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Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, along

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Speaker 1: with my co host of Bonnie Quinn. Every business day

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Speaker 1: we bring you interviews from CEOs, market pros, and Bloomberg experts,

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Speaker 1: along with essential market moving news. Kind the Bloomberg Markets

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Speaker 1: Podcast on Apple Podcasts or wherever you listen to podcasts,

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Speaker 1: and on Bloomberg dot com. All right, let's talk a

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Speaker 1: little college football. Yesterday was uh, some big news coming

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Speaker 1: out of some big conferences for college football. The Big

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Speaker 1: Ten was the first to announce that they were postponing

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Speaker 1: their fall season hope to get some games in in

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Speaker 1: the spring. The Pack twelve followed as well, talking about

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Speaker 1: all fall sports here for these schools, including football. Some

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Speaker 1: other big conferences haven't heard from yet, so let's get

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Speaker 1: the latest on how this is evolving here. Joe No

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Speaker 1: Sarah is a columnist for Bloomberg Opinion. Uh, he joins

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Speaker 1: us on the phone. Joe, thanks so much for joining

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Speaker 1: us here. Um, what are you taking away here from

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Speaker 1: what some of these big Power five conferences are doing here?

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Speaker 1: There seems to be a little bit of split on

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Speaker 1: kind of how they're viewing it. Oh, there's definitely a split. Um,

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Speaker 1: I mean, the Pack Club and the Big Ten are

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Speaker 1: out at least it was spring. The SEC is definitely in.

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Speaker 1: I mean, it would take take a lot for the

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Speaker 1: SEC to not play football. As we well know, UM,

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Speaker 1: and the other two conferences, the Big twelve in the

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Speaker 1: a SEC, they're kind of on the fence a SEC

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Speaker 1: leaning towards playing I mean, they're heavily being influenced by

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Speaker 1: Trevor Lawrence, the quarterback for Clemson, who started that we

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Speaker 1: want to play hashtag um and you know, it's just

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Speaker 1: we just don't know. I mean, I think I think

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Speaker 1: there's a decent likelihood that maybe two of the five

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Speaker 1: conferences will try to play football. I think you could

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Speaker 1: see also maybe a Nebraska or a Texas or an

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Speaker 1: Oklahoma basically say you know, hey, can we join up

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Speaker 1: with you guys for a season because we want to play.

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Speaker 1: So you can see that happening. It would be difficult,

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Speaker 1: but it's possible. And then the whole issue would be,

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Speaker 1: you know what happens with COVID? Uh does the pandemic

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Speaker 1: affect the team's the I mean, football is not exactly

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Speaker 1: social distancing, so UM, I mean I think that's where

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Speaker 1: we are right now. Yeah, and certainly the Big twelve

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Speaker 1: is moving forward. Gung Ho sounds like it can't even

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Speaker 1: understand the decision not to play. And yet in the

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Speaker 1: Big Ten there are at least five athletes who had

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Speaker 1: been infected, who had contracted MYO Kardiitas Joe, potentially dangerous

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Speaker 1: heart ailments. I mean, it doesn't bode well for those

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Speaker 1: who continue to play if if that's something that can

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Speaker 1: be as easily contracted, right, I think that's what really

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Speaker 1: scared the Big Ten, much more than the Act, than

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Speaker 1: than than COVID itself, because it is I mean, it

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Speaker 1: is true that most of these guys are young, and

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Speaker 1: they will be either asymptomatic or you know, is they

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Speaker 1: will be sick for a couple of weeks and then

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Speaker 1: they'll be five. That is, that is true. But but

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Speaker 1: but COVID has potential side effects. And if you have

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Speaker 1: five of your athletes who have you know, a dangerous

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Speaker 1: heart condition and after having COVID, you know, you can't

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Speaker 1: really just say, Okay, no big deal, we're gonna keep playing,

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Speaker 1: because you basically affecting this kid the rest of his

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Speaker 1: life potentially. So uh, you know, it's hard to see

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Speaker 1: how these other conferences are gonna say, well, we don't

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Speaker 1: have to worry about that, because if they start having

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Speaker 1: those those those same problems, how are they going to

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Speaker 1: keep playing football? Joe? Where's the n c double A

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Speaker 1: on this? This seems like it's, you know, an area

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Speaker 1: where the n C double A should be saying, Okay,

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Speaker 1: we're playing football or we're not playing football, as opposed

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Speaker 1: to leaving it up to the individual conferences. Uh. The

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Speaker 1: n c a A has surprisingly little um authority over football. Uh.

