WEBVTT - Bankruptcy Is The Solution to Student Loan Crisis: Joe Nocera 0:00:01.400 --> 0:00:04.120 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, along 0:00:04.120 --> 0:00:06.200 with my co host of Bonnie Quinn. Every business day 0:00:06.240 --> 0:00:09.239 we bring you interviews from CEOs, A, market pros, and 0:00:09.400 --> 0:00:12.800 Bloomberg experts, along with essential market moving news. Find the 0:00:12.800 --> 0:00:16.280 Bloomberg Markets Podcast on Apple podcast or wherever you listen 0:00:16.320 --> 0:00:20.560 to podcasts, and on Bloomberg dot com. It is time 0:00:20.600 --> 0:00:23.000 for a Bloomberg Opinion, and today we're going to look 0:00:23.000 --> 0:00:25.480 at student debt. I think it's fair today that nobody 0:00:25.600 --> 0:00:29.400 really wants to ever declare bankruptcy, but some people do 0:00:29.560 --> 0:00:31.680 have to declare bankruptcy. The one thing, though, that you 0:00:31.680 --> 0:00:34.520 won't be able to discharge in bankruptcy is your student loans. 0:00:34.560 --> 0:00:37.400 You'll carry them around for the rest of your life 0:00:37.440 --> 0:00:40.400 if you're not able to pay them off. Well, our 0:00:40.400 --> 0:00:42.880 next guest says bankruptcy is a solution to the student 0:00:42.920 --> 0:00:46.319 loan crisis. So to get what he means, let's bring 0:00:46.320 --> 0:00:50.519 in Jon Oh Sarah Bloomberg Opinion columnist Joe. Obviously, you 0:00:50.560 --> 0:00:54.160 know this idea that you can never discharge your student 0:00:54.280 --> 0:00:57.640 loans even in bankruptcy is something to be reckoned with. 0:00:57.760 --> 0:01:00.760 You can spend a fortune getting you know, in education, 0:01:00.920 --> 0:01:04.800 and then life can intervene. You can end up going bankrupt, 0:01:04.840 --> 0:01:09.040 which you'll still have those student loans, you know, following 0:01:09.080 --> 0:01:11.720 you around for the rest of your life. How how 0:01:11.760 --> 0:01:15.319 do we change that? How can that be changed? Good morning? So, 0:01:15.440 --> 0:01:17.360 first of all, it's beyond the rest of your life, 0:01:17.400 --> 0:01:20.399 because once you die, the federal government will come after 0:01:20.440 --> 0:01:23.640 your state to get to get paid off of the 0:01:23.720 --> 0:01:27.080 student land. Um. You know, this has been something that's 0:01:27.120 --> 0:01:30.000 been going on for about forty years, starting in the 0:01:30.040 --> 0:01:33.680 late sixties, and they made it, the Congress made it 0:01:33.720 --> 0:01:37.759 more and more difficult, near impossible to discharge the student loans, 0:01:38.120 --> 0:01:40.720 not only those that are granted by the federal government, 0:01:40.720 --> 0:01:44.039 which is about but also those that are granted in 0:01:44.080 --> 0:01:48.360 the private market though by banks and institutions at grant 0:01:48.400 --> 0:01:53.280 student loans. Um. Uh. So it is a ownerous burden. 0:01:53.680 --> 0:01:57.400 Uh The average student loan debt is about thirty dollars, 0:01:57.440 --> 0:02:01.120 but there are plenty of people who have debts of 0:02:01.160 --> 0:02:03.880 a hundred thousand or a hundred and fifty thou dollars. 0:02:03.960 --> 0:02:06.720 And you know, in in the economy that we have 0:02:06.960 --> 0:02:10.560 had for the last you know, fifteen or so years, 0:02:10.600 --> 0:02:14.760 maybe more, it's been so hard for for those people 0:02:14.800 --> 0:02:17.320 to get the kind of jobs that allow them to 0:02:17.400 --> 0:02:20.680 make monthly payments and and and stay straight with their 0:02:20.720 --> 0:02:23.680 student loans. So, Joe, I think as it relates to 0:02:23.720 --> 0:02:26.160 the student loan issue, that what we've heard the most 0:02:26.240 --> 0:02:30.080 out of politicians is actually forgiving the debt. How would 0:02:30.080 --> 0:02:32.480 you compare and contrast I guess the pros and cons 0:02:32.480 --> 0:02:36.639 of forgiving the debt versus maybe allowing um a bor 0:02:36.800 --> 0:02:42.359 or to go into bankruptcy? Right? Um, well, uh, I say, 0:02:42.480 --> 0:02:45.880 first of all, from a political point of view, forgiving 0:02:45.919 --> 0:02:49.040 debt is