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Big 10 Defies Money, Politics to Protect Athletes: Nocera · 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 the Bloomberg Markets
• 0:13
  Speaker 1: Podcast on Apple Podcasts or wherever you listen to podcasts,
• 0:17
  Speaker 1: and on Bloomberg dot com. All right, let's talk a
• 0:20
  Speaker 1: little college football. Yesterday was uh, some big news coming
• 0:24
  Speaker 1: out of some big conferences for college football. The Big
• 0:27
  Speaker 1: Ten was the first to announce that they were postponing
• 0:29
  Speaker 1: their fall season hope to get some games in in
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  Speaker 1: the spring. The Pack twelve followed as well, talking about
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  Speaker 1: all fall sports here for these schools, including football. Some
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  Speaker 1: other big conferences haven't heard from yet, so let's get
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  Speaker 1: the latest on how this is evolving here. Joe No
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  Speaker 1: Sarah is a columnist for Bloomberg Opinion. Uh, he joins
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  Speaker 1: us on the phone. Joe, thanks so much for joining
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  Speaker 1: us here. Um, what are you taking away here from
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  Speaker 1: what some of these big Power five conferences are doing here?
• 0:55
  Speaker 1: There seems to be a little bit of split on
• 0:57
  Speaker 1: kind of how they're viewing it. Oh, there's definitely a split. Um,
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  Speaker 1: I mean, the Pack Club and the Big Ten are
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  Speaker 1: out at least it was spring. The SEC is definitely in.
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  Speaker 1: I mean, it would take take a lot for the
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  Speaker 1: SEC to not play football. As we well know, UM,
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  Speaker 1: and the other two conferences, the Big twelve in the
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  Speaker 1: a SEC, they're kind of on the fence a SEC
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  Speaker 1: leaning towards playing I mean, they're heavily being influenced by
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  Speaker 1: Trevor Lawrence, the quarterback for Clemson, who started that we
• 1:26
  Speaker 1: want to play hashtag um and you know, it's just
• 1:32
  Speaker 1: we just don't know. I mean, I think I think
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  Speaker 1: there's a decent likelihood that maybe two of the five
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  Speaker 1: conferences will try to play football. I think you could
• 1:40
  Speaker 1: see also maybe a Nebraska or a Texas or an
• 1:45
  Speaker 1: Oklahoma basically say you know, hey, can we join up
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  Speaker 1: with you guys for a season because we want to play.
• 1:51
  Speaker 1: So you can see that happening. It would be difficult,
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  Speaker 1: but it's possible. And then the whole issue would be,
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  Speaker 1: you know what happens with COVID? Uh does the pandemic
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  Speaker 1: affect the team's the I mean, football is not exactly
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  Speaker 1: social distancing, so UM, I mean I think that's where
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  Speaker 1: we are right now. Yeah, and certainly the Big twelve
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  Speaker 1: is moving forward. Gung Ho sounds like it can't even
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  Speaker 1: understand the decision not to play. And yet in the
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  Speaker 1: Big Ten there are at least five athletes who had
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  Speaker 1: been infected, who had contracted MYO Kardiitas Joe, potentially dangerous
• 2:24
  Speaker 1: heart ailments. I mean, it doesn't bode well for those
• 2:28
  Speaker 1: who continue to play if if that's something that can
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  Speaker 1: be as easily contracted, right, I think that's what really
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  Speaker 1: scared the Big Ten, much more than the Act, than
• 2:38
  Speaker 1: than than COVID itself, because it is I mean, it
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  Speaker 1: is true that most of these guys are young, and
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  Speaker 1: they will be either asymptomatic or you know, is they
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  Speaker 1: will be sick for a couple of weeks and then
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  Speaker 1: they'll be five. That is, that is true. But but
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  Speaker 1: but COVID has potential side effects. And if you have
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  Speaker 1: five of your athletes who have you know, a dangerous
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  Speaker 1: heart condition and after having COVID, you know, you can't
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  Speaker 1: really just say, Okay, no big deal, we're gonna keep playing,
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  Speaker 1: because you basically affecting this kid the rest of his
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  Speaker 1: life potentially. So uh, you know, it's hard to see
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  Speaker 1: how these other conferences are gonna say, well, we don't
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  Speaker 1: have to worry about that, because if they start having
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  Speaker 1: those those those same problems, how are they going to
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  Speaker 1: keep playing football? Joe? Where's the n c double A
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  Speaker 1: on this? This seems like it's, you know, an area
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  Speaker 1: where the n C double A should be saying, Okay,
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  Speaker 1: we're playing football or we're not playing football, as opposed
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  Speaker 1: to leaving it up to the individual conferences. Uh. The
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  Speaker 1: n c a A has surprisingly little um authority over football. Uh.
