July 1, 2020 • 37 mins
Dr. Ian Lustbader, Clinical Professor of Medicine at NYU, discusses the latest coronavirus news. Bloomberg Businessweek Editor Joel Weber and Businessweek Features Editor Max Chafkin talk about stories in the Heist issue of the magazine. We get Businessweek Economics with Vinny Catalano, Chief Markets Strategist at Stuyvesant Capital Management. He shares his insight on the Fed's role in perpetuating a broken economic system. Bloomberg News Sustainability Editor Emily Chasan walks through sustainable solutions for people working from home. And we Drive to the Close with Kara Murphy, CIO at Goldman Sachs Personal Financial Management. Hosts: Carol Massar and Jason Kelly. Producer: Doni Holloway.
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Episode Transcript
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Speaker 1 (00:00):
This is Bloomberg Business Week. I'm Carol Masser and I'm
Jason Kelly. We're right here every day bringing you the
latest news from the world's of business and finance, plus technology, politics, economics,
all harnessing the power of Business Week reporters and editors.
And of course Carol that's part of a team of
twenty seven hundred journalists and analysts more than a hundred
and twenty countries and Jason. You can download Bloomberg Business
(00:23):
Week on iTunes, SoundCloud, bl Bloomberg dot com. You can
also listen to our radio show at two pm Eastern
on Bloomberg Radio every weekday, or watch us on YouTube
by searching Bloomberg Global News. We continually, of course, update
you here on the Bloomberg about what's going on with
the virus. And I gotta say, yesterday was I feel
(00:44):
like a turning point once again, as we saw surging
new cases in a bunch of southern and Western states.
We had states reopening plans, putting them on hold, hospitalizations
are up. And then Anthony Faucci, the US government's top
infectious disease specialist, warning lawmakers that virus cases could top
and rise to a hundred thousand a day if behaviors
don't change, I can't make an accurate prediction, but it
(01:08):
is going to be very disturbing. I will guarantee you that,
because when you have an outbreak in one part of
the country, even though in other parts of the country
they're doing well, they are vulnerable. I made that point
very clearly last week at a press conference. We can't
just focus on those areas that are having the surge.
It puts the entire country at risk. We are now
(01:31):
having a quality plus thousand new cases a day. I
would not be surprised if we go up to a
hundred thousand a day if this does not turn around,
and so I am very concerned. Yep, that number got
our attention. That's of course Dr Anthony Fauci talking to
senators yesterday and hearing held by the Senate Health, Education,
Labor and Pensions Committee, and Jason Dyer absolutely well, from
(01:54):
one of the nation stop doctors to our top doctor.
Dr I and Les bed are back with us, clinical
Associate Professor of Medicine at n y U s Linga
Medical Center, joining us once again on the phone from
New York City. So Ian, when you heard that from
Dr Fauci. I'm guessing it didn't shock you given how
on the front lines you've been on this, but it
has to be disappointing and a little bit scary, especially
(02:18):
given that you've been on the front lines of this
and seeing what's happened in New York City. Hi, Carol
and Jason. Yes, I think most doctors that I speak
to certainly are very concerned, and hospitals are concerned, as
they should be um to some degree. You know, I
think by by not really mandating you know, masks and
(02:38):
social isolation, really by giving that as an option, which
you know, with multiple states and in a free country,
that's certainly one approach. We're really, in a way, uh
following the Swedish model, which is letting nature take its course,
and when that happens, there's certainly a significant risk. As
Dr Fauci says, you know, cases at this point we're
(03:01):
about forty or fifty thousand a day. We know they're
really much higher because we're really only picking up about
one intent or only diagnosing one intent. There are probably
ten times more people who have UH COVID than than
are actually being picked up by tests. So we're talking
hundreds of thousands a day of new cases, and of
(03:22):
course that translates into potentially um higher surge on hospitals
and health care facilities. And this is what we're seeing
across the Sun Belt. Yeah, it's not even it's not
even just the surge with hospitals, which is a concern,
but really ultimately a higher death rate and then what
(03:43):
I like to call post COVID syndrome. Even people who
get through it often have a lot of other symptoms
and ongoing healthcare issues. So it's it's quite worrisome. Ian,
let's talk about that. In anticipation of our conversation, I
was talking to others about, um, exactly what you're getting
to know. You were the first one, Jason, and I
can kind of almost remember the day where you talked
(04:03):
about the blood clots, you know, throughout the body, and
this was just not something you see often. Talk to
us about the implications of that and and the problems
that seemed to be maybe staying with some patients even
after they recover. Exactly, so this uh and Dr Faucci
has said this. He said, this is a virus with
protein manifestations, meaning multiple ways of manifesting. We typically think
(04:29):
of viruses perhaps as an ammonia or fever, chills and aches,
but this virus is unique. We we really can't think
of something similar where multiple organs are affected, strokes in
the brain, and kidney disease, liver disease, very high liver
function test g I disease, nausea, vomiting, diarrhea, and not
(04:51):
only that, besides um killing people with blood clots and
and so of the latest data show that the virus
seems to increase a platelet aggregation or the stickiness of
platelets and platelets. Normally, you know, we need to to
cause some clotting when you get an injury or a cut,
(05:12):
but when there's a massive increase in platelet stickiness, you
get clots everywhere. And that probably explains a lot of
the you know, severe consequences that we see as a
result of these infections. Well, and presumably that ultimately has
an impact on a hospital and doctor's abilities to treat
a whole host of things, including new cases. But also
(05:35):
this long tail, as it were, uh inn of COVID
exactly right, So we have the you know, the acute
UH injury or the the acute illness, and we're still
a bit perplexed why there is a number of patients
who have mild to to know symptoms and this is
(05:55):
that large young group of people who are asymptomatic. They
form a reservoir are they're often feel fine and feel invulnerable.
They're not wearing masks. They're potentially transferring this to other
people who are older, which is why you know, universal
masking is certainly a reasonable request for for all um
and then uh, insusceptible patients. You get this really cascade
(06:20):
of effects that make people more short of breath, have
clots everywhere, and then even if people survive after hospitalization,
many have a long term not only psychologic effects but
physical effects. Ian when do you realistically still expect a virus?
I mean a vaccine mother? So I you know, I
think this is encouraging news. Fightser is one of the
(06:42):
number of companies Maderna j and j a Estra Zeneca,
you know, who are really moving forward. A lot of
these studies are going to go into phase three with
wider number of patients. The Fighter study is is fairly small,
uh you know, forty five patients or so um, but
it certainly is encouraging. What we don't know is in
a larger number of patients, how many will develop antibodies
(07:06):
that are neutralizing, how long those antibodies will last, and
will the virus mutate. So I think it is encouraging
that we're making progress. It is a unique a way
of making UH vaccine with messenger RNA which gets into
your own cells and uh UH forms these proteins that
(07:28):
are typical of the coronavirus COVID nineteen, typically the spike protein,
and then your body forms antibodies to that, so you're
not subject to the risk of a live virus. And
we think that this is hopefully a better way. It
is a relatively new technology, but again there are a
lot of hurdles before not only is it proven effective,
(07:49):
but it can be ramped up, manufactured and distributed, and
probably there'll be several vaccines using similar technology, hopefully with
similar efficacy. So I think at some point UH and
I'm thinking early, but I think it can be a
very bumpy road until we get there where it where
(08:10):
it's widespread, and then you have to see how many
people we'll be willing to take it. But since we
know probably twenty five million or more Americans probably have
the virus. Based on that one in ten, we know
the death rate is certainly higher than the you know,
hundred and twenty five or hundred and fifty thousand people
(08:30):
as going to climb much much higher. You know, we're
gonna have a lot of shocks to the system, the
economic system. Uh. And I think it is this is encouraging,
but it's it is an early step in a very
long process to to turn things around. I don't mean
to be negative. I'm just trying to keep it in perspective.
We look to you to keep it real for us. See.
