Speaker 1: This is Bloomberg Business Week. I'm Carol Masser and I'm
Speaker 1: Jason Kelly. We're right here every day bringing you the
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Speaker 1: YouTube by searching Bloomberg Global News. Let's head over to
Speaker 1: a conversation with our friends at John's Hopkins. We're talking
Speaker 1: about ANIT assist road deputy director at John's Hopkins Center
Speaker 1: for Health, Security and effectult. Remember at the Bloomberg School
Speaker 1: of Public Health is you can probably tell by the
Speaker 1: name Bloomberg School of Public Health that is supported by
Speaker 1: Mike Bloomberg, the founder of Bloomberg Philanthropies and Bloomogulp, the
Speaker 1: parent of this radio station. Anita, really nice to have
Speaker 1: you back with us. So much going on, and I
Speaker 1: want to go straight to the issue that I know
Speaker 1: is completely front of mine as parents for both Scarlett
Speaker 1: and me, which is reopening schools. Where are we what
Speaker 1: do we do? Thanks Jason, and I'm with you. I
Speaker 1: also have two high school aged children who would love
Speaker 1: to be back in school, and I would love to
Speaker 1: have them back in school. UM. I think that the
Speaker 1: most important thing we can do to get our kids
Speaker 1: back in the classroom are really three things. One, we
Speaker 1: need to get community transmission under control UM. It's hard
Speaker 1: to send kids back to school when there are still
Speaker 1: raging outbreaks in our local communities UM. And then to
Speaker 1: one school's open, open them very gradually with tight mitigation
Speaker 1: measures that we know work like physical distance and mask
Speaker 1: us UM. And to get that physical space, we may
Speaker 1: need to prioritize some kids over others, so it would
Speaker 1: make sense to younger kids back UM before older ones.
Speaker 1: And then also maybe those most vulnerable or who need
Speaker 1: UM special attention in class. And then three, invest in
Speaker 1: research that we need to understand more about kids role
Speaker 1: in transmission of coronavirus, so we know in the future
Speaker 1: how how careful or how type those mitigation measures need
Speaker 1: to be to keep everyone's safe. Yeah, well that investment
Speaker 1: can't be at the expense of schools because they already
Speaker 1: have enough expenses to deal with enough headaches. Jason and
Speaker 1: I are both in the suburbs of New York and
Speaker 1: a lot of the public schools need to submit their
Speaker 1: proposals to the state Department of Education at the end
Speaker 1: of this month. So I've been hearing a lot of
Speaker 1: different proposals from schools on how they're going to make
Speaker 1: this work. One thing that strikes me though, and I'm
Speaker 1: always puzzled by this, it seems like we're reinventing the wheel.
Speaker 1: Other countries have done this. Canada reopened its schools in May.
Speaker 1: Taiwan never closed schools. Granted, taiwan situation never got to
Speaker 1: the point like China, uh, the United States, but other
Speaker 1: countries have done it. There are best practices that we
Speaker 1: can employ. Why are we kind of fumbling in the
Speaker 1: dark here when there are examples to draw from? There
Speaker 1: are a lot of good examples. But for the the
Speaker 1: countries that open school successfully, they had much lower prevalence
Speaker 1: of disease rates than we now do. Our outbreak is
Speaker 1: um there. You know, cases are increasing in most of
Speaker 1: the states, hospitalization rates for COVID are now matching or
Speaker 1: exceeding numbers seen in New York in March and April
Speaker 1: from In many states, UM hospitalizations are getting under pressure.
Speaker 1: So it's UM it's very difficult to think about opening
Speaker 1: schools and areas where the epidemic is spiraling out of control.
Speaker 1: For those that are able to reduce the prevalence of
Speaker 1: disease and communities, I think we can use a lot
Speaker 1: of the measures that have worked successfully in other countries
Speaker 1: and they will work for us to h So that's
Speaker 1: what we should be focusing on. And tell us about
Speaker 1: some of those I mean, what are some of those measures?
Speaker 1: I mean, you've talked a little bit about the social
Speaker 1: distancing and other things. Are there things that maybe aren't
Speaker 1: as UM well known that you've seen because you've looked
Speaker 1: into this much more in depth than most of us have.
Speaker 1: I think many of them people have heard of now. Certainly,
Speaker 1: physic six feet of physical distance is important, also requiring
Speaker 1: masks indoors. It can significantly decrease the chances of infection
Speaker 1: UM decreasing the number of students per class and as
Speaker 1: c d c UM put out its recent guidance. They
Speaker 1: emphasize the issue of cohorting. You know, get kids in
Speaker 1: smaller groups and keep that same cohort together throughout the day.
Speaker 1: Now that's a lot easier to do in elementary school
Speaker 1: than it is in middle and especially high school, when
Speaker 1: kids have different kinds of classes and you can move around. Um.
