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Largest NY Hospital System Sees Return of Patients, Surgeries · 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,
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  Speaker 1: along with essential market moving news. Find the 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. Alright, very excited for this
• 0:21
  Speaker 1: next interview. Michael Dowling as President and CEO of north
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  Speaker 1: Well Health, New York State's largest healthcare provider, twenty three hospitals,
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  Speaker 1: more than thirteen and a half thousand affiliated physicians. And
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  Speaker 1: of course you will have seen Michael Dowling next to
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  Speaker 1: Governor Cuomo during the beginning part of this pandemic. He's
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  Speaker 1: been his advisor and is advising him specifically on reopening
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  Speaker 1: plans and so on. Michael, the gratitude of the state
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  Speaker 1: and country is with you. But as much as you've done,
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  Speaker 1: we're only part way through this whole story. Are you
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  Speaker 1: preparing for more cases now that New York has started
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  Speaker 1: to reopen, and of course as we see protests continue, Yes,
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  Speaker 1: the numbers of cases have dramatically dropped, and we're only
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  Speaker 1: seeing right now very very few new cases. Two days
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  Speaker 1: ago across our whole health system, we only had nine
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  Speaker 1: new cases. But given the reopening and giving all of
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  Speaker 1: the protests that recently occurred, um we are watching it
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  Speaker 1: very very closely to see whether or not there will
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  Speaker 1: be an uptick in cases over the next couple of weeks.
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  Speaker 1: We have not seen anything yet, but we are we
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  Speaker 1: are observing it very very closely, as I said, just
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  Speaker 1: in case that might happen. And of course we're also
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  Speaker 1: making plans, um uh for the potential that you could
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  Speaker 1: have an up surge sometime in the fall during the
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  Speaker 1: flu season. So we are we are prepared. I mean,
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  Speaker 1: we've handled the situation up to this point, I think
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  Speaker 1: quite well. We've learned a lot, and we definitely are
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  Speaker 1: prepared for anything that might hit us in the future.
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  Speaker 1: We hope it doesn't occur, and we hope that people
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  Speaker 1: you know, comply with the social distancing and wearing masks
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  Speaker 1: and do it do the right thing for the good
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  Speaker 1: of the community. And if they do that, then I
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  Speaker 1: think we will be in a pretty good in a
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  Speaker 1: pretty good situation. But we are prepared. Going back to
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  Speaker 1: your question, Michael North, while health Hospitals have treated more
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  Speaker 1: COVID nineteen patients than any others in the United States.
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  Speaker 1: What I want to ask you is how are your
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  Speaker 1: people doing? How And maybe kind of get to look
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  Speaker 1: back a little bit now and some of those crazy
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  Speaker 1: days and crazy weeks where your hospitals and others in
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  Speaker 1: the city, in the state were overwhelmed with patients. As
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  Speaker 1: you look back, how is your staff doing. The staff
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  Speaker 1: is doing very very well, empeed And I I do
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  Speaker 1: spend myself. I spent a lot of my time out
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  Speaker 1: on the floors of the hospital. So I am in
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  Speaker 1: the direct contact with staff and all of our facilities
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  Speaker 1: on an ongoing basis. Them allow is very very high. Um.
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  Speaker 1: It is extraordinary how people came together, work together, supported
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  Speaker 1: one another and stuck with it during the whole period
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  Speaker 1: of the severe cases we had. UM. Now, we we
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  Speaker 1: do have a lot of support programs for staff, of course,
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  Speaker 1: and while doing a crisis, everybody's a drillin is going
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  Speaker 1: and they're working very hard. But it is possible that
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  Speaker 1: as it slows down now that we're going to see
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  Speaker 1: some of the residual results of the circumstance that they
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  Speaker 1: were in. And so we're holding you know, meetings on
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  Speaker 1: mental health issues, behavioral health issues, stress reduction issues, etcetera.
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  Speaker 1: Just to make sure that we can accommodate any needs
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  Speaker 1: of the start have. But overall, among the physicians, the nurses,
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  Speaker 1: the social workers, etcetera, extraordinary resilience and unbelievable positivity even
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  Speaker 1: in the midst of a situation like this, especially since
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  Speaker 1: many of them themselves, you know, had six family members
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  Speaker 1: family members who died. I've come across a number of employees,
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  Speaker 1: including yesterday, were a nurse she actually took care of
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  Speaker 1: her brother who actually died on the floor of the
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  Speaker 1: same hospital that she was practicing. Again, um, but overall
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  Speaker 1: quite positive given the circumstances. And it says something it's
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  Speaker 1: shot them about healthcare workers. Yeah, it leaves you dumbfounded
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  Speaker 1: when you listen to some of those stories, Michael. But
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  Speaker 1: the other part of your problem is that with twenty
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  Speaker 1: three hospitals under your umbrella, seven fifty outpatient facilities, you've
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  Speaker 1: lost a lot of revenue during this time as well.