(08:51):
And um so speaking of which is speaking of long roads, uh,
the road back for New York City. You are there
in New York. You saw I'm sure that Major de
Blasio and Governor Cuomo said let's slow down a little
bit on indoor dining, uh, expansive outdoor dining. This is
a cautious reopening, to say the least. Uh, clearly informed
(09:14):
by what we see going on in the rest of
the country in New York and New York City specifically,
not wanting to fall back. What do you make of
it so far? The reopening? All right, this is really
unexplored territory. We we it's not like there's a template,
UH to follow. And I think New York certainly has
done remarkably well compared to the rest of the country.
(09:35):
We dealt with a major hospital surge, and I think
everyone is afraid, justifiably of either a second wave or
losing ground, and that would be a real strain on
not only the economics the hospital system, and so I
think we have to be careful. Certainly, we know outside
is better than inside. Wearing masks, having some social distance
(09:57):
certainly reduces the risk. Um and I think he's trying
to be prudent. It's going to be very difficult to
know when is the old clear signal that restaurants can
go back, And I think that puts a question on
the whole economy and um, yeah, and small business owners,
you know they're they're under strain. So I think, um,
(10:19):
we do need to get back. The optimal time for
that is unclear, and I think if there's any place
to begin that, it appears in New York City is
ready to take some some forward steps as long as
we track and trace and contact trace and make sure
we're not seeing any any recurrence or second wave right
and we're getting ready for that Phase three reopening. Come
(10:40):
to Lyst six um and thank you so much. Have
a great holiday, a safe holiday, and of course we'll
check in with you next week. Dr I and Lost Beat,
our clinical associate professor of Medicine at the n y
U Landgoing Medical Center. On the phone from New York City.
This is Bloomberg business Week with Carol Mazer and Jason
Kelly on Bloomberg Radio. Jason and I talked about this early.
(11:01):
It's the perfect beach read, social distancing beach read mind
you or stay cation or work from home cation read. Uh,
there's lots of from home cation, you know. I think
you've a lot of sleep. I'm throwing a lot of
words out there. Um. It has stolen Super Bowl rings,
it has corporate espionage, and the most famous art heist
in modern history. It is time for Business Week's annual
(11:23):
Heist issue. It's a double issue, lots of stories of
mystery and things gone missing behind it all. Features editor
Max Chafkin on the phone from Queen's New York, along
with Bloomberg Business Week editor Joe Weber on the phone
in Massachusetts. Joel and Max gotta tell you we love
this issue, and I feel like it's what everybody needs
right now. Well that was why we made it go ahead, Joel. Well,
(11:49):
you know, just the third annual Heist issue. It's a
huge testament to one Max Chafkin, who has become just
the captain of this thing. And you know, Max and
I just like all year long or basically like talking
about this issue and like putting together our our works
in progress list or whip list, and you know, trying
(12:09):
to figure out the ones that are gonna make it
or not make it. And you know that this issue
is a culmination really of that process and a huge
testament to him. And you know, all these UM reads.
You know, we've always said joke that, um, we want
to kind of steal your summer with this issue and
and boy, um could we have come out at a
better moment in time for that. UM. So hopefully everyone
(12:31):
can you know, pack this around all summer long and
take their time enjoying it because the stories are just
tremendously good. Max, what is your favorite? I mean, you know,
I love them all, but the this story that Carol
mentioned at the top, the Super Bowl Rings pis um
Is is epic and wonderful. It's by Zeeke Fox and
(12:53):
I don't want to ruin the whole thing. Um, but
it's about a very very very committed New England Patriots
fans who decided, uh in basically that thirteen years ago
to get revenge on on the Giants, and the way
he decided to do that was by sealing their Super Bowl.
Now and it wasn't even the biggest heist that he
(13:16):
went math for that, you'll have to read the story. Um. Uh.
You know, you guys talked with clear Subteth yesterday, um
about her story about the Gardner Museum where this five
million dollar mystery remains, this this sort of thing in
the art world that no one has ever been able
to crack. Um. My favorite little detail about that is
(13:39):
we call it we've called it the case of the
Empty Frames because the museum has to keep the frames
empty on the walls because otherwise the the entire museum
would actually turn over to Harvard and they have to
keep things exactly as they were when the eras handed
them down and created the museum. Um. So it's like
(14:00):
a heist within a heist if they you know, if
they act out of line. Um and and the stories
just kind of keep going. There's an amazing one that
we just published today by Natalie Obico Pearson Um about
Huawei and Canada where there was once a company called Nortel,
a mysterious hack um sink that company Whahwei. It coincides
(14:23):
with basically the moment in time that Huawei really started
to emerge as a dominant force. And actually, uh Huahwei
ended up hiring a whole team of Nortel engineers who
basically ended up being the ones that built five g
at Wahwei. Uh. So all of these stories, it's a
way of talking. And there's another one that we'll talk
more about tomorrow. I hope um that make it very
(14:45):
of the moment. So it's a way for us to
be both timely and and timeless, which is sort of
one of my favorite attributes that we try and do it.
They're just so much fun. So, Max, I'm just curious
about the conversations you guys have in the news room
when you are putting this together. You gotta think about
it. It It comes out every year at least for the
last four years, so you know what goes on in
the newsroom as you get ready, you know, and you
(15:05):
plan for this well so I mean these are mostly fun.
Really not every story in this issue is what I
would call, you know, a hundred percent fall laugh. Um.
But but for the most part, we're talking about stories
that are fun and entertaining to report and and and
entertaining to write and entertaining to read. And so you know,
the reporters in the newsroom like this issue. It's a
(15:27):
it's a kind of journalist favorite and um. And so yeah,
throughout the year, you know, we're, like Joel said, you know,
we're fielding pitches, um for these stories. The Super Bowl
one that I mentioned was uh, you know months in
the making. I think we first started talking about it
in October and November of last year. Um and uh
and and and so it's it's kind of a combination
(15:49):
of just sort of over the year, uh, you know,
fielding a bunch of pitches, but then also trying to
be a little bit imaginative and think about, you know,
what are some what are business stories that you wouldn't
necessarily think of as a conventional heist story, but that
could be thought of that way. And and and that's
one that's like the North Tell story that that Joel mentioned,
you know, also by the way Happy Canada Day everybody.
(16:10):
I mean, the story is about a Canadian national champion
that um was you know, through its own hand, through
the market, and through a hack was destroyed. And so
it's not it's not a straight up heist, but it
is a story where there where some theft plays a role,
and there's also kind of a sort of business theft
(16:30):
that is like one company taking another company's market share.
So we try to take you know, a a sort
of broader view of heist. And then we and then
but of course they have to have some like just
classic you know, take the painting type type type stories
and and and we actually have two of us issues.
So so it's it's a mix Canada Dayay a zoom
(16:51):
cocktail party for that one a little bit later on.
So Max, just one last quick question for you. I mean,
as you odd about this issue, and as Joel pointed out,
you know, this is one that you're talking about for
months and months and months of in advance. Obviously the
world changed pretty dramatically over the past four or five months.
How does pandemic sort of infuse a project like this
(17:15):
other than everybody's working remotely and you're probably doing to
Carol's point just a minute ago, a lot more zoom calls.
But how does it affect it editorially? Yeah, I mean
in terms of the process, that's all the usual tough
stuff that everybody's going through. Um. But but in Turm,
we we thought a lot about how to how to
treat the pandemic because on one hand, you know, maybe
(17:36):
maybe people don't want to read anything about you know,
an art and art theft or something like that, because
you know it couldn't be furthest thing, furtherest from your
mind right now. And and our thought was like, look,
people need a break where people are ready to obviously
that there's there's room for um, there's room for all
kinds of stories and the pandemic. There is a teachy
bit of pandemic in this issue. Um. But we just thought,
(17:58):
you know, time to give people a little bit of
a break, let them let them read some read some
news and read some stories that that that you know,
don't touch on this mullable thing that we're going through
in and hopefully you know, readers will appreciate that. Yeah,
I think it's great timing. Jason and I are still
talking about the b story. We just love that one
from from last year. Alright, re up that. Go to
business week dot com and re up that. Max Chafkin,
(18:21):
thank you so much, Features editor for Bloomberg, the architect
of the heist issue. Or thanks as well to Joe Webber,
the editor of Bloomberg Business Week. You're listening to Bloomberg
Business Week with Carol Masser and Jason Kelly on Bloomberg Radio,
and it's time to do a little Business Week economics.