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  Speaker 1: In there was a famous Supreme Court case in which
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  Speaker 1: the conferences won the right to take television rights away
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  Speaker 1: from the n c a A, and ever since then,
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  Speaker 1: the conferences have basically called their own shots in terms
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  Speaker 1: of football. The only thing the n c A really
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  Speaker 1: does with football is, um, uh, you know, act as
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  Speaker 1: an enforcer when somebody's violating you know, recruiting rules and
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  Speaker 1: go on. But they really have nothing to do with
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  Speaker 1: the college playoffs, with the bowl system, with anything like that.
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  Speaker 1: So it's not a surprise that the n c A
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  Speaker 1: has been has not had much to say about this.
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  Speaker 1: It's a little surprising that they haven't at least been
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  Speaker 1: vocal about what they think should be done. Um. But
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  Speaker 1: the n b A is in the same pickle that
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  Speaker 1: the that the that the conferences are, which is that
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  Speaker 1: if games aren't played, television revenue isn't generated. And this
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  Speaker 1: whole edifit, this multibillion dollar edifit, which is built on,
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  Speaker 1: you know, unpaid players generating hundreds of millions of dollars
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  Speaker 1: for schools and conferences in the n c a A
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  Speaker 1: will crumble. And uh, one of the things I said
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  Speaker 1: in my column was, you know, maybe they can get
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  Speaker 1: away with not having fall sports, but if this has
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  Speaker 1: to get canceled again and spring, it will be a
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  Speaker 1: financial disaster for for for athletic department. And so, Joe,
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  Speaker 1: is there any idea or have you gamed out at
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  Speaker 1: all how it might work if one conference were to
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  Speaker 1: play and others didn't, or if leagues joined up, you know,
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  Speaker 1: in some kind of new tic tac toe of college
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  Speaker 1: football in order just to make it through this season
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  Speaker 1: and so that they could hold on some of the funding.
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  Speaker 1: Would would would that mean some colleges would get funding
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  Speaker 1: and some wouldn't next time? Well, don't forget all of
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  Speaker 1: these conferences have their own television deals. So um, you know,
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  Speaker 1: if the Big ten doesn't play, then they don't get
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  Speaker 1: the hundreds of millions of dollars that they would get
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  Speaker 1: from whoever whoever airs their games. You know, the SEC
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  Speaker 1: has its own So I mean, I did envision a
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  Speaker 1: scenario where the a SEC and the SEC decided to play.
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  Speaker 1: So they're the only two conferences that play, and they
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  Speaker 1: play their games and they get television money for that,
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  Speaker 1: and then they decided to have their own little mini
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  Speaker 1: championship between the winner of the A C C and
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  Speaker 1: the winner of the SEC. I could see that as
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  Speaker 1: a as a plausible scenario. UM. I do think though
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  Speaker 1: that UM, the chances of the pandemic ultimately shutting college
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  Speaker 1: football down, UH is a higher likelihood, even after they
• 6:18
  Speaker 1: like play one or two games. I think that's a
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  Speaker 1: higher likelihood, um, just because it's gonna look so bad
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  Speaker 1: if they have their athletes out there getting sick, when
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  Speaker 1: everybody who's going to school, all the students are you know,
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  Speaker 1: socially distancing, washing their hands, doing all the stuff to
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  Speaker 1: stay stay safe, and these football players are out there
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  Speaker 1: grabbing each other, tackling each other, hitting each other. Uh,
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  Speaker 1: the exact opposite of what you want to prevent. COVID Joe,
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  Speaker 1: are we still waiting on a formal decision by the
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  Speaker 1: SEC or in the a c C. And if so,
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  Speaker 1: when do we expect to get that? Well, the SEC
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  Speaker 1: has been very cagy about this and and they're they're
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  Speaker 1: the one that people are watching now. So Greg Sanky,
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  Speaker 1: the Commissioner of the S you see, I mean he
• 7:01
  Speaker 1: basically said, uh when when all this was happening the
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  Speaker 1: other day, I mean, he basically said, look, we're gonna wait,
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  Speaker 1: we do we know, hurry. If we can't start our
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  Speaker 1: season in September tenth will started on September twenty. If
• 7:13
  Speaker 1: we can't started on September twenty, we'll start it on
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  Speaker 1: October four. So his idea is he's not gonna make
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  Speaker 1: a decision. He's going to keep everything as open as
• 7:23
  Speaker 1: possible so that he can make whatever decision he has
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  Speaker 1: to make as late as possible. And I think you'll
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  Speaker 1: see the Big twelve in the a SEC kind of
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  Speaker 1: follow the SEC's lead because, let's face the SEC is
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  Speaker 1: the is the number one conference. Yeah, it's so interesting
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  Speaker 1: because many of these schools probably haven't even made decisions
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  Speaker 1: on whether they're going to have in class teaching or not,
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  Speaker 1: not that that really has much to do with college sports,
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  Speaker 1: but a little bit all the same. Joe, No, Sarah,
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  Speaker 1: thank you. You always pay the best topics to go
• 7:53
  Speaker 1: after when you write opinion columns. I know is is fantastic. Well,
• 7:58
  Speaker 1: I think adventures are trying to get a sense here
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  Speaker 1: where we are in this economic recovery? Have we trough?
