WEBVTT - Bloomberg Businessweek Weekend-February 26, 2021 0:00:01.080 --> 0:00:05.440 This is Bloomberg Business Week inside from the reporters and 0:00:05.600 --> 0:00:09.200 editors who bring you America's most trusted business magazine, plus 0:00:09.240 --> 0:00:13.160 global business finance and tech news. As it happened. Bloomberg 0:00:13.240 --> 0:00:16.759 Business Week with Carol Messer and Bloomberg Quick Takes. Tim 0:00:16.800 --> 0:00:22.200 Stinovic on Bloomberg Radio. Hi everyone, Happy weekend. It is 0:00:22.320 --> 0:00:26.000 week fifty. Still though this past week, working Tim from 0:00:26.000 --> 0:00:29.160 home stood a lot of people. Yeah, and and Carol, um, 0:00:29.200 --> 0:00:31.240 I was, I gotta tell you, I was thinking about 0:00:31.440 --> 0:00:35.400 how long it's been since we've been in this lockdown environment. 0:00:35.520 --> 0:00:37.680 A long time it has. It's been almost a year 0:00:38.000 --> 0:00:41.400 since I was inside a restaurant. We're going to talk 0:00:41.440 --> 0:00:43.239 about that a little bit later on in our broadcast 0:00:43.280 --> 0:00:46.080 about what's next for the restaurant industry. But Tim, listen, 0:00:46.120 --> 0:00:47.879 it was a week where so much was going on. 0:00:47.920 --> 0:00:51.080 We saw a lot of volatility and pullbacks in tech stocks, 0:00:51.120 --> 0:00:54.160 in particular on those valuation concerns. A lot of talk 0:00:54.160 --> 0:00:57.600 of the reflation trade and market rotation to value sectors. 0:00:57.640 --> 0:01:00.760 But countered with FED Chairman Jerome Powell, you affirming his 0:01:00.880 --> 0:01:03.760 view that the U S economy needs support. Yeah, So 0:01:03.800 --> 0:01:05.440 what did it end up with? It mant the push 0:01:05.440 --> 0:01:07.280 and pull of the equity market throughout the week. So 0:01:07.319 --> 0:01:11.160 coming up, we have several voices weighing in on the markets, 0:01:11.160 --> 0:01:14.280 including one closely watched E t F investor whose comments 0:01:14.319 --> 0:01:18.280 to us seemed to move both bitcoin and Tesla this week. 0:01:18.280 --> 0:01:19.840 I'm just gonna go ahead and say it's Cathy Wood. 0:01:20.240 --> 0:01:22.920 It is Kathy Wood, also invest go home to the 0:01:22.959 --> 0:01:25.720 giant q q Q E t F. We caught up 0:01:25.720 --> 0:01:29.040 with CEO Martin Flanagan for another edition of Business Week 0:01:29.080 --> 0:01:31.839 Talks and our recent chat with Nobel Laurie Paul Krugman. 0:01:32.000 --> 0:01:34.319 We caught up with him. We talked about the economy, spacks, 0:01:34.360 --> 0:01:37.320 game stop and more. We'll have a little highlight of that. 0:01:38.040 --> 0:01:39.920 All that to come, but we do begin with that 0:01:39.959 --> 0:01:42.520 investor who everyone wanted to hear from this week, and 0:01:42.560 --> 0:01:45.360 we had her live on air and Tim you mentioned 0:01:45.400 --> 0:01:48.720 our investment founder CEO and c I O, Kathy Wood. 0:01:48.960 --> 0:01:51.920 What I've been surprised by over the last really four 0:01:52.000 --> 0:01:57.320 or five months is cyclicals and value stocks have started 0:01:57.360 --> 0:02:00.920 to outperform the broad based market indusease uh And the 0:02:01.000 --> 0:02:05.880 surprise to us is that we and our innovation strategies 0:02:05.880 --> 0:02:10.240 that are outperformed as well. That's very unusual. So the 0:02:10.280 --> 0:02:14.360 way I have interpreted that is that the market is 0:02:14.520 --> 0:02:17.959 broadening out. The bowl market is broadening out, which is 0:02:18.000 --> 0:02:21.440 a very healthy development. I think what we've seen in 0:02:21.480 --> 0:02:25.680 the last few days the correction in technology is UH, 0:02:25.720 --> 0:02:30.880 perhaps you know rotational again value there, given how many 0:02:31.040 --> 0:02:34.880 years value has underperformed, Uh, there could be a bit 0:02:34.919 --> 0:02:39.400 of rotation back into value. UH. If if you understand 0:02:39.520 --> 0:02:43.280 our portfolios, UH, you'll be very careful where you go 0:02:43.400 --> 0:02:46.800 in terms of the value space, because disruptive innovation, the 0:02:46.880 --> 0:02:49.200 likes of which we have not seen in more than 0:02:49.240 --> 0:02:52.480 a hundred years, is probably going to hurt a lot 0:02:52.520 --> 0:02:57.520 of value sectors more than growth sectors. Are you buying 0:02:57.560 --> 0:03:00.440 I mean the NASDAC was down almost four percent to 0:03:00.520 --> 0:03:04.639 Tesla was down significantly. Did you buy? Oh yes, oh yes, 0:03:04.680 --> 0:03:07.160 And we've uh we published our trades at the end 0:03:07.160 --> 0:03:10.639 of every day, so you will see them the markets closed. 