Speaker 1: But also ventilation is an important factor. I know schools
Speaker 1: are looking at ways to upgrade their ventilation systems, which
Speaker 1: really gets back to Scarlett's point about how costly it
Speaker 1: is for schools to be able to put all these
Speaker 1: measures in place. And then other um in schools and
Speaker 1: other countries have put up you know, plastic barriers either
Speaker 1: between students or we're in front of the teacher to
Speaker 1: give them additional safety. There's a lot of discussion about
Speaker 1: you know, Denmark and other places that helped classes outdoors
Speaker 1: as much as possible. That is a great idea, and
Speaker 1: we should be creative and thinking about other spaces to
Speaker 1: bring children. But it's not going to be possible for
Speaker 1: for all schools and all places in all states. Um
Speaker 1: As we you know start in the hot summer and
Speaker 1: and and continue through the cold winter. One thing that
Speaker 1: parents around the world are obsessing over and kids around
Speaker 1: the world are probably trying to ignore because it means
Speaker 1: the end of summer is reopening school, how you go
Speaker 1: about doing it, and the complications involved in it. And
Speaker 1: one thing that's come up again and again, Anita, especially
Speaker 1: when I look through some of these proposals that school
Speaker 1: districts are putting out, is schools are going forward with
Speaker 1: planning and then kind of assuming that teachers will go
Speaker 1: along with it, or then they'll bring it to the teachers. Obviously,
Speaker 1: the faculty has a lot to be concerned about. How
Speaker 1: scared should they be about potentially catching COVID through kids,
Speaker 1: through asymptomatic kids. What does the science tell us, Well,
Speaker 1: this is an area where we still have some blind
Speaker 1: spots in the science and much more UM research needs
Speaker 1: to be done to answer that question. UM. The the
Speaker 1: results of different studies around the world are are mixed
Speaker 1: UM and so in some studies have concluded that children
Speaker 1: play a less of a role in transmission as a
Speaker 1: virus than adults do UM. Other studies have shown that
Speaker 1: kids are as likely to transmit UM the virus as adults. UM.
Speaker 1: There are lots of different kinds of studies with lots
Speaker 1: of different protocols that have been used, so everyone is
Speaker 1: not sort of starting at the same point. So it's
Speaker 1: it's difficult to know. That's why we really need to
Speaker 1: be ready when schools do reopen, to be able to
Speaker 1: get on top of any clusters of cases, UM, and
Speaker 1: to track those and to figure out the chains of
Speaker 1: transmission so that we know whether children are the index case,
Speaker 1: you know, the first case to spread it to others
Speaker 1: or not. And um, and no one is really I
Speaker 1: mean teachers, UM are not going to feel comfortable, I think,
Speaker 1: being back in school unless they feel that transmission in
Speaker 1: the community is under control and the schools have a
Speaker 1: good plan for trying to reduce the risk. Anita, it's
Speaker 1: impossible to tell the future, but I'm gonna ask you
Speaker 1: too anyway, UM, what's the most likely scenario you think
Speaker 1: for a school district that that opens. Is it going
Speaker 1: to be sort of start stop, hype red schools closing,
Speaker 1: schools upening, Like, what do you think is most likely
Speaker 1: to happen in a market like New York or or
Speaker 1: Washington where you are well in New York? And it's
Speaker 1: hard to say. And I think that some public schools
Speaker 1: may make different choices than private schools do. Again, it's
Speaker 1: going to it should depend very much on the numbers
Speaker 1: at that time. I think that um DC and New
Speaker 1: York are both UM lucky if you can call it that,
Speaker 1: or through a lot of hard work, they have built
Speaker 1: up a contact tracing workforce UM that is really helpful
Speaker 1: so that they can be deployed when there are outbreak
Speaker 1: breaks to be able to track the transmission UM. I
Speaker 1: think probably you know, the two most likely scenarios are
Speaker 1: a hybrid approach or starting the school year with online
Speaker 1: learning UM and then trying to transition into a hybrid
Speaker 1: approach before the end of before the end of the
Speaker 1: calendar year. Yeah, that means a lot of uncertain parenting too,
Speaker 1: because they can't go back to work very quickly. Here Anita,
Speaker 1: do you think we need another mass lockdown? Jason, I
Speaker 1: discussed how if we had done it the right the
Speaker 1: first time and we were patient enough the first time,
Speaker 1: we'd be in a very different place. Now, of course,
Speaker 1: we now have outbreaks locally all over the place. Can
Speaker 1: we muddle through the next school year with localized shutdown
Speaker 1: or do we need something bigger? Well, there's been a
Speaker 1: lot of discussion about what we don't want, which is
Speaker 1: going back to a full on shutdown that we lived
Speaker 1: through in the spring. UM. But I think, you know,
Speaker 1: we have to think more about what what do we want? UM?
Speaker 1: What do what do we want our October November December
Speaker 1: to look like? UM? And I think that people there
Speaker 1: would all come together and though that we want to
Speaker 1: have more freedom. We want our children to be back
Speaker 1: in school, we want parents to be able to go
Speaker 1: back to work. And so I think that what we
Speaker 1: need to do to get there UM, in light of
Speaker 1: the number of high number of cases in the hospitalizations
Speaker 1: to cross the country is to really encourage physical distancing
Speaker 1: and Matthew's limit large indoor gatherings UM. And then in
Speaker 1: some areas with exponential growth of cases, we need to
Speaker 1: close high risk activities where you know, in places where
Speaker 1: the outbreak is worsening, so things like bars and indoor
Speaker 1: entertainment venues and large indoor restaurants. And we don't need
Speaker 1: to go full on all shelter in place, UM, but
Speaker 1: we we can close some of the high risk places UM.
