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Labor Secretary Scalia's 'Double Talk' Is Shocking: Ritholtz · Bloomberg Intelligence

• 0:01
  Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, along
• 0:04
  Speaker 1: with my co host of Bonnie Quinn. Every business day
• 0:06
  Speaker 1: we bring you interviews from CEOs, market pros, and Bloomberg experts,
• 0:10
  Speaker 1: along with essential market moving news. Kind of Bloomberg Markets
• 0:13
  Speaker 1: Podcast on Apple podcast or wherever you listen to podcasts,
• 0:17
  Speaker 1: and on Bloomberg dot com. I want to point out
• 0:21
  Speaker 1: that we'll be speaking with the Labor Secretary Eugene Scalia
• 0:23
  Speaker 1: in just a few minutes Alex Steele and Guy Johnson
• 0:26
  Speaker 1: with that interview on the current state of the American
• 0:29
  Speaker 1: economic recovery. Also jobs, of course, not such a pretty picture.
• 0:33
  Speaker 1: Weekly jobless claims coming in today. They did fall, but
• 0:37
  Speaker 1: still coming in at one million, four hundred and eighty
• 0:40
  Speaker 1: thousand initial jobless claims. That was down from one point
• 0:43
  Speaker 1: five four million, but not as big of a drop
• 0:46
  Speaker 1: as economists had estimated. PAULI ensured unappoyment rate falling as well,
• 0:50
  Speaker 1: but to thirteen point four percent. I mean, it's a massive,
• 0:53
  Speaker 1: massive number of no doubt. The Labor Secretary will suggest
• 0:56
  Speaker 1: that it would have been even more massive were it
• 0:58
  Speaker 1: not for everything that a government did. But it's it's
• 1:02
  Speaker 1: very hard to look at those numbers and not feel
• 1:04
  Speaker 1: like there's a big problem out there. There really is.
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  Speaker 1: And I think that one of our guests earlier mentioned
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  Speaker 1: that it was, you know, fourteen weeks into this and
• 1:12
  Speaker 1: we're still having these types of number. Right, let's send
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  Speaker 1: it over now to Bloomer TV and Alex Steel and
• 1:16
  Speaker 1: Guy Johnson with the Labor Secretary. You help black employment, well, Uh,
• 1:23
  Speaker 1: the economy before the coronavirus hit, of course was uh
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  Speaker 1: the single best economy that African Americans had experienced in
• 1:35
  Speaker 1: in in in in this country. Uh, it was an
• 1:38
  Speaker 1: economy that was great for Americans all around, with unemployment
• 1:43
  Speaker 1: that hit a UM fifty year low. Job creation was
• 1:48
  Speaker 1: more than three times what had been predicted when the
• 1:51
  Speaker 1: president came in, but unemployment for African Americans was particularly low,
• 1:55
  Speaker 1: and that was one of the really great achievements of
• 1:57
  Speaker 1: that economy. So I think looking for word, I was
• 2:01
  Speaker 1: gonna say, Mr Secretary, undoubtedly correct, but no one expects
• 2:05
  Speaker 1: us to get back to where we were. So when
• 2:07
  Speaker 1: you take a look at say, wages, uh, for for
• 2:10
  Speaker 1: black employees are lower than whites, any unemployment raised continually
• 2:14
  Speaker 1: higher for those in the community. You need to fix that.
• 2:18
  Speaker 1: So how do you do that? UM, well, you know, Alex,
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  Speaker 1: UH going forward the same policies that delivered the record
• 2:28
  Speaker 1: low unemployment that we had until the virus came, or
• 2:31
  Speaker 1: going to the policies that matter going forward. That's UH
• 2:34
  Speaker 1: lightning the tax burden on American business, it's eliminating unnecessary
• 2:37
  Speaker 1: regulatory burdens that read led to a great job creation
• 2:42
  Speaker 1: and as you know, it also led to UH wage
• 2:45
  Speaker 1: increases that were greater for people in lower income brackets.
• 2:49
  Speaker 1: So those are all very good things for African Americans.
• 2:52
  Speaker 1: I think a couple other things going forward. At one
• 2:55
  Speaker 1: is the President's proclamation on Monday UH suspe bending UH
• 3:01
  Speaker 1: immigrant workers until the end of the year to provide
• 3:04
  Speaker 1: a buffer to give American workers a greater opportunity to
• 3:08
  Speaker 1: get back into the workforce. I think that's going to
• 3:11
  Speaker 1: help African American workers, it's going to help the economy
• 3:14
  Speaker 1: more broadly. And then we have reforms that we're going
• 3:17
  Speaker 1: to be looking to make to some of those immigrant
• 3:19
  Speaker 1: worker programs too, that I think are going to deliver
• 3:22
  Speaker 1: benefits across the board. The other thing I've mentioned is
• 3:25
  Speaker 1: the U s m c A goes into effect next week.
• 3:29
  Speaker 1: And that was one of the President's great achievements earlier
• 3:32
  Speaker 1: this year, bipartisan legislation that could create as many as
• 3:37
  Speaker 1: five hundred thousand new manufacturing jobs in this country, and
• 3:40
  Speaker 1: that's going to be a boon again for all working Americans.
• 3:46
  Speaker 1: It's the secondary Guy Johnson in London, why does keeping
• 3:50
  Speaker 1: smart people out of the United States help the US economy? Well, Uh,
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  Speaker 1: the change that we've made is to give smarter Amricans
• 4:01
  Speaker 1: a better opportunity to get jobs in an economy where
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  Speaker 1: we've made We've made progress over the last few weeks. Uh,
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  Speaker 1: with two and a half million jobs add in May.
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  Speaker 1: We know we've had a lot of jobs since then,
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  Speaker 1: but we've still got too many Americans out of work.