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  Speaker 1: Is the economy coming back? What's the shape of the
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  Speaker 1: recovery that we can expect going forward? We welcome Karl Weinberg,
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  Speaker 1: founder and chief International Economists for High Frequency Economics. I
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  Speaker 1: think Carl probably has some answers for so Carl again,
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  Speaker 1: I think people are trying to get a sense here. Um,
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  Speaker 1: as we deal with some additional flare ups of the
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  Speaker 1: virus in certain key markets in the United States, such
• 8:27
  Speaker 1: as California, Texas, and Florida, what does that mean for
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  Speaker 1: the economic recovery here? How are you kind of viewing
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  Speaker 1: the current state of affairs? All right, well, good morning Paul,
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  Speaker 1: Good morning Bonny. Uh. We view the state of affairs
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  Speaker 1: as being very viewed, very cautiously right now. We're concerned
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  Speaker 1: about renewed flare ups, that's one thing. We're also concerned
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  Speaker 1: that the damage to the economy is greater than we
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  Speaker 1: are the market is currently pricing in, and that we
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  Speaker 1: are currently proceiving. We don't think this econ on the
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  Speaker 1: crisis is nearly over het and any steps toward recovery
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  Speaker 1: so far welcome, of course, but there we still have
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  Speaker 1: a very, very long way to go to get back
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  Speaker 1: to where we were. Carl, does the market prices in
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  Speaker 1: at some point or is the market on a separate
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  Speaker 1: plans at this point? Well, you know, I've been watching
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  Speaker 1: you all on Boomberg TV and uh and I'm listening
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  Speaker 1: on the radio, and this seems to be the question
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  Speaker 1: of the day. And I'll admit that I don't have
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  Speaker 1: anything other than an opinion about this, because we are
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  Speaker 1: in uncharted territory. We're looking at a bigger decline in
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  Speaker 1: the economy than we've ever experienced before in our lifetimes,
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  Speaker 1: and we should expect that we're going to get unusual
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  Speaker 1: and unexpected outcomes from being in that place. We can't tell,
• 9:40
  Speaker 1: you know, in the area of unknown unknowns. We can
• 9:42
  Speaker 1: tell exactly what they're going to be. But things are
• 9:44
  Speaker 1: going to break and we're still just at the very
• 9:46
  Speaker 1: beginning days of this of this downturn, you know, with
• 9:50
  Speaker 1: just a few months into it. So I think eventually
• 9:53
  Speaker 1: the market will have to pay attention to the fundamentals.
• 9:55
  Speaker 1: There will be a squeeze on the ways in which
• 9:58
  Speaker 1: economics affects the more markets. You know, the driver for profits,
• 10:02
  Speaker 1: the profits affect the market. You know, the drivers for prices,
• 10:05
  Speaker 1: the prices affect the markets. And of course the financial
• 10:08
  Speaker 1: system is going to come under stress more than we're
• 10:11
  Speaker 1: currently probably placing in. So yeah, eventually the piper has
• 10:15
  Speaker 1: to be paid, but I'm not quite sure exactly when
• 10:17
  Speaker 1: that will begin, all right, Carl, You know, we're with
• 10:21
  Speaker 1: the Federal Reserve has been really on the front lines
• 10:24
  Speaker 1: of dealing with the economic fallout from this pandemic, inject
• 10:27
  Speaker 1: injecting tremendous amounts of liquidity and and very clear messaging
• 10:32
  Speaker 1: uh Congress. On the other hand, we had that third
• 10:34
  Speaker 1: round of stimulus three point trillion, but the fourth round
• 10:37
  Speaker 1: of stimulus, which many believe is still required, we're not
• 10:40
  Speaker 1: seeing much movement on that. How critical is that to
• 10:43
  Speaker 1: your the calculus of kind of how you think about
• 10:45
  Speaker 1: the economy and the potential recovery? Gosh. Paul Louville for
• 10:49
  Speaker 1: Lukie are chief US economist and high frequency economics, writes
• 10:53
  Speaker 1: about this every day. It's essential. There's no way to
• 10:55
  Speaker 1: get around the fact that if we do not continue
• 10:59
  Speaker 1: to newest at a pace at or near what we've
• 11:02
  Speaker 1: been doing, that we're going to see an immediate drop
• 11:05
  Speaker 1: off and incomes and media drop off and spending the
• 11:08
  Speaker 1: severe economic consequences on top of an already hit economy.