Speaker 1: That would really help to reduce the cases. All right,
Speaker 1: So good to get some time with you and need
Speaker 1: assist for a deputy director for Johns Hopkins Center for
Speaker 1: Health Security. She joined us from Washington, d C. Well,
Speaker 1: this is a story that everyone's excited about. I have
Speaker 1: to say, I just couldn't wait to get into this
Speaker 1: with this gang. Chris Paul Mary wrote the story, It's
Speaker 1: canceled college sports games could cause ESPN millions. He's our
Speaker 1: l A bureau chief, my fellow chief out on the
Speaker 1: West Coast. He joins us from the City of Angels.
Speaker 1: Joel Webber, the editor of Bloomberg Business Week. He joins
Speaker 1: us from Massachusetts. And Joel, I mean, I just wanted
Speaker 1: to sink my teeth into this. I've been obsessively thinking
Speaker 1: about this, just in the sense of the economic implications
Speaker 1: of no sports. And as you have said many times,
Speaker 1: every story is a business story. Yeah, and it's especially
Speaker 1: true for sports right now. And you know, look like
Speaker 1: we we all are suddenly living in this world where
Speaker 1: we're craving, or at least I'm craving sports content. Um,
Speaker 1: and baseball got going. Um might see a false start there,
Speaker 1: We're about to see NBA start today. Uh. But what
Speaker 1: Chris Palm Mary did such a great job with this story.
Speaker 1: It really just looks at the worldwide leader that being
Speaker 1: ESPN in the sports world. And what it really reveals
Speaker 1: is how important college football is for ESPN's bottom line.
Speaker 1: And college football seems to be really in flux right
Speaker 1: now and and that might have big implications only for ESPN,
Speaker 1: but obviously its parent company Disney. Um Chris, what were
Speaker 1: you able to find out? He's obviously esp and huge
Speaker 1: in sports, but I just didn't realize how big in
Speaker 1: particular college They took a big bed about ten years
Speaker 1: ago to try to get as many of these conferences exclusively.
Speaker 1: So they launched these networks, ACC Network, at the SEC Network,
Speaker 1: Longhorn Network. Last year, more than half of all college
Speaker 1: football viewing was done on one of these ESPN outlets,
Speaker 1: and streaming service ESPN Plus has it. Obviously they run
Speaker 1: games on ABC as well, College Game Day hugely important
Speaker 1: full hot of American Saturday mornings. Uh. So you know,
Speaker 1: this is a big business for them, billion dollar business
Speaker 1: and uh and it's totally up in the air. I
Speaker 1: just can't believe that there are ten different channels for
Speaker 1: college games at ESPN. That that just it's stunning. I mean,
Speaker 1: I've actually watched cable television yesterday. That's several page downs
Speaker 1: on under remote control. UM. I also watched hockey last
Speaker 1: night on cable, which was really surreal. UM. You know,
Speaker 1: they're they're piped in fan noises and everything. One thing
Speaker 1: that struck me though is hockey basketball. They're they're doing
Speaker 1: the whole bubble thing, right, UM, college sports, can you
Speaker 1: can you do a bubble? And if you can't, UM,
Speaker 1: even no, let's just go with the idea that you could.
Speaker 1: There isn't one commissioner, is there. There isn't one league
Speaker 1: that can set the rules. It's kind of like all
Speaker 1: these different leagues, different conferences setting their own rules. The
Speaker 1: big difference between that and professional sports. UM. And one
Speaker 1: of the things to your point that we're starting to
Speaker 1: see and we'll see if this continues to be the trend,
Speaker 1: but the professional sports that have played in that bubble
Speaker 1: in Orlando, the NBA and Major League Soccer seemed to
Speaker 1: be having less trouble than Major League Baseball, which is
Speaker 1: out on the road. And UM College has been trying
Speaker 1: to adapt sort of a hybrid model. They've a few
Speaker 1: of the conferences have reduced their way teams essentially, they're
Speaker 1: only gonna play teams in their conference. Maybe one other game,
Speaker 1: but that still involves travel, and so uh it's it's
Speaker 1: we're mains be seen. I think it's could be a
Speaker 1: lot more pressure for the colleges if uh so these
Speaker 1: players start to test positive parents who involved, it's going
Speaker 1: to be, you know, a tug of war. Uh So.
Speaker 1: Disclosure that I'm a former ESPN employee here, but one
Speaker 1: thing that um, you know, ESPN has really been able
Speaker 1: to to use to its advantage is this lucrative uh
Speaker 1: to stream business model where it makes money not only
Speaker 1: from advertisers and it's especially lucrative demographic, but then they
Speaker 1: also make money via the cable providers. And Chris, I
Speaker 1: think one of the things that you hit on on
Speaker 1: in your reporting here is both the advertising as well
Speaker 1: as the cable revenue is is that is ultimately at
Speaker 1: risk here and and so beIN a picture like exactly
Speaker 1: how much money we're talking about here, um, and how
Speaker 1: ESPN is attempting to navigate the moment. Well, the advertising
Speaker 1: is the biggest immediate head because you cancel the game
Speaker 1: and then you had some mad spaces that were sold.