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  Speaker 1: We want to give them, uh an opportunity to get
• 4:20
  Speaker 1: back to work. Uh. If in fact, a business can't
• 4:25
  Speaker 1: find an American worker and there's a critical need to
• 4:27
  Speaker 1: be filled, there will be an exceptions process under the
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  Speaker 1: President's order. But guy, long term, UH, we're going to
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  Speaker 1: reform this program precisely so it does a better job
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  Speaker 1: of bringing super talented workers into this country rather than
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  Speaker 1: low wage workers who are competing with Americans and undercutting
• 4:46
  Speaker 1: American workers. Wages. We pivot and talk a little bit
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  Speaker 1: about today's claims data. Um, the indications are from from
• 4:57
  Speaker 1: this this high frequency data. The what was thing in
• 5:00
  Speaker 1: the US economy is a stabilization at a relatively high
• 5:05
  Speaker 1: level of unemployments. UM. Do you think we're starting to
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  Speaker 1: see a more realistic kind of view of what is
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  Speaker 1: happening emerging from the data, because up until now we've
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  Speaker 1: seen a very strong bounce back. Do you think we're
• 5:19
  Speaker 1: now starting to see evidence that that bounce back is
• 5:21
  Speaker 1: slowing down? I don't read this data that way, guy,
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  Speaker 1: although I think it's a fair question. Because the initial
• 5:28
  Speaker 1: claims number was a bit higher than had been projected.
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  Speaker 1: The number that really caught my attention was the continuing claims,
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  Speaker 1: that is, the people that are remaining on unemployment, and
• 5:38
  Speaker 1: that dropped by about seven sixty seven thousand, a big drop.
• 5:44
  Speaker 1: But there was also a correction for the prior week.
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  Speaker 1: You put them together, and we've got a million fewer
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  Speaker 1: people on unemployment UH today than we thought we had
• 5:53
  Speaker 1: a week ago. That's that's progress. And the big report,
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  Speaker 1: as you know, will be a week from today when
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  Speaker 1: we put out our June jobs report. And UM, I'm
• 6:04
  Speaker 1: hopeful that that will show really significant progress along the
• 6:08
  Speaker 1: lines of what we we saw in May. I think
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  Speaker 1: that will be a more reliable indicator than you know.
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  Speaker 1: Initial claims are just claims file. They're not necessarily claims
• 6:16
  Speaker 1: that are going to be accepted by the state. So
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  Speaker 1: even if we do get a better number for jobs Friday,
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  Speaker 1: it's still going to be bad. It will be a
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  Speaker 1: less bad kind of number. Um And at the same time,
• 6:29
  Speaker 1: at the end of this month, that additional assistance in
• 6:31
  Speaker 1: the unemployment checks from the Cares Act wears off. Anecdotally, Secretary,
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  Speaker 1: I have friends who literally will not be able to
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  Speaker 1: live without that extra money. What are you going to
• 6:42
  Speaker 1: do for them? Well, Ax, you're right. The six benefit
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  Speaker 1: that was in the Cares Act, which was a really
• 6:50
  Speaker 1: important benefit that the President and Congress provided when the
• 6:54
  Speaker 1: economy was being closed down in March, that expires at
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  Speaker 1: the end of July. UM. But we're gonna be a
• 7:00
  Speaker 1: very different situation at the end of July. Let's see
• 7:02
  Speaker 1: what the report shows us next week. But we know
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  Speaker 1: the economy is reopening. We're we're not in a situation
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  Speaker 1: anymore where government authorities are saying, essentially you can't go
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  Speaker 1: to work. So I don't think that six benefit is
• 7:14
  Speaker 1: the right policy in an opening economy. Uh, come August.
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  Speaker 1: So I wonder if there's a happy medium, because specifically
• 7:22
  Speaker 1: I'm talking about the services industry, because if you're a
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  Speaker 1: waiter and you're going back and you work on tips,
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  Speaker 1: you're not going to be getting back to where you
• 7:27
  Speaker 1: were pre COVID, So your tips might go from a
• 7:29
  Speaker 1: hundred dollars a day of fifty dollars a day, so
• 7:31
  Speaker 1: you're losing that money. Would you think about an income
• 7:34
  Speaker 1: subsidy for example, like France is doing. President at Cross
• 7:37
  Speaker 1: has something very similar today, working with unions to help
• 7:40
  Speaker 1: subsidize work or pay for it to compensate from the
• 7:42
  Speaker 1: loss they're missing. Can you do that well? Uh. Something
• 7:47
  Speaker 1: that we already have is what we call a short
• 7:49
  Speaker 1: time compensation. The idea is that a workforce can be
• 7:54
  Speaker 1: brought back, but maybe not all work full time. They've
• 7:57
  Speaker 1: they're brought back on a part time basis, and they
• 7:59
  Speaker 1: get a blend of pay and unemployment benefits. That's that's
• 8:03
  Speaker 1: being done some now, and I think that's that's a
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  Speaker 1: concept to look look at. Obviously, we have UH continuing
• 8:11
  Speaker 1: state unemployment benefits are available, and we'll take a look
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  Speaker 1: at whether there are any federal approaches that remain necessary.
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  Speaker 1: But you have that state benefit, you have the opportunity
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  Speaker 1: for a short time compensation. And we're focused most of
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  Speaker 1: all on growing the economy again, on creating those jobs.
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  Speaker 1: The President did such an extraordinary job of that up
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  Speaker 1: until the virus came. We have no reason to think
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  Speaker 1: that the economic fundamentals of UH the country are substantially
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  Speaker 1: different when they were just a few months ago. So
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  Speaker 1: I'm most focused now on reinforcing the policies that lead
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  Speaker 1: to record job creation and getting people back to work,
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  Speaker 1: rather than UM focusing so intently on the unemployment system itself.
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  Speaker 1: It's a secretary. There are large parts of the United
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  Speaker 1: States where the hospitalization count is now rising and rising dramatically.