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Speaker 1: In there was a famous Supreme Court case in which

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Speaker 1: the conferences won the right to take television rights away

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Speaker 1: from the n c a A, and ever since then,

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Speaker 1: the conferences have basically called their own shots in terms

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Speaker 1: of football. The only thing the n c A really

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Speaker 1: does with football is, um, uh, you know, act as

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Speaker 1: an enforcer when somebody's violating you know, recruiting rules and

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Speaker 1: go on. But they really have nothing to do with

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Speaker 1: the college playoffs, with the bowl system, with anything like that.

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Speaker 1: So it's not a surprise that the n c A

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Speaker 1: has been has not had much to say about this.

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Speaker 1: It's a little surprising that they haven't at least been

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Speaker 1: vocal about what they think should be done. Um. But

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Speaker 1: the n b A is in the same pickle that

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Speaker 1: the that the that the conferences are, which is that

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Speaker 1: if games aren't played, television revenue isn't generated. And this

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Speaker 1: whole edifit, this multibillion dollar edifit, which is built on,

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Speaker 1: you know, unpaid players generating hundreds of millions of dollars

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Speaker 1: for schools and conferences in the n c a A

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Speaker 1: will crumble. And uh, one of the things I said

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Speaker 1: in my column was, you know, maybe they can get

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Speaker 1: away with not having fall sports, but if this has

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Speaker 1: to get canceled again and spring, it will be a

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Speaker 1: financial disaster for for for athletic department. And so, Joe,

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Speaker 1: is there any idea or have you gamed out at

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Speaker 1: all how it might work if one conference were to

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Speaker 1: play and others didn't, or if leagues joined up, you know,

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Speaker 1: in some kind of new tic tac toe of college

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Speaker 1: football in order just to make it through this season

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Speaker 1: and so that they could hold on some of the funding.

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Speaker 1: Would would would that mean some colleges would get funding

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Speaker 1: and some wouldn't next time? Well, don't forget all of

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Speaker 1: these conferences have their own television deals. So um, you know,

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Speaker 1: if the Big ten doesn't play, then they don't get

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Speaker 1: the hundreds of millions of dollars that they would get

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Speaker 1: from whoever whoever airs their games. You know, the SEC

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Speaker 1: has its own So I mean, I did envision a

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Speaker 1: scenario where the a SEC and the SEC decided to play.

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Speaker 1: So they're the only two conferences that play, and they

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Speaker 1: play their games and they get television money for that,

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Speaker 1: and then they decided to have their own little mini

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Speaker 1: championship between the winner of the A C C and

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Speaker 1: the winner of the SEC. I could see that as

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Speaker 1: a as a plausible scenario. UM. I do think though

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Speaker 1: that UM, the chances of the pandemic ultimately shutting college

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Speaker 1: football down, UH is a higher likelihood, even after they

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Speaker 1: like play one or two games. I think that's a

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Speaker 1: higher likelihood, um, just because it's gonna look so bad

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Speaker 1: if they have their athletes out there getting sick, when

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Speaker 1: everybody who's going to school, all the students are you know,

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Speaker 1: socially distancing, washing their hands, doing all the stuff to

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Speaker 1: stay stay safe, and these football players are out there

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Speaker 1: grabbing each other, tackling each other, hitting each other. Uh,

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Speaker 1: the exact opposite of what you want to prevent. COVID Joe,

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Speaker 1: are we still waiting on a formal decision by the

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Speaker 1: SEC or in the a c C. And if so,

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Speaker 1: when do we expect to get that? Well, the SEC

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Speaker 1: has been very cagy about this and and they're they're

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Speaker 1: the one that people are watching now. So Greg Sanky,

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Speaker 1: the Commissioner of the S you see, I mean he

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Speaker 1: basically said, uh when when all this was happening the

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Speaker 1: other day, I mean, he basically said, look, we're gonna wait,

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Speaker 1: we do we know, hurry. If we can't start our

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Speaker 1: season in September tenth will started on September twenty. If

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Speaker 1: we can't started on September twenty, we'll start it on

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Speaker 1: October four. So his idea is he's not gonna make

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Speaker 1: a decision. He's going to keep everything as open as

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Speaker 1: possible so that he can make whatever decision he has

