
Speaker 1: enemy is the new coronavirus, the novel coronavirus. And doing
Speaker 1: that collectively testing, increasing the number of tests, being able
Speaker 1: to take lessons from countries like Korean Singapore that didn't
Speaker 1: have as bad of a disruption from the viral outbreak
Speaker 1: and the surge in cases as we're seeing elsewhere, including here.
Speaker 1: That's important because this is not the last time we're
Speaker 1: going to have a pandemic. We have to get the
Speaker 1: lessons from this and move forward. Diane only got about
Speaker 1: a minute left here. Uh, when will we see the
Speaker 1: full economic impact of this? I know that's a really
Speaker 1: difficult question, but when will we start to at least
Speaker 1: get the sort of parameters or some sense of our
Speaker 1: arms around it. Any modeling that you guys are doing,
Speaker 1: We're doing lots of modeling, and um, it's really hard
Speaker 1: because you get a decline in GDP that has a
Speaker 1: disproportionate decline in jobs. And you know, we're looking at
Speaker 1: something close to right now high of you know, close
Speaker 1: to seven on the unemployment rate um. And then as
Speaker 1: things come back, um and that's almost over seven million
Speaker 1: jobs just close to financial crisis. It could be more
Speaker 1: than that because of just the sheer magnitude of people
Speaker 1: that are literally overnight losing jobs. Um. That is what's
Speaker 1: really hard. That is not you know, the magnitude of
Speaker 1: losses in GP don't compare to that because, um it,
Speaker 1: you don't have the same kind of reaction function. The
Speaker 1: models you have to break them because you have this
Speaker 1: extraordinary disruption. But you can also have a very rapid
Speaker 1: ramp up after we get through the crisis and learn
Speaker 1: even with anti viral drugs and better testing and better average,
Speaker 1: better technology of how to mitigate the effects of the outbreak,
Speaker 1: we could be able to see a much bigger ramp
Speaker 1: up later on. Well, and I think you're pointing about,
Speaker 1: this isn't the last time we're gonna be dealing with
Speaker 1: these kinds of situations. So we got we we really
Speaker 1: have to figure out the playbook and really prevent it. Uh.
Speaker 1: I know how to be prepared for Diane Swamp, thank
Speaker 1: you so much. We know this is a busy time.
Speaker 1: Diane Swamp, chief economist at Grant Thornton, joining us on
Speaker 1: the phone from Chicago. You're listening to Bloomberg Business Week
Speaker 1: with Carol Messer and Jason Kelly on Bloomberg Radio. Let's
Speaker 1: turn now to the medical side of this crisis. Lisa
Speaker 1: Romano joins this, chief nursing officer for Cipher Health on
Speaker 1: the phone in New York City. And Lisa, great to
Speaker 1: have you with us. And I should say, like anyone
Speaker 1: in the medical world, we really owe a deep gratite
Speaker 1: debt of gratitude. Uh two, So thank you for all
Speaker 1: the work you're doing. Help us understand the screening side
Speaker 1: of this and the testing side, because that is at
Speaker 1: the core of making all of this better. Right, Yes, yes,
Speaker 1: thank you for having me. Uh. I can tell you that, uh,
Speaker 1: you know, COVID nineteen continues to progress rapidly, you know,
Speaker 1: seeing increasing number of cases, and we know that there
Speaker 1: are steps to take to protect yourself. But at the
Speaker 1: end of the day, UM, it is essential that we
Speaker 1: perform screening before anyone comes into the hospital h for
Speaker 1: any procedure or any visit. UM. We need to keep
Speaker 1: the healthcare providers safe UH so that we have people
Speaker 1: to take care of those that are sick. So the
Speaker 1: screening that UM we are looking at, following you know
Speaker 1: CDC guidelines and also now working UM with many hospitals
Speaker 1: in the US that are taking care of patients with
Speaker 1: the virus, is looking for stems like a dry cough,
Speaker 1: fever greater than a hundred point three UM, and shortness
Speaker 1: of breath. UM. The good news is that most patients
Speaker 1: UH do recover from infection with COVID nineteen, but we
Speaker 1: do see patients at a point that they start to
Speaker 1: experience symptoms of UM respiratory distress UH, you know, difficulty
Speaker 1: breathing that they do need care. So screening is essential UM.