going to be highly contentious. It's just gonna 0:02:49.080 --> 0:02:52.200 be very controversial. There are gonna be lots and lots 0:02:52.200 --> 0:02:54.640 of people who say, you know, I had to pay 0:02:54.680 --> 0:02:57.959 my loan, why does this freeloader get you know, get 0:02:58.080 --> 0:03:03.320 his loan up and partially um uh, you know, wipe 0:03:03.360 --> 0:03:05.840 wiped off the board. So so that's point one, it's 0:03:05.919 --> 0:03:09.040 it's a political it's a political problem. Point number two 0:03:09.240 --> 0:03:12.080 is that you know, the amounts that are being talked 0:03:12.080 --> 0:03:15.360 about are being between loan forgiveness between ten thousand and 0:03:15.400 --> 0:03:18.000 fifty dollars. So for some people that will wipe out 0:03:18.040 --> 0:03:20.840 their loan. For many others, it won't, and they'll still 0:03:20.880 --> 0:03:23.120 have a lot of money to pay back, just not 0:03:23.160 --> 0:03:26.400 as much as they had before. The thing about bankruptcy 0:03:26.680 --> 0:03:30.120 is number one, it would wipe out the entire loan. 0:03:31.000 --> 0:03:34.800 But number two, it comes at a price. Nobody, as 0:03:34.960 --> 0:03:37.760 as as you said at the beginning, nobody wants to 0:03:37.800 --> 0:03:40.720 file for bankruptcy. You know, it hurts your credit and 0:03:40.840 --> 0:03:43.240 makes it difficult to buy a house, and maybe it 0:03:43.360 --> 0:03:46.120 sometimes makes it difficult to buy a car for five, six, 0:03:46.160 --> 0:03:49.480 seven years, and it takes a while to recover from. 0:03:49.520 --> 0:03:52.120 So when you file for bankruptcy, you pay a price. 0:03:52.480 --> 0:03:57.800 So that would help um subdue some of the objections 0:03:57.880 --> 0:04:01.640 from those who think it's just a program for freeloaders. 0:04:02.800 --> 0:04:05.760 Is there I mean, is there any appetite for it 0:04:05.800 --> 0:04:08.080 to be done across the board? So I've definitely seen 0:04:08.600 --> 0:04:10.960 people talk about maybe doing it for teachers if they 0:04:10.960 --> 0:04:12.760 put in a certain amount of time of public schools, 0:04:12.880 --> 0:04:15.320 or doing it for people who go work with the 0:04:15.320 --> 0:04:18.160 Peace Corps for a while. But hows anybody has just 0:04:18.520 --> 0:04:22.280 suggested has it got anywhere in Congress? This idea that 0:04:22.839 --> 0:04:24.880 you know, as a certain amount of student loans we've 0:04:24.880 --> 0:04:31.119 paid off for every single student no matter what they study. Um, 0:04:31.160 --> 0:04:33.400 it depends on what you talked to. I mean, in 0:04:33.440 --> 0:04:36.880 the progressive wing of the Democratic Party, there is an 0:04:37.040 --> 0:04:41.760 enormous amount of desire to get this done. In the 0:04:42.320 --> 0:04:45.240 in the in the in the furthest right wing of 0:04:44.800 --> 0:04:49.400 the Republican Party, there's no appetite for this whatsoever. And 0:04:49.440 --> 0:04:52.560 that's one of the reasons that I've been suggesting bankruptcy 0:04:52.920 --> 0:04:56.400 as as a possible middle ground. Um. But let me 0:04:56.440 --> 0:04:58.520 say something else about what you just said about teachers 0:04:58.560 --> 0:05:02.159 and so on. Um, there's a second aspect to this. 0:05:02.680 --> 0:05:06.080 If you file, if you bring back bankruptcy, it means 0:05:06.120 --> 0:05:10.520 that the lenders, the banks, the government are all going 0:05:10.560 --> 0:05:13.280 to have to be more careful about making loans. That's 0:05:13.279 --> 0:05:15.560 one of the big problems. They give the money to anybody, 0:05:15.880 --> 0:05:17.800 they don't have to care whether the person can pay 0:05:17.800 --> 0:05:19.760 it back or not, because they're gonna get reimbursed by 0:05:19.800 --> 0:05:24.960 the federal government. That's a huge problem. That's called moral hazard. Um. 0:05:25.000 --> 0:05:27.960 And so you know, if they're more careful with their lending, 0:05:28.080 --> 0:05:30.599 that means that you know, working class and poor kids 0:05:30.600 --> 0:05:33.239 are going to have a much harder time getting loans. 