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Speaker 1: to make as late as possible. And I think you'll

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Speaker 1: see the Big twelve in the a SEC kind of

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Speaker 1: follow the SEC's lead because, let's face the SEC is

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Speaker 1: the is the number one conference. Yeah, it's so interesting

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Speaker 1: because many of these schools probably haven't even made decisions

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Speaker 1: on whether they're going to have in class teaching or not,

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Speaker 1: not that that really has much to do with college sports,

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Speaker 1: but a little bit all the same. Joe, No, Sarah,

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Speaker 1: thank you. You always pay the best topics to go

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Speaker 1: after when you write opinion columns. I know is is fantastic. Well,

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Speaker 1: I think adventures are trying to get a sense here

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Speaker 1: where we are in this economic recovery? Have we trough?

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Speaker 1: Is the economy coming back? What's the shape of the

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Speaker 1: recovery that we can expect going forward? We welcome Karl Weinberg,

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Speaker 1: founder and chief International Economists for High Frequency Economics. I

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Speaker 1: think Carl probably has some answers for so Carl again,

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Speaker 1: I think people are trying to get a sense here. Um,

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Speaker 1: as we deal with some additional flare ups of the

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Speaker 1: virus in certain key markets in the United States, such

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Speaker 1: as California, Texas, and Florida, what does that mean for

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Speaker 1: the economic recovery here? How are you kind of viewing

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Speaker 1: the current state of affairs? All right, well, good morning Paul,

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Speaker 1: Good morning Bonny. Uh. We view the state of affairs

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Speaker 1: as being very viewed, very cautiously right now. We're concerned

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Speaker 1: about renewed flare ups, that's one thing. We're also concerned

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Speaker 1: that the damage to the economy is greater than we

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Speaker 1: are the market is currently pricing in, and that we

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Speaker 1: are currently proceiving. We don't think this econ on the

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Speaker 1: crisis is nearly over het and any steps toward recovery

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Speaker 1: so far welcome, of course, but there we still have

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Speaker 1: a very, very long way to go to get back

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Speaker 1: to where we were. Carl, does the market prices in

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Speaker 1: at some point or is the market on a separate

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Speaker 1: plans at this point? Well, you know, I've been watching

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Speaker 1: you all on Boomberg TV and uh and I'm listening

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Speaker 1: on the radio, and this seems to be the question

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Speaker 1: of the day. And I'll admit that I don't have

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Speaker 1: anything other than an opinion about this, because we are

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Speaker 1: in uncharted territory. We're looking at a bigger decline in

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Speaker 1: the economy than we've ever experienced before in our lifetimes,

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Speaker 1: and we should expect that we're going to get unusual

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Speaker 1: and unexpected outcomes from being in that place. We can't tell,

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Speaker 1: you know, in the area of unknown unknowns. We can

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Speaker 1: tell exactly what they're going to be. But things are

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Speaker 1: going to break and we're still just at the very

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Speaker 1: beginning days of this of this downturn, you know, with

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Speaker 1: just a few months into it. So I think eventually

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Speaker 1: the market will have to pay attention to the fundamentals.

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Speaker 1: There will be a squeeze on the ways in which

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Speaker 1: economics affects the more markets. You know, the driver for profits,

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Speaker 1: the profits affect the market. You know, the drivers for prices,

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Speaker 1: the prices affect the markets. And of course the financial

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Speaker 1: system is going to come under stress more than we're

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Speaker 1: currently probably placing in. So yeah, eventually the piper has

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Speaker 1: to be paid, but I'm not quite sure exactly when

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Speaker 1: that will begin, all right, Carl, You know, we're with

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Speaker 1: the Federal Reserve has been really on the front lines

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Speaker 1: of dealing with the economic fallout from this pandemic, inject

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Speaker 1: injecting tremendous amounts of liquidity and and very clear messaging

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Speaker 1: uh Congress. On the other hand, we had that third

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Speaker 1: round of stimulus three point trillion, but the fourth round

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Speaker 1: of stimulus, which many believe is still required, we're not

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Speaker 1: seeing much movement on that. How critical is that to

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Speaker 1: your the calculus of kind of how you think about

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Speaker 1: the economy and the potential recovery? Gosh. Paul Louville for

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Speaker 1: Lukie are chief US economist and high frequency economics, writes

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Speaker 1: about this every day. It's essential. There's no way to

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Speaker 1: get around the fact that if we do not continue

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Speaker 1: to newest at a pace at or near what we've

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Speaker 1: been doing, that we're going to see an immediate drop

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Speaker 1: off and incomes and media drop off and spending the

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Speaker 1: severe economic consequences on top of an already hit economy.