Speaker 1: And then following that up with testing. And we have
Speaker 1: seeing that there is more availability of lab testing now UM,
Speaker 1: not quite as UM easy to get yet, but certainly
Speaker 1: better than it was last week at this time UM.
Speaker 1: And you know part of that laboratory testing is actually
Speaker 1: getting test results to do and you know that has
Speaker 1: been a challenge for clinical providers that are baby taking
Speaker 1: care of SURGE. So give us an idea though, because
Speaker 1: I do think there's so much still confusion among the
Speaker 1: communities across America about should I get tested? Should I
Speaker 1: not get tested? In terms of science, So what is
Speaker 1: this program? This reach you screening program? You guys, it
Speaker 1: sounds like are the screening program encourages hospitals and healthcare
Speaker 1: systems to actually reach out to the community. Yeah. So
Speaker 1: our our program uses telephone technology that allows the person
Speaker 1: who has been called to actually interact via the phone
Speaker 1: or by text message, UM using prompts, and we can
Speaker 1: do the symptom checker asking those questions. UM. And if
Speaker 1: they do answer a question in a way that it
Speaker 1: triggers a you know, positive symptoms screening, it is escalated
Speaker 1: to a live person. So it's essentially triaging patients. And
Speaker 1: at that point, UM, when the you know, clinical provider
Speaker 1: calls that patient back, they're able to say, UM, we're
Speaker 1: going to reschedule your procedure or you can seek care
Speaker 1: in this location. UM. Telemedicine has become very valuable during
Speaker 1: this crisis, where you know, you can through a you know,
Speaker 1: telephone screen, computer screen, actually see the doctor. So, UM,
Speaker 1: screening is essential. So how worried should we be about
Speaker 1: the numbers? Just spiking so dramatically here, Lisa, as more
Speaker 1: testing comes through. UM, I have been a nurse for
Speaker 1: thirty two years. I have never seen anything quite like this. UM,
Speaker 1: and I will say that I am concerned. UM. I
Speaker 1: think that part of the reason we're seeing this very
Speaker 1: dramatic rise, I mean literally from yesterday to today is shocking. Right.
Speaker 1: There's currently the CDC is saying there's seven thousand, thirty
Speaker 1: eight cases in the US. UM is that we have
Speaker 1: more testing available, right, So some of that is that
Speaker 1: we did have these patients before, we just didn't know
Speaker 1: that they had the COVID nineteen virus. That said. UM,
Speaker 1: what we've learned from looking at the progression of the
Speaker 1: virus in other countries is that the escalation continues and
Speaker 1: it continues to ramp up. And there's that bell shape
Speaker 1: curve that everyone sees on television, you know, trying to
Speaker 1: you know, UM, trying to flatten that out. UM. The
Speaker 1: best way we can do that is through this now
Speaker 1: trendy word of social distancing. Uh, you know, but that's
Speaker 1: difficult to do, so, you know, I mean, I think,
Speaker 1: I mean, everybody should do their best, and we should
Speaker 1: absolutely try to do that, but there are some people
Speaker 1: that do need to go to work that you know,
Speaker 1: do need to go out, do need to go to
Speaker 1: the hospital. So only the healthcare providers and that where
Speaker 1: you need to take measures, right, you know, protecting yourself. Well,
Speaker 1: we really appreciate your time, UM, Lisa, thank you so much.
Speaker 1: We know it's a hectic time for you as well.
Speaker 1: Lisa Romana, she's chief nursing officer at Cipher Health. UH
Speaker 1: here in New York City. You are listening to Bloomberg
Speaker 1: Business Week on this Wednesday, Carol Master along with Jason Kelly,
Speaker 1: both of us broadcasting from home, as are our next
Speaker 1: members of our team. Vernon Silver's Projects and Investigations reporter
Speaker 1: at Bloomberg News. He is on the phone from Rome.