Let's talk about everything that's going on in the world
(18:43):
of economics, Carol, because those FED minutes obviously very important
in terms of setting the tone. UM. Happy to catch
up with Winny Catalano. Yeah, he's a chief market strategist
of its Duyveson Capital Management, global investment strategist at Defoe
Red Mound on the phone for New Jersey. I'm being
nice to have you back with us. How are you.
(19:04):
I'm doing well, How are you doing okay? I'm trying
to make sense, you know, and just watching the virus developments,
watching the economy, watching the market moves. UM, and of
course we have those FED minutes earlier. You have some
thoughts about the role of the FED, in which you
talk about perpetuating a broken economic system. How so okay,
(19:27):
several years ago I had an email debate going on
with the then Minneapolis FED president Narayana cut up Coda,
I believe is how you pronounced his name. I asked
a simple question, is the Fed back stopping bad economic behavior?
Of course, that can happen from time to time, And
(19:48):
his response was an interesting one. It was that they
are appointed officials and it is not their job to
um to do to disagree with say they might disagree with,
but it's not their job to implement different policy than
elected officials, meaning politicians. And I just let that thought. Okay,
(20:10):
it's sunk in for a while, and then I'm looking
at the way the market has how the ft has behaved,
and the markets have behaved in the economy and everything
else over the years. And a couple of other things
sorted to fall into place, which deals with the fact
that we're in an economic system which I call neoliberalism,
which is the replacement from Keynesianism. And there are certain
(20:33):
dynamics and elements that happened within this economic system of
neoliberalism that involved a proactive the central bank. So now
if you put those two things together. What you get
is you get a proactive FED. Uh, not reactive like
it had been in the past. But since the mid
nineteen nineties, the FET has been proactive. It's been stepping in,
(20:56):
has been um avoiding, doing its best to have the
economy avoid an economic downturn. You know, recessions happen and
we end up getting these uh ten year period big
hits to the economy because they don't allow the normal
process to occur. So the FED is acting in this
(21:19):
proactive manner. Elected officials love that idea because they don't
have to make the hard choices. And we do need
a new economic system because clearly neoliberalism is run its course.
Just like Caijianism run its course. Neoliberalism is run its course.
We need something new, but it's not going to happen
because I called the FED the monetary uh pueterion guard. Uh.
(21:46):
They are the protectors of the emperor, the protectors of
the empire. Alright, alright, we got a lot of questions,
so you get it. Wait, hold on a second, So
so go ahead, James, I think you've got something. Well,
I mean, I have many questions, but how much of
this is crisis induced Vinny, and how much of this
(22:06):
was just going on before and now it's much more apparent. Okay,
everything seems to be a crisis. At least in terms
this is a big one. I think we can agree
this is a pretty big This is a big one,
and this was needed. And this is where the FED
traditionally has been reactive. It's necessary to do because of
what's happened circumstances, you know, uh, force the situation. But
(22:30):
in prior periods, at the end off and the early
part of when they went into the QUEUEI to infinity toolbox,
it was at a point in time in which the
financial markets were turning down, the economy was getting a
little bit weak. It wasn't necessary at that point in time,
at least from what I can tell that they had
a step in at that at that particular juncture. So
(22:53):
there were points along the way in which they did
things that did not allow the economy to go through
it's normal creative, destructive process, as painful as that is,
and then things build up and build up and build up,
and then something comes along a catalyst, So this one
was unusual, and then we end up with where we're
at now. All right, So Okay, we've only got about
(23:14):
two minutes a little bit over. So what what should
be the new economic system? And the other thing that
I need to ask you. If the FETE did not
come in after the Great Recession, after what's happened with
the COVID shutdown, I am worried about what might have
happened essentially to our economy, our market environment, um kind
(23:34):
of to our system. Are you saying that we should
have just let it come undone? No? Not. At those
points in time it was necessary to step in. They
did what they needed to do to stabilize the system,
to help the economy get out of a bad situation.
But then along the way it stepped in repeatedly because
of this market centric mentality of what neoliberalism is. And
(23:56):
so therefore the FETE is just reflecting back on ideology.
What a system that will replace it? I don't know.
I don't know what it is. I just know the process. Finny, Jenny,
you can't come up and tell me it's this huge
problem and they not have a solution. You're a man
of solutions, Vinny, Well, you know that's a great point.
(24:18):
What you need is what they call Erik Coffer called
a man of words, let's call him a person of words,
somebody who writes the economic theory that then gets adopted
by the person of action. And if you look at neoliberalism,
the person of words was Milton Friedman, Frederick Kayak fifties
and sixties. And then along comes roun Oreagan, Margaret Santra Boom,
(24:41):
it gets implemented. Those are the people of action. Listen,
I will say, I will say, and we're running out
of time, but this is one of those things we could,
you know, sit down at a bar, have some good
red wine and really talk about it for a long time.
But I do agree that there are some things in
our economic system that we know, and certainly these crises
continue to lay it out for us that we need
to look at our system and maybe rework some things
(25:02):
so that it works better. Vinny um, always provocative. Have
a great holiday. Nice to check in with you. Yeah,
be well. Vinny Catalana, Chief Market Strategy at Stuyveston Capital Management,
Global Investment Strategies at the Faux Red Mount, on the
phone from New Jersey. This is Bloomberg Business Week with
Carol Masser and Jason Kelly on Bloomberg Radio. Let's get
(25:23):
to our next story. Emily Chason is back with us.
She's talking about what we're all doing, which is working
from home, Carol, and she is here to talk about
what we do in a green world? Can we be
sustainable while we're working from home? I would like to
be Emily Jason shed on the phone, tell me what
(25:44):
we should be thinking about. Yeah, hi, Green newsletter this week. UM,
I was looking at what happened when everybody works from home,
and you know, daily US carbon emissions were down in
March to early June. So just eliminating the commute with
a huge impact in terms of reducing emissions. Um. But
(26:07):
it turns out that's the only part of the story.
While all these people were working from home. UM. We
also talk to Google, and Google found that the number
of people searching for how to live a sustainable lifestyle
increased by four thousand five during the coronavirus period. So
people are trying to be more sustainable at home. I
love your story because what you say when it comes
(26:27):
to as Google searches, people are searching on composting, switching
to green energy providers. That has all become populars popular,
I mean people. I do agree that folks don't laugh
at me, Jason, I'm because I can only see the
very top of your head because sorry, I had to
stand up now. But what's interesting, Emily is we've been
having this conversation, whether it's talking about sustainability, whether it's
(26:51):
about race and diversity, Like we're all at home kind
of really looking or you know, what we're eating. We
talked about this with Impossible Foods the CFO, like what
we're eating, we're really looking, taking a deep dive into
our life and looking at kind of our actions and
and that plays into what you write about in terms
of sustainability. Yeah, I mean when you're home, all the
(27:12):
stuff that's visibility. You know, most people haven't sent that
much time in their home or it just kind of
come in and out every day, and you know, it's
spending all the time really well, what am I really
doing here? And it's very visible to you. And the
things that you can do to actually reduce your emissions
impact or maybe not that obvious, like using the dishwasher
is more energy and water efficient than hand washing dishes. Um,
(27:33):
using cold laundry cold water to wash your clothes and
the laundry um, says a huge amount of emissions. Like
if you talk to practor and Gamble or seven generations,
they'll say that that is a huge impact. I do
almost all my laundry and cold water really, yeah, forever.
And part of it is because it's better on your clothes,
because hot water really in terms of the colors and pigments.
So I almost always do all cold water and almost
(27:55):
all of my clothes. I'm sorry. And one of the
ones today we found the still read this week about
toilet paper. Um, I guess the stuff that we were
getting in the office is made of more recycled content,
and the fluffier stuff you buy at home is made
of more virgin wood pulp from trees. Oh my god.