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  Speaker 1: We're saying it in Texas, We're seeing it's in Florida,
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  Speaker 1: We're seeing it in California. Did these places reopened too quickly?
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  Speaker 1: Is there too much emphasis being placed on reopening the
• 9:16
  Speaker 1: economy at this point at the expense potentially of public health? Well, guy,
• 9:21
  Speaker 1: I don't think it's quite right to say that there
• 9:22
  Speaker 1: are large parts of the country that are seeing these
• 9:26
  Speaker 1: flare ups, but we are we are seeing some flare
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  Speaker 1: ups in parts of large states and it certainly has
• 9:32
  Speaker 1: to be and is being taken seriously. No, we did
• 9:35
  Speaker 1: not reopen too early. We knew that as we opened, UH,
• 9:40
  Speaker 1: that there would be some increased cases. We know far
• 9:44
  Speaker 1: better now how to deal with this virus than we
• 9:46
  Speaker 1: did two three months ago, and we have a much
• 9:49
  Speaker 1: greater capability to address it in terms of the tests
• 9:53
  Speaker 1: that are available, ventilator capacity and all of that. So
• 9:57
  Speaker 1: these are these flare ups are serious matters to take
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  Speaker 1: a look at, uh, the viruses out there. Americans do
• 10:03
  Speaker 1: need to continue to exercise discipline so that we can
• 10:06
  Speaker 1: stay open um. But you look across the country as
• 10:10
  Speaker 1: a whole. The reopening is going well, it's going safely,
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  Speaker 1: but we will continue to focus on these flare ups
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  Speaker 1: as they occur. Mr. Secretary, It's it's really hard to
• 10:19
  Speaker 1: agree with you on that though. When you have Texas, California,
• 10:23
  Speaker 1: and Florida, I mean Texas suspended all elective surgeries. They're
• 10:26
  Speaker 1: looking at reaching hospital big capacity in certain areas, and
• 10:30
  Speaker 1: Houston is a huge medical center and they're having some
• 10:33
  Speaker 1: serious problems. Uh. The government seems to no longer have
• 10:37
  Speaker 1: control over shutdowns or not. If I'm living in Houston,
• 10:40
  Speaker 1: I'm probably not leaving my house and I'm not going shopping.
• 10:42
  Speaker 1: So how does that then trickle through to the labor market.
• 10:45
  Speaker 1: You're going to have more layoffs potentially, or second round
• 10:47
  Speaker 1: layoffs just because people just want to stay home themselves,
• 10:51
  Speaker 1: because these are huge states with a huge rising cases. Well, Alex,
• 10:57
  Speaker 1: I gotta disagree with you. I think you're these are
• 11:00
  Speaker 1: ups are serious. I think you're exaggerating the current situation.
• 11:04
  Speaker 1: That local authorities are well aware of it, they're looking
• 11:07
  Speaker 1: to address it. We here uh in the administration are
• 11:12
  Speaker 1: in contact with them and looking for ways to help.
• 11:15
  Speaker 1: But again, you look across the country as a whole. Uh,
• 11:17
  Speaker 1: the reopening has gone very successfully, and uh what's happening
• 11:22
  Speaker 1: in these specific locations is a reminder of the importance
• 11:26
  Speaker 1: of discipline, of being careful about the virus that it's
• 11:30
  Speaker 1: still out there. It's not a judgment on the reopening
• 11:32
  Speaker 1: as a whole. To pay it's away from what we've
• 11:38
  Speaker 1: just been talking about. Mr Secretary UM, Let's talk a
• 11:41
  Speaker 1: little bit about investing and how public money, public pension
• 11:46
  Speaker 1: money via funds should be invested. You have written that
• 11:51
  Speaker 1: the profit motive is ultimately the final arbiter of whether
• 11:56
  Speaker 1: or not decisions should be made versus one investment, sorry,
• 11:59
  Speaker 1: versus another investment. Why is impact investing wrong? Why is
• 12:03
  Speaker 1: E s G investing wrong? Particularly at a time when
• 12:07
  Speaker 1: we see such need for changes in the way we
• 12:11
  Speaker 1: approach the climates and changes in the way we approach society.
• 12:14
  Speaker 1: We started this conversation talking about black lives matter. Well, guys,
• 12:21
  Speaker 1: you're referring to a rule that the Labor Department put
• 12:23
  Speaker 1: out earlier this week regarding so called E s G
• 12:27
  Speaker 1: investing in in the context of of a private pension
• 12:32
  Speaker 1: plans here in the U s and uh Uh Obviously
• 12:36
  Speaker 1: people uh like the opportunity to, as I put it
• 12:40
  Speaker 1: in an op ed, I wrote, to do good while
• 12:43
  Speaker 1: also doing well financially. But some questions certainly have been
• 12:46
  Speaker 1: raised about some of the E s G rating systems
• 12:49
  Speaker 1: out there. How reliable thorough are they really? You see
• 12:52
  Speaker 1: systems that uh, one rating is high for a company,
• 12:56
  Speaker 1: another rating system rates it low. There have been questions
• 12:59
  Speaker 1: raised by the SEC about how some of these funds
• 13:03
  Speaker 1: are are being promoted. That the key under our law
• 13:07
  Speaker 1: for pension plans is simply that pension plans are to
• 13:10
  Speaker 1: be managed with one goal. That's maximizing Americans retirement savings.