0:03:11.120 --> 0:03:16.000 We bought a lot of Tesla today across any strategy 0:03:16.120 --> 0:03:20.240 that holds Tesla, and we will be publishing in a 0:03:20.280 --> 0:03:26.440 few weeks UH a report updating our thoughts about Tesla, 0:03:27.120 --> 0:03:30.560 our excitement about the potential of a ride hailing service 0:03:30.600 --> 0:03:35.520 as a bridge to an autonomous service and are higher 0:03:35.520 --> 0:03:40.160 and the higher odds that autonomous is going to happen 0:03:40.240 --> 0:03:42.920 for Tesla. Uh. And part of the reason for the 0:03:43.000 --> 0:03:47.240 higher odds is now that weymo is on the road autonomously, 0:03:47.760 --> 0:03:50.960 we know it can be done. Uh. Tesla has so 0:03:51.200 --> 0:03:55.240 much more data than Google or anyone else or everyone 0:03:55.320 --> 0:03:59.240 else combined that we think it's in the pole position. Well, 0:03:59.240 --> 0:04:03.080 it's interesting to you know, it's funny Kathy people you know, 0:04:03.120 --> 0:04:04.960 expecting you to be on and they were sending us 0:04:05.000 --> 0:04:07.160 tons of questions. You know, this whole idea of the 0:04:07.160 --> 0:04:10.200 treasure trove of data that Tesla has. Specifically, you talk 0:04:10.280 --> 0:04:13.240 about it a lot, you know, do other people believe it? 0:04:13.280 --> 0:04:15.280 Do you? Are you seeing other you know people kind 0:04:15.320 --> 0:04:18.160 of uh put that out as kind of one of 0:04:18.200 --> 0:04:20.640 the fundamental reasons that you want to own Tesla. It's 0:04:20.640 --> 0:04:22.839 not just a car company, right, It's a technology company. 0:04:22.839 --> 0:04:25.480 It's a battery company. Is that thesis of it being 0:04:25.480 --> 0:04:29.720 a data company getting a lot more recognition. We do 0:04:29.800 --> 0:04:35.040 not think many analysts or investors are giving Tesla credit 0:04:35.120 --> 0:04:39.040 for autonomous. UH. If they were, the stock would be 0:04:39.080 --> 0:04:41.760 a lot higher. What we do think they're giving Tesla 0:04:42.160 --> 0:04:47.279 credit for increasingly is you know, it's an electric vehicle franchise, 0:04:47.360 --> 0:04:52.280 and how far ahead of the competition Tesla is when 0:04:52.320 --> 0:04:56.960 it comes to battery technology, to artificial intelligence, both in 0:04:56.960 --> 0:05:00.760 the form of a chip through the data collection. We 0:05:00.839 --> 0:05:06.000 think thirty billion plus miles compared to Google's thirty million 0:05:06.440 --> 0:05:10.720 ish miles. Uh and still over the air software updates 0:05:10.800 --> 0:05:16.159 to uh to change performance. It's it's remarkable that more 0:05:16.200 --> 0:05:19.360 are not on board, even the last one yet. Uh. 0:05:19.520 --> 0:05:23.160 So I think it's franchise has legs here. So so 0:05:23.279 --> 0:05:26.440 how does that translate into market value for Tesla? How 0:05:26.520 --> 0:05:28.600 much more opportunity is there? How much how much more 0:05:28.640 --> 0:05:32.640 opportunity is is left for this run up to continue? Well, 0:05:32.800 --> 0:05:35.320 I'll give you a sense of uh and this is 0:05:35.360 --> 0:05:38.599 from our big ideas one. You can get that on 0:05:38.640 --> 0:05:42.440 our site our dash invest dot com. Uh. We we 0:05:42.560 --> 0:05:48.560 believe that the autonomous market, so the ride hailing market, 0:05:48.640 --> 0:05:54.760 but autonomous, will be a seven trillion dollar revenue opportunity. 