0:05:33.279 --> 0:05:36.080 So that's where I proposed the second part of this, 0:05:36.640 --> 0:05:39.799 which is to make it much easier to get into 0:05:39.839 --> 0:05:44.520 these income based repayment plans where you pay a percentage 0:05:44.520 --> 0:05:48.880 of your income for a certain number of years um 0:05:48.920 --> 0:05:51.520 as your way of paying of paying back your loan. 0:05:51.680 --> 0:05:54.320 And if you have certain you could you could make 0:05:54.360 --> 0:05:55.680 it so that, you know, if you are in the 0:05:55.720 --> 0:05:58.080 Peace Corps, if you are a teacher, or if you 0:05:58.160 --> 0:06:00.680 do work on an Indian reservation, or you know, any 0:06:00.680 --> 0:06:04.840 of those kind of things, that that the amount would 0:06:04.839 --> 0:06:07.920 be reduced just because you're doing you know, what amounts 0:06:07.960 --> 0:06:13.839 to public service. So I think between bankruptcy and income repayment, uh, 0:06:14.000 --> 0:06:17.400 you pretty much have the problem solved. Joe, what do 0:06:17.440 --> 0:06:22.240 we know about President elect Biden and his thoughts about 0:06:22.279 --> 0:06:24.360 this issue, because presumably this might be one of the 0:06:24.360 --> 0:06:26.400 things he might want to tackle in this first one days. 0:06:27.279 --> 0:06:29.400 I doubt he'll tackle it in this first one days 0:06:29.440 --> 0:06:32.000 because it's con contentious, but I do think he does 0:06:32.040 --> 0:06:34.880 want to tackle it. He needs to give something to 0:06:34.960 --> 0:06:39.320 the progressives. Now what I've heard is that, um, what 0:06:39.440 --> 0:06:43.520 he's looking at. You know, Elizabeth Warren wants fifty uh 0:06:43.760 --> 0:06:46.400 wiped away. He and he and she and she wants 0:06:46.440 --> 0:06:49.359 him to do it through executive order. He would like 0:06:49.760 --> 0:06:52.919 to reduce it simply by ten thousand dollars, and he 0:06:52.960 --> 0:06:56.160 wants to do it through legislation, so it wouldn't look like, 0:06:56.560 --> 0:06:58.280 you know, by sea I, it wouldn't look like he's 0:06:58.279 --> 0:07:02.359 trying to ram something down those throats. Um, whether he 0:07:02.360 --> 0:07:04.279 could get a past legislation, well, a lot of that 0:07:04.320 --> 0:07:07.719 depends on what happens in Georgia, you know, in early January. 0:07:08.240 --> 0:07:13.000 Um uh, And so we'll just shop to see about that. Yeah. 0:07:13.040 --> 0:07:16.160 And I mean, you know, it doesn't matter what kind 0:07:16.160 --> 0:07:18.080 of college you go to, you end up with these 0:07:18.240 --> 0:07:21.520 crushing debts, and then you know, interest rates that are 0:07:21.640 --> 0:07:24.320 insane for for a lot of young people out there 0:07:24.320 --> 0:07:27.000 that are just trying to give themselves an education. I 0:07:27.080 --> 0:07:29.160 know that Joe Biden has definitely talked about pel grounds 0:07:29.160 --> 0:07:31.440 for everybody, but I mean, that's what the tip of 0:07:31.480 --> 0:07:34.960 the iceberg, right Jo, Yes, it is. And I would 0:07:34.960 --> 0:07:38.240 say I'm also about the crushing debt. Don't forget you know, 0:07:38.640 --> 0:07:41.640 kids who drop out of school because they can't keep paying, 0:07:41.960 --> 0:07:44.560 you know that they still have that debt. Kids who 0:07:44.560 --> 0:07:46.840 go to for profit colleges that are turned out to 0:07:46.880 --> 0:07:50.400 be scammed, they still have that debt. So, I mean, 0:07:50.640 --> 0:07:52.760 you know, there's a percentage of people for whom the 0:07:52.800 --> 0:07:54.800 debt is great. They get through college, you know, they 0:07:54.840 --> 0:07:57.000 have a good life, they have you know, they did 0:07:57.000 --> 0:07:59.040 a good job. But there's a whole lot of other people, 0:07:59.240 --> 0:08:01.600 well that doesn't need can happen, and they're still stuck 0:08:01.600 --> 0:08:04.280 with the dad. Yeah, very big issue for a growing 0:08:04.360 --> 0:08:06.600 number of people. Jonah Sarah, thanks so much for joining us. 0:08:06.640 --> 0:08:09.640 Jonah Sarah's a columnist for Bloomberg Opinion. You can read 0:08:09.720 --> 0:08:12.160 his work and all the work of Bloomberg Opinion at 0:08:12.160 --> 0:08:15.280 