Speaker 1: Joel Weber is editor Bloomberg Business Week, on the phone
Speaker 1: in Brooklyn, And this is all about for and in
Speaker 1: your story, Um, really an important story to read, and
Speaker 1: it talks about what happened in Italy specifically, and you
Speaker 1: talk about that there really was a huge denial that
Speaker 1: was going on and now we see kind of how
Speaker 1: this virus is playing out there. Talk to us a
Speaker 1: little bit about your story in the magazine this week. Yeah,
Speaker 1: I mean What was amazing is to realize as this
Speaker 1: unfolded was that we and Italy were going through something
Speaker 1: that people have gone through an epidemics through centuries, which
Speaker 1: is the first do you think that it's somebody else's
Speaker 1: problem and you know, just elbow it away, as as
Speaker 1: the head of the big hospital in Milan who deals
Speaker 1: with these things says, And then next it's next door
Speaker 1: and it's like, well, my neighbor has it, and then
Speaker 1: you have it in your house and it's like, well,
Speaker 1: it's not a big deal. And then finally you're you know,
Speaker 1: you're totally wrecked and you're all sick and everybody dies,
Speaker 1: and then oh yeah, that was a problem. Um, and
Speaker 1: this is exactly what had happened here. And talking to
Speaker 1: people and seeing, you know, even what was going on
Speaker 1: social media, it looked like people in the UK, or
Speaker 1: in France or certainly in the US were only two
Speaker 1: weeks behind us in that process. And so vernon what
Speaker 1: are the lessons? I mean, I feel like we are
Speaker 1: all in the United States looking to Italy with a
Speaker 1: combination of terror and anticipation and also desperately one to
Speaker 1: know what, if anything, can we do differently? What lessons
Speaker 1: are to be learned here. I mean, one thing to
Speaker 1: do is is to take seriously, you know, any anything
Speaker 1: that you that you hear, even if it's not required.
Speaker 1: And one big change that happened, and this is a
Speaker 1: slow process through through a week of people suggesting things
Speaker 1: and then requiring things. You know that the north of
Speaker 1: the country being locked down, the south of the country
Speaker 1: being locked down. At some point if things go in
Speaker 1: this direction, you're going to want to be pretty much
Speaker 1: completely locked down and um well supplied and following the rules.
Speaker 1: And one thing, one thing that was really clear is
Speaker 1: that when there were rules, and again you know, totalitarian
Speaker 1: tendencies aren't things that a lot of people like, but
Speaker 1: when there are rules, it makes a lot of people
Speaker 1: happier about knowing that everybody else is going to be
Speaker 1: following the rules and they don't have to be self
Speaker 1: conscious about following the rules about what's going to be healthier,
Speaker 1: uh for everyone. And the other thing that that came
Speaker 1: out is that it's a kind of a filter to
Speaker 1: see what sort of people surround you, whether they are
Speaker 1: people with empathy or people who are only thinking for themselves.
Speaker 1: It's there's a lot that's going to come out on
Speaker 1: the other end of this about discovering who you are,
Speaker 1: who you're you know, neighbors are, who who you're you know,
Speaker 1: who your friends are, and who the people in your
Speaker 1: community are. Get to that end, you know. I just
Speaker 1: think UM a lot of when we read this story,
Speaker 1: when Vernon filed it, I think we were It was
Speaker 1: like a punch to the gut in many ways, because
Speaker 1: it was like, this thing is coming, you know, and
Speaker 1: we were able to see, you know, see it in advance,
Speaker 1: and you start to, almost on a personal level, attempt
Speaker 1: to do some things that could help UM. But I
Speaker 1: think the thing that was profound to the story and
Speaker 1: why I just encourage everybody to read it on the
Speaker 1: terminal or in this week's forthcoming issue or online. The
Speaker 1: thing that really stuck out is that there's human side
Speaker 1: to a catastrophe like this that we can't overlook. And
Speaker 1: the fact, the takeaway that I think just struck us
Speaker 1: and literally provided a sense of awe was that. And Vernon,
Speaker 1: I would love to hear more from you about this.
Speaker 1: But at six pm every evening, romans are opening their
Speaker 1: windows and singing together out their windows. UM. And if
Speaker 1: that doesn't give you some chills, and maybe even a
Speaker 1: tear in your eye. I don't know what will yeah,
Speaker 1: I mean this is this is one of the things
Speaker 1: that we already were in a routine at six pm
Speaker 1: every day of hearing that literally the death Toll, where
Speaker 1: a man from Civil Protection would come on TV and say,
Speaker 1: this is how many people are in facted, this is
Speaker 1: how many people are dead. Um. And about a week
Speaker 1: after everyone started watching that, um, once everyone got shut in,
Speaker 1: they started this new tradition of everyone going to their
Speaker 1: windows at six pm and singing and and it depends
Speaker 1: on the neighborhood, and it depends on if there's you know,
Speaker 1: a ringleader who's going to strike up something or has
Speaker 1: a guitar and or maybe turns to speakers of the
Speaker 1: stereo out the window and and get things going. UM.