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Speaker 1: We can't say that often enough or loudly enough. Now

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Speaker 1: there's a question as to whether or not at some

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Speaker 1: point we're going to have to face that kind of

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Speaker 1: fiscal cliff anyhow. But if it doesn't have to be

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Speaker 1: faced right now, and we can buy time to repair

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Speaker 1: what's wrong with the economy, notably the virus itself, and

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Speaker 1: buying time that we can address the disease and get

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Speaker 1: it under control, Um, then you know, there may come

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Speaker 1: a day when we do have to go off that clift,

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Speaker 1: but we can amploid it now. That would be great. Carl,

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Speaker 1: you're a specialist in China obviously as well, and we

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Speaker 1: love talking to you about China. I'm curious as to

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Speaker 1: where that conversation goes. It sort of took a right

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Speaker 1: turn with this TikTok by Dunn's argument. Um, you know,

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Speaker 1: we obviously have been prepping for something on the company

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Speaker 1: side of things with China, whether a beach of companies,

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Speaker 1: bother band companies, or what have you. But suddenly we're

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Speaker 1: in different territory. Now it seems well, I agree with you, Ronnie,

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Speaker 1: this is UH. I think of it more as an

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Speaker 1: extension of a slippery slope that we engaged in three

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Speaker 1: years ago when the Trump administration started exercising its options

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Speaker 1: on trade policy, and relations with China have no decayed

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Speaker 1: to a level lower than they've been UH since we

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Speaker 1: started relationships with China in the early nineteen seventies. UM,

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Speaker 1: I don't see a good outcome as things continue in

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Speaker 1: the direction that they are going in, And frankly, I

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Speaker 1: don't see good positive results coming from the direction that

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Speaker 1: the Trump administration has taken us on. We have started

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Speaker 1: a confrontation with somebody with a with a with an

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Speaker 1: opponent who is equally powerful and agile as we are,

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Speaker 1: and we would all be much better off if everybody

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Speaker 1: could embrace the things that we can accomplish together and

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Speaker 1: not try to change the things that make us different

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Speaker 1: from them, speaking in their specifically political systems and so forth.

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Speaker 1: What's your base case, Carlin we're almost out of time, unfortunately.

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Speaker 1: But does this all change if the presidency becomes a

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Speaker 1: Joe Biden presidency and if not, do we start seeing

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Speaker 1: the splitting up of all Chinese American companies or partnered companies. Well,

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Speaker 1: I think that we're headed towards split up strategy right now.

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Speaker 1: I can't predict what the Biden administration will do. My

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Speaker 1: guess is that they will be tough on China, but

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Speaker 1: tough in the constructive way looking is Richard Nixon pointed

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Speaker 1: out when he went to China for the first time,

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Speaker 1: looking for the things we can accomplish together and accept

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Speaker 1: the fact that we have fundamental differences in worlds used

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Speaker 1: in politics, live with those differences except what we can change,

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Speaker 1: and take advantage of the things we can do together.

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Speaker 1: I think that's the winning strategy, and I'm hopeful that

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Speaker 1: Biden administration will be tough but forward looking in its policies. Carl,

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Speaker 1: thank you for joining us. We will speak to you

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Speaker 1: again very soon. That is Carl Weinberg, founder and chief

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Speaker 1: economist at a High Frequency Economics. All Right. As we know,

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Speaker 1: Gold has been on a little bit of a ride

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Speaker 1: in the last couple of months, especially when things looked

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Speaker 1: on certain gold actually topped two thousand dollars and ounce.

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Speaker 1: If we look today, we're off of those highs. But nevertheless,

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Speaker 1: people obviously considering gold a store of value once again

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Speaker 1: and one that they should take a second or third

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Speaker 1: look at. Let's bring in somebody who knows all about gold.

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Speaker 1: Frank Holmes joins us now, and Frank, it is great

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Speaker 1: to have you, because if anybody knows about gold, it

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Speaker 1: is you. Is the peak past four gold prices right now?