• 13:15
  Speaker 1: That's a really, really good social objective. It shouldn't be
• 13:19
  Speaker 1: compromised by fiduciaries to those retirees who are pursuing political
• 13:25
  Speaker 1: ends that cost those retirees money. That's what our proposed
• 13:29
  Speaker 1: rule addresses. Okay, interesting in the light of what the
• 13:35
  Speaker 1: business round table is kind of moving towards. But we
• 13:38
  Speaker 1: have to leave the conversation that Mrs Secretary, thank you
• 13:41
  Speaker 1: very much. Indeed, Eugene Scalia, the US Labor Secretary. This
• 13:47
  Speaker 1: that was US Labor Secretary Eugene Scalia speaking with Bloomberg
• 13:50
  Speaker 1: anchors Alex Steel and Guy Johnson on a wide reaching
• 13:52
  Speaker 1: conversation from all things from the pandemic and the impact
• 13:56
  Speaker 1: on the economy to the current state of the jobs market. Again,
• 13:59
  Speaker 1: we had jobs claims today came in a little bit
• 14:01
  Speaker 1: higher than expected, so really weighing in on the employment
• 14:05
  Speaker 1: situation and the economic uh situation within the US. Right now,
• 14:09
  Speaker 1: let's pivot right now and talk to our good friend
• 14:12
  Speaker 1: Barry Ridholtz. He's found of Ridholts Wealth Management, Bloomberg opinion
• 14:15
  Speaker 1: columnists and host of Masters of Business, Barry, what was
• 14:18
  Speaker 1: your takeaway from the discussion with Secretary Scalia? Kind of
• 14:23
  Speaker 1: shocking to hear the Department of Labor secretary doesn't seem
• 14:28
  Speaker 1: to know what the word fiduciary means. I kind of
• 14:31
  Speaker 1: had to rewind that and do a double take. His
• 14:35
  Speaker 1: his take on e s g IS is malignantly malinformed.
• 14:39
  Speaker 1: The data on this shows that this has performed at
• 14:42
  Speaker 1: least as well as other actively managed accounts, especially over
• 14:46
  Speaker 1: the past couple of years. And if people want to
• 14:49
  Speaker 1: express their views through their portfolios, that's up to the
• 14:53
  Speaker 1: individual investor, the fiduciary, the advisor who is working with
• 14:58
  Speaker 1: a client their job just to put the client's best
• 15:01
  Speaker 1: interest first. It's kind of shocked the way he spits
• 15:04
  Speaker 1: that word out as if it was acid in his mouth.
• 15:08
  Speaker 1: You know, the studies have shown that having non fiduciaries
• 15:12
  Speaker 1: advise on four oh one case and other retirement accounts
• 15:16
  Speaker 1: coasted seventeen billion dollars a year. If he's really concerned
• 15:19
  Speaker 1: about maximizing investors retirement savings, enforce the fiduciary rule and
• 15:26
  Speaker 1: make everybody who advises on that that account have to
• 15:30
  Speaker 1: put the investors first. Best interest first, it's a really
• 15:34
  Speaker 1: simple solution. I was shocked by the double talk I
• 15:37
  Speaker 1: just heard. I mean, it's so interesting because obviously the
• 15:41
  Speaker 1: Labor Secretary can propose whatever he wants, right Barry, But
• 15:44
  Speaker 1: this is something that would be pretty detrimental. I think
• 15:48
  Speaker 1: to a lot of workers out there at a time
• 15:50
  Speaker 1: when there is, you know, a skyrocketing unempoyment rate and
• 15:53
  Speaker 1: initiate all those kids. They just are not coming down
• 15:56
  Speaker 1: fast enough, and so much uncertainty out there. You know.
• 15:59
  Speaker 1: I don't to let my politics get in the way
• 16:02
  Speaker 1: of of responding to the Labor Secretary. But I have
• 16:07
  Speaker 1: a full dashboard of COVID nineteen data and I look
• 16:10
  Speaker 1: at this every day, along with all the other data
• 16:13
  Speaker 1: I run through. And I don't know if he's looking
• 16:17
  Speaker 1: at the data, but but what we're seeing is an
• 16:20
  Speaker 1: increase um in testing and an even larger increase in
• 16:25
  Speaker 1: infection rate, and the whole Sun Belt is doing poorly.
• 16:31
  Speaker 1: Look at rt dot live shows you the the are
• 16:35
  Speaker 1: one measures of state by state. You have thirty three
• 16:39
  Speaker 1: states that are still showing a greater contagion and the
• 16:43
  Speaker 1: numbers going in the wrong directions. The early States, New York,
• 16:46
  Speaker 1: New Jersey, Connecticut, Massachusetts. Their numbers are coming down. The
• 16:51
  Speaker 1: early infection states from international travel, mostly from Europe. But
• 16:55
  Speaker 1: now we're seeing the states that reopened. Looks the facts
• 16:58
  Speaker 1: are a lot of these states. It's ignored the White
• 17:01
  Speaker 1: House guidelines, ignored the CDC guidelines. It's hard to look
• 17:05
  Speaker 1: at the date and say this is going great. The
• 17:08
  Speaker 1: reason the market got she lacked earlier this week, at
• 17:12
  Speaker 1: least in some narratives tellings, is because, Jeeves, we're not
• 17:17
  Speaker 1: even waiting for second waves. The first wave hasn't run
• 17:19
  Speaker 1: its course, and the numbers are heading in the wrong direction. Florida, California, Texas.
• 17:25
  Speaker 1: That those are both red, blue and purple states. The
• 17:28
  Speaker 1: virus doesn't care about your politics. It's going to infect
• 17:32
  Speaker 1: people when given an opportunity, and we're continuing to give
• 17:36
  Speaker 1: COVID nineteen an opportunity to spread. We we are not
• 17:40
  Speaker 1: doing this well compared to other countries. It's interesting. So Barry,
• 17:45
  Speaker 1: given again, that's shlacking you mentioned earlier in this week.
• 17:48
  Speaker 1: I agree that in large part due to some of
• 17:50
  Speaker 1: the virus news. It seems like, you know, I'm just
• 17:54
  Speaker 1: wondering how we play this again. I mean, is it
• 17:56
  Speaker 1: just steady as she goes and recognize that this is
• 17:59
  Speaker 1: probably gonna be a longer pull than maybe we had
• 18:02
  Speaker 1: initially hoped for. So we've kind of gone full circle.