0:05:55.000 --> 0:05:58.080 That was our investment founder, CEO and ce IO Cathy 0:05:58.120 --> 0:06:00.600 Wood talking with us on Tuesday. That was a day 0:06:00.640 --> 0:06:03.640 of tech stock volatility. It was I mean the timing 0:06:03.640 --> 0:06:05.480 of that inteview, Carol, I want to say, we're brilliant 0:06:05.560 --> 0:06:08.360 enough to actually have scheduled her. Okay, yeah we are. 0:06:08.480 --> 0:06:10.160 We'll just keep it. But no, the interview is scheduled 0:06:10.200 --> 0:06:11.920 for a long time, and there was no better day 0:06:11.920 --> 0:06:14.039 to have her on than this past Tuesday. No, it 0:06:14.080 --> 0:06:15.880 was the perfect guest to talk about what was going 0:06:15.880 --> 0:06:19.160 on in the tech trade, specifically names like Tesla Bitcoin. 0:06:19.240 --> 0:06:21.120 We all wanted to know from her because she has 0:06:21.160 --> 0:06:24.280 been one of the top performers, consistent performers on these 0:06:24.320 --> 0:06:28.520 trades and when she talks, investors listen. Yeah. Absolutely, so 0:06:28.560 --> 0:06:31.080 that interview, I've got to say her comments, they got 0:06:31.120 --> 0:06:33.480 reed spikes throughout the week. They were among the most read, 0:06:33.520 --> 0:06:37.240 most watch, most listened to across Bloomberg platforms throughout the week. 0:06:37.480 --> 0:06:39.320 And coming up, we've got more of that interview with 0:06:39.440 --> 0:06:42.000 Kathy Wood. Were you kind of secretly rooting for a 0:06:42.040 --> 0:06:44.360 little bit of a of a pullback um to kind 0:06:44.400 --> 0:06:46.560 of get some of the performance chasing money out of 0:06:46.600 --> 0:06:49.520 the market. The answer to that question and her views 0:06:49.520 --> 0:06:52.440 on bitcoin and more. You're listening to Bloomberg Business Week. 0:06:52.560 --> 0:07:07.159 This is Bloomberg. This is Bloomberg Business Week with Carol 0:07:07.200 --> 0:07:11.440 Messer and Bloomberg Quick Takes. Tim Spinovik from Bloomberg Radio. 0:07:12.760 --> 0:07:15.080 It was just one week ago that Bloomberg reported on 0:07:15.120 --> 0:07:18.640 our Investments Kathy would reaching sixty billion dollars in assets. Tim, 0:07:18.680 --> 0:07:22.000 you reminded me on air that that was up from 0:07:22.040 --> 0:07:24.600 just three point six billion dollars one year before. What 0:07:24.720 --> 0:07:28.000 a difference A year makes a remarkable run, and despite 0:07:28.040 --> 0:07:30.360 some pullbacks and fund outflows this week, she's sticking to 0:07:30.400 --> 0:07:32.720 her fundamentals when it comes to her investments. Yeah, our 0:07:32.720 --> 0:07:35.360 deep dive conversation with Kathy Man it was so popular 0:07:35.400 --> 0:07:37.560 on the Bloomberg this week, so we thought we would 0:07:37.560 --> 0:07:39.840 bring you a little bit more of it, including her 0:07:39.840 --> 0:07:42.240 thoughts on how long the reflation trade might last and 0:07:42.840 --> 0:07:45.960 if it is impacting how she is investing. I don't 0:07:46.040 --> 0:07:49.600 know how long this rotation will continue. All I do 0:07:49.760 --> 0:07:53.680 know is that we have a five year time horizon 0:07:54.280 --> 0:07:59.080 and our all of our price targets are five years out. 0:08:00.120 --> 0:08:03.280 A few days ago, I would have told you that 0:08:03.600 --> 0:08:07.280 the returns that we're expecting now we could be wrong. 0:08:07.360 --> 0:08:11.440 These are our estimates, so consider the source. But uh, 0:08:11.520 --> 0:08:15.600 the compound annual rate of return that we were expecting 0:08:16.000 --> 0:08:20.320 for our portfolios during the next five years was fifteen percent, 0:08:20.800 --> 0:08:23.600 which is our minimum hurdle rate of return. Just given 0:08:23.640 --> 0:08:27.520 the last few days of correction, that is closer. Now, 0:08:28.640 --> 0:08:31.120 compound annual rate of return over five years is a 0:08:31.200 --> 0:08:34.440 doubling over five years. Right, that's a healthy return. What 0:08:34.559 --> 0:08:37.640 happens very short term, I can't tell you. All I 0:08:37.679 --> 0:08:40.600 know is we are keeping our eyes on the prize, 0:08:41.080 --> 0:08:43.679 and the prize just got a little bit more interesting. 