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  Speaker 1: And of course no one likes to talk about, you know,
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  Speaker 1: profit and making money during as tough a time as
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  Speaker 1: we've had. But you're going to have to look after
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  Speaker 1: conservations and patients who need you know, surgery immediately and
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  Speaker 1: so on. How do you do that when you've lost
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  Speaker 1: one and a half billion dollars in revenue, Well, you
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  Speaker 1: focus on if you focus on your stay positive and
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  Speaker 1: you stay up beat. I mean we we we had
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  Speaker 1: a circumstance to deal with. We dealt with it when
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  Speaker 1: not only lost revenue, but we had to spend an
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  Speaker 1: awful lot of new money is to just accommodate all
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  Speaker 1: of the new cases, and we retrofit many of our hospitals.
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  Speaker 1: But that's an the lens by which you look at it.
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  Speaker 1: During a crisis, you do what you do because it's
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  Speaker 1: the right thing to do, and you take care of
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  Speaker 1: the community. And now that we are coming out of it,
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  Speaker 1: at least for this stage of it, hopefully, and it
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  Speaker 1: will be the end stage, we are rebuilding back and
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  Speaker 1: we're transitioning, we're bringing back business. We're focusing a lot
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  Speaker 1: on the cases that were deferred that can't be deferred
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  Speaker 1: any longer, otherwise you can have some other serious negative effects.
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  Speaker 1: So give you an example. Two days ago, I mentioned
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  Speaker 1: that we had nine COVID patients into our facilities, but
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  Speaker 1: we had seven hundred and twenty intatient admissions on that
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  Speaker 1: very same day across our health system. So patients are
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  Speaker 1: coming back, surgery is being done, and we're going to
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  Speaker 1: build back up. And I think we're going to build
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  Speaker 1: back up in a stronger and will be in a
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  Speaker 1: stronger position in the future that we were in the
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  Speaker 1: past because we learn some lessons. We have to rethink
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  Speaker 1: our organization right now, become more product productive, become more
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  Speaker 1: consumers focused, become leaner and uh and use technology and
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  Speaker 1: awful lot more about our normable lessons that we learned here.
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  Speaker 1: And of course we did get some support from the
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  Speaker 1: federal government. So when I look forward a year from now,
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  Speaker 1: we will come out of this. Okay, Um, you know, circumstances, yeah,
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  Speaker 1: show you you know, put your into a negative circumstances
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  Speaker 1: for a while, but you look forward and you're going
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  Speaker 1: to come out of it healthy, strong, and better. I
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  Speaker 1: believe sometimes, you know, going through a bad experience weakens
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  Speaker 1: you up and gives you a new perspective, gets you
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  Speaker 1: to think about what's important and how to build your
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  Speaker 1: organization for the future. So I'm optimistic, um, And you
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  Speaker 1: have to be optimistic because it also is in a
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  Speaker 1: leadership in any organization should be optimistic at a time
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  Speaker 1: like this, because that's the message that you sent to
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  Speaker 1: your staff as well. So I thought, absolutely, Michael, just
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  Speaker 1: about thirty seconds left. How about some smaller market hospitals.
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  Speaker 1: I've seen some news reporting that, boy, a lot of
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  Speaker 1: the those types of facilities are really gonna have a
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  Speaker 1: hard time staying afloat what is what? What's your understanding there? Yes,
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  Speaker 1: smaller hospitals that are stand alone hospitals that are not
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  Speaker 1: part of the larger system, that don't have some of
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  Speaker 1: the you know, capabilities that places like us have. But
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  Speaker 1: we'll have a most more difficult circumstance. You will have
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  Speaker 1: some places across the country, my guests, that will close.
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  Speaker 1: You will have some places that will will will allie,
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  Speaker 1: we create alliances with other large entities. But there's going
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  Speaker 1: to be a shift and a change in healthcare now,
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  Speaker 1: and I think some of that is for the good.