We went so deep on that story, Emily. It was actually,
I think disturbing to our listeners because we talked at nauseam. Emily.
(28:18):
It was a t m I moment. Yeah, it was
just there was so much about buying habits and and
I just I'm glad you weren't listening. But it is
an important story. It's an important piece of the story.
But it's an awareness, right like we had we have
had now the soft toilet paper conversation at home and
we might have to rethink that. I mean, my husband's like,
do you really need that's love stuff? And you know,
(28:39):
but but we're thinking about this stuff, right Yeah. Well,
I guess you know. One thing that's interesting about they
two is there's a lot more single use classic out there.
People are seeing the masks and the gloves on the
ground and thinking, oh, well, am I using all the
classic And you know, when you limiting your commute, you're
actually probably reducing some of your single use plasticause you
don't have that coffee cut to go or anything like that.
(29:01):
But um, you know, the plastics industry has really pushed
but you know, their stuff is safe right now. And
a screen piece just this month put out a piecing
you know, usable bags and cups are still safe, Like
they didn't want UM people to think that you have
to do single use to be safe. You can still
wash things and they're still safe from coronavirus. Yeah. I
think we need to understand that we're on a mission
(29:21):
in our home to get rid of UM. And I'm
really sorry Ziplock, but Ziplock bags and things like we've
been buying a lot of those. The new kinds of
is its silicone, silicon, um, the plastic and stuff that's
supposed to be safer in terms of what the wax
paper and yeah, like really rethinking that because you can
go through so much of that stuff. Yeah, Well, it's
(29:42):
it's interesting to change when people change habits to when
you do that or like you know, stop buying straws um,
but you do it. It's kind of hard and Sustainbillard
to unsee it. Right. Once you see something and you
start doing it, you're kind of not going to go
backwards on that behavior. Um. So it's pretty interesting as
people adopt it and its they're going to stay home more. Um.
That just to be sort of a long term impact. Well,
(30:05):
and I will say, and I know you experienced this
to Carol. Kids are a great check on this, especially
teenagers who are definitely much more environmentally aware of calling
us out on you know, things, whether it's single use
stuff for I don't know, I'm just spitballing here printing uh.
In any case, Emily Chason, thank you so much, sustainability
editor for Bloomberg, joining us on the phone from New
(30:27):
York City. I'm bro journal Yeah, but you let me drive?
Oh no, no, no, no, who's going to honey? Please,
I'll do the right revel I want to drive ball,
just drive baby, questions trying. This is the Drive to
(30:59):
the Globe that COMMU Boomberg Radio and it's time for
the Drive to the clothes. Let's head south. Check back
in with Kara Murphy, chief investment officer for Goldman Sex
Personal Financial Management, joining us on the phone from Dallas.
Also a proud Hoya I will point out alma of
(31:20):
that fine institution. Kara. Great to have you back with
Carol and myself. So what's it like in Dallas right now? Well,
it's amazing how quickly we've gone to being relatively unaffected
by COVID to a new hot spot. So it hasn't
changed too much, but definitely the headlines out So your
life hasn't changed that much. Well, we've we've been locked
(31:42):
down since mid March. You know, I spend a lot
of walking up and down my street, not going to restaurants,
and so you know that really hasn't changed. But driving around,
you know recently you had seen definitely more people out
and about. Um, I think that's probably starting to change again.
But you know, personally we're hold up like every boy else.
So what does it mean as we you know, Jason
(32:03):
and I kind of kid that, you know, we make
a little bit of progress and then we fall back.
I mean, that's certainly what we're seeing here in terms
of the reopening UM. But it's not just about the reopening.
It's about the implications it has obviously on individuals on
the economy. UM. Markets seem to be okay with it,
so there is that disconnect, But how do you see it? Yeah,
(32:23):
it's interesting because I think we can expect that there
are going to be a lot of fits and starts
with this virus for quite some time, so we're probably
going to have to get used to this. UM. But
when we look very broadly at the market, and it's
incredible to say this given all of the volatility that
we've seen over the last couple of months, but when
we look at the market today, it feels about fairly valued.
(32:45):
And one way that we look at it is, you know,
on purely evaluation basis, if you compare where we are
today to a very long term historical average, we look expensive.
But that if you isolate those periods in history where
inflation is low and stable as it is today, we
look about in line with those periods, so that could
mean that that likely means going forward, we can expect
(33:07):
stock returns to be about mid single digits, in line
with near term earnings growth. Um. But it feels like
we're about where we should be. So that's kind of
an amazing place to be here. And I was about
to stay June, but it's actually July. So what's an
investor to do? I mean, I I look at this,
(33:28):
you know, both from a professional perspective, but also as
a guy who as a four oh one k who
you know, sort of watched everything really plummet and then
come back. But I'm still worried because I see the
headlines and everything around the virus as well, you know,
I see governors and mayors being very very cautious. Uh,
(33:48):
and yet I see a market that's like to do
to do? Here we go? So what do you do? Yeah?
And so I think one very interesting lesson that we've
had during this downturn. And remember, like we've had a
recession in a bear market in the last couple of rods.
It's prettyful. But one lesson that I took away from
that is that this downturn was in many ways very typical.
(34:10):
So the speed at which it unfolded was very atypical.
What normally takes months or years took weeks. So it's
been very hard to kind of get our arms around that.
But during the downturn, we had risk assets like stocks
and hay yield greatly under perform and we had bonds
that did a really great job buffering during that period.
And then as the market started to to to re
(34:31):
um to re accelerate, we had the reverse of that. So,
like a lot of these sorts, like classic lessons that
individual investors should have, I think we're the right ones.
So you need to have a diverse, fied portfolio. You
might be all really excited about stocks, but they're gonna
be periods when stocks are going to greatly underperform um
and so it's really best to have a mix of both.
(34:52):
You sound I just want to break in. You sound
fairly enthusiastic, and I just do wonder we're going to
head into another earning cycle. Um, what do we need
to hear when companies report that support the bounce back
that we've seen in equity so far? Yeah, And it's
interesting because even just this morning we got some I
s M manufacturing data that was quite optimistic, you know,
(35:14):
coming in at the headline number, coming in at fifty
two point six UM. This tends to be a pretty
good leading leading indicator for the next couple of months.
And also some more contemporaneous data that we've seen in
terms of UM people getting out on the road, more
consumer spending. So I think what we're just gonna want
to see is more on the ground data confirming that,
(35:35):
you know, people are indeed starting to open their wallets more,
some people are getting back to work. There are obviously
some areas of the economy that are continued to go
and continue to be really challenged. You know, sing bars
are probably going to be really challenged for quite some time.
But other areas, like technology are able to operate pretty
well remotely. I mean, my business, everybody's at home and
we're just as productive as we were. So not to
(35:57):
say that there aren't challenges, but I think we're gonna
want to hear from companies that they're continuing to kind
of get back to a state of normal. So, Kara,
if you can generalize, what's the tone of the calls
that you're getting from clients as you talk to them,
how are they feeling? Does it depend on where they
are geographically, like what's the tone from them? Yeah, it's
(36:20):
very interesting because throughout this period I will say that
by and large, our clients felt okay, which again it's
remarkable given what we've been through. And I think there
are a couple of reasons for that. One is, you know,
I firmly believe that an investment portfolio, it should be
constructed in the context of a financial plan. We have
(36:40):
to know what's important to our clients in order to
build that plan for them. So what that means is
that we talk a lot about long term goals, about
you know, margin of error, and even though we had
a significant downturn in the market, our clients knew that
they were still on track to meet those goals. And
that's really key to sit through volatility, I have to say.