Bloomberg dot com, slash Opinion or on the terminal O 0:08:15.480 --> 0:08:21.640 P I N go. Well, we got another dose of 0:08:21.880 --> 0:08:26.360 sobering jobless claims this morning, arguably once again raising the 0:08:26.720 --> 0:08:29.960 incentive for the Fed remaining accommodative and for Congress to 0:08:30.000 --> 0:08:33.080 move forward on a meaningful piece of fiscal stimulus. Let's 0:08:33.080 --> 0:08:37.160 get the latest economic outlook with Lindsay Pegsa, chief economist 0:08:37.440 --> 0:08:40.800 at Steeple Financial, joining us on the phone from Chicago. Lindsay, 0:08:40.840 --> 0:08:43.520 thanks so much for joining us here. You know, if 0:08:43.520 --> 0:08:45.880 we step back a little bit, we can certainly see 0:08:46.120 --> 0:08:49.480 signs that the economy is through the worst of the 0:08:49.600 --> 0:08:53.679 pandemic UH disruption, but there's still a lot of work 0:08:54.120 --> 0:08:57.040 to do. Given what we heard from FED Chairman Pal 0:08:57.160 --> 0:08:58.760 this week, given what we see on the on the 0:08:58.840 --> 0:09:01.520 job was front of other eco economic data points, where 0:09:01.520 --> 0:09:05.200 do you think we are in the recovery? Well, I said, 0:09:05.240 --> 0:09:08.520 I think we've made it through the first the biggest barrier, 0:09:08.559 --> 0:09:10.800 the biggest top as we saw the worst of the 0:09:10.840 --> 0:09:13.880 pandemic in the second quarter. But that's not to say 0:09:13.880 --> 0:09:16.040 that we're not going to have more difficult times ahead, 0:09:16.120 --> 0:09:19.000 because even if we do see the second round resurgeon 0:09:19.640 --> 0:09:22.880 UH snuffed out at a relatively faster pace than the 0:09:22.920 --> 0:09:27.040 first round. Remember, businesses and individuals are already beginning from 0:09:27.040 --> 0:09:31.000 an extremely fragile position after months of hardship, so it's 0:09:31.000 --> 0:09:34.000 going to be increasingly difficult for them to continue to 0:09:34.200 --> 0:09:38.880 weather a storm without some sort of additional artificial support 0:09:39.120 --> 0:09:42.160 from officials in Washington. So there really has to be 0:09:42.320 --> 0:09:45.840 some increased pressure on our representatives on Capitol Hill to 0:09:45.880 --> 0:09:48.520 really do their job and get some of those funds 0:09:48.559 --> 0:09:52.640 out to hurting individuals and businesses really struggling at this point. 0:09:53.160 --> 0:09:57.120 How concerned you think the FLMC is about the situation, Lindsay, 0:09:58.000 --> 0:10:00.199 I think they're very concerned. I do think that FED 0:10:00.280 --> 0:10:03.520 chairman struck a very delicate line. On the one hand, 0:10:03.600 --> 0:10:06.480 he was trying to be optimistic about the improvement that 0:10:06.520 --> 0:10:09.240 we've seen thus far, particularly in the third quarter, with 0:10:09.360 --> 0:10:12.560 that stellar rise more than offsetting the decline in the 0:10:12.600 --> 0:10:15.600 second quarter, at least in percentage terms. But he was 0:10:15.640 --> 0:10:17.960 also very cautious to say it looks that the virus 0:10:18.080 --> 0:10:20.560 is going to dictate the path of the recovery. It's 0:10:20.600 --> 0:10:24.560 still very uncertain, and while we're optimistic, a number of 0:10:24.600 --> 0:10:26.760 things have to go right, A number of dominoes have 0:10:26.880 --> 0:10:29.760 to fall just perfectly in line in order to really 0:10:29.840 --> 0:10:34.120 navigate ourselves out of this, this unprecedented situation. So I 0:10:34.160 --> 0:10:37.480 do think the FED is increasingly concerned about being able 0:10:37.559 --> 0:10:41.280 to get the economy back on track, but more importantly, 0:10:41.400 --> 0:10:46.040 back to a position of a longer run, sustainable improved trajectory. 0:10:46.280 --> 0:10:48.840 It's not about just a one quarter bounds, but really 0:10:48.880 --> 0:10:52.840 getting the economy back on a pathway towards potential GDP. 0:10:53.960 --> 0:10:57.240 There's a nillion dollar fiscal stimus here, do that, lindsay, 0:10:57.440 --> 0:10:59.559 or do we need even more than that? From your 0:10:59.600 --> 0:11:02.920 perspective this, I do think it will help. I do 0:11:03.000 --> 0:11:05.440 think it will help stabilize the economy. But again, it 0:11:05.480 --> 0:11:08.480 depends on the depth and duration of this second round resurgence. 