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  Speaker 1: Some of the things we were always doing one way
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  Speaker 1: we would now do a different way. Especially do you
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  Speaker 1: telemedicine and telehealth, etcetera. So yes, um, you'll see some
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  Speaker 1: positives coming out of this, But like everything else that
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  Speaker 1: happens in circumstances like this, you're going to see some
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  Speaker 1: negatives as well. Michael Dowling, thank you so much for
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  Speaker 1: taking the time to speak with us. We really appreciate
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  Speaker 1: hearing your perspective from really ground zero on the very
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  Speaker 1: front lines of dealing with this COVID nineteen and you know,
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  Speaker 1: our our thanks to you into all the staff of
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  Speaker 1: your hospitals. Michael Dawling, President, chief executive officer of north
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  Speaker 1: Well Health joining us. Just some extraordinary commentary, Vanni. You know,
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  Speaker 1: think about the no hospital system in the country handed
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  Speaker 1: more COVID nineteen cases than north Well. Yeah, and saved
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  Speaker 1: the state and the rest of the country from you know,
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  Speaker 1: a lot of tragedy as well. But I'm sure that
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  Speaker 1: one anecdote he told he probably has hundreds more. And
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  Speaker 1: you wonder what it's like to lead an organization like
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  Speaker 1: that at a time like this. It is time to
• 8:29
  Speaker 1: check in with Bloomberg Opinion. We're joined now by opinion
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  Speaker 1: columnist Sarah Holzack. Sarah, thank you for joining a great
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  Speaker 1: opinion piece today. On retail. We've known for some time
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  Speaker 1: that retail will be challenged, but there are more challenges
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  Speaker 1: facing retail. As the protests got underway and each of
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  Speaker 1: the brands were called out to have a response to
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  Speaker 1: what was going on in the environment. So where do
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  Speaker 1: we stand now with retail? What are CEO is telling you? Yeah,
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  Speaker 1: I think the key thing that I've been thinking about
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  Speaker 1: is that the clothing category in particular is in dire
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  Speaker 1: straits right now. Um, it's just a corner of retail
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  Speaker 1: that was more overstored than any other and already so
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  Speaker 1: many of the brands in that space were in a
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  Speaker 1: beleaguered position before the onset of the pandemic and the recession.
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  Speaker 1: The likes of Victoria's Secret, Banana Republic Gap Chico's expressed
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  Speaker 1: these are brands that for years have been struggling to
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  Speaker 1: connect with customers based on their fashion alone, and now
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  Speaker 1: when you add these other problems on top of it,
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  Speaker 1: it's going to be a very very dark time in
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  Speaker 1: this segment of retail for months and perhaps years to come. So, Sarah,
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  Speaker 1: as we think about the clothing aspect of retail again,
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  Speaker 1: as you mentioned, there's a lot of the fashion aspect
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  Speaker 1: to it. How has kind of the pandemic and changing
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  Speaker 1: consumer behaviors about how they actually purchase clothing, How has
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  Speaker 1: that changed our people more comfortable spending on fairly moderate
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  Speaker 1: the big ticket items strictly online. Yes, so I think
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  Speaker 1: that what this has done has basically meant years worth
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  Speaker 1: of online adoption was compressed into a matter of months um,
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  Speaker 1: and so people are getting more comfortable with purchasing clothing online.
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  Speaker 1: I've seen UH surveys that show people plan to keep
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  Speaker 1: buying clothing online at the rate that they've begun to
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  Speaker 1: now during this time of lockdowns, and that creates a
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  Speaker 1: unique challenge for the clothing segment that's not faced elsewhere.
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  Speaker 1: And that's because re terms of online purchases and this
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  Speaker 1: segment tends to be extremely high. We all probably know
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  Speaker 1: this from personal experience. You buy multiple sizes of a
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  Speaker 1: given pair of pants or multiple colors um, and having
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  Speaker 1: to foot the bill for return, shipping and restocking um
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  Speaker 1: is a really tricky profitability problem for these clothing retailers
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  Speaker 1: that just simply is not faced by retailers of electronics, toys, groceries,
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  Speaker 1: that kind of thing. So one of the reasons that
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  Speaker 1: people still do go into break and mortar stories is
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  Speaker 1: to avoid having to do that Sarah, to try on
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  Speaker 1: different sizes and to just try on something so they
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  Speaker 1: won't have to send it back. How will stores change
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  Speaker 1: their fitting room policies post pandemic. Yeah, so we're seeing
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  Speaker 1: a number of different approaches on this front. Coals and
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  Speaker 1: t J Max, for example, have their fitting rooms closed
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  Speaker 1: all together right now. Nords from its taking an approach
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  Speaker 1: where it has only a limited number of them open
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  Speaker 1: and they're cleaning each fitting room in between each patron um,
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  Speaker 1: and again you can see how this just compounds the
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  Speaker 1: problem of fitting rooms are a key reason that you
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  Speaker 1: go to do brick and mortar shopping in the first
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  Speaker 1: place for clothing stores, and when that option is not
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  Speaker 1: available to you, or when it's suddenly become a lot
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  Speaker 1: flunk here, you can see how that might keep people
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  Speaker 1: away or keep people from purchasing as many things as
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  Speaker 1: they might have if they were able to try them on. So, Sara,
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  Speaker 1: one of the things that we've heard about within retail
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  Speaker 1: generally speaking, is this omni channel approach to retailing. You know,
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  Speaker 1: the bricks and mortar plus the online being able to
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  Speaker 1: you know, maybe pick up something that you ordered online.