• 18:06
  Speaker 1: The initial fear was this is a multi year process
• 18:09
  Speaker 1: to get a treatment, get a vaccine developed her immunity
• 18:13
  Speaker 1: where we're knowing near her community, yet you need well
• 18:17
  Speaker 1: over people to either have a vaccine or exposure to
• 18:20
  Speaker 1: to get that. And you know, we we kinda got
• 18:24
  Speaker 1: very enthusiastic. There is lots and lots of positive news
• 18:29
  Speaker 1: coming out in terms of treatment and vaccine testing and
• 18:34
  Speaker 1: the amount of treatment we're doing. Those have been moving
• 18:38
  Speaker 1: in the right direction, but they are also being confronted
• 18:43
  Speaker 1: by a lot of um let's call it lazy and
• 18:48
  Speaker 1: unfocused behavior that can lead to the spread of this
• 18:52
  Speaker 1: That The other factor that I think is important from
• 18:55
  Speaker 1: a market perspective, not from how rapidly we're spreading the disease,
• 19:00
  Speaker 1: is is simply at a certain point, markets and investors
• 19:05
  Speaker 1: lose their ability to get shocked and and and once
• 19:09
  Speaker 1: you cross a World War two number of American deaths,
• 19:14
  Speaker 1: you know a lot of the horrific, stunning shock of
• 19:18
  Speaker 1: that you become somewhat in order to it and so hey,
• 19:22
  Speaker 1: the good news is the death rate is going down,
• 19:25
  Speaker 1: partly because a lot of the spread of COVID is
• 19:28
  Speaker 1: taking place amongst the younger and younger. The average age
• 19:32
  Speaker 1: of infection is going lower. Um, but that's still dangerous.
• 19:36
  Speaker 1: And you're remember you're always on a two to three
• 19:38
  Speaker 1: week lag from testing to infection to mortality. Well, and
• 19:43
  Speaker 1: it's going down for now. But we're hearing today that
• 19:45
  Speaker 1: you know, Texas is overwhelmed and even the governor is
• 19:48
  Speaker 1: coming out saying you're sweeping problem Houston. Yeah, exactly. And
• 19:53
  Speaker 1: you know, obviously with people on ventilator is you know,
• 19:56
  Speaker 1: you don't want to to forecast it, but it would
• 19:59
  Speaker 1: seem more likely than not that there will be more
• 20:02
  Speaker 1: deaths in Texas. Barry. You know, our market participants looking
• 20:07
  Speaker 1: to the next presidential cycle, and are they assuming that
• 20:12
  Speaker 1: no matter who it is, does it doesn't really matter
• 20:15
  Speaker 1: because the federal reserve is in there and there's plenty
• 20:18
  Speaker 1: of back stopping of this market and it won't change
• 20:20
  Speaker 1: no matter who the next president is. That's always an
• 20:24
  Speaker 1: interesting question. You know. The traditional wisdom has has been
• 20:27
  Speaker 1: for a long time that markets like a divided government,
• 20:31
  Speaker 1: one party has the Congress, the other party has the
• 20:35
  Speaker 1: the White House, and everybody has to reach across the
• 20:37
  Speaker 1: aisle to um to work together. UM. I think that
• 20:42
  Speaker 1: that's sort of a glib overstatement, and we do all
• 20:46
  Speaker 1: have a tendency to put too much emphasis on what
• 20:49
  Speaker 1: the White House or where Congress has done. For the
• 20:52
  Speaker 1: most part, markets are going to do what they're going
• 20:54
  Speaker 1: to do. The economy is going to do what it's
• 20:56
  Speaker 1: going to do. There is very little correlation between between
• 21:00
  Speaker 1: the two. It certainly feels that way on a day
• 21:02
  Speaker 1: to day basis. I haven't seen any indication that that
• 21:08
  Speaker 1: the market is um is discounting one side or the
• 21:12
  Speaker 1: other winning. Whenever I read that, it tends to be
• 21:16
  Speaker 1: filled with people's personal bias and they take what the
• 21:19
  Speaker 1: market is doing and somehow crafted into a narrative. UM.
• 21:24
  Speaker 1: I had a little disagreement with my friend Jim Cramer
• 21:28
  Speaker 1: on on Twitter yesterday who said the two percent fall
• 21:32
  Speaker 1: in markets had to do with Biden's uh increase in
• 21:36
  Speaker 1: in ratings. It's like, wait, this market is up while
• 21:41
  Speaker 1: the incumbent was in free fall. Why are you picking
• 21:44
  Speaker 1: on Wednesday as your indicator. Isn't that a little bit
• 21:47
  Speaker 1: of a personal bias there, Jim, who I was just kidding. Barry,
• 21:53
  Speaker 1: thank you so much. It's always great to talk to
• 21:55
  Speaker 1: Barrier at alls, who doesn't pull us punches and always
• 21:58
  Speaker 1: has the smart take on what's going on in the
• 21:59
  Speaker 1: mark get and then political life and generally in investing.
• 22:02
  Speaker 1: You don't forget to listen to his Master's in Business podcast.
• 22:05
  Speaker 1: Just another brilliant episode week over week over week. So
• 22:09
  Speaker 1: thank you for that very well. It is time to
• 22:15
  Speaker 1: check in with the Bloomberg Opinion. First, I want to
• 22:18
  Speaker 1: reiterate the Supreme Court decision that came out today bolstering
• 22:22
  Speaker 1: the government's ability to quickly deport people who enter the
• 22:24
  Speaker 1: country illegally. You know, it's again siding with the Trump
• 22:28
  Speaker 1: administration on that refusal to give asylum seekers abroad right
• 22:32
  Speaker 1: to make their case to a federal judge. So Supreme
• 22:35
  Speaker 1: Court rules against court access for asylum seekers. It's a
• 22:38
  Speaker 1: separate story but slightly related in that it goes to
• 22:41
  Speaker 1: the tendency of Resident Trump to keep people out of
• 22:44
  Speaker 1: the USA. He signed an order on Monday temporarily halting
• 22:47
  Speaker 1: access to several employment based visas, and that affects hundreds
• 22:51
  Speaker 1: of thousands of people seeking to work in the United States.