Speaker 1: But it is a battle that's constant of people to
Speaker 1: sort of fight the sadness and the melancholia that's that's
Speaker 1: always hanging in the air. But there are those moments
Speaker 1: that make you think, all right, we're gonna pull We're
Speaker 1: gonna pull through it. And having you know, this is
Speaker 1: like a natural disaster, and having covered things like like hurricanes,
Speaker 1: there's a certain sense of hope, Um, that you get
Speaker 1: where you think it's gonna be really really bad, and
Speaker 1: very often because people take the right decisions and do
Speaker 1: the right things along the way and stick together, a
Speaker 1: lot of time ends up being a lot worse than
Speaker 1: you thought it would be. And that and that's you know,
Speaker 1: that's how I you know, I see this coming out
Speaker 1: partly just through the character of Italians and how they've
Speaker 1: come together with this. What I found striking Vernon too,
Speaker 1: and just listening to various coverage and just folks how
Speaker 1: they're lining this to going back to World War Two,
Speaker 1: like the bombings of London where people had to kind
Speaker 1: of really hunker down, you know, lights were off, everybody
Speaker 1: was in their homes. Um. But it is you know,
Speaker 1: and even the President I think talked about, you know,
Speaker 1: bringing in the Department of Defense. This is a war,
Speaker 1: it's a health war, but nonetheless it requires something that
Speaker 1: I think for many of us have never seen before. Yeah,
Speaker 1: and I think in the war comparison. There was a
Speaker 1: moment where the film The Garden of the Finsy Contini
Speaker 1: uh came to mind, you know, as I was watching
Speaker 1: my kid playing tennis and part of um, you know,
Speaker 1: while getting the death toll numbers coming in a part
Speaker 1: of what that film and the novel have, you know,
Speaker 1: as a central idea, is this thing where this family
Speaker 1: that has you know, World War two encroaching on their
Speaker 1: lives and they will soon perish, continues playing tennis and
Speaker 1: continues acting as if everything is is normal, when in
Speaker 1: fact they don't realize yet that it's that it's war.
Speaker 1: And it wasn't until you know, recent days that in
Speaker 1: Rome certainly the people realize, like you know what, it's
Speaker 1: not cocktailer or anymore, it's it's it's coronavirus time. Yeah, amazing, amazing. Well,
Speaker 1: it's a terrific piece of reporting. We always count on you,
Speaker 1: Vernon for these types of really really important stories, and
Speaker 1: you give it to a straight as always. Vernon Silver,
Speaker 1: one of our top reporters. Joining us from Rome. Joe Weber,
Speaker 1: the editor of Bloomberg Business Week, joining us on the
Speaker 1: phone from Brooklyn. You're listening to Bloomberg Business Week with
Speaker 1: Carol Masser and Jason Kelly on Bloomberg Radio. Let's head
Speaker 1: down to Washington now. Josh wynd Grove is their White
Speaker 1: House correspondent for Bloomberg. Joining us from the White House
Speaker 1: a busy day, to say the least. This administration really
Speaker 1: on the front foot at this point, trying to stem
Speaker 1: at least the market reaction and provide some reassurance to
Speaker 1: consumers and businesses out there. Josh tell us the latest
Speaker 1: obviously the big thing that a lot of people are
Speaker 1: going onto our check showing up in people's mailboxes. How
Speaker 1: realistic is this? Where do we well? I think it
Speaker 1: looks like it's going to slide into the third bill.