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Speaker 1: No Vanni, not at all. If you look at the

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Speaker 1: past eighty months is when the golden cross took place

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Speaker 1: where the fifty day crossed about the day and gold

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Speaker 1: has had this nice steady run up about seven hundred

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Speaker 1: dollars and it goes through a correction. And during this

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Speaker 1: run it's had something like six times has moved up

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Speaker 1: one standard deviation, which means for your listeners that it's

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Speaker 1: his ball facility that can happen by surging six percent

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Speaker 1: over over three months. Uh and three times has gone

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Speaker 1: up two standard deviasions over six months, and then it corrects.

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Speaker 1: It goes through these corrections. So I think we're up

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Speaker 1: to center. Viations were due for a correction which would

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Speaker 1: be healthy. Uh in this great run, this bowl market

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Speaker 1: that we're seeing in bullion, and I don't think it

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Speaker 1: was going away because of the unprecedented G twenty printing

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Speaker 1: of money. The it's it's a collective group of finance

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Speaker 1: ministers and central banks that are called they're fighting World

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Speaker 1: War three, which is a coronavirus, and they're all working

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Speaker 1: together and it's a lot of money printing and its

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Speaker 1: currency debasement, and you see that in history, gold starts

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Speaker 1: to rise in each of those countries currencies. Frank Coin

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Speaker 1: CEO and chief investment officer for US Global Investors with

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Speaker 1: US Frank, the gold traded off that ten percent yesterday?

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Speaker 1: What was that? Was that a technical trade? Was that

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Speaker 1: a big seller coming on the market? What do you

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Speaker 1: make of that trade? Yeah? I think a big seller.

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Speaker 1: I when it comes to these types of trades, I

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Speaker 1: really try to be agnostic and just look at the

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Speaker 1: statistics volatility, and whenever it's up two standard deviations over

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Speaker 1: sixty trade and days, it's a probability of a drop

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Speaker 1: of six to ten percent, and we got it, you know,

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Speaker 1: and gold stocks are even more severe from their peaks.

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Speaker 1: There will be two times at rate yeah, it's pretty amazing. Well,

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Speaker 1: what do you make of the performance of the gold

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Speaker 1: miners recently? Obviously Barrick is one that we've been We've

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Speaker 1: been focused on g O l D as the taker symbol,

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Speaker 1: and it had a nice run up this year. Frank, Well,

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Speaker 1: it's the big market cap, you know. They and Newmont

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Speaker 1: are the two big elephants in the room. And uh

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Speaker 1: and and they have been marketing themselves as having free

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Speaker 1: cash flow. What's really important is in this run now,

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Speaker 1: in the first time was in March that we saw

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Speaker 1: in over a decade a that the hundred gold producers

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Speaker 1: that we follow had a free cash flow yield. Has

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Speaker 1: not happened. I the SMP has always had a free

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Speaker 1: cash flow yield. What does that mean? It means they

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Speaker 1: can pay dividends. Uh, they can buy back to stock.

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Speaker 1: And so after the coronavirus hit in March, then the

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Speaker 1: SMP fell to a negative free cash flow yield, the

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Speaker 1: gold stocks went up. So all of a sudden you

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Speaker 1: started seeing the non traditional golf or stock buyer buying

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Speaker 1: gold stocks because they have free cash flow. But is

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Speaker 1: the run over I suppose that is what I'm saying.

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Speaker 1: I mean, if you have no, no, no, because let's

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Speaker 1: take a look. When Greenspan left, green Span left, the

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Speaker 1: federal balance sheet was six the g d P now

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Speaker 1: with pal you know, in all these crisises, it's over.

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Speaker 1: When we go back and look at when President Obama

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Speaker 1: came in the Federal Reserve, they had to spend something

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Speaker 1: like three threllion dollars in the balance sheet, and three

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Speaker 1: years later gold went from eight d to If you

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Speaker 1: looked at the growth in the balance sheet today, uh,

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Speaker 1: that easily forecast the next three years ago to go

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Speaker 1: to four thousand, and if you looked at facing adjusted numbers, uh,

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Speaker 1: it's also thirty dollars gold. So I think that this

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Speaker 1: is a fascinating to me to watch the gold is

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Speaker 1: starting to become its own. It is the fourth most

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Speaker 1: liquid classing class of the world, but it's becoming the

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Speaker 1: sort of source of an additional investment. And we saw

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Speaker 1: eighteen months ago new country central banks hungry, uh, poland

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Speaker 1: Columbia emerging market country buying gold as a part of

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Speaker 1: the foreign currency. I don't think that's going away. Frank,

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Speaker 1: how about silver? What do we do there with that one?