Speaker 1: That's about the roughly three billion in revenues for the
Speaker 1: ESPN Empire. But you said, the bigger number is this
Speaker 1: ten billion year in fees that come in from everybody
Speaker 1: paying their their cable bill every month. You know, that's
Speaker 1: a longer term. It's it's sticky. But there were some
Speaker 1: news today. Comcast just said they are going to refund
Speaker 1: people's monthly bills for their regional sports networks. Uh. You
Speaker 1: know these are Chicago, Philly, um, you know local channels,
Speaker 1: the broadcast and particularly the baseball games because their season
Speaker 1: has been cut so dramatically, and so this is this
Speaker 1: has been been following the story for months. What's how
Speaker 1: is this sort of model, the ecosystems, as people call it,
Speaker 1: going into the hold or is it going to break?
Speaker 1: You know, people playing their cable you know, the cable
Speaker 1: companies pay their networks, and the networks play pay the league.
Speaker 1: Nobody wants to upset that wonderful little system that they've got,
Speaker 1: but after months without sports, it's starting to crack. Well,
Speaker 1: and Chris, you went exactly where I was going to
Speaker 1: go next. And it's a very personal thing. I'm a
Speaker 1: huge college football fan. I grew up in the South.
Speaker 1: I love SEC football. I tuned into the SEC network
Speaker 1: all fall. But I have to say college football is
Speaker 1: one of the only reasons we still have cable at
Speaker 1: this point. And it sounds like, based on your reporting
Speaker 1: the kicker to the to your story, I'm not alone
Speaker 1: in hanging onto that and not hanging onto it if
Speaker 1: there's no college football. Well, you know, everyone's been thinking
Speaker 1: about their spending on cable because of Netflix and all
Speaker 1: the other wonderful screaming sources. Ub Security did a survey.
Speaker 1: They said there's customers who cancel the cable if there
Speaker 1: was no college football. So you know, that's a pretty
Speaker 1: big hit in the broad with that. For the for
Speaker 1: the networks is you know, you cancel and then that's
Speaker 1: you're done, right. It's not like an advocates canceled, Right,
Speaker 1: You've lost the subscriber for for years and uh so
Speaker 1: that's you know, what we've seen in covid is there
Speaker 1: have been ongoing trends pressure on a gable bundle and
Speaker 1: and this has really accelerated these trends, so huge surgeon
Speaker 1: people watching streaming and hire much stronger cuts in in
Speaker 1: the PayTV customers. Alright, we're gonna leave it there. It's
Speaker 1: a terrific story. I know scartand I both just devoured
Speaker 1: it when we saw it come across this morning. Chris
Speaker 1: Palm Mary wrote it the story canceled college sports games
Speaker 1: could cost ESPN millions. It's online on the Bloomberg right now.
Speaker 1: It'll be in the new issue of Bloomberg Business Week
Speaker 1: magazine coming out later this week. Our thanks to Chris
Speaker 1: as well as to Joe Webber, the editor of the magazine.
Speaker 1: This is Bloomberg Business Week with Carol Masser and Jason
Speaker 1: Kelly on Bloomberg. Brady, all right, let's talk a little
Speaker 1: business week economics and continue our series that we inadvertently
Speaker 1: are doing. Today's Scarlett talking with people who ask questions
Speaker 1: of J. Paul yesterday from Bloomberg. A lot of them,
Speaker 1: There are a lot of them. We are happy to
Speaker 1: be joined by Katarina Surviva, Federal Reserve and economics reporter
Speaker 1: for Bloomberg. Joinus on the phone from Houston, and Katerina,
Speaker 1: great to talk to you. I know it's a busy week.
Speaker 1: Uh talk to us about what we heard, didn't hear
Speaker 1: and the reaction by investors to J. Pall yesterday. Hi,
Speaker 1: thanks so much for having me on. Um. Yeah, so
Speaker 1: it was you know, it was a press conference and
Speaker 1: a Fed meeting that UM in some respects was what
Speaker 1: people were expecting. You know, there was not much news
Speaker 1: in terms of new policy action that came from it.
Speaker 1: They of course left weights unchanged and pledged their support
Speaker 1: for the economy as we continue through the crisis. UM.
Speaker 1: But I do think you heard, especially in the press conference, UM,
Speaker 1: some more kind of UM somber notes on the economy. UM.
Speaker 1: Of course, we saw today's second quarter GDP print UM
Speaker 1: kind of show the length of what we're looking at,
Speaker 1: UM in terms of the crisis. So you heard that
Speaker 1: from Jaire Powell that yesterday. And you also heard him
Speaker 1: UM talk about fiscal action UM, which which is you know,
Speaker 1: timely as Congress debates the next round of stimulus. UM.
Speaker 1: So you heard him kind of point point to that
Speaker 1: as UM as possibly you know, calling out his colleagues
Speaker 1: there to to perhaps do more right. And we expected
Speaker 1: him to do that. That's been something he's been pounding
Speaker 1: the table on, or in his case, gently tapping the
Speaker 1: table on for a couple of meetings. Now j Pal
Speaker 1: doesn't pound the table. He's much more nuanced than that.