Speaker 1: The Senate looks poised to vote on the bill that
Speaker 1: already passed the House while they figure out what to
Speaker 1: put into the next one. That means, in other words,
Speaker 1: the big sort of big money items to stimulus stuff,
Speaker 1: including those checks. Look at they look like they're going
Speaker 1: to roll into the next piece of legislation and be
Speaker 1: a few days or more away. What we know the
Speaker 1: administration is asked for is two rounds of checks, two
Speaker 1: fifty billion per round, so five billion total sent directly
Speaker 1: to people. The exact number sort of dollar value, is
Speaker 1: both up in the air and looks like it could
Speaker 1: depend on your situation. For instance, are you lower income,
Speaker 1: you might get more. Do you have kids? You might
Speaker 1: get more? So it's still up in the air. There
Speaker 1: does appear to be bipartisan support on it. Uh. The
Speaker 1: administration is also asking for about three hundred billion for
Speaker 1: small businesses to sort of bridge themselves. I guess one
Speaker 1: way or another through this if they can. Any one
Speaker 1: of us walk down the street of a major city
Speaker 1: right now knows what's coming down the pipe right now
Speaker 1: for restaurants, bars, shops, all these things, they're facing a
Speaker 1: bit of a long spring without revenue, and well for
Speaker 1: bigger corporations, including fifty billion for airlines to try to
Speaker 1: get them through this. So really a lot of moving
Speaker 1: parts on this. President is also meeting shortly with nurses
Speaker 1: on the response and is really ratcheted up the wartime
Speaker 1: language today. That's been a bit of a tone change
Speaker 1: on Trump thing we're at war with this virus. I
Speaker 1: have to ask you, yeah, we are totally at war.
Speaker 1: I feel like that is the new kind of how
Speaker 1: do you get your head around this? The thing I
Speaker 1: want to ask you, josh Um. I think there's an
Speaker 1: urgency to get programs done to help individuals, to help
Speaker 1: certainly the small business community, whether it's restaurants and others. Um.
Speaker 1: But when we're dealing with big business companies, big publicly
Speaker 1: held companies. There are lots of questions, um. You know,
Speaker 1: I'm sure you've heard the stories about, you know, why
Speaker 1: do we bail out the airlines that when they got
Speaker 1: this big tax break, they didn't use it to maybe
Speaker 1: all the safety net for themselves, but instead they did
Speaker 1: buy back. So I do wonder what's the balance of
Speaker 1: an urgency to get things done quickly because there are
Speaker 1: folks in small businesses that really need some help right
Speaker 1: now without doing maybe the wrong thing in terms of
Speaker 1: rescuing you know, publicly health companies. Yeah, I think absolutely
Speaker 1: we're going to hear push back on that, um. And
Speaker 1: I think that's why they're trying to pair it. In
Speaker 1: other words, it's not just a bail out of the
Speaker 1: the airlines, um, but also you know, paired with those
Speaker 1: checks of people. But you know we're all we are
Speaker 1: hearing Republican opposition UM to that already. And uh, forgive me,
Speaker 1: I'm just asking there's some new fact that's the world
Speaker 1: Ye a Canadian airline. My old jobs as suspended service
Speaker 1: here as we've been on there. But moral hazard, right,
Speaker 1: you know, you bail at this industry and then we
Speaker 1: have another crisis, and then so what stops the government
Speaker 1: from bailing them out? Like where do you draw the line? Absolutely, absolutely,
Speaker 1: there's calls, for instance, that if you did stalk buy backs,
Speaker 1: or if you get a bail out, you should not
Speaker 1: be able to do further stalk buy backs. And right
Speaker 1: now Trump really hasn't commented on that, but I think
Speaker 1: absolutely could be sensitive to this. One of the weird
Speaker 1: things in this is, you know, he's talking about five
Speaker 1: billion to people. That is, that is the president seeking
Speaker 1: election will sending checks to people, and you might, for instance,
Speaker 1: think that those checks are absolutely necessary, but also be
Speaker 1: uncomfortable with the political dynamic of this. He also doesn't
Speaker 1: want to, you know, go into an election years looking
Speaker 1: like he just bailed out a bunch of his buddies,
Speaker 1: and you know, in in companies that acted irresponsibly in
Speaker 1: the as of some people by doing these stalk buy backs,
Speaker 1: and then the cupboard is bare when things took a turn.
Speaker 1: I mean, anyone who's watching what in particular these airline
Speaker 1: stocks have done. Boy, you know so, I think I
Speaker 1: think it's an open question right now, absolutely, and we
Speaker 1: just don't have it. We don't have clarity alright. Well,
Speaker 1: scout has arrived home in Carol Master's house. But I
Speaker 1: don't questions a bail out. I'm just gonna have some questions.