(37:01):
I mean that has been a point of comfort for
me at least so far as like you got like,
you know, you sort of like squinter your eyes a
little bit, like you brace yourself and you look at
the formumday you're like, okay, like maybe you know, maybe
we're gonna be okay to all of this. Yeah, amazing,
all right, Kara Murphy. Great to hear your voice. Good
luck down in Dallas, especially at what is certainly an
(37:21):
uncertain time there in Texas. Kara Murphy is chief investment
Officer for Goldman Sachs Personal Financial Management, joining us on
the phone from the Big d. Thanks so much for
listening to Bloomberg Business Week. Download the podcast on iTunes, Southcloud,
Bloomberg dot com, or wherever you get your podcasts. And
of course you can always listen to our radio show
at two pm Eastern on Bloomberg Radio, or watch us
on YouTube by searching Bloomberg Global News
This is Bloomberg Business Week. I'm Carol Masser and I'm
Jason Kelly. We're right here every day bringing you the
latest news from the world's of business and finance, plus technology, politics, economics,
all harnessing the power of Business Week reporters and editors.
And of course Carol that's part of a team of
twenty seven hundred journalists and analysts more than a hundred
and twenty countries and Jason. You can download Bloomberg Business
(00:23):
Week on iTunes, SoundCloud, bl Bloomberg dot com. You can
also listen to our radio show at two pm Eastern
on Bloomberg Radio every weekday, or watch us on YouTube
by searching Bloomberg Global News. We continually, of course, update
you here on the Bloomberg about what's going on with
the virus. And I gotta say, yesterday was I feel
(00:44):
like a turning point once again, as we saw surging
new cases in a bunch of southern and Western states.
We had states reopening plans, putting them on hold, hospitalizations
are up. And then Anthony Faucci, the US government's top
infectious disease specialist, warning lawmakers that virus cases could top
and rise to a hundred thousand a day if behaviors
don't change, I can't make an accurate prediction, but it
(01:08):
is going to be very disturbing. I will guarantee you that,
because when you have an outbreak in one part of
the country, even though in other parts of the country
they're doing well, they are vulnerable. I made that point
very clearly last week at a press conference. We can't
just focus on those areas that are having the surge.
It puts the entire country at risk. We are now
(01:31):
having a quality plus thousand new cases a day. I
would not be surprised if we go up to a
hundred thousand a day if this does not turn around,
and so I am very concerned. Yep, that number got
our attention. That's of course Dr Anthony Fauci talking to
senators yesterday and hearing held by the Senate Health, Education,
Labor and Pensions Committee, and Jason Dyer absolutely well, from
(01:54):
one of the nation stop doctors to our top doctor.
Dr I and Les bed are back with us, clinical
Associate Professor of Medicine at n y U s Linga
Medical Center, joining us once again on the phone from
New York City. So Ian, when you heard that from
Dr Fauci. I'm guessing it didn't shock you given how
on the front lines you've been on this, but it
has to be disappointing and a little bit scary, especially
(02:18):
given that you've been on the front lines of this
and seeing what's happened in New York City. Hi, Carol
and Jason. Yes, I think most doctors that I speak
to certainly are very concerned, and hospitals are concerned, as
they should be um to some degree. You know, I
think by by not really mandating you know, masks and
(02:38):
social isolation, really by giving that as an option, which
you know, with multiple states and in a free country,
that's certainly one approach. We're really, in a way, uh
following the Swedish model, which is letting nature take its course,
and when that happens, there's certainly a significant risk. As
Dr Fauci says, you know, cases at this point we're
(03:01):
about forty or fifty thousand a day. We know they're
really much higher because we're really only picking up about
one intent or only diagnosing one intent. There are probably
ten times more people who have UH COVID than than
are actually being picked up by tests. So we're talking
hundreds of thousands a day of new cases, and of
(03:22):
course that translates into potentially um higher surge on hospitals
and health care facilities. And this is what we're seeing
across the Sun Belt. Yeah, it's not even it's not
even just the surge with hospitals, which is a concern,
but really ultimately a higher death rate and then what
(03:43):
I like to call post COVID syndrome. Even people who
get through it often have a lot of other symptoms
and ongoing healthcare issues. So it's it's quite worrisome. Ian,
let's talk about that. In anticipation of our conversation, I
was talking to others about, um, exactly what you're getting
to know. You were the first one, Jason, and I
can kind of almost remember the day where you talked
(04:03):
about the blood clots, you know, throughout the body, and
this was just not something you see often. Talk to
us about the implications of that and and the problems
that seemed to be maybe staying with some patients even
after they recover. Exactly, so this uh and Dr Faucci
has said this. He said, this is a virus with
protein manifestations, meaning multiple ways of manifesting. We typically think
(04:29):
of viruses perhaps as an ammonia or fever, chills and aches,
but this virus is unique. We we really can't think
of something similar where multiple organs are affected, strokes in
the brain, and kidney disease, liver disease, very high liver
function test g I disease, nausea, vomiting, diarrhea, and not
(04:51):
only that, besides um killing people with blood clots and
and so of the latest data show that the virus
seems to increase a platelet aggregation or the stickiness of
platelets and platelets. Normally, you know, we need to to
cause some clotting when you get an injury or a cut,
(05:12):
but when there's a massive increase in platelet stickiness, you
get clots everywhere. And that probably explains a lot of
the you know, severe consequences that we see as a
result of these infections. Well, and presumably that ultimately has
an impact on a hospital and doctor's abilities to treat
a whole host of things, including new cases. But also
(05:35):
this long tail, as it were, uh inn of COVID
exactly right, So we have the you know, the acute
UH injury or the the acute illness, and we're still
a bit perplexed why there is a number of patients
who have mild to to know symptoms and this is
(05:55):
that large young group of people who are asymptomatic. They
form a reservoir are they're often feel fine and feel invulnerable.
They're not wearing masks. They're potentially transferring this to other
people who are older, which is why you know, universal
masking is certainly a reasonable request for for all um
and then uh, insusceptible patients. You get this really cascade
(06:20):
of effects that make people more short of breath, have
clots everywhere, and then even if people survive after hospitalization,
many have a long term not only psychologic effects but
physical effects. Ian when do you realistically still expect a virus?
I mean a vaccine mother? So I you know, I
think this is encouraging news. Fightser is one of the
(06:42):
number of companies Maderna j and j a Estra Zeneca,
you know, who are really moving forward. A lot of
these studies are going to go into phase three with
wider number of patients. The Fighter study is is fairly small,
uh you know, forty five patients or so um, but
it certainly is encouraging. What we don't know is in
a larger number of patients, how many will develop antibodies
(07:06):
that are neutralizing, how long those antibodies will last, and
will the virus mutate. So I think it is encouraging
that we're making progress. It is a unique a way
of making UH vaccine with messenger RNA which gets into
your own cells and uh UH forms these proteins that
(07:28):
are typical of the coronavirus COVID nineteen, typically the spike protein,
and then your body forms antibodies to that, so you're
not subject to the risk of a live virus. And
we think that this is hopefully a better way. It
is a relatively new technology, but again there are a
lot of hurdles before not only is it proven effective,
(07:49):
but it can be ramped up, manufactured and distributed, and
probably there'll be several vaccines using similar technology, hopefully with
similar efficacy. So I think at some point UH and
I'm thinking early, but I think it can be a
very bumpy road until we get there where it where
(08:10):
it's widespread, and then you have to see how many
people we'll be willing to take it. But since we
know probably twenty five million or more Americans probably have
the virus. Based on that one in ten, we know
the death rate is certainly higher than the you know,
hundred and twenty five or hundred and fifty thousand people
(08:30):
as going to climb much much higher. You know, we're
gonna have a lot of shocks to the system, the
economic system. Uh. And I think it is this is encouraging,
but it's it is an early step in a very
long process to to turn things around. I don't mean
to be negative. I'm just trying to keep it in perspective.
We look to you to keep it real for us. See.
(08:51):
And um so speaking of which is speaking of long roads, uh,
the road back for New York City. You are there
in New York. You saw I'm sure that Major de
Blasio and Governor Cuomo said let's slow down a little
bit on indoor dining, uh, expansive outdoor dining. This is
a cautious reopening, to say the least. Uh, clearly informed
(09:14):
by what we see going on in the rest of
the country in New York and New York City specifically,
not wanting to fall back. What do you make of
it so far? The reopening? All right, this is really
unexplored territory. We we it's not like there's a template,
UH to follow. And I think New York certainly has
done remarkably well compared to the rest of the country.