• 11:12
  Speaker 1: We can't say that often enough or loudly enough. Now
• 11:15
  Speaker 1: there's a question as to whether or not at some
• 11:17
  Speaker 1: point we're going to have to face that kind of
• 11:19
  Speaker 1: fiscal cliff anyhow. But if it doesn't have to be
• 11:22
  Speaker 1: faced right now, and we can buy time to repair
• 11:25
  Speaker 1: what's wrong with the economy, notably the virus itself, and
• 11:29
  Speaker 1: buying time that we can address the disease and get
• 11:32
  Speaker 1: it under control, Um, then you know, there may come
• 11:35
  Speaker 1: a day when we do have to go off that clift,
• 11:37
  Speaker 1: but we can amploid it now. That would be great. Carl,
• 11:40
  Speaker 1: you're a specialist in China obviously as well, and we
• 11:43
  Speaker 1: love talking to you about China. I'm curious as to
• 11:45
  Speaker 1: where that conversation goes. It sort of took a right
• 11:48
  Speaker 1: turn with this TikTok by Dunn's argument. Um, you know,
• 11:52
  Speaker 1: we obviously have been prepping for something on the company
• 11:56
  Speaker 1: side of things with China, whether a beach of companies,
• 11:58
  Speaker 1: bother band companies, or what have you. But suddenly we're
• 12:01
  Speaker 1: in different territory. Now it seems well, I agree with you, Ronnie,
• 12:04
  Speaker 1: this is UH. I think of it more as an
• 12:06
  Speaker 1: extension of a slippery slope that we engaged in three
• 12:10
  Speaker 1: years ago when the Trump administration started exercising its options
• 12:14
  Speaker 1: on trade policy, and relations with China have no decayed
• 12:17
  Speaker 1: to a level lower than they've been UH since we
• 12:21
  Speaker 1: started relationships with China in the early nineteen seventies. UM,
• 12:25
  Speaker 1: I don't see a good outcome as things continue in
• 12:29
  Speaker 1: the direction that they are going in, And frankly, I
• 12:31
  Speaker 1: don't see good positive results coming from the direction that
• 12:34
  Speaker 1: the Trump administration has taken us on. We have started
• 12:38
  Speaker 1: a confrontation with somebody with a with a with an
• 12:41
  Speaker 1: opponent who is equally powerful and agile as we are,
• 12:45
  Speaker 1: and we would all be much better off if everybody
• 12:47
  Speaker 1: could embrace the things that we can accomplish together and
• 12:51
  Speaker 1: not try to change the things that make us different
• 12:54
  Speaker 1: from them, speaking in their specifically political systems and so forth.
• 12:58
  Speaker 1: What's your base case, Carlin we're almost out of time, unfortunately.
• 13:02
  Speaker 1: But does this all change if the presidency becomes a
• 13:06
  Speaker 1: Joe Biden presidency and if not, do we start seeing
• 13:08
  Speaker 1: the splitting up of all Chinese American companies or partnered companies. Well,
• 13:15
  Speaker 1: I think that we're headed towards split up strategy right now.
• 13:18
  Speaker 1: I can't predict what the Biden administration will do. My
• 13:21
  Speaker 1: guess is that they will be tough on China, but
• 13:24
  Speaker 1: tough in the constructive way looking is Richard Nixon pointed
• 13:28
  Speaker 1: out when he went to China for the first time,
• 13:30
  Speaker 1: looking for the things we can accomplish together and accept
• 13:33
  Speaker 1: the fact that we have fundamental differences in worlds used
• 13:36
  Speaker 1: in politics, live with those differences except what we can change,
• 13:40
  Speaker 1: and take advantage of the things we can do together.
• 13:42
  Speaker 1: I think that's the winning strategy, and I'm hopeful that
• 13:45
  Speaker 1: Biden administration will be tough but forward looking in its policies. Carl,
• 13:50
  Speaker 1: thank you for joining us. We will speak to you
• 13:52
  Speaker 1: again very soon. That is Carl Weinberg, founder and chief
• 13:55
  Speaker 1: economist at a High Frequency Economics. All Right. As we know,
• 14:01
  Speaker 1: Gold has been on a little bit of a ride
• 14:03
  Speaker 1: in the last couple of months, especially when things looked
• 14:06
  Speaker 1: on certain gold actually topped two thousand dollars and ounce.