0:08:43.760 --> 0:08:45.319 But I have to ask you, were you kind of 0:08:45.400 --> 0:08:47.280 secretly rooting for a little bit of a of a 0:08:47.360 --> 0:08:49.920 pullback um to kind of get some of the performance 0:08:50.000 --> 0:08:54.160 chasing money out of the market. Well, I do believe 0:08:54.880 --> 0:08:57.960 we we love a wall of worry, and we were 0:08:58.000 --> 0:09:01.240 seeing the wall of worry starts all. I saw it 0:09:01.280 --> 0:09:05.200 on social media, a lot of chatter, Uh, some just 0:09:05.320 --> 0:09:11.400 waiting for our funds in particular, uh to take a tumble. Uh. 0:09:11.480 --> 0:09:15.080 Some maybe to buy, and some happy to sell and 0:09:15.240 --> 0:09:18.240 short and all of that. We love the liquidity that 0:09:18.360 --> 0:09:21.680 this provides us. We think it's very healthy and very 0:09:21.679 --> 0:09:24.600 healthy shake out. But I'll give you a sense of 0:09:24.640 --> 0:09:30.080 what where I in history. I felt this way before. 0:09:30.600 --> 0:09:35.560 In nineties six, we were in a very interesting market. 0:09:35.600 --> 0:09:40.160 Alan Greenspan was the FED chairman, and he was at 0:09:40.200 --> 0:09:47.160 the time UH warned all of us against irrational exuberant UH. 0:09:47.160 --> 0:09:50.520 And many investors were just beginning to understand how how 0:09:50.559 --> 0:09:54.040 the internet was working, and uh, you know what the 0:09:54.160 --> 0:09:57.640 interesting applications were going to be. Uh. We had another 0:09:57.720 --> 0:10:03.480 four years of move, which when you think about that time, 0:10:03.880 --> 0:10:08.040 that move was too much capital chasing, too few stocks, uh, 0:10:08.080 --> 0:10:13.280 too quickly. The technologies weren't ready, the costs were way 0:10:13.320 --> 0:10:16.960 too high. But all the seeds for what we're investing 0:10:16.960 --> 0:10:20.319 in we're planted back then. So we've had fifteen to 0:10:20.480 --> 0:10:23.760 twenty to twenty five years of gest station of these 0:10:23.800 --> 0:10:27.360 seeds and now they're starting to flourish, and we are ready. 0:10:27.400 --> 0:10:30.280 From a technology point of view and from a cost 0:10:30.360 --> 0:10:34.120 point of view, that's so important to see that electric 0:10:34.240 --> 0:10:39.360 vehicle costs come down. UH so that by this time, 0:10:39.760 --> 0:10:43.360 maybe in a year or two, uh, the sticker price 0:10:43.400 --> 0:10:46.400 of the average electric vehicle will below be below that 0:10:46.559 --> 0:10:51.520 of the average UH gas powered vehicle. Yeah. And and 0:10:51.600 --> 0:10:55.920 by the average electric vehicle price will be eighteen thousand, 0:10:56.360 --> 0:11:02.080 and the Toyota camera will still be a dollars no brainers. Yeah, Hey, Hey, Kathy, 0:11:02.120 --> 0:11:05.240 I gotta ask, UM, so much money is pouring into 0:11:05.240 --> 0:11:08.480 your funds? Uh? South Korean retail investors literally give you 0:11:08.520 --> 0:11:11.840 a nickname, money tree. UM, in terms of money, does 0:11:11.880 --> 0:11:16.040 it ever become too much that's pouring into your funds? Well, 0:11:16.080 --> 0:11:19.640 what I've always said when we've been asked the capacity 0:11:19.760 --> 0:11:24.080 question is that if we are right and the five 0:11:24.200 --> 0:11:29.600 platforms that involve fourteen different technologies are are ready for 0:11:29.679 --> 0:11:33.200 prime time, if not already in the sweet spot of 0:11:33.240 --> 0:11:38.319 their s curve, then our capacity should grow exponentially with 0:11:38.360 --> 0:11:41.679 those platforms. Now, what happened to us in the last 0:11:41.760 --> 0:11:47.720 year was not exponential, but parabolic growth in terms of 0:11:47.760 --> 0:11:50.600 the flows, and it's been very gratifying, and we're so 0:11:50.720 --> 0:11:55.600 happy that more and more investors are diversifying into innovation. 