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Speaker 1: That's a great speculator, you know, Um, it's it's like

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Speaker 1: a warrant on on gold and it always has a

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Speaker 1: more bolt. Silly, both up and down. Gold had a

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Speaker 1: big run, Silver was lagging and all of a sudden

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Speaker 1: it surges. Uh. There's a whole audience of community of

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Speaker 1: investors saying the ratio gold of silver is too cheap,

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Speaker 1: so they started buying it, and uh, we had this

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Speaker 1: big pick up. But the long term range is like

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Speaker 1: sixty fifty to sixty times silver to gold, and that's

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Speaker 1: why you saw silver had this big run. But any correction,

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Speaker 1: silver historically corrects more. Frank, we're almost of the time.

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Speaker 1: But how has the emergence of bitcoin, ethereum and all

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Speaker 1: these other sort of cryptocurrencies affected the trade in gold. Well,

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Speaker 1: the the the audience of people that really speculate any

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Speaker 1: theory um and bitcoin, they're that millennial investors. And that's

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Speaker 1: a great question, Bonnie, because we have experienced in our

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Speaker 1: jet CTF a billion dollars came in during the crisis, uh,

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Speaker 1: seventy straight days and Eric Mucconins has talked about it

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Speaker 1: several times. Came into this et F. Uh and for Dommy,

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Speaker 1: we saw Robin Hood investors coming in. Yeah, well before

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Speaker 1: the airlines took off, we're seeing it and go AU.

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Speaker 1: So these millennials used to trade bitcoin, etherorium and now

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Speaker 1: they're trading stocks stocks. Yeah. Absolutely, we're seeing the robin

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Speaker 1: Hood traders coming into the market. Frank Coom CEO and

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Speaker 1: c I O of u S Global Investors. We always

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Speaker 1: appreciate your perspective on precious metals, gold, silver, even bitcoin

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Speaker 1: a little bit. Perhaps it's a store of value. Summer

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Speaker 1: suggesting the US Postal Service is in trouble. In fact,

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Speaker 1: most recently the Treasury actually prepared at ten billion dollar

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Speaker 1: credit line for the US Postal Service, and at the

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Speaker 1: time the Treasury Secretary said, while the USPS is able

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Speaker 1: to fund its operating expenses without additional borrowing at this time,

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Speaker 1: we are pleased to have reached an agreement on the

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Speaker 1: material terms and conditions of alone should the need arise.

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Speaker 1: It's all very fragile. Let's bring in somebody who can

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Speaker 1: tell us a lot more. Gentle is President, owner founder

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Speaker 1: of s J Consulting and Satisia. It's way to speak

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Speaker 1: with you is the USPS and danger of failing. No.

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Speaker 1: I think the new CEO that has just taken over,

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Speaker 1: Louise de Joy. I have had the pleasure of working

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Speaker 1: with him in the past when he was CEO of

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Speaker 1: New Breed. He's a very quick study, very action oriented, UH,

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Speaker 1: and he's going to be a having the opportunity to

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Speaker 1: fix a lot of areas of shortcomings in the post Office,

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Speaker 1: one of them being that they are a very big

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Speaker 1: partner of the Amazon and other careers in parcel shipping.

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Speaker 1: The volume in the months of April, May and June

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Speaker 1: was up two times that of UPS and fed X

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Speaker 1: and I fully expect him to leverage that kind of

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Speaker 1: increase to get some rate increases that will help the

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Speaker 1: revenue increased at the post Office. So stas there has

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Speaker 1: been some concern and I guess plust message, the Joy

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Speaker 1: had a new organization chart kind of UH and implemented recently.

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Speaker 1: A lot of executives were displaced, including two the top

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Speaker 1: executives overseeing day to day operations. And I know some

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Speaker 1: Democrats have suggest that maybe that's deliberate sabotage to disrupt

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Speaker 1: mail service on the evil the election. UH. And with

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Speaker 1: an election that's going to really depend upon mail and balance,

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Speaker 1: Is that a valid concern in your mind? Not at all.

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Speaker 1: I know some of the people who are still there.

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Speaker 1: Dave Williams see in charge of the operations, check the

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Speaker 1: Straco in charge of some of the sales and marketing.