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  Speaker 1: Is that still seen as the best strategy for a
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  Speaker 1: lot of these retail segments. So I think curbs I'd
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  Speaker 1: pick up the getting a huge boost in the grocery
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  Speaker 1: category right now, and I think a lot of people
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  Speaker 1: are trying that for the first time and reach other's
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  Speaker 1: like Walmart and Target have long said that these services
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  Speaker 1: have extraordinarily high net promoter scores that once people, once
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  Speaker 1: they can get people to try them, uh, they really
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  Speaker 1: do stick with them and recommend them to other shoppers.
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  Speaker 1: So this moment of trial for curbside pickup in the
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  Speaker 1: grocery space in particular, I think it's going to be
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  Speaker 1: sticky and powerful. Um, these experiments that say a Bloomingdale'
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  Speaker 1: is doing with curbside pickup, I'm not sure how enduring
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  Speaker 1: that's going to be after the pandemic, because again, this
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  Speaker 1: seems like a situation where either you'd want to go
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  Speaker 1: to the store, try the clothes on, have that sort
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  Speaker 1: of social experiential moment, or you'd want to shop online.
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  Speaker 1: And I don't think curbside will be have lasting impacts there. Sarah, Obviously,
• 12:49
  Speaker 1: you know a big story is rent and Gap is
• 12:53
  Speaker 1: suing it doesn't want to pay rent and so on.
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  Speaker 1: What are people like MPG group and so on saying
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  Speaker 1: about who will up on the hook for rents? Yeah,
• 13:03
  Speaker 1: it's a tricky question and I think it would me
• 13:06
  Speaker 1: everyone's watching that particular lawsuit you mentioned very closely to
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  Speaker 1: see how it shapes out. Um. I think it's interesting
• 13:13
  Speaker 1: to note that different retailers will have different advantages that
• 13:16
  Speaker 1: they can bring to these lease negotiations. If you're someone
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  Speaker 1: who's a key traffic driver to a shopping center, so Apple,
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  Speaker 1: for example, uh tends to drive a lot of foot
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  Speaker 1: traffic to a mall. Or if you're a grocery store
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  Speaker 1: which has been opened this whole time and is a
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  Speaker 1: basics retailer, you have a lot of leverage in these
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  Speaker 1: negotiations with the mall operators. If you're one of these
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  Speaker 1: leaguer clothing stores we were talking about earlier, a Victoria's
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  Speaker 1: Secret and express Uh, you know, Victoria's secret is closing
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  Speaker 1: a quarter of its North American fleet. That does not
• 13:43
  Speaker 1: really put you on good footing to be able to
• 13:46
  Speaker 1: renegotiate that our terms for your leases. And so I
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  Speaker 1: think that is definitely going to play a role and
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  Speaker 1: who the ultimate survivors are after all of this tumult.
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  Speaker 1: Sarah Hals like, thank you so much for joining us.
• 13:57
  Speaker 1: We're always glad to get your perspective and all things
• 13:59
  Speaker 1: retail Cheach retail colms for Bloomberg Opinion. You can read
• 14:02
  Speaker 1: more of Sarah's work and other stories from Bloomberg Opinion
• 14:05
  Speaker 1: at Bloomberg dot com, slash Opinion, and on the Terminal
• 14:08
  Speaker 1: by typing o p I n go So, Fannie, I
• 14:12
  Speaker 1: think it's just more tough times for the retail retailers
• 14:16
  Speaker 1: out there. It's gonna be really tough coming back from
• 14:18
  Speaker 1: this pandemic, right, I mean, there were so many of
• 14:20
  Speaker 1: them on the brink of bankruptcy. Anyway, if you listen
• 14:23
  Speaker 1: to somebody like Howard Divito, Wits or whatever, he will
• 14:25
  Speaker 1: tell you that, you know, they should have been bankrupt
• 14:28
  Speaker 1: a long time ago, some of them. And obviously, this
• 14:31
  Speaker 1: pivot online, as you said, Paul, is just going to
• 14:33
  Speaker 1: accelerate and has been accelerating in the pandemic. So obviously,
• 14:37
  Speaker 1: as we saw online shopping boosted massively, it doesn't mean
• 14:41
  Speaker 1: that the brick and mortar stores will be able to
• 14:42
  Speaker 1: stick around. And we are back looking forward to our
• 14:48
  Speaker 1: chat with the illustrious David Kotag. Next. David joins us
• 14:52
  Speaker 1: from Cumberland Advisors, where he's the chief investment Officer, chairman
• 14:56
  Speaker 1: and of course just a friend of the show for decades.