0:11:55.679 --> 0:11:58.199 They need to to hedge against all of the value 0:11:58.200 --> 0:12:04.000 traps that innovation is going to UH is going to create. UH. 0:12:04.040 --> 0:12:07.719 But we do believe that given the swish we had 0:12:07.800 --> 0:12:10.560 this year, UM, we will need a little time to 0:12:11.440 --> 0:12:14.319 have the capacity come our way. How is it coming 0:12:14.320 --> 0:12:17.880 our way? Well, you see, because of the performance of 0:12:17.960 --> 0:12:22.640 stocks like those in our portfolios, we're seeing a significant 0:12:22.720 --> 0:12:26.920 number of I P O s UH secondaries, there's the 0:12:27.000 --> 0:12:30.480 stack revolution, there's a stack revolutionist. And if you think 0:12:30.520 --> 0:12:34.240 about what happened even last year, so our flagship fund 0:12:34.360 --> 0:12:37.480 was up around a hundred and fifty percent, that meant 0:12:37.559 --> 0:12:40.559 that our capacity went up a hundred and fifty If 0:12:40.600 --> 0:12:43.960 you look at our performance since since UH for the 0:12:44.000 --> 0:12:49.120 past five years, our performance of the Flagship fund is 0:12:49.200 --> 0:12:53.120 up a thousand percent. So that means our capacity is 0:12:53.160 --> 0:12:55.680 up a thousand percent. And if we're right and we're 0:12:55.720 --> 0:12:59.920 still on these exponential growth trajectories, we should continue to 0:13:00.040 --> 0:13:03.840 find good capacity going forward. So I'm also curious about, 0:13:04.000 --> 0:13:05.439 you know, some of the positions you have. And I'm 0:13:05.440 --> 0:13:07.480 sure you've been asked about this for for Cathy, but 0:13:07.640 --> 0:13:10.160 you know, I'm just looking at some of our research 0:13:10.200 --> 0:13:12.440 that you guys are already a ten percent holder and 0:13:12.440 --> 0:13:15.600 I think more than twenty companies and a holder in 0:13:15.640 --> 0:13:17.840 three And forgive me my my mouth's a little bit off, 0:13:18.160 --> 0:13:21.040 But I mean, is that do you get nervous about 0:13:21.160 --> 0:13:25.400 that level of concentration? I mean, some investment managers would say, so, 0:13:25.840 --> 0:13:29.560 how do you feel about that? Yes, what we've put 0:13:29.640 --> 0:13:34.160 in risk controls to prevent UH again, some of that 0:13:34.200 --> 0:13:36.920 happened because of the swish right fairness. We put in 0:13:37.040 --> 0:13:41.040 risk Yes, we put in risk control so that you know, 0:13:41.200 --> 0:13:45.079 we do so that we will not be considered quote 0:13:45.120 --> 0:13:48.960 unquote an affiliate of of any of these companies. That's 0:13:49.000 --> 0:13:52.120 why I think what we want to be on the 0:13:52.200 --> 0:13:56.000 right side of regulation. Uh, And so you will see 0:13:56.200 --> 0:14:02.360 fewer and fewer names over let's say, going forward, especially 0:14:02.360 --> 0:14:06.079 as many of our companies are issuing are are are 0:14:06.160 --> 0:14:10.000 doing secondaries importantly, and the reason they need to do 0:14:10.160 --> 0:14:14.920 them is often in the world of disruptive innovation and 0:14:15.000 --> 0:14:21.040 particularly because of artificial intelligence, the companies that invest the 0:14:21.080 --> 0:14:25.600 most aggressively today are going to have a higher probability 0:14:25.760 --> 0:14:29.520 of winning winner take most markets, like I just described 0:14:29.600 --> 0:14:33.080 autonomous taxi network. Look Tesla as a company, as Kathy mentioned, 0:14:33.080 --> 0:14:35.480 that has a lot of cash. We've talked about this before, Carol, 0:14:35.560 --> 0:14:37.400 one point five billion dollars look to a lot of people, 0:14:37.440 --> 0:14:39.160 has a lot of money. But for Tesla, it's not 0:14:39.240 --> 0:14:41.200 that much of an investment in bitcoin, at least not 0:14:41.280 --> 0:14:43.240 right now. Yeah, she doesn't seem worried in terms of 0:14:43.280 --> 0:14:45.920 their cash position. All right, still ahead, I think we 0:14:46.040 --> 0:14:51.400 still have another six months of rough Times about Laurie. 0:14:51.400 --> 0:14:54.880 Paul Krugman. He is back. He's talking zombies and getting 0:14:54.880 --> 0:14:57.920 the vaccine his second shot that's coming up next. This 0:14:58.040 --> 0:15:05.600 is Boober broadcasting from the financial capital of the World, Bloomberg. 