• 14:10
  Speaker 1: If we look today, we're off of those highs. But nevertheless,
• 14:13
  Speaker 1: people obviously considering gold a store of value once again
• 14:17
  Speaker 1: and one that they should take a second or third
• 14:19
  Speaker 1: look at. Let's bring in somebody who knows all about gold.
• 14:23
  Speaker 1: Frank Holmes joins us now, and Frank, it is great
• 14:26
  Speaker 1: to have you, because if anybody knows about gold, it
• 14:29
  Speaker 1: is you. Is the peak past four gold prices right now?
• 14:36
  Speaker 1: No Vanni, not at all. If you look at the
• 14:38
  Speaker 1: past eighty months is when the golden cross took place
• 14:41
  Speaker 1: where the fifty day crossed about the day and gold
• 14:45
  Speaker 1: has had this nice steady run up about seven hundred
• 14:48
  Speaker 1: dollars and it goes through a correction. And during this
• 14:51
  Speaker 1: run it's had something like six times has moved up
• 14:56
  Speaker 1: one standard deviation, which means for your listeners that it's
• 14:59
  Speaker 1: his ball facility that can happen by surging six percent
• 15:02
  Speaker 1: over over three months. Uh and three times has gone
• 15:06
  Speaker 1: up two standard deviasions over six months, and then it corrects.
• 15:10
  Speaker 1: It goes through these corrections. So I think we're up
• 15:12
  Speaker 1: to center. Viations were due for a correction which would
• 15:16
  Speaker 1: be healthy. Uh in this great run, this bowl market
• 15:19
  Speaker 1: that we're seeing in bullion, and I don't think it
• 15:22
  Speaker 1: was going away because of the unprecedented G twenty printing
• 15:26
  Speaker 1: of money. The it's it's a collective group of finance
• 15:29
  Speaker 1: ministers and central banks that are called they're fighting World
• 15:32
  Speaker 1: War three, which is a coronavirus, and they're all working
• 15:36
  Speaker 1: together and it's a lot of money printing and its
• 15:38
  Speaker 1: currency debasement, and you see that in history, gold starts
• 15:42
  Speaker 1: to rise in each of those countries currencies. Frank Coin
• 15:46
  Speaker 1: CEO and chief investment officer for US Global Investors with
• 15:50
  Speaker 1: US Frank, the gold traded off that ten percent yesterday?
• 15:54
  Speaker 1: What was that? Was that a technical trade? Was that
• 15:58
  Speaker 1: a big seller coming on the market? What do you
• 16:00
  Speaker 1: make of that trade? Yeah? I think a big seller.
• 16:03
  Speaker 1: I when it comes to these types of trades, I
• 16:06
  Speaker 1: really try to be agnostic and just look at the
• 16:08
  Speaker 1: statistics volatility, and whenever it's up two standard deviations over
• 16:13
  Speaker 1: sixty trade and days, it's a probability of a drop
• 16:18
  Speaker 1: of six to ten percent, and we got it, you know,
• 16:22
  Speaker 1: and gold stocks are even more severe from their peaks.
• 16:26
  Speaker 1: There will be two times at rate yeah, it's pretty amazing. Well,
• 16:30
  Speaker 1: what do you make of the performance of the gold
• 16:31
  Speaker 1: miners recently? Obviously Barrick is one that we've been We've
• 16:35
  Speaker 1: been focused on g O l D as the taker symbol,
• 16:37
  Speaker 1: and it had a nice run up this year. Frank, Well,
• 16:42
  Speaker 1: it's the big market cap, you know. They and Newmont
• 16:44
  Speaker 1: are the two big elephants in the room. And uh
• 16:49
  Speaker 1: and and they have been marketing themselves as having free
• 16:53
  Speaker 1: cash flow. What's really important is in this run now,
• 16:56
  Speaker 1: in the first time was in March that we saw
• 16:59
  Speaker 1: in over a decade a that the hundred gold producers
• 17:01
  Speaker 1: that we follow had a free cash flow yield. Has
• 17:05
  Speaker 1: not happened. I the SMP has always had a free
• 17:09
  Speaker 1: cash flow yield. What does that mean? It means they
• 17:11
  Speaker 1: can pay dividends. Uh, they can buy back to stock.
• 17:14
  Speaker 1: And so after the coronavirus hit in March, then the
• 17:17
  Speaker 1: SMP fell to a negative free cash flow yield, the
• 17:21
  Speaker 1: gold stocks went up. So all of a sudden you
• 17:23
  Speaker 1: started seeing the non traditional golf or stock buyer buying
• 17:27
  Speaker 1: gold stocks because they have free cash flow. But is
• 17:31
  Speaker 1: the run over I suppose that is what I'm saying.