Speaker 1: One thing that I noticed was there's a note from
Speaker 1: that West indicating that they believe said will delay a
Speaker 1: pivot to ford In for guidance till November. So the
Speaker 1: thinking was that this would be a wait and see
Speaker 1: kind of meeting and there be some action to be
Speaker 1: announced in September. But if not West is correct, they
Speaker 1: might push that off until November. Why is there Why
Speaker 1: do you think there is this pressure to come up
Speaker 1: with something by September? Yeah, I mean I think some
Speaker 1: of it might just be that it's kind of the
Speaker 1: what next attitude? Um. I think it's some of that. Um.
Speaker 1: You know, we of course had a lot of activity
Speaker 1: from the Fed in the spring. Um, there's been a
Speaker 1: bit of a lull as to kind of wait and
Speaker 1: see what happens with the economy. So I wonder if
Speaker 1: if investors are kind of eager to see, um, what
Speaker 1: more the central Bank can do. And also, I mean
Speaker 1: that would come at a time when you know, we're
Speaker 1: seeing this resurgence in the virus this summer, so perhaps
Speaker 1: by September we may very well need something else. UM.
Speaker 1: I think that's why we're seeing some pressure from some investors. UM.
Speaker 1: I think the call to to maybe see that delayed
Speaker 1: until November, you know, also makes sense. I think it's
Speaker 1: just it's tough. I think it's really kind of week
Speaker 1: by week at this point in terms of what's going
Speaker 1: on with the economy. And so tell us how the
Speaker 1: economy looks, Katerina from your perspective being there in Houston.
Speaker 1: I know I asked this question every time we talked
Speaker 1: to you, but I am fascinated by this idea that
Speaker 1: you have this view from all your colleagues and from
Speaker 1: all your great work covering the FED. But you're also
Speaker 1: in Houston, so you're talking to people locally and regionally,
Speaker 1: and we know from talking to folks across the country,
Speaker 1: this is a very different economy and a very different
Speaker 1: feel around the virus and the recovery, if there is
Speaker 1: such a thing right now, depending on where you're sitting, Yeah, absolutely,
Speaker 1: I mean the resurgence that we've seen here, it's just
Speaker 1: it's incredible because of course, you know, like everyone else
Speaker 1: or most of everyone else, Texas locked down in April,
Speaker 1: and at that point, you know, we really didn't have,
Speaker 1: um the caseload that you know, you guys had in
Speaker 1: the New York area. UM. So it's it's been interesting
Speaker 1: because we were locked down, we opened up, you know,
Speaker 1: fairly early in May, and then of course mid till
Speaker 1: late June we had this resurgence. So you know, we
Speaker 1: feel like we've been locked down here for many months
Speaker 1: and there's just been no let up. I think that's
Speaker 1: that's that businesses here having a really hard time with that. Um.
Speaker 1: I think you kind of, you know something, some bigger
Speaker 1: businesses that probably cater um to a more national clientele, um,
Speaker 1: like manufacturing firms here in Texas have seen a bit
Speaker 1: of business and demand come back where we're seeing that.
Speaker 1: But I think beyond the ground mom and pop places
Speaker 1: you know, are not I mean our our local restaurants
Speaker 1: here that we love to go to. A lot of them,
Speaker 1: you know, opened for a few weeks, but how again
Speaker 1: kind of gone to take out only or just completely
Speaker 1: shut their doors for the time being. UM. So yeah,
Speaker 1: it is really starved to see here. Yeah, I can imagine.
Speaker 1: And Katerina, you were at the FED press conference yesterday
Speaker 1: virtually of course asking a question, and I know you
Speaker 1: posed a question on the Federal Reserve targeting the black
Speaker 1: unemployment rate and it is higher than for other ethnicities
Speaker 1: such as whites or Asians. Um, what kind of answer
Speaker 1: did Powell give? Did it seem like it was something
Speaker 1: the FED has discussed at length. Yeah, I think the
Speaker 1: FED is discussing this UM a good amount. I think
Speaker 1: that you've seen a lot of that, especially since Janet
Speaker 1: Yellin's tenure. UM. It is something they talk about and
Speaker 1: are I think aware of. UM. We see evidence of
Speaker 1: that in the minutes the meeting minutes as well when
Speaker 1: we get those UM. He did say that, UM, you
Speaker 1: know they're in his mind. I think there's not a
Speaker 1: ton they and do he kind of punted the ball,
Speaker 1: if you will, to the fiscal realm and and you know,
Speaker 1: talked about perhaps more fundamental changes and how fund education
Speaker 1: in this country and um, you know some of those
Speaker 1: other areas of the economy that that probably Congress is
Speaker 1: better suited for. But I do think there is UM,
Speaker 1: there are things that the FED could do in this realm.