(09:35):
We dealt with a major hospital surge, and I think
everyone is afraid, justifiably of either a second wave or
losing ground, and that would be a real strain on
not only the economics the hospital system, and so I
think we have to be careful. Certainly, we know outside
is better than inside. Wearing masks, having some social distance
(09:57):
certainly reduces the risk. Um and I think he's trying
to be prudent. It's going to be very difficult to
know when is the old clear signal that restaurants can
go back, And I think that puts a question on
the whole economy and um, yeah, and small business owners,
you know they're they're under strain. So I think, um,
(10:19):
we do need to get back. The optimal time for
that is unclear, and I think if there's any place
to begin that, it appears in New York City is
ready to take some some forward steps as long as
we track and trace and contact trace and make sure
we're not seeing any any recurrence or second wave right
and we're getting ready for that Phase three reopening. Come
(10:40):
to Lyst six um and thank you so much. Have
a great holiday, a safe holiday, and of course we'll
check in with you next week. Dr I and Lost Beat,
our clinical associate professor of Medicine at the n y
U Landgoing Medical Center. On the phone from New York City.
This is Bloomberg business Week with Carol Mazer and Jason
Kelly on Bloomberg Radio. Jason and I talked about this early.
(11:01):
It's the perfect beach read, social distancing beach read mind
you or stay cation or work from home cation read. Uh,
there's lots of from home cation, you know. I think
you've a lot of sleep. I'm throwing a lot of
words out there. Um. It has stolen Super Bowl rings,
it has corporate espionage, and the most famous art heist
in modern history. It is time for Business Week's annual
(11:23):
Heist issue. It's a double issue, lots of stories of
mystery and things gone missing behind it all. Features editor
Max Chafkin on the phone from Queen's New York, along
with Bloomberg Business Week editor Joe Weber on the phone
in Massachusetts. Joel and Max gotta tell you we love
this issue, and I feel like it's what everybody needs
right now. Well that was why we made it go ahead, Joel. Well,
(11:49):
you know, just the third annual Heist issue. It's a
huge testament to one Max Chafkin, who has become just
the captain of this thing. And you know, Max and
I just like all year long or basically like talking
about this issue and like putting together our our works
in progress list or whip list, and you know, trying
(12:09):
to figure out the ones that are gonna make it
or not make it. And you know that this issue
is a culmination really of that process and a huge
testament to him. And you know, all these UM reads.
You know, we've always said joke that, um, we want
to kind of steal your summer with this issue and
and boy, um could we have come out at a
better moment in time for that. UM. So hopefully everyone
(12:31):
can you know, pack this around all summer long and
take their time enjoying it because the stories are just
tremendously good. Max, what is your favorite? I mean, you know,
I love them all, but the this story that Carol
mentioned at the top, the Super Bowl Rings pis um
Is is epic and wonderful. It's by Zeeke Fox and
(12:53):
I don't want to ruin the whole thing. Um, but
it's about a very very very committed New England Patriots
fans who decided, uh in basically that thirteen years ago
to get revenge on on the Giants, and the way
he decided to do that was by sealing their Super Bowl.
Now and it wasn't even the biggest heist that he
(13:16):
went math for that, you'll have to read the story. Um. Uh.
You know, you guys talked with clear Subteth yesterday, um
about her story about the Gardner Museum where this five
million dollar mystery remains, this this sort of thing in
the art world that no one has ever been able
to crack. Um. My favorite little detail about that is
(13:39):
we call it we've called it the case of the
Empty Frames because the museum has to keep the frames
empty on the walls because otherwise the the entire museum
would actually turn over to Harvard and they have to
keep things exactly as they were when the eras handed
them down and created the museum. Um. So it's like
(14:00):
a heist within a heist if they you know, if
they act out of line. Um and and the stories
just kind of keep going. There's an amazing one that
we just published today by Natalie Obico Pearson Um about
Huawei and Canada where there was once a company called Nortel,
a mysterious hack um sink that company Whahwei. It coincides
(14:23):
with basically the moment in time that Huawei really started
to emerge as a dominant force. And actually, uh Huahwei
ended up hiring a whole team of Nortel engineers who
basically ended up being the ones that built five g
at Wahwei. Uh. So all of these stories, it's a
way of talking. And there's another one that we'll talk
more about tomorrow. I hope um that make it very
(14:45):
of the moment. So it's a way for us to
be both timely and and timeless, which is sort of
one of my favorite attributes that we try and do it.
They're just so much fun. So, Max, I'm just curious
about the conversations you guys have in the news room
when you are putting this together. You gotta think about
it. It It comes out every year at least for the
last four years, so you know what goes on in
the newsroom as you get ready, you know, and you
(15:05):
plan for this well so I mean these are mostly fun.
Really not every story in this issue is what I
would call, you know, a hundred percent fall laugh. Um.
But but for the most part, we're talking about stories
that are fun and entertaining to report and and and
entertaining to write and entertaining to read. And so you know,
the reporters in the newsroom like this issue. It's a
(15:27):
it's a kind of journalist favorite and um. And so yeah,
throughout the year, you know, we're, like Joel said, you know,
we're fielding pitches, um for these stories. The Super Bowl
one that I mentioned was uh, you know months in
the making. I think we first started talking about it
in October and November of last year. Um and uh
and and and so it's it's kind of a combination
(15:49):
of just sort of over the year, uh, you know,
fielding a bunch of pitches, but then also trying to
be a little bit imaginative and think about, you know,
what are some what are business stories that you wouldn't
necessarily think of as a conventional heist story, but that
could be thought of that way. And and and that's
one that's like the North Tell story that that Joel mentioned,
you know, also by the way Happy Canada Day everybody.
(16:10):
I mean, the story is about a Canadian national champion
that um was you know, through its own hand, through
the market, and through a hack was destroyed. And so
it's not it's not a straight up heist, but it
is a story where there where some theft plays a role,
and there's also kind of a sort of business theft
(16:30):
that is like one company taking another company's market share.
So we try to take you know, a a sort
of broader view of heist. And then we and then
but of course they have to have some like just
classic you know, take the painting type type type stories
and and and we actually have two of us issues.
So so it's it's a mix Canada Dayay a zoom
(16:51):
cocktail party for that one a little bit later on.
So Max, just one last quick question for you. I mean,
as you odd about this issue, and as Joel pointed out,
you know, this is one that you're talking about for
months and months and months of in advance. Obviously the
world changed pretty dramatically over the past four or five months.
How does pandemic sort of infuse a project like this
(17:15):
other than everybody's working remotely and you're probably doing to
Carol's point just a minute ago, a lot more zoom calls.
But how does it affect it editorially? Yeah, I mean
in terms of the process, that's all the usual tough
stuff that everybody's going through. Um. But but in Turm,
we we thought a lot about how to how to
treat the pandemic because on one hand, you know, maybe
(17:36):
maybe people don't want to read anything about you know,
an art and art theft or something like that, because
you know it couldn't be furthest thing, furtherest from your
mind right now. And and our thought was like, look,
people need a break where people are ready to obviously
that there's there's room for um, there's room for all
kinds of stories and the pandemic. There is a teachy
bit of pandemic in this issue. Um. But we just thought,
(17:58):
you know, time to give people a little bit of
a break, let them let them read some read some
news and read some stories that that that you know,
don't touch on this mullable thing that we're going through
in and hopefully you know, readers will appreciate that. Yeah,
I think it's great timing. Jason and I are still
talking about the b story. We just love that one
from from last year. Alright, re up that. Go to
business week dot com and re up that. Max Chafkin,
(18:21):
thank you so much, Features editor for Bloomberg, the architect
of the heist issue. Or thanks as well to Joe Webber,
the editor of Bloomberg Business Week. You're listening to Bloomberg
Business Week with Carol Masser and Jason Kelly on Bloomberg Radio,
and it's time to do a little Business Week economics.