• 17:33
  Speaker 1: I mean, if you have no, no, no, because let's
• 17:38
  Speaker 1: take a look. When Greenspan left, green Span left, the
• 17:41
  Speaker 1: federal balance sheet was six the g d P now
• 17:45
  Speaker 1: with pal you know, in all these crisises, it's over.
• 17:49
  Speaker 1: When we go back and look at when President Obama
• 17:51
  Speaker 1: came in the Federal Reserve, they had to spend something
• 17:54
  Speaker 1: like three threllion dollars in the balance sheet, and three
• 17:58
  Speaker 1: years later gold went from eight d to If you
• 18:03
  Speaker 1: looked at the growth in the balance sheet today, uh,
• 18:06
  Speaker 1: that easily forecast the next three years ago to go
• 18:08
  Speaker 1: to four thousand, and if you looked at facing adjusted numbers, uh,
• 18:14
  Speaker 1: it's also thirty dollars gold. So I think that this
• 18:20
  Speaker 1: is a fascinating to me to watch the gold is
• 18:22
  Speaker 1: starting to become its own. It is the fourth most
• 18:26
  Speaker 1: liquid classing class of the world, but it's becoming the
• 18:28
  Speaker 1: sort of source of an additional investment. And we saw
• 18:32
  Speaker 1: eighteen months ago new country central banks hungry, uh, poland
• 18:37
  Speaker 1: Columbia emerging market country buying gold as a part of
• 18:41
  Speaker 1: the foreign currency. I don't think that's going away. Frank,
• 18:45
  Speaker 1: how about silver? What do we do there with that one?
• 18:48
  Speaker 1: That's a great speculator, you know, Um, it's it's like
• 18:52
  Speaker 1: a warrant on on gold and it always has a
• 18:56
  Speaker 1: more bolt. Silly, both up and down. Gold had a
• 18:59
  Speaker 1: big run, Silver was lagging and all of a sudden
• 19:02
  Speaker 1: it surges. Uh. There's a whole audience of community of
• 19:06
  Speaker 1: investors saying the ratio gold of silver is too cheap,
• 19:08
  Speaker 1: so they started buying it, and uh, we had this
• 19:11
  Speaker 1: big pick up. But the long term range is like
• 19:14
  Speaker 1: sixty fifty to sixty times silver to gold, and that's
• 19:18
  Speaker 1: why you saw silver had this big run. But any correction,
• 19:21
  Speaker 1: silver historically corrects more. Frank, we're almost of the time.
• 19:25
  Speaker 1: But how has the emergence of bitcoin, ethereum and all
• 19:28
  Speaker 1: these other sort of cryptocurrencies affected the trade in gold. Well,
• 19:33
  Speaker 1: the the the audience of people that really speculate any
• 19:37
  Speaker 1: theory um and bitcoin, they're that millennial investors. And that's
• 19:42
  Speaker 1: a great question, Bonnie, because we have experienced in our
• 19:45
  Speaker 1: jet CTF a billion dollars came in during the crisis, uh,
• 19:50
  Speaker 1: seventy straight days and Eric Mucconins has talked about it
• 19:53
  Speaker 1: several times. Came into this et F. Uh and for Dommy,
• 19:57
  Speaker 1: we saw Robin Hood investors coming in. Yeah, well before
• 20:01
  Speaker 1: the airlines took off, we're seeing it and go AU.
• 20:04
  Speaker 1: So these millennials used to trade bitcoin, etherorium and now
• 20:08
  Speaker 1: they're trading stocks stocks. Yeah. Absolutely, we're seeing the robin
• 20:13
  Speaker 1: Hood traders coming into the market. Frank Coom CEO and
• 20:15
  Speaker 1: c I O of u S Global Investors. We always
• 20:18
  Speaker 1: appreciate your perspective on precious metals, gold, silver, even bitcoin
• 20:24
  Speaker 1: a little bit. Perhaps it's a store of value. Summer
• 20:27
  Speaker 1: suggesting the US Postal Service is in trouble. In fact,
• 20:32
  Speaker 1: most recently the Treasury actually prepared at ten billion dollar
• 20:36
  Speaker 1: credit line for the US Postal Service, and at the
• 20:39
  Speaker 1: time the Treasury Secretary said, while the USPS is able
• 20:42
  Speaker 1: to fund its operating expenses without additional borrowing at this time,
• 20:45
  Speaker 1: we are pleased to have reached an agreement on the
• 20:47
  Speaker 1: material terms and conditions of alone should the need arise.