0:11:08.760 --> 0:11:12.080 If we continue to see businesses shut down, workers sent 0:11:12.200 --> 0:11:15.679 home well into the first quarter, billion is not going 0:11:15.720 --> 0:11:18.360 to do it. So it really depends on how quickly 0:11:18.400 --> 0:11:22.600 we're able to control the virus and how how really 0:11:22.720 --> 0:11:25.160 lenient I would say, local officials are in terms of 0:11:25.200 --> 0:11:28.920 allowing the private market to return to some semblance of 0:11:29.120 --> 0:11:32.520 normal market activity. Remember, this isn't a market crisis, this 0:11:32.600 --> 0:11:36.920 is a health crisis. So the best way to control this, uh, 0:11:37.160 --> 0:11:41.360 this unprecedented scenario is having a meaningful way of separating 0:11:41.440 --> 0:11:43.920 the healthy from the sick, something that we don't have 0:11:44.040 --> 0:11:47.760 at this point. What else can the FED do? At 0:11:47.760 --> 0:11:50.880 this point where you surprised at the fact that the 0:11:51.200 --> 0:11:55.760 SCP skewed a little more positive, No, I wasn't. I 0:11:55.800 --> 0:11:58.600 wasn't necessarily surprised by that. We did anticipate a little 0:11:58.640 --> 0:12:00.960 bit of an upward revision in terms of the Fed's 0:12:01.000 --> 0:12:05.719 expectation for growth and unemployment because we have seen vast improvements, 0:12:05.720 --> 0:12:08.600 in fact, faster than expected improvement. As I mentioned in 0:12:08.600 --> 0:12:12.679 the third quarter, carrying forward through October and somewhat in November. 0:12:13.000 --> 0:12:15.520 So it does make sense that the FET is reflecting 0:12:15.600 --> 0:12:20.640 that improved baseline scenario. But going forward, I do think 0:12:20.679 --> 0:12:23.960 that the FED has put so many tremendous proposals and 0:12:24.040 --> 0:12:27.280 plans in place that at this point that there's very 0:12:27.320 --> 0:12:30.439 little additional they can do to support the market or 0:12:30.480 --> 0:12:33.800 support the economy. It really has to come from fiscal 0:12:33.840 --> 0:12:36.319 policy support at this point, and the FED all but 0:12:36.480 --> 0:12:40.640 handed that proverbial batime over to our officials in Washington, saying, look, 0:12:40.679 --> 0:12:44.360 we've done everything we can up to this point. Now 0:12:44.400 --> 0:12:46.600 it's up to you guys to again do your job 0:12:47.080 --> 0:12:50.120 and reach an agreement and get those much needed funds 0:12:50.160 --> 0:12:52.720 out to those that are hurting the worst, including small 0:12:52.720 --> 0:12:55.880 businesses and individuals that have lost their job through no 0:12:56.000 --> 0:12:58.840 faults of their own, but by the government's own design. 0:12:59.880 --> 0:13:04.000 H lindsay, briefly, what's the steeple four Q GDP call 0:13:04.200 --> 0:13:08.480 and GDP call. I do think there's enough strength in 0:13:08.520 --> 0:13:12.920 October and November to carry growth in positive territory in 0:13:12.920 --> 0:13:15.280 the fourth quarter. So I am looking for low single 0:13:15.320 --> 0:13:18.080 digit growth around four or five percent for the fourth quarter, 0:13:18.480 --> 0:13:20.959 certainly a decline from that rebound that we saw on 0:13:21.000 --> 0:13:23.760 the third quarter, but still a very a very welcomed 0:13:23.800 --> 0:13:27.240 improvement in terms of growth going forward, however, into the 0:13:27.280 --> 0:13:30.160 first quarter. Right now, our baseline scenario is less than 0:13:30.200 --> 0:13:33.720 one percent GDP, with a downside risk of the U 0:13:33.800 --> 0:13:37.040 S economy falling back into negative territory if we do 0:13:37.160 --> 0:13:39.959 see a continued drag out of this second round resurgence 0:13:40.040 --> 0:13:44.040 without additional support from the federal government. Lindsay, you have 0:13:44.080 --> 0:13:46.520 to live there, but thank you so much for joining us, 0:13:46.600 --> 0:13:48.920 and uh, maybe speak to you again before the end 0:13:48.960 --> 0:13:51.840 of the year. If not, we'll talk to you in January. 