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  Speaker 1: I would have to say, at this point, David, you've
• 15:02
  Speaker 1: seen money markets sell off. David, is this a sell
• 15:05
  Speaker 1: off based on panic, based on fundamentals, based on what
• 15:09
  Speaker 1: FED chair Paul said yesterday, or all of the above? Oh, Vanni,
• 15:14
  Speaker 1: thank you very much and nice to be with you
• 15:16
  Speaker 1: and Paul, all of the above. In an extraordinary environment
• 15:22
  Speaker 1: with a VIX, which is an indicator of volatility and
• 15:27
  Speaker 1: risk that's contemporaneous with the markets, that has been at
• 15:32
  Speaker 1: such a high level reflecting that volatility. You think about
• 15:37
  Speaker 1: what we've done in three months. We went from thirty
• 15:40
  Speaker 1: three hundred on the SMP back to thirty two hundred,
• 15:44
  Speaker 1: and now we're somewhere around thirty one and in what
• 15:49
  Speaker 1: looks like a very free fault. Temporarily, it's a wild time.
• 15:54
  Speaker 1: So we're it's explainable by what you're just outlined, and
• 15:59
  Speaker 1: there will be more, but I'm afraid to say so today,
• 16:02
  Speaker 1: but we got another very difficult drobbles claims number today.
• 16:06
  Speaker 1: We had FED chairman Pal yesterday calling out that a
• 16:09
  Speaker 1: rebound in this economy will take longer than perhaps people anticipated.
• 16:14
  Speaker 1: As you look across the credit spectrum, are you starting
• 16:16
  Speaker 1: to see significant credit quality problems that are going to
• 16:21
  Speaker 1: be an issue for investors going forward. Well, we worry
• 16:24
  Speaker 1: about the credit problems, Paul. We have seen. We saw
• 16:28
  Speaker 1: the credit spreads blowout at the end of March, and
• 16:32
  Speaker 1: then the FED activities started to narrow them, and they
• 16:37
  Speaker 1: narrowed wherever the market believed the FED would provide market
• 16:42
  Speaker 1: function support and not only functioning, but liquidity to continuously functioned.
• 16:50
  Speaker 1: So there is confidence restored in those credit spread and
• 16:55
  Speaker 1: other credit spreads much less so. So there's a sort
• 16:59
  Speaker 1: of a division. And I think in the market, I
• 17:01
  Speaker 1: would draw the line at what was previously investment grade
• 17:06
  Speaker 1: of any type. The FED is intent on trying to
• 17:10
  Speaker 1: keep that a functioning market. If it was below if
• 17:13
  Speaker 1: it was a junk credit, and the junk credit last fall,
• 17:16
  Speaker 1: the FED is not going to go bail it out,
• 17:19
  Speaker 1: but they do want market functionality. And I believe that's
• 17:22
  Speaker 1: how you divide the credit analysis in a general thematic way.
• 17:27
  Speaker 1: David Square off for me, the idea that this will
• 17:30
  Speaker 1: be the shortest recession of all time with the data
• 17:33
  Speaker 1: that we're seeing and what the FED chair said yesterday
• 17:36
  Speaker 1: about unemployments still being just below time present by the
• 17:39
  Speaker 1: end of the year and F one C member is
• 17:41
  Speaker 1: not being able to forecast an interest rate increase until
• 17:43
  Speaker 1: at least well. I can understand what j Pal tried
• 17:50
  Speaker 1: to convey because he's feeling this so many unknowns, like
• 17:54
  Speaker 1: how long the virus, how much damage does it do,
• 17:57
  Speaker 1: When do we have curated treatment, super people have safety
• 18:01
  Speaker 1: if they get sick, and when do we get a
• 18:03
  Speaker 1: vaccine in mass distribution. We don't know that everything is
• 18:07
  Speaker 1: being worked on. Everybody's hopeful, but we have no idea
• 18:10
  Speaker 1: as to time. So he has to give himself a
• 18:13
  Speaker 1: time cushion, and that would probably be a safe two years.
• 18:18
  Speaker 1: The second thing he has to do is say, we
• 18:20
  Speaker 1: don't know how deep and how much the damage will be.