• 22:54
  Speaker 1: These H one, B and H war visas used by
• 22:57
  Speaker 1: tech workers primarily, let's bring in someone who's written a
• 22:59
  Speaker 1: great column, honest, take him of Bloomberg opinion. Okay, why
• 23:03
  Speaker 1: is this generally not a good idea for the United
• 23:07
  Speaker 1: States and its productivity? So I see where Trump's trying
• 23:13
  Speaker 1: to do what he's saying that by restricting this immigration
• 23:16
  Speaker 1: within a free up jobs for Americans. But we're usually
• 23:20
  Speaker 1: risking one of the most important strategic assets that the
• 23:23
  Speaker 1: US has, which is the Silicon Valley innovation machine, which
• 23:26
  Speaker 1: is the end of the world and it's where the
• 23:29
  Speaker 1: most ambitious, best, brightest entrepreneurs and engineers around the world
• 23:33
  Speaker 1: want to start their companies, which is here. And we're
• 23:37
  Speaker 1: kind of risking this braking that we have um just needlessly.
• 23:41
  Speaker 1: And if you look at the history of the Valley
• 23:44
  Speaker 1: and American tech companies um, Bond, Cappell have this great
• 23:48
  Speaker 1: slide where six of the most highly valued US tech
• 23:52
  Speaker 1: companies were founded by either first generation second generation immigrants
• 23:56
  Speaker 1: were talking Google, Video, Qualcom, even Apple was second generation
• 24:01
  Speaker 1: with deep jobs. So we're easily risking this most important
• 24:05
  Speaker 1: thing and already companies and countries like Canada. The CEO
• 24:12
  Speaker 1: Shopify is going out there saying, oh, come to Canada.
• 24:15
  Speaker 1: That So I just I just argue that it's just
• 24:18
  Speaker 1: very shortsighted to risk this thing that we have that's
• 24:21
  Speaker 1: so great UM by limiting these visas. So Tay, I know,
• 24:25
  Speaker 1: at one point, you know, these visas were so so
• 24:28
  Speaker 1: important for the technology companies because quite frankly, America wasn't
• 24:33
  Speaker 1: producing enough engineers, enough computer scientists. Is that still the case?
• 24:39
  Speaker 1: I think, yes, that's the case. When you talk to
• 24:41
  Speaker 1: these companies, are we don't have enough engineers? Um shopifies
• 24:46
  Speaker 1: us all the time that their biggest constraint is they're
• 24:49
  Speaker 1: not finding enough talented computer engineers. So that's still a
• 24:54
  Speaker 1: huge constraint. And when you see this avalanche of criticism
• 24:58
  Speaker 1: in the last couple of days we're talking that's on Facebook,
• 25:00
  Speaker 1: Micro everyone's coming out saying they're up at arms. Even
• 25:04
  Speaker 1: startups are saying this is it's going to hurt our
• 25:06
  Speaker 1: ability recruit talent, it's going to hurt the economiccovery. One
• 25:10
  Speaker 1: of the other visas is uh. One of the the other
• 25:13
  Speaker 1: visa suspensions stops internal transfers inside these companies where they
• 25:19
  Speaker 1: can't move managers around, So it just throws a wrench
• 25:23
  Speaker 1: into the operation of these countries and also puts a
• 25:27
  Speaker 1: massive amount uncertainty when we're trying to recruit the best
• 25:31
  Speaker 1: and brightest people in the world. I mean, it seems
• 25:33
  Speaker 1: to be almost you know, a reflex on the part
• 25:35
  Speaker 1: of President Trump. As soon as things are not going
• 25:38
  Speaker 1: particularly well at the White House, he does something to
• 25:41
  Speaker 1: block access to this country. Is there an argument for
• 25:46
  Speaker 1: that going too far at some point? And for these
• 25:48
  Speaker 1: companies like Google and Facebook to just continue to set
• 25:51
  Speaker 1: up operations abroad. I mean, their tax headquarters are usually
• 25:55
  Speaker 1: in other places anyway. I mean I agree with that,
• 25:59
  Speaker 1: like if we can't bring people here, why all these
• 26:04
  Speaker 1: companies are going to start international offices and try to
• 26:07
  Speaker 1: recruit people to those international offers. But I think the
• 26:09
  Speaker 1: bigger problem is, um it might attract all these immigrants
• 26:15
  Speaker 1: to go elsewhere, like go to Europe, go to China,
• 26:19
  Speaker 1: or even stay where they are, instead of coming to
• 26:22
  Speaker 1: American companies and generating innovation that we need. And I mean,
• 26:27
  Speaker 1: this is not a zero sume game. This is not like,
• 26:29
  Speaker 1: oh we don't have this, We're not gonna It just
• 26:34
  Speaker 1: takes up an American person's job if we miss out
• 26:37
  Speaker 1: on the next Google or in video. These are the
• 26:40
  Speaker 1: thousands and thousands of jobs and economic growth that we're
• 26:43
  Speaker 1: not going to get. I mean, it's it's not a
• 26:45
  Speaker 1: zero sum game. We just we can miss out on
• 26:47
  Speaker 1: huge innovation, economic growth and job creation that we just
• 26:53
  Speaker 1: will totally miss out on. So tell you about their
• 26:56
  Speaker 1: thirty seconds. Are there other industries besides technology they're going
• 27:00
  Speaker 1: to be impacted by this move? Yes? Um, I think
• 27:05
  Speaker 1: a lot of wort tram workers. There's restrictions like camp
• 27:08
  Speaker 1: counselors or pairs. So this is not just tech. This
• 27:11
  Speaker 1: is across the board. All these work visas are getting
• 27:14
  Speaker 1: restricted for the rest of the year, and then green
• 27:16
  Speaker 1: cards the band for green cards is extended to to
• 27:20
  Speaker 1: the rest of the year too, So this is just
• 27:22
  Speaker 1: a vast kind of visas suspension for an immigration altogether. Well,
• 27:28
  Speaker 1: and definitely some of the offices are closed these days anyway,
• 27:31
  Speaker 1: both in the US and in other countries, so you know,
• 27:34
  Speaker 1: you could argue that it's just disruption. You know, it
• 27:37
  Speaker 1: doesn't mean that all these people that are seeking you
• 27:39
  Speaker 1: won't eventually get these visas, but for the moment they
• 27:41
  Speaker 1: certainly won't. And we don't know if that will be reversed,
• 27:43
  Speaker 1: so we don't know what the situation will be in
• 27:45
  Speaker 1: coming months. It's certainly fascinating. And you know, I noticed
• 27:50
  Speaker 1: the other day on Twitter the Shopify CEO tweeting out, look,
• 27:55
  Speaker 1: this might have happened. So then come come to Canada.