Speaker 1: You know, we've had economist call for the FED to
Speaker 1: specifically target um, you know, an indicator like black unemployment, UM,
Speaker 1: you know, saying for example that we won't raise rates
Speaker 1: until we see black unemployment across this threshold. So you know,
Speaker 1: there there are things they could do. Certainly there are
Speaker 1: no uh Panaceo when occurred to the entire economy, but
Speaker 1: you know they do have tools at their disposal in
Speaker 1: my opinion. Well, and we know you've done some great
Speaker 1: reporting around that you've talked to to us about it
Speaker 1: on this program. So check out Katerina's Arriva's work at
Speaker 1: Katerina's Arriva on Twitter as well, because he's leading the
Speaker 1: way along with the Bloomberg team on a lot of
Speaker 1: these core economic issues. At a reserve in the economics
Speaker 1: reporter joining us on the phone from Houston. All right,
Speaker 1: let's talk politics right now, because in the markets today,
Speaker 1: there are a couple of things that really got investors attention. First,
Speaker 1: of course, was that terrible print on GDP would showed
Speaker 1: the economy contracted annualized rate, so if you were to
Speaker 1: stretch out what happened in the second quarter to the
Speaker 1: full year, it would be a thirty three percent contraction.
Speaker 1: And then, of course, the president tweeting that the election
Speaker 1: should be delayed or could be delayed, or he wants
Speaker 1: it to be delayed. It's not really clear. He just
Speaker 1: kind of used a lot of exclamation points. But I
Speaker 1: want to bring in Wendy Benminson, who is our politics
Speaker 1: editor here at Bloomberg news and she covers all things,
Speaker 1: and of course, Wendy, the tweet that President Trump sent
Speaker 1: out was very much tied to the GDP report. His
Speaker 1: election prospects hinge on the economy, right, it does hinge
Speaker 1: on the economy, and lately the pole have shown that
Speaker 1: while the economy used to be the one policy area
Speaker 1: where people trusted him more than Democratic nominee Joe Biden,
Speaker 1: that's no longer the case. They are at least even
Speaker 1: a Biden as ahead. So as soon as those very
Speaker 1: gloomy GDP numbers came out, he suggested we delay the election.
Speaker 1: To be sure. He cannot delay the election. It takes
Speaker 1: an act of Congress, and everyone from Miss McConnell to
Speaker 1: Nancy Pelosi has said it's not gonna happen. Were you surprised, Wendy,
Speaker 1: having and knowing having the experience you have, knowing Washington
Speaker 1: the way you do, the the ins and outs and
Speaker 1: the politics of it all. Were you surprised how quickly, uh,
Speaker 1: the especially the Republicans came out against this, given how
Speaker 1: much they have fallen into line with this president in
Speaker 1: recent history. Well, yes, is the short answer. I was
Speaker 1: a little surprised at how swiftly. Um, they all came
Speaker 1: out against it. Uh. That crack in his support has
Speaker 1: been widening for a little while now, sort of ever
Speaker 1: since the Republican led States and the Sun Belt in
Speaker 1: the South began to be hit with the virus very hard,
Speaker 1: people have and Trump's pool numbers have continued to decline.
Speaker 1: Republicans are starting to feel a little safer about contradicting
Speaker 1: the President. They contradicted him on the payroll text, which
Speaker 1: he wanted to eliminate in the latest stimulus, and now
Speaker 1: they're finding other reasons. And it is just one of
Speaker 1: the pillars of our democracy that the election is on
Speaker 1: the first Tuesday after the first Monday in November. All
Speaker 1: has been since eighteen forty five, and there is no
Speaker 1: reason to change it in the minds of Congress. What
Speaker 1: what gets my interest is how he tweeted it, or
Speaker 1: what he said in the tweet. He said, with universal
Speaker 1: mail and voting and in parentheses, not absentee voting, which
Speaker 1: is good, will be the most inaccurate and fraudulent election
Speaker 1: in history. And then he goes on to suggest to
Speaker 1: delay the election action. What is the difference between universal
Speaker 1: mail in voting and absentee voting virtually nothing. Some states
Speaker 1: call it mail in balloting. Some states call it absentee voting. UM.
Speaker 1: In some states they have both, and there are slight
Speaker 1: technical differences. But he the difference is that he's talking
Speaker 1: about not lining up at the ball in place. President
Speaker 1: Trump is setting up reasons for a possible legal challenge
Speaker 1: after the election. I'm not saying that, you know, the
Speaker 1: army is going to have to come in there and
Speaker 1: drag him out of the Oval office. I'm not suggesting that,
Speaker 1: but I am suggesting that he keeps saying that mail
Speaker 1: in an absentee balloting, which is going to become much
Speaker 1: more popular because of the virus this year. UM, he
Speaker 1: says it's fraudulent. And so when a majority of Americans
Speaker 1: vote mail in our absentee and he and if he loses,
Speaker 1: he will be able to say, ah ha, that's fraudulent.