0:15:05.680 --> 0:15:08.440 He Love in Frio in New York to Washington, d C. 0:15:08.640 --> 0:15:13.360 Bloomberg to Boston, Bloomberg one oh six one, to San Francisco, 0:15:13.440 --> 0:15:16.880 Bloomberg nine sixty to the country Sirius XM Chado one 0:15:16.960 --> 0:15:20.120 nineteen and around the globe the Bloomberg Business app and 0:15:20.160 --> 0:15:25.480 Bloomberg Radio dot Com. This is Bloomberg Business Week, so too. 0:15:25.600 --> 0:15:28.880 I recently caught up with Paul Krugman. Nobel Laureate Economists, 0:15:28.880 --> 0:15:31.640 New York Times Columnists, City University of New York, Distinguished 0:15:31.640 --> 0:15:34.360 Professor of Economics. The titles go on and on. He's 0:15:34.400 --> 0:15:36.800 also editor of a lot of books. Yeah, you know, 0:15:36.840 --> 0:15:38.840 more than two dozen, so we can't list them all here. 0:15:38.840 --> 0:15:41.160 But his latest book, now out in paperback, is arguing 0:15:41.160 --> 0:15:44.760 with Zombies, economics, politics, and the fight for a better future. 0:15:45.200 --> 0:15:47.680 And on the day we talked with him, he actually 0:15:47.680 --> 0:15:51.760 had tweeted out that he had gotten his second coronavirus vaccine, 0:15:51.960 --> 0:15:54.880 so we had to start there. I'm a little wearie. 0:15:54.960 --> 0:15:56.960 I think there's a little bit of the second day 0:15:57.000 --> 0:15:59.640 effect of the of the vaccine. But I'm fine. Okay, 0:15:59.680 --> 0:16:01.240 So you are feeling a little bit. We've heard that 0:16:01.240 --> 0:16:03.000 from a fair amount of people, So you do feel 0:16:03.000 --> 0:16:07.160 a little something. Yeah, it's it's it's fine, it's the 0:16:07.200 --> 0:16:11.040 water is fine. Jumped in and we're ready. We're ready 0:16:11.040 --> 0:16:15.080 and eager. So let's talk about kind of this world 0:16:15.120 --> 0:16:16.920 where we are. But I do want to ask you 0:16:16.960 --> 0:16:19.920 when you look at the US economy the impact of COVID. 0:16:20.440 --> 0:16:23.040 There are some economic reports that do feel like things 0:16:23.040 --> 0:16:26.120 are certainly getting better, Labor markets still tough. How do 0:16:26.160 --> 0:16:29.640 you see the US economy? I think we still have 0:16:29.720 --> 0:16:34.960 another six months of rough times because it is very 0:16:34.960 --> 0:16:39.400 hard to do normal business when people are rightfully still 0:16:39.440 --> 0:16:43.040 afraid of of of COVID, and so we're going to 0:16:43.080 --> 0:16:47.520 be a pandemic depressed economy for well passed in the 0:16:47.520 --> 0:16:50.440 middle of this year. But I'm actually I'm quite optimistic 0:16:50.440 --> 0:16:52.880 about after that. I think we are we don't have 0:16:52.920 --> 0:16:57.040 the same kind of overhanging of excessive debts and so 0:16:57.120 --> 0:16:59.960 on that we had after the last crisis. We are 0:17:00.000 --> 0:17:03.760 are apparently on the verge of getting an adequate economic 0:17:03.800 --> 0:17:06.280 relief package. So I think we're going to have a 0:17:06.840 --> 0:17:10.600 probably gonna be feeling pretty optimistic by this time next year. 0:17:10.960 --> 0:17:13.520 Well that's that's some that's some good news. Um, what 0:17:13.560 --> 0:17:16.600 about when it comes to the labor market specifically, how 0:17:16.640 --> 0:17:19.400 do we get millions of Americans who lost their job 0:17:19.480 --> 0:17:22.719 during this pandemic back to work. I think that's going 0:17:22.760 --> 0:17:26.600 to be a lot easier than people imagine. Uh, the 0:17:27.359 --> 0:17:30.480 job losses are concentrated. Uh, there are a lot of 0:17:30.960 --> 0:17:32.800 it's not all there, but a lot of the job 0:17:32.880 --> 0:17:36.240 losses are concentrated in sectors that are basically shut down 0:17:36.720 --> 0:17:41.680 because of pandemic risks. And once we have widespread vaccination. 0:17:41.800 --> 0:17:43.800 You know, this is all assuming that the variants don't 0:17:43.800 --> 0:17:46.080 get ahead of us and we lose control of the 0:17:46.080 --> 0:17:50.680 pandemic again. But once we have widespread vaccination effective herd immunity, 0:17:51.160 --> 0:17:53.720 people will start eating in restaurants again, people will start 0:17:53.760 --> 0:17:56.640 to travel again. There'll be some dislocations because we won't 0:17:56.640 --> 0:17:59.640 go back to exactly the same economy we had before. 