0:13:52.080 --> 0:13:55.800 That's Lindsay, pe TV economists add Stephile Nicholas joining us 0:13:55.800 --> 0:13:59.040 there and pull. It's really just so fascinating to see 0:13:59.120 --> 0:14:01.160 the data come in and some of it poor, some 0:14:01.240 --> 0:14:04.760 of it okay. It really is so obviously a caeshaped recovery. 0:14:04.960 --> 0:14:07.160 It really is. And I think the concern here is 0:14:07.240 --> 0:14:09.720 is Lindsay suggested not getting a handle in the near 0:14:09.800 --> 0:14:14.080 term on this pandemic. Another industry that's had a very 0:14:14.120 --> 0:14:17.440 tough year is the home health business. Those going into 0:14:17.440 --> 0:14:21.760 people's homes protecting the aging population. And so on. Charlie 0:14:21.840 --> 0:14:25.400 Young is the CEO of Synergy home Care, located in 0:14:25.480 --> 0:14:27.920 New Jersey. It's one of the leading in home care 0:14:28.040 --> 0:14:31.840 organizations that operates in three markets. Charlie, first of all, 0:14:31.880 --> 0:14:34.920 before we get onto the vaccine vaccine rollout, tell us 0:14:34.920 --> 0:14:38.240 how your business has been going and what changes you've 0:14:38.240 --> 0:14:41.560 had to make thanks to the pandemic. Well, first of all, Fanny, 0:14:41.640 --> 0:14:44.800 it's great to be here. Thanks for having me. I'm 0:14:44.840 --> 0:14:48.920 actually out in Arizona, so I missed that beautiful snowstorm 0:14:49.080 --> 0:14:52.720 that you are just that. Uh. The business of home 0:14:52.760 --> 0:14:56.480 care has has seen quite a bit of demand, as 0:14:56.480 --> 0:15:00.480 you can imagine obviously. Uh, people are looking to make 0:15:00.520 --> 0:15:04.120 sure that they are safe and one of the safest 0:15:04.120 --> 0:15:09.080 places to be is at home. Like many industries, senior care, 0:15:09.200 --> 0:15:13.120 home care, December this is prime time for us UM 0:15:13.520 --> 0:15:16.640 and the reason for that is generally this is when 0:15:16.640 --> 0:15:21.120 families get together. This is when families gather usually for extended, 0:15:21.200 --> 0:15:25.000 extended areod of time and adult children often times see 0:15:25.040 --> 0:15:27.760 that mom or dad or another senior love one of 0:15:27.800 --> 0:15:32.000 theirs needs more care and more more help. Um. We're 0:15:32.000 --> 0:15:35.400 not having that this year. Um uh, So we're trying 0:15:35.400 --> 0:15:38.920 to help people understand how that they can support their 0:15:38.920 --> 0:15:40.920 loved ones and look for the things that they need 0:15:41.280 --> 0:15:43.800 uh to help them to continue to thrive at home, 0:15:44.400 --> 0:15:46.320 even though they might not be there in person. But 0:15:46.400 --> 0:15:49.320 to your to your point, the business has been been 0:15:49.360 --> 0:15:52.920 doing quite well because the demand for home care during 0:15:52.920 --> 0:15:57.800 the pandemic is quite high. Charlie, your employees, they are 0:15:58.400 --> 0:16:01.560 just the definition of frontline workers. Here a couple of 0:16:01.600 --> 0:16:04.360 points here how to how they've been faring Number one 0:16:04.400 --> 0:16:08.000 and number two. Um, presumably they will be one of 0:16:08.040 --> 0:16:09.640 the first to get the vaccine. What if we can 0:16:09.640 --> 0:16:12.720 you tell us about that? Yeah? Well, first of all, 0:16:12.760 --> 0:16:16.160 you're absolutely right. I mean, there's no more noble cause 0:16:16.280 --> 0:16:19.480 than to be a caregiver who goes into another's home 0:16:20.120 --> 0:16:23.360 UH to take care of them. Our mission at Synergy 0:16:23.360 --> 0:16:25.240 own cares to help people thrive at home, and that's 0:16:25.240 --> 0:16:29.400 what these people do every single day. UH. As you know, 0:16:30.120 --> 0:16:35.480 the response to the pandemic has been decentralized across the country, 0:16:36.120 --> 0:16:41.200 with states all having different approaches and oftentimes trickling down 0:16:41.240 --> 0:16:47.360 to local UH and county governmental decisions. So UM, you know, 0:16:47.400 --> 0:16:49.880 what we're seeing is that our home care workers are 0:16:49.920 --> 0:16:52.840 being treated as essential. Some places, but not in others. 