• 27:58
  Speaker 1: I've seen that. Yeah, you know, open for business. Yeah exactly. Hey,
• 28:02
  Speaker 1: thank you. Always great to dig into these orders in
• 28:06
  Speaker 1: a lot more detail, because there's usually a little more
• 28:08
  Speaker 1: there than meets the eye. Initially that has taken him
• 28:11
  Speaker 1: of Bloomberg Opinion. We do like to check in on
• 28:13
  Speaker 1: Bloomberg Opinion at least once a day. Paul, would you
• 28:17
  Speaker 1: go to another country of a tech company? Were to
• 28:19
  Speaker 1: ask you, well, I think if you're an immigrant, you're
• 28:21
  Speaker 1: looking for the best opportunity, and now historically that's been
• 28:23
  Speaker 1: in the US. But if you know, I think you're
• 28:26
  Speaker 1: absolutely gonna be flexible there. Yeah, I mean, if you're
• 28:28
  Speaker 1: moving anyway, why not move where you're wanted? Right, Well,
• 28:34
  Speaker 1: what we've seen from this pandemic is the how it's
• 28:36
  Speaker 1: really impacted pretty much every industry, every company out there,
• 28:40
  Speaker 1: in terms of how the executive team and the managements
• 28:43
  Speaker 1: kind of think about their strategies, their daily workflows. A
• 28:47
  Speaker 1: lot of companies and a lot of management teams have
• 28:49
  Speaker 1: had to completely rethink how they do their business and
• 28:52
  Speaker 1: to get a sense of kind of what they're thinking
• 28:54
  Speaker 1: about what's on the top of their to do list.
• 28:56
  Speaker 1: We welcome chrish Nan Ramano Jump. He's a president and
• 28:59
  Speaker 1: head of Business and Technology Services at Tata Consulting Services. Christna,
• 29:04
  Speaker 1: thanks so much for joining us from Mumbai. UM, give
• 29:07
  Speaker 1: us a sense of kind of boy, I just can't
• 29:09
  Speaker 1: imagine the conversations you're having with your clients. But what
• 29:11
  Speaker 1: are the two or three things you're asking your clients,
• 29:14
  Speaker 1: are suggesting to your clients that they think about as
• 29:17
  Speaker 1: they navigate a new world order impacted by this pandemic.
• 29:23
  Speaker 1: Good morning, Paul. Thank you for having me on the show.
• 29:25
  Speaker 1: It's suppaser to be here, so I would probably talk
• 29:29
  Speaker 1: about three or four things, Paul. The first and foremost, UM,
• 29:35
  Speaker 1: we've been telling our clients about how it is not
• 29:38
  Speaker 1: it is extremely important for transformation to be looked at
• 29:43
  Speaker 1: not as a one time moon shot, but it's something
• 29:46
  Speaker 1: that needs to be navigated on an ongoing basis. This
• 29:48
  Speaker 1: is a phenomenon we call as perfectual transformation gone off
• 29:52
  Speaker 1: the base. You can take one moon shot at transformation
• 29:54
  Speaker 1: and then live happily a roster. The technology and so
• 29:57
  Speaker 1: many other factors are changing, ever so often enterprises need
• 30:01
  Speaker 1: to have the ability to navigate multiple transformations, smaller transformations perpetually.
• 30:06
  Speaker 1: That's a key capability. That's the first and perhaps the
• 30:09
  Speaker 1: most important advice I give to my clients. The second
• 30:12
  Speaker 1: one I talk about is about location independent workforces. There
• 30:16
  Speaker 1: is this concept called agile in our line of business.
• 30:19
  Speaker 1: It's extremely um effective and there there was a trend
• 30:25
  Speaker 1: that said the teams had to be co located. But
• 30:28
  Speaker 1: over the last five years, Teachings as a company has
• 30:31
  Speaker 1: been a pioneer in terms of advocating how location independence
• 30:35
  Speaker 1: is a key if agile has to realize its potential.
• 30:38
  Speaker 1: And I think the pandemic has only um clearly demonstrated.
• 30:43
  Speaker 1: How precient, however, U forecast was around that. And the
• 30:48
  Speaker 1: third thing that I would probably say is about being
• 30:50
  Speaker 1: boderless collaborative. I think it's extremely clear the the winners
• 30:54
  Speaker 1: of the future are going to be enterprises that can
• 30:56
  Speaker 1: collaborate very well among themselves, internally within the company as
• 31:00
  Speaker 1: also with the partners. So there are many many technologies
• 31:03
  Speaker 1: that enable this, being data centric, leveraging, cloud and so
• 31:07
  Speaker 1: on and so forth. UM that in term the selves
• 31:10
  Speaker 1: in so many other benefits, but I'd probably stoppered these
• 31:12
  Speaker 1: three things. Perfectual transformation, location, independent workforce and collaborative boderless mindset.