0:17:59.720 --> 0:18:03.400 But you know, after the after the last crisis, there 0:18:03.400 --> 0:18:06.239 were many people were saying, oh, just those jobs are 0:18:06.280 --> 0:18:09.480 not coming back. Workers don't have the right skills. They 0:18:09.480 --> 0:18:12.440 were totally wrong. Turned out that we were quite capable 0:18:12.440 --> 0:18:14.600 of getting back to full employment, and there's no ways 0:18:14.680 --> 0:18:16.800 to think that is true. Again, do you think that 0:18:16.840 --> 0:18:18.240 when we get on the other side of this that 0:18:18.280 --> 0:18:20.920 we do you you're optimistic obviously, as you said that 0:18:20.960 --> 0:18:24.879 we do have potentially a run in the economy, a 0:18:25.000 --> 0:18:27.640 run perhaps in the financial markets, just like we had 0:18:27.760 --> 0:18:30.840 after the financial crisis, which was kind of low and 0:18:30.880 --> 0:18:34.000 slow but kept on going for a long time. Well, 0:18:34.080 --> 0:18:36.840 this one looks to me like a lot faster. And 0:18:36.880 --> 0:18:39.600 there were reasons that there was a combination of reasons 0:18:39.640 --> 0:18:41.800 why it was so slow last time. One of it 0:18:41.960 --> 0:18:45.359 was that this there was this legacy of excess household debt, 0:18:46.119 --> 0:18:49.199 which is not the situation now. Another wise, that we 0:18:49.240 --> 0:18:53.320 had a lot of destructive disclosterity that was holding back 0:18:53.320 --> 0:18:57.119 the recovery. And uh, you know, those by elections in 0:18:57.160 --> 0:19:00.280 Georgia made all the difference. It means that the time 0:19:00.320 --> 0:19:02.600 and Democrats have learned a lesson. So now that they have, 0:19:03.080 --> 0:19:05.600 even if it's a razor for the majority, they're they're 0:19:05.640 --> 0:19:07.480 not going to make that mistake again. They're gonna go 0:19:07.600 --> 0:19:10.359 for a big package. And so I actually think this 0:19:10.440 --> 0:19:12.960 is gonna be a very different story if you believe 0:19:13.000 --> 0:19:16.760 some of the projections out there about growth. Uh, it's 0:19:16.760 --> 0:19:19.560 gonna be. It really is Morning in America style growth 0:19:19.560 --> 0:19:21.160 that we may be looking at. We may be looking 0:19:21.160 --> 0:19:23.920 at something like you know, over a fourth quarter on 0:19:24.000 --> 0:19:27.440 fourth quarter six seven percent. This is this is looking 0:19:27.440 --> 0:19:30.480 at very very different, not at all the story. You know, 0:19:30.560 --> 0:19:32.840 don't don't fight the last war on this one. Well, 0:19:32.920 --> 0:19:36.000 you know it's interesting. So with that optimism, do you 0:19:36.040 --> 0:19:38.520 think we still need a stimulus package? And I think 0:19:38.520 --> 0:19:40.000 I know the answer to it because I know you've 0:19:40.040 --> 0:19:42.399 been supportive of it. Do you still think we need 0:19:42.440 --> 0:19:46.920 more help? Yeah, So it's not a stimulus package. It's 0:19:46.960 --> 0:19:49.320 mostly just not what it's about. It's a it's an 0:19:49.359 --> 0:19:53.520 economic rescue package. It is we have a miserable time. 0:19:53.560 --> 0:19:56.120 We won't be back to anything like full employment even 0:19:56.200 --> 0:19:59.800 with all of this stuff, until early next year. And 0:19:59.800 --> 0:20:04.120 in the meantime, mass unemployment, Uh, lots of disruption, many 0:20:04.200 --> 0:20:09.919 businesses and great and under terrible stress. The state, local governments, 0:20:09.920 --> 0:20:12.520 it's very uneven, but many of them are still in 0:20:13.119 --> 0:20:18.280 deep trouble. It's almost certainly it's funny thing, the simitly 0:20:19.000 --> 0:20:21.280 I hate calling it the stimulus package, the relief package. 0:20:21.560 --> 0:20:26.080 It's enormously popular, has gigantic public approval, relatively little disapproval. 0:20:26.119 --> 0:20:29.120 Even Republicans approve of it, and it will probably not 0:20:29.160 --> 0:20:31.600 get a single Republican vote in Congress. All right, Tim, 0:20:31.680 --> 0:20:34.760 So it sounds like politics as usual. That was Nobel Laureate, 0:20:34.800 --> 0:20:37.639 an author of Arguing with Zombies, Economics, Politics, and the 0:20:37.640 --> 0:20:39.919 Fight for a Better Future. Of course, that was Paul Krugman. 