• 18:23
  Speaker 1: We're trying to buffer the damage. We're trying to bridge
• 18:28
  Speaker 1: across the valley, and we cannot know how why the
• 18:31
  Speaker 1: valley is and that was the nature of his message.
• 18:35
  Speaker 1: I think the FED in the pal are doing a
• 18:39
  Speaker 1: terrific job confronting something that is a once in a
• 18:44
  Speaker 1: hundred year type of an event. So I believe they
• 18:48
  Speaker 1: were candidate. They said what they did, They said, take
• 18:51
  Speaker 1: this very seriously. Where markets were on this euphoric rise
• 18:57
  Speaker 1: based upon opening up is an access market swing to
• 19:03
  Speaker 1: access in both directions, and they did it over the
• 19:06
  Speaker 1: last period of time, and now they're correcting the excess.
• 19:10
  Speaker 1: If the sell off gets to the point where we
• 19:13
  Speaker 1: think it is, it will present an entry opportunity again,
• 19:18
  Speaker 1: because in the end of this there is recovery, and
• 19:23
  Speaker 1: after the recovery there's a reconfiguration of economics. People forget,
• 19:28
  Speaker 1: if I have another minute, Bunny and Paul. People forget
• 19:32
  Speaker 1: there's a survivor bias under way here. Look at the
• 19:36
  Speaker 1: SMP five index, for example, Macy's used to be in it.
• 19:40
  Speaker 1: It's not in it anymore. It's still a five hundred index,
• 19:44
  Speaker 1: but it's reconfigured by definition to capture and adjust for
• 19:49
  Speaker 1: the changes. So, David, given that time frame that Chairman
• 19:54
  Speaker 1: Pal suggested yesterday, perhaps a two year kind of time
• 19:58
  Speaker 1: frame here for trying to get to the other side here,
• 20:01
  Speaker 1: how how are you positioning your portfolio right now, given
• 20:05
  Speaker 1: that again this may be a little bit longer to recover. Well,
• 20:11
  Speaker 1: the first is today in the stock or FOLI we
• 20:14
  Speaker 1: have a cash reserve, we have had it for a while.
• 20:17
  Speaker 1: We will deploy it and reduce it on entries that
• 20:21
  Speaker 1: appear inviting and we will raise it if markets go
• 20:25
  Speaker 1: to access. Our biggest overweight in the United States and
• 20:29
  Speaker 1: the US portfolio is the health care sector. We think
• 20:33
  Speaker 1: when this is over, Paul, the healthcare sector in the
• 20:36
  Speaker 1: United States will amount to the GDP of the country.
• 20:40
  Speaker 1: That will be an all time record high American healthcare country.
• 20:44
  Speaker 1: Companies in partnership with others around the world, are doing
• 20:49
  Speaker 1: a stellar job in cooperatively developing what the tools will
• 20:55
  Speaker 1: be to deal with the pandemic. It's this is how
• 21:00
  Speaker 1: our biggest overweights there. We're worried about the geopolitics of
• 21:03
  Speaker 1: the world, so we have an overweight the defense sector.
• 21:06
  Speaker 1: I wish it weren't so. And we have a position
• 21:10
  Speaker 1: which I really like because I think some changes are
• 21:13
  Speaker 1: going to happen, and that's in water, wind and solar.
• 21:18
  Speaker 1: We are overweight that package. We think there's going to
• 21:22
  Speaker 1: be some reaction around the world. I wish there would
• 21:26
  Speaker 1: be more to the change that's necessary to address climate change.
• 21:31
  Speaker 1: That's a hopeful estimate, but we've got some money on
• 21:34
  Speaker 1: it is happening. David Kotalk, thank you so much for
• 21:38
  Speaker 1: joining us. As always, we appreciate your thoughts and commentary
• 21:41
  Speaker 1: and your experience, the benefit of your experience. David Coo Talk,
• 21:44
  Speaker 1: chairman and chief investment officer, a couple of advisors joining
• 21:48
  Speaker 1: us at once again with his Sage Advice and Ronnie
• 21:50
  Speaker 1: looking at the markets here. Uh, you know, continued weakness here.
• 21:53
  Speaker 1: I think it's continuing the third day we've seen the
• 21:56
  Speaker 1: sell off here, we're now uh four off on the Dow.
• 22:00
  Speaker 1: Uh So again the market reacting to a confluence of
• 22:04
  Speaker 1: events from the last several days. Yeah, and I mean,
• 22:07
  Speaker 1: let's not overplay it right now because we had actually
• 22:11
  Speaker 1: been out records before this, which was really sort of
• 22:13
  Speaker 1: the stunning thing. But still for the year now the
• 22:15
  Speaker 1: Dow was down about ten percent based on today's numbers included. Well,
• 22:21
  Speaker 1: we certainly have equity markets trading off substance substantially today.