0:16:53.320 --> 0:16:55.480 Really encouraged. I did get a call from a franchise 0:16:55.520 --> 0:16:58.520 e of ours in New Jersey this morning. They were 0:16:58.560 --> 0:17:02.720 called by their county health department yesterday asking for a 0:17:02.720 --> 0:17:05.160 list of their caregivers so that they could be put 0:17:05.200 --> 0:17:09.360 on uh that priority list for the vaccine. And uh, 0:17:09.440 --> 0:17:12.000 I only uh wish it was that way all over 0:17:12.040 --> 0:17:15.679 the country. So Charlie talked us about how franchise e 0:17:17.119 --> 0:17:20.560 that works. Are all of your home all of your 0:17:20.560 --> 0:17:23.639 businesses in the various dates franchise run and uh and 0:17:23.680 --> 0:17:25.359 how do they pay you a fee? And what do 0:17:25.400 --> 0:17:29.439 you provide to them? Yeah? Absolutely so, uh, you know, 0:17:29.600 --> 0:17:33.680 we are a franchise business. We uh we really offer 0:17:33.760 --> 0:17:38.600 the promise to help care minded uh compassionate entrepreneurs build 0:17:38.600 --> 0:17:41.800 a robust business. We do that in four basic ways. 0:17:41.840 --> 0:17:44.160 We provide a home care platform everything that you need 0:17:44.200 --> 0:17:46.359 to run a home care business, from the initial training, 0:17:46.800 --> 0:17:51.639 the software and other tech backbone that you need, uh, 0:17:51.680 --> 0:17:54.520 and then all the marketing that goes with it. We 0:17:54.720 --> 0:17:59.199 provide all the local lead generation marketing, referral partnerships with 0:17:59.280 --> 0:18:04.160 insurance and health organizations, and obviously a network of people 0:18:04.160 --> 0:18:06.800 who have done this before. Uh, and so when you 0:18:06.880 --> 0:18:09.639 have over three seventy markets around the country, there's a 0:18:09.720 --> 0:18:12.840 robust group of people who have experience and can help there. 0:18:13.000 --> 0:18:15.280 That's another area of our business has grown quite well 0:18:15.359 --> 0:18:19.680 during the pandemic is the franchising side. We're selling home 0:18:19.680 --> 0:18:23.080 care franchises. I think that's a function of two things. 0:18:23.119 --> 0:18:26.320 One is, you know, the the economic situation in the country. 0:18:26.359 --> 0:18:29.440 Many people have been downsized and are out of work 0:18:29.480 --> 0:18:32.960 and are looking for a new chapter in their lives. 0:18:33.400 --> 0:18:35.680 And then I think when you look at the the 0:18:36.359 --> 0:18:39.600 the upside for home care in the years to come 0:18:39.800 --> 0:18:44.560 starts with demographics. Uh, it starts with a shift in 0:18:44.560 --> 0:18:48.600 in in thinking about the whole healthcare continuum. It's a 0:18:48.640 --> 0:18:50.680 it's a business to be in and so we've done 0:18:50.680 --> 0:18:55.320 well there over the last nine months as well. So 0:18:55.359 --> 0:18:58.040 it was I just curious, why would somebody need to 0:18:58.040 --> 0:19:00.480 buy into a franchise if they want to, you know, 0:19:00.520 --> 0:19:03.439 be in the home care business. Can they not just 0:19:03.520 --> 0:19:07.240 do it? You could? You could just do it. You 0:19:07.280 --> 0:19:11.159 would be faced with a much steeper learning curve and 0:19:11.240 --> 0:19:14.480 startup curve because when you when you join a synergy 0:19:14.480 --> 0:19:17.719 of home care franchise, you're gonna have all of your 0:19:17.760 --> 0:19:21.359 systems in place from day one. So that is a 0:19:21.440 --> 0:19:23.720 thought process as a business owner that you don't need 0:19:24.119 --> 0:19:27.520 to go through. You're going to have the software, software 0:19:27.560 --> 0:19:33.399 platform for billing, for scheduling, for recruiting caregivers, all of 0:19:33.400 --> 0:19:35.600 that sort of thing. You're gonna have the marketing platform 0:19:35.680 --> 0:19:38.680 for lead generation. And because we have a national footprint, 0:19:38.800 --> 0:19:42.560 we have uh, national partners who are bringing referral business 0:19:42.640 --> 0:19:45.879 to us. Uh you know, and so so it's a 0:19:46.000 --> 0:19:48.720 it's a it is a way to get up and 0:19:48.800 --> 0:19:54.560 running and uh uh much more, much more efficiently. Yeah, 0:19:54.600 --> 0:19:56.840 go ahead. Interesting, Charlie, thanks so much for joining us. 0:19:56.880 --> 0:19:58.920 It's a really an interesting time for you and your business. 