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Speaker 1: They are very seasoned, very skilled, experienced people, and I

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Speaker 1: do not see this being in any way compromising the

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Speaker 1: quality of service, the speed of it, and in fact

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Speaker 1: he streamlining it to make it happen quicker and better.

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Speaker 1: And we even track on time performance of first class

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Speaker 1: and prior to mail, and the month of July shows

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Speaker 1: no decline over the prior So I do not anticipate

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Speaker 1: anything to compromise the quality of postal service city. So

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Speaker 1: I mean one of the one of the things that

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Speaker 1: the USP has had over other services was that last

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Speaker 1: mile right, which was also its achilles heel, because the

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Speaker 1: last mile is the most expensive, it's it's the most annoying,

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Speaker 1: it's the most difficult, and you know, you are promising

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Speaker 1: that you will, you know, have that package at that

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Speaker 1: door on a certain day, so you just have to

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Speaker 1: be there. If other services, you know, even Uber is

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Speaker 1: you know fantastic on on GPS and location and that

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Speaker 1: kind of thing, if those services start doing last mile,

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Speaker 1: does that jeopardize USPS. No way, No company has ability

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Speaker 1: to compete in terms of the cost of last mile

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Speaker 1: delivery and the presence that they have They go to

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Speaker 1: every address every day. No company had that capability. And

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Speaker 1: you've mentioned about and left they are nowhere close to

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00:24:01,640 --> 00:24:03,959
Speaker 1: even UPS and fed X and they can't do it

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00:24:04,040 --> 00:24:07,040
Speaker 1: as cost effectively as the Post Office does, and that's

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00:24:07,119 --> 00:24:11,679
Speaker 1: validated by you. PS has a service called shot post

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00:24:11,960 --> 00:24:14,200
Speaker 1: which is where they handle most of the last mile

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00:24:14,640 --> 00:24:17,639
Speaker 1: B to see packages and they are delivered by Post

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00:24:17,680 --> 00:24:22,280
Speaker 1: Office for ups Alright, So cities, as we take a

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00:24:22,320 --> 00:24:25,080
Speaker 1: look at the US Postal Service as a entity here,

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00:24:25,119 --> 00:24:27,199
Speaker 1: talk to us about the financial condition that it's in

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Speaker 1: right now and and kind of what needs to be

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00:24:30,480 --> 00:24:34,280
Speaker 1: done in terms of investment going forward. The area where

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00:24:34,320 --> 00:24:39,160
Speaker 1: I think Post Office can rapidly improve its financial conditions

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00:24:39,200 --> 00:24:41,600
Speaker 1: from an operating point To keep in mind, what the

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00:24:41,640 --> 00:24:46,879
Speaker 1: public sees are financials that include the retirement payments that

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00:24:46,960 --> 00:24:49,600
Speaker 1: they have to make, whnually take that out. Because they

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00:24:49,600 --> 00:24:51,920
Speaker 1: are asked to do something that no private company does.

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00:24:52,320 --> 00:24:54,480
Speaker 1: If you look at it on an operating basis, they

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00:24:54,520 --> 00:24:58,840
Speaker 1: have a huge opportunity to leverage their parts of services

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00:24:58,880 --> 00:25:01,760
Speaker 1: for increases. A simple for example being that during the

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00:25:01,800 --> 00:25:06,880
Speaker 1: peak the volumes increased by UPS is already annown take

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00:25:06,920 --> 00:25:09,840
Speaker 1: on a chart and extra dollar for the delivery of

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00:25:09,880 --> 00:25:12,879
Speaker 1: those packages that actually are being done by the post office.

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00:25:13,160 --> 00:25:15,679
Speaker 1: The post office should be getting that extra dollar and

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00:25:15,760 --> 00:25:17,880
Speaker 1: they should be putting a search out for the peak

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00:25:18,040 --> 00:25:22,240
Speaker 1: and it will be hundreds and millions of dollars for them.

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00:25:22,240 --> 00:25:24,879
Speaker 1: So what kind of search charge should customers expect to

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00:25:24,880 --> 00:25:26,840
Speaker 1: see Because we've really sort of had a good and

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00:25:26,840 --> 00:25:28,760
Speaker 1: people complain every time the price of the stamp goes

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00:25:28,840 --> 00:25:32,399
Speaker 1: up cities, but you know, honestly, it's not that much

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00:25:32,480 --> 00:25:35,800
Speaker 1: to send something via USPS. Thank you for saying that

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00:25:36,800 --> 00:25:40,000
Speaker 1: first class mail in perspective, we have done extensive study.