• 22:25
  Speaker 1: The question is simply, is this something that is to
• 22:28
  Speaker 1: be expected given the huge rebound we've had off the
• 22:30
  Speaker 1: bottom source, it's suggesting something more. To get some color,
• 22:33
  Speaker 1: we welcome Barry Ridholt's, founder of rit Holt's Wealth Management,
• 22:37
  Speaker 1: is also Bloomberg Opinion calumnists and host of Masters in Business.
• 22:40
  Speaker 1: So Barry, what say you about this market today? Yeah,
• 22:44
  Speaker 1: this is kind of fascinating when you look at um
• 22:48
  Speaker 1: the after the fact explanation, and we love to do that,
• 22:51
  Speaker 1: We love to create a narrative about that. You had
• 22:55
  Speaker 1: fed chair and Pal's comments about keeping rates low until
• 23:00
  Speaker 1: two and I think he threw a little bit of
• 23:02
  Speaker 1: cold water on the u V shape recovery expectations in
• 23:07
  Speaker 1: the economy. This is going to be a long slow recovery,
• 23:10
  Speaker 1: especially in the labor market. But also given all the
• 23:15
  Speaker 1: reopenings of various states that we've seen over the past
• 23:17
  Speaker 1: two weeks, the spike in new infections is definitely um
• 23:24
  Speaker 1: startling people. It probably shouldn't, but uh, if you back
• 23:28
  Speaker 1: out New York, New Jersey, Connecticut, in Massachusetts and look
• 23:31
  Speaker 1: at the rest of the country that seems to have
• 23:35
  Speaker 1: ramped up infection rates later than the Northeast, we are
• 23:39
  Speaker 1: not doing a great job here. We're not doing a
• 23:41
  Speaker 1: great job on flattening the curve elsewhere or testing and
• 23:45
  Speaker 1: contact racing, and so we may see a reopening that
• 23:49
  Speaker 1: stumbles and we go right back down to lockdown. If
• 23:52
  Speaker 1: that's this gets much worse, and I think the markets
• 23:56
  Speaker 1: are looking at that as well. Sorry, markets haven't really
• 24:01
  Speaker 1: cared though about what good or about of a job
• 24:04
  Speaker 1: we're doing on the pandemic. They only care if businesses
• 24:06
  Speaker 1: are open, and they haven't seemed to be even worried
• 24:09
  Speaker 1: about demand if businesses do open until literally today, Are
• 24:12
  Speaker 1: you saying that suddenly markets change their mind about that, Um,
• 24:16
  Speaker 1: you know. I don't think it's that the markets did
• 24:19
  Speaker 1: not care about the lockdown or or or about how
• 24:23
  Speaker 1: well we're doing. I think they were looking over the
• 24:26
  Speaker 1: valley of the shutdown towards a treatment of vaccine contact tracing.
• 24:33
  Speaker 1: I think they were very optimistic about our ability to
• 24:38
  Speaker 1: manage this competently and allow if you look at Singapore
• 24:43
  Speaker 1: or South Korea, you look at some of the other
• 24:44
  Speaker 1: countries that have handled the shutdown and reopening well, the
• 24:49
  Speaker 1: expectations where hey, hopefully we can do at least as
• 24:52
  Speaker 1: well as that, and the early data that we're really
• 24:56
  Speaker 1: just seeing. Remember you're always on a week to two
• 24:58
  Speaker 1: week delay, and today is the eleven, so a lot
• 25:02
  Speaker 1: of states that opened on the first we're just starting
• 25:06
  Speaker 1: to see infection rates and hospitalization rates increase now and
• 25:10
  Speaker 1: over the next few days, we're really going to find
• 25:12
  Speaker 1: out what the opening did. I think this is new
• 25:16
  Speaker 1: data that the market is incorporating and saying, hey, we
• 25:19
  Speaker 1: are far less competent than other countries are in managing this,
• 25:23
  Speaker 1: and there will be an economic price to pay if
• 25:26
  Speaker 1: we don't do this right. Well, we have Secretary Mnution
• 25:29
  Speaker 1: coming out suggesting that are saying that there will not
• 25:31
  Speaker 1: be another I guess nationwide lockdown if the virus makes
• 25:36
  Speaker 1: a return. So there's kind of a dulling narrative there, Barry.