Speaker 1: Uh So, Josh, I gotta ask you because you gave
Speaker 1: me an opening. You know, you and I got to
Speaker 1: know each other when you were you know, covering Ottawa
Speaker 1: not Washington, And I do wonder you know the moves
Speaker 1: today on both sides of the Canadian US border, Uh,
Speaker 1: pretty striking. Help us just in in a minute or
Speaker 1: so sort of synthesize everything that's happening between the two countries,
Speaker 1: between the two leaders. Yeah, I think Trudeau is able
Speaker 1: to do things a little more unilaterally than Trump is
Speaker 1: with the way the government's work there, even though he's
Speaker 1: got a minority. And what we saw is he rolled
Speaker 1: out about totally eight about three percent of GDP. What
Speaker 1: Trump is asking for something a little a little more
Speaker 1: than that in scale, but whether he get it gets
Speaker 1: it remains I'm clear. Trudeau also has existing programs that
Speaker 1: he can fire money into the economy more quickly than
Speaker 1: Trump has. So I think Trudeau has more levers and
Speaker 1: we're seeing him use them more quickly, although later than
Speaker 1: Trump did. But Trump now is in other words, they're
Speaker 1: both kind of waking up to it. But Trudeau so
Speaker 1: far moving more quickly than Trump to contain this. And
Speaker 1: we saw in particular the closing or restricting of the
Speaker 1: border to leisure travel today. It's an open question as
Speaker 1: to which leader wanted that more. All right, Josh wynd Grove,
Speaker 1: thank you so much. Great insights from the White House,
Speaker 1: and uh, tapping your home country as well. Always appreciate
Speaker 1: your insights. You are listening to Bloomberg Business Week. Alright,
Speaker 1: let's get a sense of what is happening in the
Speaker 1: markets today, another huge swing. Yanna Barton, co director of
Speaker 1: Growth Equities at Eaton Vance. She joins us on the
Speaker 1: phone from Boston. Uh, Janna, what do you make of
Speaker 1: a day like today? Well, it's not a good day,
Speaker 1: lots of red. But I think the most important point
Speaker 1: is the long term investors. This is certainly the time
Speaker 1: where you should be sifting through the rubble. The headlines
Speaker 1: will get progressively worse. Um, you're going to hear of
Speaker 1: continued shutdown of retail outlets, spikes and incidents like we
Speaker 1: talked about withdrawal of INKS guidance in a couple of weeks.
Speaker 1: But headlines don't make good long term investment decisions. So well,
Speaker 1: we can't have in a direct precedent to us distancing
Speaker 1: social distancing. We do have a record of what it
Speaker 1: looks like on the other side, and consistently long term
Speaker 1: investors have made money in the market. If you're holding
Speaker 1: period is greater than days or even weeks. So for
Speaker 1: long term investors, they're great opportunities and dislocations being presented.
Speaker 1: I gotta say, yeah, I'm not a market timer. I
Speaker 1: don't believe in it, but I've got to say when
Speaker 1: I'm looking at the S and P five hundred down
Speaker 1: almost thirty percent this year, that I think, you know,
Speaker 1: there are folks that they're saying, Man, I could have
Speaker 1: just you know, put everything in cash earlier in this
Speaker 1: year when we hit a record, We had a decent
Speaker 1: gain already for the year and been safe. Like what
Speaker 1: is the balance between Because I've Jason, like you know both, Jason,
Speaker 1: I've done this for a long time, and I understand
Speaker 1: the idea of long term investing. You can't time the market,
Speaker 1: can't get in and out. But there is something to
Speaker 1: be said. Certainly the big investment as will tell you
Speaker 1: something to capital preservation also before you get smacked in
Speaker 1: a market downturn like this. Absolutely, and again, you know
Speaker 1: you bring up a good point. Listen, I'm a large
Speaker 1: cap growth manager. My job is to be fully invested
Speaker 1: in the market. So for folks that are sitting there
Speaker 1: with you know, excessive holdings that are on the riskier
Speaker 1: side of the equation, I totally hear what you're saying,
Speaker 1: and that's the importance of diversification at all times. But
Speaker 1: I will also say, if you're looking on your equity
Speaker 1: side of the ledger and you're thinking to yourself, where
Speaker 1: is the value in the market, you know, versus other
Speaker 1: safety assets like fixed income. You look at current SMP
Speaker 1: levels of twenty undred here, and you've got an earnings
Speaker 1: yield that is approaching seven percent, approaching an excessive five
Speaker 1: uh that's significantly greater than ten year. Your treasury is
Speaker 1: here at one percent. So I hear what you're saying,
Speaker 1: and I'm not saying all in, which is why you
Speaker 1: have to be active. But I think this is when
Speaker 1: you're deciphering, Hey, within consumer discretionary, I've got stocks that
Speaker 1: are probably down more than forty five off their fifty
Speaker 1: two week highs or higher. Maybe there's an opportunity there,
Speaker 1: and that's all I'm saying. Alright, So, Yana, you know
Speaker 1: one question that I think a lot of investors have,
Speaker 1: especially people who are paying attention to the political or
Speaker 1: the or the governmental and policy headlines, I should say,
Speaker 1: is this notion of a bailout. And you know, some
Speaker 1: industries may get bailed out in all of this, some
Speaker 1: may not. That's going to be a topic of pretty
Speaker 1: strenuous debate. It feels like they're in Washington. How do
Speaker 1: you factor that in when you're starting to think about
Speaker 1: sectors and names. I think most of us would agree
Speaker 1: that the word bailout has sort of a very negative
Speaker 1: association and now lexicon only because of the last time
Speaker 1: we went through this, there were only a certain number
Speaker 1: of industries and companies that we are bailed out, right.