0:20:40.000 --> 0:20:42.680 Check out his book. It's now out in paperback, and 0:20:42.760 --> 0:20:45.320 also check out that full conversation. It's on our podcast 0:20:45.400 --> 0:20:47.680 feed at Bloomberg dot com. Because Tim, he talked game Stop, 0:20:47.760 --> 0:20:49.760 he talked Bitcoin, he talked about a lot of things. 0:20:49.800 --> 0:20:51.760 You got him talk Robin Hood a little bit as well. 0:20:51.840 --> 0:20:54.320 We did. You're listening to Bloomberg Business Week. Up next, 0:20:54.320 --> 0:20:57.879 our exclusive Business Week Talks interview with Investco CEO Marty 0:20:57.920 --> 0:21:02.119 Flannagan on whether SPACs are in bubble Territory. This is Bloomberg. 0:21:10.200 --> 0:21:13.680 You're listening to Bloomberg Business Week with Carol Messer and 0:21:13.800 --> 0:21:20.280 Bloomberg Quick Takes. Tim Stinovich from Bloomberg Radio. All right, 0:21:20.400 --> 0:21:22.800 so Investco, you know who they are. They are the 0:21:22.800 --> 0:21:26.120 independent investment management firm running more than one point three 0:21:26.200 --> 0:21:29.080 trillion dollars and tim that includes the giant q q 0:21:29.280 --> 0:21:32.280 q E t F tracking the nastack one d It's massive, 0:21:32.560 --> 0:21:35.360 it is and CEO Marty Flanagan has run the Atlanta 0:21:35.400 --> 0:21:38.000 based fund company since two thousand five and during his 0:21:38.080 --> 0:21:41.959 tenure has acquired the power shares in Guggenheim et F businesses, 0:21:42.080 --> 0:21:45.160 as well as Oppenheimer funds and Van Kampen fund families. 0:21:45.240 --> 0:21:46.520 And we caught up with him at the end of 0:21:46.600 --> 0:21:49.440 January for another edition of Bloomberg Business Week Talks. We 0:21:49.640 --> 0:21:52.240 gave your teaser that conversation you might recall just a 0:21:52.240 --> 0:21:55.119 few weeks ago. So here's the complete conversation that began 0:21:55.200 --> 0:21:57.680 by talking about the year like no other that we've 0:21:57.720 --> 0:22:02.480 all had, something that none of us have ever imagined living. 0:22:02.600 --> 0:22:05.240 And uh, I will say a lot of the work 0:22:05.280 --> 0:22:08.920 that was done in sets up a very interesting environment 0:22:08.920 --> 0:22:12.600 going in one. I think everybody's looking for strong economic 0:22:12.640 --> 0:22:15.760 growth in the United States in particular and those countries 0:22:15.800 --> 0:22:18.840 around the world, driven by the optimism and the ability 0:22:18.840 --> 0:22:20.720 to start to get back to work with the vaccine 0:22:20.760 --> 0:22:23.639 coming and all us frankly learning how to work in 0:22:23.640 --> 0:22:26.840 different ways. Yeah. Absolutely. Well, what's interesting is our Peter Koy, 0:22:26.920 --> 0:22:31.120 Bloomberg Economics editor, uh, Bloomberg Business Week Economics editor. He's 0:22:31.119 --> 0:22:32.920 got a story out there about whether or not we're 0:22:32.960 --> 0:22:35.800 setting up to be like the roaring nineteen twenties, the 0:22:36.160 --> 0:22:38.960 what we saw after another time period in our history 0:22:38.960 --> 0:22:42.399 where we had a pandemic, we had a tough economy. Um, 0:22:42.440 --> 0:22:44.080 and whether or not we see we you know, we 0:22:44.160 --> 0:22:46.159 come roaring back. How do you see it? Do you 0:22:46.200 --> 0:22:49.080 think that we might be creating bubbles right now and 0:22:49.119 --> 0:22:50.880 that we're going to pay the piper at some point, 0:22:50.960 --> 0:22:53.399 or do you see us setting up for maybe a 0:22:53.440 --> 0:22:57.720 really positive type of market environment, some economic momentum that 0:22:57.960 --> 0:23:03.000 feels much more normal and maybe even up beat. Yeah, so, uh, 0:23:03.920 --> 0:23:06.000 lots of good thoughts there. Let's go to the more 0:23:06.080 --> 0:23:08.520 immediate outlook, and I think you could really have, as 0:23:08.520 --> 0:23:11.000 your connects are saying, a really strong economy right with 0:23:11.040 --> 0:23:13.160