Speaker 1: I'm sewing, which is also one of the things he
Speaker 1: has often done in his life as a businessman and
Speaker 1: a politics So I think he's setting up the grounds
Speaker 1: for a legal challenge after the election. Wendy, I do
Speaker 1: want to ask you before we let you go. Only
Speaker 1: about a minute and a half left here or so
Speaker 1: some striking optics today at the funeral of John Lewis,
Speaker 1: where you know, of course, the well known representative from
Speaker 1: Atlanta full disclosure, he was my congressman when I lived
Speaker 1: in Atlanta for a time. Um former Presidents Clinton, Obama,
Speaker 1: and Bush forty three all eulogizing him. There's there's something
Speaker 1: to be noted there, especially given the lack of response
Speaker 1: other than I believe one tweet that the President made
Speaker 1: with the passing of John Lewis. Yes, well, like him
Speaker 1: or not. Trump is the kind of person who has
Speaker 1: a personality where it's all about him, and I'm not
Speaker 1: in his head. I certainly don't know whiver him. I
Speaker 1: know that he has been upset of John Lewis for
Speaker 1: being one of the ringleaders of the impeachment effort, and
Speaker 1: I'm sure that that in his mind made it so
Speaker 1: that he didn't have to say what normal people say
Speaker 1: after someone of note dies. So, yes, you had President
Speaker 1: George W. Bush there, you had former President Jimmy Carter,
Speaker 1: You of course had Barack Obama there, But you didn't
Speaker 1: have Donald Trump at the funeral at He didn't go
Speaker 1: to the capital to see John Lewis. Lions state and
Speaker 1: when Herman Kane died a Republican today of the virus,
Speaker 1: and he got it out of Trump rally. Um. There
Speaker 1: was a very hard felt tweet, but not a word
Speaker 1: about John Lewis notable Wendy Benjaminson, thank you so much.
Speaker 1: Nice to catch up with politics editor for Bloomberg Jinus
Speaker 1: on the phone. Her team doing a really a fantastic
Speaker 1: job covering this very complicated, already presidential race and obviously
Speaker 1: a lot of rhetoric being tweeted around today a journal now,
Speaker 1: but you let me drive. Oh no, no, no, no no,
Speaker 1: all right, please, I'll do the right revel. I want
Speaker 1: to try it. Just drive, baby, good questions trying. This
Speaker 1: is the drive to the globe. Thanks, we'll try us.
Speaker 1: Bloomberg Radio, all right, it is the drive to the clothes.
Speaker 1: It's a big one today given what we're anticipating. On
Speaker 1: the other side. The perfect person to talk to us
Speaker 1: about it's Scarlett. It's Cathy Boyle, President founder of Chapin
Speaker 1: Hill Advisors, joining us on the phone from Lovely Pound Ridge,
Speaker 1: New York, just up the road from me here in
Speaker 1: Westchester and normally where you are, just up the road
Speaker 1: from your place, Scarlett, Cathy really nice to have you
Speaker 1: back with us. Great to be here, Jason, how are you.
Speaker 1: I'm doing well? Uh, tech, let's talk. I mean, this
Speaker 1: is a massive day. So just to set the table
Speaker 1: a little bit, we were just with our own Dave
Speaker 1: Wilson doing his chart of the day, and following up,
Speaker 1: he said, of the total weight in the SMP five,
Speaker 1: the big four tech companies, you throw on Microsoft, it's
Speaker 1: this is this is the market right now. It is Indeed,
Speaker 1: it's a very very narrow market. And um if these
Speaker 1: tech stocks were to correct ten percent, the bottom one
Speaker 1: d have to move up just to the s Holy
Speaker 1: mackerel say that again. If tech stocks go's five FAM right,
Speaker 1: f A, M F A MG, if they were to
Speaker 1: fall ten percent, the bottom one stocks in the SMP
Speaker 1: would have to move up collectively in order to keep
Speaker 1: them index even. Wow, that's just stunning. Jason and I
Speaker 1: were saying that we've never had a day, or we
Speaker 1: can't remember a day in which these four companies announced
Speaker 1: earnings all at the same time, or roughly all at
Speaker 1: the same time. UM, Apple will be reporting it. Fourth,
Speaker 1: what do you think is Priceton right now? I mean,
Speaker 1: everyone knows that there's going to be a slowdown in advertising.
Speaker 1: Everyone knows that Apple can't tell us very much about
Speaker 1: the iPhone twelve. But what's priced in What could cause
Speaker 1: a bit of a sell off maybe not ten percent,
Speaker 1: but a bit of a sell off in some of
Speaker 1: these names. Well, almost anything, right, It's like the elephant's
Speaker 1: head move for the door scarlet, you know, it's that's
Speaker 1: what we tell people. It's like, you know, if they
Speaker 1: all go for that door at the same time and
Speaker 1: you're an ant on that glass, forget it, You're getting smashed.