Let's talk about everything that's going on in the world
(18:43):
of economics, Carol, because those FED minutes obviously very important
in terms of setting the tone. UM. Happy to catch
up with Winny Catalano. Yeah, he's a chief market strategist
of its Duyveson Capital Management, global investment strategist at Defoe
Red Mound on the phone for New Jersey. I'm being
nice to have you back with us. How are you.
(19:04):
I'm doing well, How are you doing okay? I'm trying
to make sense, you know, and just watching the virus developments,
watching the economy, watching the market moves. UM, and of
course we have those FED minutes earlier. You have some
thoughts about the role of the FED, in which you
talk about perpetuating a broken economic system. How so okay,
(19:27):
several years ago I had an email debate going on
with the then Minneapolis FED president Narayana cut up Coda,
I believe is how you pronounced his name. I asked
a simple question, is the Fed back stopping bad economic behavior?
Of course, that can happen from time to time, And
(19:48):
his response was an interesting one. It was that they
are appointed officials and it is not their job to
um to do to disagree with say they might disagree with,
but it's not their job to implement different policy than
elected officials, meaning politicians. And I just let that thought. Okay,
(20:10):
it's sunk in for a while, and then I'm looking
at the way the market has how the ft has behaved,
and the markets have behaved in the economy and everything
else over the years. And a couple of other things
sorted to fall into place, which deals with the fact
that we're in an economic system which I call neoliberalism,
which is the replacement from Keynesianism. And there are certain
(20:33):
dynamics and elements that happened within this economic system of
neoliberalism that involved a proactive the central bank. So now
if you put those two things together. What you get
is you get a proactive FED. Uh, not reactive like
it had been in the past. But since the mid
nineteen nineties, the FET has been proactive. It's been stepping in,
(20:56):
has been um avoiding, doing its best to have the
economy avoid an economic downturn. You know, recessions happen and
we end up getting these uh ten year period big
hits to the economy because they don't allow the normal
process to occur. So the FED is acting in this
(21:19):
proactive manner. Elected officials love that idea because they don't
have to make the hard choices. And we do need
a new economic system because clearly neoliberalism is run its course.
Just like Caijianism run its course. Neoliberalism is run its course.
We need something new, but it's not going to happen
because I called the FED the monetary uh pueterion guard. Uh.
(21:46):
They are the protectors of the emperor, the protectors of
the empire. Alright, alright, we got a lot of questions,
so you get it. Wait, hold on a second, So
so go ahead, James, I think you've got something. Well,
I mean, I have many questions, but how much of
this is crisis induced Vinny, and how much of this
(22:06):
was just going on before and now it's much more apparent. Okay,
everything seems to be a crisis. At least in terms
this is a big one. I think we can agree
this is a pretty big This is a big one,
and this was needed. And this is where the FED
traditionally has been reactive. It's necessary to do because of
what's happened circumstances, you know, uh, force the situation. But
(22:30):
in prior periods, at the end off and the early
part of when they went into the QUEUEI to infinity toolbox,
it was at a point in time in which the
financial markets were turning down, the economy was getting a
little bit weak. It wasn't necessary at that point in time,
at least from what I can tell that they had
a step in at that at that particular juncture. So
(22:53):
there were points along the way in which they did
things that did not allow the economy to go through
it's normal creative, destructive process, as painful as that is,
and then things build up and build up and build up,
and then something comes along a catalyst, So this one
was unusual, and then we end up with where we're
at now. All right, So Okay, we've only got about
(23:14):
two minutes a little bit over. So what what should
be the new economic system? And the other thing that
I need to ask you. If the FETE did not
come in after the Great Recession, after what's happened with
the COVID shutdown, I am worried about what might have
happened essentially to our economy, our market environment, um kind
(23:34):
of to our system. Are you saying that we should
have just let it come undone? No? Not. At those
points in time it was necessary to step in. They
did what they needed to do to stabilize the system,
to help the economy get out of a bad situation.
But then along the way it stepped in repeatedly because
of this market centric mentality of what neoliberalism is. And
(23:56):
so therefore the FETE is just reflecting back on ideology.
What a system that will replace it? I don't know.
I don't know what it is. I just know the process. Finny, Jenny,
you can't come up and tell me it's this huge
problem and they not have a solution. You're a man
of solutions, Vinny, Well, you know that's a great point.
(24:18):
What you need is what they call Erik Coffer called
a man of words, let's call him a person of words,
somebody who writes the economic theory that then gets adopted
by the person of action. And if you look at neoliberalism,
the person of words was Milton Friedman, Frederick Kayak fifties
and sixties. And then along comes roun Oreagan, Margaret Santra Boom,
(24:41):
it gets implemented. Those are the people of action. Listen,
I will say, I will say, and we're running out
of time, but this is one of those things we could,
you know, sit down at a bar, have some good
red wine and really talk about it for a long time.
But I do agree that there are some things in
our economic system that we know, and certainly these crises
continue to lay it out for us that we need
to look at our system and maybe rework some things
(25:02):
so that it works better. Vinny um, always provocative. Have
a great holiday. Nice to check in with you. Yeah,
be well. Vinny Catalana, Chief Market Strategy at Stuyveston Capital Management,
Global Investment Strategies at the Faux Red Mount, on the
phone from New Jersey. This is Bloomberg Business Week with
Carol Masser and Jason Kelly on Bloomberg Radio. Let's get
(25:23):
to our next story. Emily Chason is back with us.
She's talking about what we're all doing, which is working
from home, Carol, and she is here to talk about
what we do in a green world? Can we be
sustainable while we're working from home? I would like to
be Emily Jason shed on the phone, tell me what
(25:44):
we should be thinking about. Yeah, hi, Green newsletter this week. UM,
I was looking at what happened when everybody works from home,
and you know, daily US carbon emissions were down in
March to early June. So just eliminating the commute with
a huge impact in terms of reducing emissions. Um. But
(26:07):
it turns out that's the only part of the story.
While all these people were working from home. UM. We
also talk to Google, and Google found that the number
of people searching for how to live a sustainable lifestyle
increased by four thousand five during the coronavirus period. So
people are trying to be more sustainable at home. I
love your story because what you say when it comes
(26:27):
to as Google searches, people are searching on composting, switching
to green energy providers. That has all become populars popular,
I mean people. I do agree that folks don't laugh
at me, Jason, I'm because I can only see the
very top of your head because sorry, I had to
stand up now. But what's interesting, Emily is we've been
having this conversation, whether it's talking about sustainability, whether it's
(26:51):
about race and diversity, Like we're all at home kind
of really looking or you know, what we're eating. We
talked about this with Impossible Foods the CFO, like what
we're eating, we're really looking, taking a deep dive into
our life and looking at kind of our actions and
and that plays into what you write about in terms
of sustainability. Yeah, I mean when you're home, all the
(27:12):
stuff that's visibility. You know, most people haven't sent that
much time in their home or it just kind of
come in and out every day, and you know, it's
spending all the time really well, what am I really
doing here? And it's very visible to you. And the
things that you can do to actually reduce your emissions
impact or maybe not that obvious, like using the dishwasher
is more energy and water efficient than hand washing dishes. Um,
(27:33):
using cold laundry cold water to wash your clothes and
the laundry um, says a huge amount of emissions. Like
if you talk to practor and Gamble or seven generations,
they'll say that that is a huge impact. I do
almost all my laundry and cold water really, yeah, forever.
And part of it is because it's better on your clothes,
because hot water really in terms of the colors and pigments.
So I almost always do all cold water and almost
(27:55):
all of my clothes. I'm sorry. And one of the
ones today we found the still read this week about
toilet paper. Um, I guess the stuff that we were
getting in the office is made of more recycled content,
and the fluffier stuff you buy at home is made
of more virgin wood pulp from trees. Oh my god.
We went so deep on that story, Emily. It was actually,
I think disturbing to our listeners because we talked at nauseam. Emily.
(28:18):
It was a t m I moment. Yeah, it was
just there was so much about buying habits and and
I just I'm glad you weren't listening. But it is
an important story. It's an important piece of the story.