• 25:40
  Speaker 1: It's interesting, you know, fiscal stimulus has kind of gone
• 25:43
  Speaker 1: into the back burner a little bit. There seems to
• 25:44
  Speaker 1: be a lack of agreement between the Democrats and Republicans
• 25:48
  Speaker 1: about the next round of stimulus. Is that something you
• 25:51
  Speaker 1: think the market should be paying attention to, perhaps a
• 25:54
  Speaker 1: little bit more so, So let me address both of
• 25:57
  Speaker 1: those issues, Minution and the stimulus in one answer. Um,
• 26:02
  Speaker 1: whether or not there's a national lockdown or not has
• 26:06
  Speaker 1: become completely irrelevant because of the total um lack of
• 26:11
  Speaker 1: leadership on a on a national basis in this it
• 26:14
  Speaker 1: has fallen to the individual states, and we are now
• 26:17
  Speaker 1: running fifty experiments. What what happens in Wyoming is different
• 26:21
  Speaker 1: than California and Florida and Massachusetts and New York, etcetera.
• 26:25
  Speaker 1: So if if the Treasury Secretary is focused on a
• 26:32
  Speaker 1: national lockdown question, he's missing what's actually taking place where
• 26:36
  Speaker 1: boots are on the ground, what's actually happening state by state.
• 26:39
  Speaker 1: And the answer to your question about UM another round
• 26:44
  Speaker 1: of stimulus depends on how bad the sell off gets.
• 26:48
  Speaker 1: I don't mean today, I mean over the next couple
• 26:50
  Speaker 1: of months. Think back to September and October two thousand
• 26:53
  Speaker 1: and eight, when we first introduced some form of of
• 26:59
  Speaker 1: UM national rescue plan for the Great Financial Crisis. Congress
• 27:06
  Speaker 1: said no, and then the Dow had its worst week
• 27:09
  Speaker 1: in decades, and by that Monday, no, by Friday became yes.
• 27:15
  Speaker 1: Let this market sell off another ten that's good for
• 27:18
  Speaker 1: a trillion dollars. Let it sell down another thirty from here,
• 27:22
  Speaker 1: and you'll see another two and a half three trillion dollars.
• 27:26
  Speaker 1: Congress and the President react to a variety of signals.
• 27:30
  Speaker 1: Nothing scares the but Jesus set of people like seeing
• 27:33
  Speaker 1: the market lose a third of its value in a
• 27:35
  Speaker 1: month or two. That motivates them. Barry, we have to
• 27:39
  Speaker 1: leave there already. I did want to ask you about
• 27:41
  Speaker 1: the Federal Reserve chairman and concerns about some kind of
• 27:45
  Speaker 1: frosthiness here, but we're going to have to wait for
• 27:47
  Speaker 1: the next time. And anyway, we're seeing us frothiness today.
• 27:49
  Speaker 1: That is very riddles of riddles wealth management, of course
• 27:52
  Speaker 1: Bloomberg opinion columns. Of his latest columns include talking about
• 27:56
  Speaker 1: market panic, selling, and other behavioral aspects to this market performance,
• 28:02
  Speaker 1: speaking of which we are down three point seven five
• 28:05
  Speaker 1: percent on the Dow Johnes Industrial Average, the SMP down three,
• 28:09
  Speaker 1: and the NAZAC is the winner today pole but it
• 28:11
  Speaker 1: is still down two. Yeah. Yeah, significant layoff sell off here,
• 28:16
  Speaker 1: and it's barried with suggesting some combination of the Fed
• 28:18
  Speaker 1: chairman's comments yesterday about the longer term trends for the economy,
• 28:22
  Speaker 1: plus some you know, growing news and growing awareness of
• 28:26
  Speaker 1: perhaps a second wave in certain regions of the country.
• 28:29
  Speaker 1: So the market's kind of digesting that new news and
• 28:32
  Speaker 1: will certainly followed up throughout the remainder of the day. Yeah.
• 28:35
  Speaker 1: I mean, if we're looking at an unappointment rate of
• 28:37
  Speaker 1: just blow time percent at the end of the year,
• 28:39
  Speaker 1: that is not a pretty picture. Thanks for listening to
• 28:43
  Speaker 1: the Bloomberg Markets podcast. You can subscribe and listen to
• 28:46
  Speaker 1: interviews at Apple Podcasts or whatever. Podcast platform you prefer.
• 28:50
  Speaker 1: I'm Bonnie Quinn. I'm on Twitter at Bonny Quinn and
• 28:53
  Speaker 1: on Paul Sweeney. I'm on Twitter at pt Sweeney. Before
• 28:56
  Speaker 1: the podcast, you can always catch us worldwide at Bloomberg Radio. Well. Eh,