• 31:18
  Speaker 1: Those are the three things I would pick as a
• 31:20
  Speaker 1: top three advice pieces of advice that I give to
• 31:23
  Speaker 1: my clients. Christen, and give us an idea of how
• 31:25
  Speaker 1: you managed to relocate four hundred and fifty thousand employees
• 31:32
  Speaker 1: to working remotely. I mean, that's a phenomenal exercise. Yes,
• 31:37
  Speaker 1: thank you. It still looks so surreal to me. Um.
• 31:42
  Speaker 1: If you ask me around mid to late March when
• 31:45
  Speaker 1: this pandemic hit us Vaney whether I'd be three months
• 31:49
  Speaker 1: later or whether I'd be sitting comfortably in my home
• 31:51
  Speaker 1: and almost back to normal in terms of working from
• 31:55
  Speaker 1: a remote location, I'd have said the odds are completely
• 31:58
  Speaker 1: against it. So I was extremely nervous, and so were
• 32:02
  Speaker 1: all of my colleagues in the senior management team there
• 32:04
  Speaker 1: at Tires. But um Thesis is very well known for
• 32:09
  Speaker 1: its um you know, I never say the attitude and
• 32:13
  Speaker 1: we love the challenge. It did require a heroic effort
• 32:16
  Speaker 1: from many of our employees. But the fact is that
• 32:19
  Speaker 1: everyone knew that all of us had to come together
• 32:22
  Speaker 1: to make it happen. And as a company, we put
• 32:25
  Speaker 1: customer centricity as the top of our priority list. So
• 32:28
  Speaker 1: unless we very very quickly became effective in terms of
• 32:32
  Speaker 1: working from homes, many of the critical and essential services
• 32:36
  Speaker 1: for our customers would suffer in a big way. So
• 32:39
  Speaker 1: once that pressure is on us, it's extremely important for
• 32:42
  Speaker 1: us to make it happen. Also, the government here, the
• 32:45
  Speaker 1: local authorities, everybody cooperated as also our people demonstrate an
• 32:50
  Speaker 1: excellent sense of responsibility and work ethics. So it required
• 32:54
  Speaker 1: a huge effort. But a combination of support from the
• 32:58
  Speaker 1: government and the huge demonstration of work epic and customer
• 33:02
  Speaker 1: commitment from our employees that's what made it happen. But
• 33:05
  Speaker 1: to say that today we are upwards of person of
• 33:08
  Speaker 1: our employees working from home is indeed remarkable. And all
• 33:12
  Speaker 1: of this happened in a matter of what four to
• 33:13
  Speaker 1: five weeks, So Christian about thirty seconds. Love to get
• 33:17
  Speaker 1: your sense of kind of how things are in India
• 33:20
  Speaker 1: right now. We're starting to see some resurgence in cases
• 33:22
  Speaker 1: here in the US. How is the virus trending in
• 33:26
  Speaker 1: India right now. In India still the curve is going up.
• 33:32
  Speaker 1: But the encouraging news is that the test positivity rate
• 33:35
  Speaker 1: is either flat are actually coming down. That is an
• 33:38
  Speaker 1: important thing. That which means two things, which means we
• 33:40
  Speaker 1: are testing enough um and the fact that the test
• 33:44
  Speaker 1: positivity rate is not going up probably means that it
• 33:48
  Speaker 1: is not out of control. Of course, in a country
• 33:50
  Speaker 1: like India at one point three billion people, the numbers
• 33:53
  Speaker 1: are going to be staggering, of course, but I think
• 33:56
  Speaker 1: so far, so good, even though that's not to say
• 33:58
  Speaker 1: what will happen tomorrow? Call as I'm sure they can imagine. Well,
• 34:02
  Speaker 1: these days we never know what to expect. Christian, thank
• 34:04
  Speaker 1: you for joining us today. Fascinating company and the fascinating
• 34:08
  Speaker 1: industry to be in right now. Christian Roman Nujam, President
• 34:11
  Speaker 1: of Business and Technology Services Atata Consulting Services, coming to
• 34:15
  Speaker 1: us from Mumbai there and he obviously had to relocate
• 34:19
  Speaker 1: you know, his staff Poul or the company's staff board
• 34:22
  Speaker 1: and fift. They're also dealing with everyone else's staff working
• 34:25
  Speaker 1: remotely as well, so it really boggles the mind. He's
• 34:28
  Speaker 1: been offering serious advice to C. E. O s during
• 34:30
  Speaker 1: the pandemic, including you know, perpetual transformation. A lot of
• 34:34
  Speaker 1: people get stuck during a time like this because there's
• 34:36
  Speaker 1: so many logistical concerns, but really, now is the time
• 34:39
  Speaker 1: to be transforming and to continue to move forward. Yeah,
• 34:43
  Speaker 1: technology is a Christman mentioned is just a key part
• 34:46
  Speaker 1: of that trying to help people remain productive during this
• 34:50
  Speaker 1: remote time. Thanks for listening to Bloomberg Markets podcast. You
• 34:54
  Speaker 1: can subscribe and listen to interviews at Apple Podcasts or
• 34:58
  Speaker 1: whatever a podcast platform you prefer. I'm Bonnie Quinn. I'm
• 35:01
  Speaker 1: on Twitter at Bonnie Quinn, and I'm Paul Sweeney. I'm
• 35:04
  Speaker 1: on Twitter at pt Sweeney. Before the podcast, you can
• 35:06
  Speaker 1: always catch us worldwide at Bloomberg Radio