• 20:51
  Speaker 1: It's all very fragile. Let's bring in somebody who can
• 20:54
  Speaker 1: tell us a lot more. Gentle is President, owner founder
• 20:57
  Speaker 1: of s J Consulting and Satisia. It's way to speak
• 21:00
  Speaker 1: with you is the USPS and danger of failing. No.
• 21:05
  Speaker 1: I think the new CEO that has just taken over,
• 21:09
  Speaker 1: Louise de Joy. I have had the pleasure of working
• 21:13
  Speaker 1: with him in the past when he was CEO of
• 21:16
  Speaker 1: New Breed. He's a very quick study, very action oriented, UH,
• 21:21
  Speaker 1: and he's going to be a having the opportunity to
• 21:27
  Speaker 1: fix a lot of areas of shortcomings in the post Office,
• 21:31
  Speaker 1: one of them being that they are a very big
• 21:34
  Speaker 1: partner of the Amazon and other careers in parcel shipping.
• 21:40
  Speaker 1: The volume in the months of April, May and June
• 21:43
  Speaker 1: was up two times that of UPS and fed X
• 21:48
  Speaker 1: and I fully expect him to leverage that kind of
• 21:51
  Speaker 1: increase to get some rate increases that will help the
• 21:54
  Speaker 1: revenue increased at the post Office. So stas there has
• 21:58
  Speaker 1: been some concern and I guess plust message, the Joy
• 22:02
  Speaker 1: had a new organization chart kind of UH and implemented recently.
• 22:07
  Speaker 1: A lot of executives were displaced, including two the top
• 22:10
  Speaker 1: executives overseeing day to day operations. And I know some
• 22:13
  Speaker 1: Democrats have suggest that maybe that's deliberate sabotage to disrupt
• 22:17
  Speaker 1: mail service on the evil the election. UH. And with
• 22:21
  Speaker 1: an election that's going to really depend upon mail and balance,
• 22:24
  Speaker 1: Is that a valid concern in your mind? Not at all.
• 22:26
  Speaker 1: I know some of the people who are still there.
• 22:29
  Speaker 1: Dave Williams see in charge of the operations, check the
• 22:32
  Speaker 1: Straco in charge of some of the sales and marketing.
• 22:34
  Speaker 1: They are very seasoned, very skilled, experienced people, and I
• 22:39
  Speaker 1: do not see this being in any way compromising the
• 22:43
  Speaker 1: quality of service, the speed of it, and in fact
• 22:46
  Speaker 1: he streamlining it to make it happen quicker and better.
• 22:51
  Speaker 1: And we even track on time performance of first class
• 22:54
  Speaker 1: and prior to mail, and the month of July shows
• 22:57
  Speaker 1: no decline over the prior So I do not anticipate
• 23:03
  Speaker 1: anything to compromise the quality of postal service city. So
• 23:07
  Speaker 1: I mean one of the one of the things that
• 23:09
  Speaker 1: the USP has had over other services was that last
• 23:13
  Speaker 1: mile right, which was also its achilles heel, because the
• 23:15
  Speaker 1: last mile is the most expensive, it's it's the most annoying,
• 23:18
  Speaker 1: it's the most difficult, and you know, you are promising
• 23:23
  Speaker 1: that you will, you know, have that package at that
• 23:25
  Speaker 1: door on a certain day, so you just have to
• 23:28
  Speaker 1: be there. If other services, you know, even Uber is
• 23:33
  Speaker 1: you know fantastic on on GPS and location and that
• 23:37
  Speaker 1: kind of thing, if those services start doing last mile,
• 23:40
  Speaker 1: does that jeopardize USPS. No way, No company has ability
• 23:46
  Speaker 1: to compete in terms of the cost of last mile
• 23:50
  Speaker 1: delivery and the presence that they have They go to
• 23:54
  Speaker 1: every address every day. No company had that capability. And
• 23:58
  Speaker 1: you've mentioned about and left they are nowhere close to
• 24:01
  Speaker 1: even UPS and fed X and they can't do it
• 24:04
  Speaker 1: as cost effectively as the Post Office does, and that's
• 24:07
  Speaker 1: validated by you. PS has a service called shot post
• 24:11
  Speaker 1: which is where they handle most of the last mile
• 24:14
  Speaker 1: B to see packages and they are delivered by Post
• 24:17
  Speaker 1: Office for ups Alright, So cities, as we take a
• 24:22
  Speaker 1: look at the US Postal Service as a entity here,
• 24:25
  Speaker 1: talk to us about the financial condition that it's in
• 24:27
  Speaker 1: right now and and kind of what needs to be
• 24:30
  Speaker 1: done in terms of investment going forward. The area where
• 24:34
  Speaker 1: I think Post Office can rapidly improve its financial conditions
• 24:39
  Speaker 1: from an operating point To keep in mind, what the
• 24:41
  Speaker 1: public sees are financials that include the retirement payments that
• 24:46
  Speaker 1: they have to make, whnually take that out. Because they
• 24:49
  Speaker 1: are asked to do something that no private company does.