Speaker 1: I think what you're seeing here, the fiscal response that
Speaker 1: is on the common coming in every minute, is really
Speaker 1: trying to balance that capital side of the equation with
Speaker 1: as the main street right, individual um individuals that are
Speaker 1: going to be hard hit if they lose their jobs
Speaker 1: or can go out and do everyday things right. So
Speaker 1: it's striking that balance and it will be very difficult.
Speaker 1: I think companies UM and profitabilities of companies is going
Speaker 1: to be extremely important. Cash on hand, access to liquidity
Speaker 1: UM and credit markets that will continue to be important,
Speaker 1: both on the corporate side as well on as well
Speaker 1: as on the individual UM investment side. So UM it's
Speaker 1: striking that balance. But I will have to say, and
Speaker 1: I think you will agree, that the policy response, both
Speaker 1: on the monitory and the fiscal side of the equation
Speaker 1: has been extraordinary and I think given the market fluidity
Speaker 1: that we're and and the unfor seen events we're dealing with,
Speaker 1: UM has been the right call. So I think we're
Speaker 1: going to see much more UM and that certainly is
Speaker 1: the right side of the optimistic ledger that we're watching. Well,
Speaker 1: but it's hard to be optimistic, you know. Just recapping
Speaker 1: where we are in terms of the markets right now
Speaker 1: for everyone in our listeners, S and P five hundred
Speaker 1: down a hundred nine points. That's a seven point nine
Speaker 1: percent decline to the downside. Dow Jones Industrial Average down
Speaker 1: one thousand, eight hundred seventy four points, down eight point
Speaker 1: nine percent. Nineteen thousand, three sixty five is where we
Speaker 1: are on the Dow Jones Industrial average NASDAC down five
Speaker 1: twenty points. That works out to a decline of seven percent.
Speaker 1: So I hear what you're saying, and I know you
Speaker 1: have to invest, you know, for clients. So having said that,
Speaker 1: I do hear uh I feel like a little bit
Speaker 1: of optimism in your voice. Yanna, Does that mean you
Speaker 1: are buying equity specifically right now? And if you what
Speaker 1: what are you buying? What are you buying? So UM,
Speaker 1: As you mentioned, capital preservation is at probably most critical
Speaker 1: component of what we're doing. We manage a lot of
Speaker 1: tax managed accounts and that's sort of in our blood right.
Speaker 1: You're constantly harvesting losses because it offsets gains and the portfolios,
Speaker 1: and what we're doing is we're upgrading the quality of
Speaker 1: the portfolio as well. So we're doing a lot of
Speaker 1: different pair trades, you know, particularly within the industrial space,
Speaker 1: where the sicklicality and the and the impact on those
Speaker 1: companies will be the same because of the macro um
Speaker 1: driven factors there. So there are a lot of pair
Speaker 1: traits where we're harvesting losses in something and going into
Speaker 1: something else. I mentioned the consumer space, we're upgrading the
Speaker 1: quality UM. I mean you're looking at large gap quality
Speaker 1: businesses with solid balance sheets, scale, UM, all of the
Speaker 1: advantages that we're talking about within the internet space, UM,
Speaker 1: retail space, restaurants space, you name it. We're in there
Speaker 1: because we do believe that will make it on the
Speaker 1: other side and they're going to be even stronger than today.