0:19:58.960 --> 0:20:03.040 I'm sure, Charlie young Ief, executive officer for Synergy Home Care, 0:20:03.320 --> 0:20:10.480 obviously seeing increased demand during these pandemic times. Now, let's 0:20:10.480 --> 0:20:14.119 bring in Bloomberg journalist to Molly Smith. A fantastic story 0:20:14.119 --> 0:20:18.320 on the Bloomberg Today and it relates to minority owned 0:20:18.480 --> 0:20:22.160 underwriting firms and how they benefited from a new detention 0:20:22.200 --> 0:20:27.000 on social justice issues, particularly this summer after Floyd's killing. 0:20:27.760 --> 0:20:31.040 But they say that actual institutional barriers are keeping them 0:20:31.040 --> 0:20:33.560 from gaining a bigger share of the corporate debt market, 0:20:33.600 --> 0:20:36.800 and it really is a phenomenal, molly great story. First 0:20:36.840 --> 0:20:38.439 of all, give us a rundown of some of the 0:20:38.440 --> 0:20:41.440 firms that you're talking about. Sure, So when we talk 0:20:41.520 --> 0:20:46.679 about diverse underwriters, these are banks that are owned by minorities, women, 0:20:46.960 --> 0:20:50.840 and veterans. So we talked to several of the prominent 0:20:50.880 --> 0:20:54.800 African American owned banks like Luke Capital, playlog Van, We 0:20:54.920 --> 0:20:59.520 talked to several veteran owned banks like Drexel Hamilton's Academy Securities, 0:21:00.040 --> 0:21:02.919 and a lot of these banks really trace their roots 0:21:02.920 --> 0:21:06.040 back to UH the civil rights movement, and that's when 0:21:06.040 --> 0:21:09.120 a lot of them got started and in underwriting bonds 0:21:09.200 --> 0:21:13.520 for America's local governments, and that's why they've done so 0:21:13.560 --> 0:21:17.920 well in the municipal bond market, where where America's leadership 0:21:17.960 --> 0:21:21.040 at the local government level, excuse me, is tends to 0:21:21.080 --> 0:21:24.040 be much more diverse in nature itself. You transition them 0:21:24.040 --> 0:21:27.800 to the corporate market, and America's companies are hardly as 0:21:27.840 --> 0:21:30.960 diverse in nature at the leadership level than the cities are, 0:21:31.040 --> 0:21:33.919 and it just hasn't been as integral and natural of 0:21:33.920 --> 0:21:37.919 emission on the corporate market. So'm only I know historically 0:21:37.960 --> 0:21:39.960 some of the challenges for some of these minority on 0:21:40.040 --> 0:21:43.520 banks as it relates to uh, the corporate market is 0:21:44.160 --> 0:21:47.520 lack of adequate capital and maybe even staffing and so on. 0:21:47.560 --> 0:21:51.479 So what's the story there. The biggest obstacle that a 0:21:51.520 --> 0:21:54.000 lot of the banks will point to is that they 0:21:54.040 --> 0:21:56.640 are set up as solely investment banks, meaning that they 0:21:56.720 --> 0:22:00.359 don't have commercial banking abilities as well. And that's what 0:22:00.560 --> 0:22:04.000 makes the biggest banks on wall streets such a formidable 0:22:04.080 --> 0:22:06.720 force in this space, so that they are able to 0:22:06.760 --> 0:22:10.479 provide cheap loans to companies with the expectation of winning 0:22:10.480 --> 0:22:14.000 the more lucrative capital markets business in return. And when 0:22:14.040 --> 0:22:17.560 you're just an investment bank that's not in your wheelhouse, 0:22:17.600 --> 0:22:21.480 you don't have, you know, provide these credit facilities to companies. 0:22:21.760 --> 0:22:24.800 So the lend these diverse underwriters have had to be 0:22:24.880 --> 0:22:28.160 much more creative and how they get into deals, and 0:22:28.560 --> 0:22:32.160 that's that's what key obstacle that they pointed to that's 0:22:32.240 --> 0:22:34.520 keeping them from moving forward. Yeah, I mean earlier this 0:22:34.600 --> 0:22:38.920