Speaker 1: So this is what people don't understand. These tech stocks
Speaker 1: are also in every single large cap mutual fund. They're
Speaker 1: also in every single hedge fund, any of the big
Speaker 1: hedge funds. The concentration and people's portfolios to these are incredible. So,
Speaker 1: you know, it could be almost anything. It could be
Speaker 1: um an overall, It could be something on the fit
Speaker 1: right right now, the Fit is driving this. Everybody is
Speaker 1: fear of missing out. Let's get in, let's stay in,
Speaker 1: and everybody thinks they're so freaking smart that they're going
Speaker 1: to get out before the collapse starts to happen. And
Speaker 1: so it could be earnings, could be uh Global, could
Speaker 1: be you know, more China, you know Trump, It could
Speaker 1: be almost anything that could be the catalyst. Um. We
Speaker 1: have no volatility, the fetish shortfall, you know, and that's
Speaker 1: how hedge funds usually make money. UM. So you know,
Speaker 1: it really is crazy the four in the SMP, other
Speaker 1: than these five or down five. Yeah, yeah, And I'm
Speaker 1: glad you pointed that out, because you know, we take
Speaker 1: a look almost every day. It's sort of what's been
Speaker 1: going on year to date. And if you look at
Speaker 1: the NASDAC, it's up at this very moment. And obviously
Speaker 1: we're ahead of the clothes here. The SMP barely up
Speaker 1: about five tenths of one percent, Dow Jones industry average
Speaker 1: down about seven point eight percent, give or take. This
Speaker 1: has been the story of this market. And meanwhile, just
Speaker 1: to shift gears a little bit, we have an economy,
Speaker 1: especially a small business economy, that is suffering mightily. Cathy,
Speaker 1: and you shared some statistics with us about New York
Speaker 1: City restaurants, and that really I think hits home for
Speaker 1: looks like Scarlett and me and you who make our living.
Speaker 1: Maybe we live out here, but we make our living
Speaker 1: in there in Manhattan, where Scarlett is right now, it's
Speaker 1: a bleak picture, it really is. I mean, and you
Speaker 1: think about the domino effect. Right commercial real estate is
Speaker 1: going down the tubes. One of the sayings is stay
Speaker 1: alive until you know, and I don't even know that's
Speaker 1: gonna be long enough. They're talking about converting commercial real
Speaker 1: estate to condos and some kind of housing. You know.
Speaker 1: I've talked people at large companies and they're like, I'm
Speaker 1: not going back. So you know, I think that brings
Speaker 1: us to know the domino effect across the board. Taxis
Speaker 1: are down dramatically, um uber and lift or are up
Speaker 1: a little bit from where they were, but nothing close
Speaker 1: to what if you don't have people walk in the streets,
Speaker 1: you don't have people who eating the food carts. I
Speaker 1: have one pending client with food carts and all those
Speaker 1: guys came back out and then the protests happened and
Speaker 1: they all got they got ripped off, and they went
Speaker 1: back in. So he's he's thinking of closing his commissary
Speaker 1: is enough food carts. He goes through twenty pips of
Speaker 1: sometimes the chicken a week. So you think about the
Speaker 1: decimate decimatization of these businesses. You know, janitorial supplies Why
Speaker 1: do you need to clean the facility if there aren't
Speaker 1: a bunch of employees food service. You know, it just
Speaker 1: goes on and on and on, and all those people
Speaker 1: are consumers, and consumer still drives this country's GDP. Ultimately absolutely.
Speaker 1: One thing you also point out, and it's something we
Speaker 1: should watch for, especially when we're looking at Amazon's earnings,
Speaker 1: is how much it costs for these companies to operate
Speaker 1: in this COVID nineteen environment. Last quarter we heard from
Speaker 1: Amazon that it would have posted an operating profit except
Speaker 1: for the fact that it had to spend a lot
Speaker 1: of money making sure it's warehouses were clean, making sure
Speaker 1: it's employees were safe. Um. All this expense for PPE,
Speaker 1: for cleaning, for UM, retro fitting your office is piling up.
Speaker 1: It really is that I don't think people are focused
Speaker 1: on that, Scarlett. I have done a pivot. You know,
Speaker 1: my speaking business is getting the water right now. We're
Speaker 1: trying to move to virtual. But I got canceled on
Speaker 1: every speaking engagement for this year. We have events, we
Speaker 1: can't hold them in New York City. Are people from
Speaker 1: westchestern Fearfield in New Jersey You're telling us they don't
Speaker 1: want to go go into New York. And you know then
Speaker 1: a lot of my clients are afraid the businesses aren't
Speaker 1: gonna exist. So I ended up falling into this ppe
Speaker 1: market just because I have huge connections and we are
Speaker 1: selling millions of boxes of gloves and masks and downs
Speaker 1: and the amount of money people are spending on this stuff.
Speaker 1: People have no idea. I mean, if you have a
Speaker 1: factory and you have a bunch of workers, they go
Speaker 1: off from they break, they take the mask off, they
Speaker 1: take their gloves off, they need new when they again.
Speaker 1: If you're dealing with people, you have to change those
Speaker 1: masks on a regular basis. And even if you're only
Speaker 1: paying thirty cents for the mask, you have two employees
Speaker 1: times for us today, it just adds up absolutely well.
Speaker 1: It's always interesting to catch up with you and get
Speaker 1: your perspective because we know you are both an investment
Speaker 1: guru and an entrepreneur. So Cathie Boyle really get to
Speaker 1: catch up with you. Best of luck, hope to catch
Speaker 1: up with you in the not too distant future. President,
Speaker 1: founder of Chapin Hill Advisors, joining us on the phone
Speaker 1: from Pound Ridge, New York. Thanks so much for listening
Speaker 1: to Bloomberg Business week, download the podcast on iTunes, Southcloud
Speaker 1: of Bloomberg dot Com, or wherever you get your podcasts.
Speaker 1: And of course you can always listen to our radio
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