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00:25:40,320 --> 00:25:43,240
Speaker 1: When you look around the world and look at other

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00:25:43,320 --> 00:25:46,960
Speaker 1: developing countries, take example of Germany. The size of Germany

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00:25:47,359 --> 00:25:51,320
Speaker 1: is one fifth or less than that of USA without

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00:25:51,320 --> 00:25:55,120
Speaker 1: including Alaska and Hawaii, and yet their first class mail

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00:25:55,359 --> 00:25:59,320
Speaker 1: is about more expensive than OURT. And I would tell

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00:25:59,359 --> 00:26:03,800
Speaker 1: you that or average housewife or a household, increase of

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00:26:04,000 --> 00:26:08,560
Speaker 1: post dage by will hardly be felt by them. It

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00:26:08,720 --> 00:26:11,280
Speaker 1: is the big mailers like Capital One. You may see

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00:26:11,320 --> 00:26:14,439
Speaker 1: how many males packages to send you every week, but

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00:26:14,520 --> 00:26:16,400
Speaker 1: they will have to pay more and let them pay

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00:26:16,400 --> 00:26:18,520
Speaker 1: more because they will ship lets and that would be

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00:26:18,520 --> 00:26:21,360
Speaker 1: better for you and me and the post office. How

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00:26:21,480 --> 00:26:24,280
Speaker 1: is the US Post Office going to do during this

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00:26:24,359 --> 00:26:27,239
Speaker 1: election season? Again, looks like there's going to be a

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00:26:27,359 --> 00:26:31,359
Speaker 1: much much higher than average mail in vote. How do

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00:26:31,359 --> 00:26:33,480
Speaker 1: you think that post office will perform? Can it stay

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00:26:33,520 --> 00:26:36,760
Speaker 1: out of the politics of it? I do not see

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00:26:36,800 --> 00:26:40,040
Speaker 1: any challenges for them. Do not be able to handle

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00:26:40,080 --> 00:26:43,080
Speaker 1: the volume? Keep in mind that the first class mail,

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00:26:43,720 --> 00:26:46,960
Speaker 1: especially the ones that are in simple envelope, they go

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00:26:47,119 --> 00:26:50,280
Speaker 1: through a sortation system that moves so fast that if

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00:26:50,280 --> 00:26:52,119
Speaker 1: you got your finger in it, it will cut your

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00:26:52,119 --> 00:26:56,240
Speaker 1: finger off. And that speed of handling first class mail

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00:26:56,800 --> 00:26:59,520
Speaker 1: is so well set up that they can have a

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00:26:59,560 --> 00:27:03,000
Speaker 1: thirty what the porton increase in those mailers, that they're

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00:27:03,000 --> 00:27:06,160
Speaker 1: gonna get hundred person increase in the votes that come

486
00:27:06,240 --> 00:27:08,680
Speaker 1: in through that, and maybe you'll take a day more,

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00:27:09,040 --> 00:27:12,160
Speaker 1: but that still is not something to be concerned about.

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Speaker 1: Satist Gandel, thanks so much for joining us. We appreciate

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00:27:16,000 --> 00:27:18,880
Speaker 1: getting your thoughts on the postal service front and center here.

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00:27:18,920 --> 00:27:21,320
Speaker 1: It's getting a little bit politicized, but will certainly be

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00:27:21,359 --> 00:27:25,160
Speaker 1: an important player in this upcoming election Satish Gentel President

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00:27:25,359 --> 00:27:30,159
Speaker 1: s J Consulting based in Pennsylvania, joining us here. Thanks

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00:27:30,160 --> 00:27:33,399
Speaker 1: for listening to Bloomberg Markets podcast. You can subscribe and

494
00:27:33,480 --> 00:27:37,280
Speaker 1: listen to interviews at Apple Podcasts or whatever podcast platform

495
00:27:37,320 --> 00:27:40,760
Speaker 1: you prefer. I'm Bonnie Quinn, I'm on Twitter at Bonnie Quinn,

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00:27:40,920 --> 00:27:43,320
Speaker 1: and I'm Paul Sweeney. I'm on Twitter at pt Sweeney.

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00:27:43,359 --> 00:27:46,040
Speaker 1: Before the podcast, you can always catch us worldwide at

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00:27:46,040 --> 00:27:46,800
Speaker 1: Bloomberg Radio