But it's an awareness, right like we had we have
had now the soft toilet paper conversation at home and
we might have to rethink that. I mean, my husband's like,
do you really need that's love stuff? And you know,
(28:39):
but but we're thinking about this stuff, right Yeah. Well,
I guess you know. One thing that's interesting about they
two is there's a lot more single use classic out there.
People are seeing the masks and the gloves on the
ground and thinking, oh, well, am I using all the
classic And you know, when you limiting your commute, you're
actually probably reducing some of your single use plasticause you
don't have that coffee cut to go or anything like that.
(29:01):
But um, you know, the plastics industry has really pushed
but you know, their stuff is safe right now. And
a screen piece just this month put out a piecing
you know, usable bags and cups are still safe, Like
they didn't want UM people to think that you have
to do single use to be safe. You can still
wash things and they're still safe from coronavirus. Yeah. I
think we need to understand that we're on a mission
(29:21):
in our home to get rid of UM. And I'm
really sorry Ziplock, but Ziplock bags and things like we've
been buying a lot of those. The new kinds of
is its silicone, silicon, um, the plastic and stuff that's
supposed to be safer in terms of what the wax
paper and yeah, like really rethinking that because you can
go through so much of that stuff. Yeah, Well, it's
(29:42):
it's interesting to change when people change habits to when
you do that or like you know, stop buying straws um,
but you do it. It's kind of hard and Sustainbillard
to unsee it. Right. Once you see something and you
start doing it, you're kind of not going to go
backwards on that behavior. Um. So it's pretty interesting as
people adopt it and its they're going to stay home more. Um.
That just to be sort of a long term impact. Well,
(30:05):
and I will say, and I know you experienced this
to Carol. Kids are a great check on this, especially
teenagers who are definitely much more environmentally aware of calling
us out on you know, things, whether it's single use
stuff for I don't know, I'm just spitballing here printing uh.
In any case, Emily Chason, thank you so much, sustainability
editor for Bloomberg, joining us on the phone from New
(30:27):
York City. I'm bro journal Yeah, but you let me drive?
Oh no, no, no, no, who's going to honey? Please,
I'll do the right revel I want to drive ball,
just drive baby, questions trying. This is the Drive to
(30:59):
the Globe that COMMU Boomberg Radio and it's time for
the Drive to the clothes. Let's head south. Check back
in with Kara Murphy, chief investment officer for Goldman Sex
Personal Financial Management, joining us on the phone from Dallas.
Also a proud Hoya I will point out alma of
(31:20):
that fine institution. Kara. Great to have you back with
Carol and myself. So what's it like in Dallas right now? Well,
it's amazing how quickly we've gone to being relatively unaffected
by COVID to a new hot spot. So it hasn't
changed too much, but definitely the headlines out So your
life hasn't changed that much. Well, we've we've been locked
(31:42):
down since mid March. You know, I spend a lot
of walking up and down my street, not going to restaurants,
and so you know that really hasn't changed. But driving around,
you know recently you had seen definitely more people out
and about. Um, I think that's probably starting to change again.
But you know, personally we're hold up like every boy else.
So what does it mean as we you know, Jason
(32:03):
and I kind of kid that, you know, we make
a little bit of progress and then we fall back.
I mean, that's certainly what we're seeing here in terms
of the reopening UM. But it's not just about the reopening.
It's about the implications it has obviously on individuals on
the economy. UM. Markets seem to be okay with it,
so there is that disconnect, But how do you see it? Yeah,
(32:23):
it's interesting because I think we can expect that there
are going to be a lot of fits and starts
with this virus for quite some time, so we're probably
going to have to get used to this. UM. But
when we look very broadly at the market, and it's
incredible to say this given all of the volatility that
we've seen over the last couple of months, but when
we look at the market today, it feels about fairly valued.
(32:45):
And one way that we look at it is, you know,
on purely evaluation basis, if you compare where we are
today to a very long term historical average, we look expensive.
But that if you isolate those periods in history where
inflation is low and stable as it is today, we
look about in line with those periods, so that could
mean that that likely means going forward, we can expect
(33:07):
stock returns to be about mid single digits, in line
with near term earnings growth. Um. But it feels like
we're about where we should be. So that's kind of
an amazing place to be here. And I was about
to stay June, but it's actually July. So what's an
investor to do? I mean, I I look at this,
(33:28):
you know, both from a professional perspective, but also as
a guy who as a four oh one k who
you know, sort of watched everything really plummet and then
come back. But I'm still worried because I see the
headlines and everything around the virus as well, you know,
I see governors and mayors being very very cautious. Uh,
(33:48):
and yet I see a market that's like to do
to do? Here we go? So what do you do? Yeah?
And so I think one very interesting lesson that we've
had during this downturn. And remember, like we've had a
recession in a bear market in the last couple of rods.
It's prettyful. But one lesson that I took away from
that is that this downturn was in many ways very typical.
(34:10):
So the speed at which it unfolded was very atypical.
What normally takes months or years took weeks. So it's
been very hard to kind of get our arms around that.
But during the downturn, we had risk assets like stocks
and hay yield greatly under perform and we had bonds
that did a really great job buffering during that period.
And then as the market started to to to re
(34:31):
um to re accelerate, we had the reverse of that. So,
like a lot of these sorts, like classic lessons that
individual investors should have, I think we're the right ones.
So you need to have a diverse, fied portfolio. You
might be all really excited about stocks, but they're gonna
be periods when stocks are going to greatly underperform um
and so it's really best to have a mix of both.
(34:52):
You sound I just want to break in. You sound
fairly enthusiastic, and I just do wonder we're going to
head into another earning cycle. Um, what do we need
to hear when companies report that support the bounce back
that we've seen in equity so far? Yeah, And it's
interesting because even just this morning we got some I
s M manufacturing data that was quite optimistic, you know,
(35:14):
coming in at the headline number, coming in at fifty
two point six UM. This tends to be a pretty
good leading leading indicator for the next couple of months.
And also some more contemporaneous data that we've seen in
terms of UM people getting out on the road, more
consumer spending. So I think what we're just gonna want
to see is more on the ground data confirming that,
(35:35):
you know, people are indeed starting to open their wallets more,
some people are getting back to work. There are obviously
some areas of the economy that are continued to go
and continue to be really challenged. You know, sing bars
are probably going to be really challenged for quite some time.
But other areas, like technology are able to operate pretty
well remotely. I mean, my business, everybody's at home and
we're just as productive as we were. So not to
(35:57):
say that there aren't challenges, but I think we're gonna
want to hear from companies that they're continuing to kind
of get back to a state of normal. So, Kara,
if you can generalize, what's the tone of the calls
that you're getting from clients as you talk to them,
how are they feeling? Does it depend on where they
are geographically, like what's the tone from them? Yeah, it's
(36:20):
very interesting because throughout this period I will say that
by and large, our clients felt okay, which again it's
remarkable given what we've been through. And I think there
are a couple of reasons for that. One is, you know,
I firmly believe that an investment portfolio, it should be
constructed in the context of a financial plan. We have
(36:40):
to know what's important to our clients in order to
build that plan for them. So what that means is
that we talk a lot about long term goals, about
you know, margin of error, and even though we had
a significant downturn in the market, our clients knew that
they were still on track to meet those goals. And
that's really key to sit through volatility, I have to say.
(37:01):
I mean that has been a point of comfort for
me at least so far as like you got like,
you know, you sort of like squinter your eyes a
little bit, like you brace yourself and you look at
the formumday you're like, okay, like maybe you know, maybe
we're gonna be okay to all of this. Yeah, amazing,
all right, Kara Murphy. Great to hear your voice. Good
luck down in Dallas, especially at what is certainly an
(37:21):
uncertain time there in Texas. Kara Murphy is chief investment
Officer for Goldman Sachs Personal Financial Management, joining us on
the phone from the Big d. Thanks so much for
listening to Bloomberg Business Week. Download the podcast on iTunes, Southcloud,
Bloomberg dot com, or wherever you get your podcasts. And
of course you can always listen to our radio show
at two pm Eastern on Bloomberg Radio, or watch us
on YouTube by searching Bloomberg Global News
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