• 24:52
  Speaker 1: If you look at it on an operating basis, they
• 24:54
  Speaker 1: have a huge opportunity to leverage their parts of services
• 24:58
  Speaker 1: for increases. A simple for example being that during the
• 25:01
  Speaker 1: peak the volumes increased by UPS is already annown take
• 25:06
  Speaker 1: on a chart and extra dollar for the delivery of
• 25:09
  Speaker 1: those packages that actually are being done by the post office.
• 25:13
  Speaker 1: The post office should be getting that extra dollar and
• 25:15
  Speaker 1: they should be putting a search out for the peak
• 25:18
  Speaker 1: and it will be hundreds and millions of dollars for them.
• 25:22
  Speaker 1: So what kind of search charge should customers expect to
• 25:24
  Speaker 1: see Because we've really sort of had a good and
• 25:26
  Speaker 1: people complain every time the price of the stamp goes
• 25:28
  Speaker 1: up cities, but you know, honestly, it's not that much
• 25:32
  Speaker 1: to send something via USPS. Thank you for saying that
• 25:36
  Speaker 1: first class mail in perspective, we have done extensive study.
• 25:40
  Speaker 1: When you look around the world and look at other
• 25:43
  Speaker 1: developing countries, take example of Germany. The size of Germany
• 25:47
  Speaker 1: is one fifth or less than that of USA without
• 25:51
  Speaker 1: including Alaska and Hawaii, and yet their first class mail
• 25:55
  Speaker 1: is about more expensive than OURT. And I would tell
• 25:59
  Speaker 1: you that or average housewife or a household, increase of
• 26:04
  Speaker 1: post dage by will hardly be felt by them. It
• 26:08
  Speaker 1: is the big mailers like Capital One. You may see
• 26:11
  Speaker 1: how many males packages to send you every week, but
• 26:14
  Speaker 1: they will have to pay more and let them pay
• 26:16
  Speaker 1: more because they will ship lets and that would be
• 26:18
  Speaker 1: better for you and me and the post office. How
• 26:21
  Speaker 1: is the US Post Office going to do during this
• 26:24
  Speaker 1: election season? Again, looks like there's going to be a
• 26:27
  Speaker 1: much much higher than average mail in vote. How do
• 26:31
  Speaker 1: you think that post office will perform? Can it stay
• 26:33
  Speaker 1: out of the politics of it? I do not see
• 26:36
  Speaker 1: any challenges for them. Do not be able to handle
• 26:40
  Speaker 1: the volume? Keep in mind that the first class mail,
• 26:43
  Speaker 1: especially the ones that are in simple envelope, they go
• 26:47
  Speaker 1: through a sortation system that moves so fast that if
• 26:50
  Speaker 1: you got your finger in it, it will cut your
• 26:52
  Speaker 1: finger off. And that speed of handling first class mail
• 26:56
  Speaker 1: is so well set up that they can have a
• 26:59
  Speaker 1: thirty what the porton increase in those mailers, that they're
• 27:03
  Speaker 1: gonna get hundred person increase in the votes that come
• 27:06
  Speaker 1: in through that, and maybe you'll take a day more,
• 27:09
  Speaker 1: but that still is not something to be concerned about.
• 27:13
  Speaker 1: Satist Gandel, thanks so much for joining us. We appreciate
• 27:16
  Speaker 1: getting your thoughts on the postal service front and center here.
• 27:18
  Speaker 1: It's getting a little bit politicized, but will certainly be
• 27:21
  Speaker 1: an important player in this upcoming election Satish Gentel President
• 27:25
  Speaker 1: s J Consulting based in Pennsylvania, joining us here. Thanks
• 27:30
  Speaker 1: for listening to Bloomberg Markets podcast. You can subscribe and
• 27:33
  Speaker 1: listen to interviews at Apple Podcasts or whatever podcast platform
• 27:37
  Speaker 1: you prefer. I'm Bonnie Quinn, I'm on Twitter at Bonnie Quinn,
• 27:40
  Speaker 1: and I'm Paul Sweeney. I'm on Twitter at pt Sweeney.
• 27:43
  Speaker 1: Before the podcast, you can always catch us worldwide at
• 27:46
  Speaker 1: Bloomberg Radio