Speaker 1: And I think UM in the healthcare space that has
Speaker 1: finally been defensive in this downturn, there's also a lot
Speaker 1: of UM, a lot of opportunities that are brewing on
Speaker 1: the biotech space. Again, as a as an investor, I
Speaker 1: think by nature, I recognize that there is a sense
Speaker 1: of optimists that all of us must have because if
Speaker 1: we're investing in these equities today, we have to believe
Speaker 1: that tomorrow is better than today, and maybe that tomorrow
Speaker 1: is you know, a few days out from like T
Speaker 1: plus one. That being said, the secular growth stories that
Speaker 1: I've shared with you guys in the past, they're not
Speaker 1: going to go away. I mean now we're going to
Speaker 1: be shopping luss or more online and look at look
Speaker 1: at the implication of our daily lives on cybersecurity, remote networking,
Speaker 1: all of those things. That's that's only going to intensify
Speaker 1: and the companies that are participating in these secular growth
Speaker 1: trends are going to thrive. They're going to thrive, and
Speaker 1: those are the opportunities we're trying to step up to
Speaker 1: because a lot of these names with higher growth profiles
Speaker 1: of selling it at a multiple you haven't seen in years.
Speaker 1: So by what right now? I can go into specifics
Speaker 1: for stocks, but I mentioned healthcare, So a lot of
Speaker 1: men device companies while they are being hit by elective
Speaker 1: procedures that are um, you know, being postponed. The flip
Speaker 1: side of it is think about you know, next gen
Speaker 1: sequencing companies. By the way, the coronavirus was sequenced in
Speaker 1: a matter of weeks, not months as in previous stars,
Speaker 1: so companies that are providing that intel. When you think
Speaker 1: about robotic surgery again, less than five percent of all
Speaker 1: surgeries today are performed by these robotic instruments, and that's
Speaker 1: only going to increase because of the safety profile UM.
Speaker 1: And then many pharmaceutical companies that are going to be
Speaker 1: the answers to perhaps the biotech warfare that might be
Speaker 1: you know, the next sort of warfare we're fighting. We're
Speaker 1: in one today, right, So examples, Yeah, I'm interested to
Speaker 1: hear you say that, Yana, because you know this whole
Speaker 1: notion of and we've been talking about it a lot
Speaker 1: over the past hour or so, this notion that the
Speaker 1: president is now talking about wartime footing in many ways.
Speaker 1: I mean, we're closing border as we obviously are not
Speaker 1: in a militaristic footing at this moment, but you do
Speaker 1: have to wonder about I would think defense and an
Speaker 1: aerospace at this point right absolutely, And that's one area
Speaker 1: within the industrial space. Interestingly enough, there has been the
Speaker 1: hardest I mean obviously, UM, you know, if you look
Speaker 1: at a cup weighted profile of those companies, many of
Speaker 1: them are off over. So I mean, I think if
Speaker 1: you think about aerospace and defense, you know, if I
Speaker 1: were to ask any of your listeners, are you're ever
Speaker 1: going to fly again? Most of them will say yes,
Speaker 1: maybe not tomorrow or in two weeks, but I am
Speaker 1: pretty sure we're going to get on the plane again.
Speaker 1: And um, in terms of defense, I mean, it's I
Speaker 1: think just the definition of what it means to be UM.
Speaker 1: You know, next gen defense company is going to change
Speaker 1: perhaps outside of just the industrial space. So that's UM,
Speaker 1: that's one area that we're particularly keen on and I
Speaker 1: already touched on the consumer, but it's broad based and listen,
Speaker 1: it doesn't feel good. I mean the stats that you
Speaker 1: meant and I'm looking at them unfortunately tick bite tick.
Speaker 1: But you know, the greatest investment opportunities that presented when
Speaker 1: it feels the worst. So it's time to get uncomfortable
Speaker 1: with feeling the way we do and um again gradually um,
Speaker 1: you know, nibble um at these at these levels. Yeah. No,
Speaker 1: good to hear that um optimism at least in terms
Speaker 1: of the outlook. Janna, Thank you so much. Janna Barton,
Speaker 1: she's co director of Growth Equities at EAT Advance. On
Speaker 1: the phone from Boston. Thanks for listening to Bloomberg Business Week.
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